Category: Data Source
Here is a new and very important paper by Victor Stango and Jonathan Zinman, here are some of the main results, noting that each and every paragraph is important:
Our first finding is that biases are more rule than exception. The median consumer exhibits 10 of 17 potential biases. No one exhibits all 17, but almost everyone exhibits multiple biases; e.g., the 5th percentile is 6.
Our second finding is that cross-consumer heterogeneity in biases is substantial. The standard deviation of the number of biases exhibited is about 20% of its mean, and several results below suggest that this variance is economically meaningful and not substantially inflated by measurement error.
Our third finding is that cross-consumer heterogeneity in biases is poorly explained by even a “kitchen sink” of other consumer characteristics, including classical decision inputs, demographics, and measures of survey effort. Most strikingly, we find more bias variance within classical sub-groups widely thought to proxy for behavioral biases than across them. E.g., we find more bias variation with the highest-education group than across the highest- and lowest-education groups.
Our fourth finding is that our 17 biases are positively correlated with each other within-consumer, especially after accounting for measurement error following Gillen et al. (2019).1Across all biases, the average pairwise correlation is 0.13, and 18% have p-values < 0.001. Within six theoretically-related groups of biases (present-biased discounting, inconsistent and/or dominated choices, risk biases, overconfidence, math biases, and limited attention/memory), the average pairwise correlation is 0.25 and 29% have p < 0.001.
Our fifth finding is that there are also some important correlations between biases and classical inputs. Classical inputs and demographics may not explain much of the variance in biases (per finding #3), but some of them are correlated with biases in patterns that align with prior work. Most notably, the average pairwise correlation between cognitive skills and biases is -0.25. Cognitive skills are strongly negatively correlated with most biases, but positively correlated with loss aversion and ambiguity aversion. Other classical inputs are relatively weakly correlated with biases, except for a few expected links between patience and present bias, risk aversion and aversion to uncertainty and losses, and risk aversion and math biases that can lead to undervaluation of returns to risk-taking.
Overall not encouraging! But perhaps some of that is also what makes life more meaningful, at a high cost admittedly.
From Kimberly Rodgers Cornaggia and Han Xia:
With a license to use individually identifiable information on student loan borrowers, we find that a majority of distressed student borrowers manage their debt sub-optimally and that suboptimal debt management is associated with higher loan delinquency. Cross-sectional analysis indicates that loan (mis)management varies significantly across student gender, ethnicity, and age. We test several potential selection-based explanations for such demographic variation in student loan management, including variation in students’ overconfidence, consumption preferences and discount rates, and aversion to administrative paperwork. Motivated by federal and state allegations against student loan servicers, we also test for the presence of treatment effects. Overall, the empirical evidence supports the conclusion that loan servicers’ differential treatment across borrowers play an important role in student loan outcomes.
Here is a key background fact:
Broadly, subsidized student borrower assistance programs include provisions for loan forbearance, loan deferment, and
income-driven repayment (IDR) options for financially distressed borrowers.
Borrowers should switch to those provisions more than they do, with older students, non-traditional students, males, and non-whites performing less well than others. Here is the link to the paper, via the excellent Kevin Lewis.
We analyze the tone of COVID-19 related English-language news articles written since January 1, 2020. Ninety one percent of stories by U.S. major media outlets are negative in tone versus fifty four percent for non-U.S. major sources and sixty five percent for scientific journals. The negativity of the U.S. major media is notable even in areas with positive scientific developments including school re-openings and vaccine trials. Media negativity is unresponsive to changing trends in new COVID-19 cases or the political leanings of the audience. U.S. major media readers strongly prefer negative stories about COVID-19, and negative stories in general. Stories of increasing COVID-19 cases outnumber stories of decreasing cases by a factor of 5.5 even during periods when new cases are declining. Among U.S. major media outlets, stories discussing President Donald Trump and hydroxychloroquine are more numerous than all stories combined that cover companies and individual researchers working on COVID-19 vaccines.
Emphasis added by me. That is the abstract of a new NBER working paper by Bruce Sacerdote, Ranjan Sehgal, and Molly Cook.
No, according to Barry Eichengreen, Cevat Giray Aksoy, and Orkun Saka:
It is sometimes said that an effect of the COVID-19 pandemic will be heightened appreciation of the importance of scientific research and expertise. We test this hypothesis by examining how exposure to previous epidemics affected trust in science and scientists. Building on the “impressionable years hypothesis” that attitudes are durably formed during the ages 18 to 25, we focus on individuals exposed to epidemics in their country of residence at this particular stage of the life course. Combining data from a 2018 Wellcome Trust survey of more than 75,000 individuals in 138 countries with data on global epidemics since 1970, we show that such exposure has no impact on views of science as an endeavor but that it significantly reduces trust in scientists and in the benefits of their work. We also illustrate that the decline in trust is driven by the individuals with little previous training in science subjects. Finally, our evidence suggests that epidemic-induced distrust translates into lower compliance with health-related policies in the form of negative views towards vaccines and lower rates of child vaccination.
Here is the link to the NBER working paper.
In our estimation, and with standard preference parameters, the value of the ability to end the pandemic is worth 5-15% of total wealth. This value rises substantially when there is uncertainty about the frequency and duration of pandemics. Agents place almost as much value on the ability to resolve the uncertainty as they do on the value of the cure itself.
That is from a new NBER working paper by Viral V. Acharya, Timothy Johnson, Suresh Sundaresan, and Steven Zheng. Their analysis also shows that preventing or limiting future pandemics may be a bigger deal yet.
Via Eric Topol.
Previous research has isolated the effect of “congressional dominance” in explaining bureaucracy-related outcomes. This analysis extends the concept of congressional dominance to the allocation of H1N1, or swine flu, vaccine doses. States with Democratic United States Representatives on the relevant House oversight committee received roughly 60,000 additional doses per legislator during the initial allocation period, though this political advantage dissipated after the first 3 weeks of vaccine distribution. As a result political factors played a role in determining vaccine allocation only when the vaccine was in particularly short supply. At-risk groups identified by the Centers for Disease Control (CDC), such as younger age groups and first responders, do not receive more vaccine doses, and in fact receive slightly fewer units of vaccine.
That is from an Economic Inquiry paper by Matt E. Ryan. Via Henry Thompson.
When estimating income inequality with tax data, accounting for missing income presents many challenges. Researchers have adopted different approaches to address these challenges. Saez and Zucman (2020) discuss differences between the national income distributions of Piketty, Saez, and Zucman (PSZ, 2018) and Auten and Splinter (AS, 2019a). Saez and Zucman also make updates to their estimates for retirement income, partially responding to one of the concerns raised in AS. In this reply, I explain that SZ only partly correct this problem and do not address other issues raised by AS. For the allocation of underreported income—the most consequential difference between AS and PSZ—I show that the AS approach conforms with special audit studies in five ways, while the PSZ approach is inconsistent with them. I also provide historical background on the two projects, respond to technical points raised, and discuss estimates of tax progressivity.
Here is the link to the paper.
How many will speak up for science today?:
Our results show that the enormous expansions of parental leave and child care subsidies have had virtually no impact on gender convergence.
That is from a new NBER working paper by Henrik Kleven, Camille Landais, Johanna Posch, Andreas Steinhauer, and Josef Zweimüller., based on decades of data from Austria.
Do not judge Sweden until the autumn. That was the message from its state epidemiologist Anders Tegnell in May and through the summer as he argued that Sweden’s initial high death toll from Covid-19 would be followed in the second wave by “a high level of immunity and the number of cases will probably be quite low”.
Now the autumn is here, and hospitalisations from Covid-19 are currently rising faster in Sweden than in any other country in Europe, while in Stockholm — the centre for both the first and second waves in the country — one in every five tests is positive, suggesting the virus is even more widespread than official figures suggest.
Even Sweden’s public health agency admits its earlier prediction that the country’s Nordic neighbours such as Finland and Norway would suffer more in the autumn appears wrong. Sweden is currently faring worse than Denmark, Finland and Norway on cases, hospitalisations and deaths relative to the size of their population.
…The number of patients hospitalised with Covid-19 is doubling in Sweden every eight days currently, the fastest rate for any European country for which data is available. Its cases per capita have sextupled in the past month to more than 300 new daily infections per million people, close to the UK and way ahead of its Nordic neighbours.
Here is more from Richard Milne at the FT. To be clear, it seems that many of the Swedish deaths are due to a “dry tinder” effect, so in relative terms they are not doing as much worse than you might think. Other parts of Europe may well catch up to them, at least on a “tinder-adjusted” basis. But if you are just asking which predictions of which model are being vindicated here, it is that the herd immunity obtained through a partial neutralization of super-spreaders is temporary rather than permanent.
To be clear, I did not predict this (or its opposite), but rather for many months I have been saying we need more data from Sweden to draw a conclusion. Now we have more data.
In this article, Erik Parens urges me and other scientists working in the field of social genomics to “curb [our] optimism” regarding how genetic discoveries could be used to advance progressive and egalitarian social goals. In my view, however, it is Parens and other critics of social genomics who need to curb their optimism, in two ways.
First, Parens is overly optimistic that social science can ever hope to be successful without genetics. In reality, social scientists have failed, time and time again, to produce interventions that bring about lasting improvements in people’s lives. There are many reasons for that failure. But one reason is that many scientists continue to engage in what the sociologist Jeremy Freese has called a “tacit collusion” to avoid reckoning, in their research designs and in their causal inferences, with the fact that people are genetically different from one another.
All interventions and policies are built on a model of how the world works: “If I change x, then y will happen.” A model of the world that pretends all people are genetically the same, or that the only thing people inherit from their parents is their environment, is a wrong model of how the world works. The more often our models of the world are wrong, the more often we will continue to fail in designing interventions and policies that do what they intend to do. The goal of integrating genetics into the social sciences is not to design boutique educational interventions tailored for children’s genotypes. It is to help rescue us from our current situation, where most educational interventions tested don’t work for anyone. This track record of failure plays directly into the hands of a right-wing that touts the ineffectiveness of intervention as evidence for its false narrative of genetic determinism.
Second, Parens and other critics are overly optimistic that their strategy of disapproval, discouragement, and disavowal of genetic research will be effective in neutralizing the pernicious ideologies of the far-right. What is the evidence that this strategy actually works? Herrnstein and Murray published “The Bell Curve” when I was 12 years old; Murray published “Human Diversity” when I was 37 years old; and in all that time, the predominant response from the political left has remained pretty much exactly the same – emphasize people’s genetic sameness, question the wisdom of doing genetic research at all, urge caution. Yet, the far-right is ascendant. In my view, the left’s response to genetic science simply preaches to its own choir. Meanwhile, this strategy of minimization allows right-wing ideologues to offer to “red-pill” people with the “forbidden knowledge” of genetic results.
What the left hasn’t done (yet) is formulate a messaging strategy that (a) reconciles the existence of human genetic differences with people’s moral and political commitments to human equality, and (b) is readily comprehensible outside the confines of the ivory tower. Reminding people that genes are a source of luck in their lives has the potential to be that message. Parens characterizes me as making a “generous hearted but large leap” to expect that portraying genes as luck will change people’s minds, but economic research suggests that reminding people of the role of luck in their lives does, in fact, make them more supportive of redistribution.
Overall, this article portrays me and others working in this space as “soft-pedaling” the dangers of social genomics being appropriated by the far right. But I am fully cognizant of the dangers. Parens is the one who is soft-pedaling. He is soft-pedaling the enormous damage done to progress in psychology, sociology, and other social sciences – fields that are tasked with improving people’s lives – by their refusal to engage with genetics. And, he is soft-pedaling the danger of simply continuing the left’s decades-old, easily-“red-pilled” rhetorical strategy at a time with right-wing ideologies are on the rise globally.
Via Scott Gottlieb. And how about North Dakota? It is a low population state, but if all of the United States were putting in a comparable Covid performance we would be having about 12,500 Covid deaths a day. That is certainly not my prediction, but it is one way to think about what could happen from a very bad policy and social norms response. Is that the road we wish to be veering towards?
That is a work in progress by Brian Wheaton, job market candidate from Harvard University. Here is the abstract:
Over the past several decades, working-class America has been plagued by multiple adverse trends: a sharp increase in social isolation, an even sharper increase in single parenthood, a decline in male labor force participation rates, and a decline in generational economic mobility – amongst other things. Material economic factors have been unable to fully explain these phenomena, often yielding mixed results or – in some cases, such as that of single parenthood – lacking explanatory power altogether. I study the decline in religiosity and, using a shift-share instrument leveraging the fact that different religious denominations are declining at different rates, I find that religious decline has a strong adverse effect on the aforementioned variables. The effects are not weakened by including other potential explanatory factors (such as China trade shocks and variation in public assistance). I present evidence that, to the extent reverse causality exists, it creates bias in the opposite direction of my estimates. These findings are also robust to several alternative instruments, including the repeal of the state blue laws banning retail activity on Sundays and the Catholic church scandals of the 2000s. Two instruments – the blue laws and the state anti-evolution laws mandating teaching of creationism in school – allow me to ascertain whether the effect proceeds through religious attendance or beliefs. I find that, for most outcomes, the bulk of the effect is driven by religious attendance.
To be clear, that is not Brian’s job market paper, which covers “Laws, Beliefs, and Backlash.” Or you might wish to try these results on corporal punishment in schools (with Maria Petrova and Gautam Rao):
We find that the presence of corporal punishment in schools increases educational attainment, increases later-life social trust and trust in institutions, and leads to less authoritarian attitudes toward child-rearing, and greater tolerance of free speech. Additionally, exposure to corporal punishment in school decreases later-life crime. We find no effects on mental or physical health.
Here is his paper about flat tax reform in Eastern Europe:
Using static and dynamic difference-in-differences approaches, I find that the flat tax reforms increase annual GDP growth by 1.36 percentage points for a transitionary period of approximately one decade.
I praise the scholarship and courage of Brian N. Wheaton.
Controversial police use of force incidents have spurred protests across the nation and calls for reform. Body-worn cameras (BWCs) have received extensive attention as a potential key solution. I conduct the first nationwide study of the effects of BWCs in more than 1,000 agencies. I identify the causal effects by using idiosyncratic variation in adoption timing attributable to administrative hurdles and the lengthy process to the eventual adoption at different agencies. This empirical strategy addresses limitations of previous studies that evaluated BWCs within a single agency; in a single-agency setting, the control group officers are also indirectly affected by BWCs because they interact with the treatment group officers (spillover), and agencies that give researchers access may fundamentally differ from other agencies (site-selection bias). Overcoming these limitations, my multi-agency study finds that BWCs have led to a substantial drop in the use of force, both among whites and minorities. Nationwide, they reduce police-involved homicides by 43%. Surprisingly, I do not find evidence that BWCs are associated with de-policing. Examining social media usage data from Twitter as well as data on the Black Lives Matter (BLM) movement, I find that after BWC adoption, public opinion toward the police improves. These findings imply that BWCs can be an important tool for improving police accountability without sacrificing policing capabilities.
Comparing same-state early and late adopters of county dry laws in a difference-in-differences design, we find that early Prohibition adoption increased population and farm real estate values. Moreover, we find strong effects on farm productivity consistent with increased investment due to a land price channel. In equilibrium, the amenity change disproportionately attracted immigrants and African-Americans.
That is from a new paper by Greg Howard and Arianna Ornaghi, revise and resubmit at Journal of Economic History. Arianna is on the job market from MIT, here is her job market paper and broader portfolio. Here is her paper on civil service reforms for U.S. police departments.