Category: Economics

MRU Around the World

Here’s a message I received from Amol Shaila Suresh:

Hi Prof. Alex,

Last year, I started preparing for entrance exams of India’s premiere universities for masters in economics. I am an ‘engineering’ undergrad, turned to development sector. When I decided to do masters in economics, I had a huge 6 years educational gap and was amateur to the field. Mrs. Ashwini Kulkarni (whom you visited in Nashik, India to understand onion market) recommended me to check out “Marginal Revolution University” website for econ videos.

Following her advice, I completed micro and macro courses on mru.org and only then touched other reference books (be it Mankiw, Blanchard, Varian, Debraj, etc.) MRU videos helped me immensely in grasping basic economics concepts and made my preparation so smooth that I scored highly in many university entrance exams. Being from non-econ background with 6 years education gap & that too self-study, it was quite a satisfying performance.

Yesterday, South Asian University in New Delhi declared its result and I am at #13 on the merit list across India. It has been a dream to crack the SAU entrance and study development economics there. And I made it!

Sir, I am writing this whole story in detail to convey how huge this has been for me. I can not thank you and Prof. Cowen more. I referred to plenty of resources on the internet, but MRU as starter was exceptional and saviour for me! Without MRU, I may have struggled and who knows I could have given up to the subject which was alien to me.

Thank you sooooo much sir!

Look forward to meeting you in person in your next India trip! 🙂

Congratulations Amol! Everyone at MRU is thrilled to have helped. We love stories like this.

Here is our Principles of Micro class and Principles of Macro and for instructors here is more information on our textbook, Modern Principles of Economics.

Addendum: Here’s the post about my trip to the Lasalgaon Onion Market which apparently had ripple effects.

Emergent Ventures India, new winners, third Indian cohort

Angad Daryani / Praan

Angad Daryani is 22-year-old social entrepreneur and inventor from Mumbai, and his goal is to find solutions for clean air at a low cost, accessible to all. He received his EV grant to build ultra-low cost, filter-less outdoor air purification systems for deployment in open areas through his startup Praan. Angad’s work was recently covered by the BBC here.

Swasthik Padma

Swasthik Padma is a 19-year-old inventor and researcher. He received his EV grant to develop PLASCRETE, a high-strength composite material made from non-recyclable plastic (post-consumer plastic waste which consists of Multilayer, Film Grade Plastics and Sand) in a device called PLASCREATOR, also developed by Swasthik. The final product serves as a stronger, cost-effective, non-corrosive, and sustainable alternative to concrete and wood as a building material. He is also working on agritech solutions, desalination devices, and low cost solutions to combat climate change.

Ajay Shah

Ajay Shah is an economist, the founder of the LEAP blog, and the coauthor (with Vijay Kelkar) of In Service of the Republic: The Art and Science of Economic Policy, an excellent book, covered by Alex here. He received his EV grant for creating a community of scholars and policymakers to work on vaccine production, distribution, and pricing, and the role of the government and private sector given India’s state capacity.

Meghraj Suthar

Meghraj Suthar, is an entrepreneur, software engineer, and author from Jodhpur. He founded Localites, a global community (6,000 members from more than 130 countries) of travelers and those who like to show around their cities to travelers for free or on an hourly charge. He also writes inspirational fiction. He has published two books: The Dreamers and The Believers and is working on his next book. He received his EV grant to develop his new project Growcify– helping small & medium-sized businesses in smaller Indian cities to go online with their own end-to-end integrated e-commerce app at very affordable pricing.

Jamie Martin/ The Queen’s English 

Jamie Martin and Sandeep Mallareddy founded The Queen’s English to develop a tool to help speak English. Indians who speak English earn 5x more than those who don’t. The Queen’s English provides 300 hours of totally scripted lesson plans on a simple Android app for high quality teaching by allowing anyone who can speak English to teach high quality spoken English lessons using just a mobile phone.

Rubén Poblete-Cazenave

Rubén Poblete-Cazenave is a post-doctoral fellow at the Department of Economics at Erasmus University Rotterdam. His work has focused on studying topics on political economy, development economics and economics of crime, with a particular interest in India. Rubén received his EV grant to study the dynamic effects of lockdowns on criminal activity and police performance in Bihar, and on violence against women in India.

Chandra Bhan Prasad

Chandra Bhan Prasad is an Indian scholar, political commentator, and author of the Bhopal Document, Dalit Phobia: Why Do They Hate Us?, What is Ambedkarism?, Dalit Diary, 1999-2003: Reflections on Apartheid in India, and co-author author (with D Shyam Babu and Devesh Kapur) of Defying the Odds: The Rise of Dalit Entrepreneurs. He is also the founder of the ByDalits.com e-commerce platform and the editor of Dalit Enterprise magazine. He received his EV grant to pursue his research on Dalit capitalism as a movement for self-respect.

Praveen Tiwari

Praveen Tiwari is a rural education entrepreneur in India. At 17, he started Power of Youth to increase education and awareness among rural students in his district. To cope with the Covid lockdown he started the Study Garh with a YouTube channel to provide better quality educational content to rural students in their regional language (Hindi).

Preetham R and Vinayak Vineeth

Preetham R. and Vinayak Vineeth are 17-year-old high-schoolers from Bangalore. Preetham is interested in computing, futurism and space; and Vinayak is thinking about projects ranging from automation to web development. They received their EV grant for a semantic text analysis system based on graph similarity scores. The system (currently called the Knowledge Engine) will be used for perfectly private contextual advertising and will soon be expanded for other uses like better search engines, research tools and improved video streaming experiences. They hope to launch it commercially by the end of 2022.

Shriya Shankar:

Shriya Shankar is a 20-year-old social entrepreneur and computer science engineer from Bangalore and the founder of Project Sitara Foundation, which provides accessible STEM education to children from underserved communities. She received her EV grant to develop an accessible ed-tech series focused on contextualizing mathematics in Kannada to make learning more relatable and inclusive for children.

Baishali Bomjan and Bhuvana Anand

Baishali and Bhuvana are the co-founders of Trayas Foundation, an independent research and policy advisory organization that champions constitutional, social, and market liberalism in India through data-informed public discourse. Their particular focus is on dismantling regulatory bottlenecks to individual opportunity, dignity and freedom. The EV grant will support Trayas’s work for reforms in state labor regulations that ease doing business and further prosperity, and help end legal restrictions placed on women’s employment under India’s labor protection framework to engender economic agency for millions of Indians.

Akash Bhatia and Puru Botla / Infinite Analytics

Infinite Analytics received their first grant for developing the Sherlock platform to help Indian state governments with mobility analysis to combat Covid spread. Their second EV grant is to scale their platform and analyze patterns to understand the spread of the Delta variant in the 2021 Covid wave in India. They will analyze religious congregations, election rallies, crematoria footfalls and regular daily/weekly bazaars, and create capabilities to understand the spread of the virus in every city/town in India.

PS Vishnuprasad

Vishnuprasad is a 21-year-old BS-MS student at IISER Tirupati. He is interested in the intersection of political polarization and network science and focused on the emergence and spread of disinformation and fake news. He is working on the spread of disinformation and propaganda in spaces Indians use to access information on the internet. He received his EV grant to build a tool that tracks cross-platform spread of disinformation and propaganda on social media. He is also interested in the science of cooking and is a stand-up comedian and writer.

Prem Panicker:

Prem Panicker is a journalist, cricket writer, and founding editor of peepli.org, a site dedicated to multimedia long form journalism focused on the environment, man/animal conflict, and development. He received an EV grant to explore India’s 7,400 km coastline, with an emphasis on coastal erosion, environmental degradation, and the consequent loss of lives and livelihoods.

Vaidehi Tandel

Vaidehi Tandel is an urban economist and Lecturer at the Henley Business School in University of Reading. She is interested in understanding the challenges and potential of India’s urban transformation and her EV grant will support her ongoing research on the political economy of urbanization in India. She was part of the team led by Malani that won the EV Covid India prize.

Abhinav Singh

Abhinav recently completed his Masters in the Behavioral and Computational Economics program at Chapman University’s Economic Science Institute. His goal is to make political economy ideas accessible to young Indians, and support those interested in advancing critical thinking over policy questions. He received his EV grant to start Polekon, a platform that will host educational content and organize seminars on key political economy issues and build a community of young thinkers interested in political economy in India.

Bevin A./Contact

CONTACT was founded by two engineers Ann Joys and Bevin A. as a low-cost, voluntary, contact tracing solution. They used RFID tags and readers for consenting individuals to log their locations at various points like shops, hotels, educational institutions, etc. These data are anonymized and analyzed to track mobility and develop better Covid policies, while maintaining user anonymity.

Onkar Singh Batra

Onkar Singh is a 16-year-old developer/researcher and high school student in Jammu. He received his first EV grant for his Covid Care Jammu project. His goal is to develop India’s First Open-Source Satellite, and he is founder of Paradox Sonic Space Research Agency, a non-profit aerospace research organization developing inexpensive and open-source technologies. Onkar received his second EV grant to develop a high efficiency, low cost, nano satellite. Along with EV his project is also supported by an Amateur Radio Digital Communications (ARDC) grant. Onkar has a working engineering model and is developing the final flight model for launch in 2022.

StorySurf

Storysurf, founded by Omkar Sane and Chirag Anand, is based on the idea that stories are the simplest form of wisdom and that developing an ocean of stories is the antidote to social media polarization. They are developing both a network of writers, and a range of stories between 6-300 words in a user-friendly app to encourage people to read narratives. Through their stories, they hope to help more readers consume information and ideas through stories.

Naman Pushp/ Airbound

Airbound is cofounded by its CEO Naman Pushp, a 16 year old high-schooler from Mumbai passionate about engineering and robotics, and COO Faraaz Baig, a 20 year old self-taught programmer and robotics engineers from Bangalore. Airbound aims to make delivery accessible by developing a VTOL drone design that can use small businesses as takeoff/landing locations. They have also created the first blended wing body tail sitter (along with a whole host of other optimizations) to make this kind of drone delivery possible, safe and accessible.

Anup Malani / CMIE / Prabhat Jha

An joint grant to (1) Anup Malani, Professor at the University of Chicago, (2) The Centre for Monitoring Indian Economy (CMIE), and (3) Prabhat Jha, Professor at University of Toronto and the Centre for Global Health Research, to determine the extent to which reported excess deaths in India are due to Covid. Recent studies show that that the pandemic in India may be associated with between 3 million to 4.9 million excess deaths, roughly 8-12 times officially reported number of COVID deaths. To determine how many of these deaths are statistically attributable to Covid, they will conduct verbal autopsies on roughly 20,000 deaths, with the results to be made publicly available.

And finally:

Aditya Dar/The Violence Archive

A joint grant to Aaditya Dar, an economist at Indian School of Business, Kiran Garimella, a computer scientist at Rutgers University and Vasundhara Sirnate, a political scientist and journalist for creating the India Violence Archive. They will use machine learning and natural language processing to develop an open-source historical record of collective public violence in India over 100 years. The goal is to create accessible and high-quality public data so civil society can pursue justice and governments can make better policy.

Those unfamiliar with Emergent Ventures can learn more here and here. EV India announcement here. More about the winners of EV India second cohort here. To apply for EV India, use the EV application click the “Apply Now” button and select India from the “My Project Will Affect” drop-down menu.

Note that EV India is led and run by Shruti Rajagopalan, I thank her for all of her excellent work on this!

Here is Shruti on Twitter, and here is her excellent Ideas of India podcast.  Shruti is herself an earlier Emergent Ventures winner, and while she is very highly rated remains grossly underrated.

Gödel Prize Winners Don’t Cosplay

Tim Roughgarden, a top-notch computer scientist (co-winner of a Gödel Prize), is teaching a class on blockchains. He’s only just begun to put up material but I liked this bit of “hype” from Lecture One.

It’s worth recognizing that we’re currently in a particular moment in time, witnessing a new area of computer science blossom before our eyes in real time. It draws on well-established parts of computer science (e.g., cryptography and distributed systems) and other fields (e.g., game theory and finance), but is developing into a fundamental and interdisciplinary area of science and engineering its own right. Future generations of computer scientists will be jealous of your opportunity to get in on the ground floor of this new area–analogous to getting into the Internet and the Web in the early 1990s. I cannot overstate the opportunities available to someone who masters the material covered in this course–current demand is much, much bigger than supply.

And perhaps this course will also serve as a partial corrective to the misguided coverage and discussion of blockchains in a typical mainstream media article or water cooler conversation, which seems bizarrely stuck in 2013 (focused almost entirely on Bitcoin, its environmental impact, the use case of payments, Silk Road, etc.). An enormous number of people, including a majority of computer science researchers and academics, have yet to grok the modern vision of blockchains: a new computing paradigm that will enable the next incarnation of the Internet and the Web, along with an entirely new generation of applications.

I share Tim’s excitement at the possibilities. Indeed, I had the pleasure of working with Tim advising a blockchain project (sadly killed by the SEC). By the way, Silvio Micali, another winner of the Godel prize, is a prime mover behind the Algorand blockchain.

Addendum: Here’s a perfect example of a mainsteam media article stuck in 2013.

Scott Gottlieb’s Uncontrolled Spread

Scott Gottlieb’s Uncontrolled Spread is superb. I reviewed it for the WSJ. Here’s one bit:

If there’s one overarching theme of “Uncontrolled Spread,” it’s that the Centers for Disease Control and Prevention failed utterly. It’s now well known that the CDC didn’t follow standard operating procedures in its own labs, resulting in contamination and a complete botch of its original SARS-CoV-2 test. The agency’s failure put us weeks behind and took the South Korea option of suppressing the virus off the table. But the blunder was much deeper and more systematic than a botched test. The CDC never had a plan for widespread testing, which in any scenario could only be achieved by bringing in the big, private labs.

Instead of working with the commercial labs, the CDC went out of its way to impede them from developing and deploying their own tests. The CDC wouldn’t share its virus samples with commercial labs, slowing down test development. “The agency didn’t view it as a part of its mission to assist these labs.” Dr. Gottlieb writes. As a result, “It would be weeks before commercial manufacturers could get access to the samples they needed, and they’d mostly have to go around the CDC. One large commercial lab would obtain samples from a subsidiary in South Korea.”

At times the CDC seemed more interested in its own “intellectual property” than in saving lives. In a jaw-dropping section, Dr. Gottlieb writes that “companies seeking to make the test kits described extended negotiations with the CDC that stretched for weeks as the agency made sure that the contracts protected its inventions.” When every day of delay could mean thousands of lives lost down the line, the CDC was dickering over test royalties.

In the early months of the pandemic the CDC impeded private firms from developing their own tests and demanded that all testing be run through its labs even as its own test failed miserably and its own labs had no hope of scaling up to deal with the levels of testing needed. Moreover, the author notes, because its own labs couldn’t scale, the CDC played down the necessity of widespread testing and took “deliberate steps to enforce guidelines that would make sure it didn’t receive more samples than its single lab could handle.”

Read the whole thing.

Addendum: My previous reviews of Michael Lewis’s The Premonition, Slavitt’s Preventable and Abutaleb and Paletta’s Nightmare Scenario.

Covid and intertemporal substitution

That is the topic of my latest Bloomberg column, here is one bit:

Before the vaccines came along, it made great sense to enforce masking norms. If infections could be shifted into the future, an eventually vaccinated citizenry would be much better protected.

There is a less obvious corollary: Those same mask norms make less sense when large numbers of people are vaccinated. Masking still will push infections further into the future, but if the vaccines become marginally less effective over time, as some data suggest, people may be slightly worse off later on (they’ll also be a bit older). The upshot is that the case for masking is less strong, even if you still think it is a good idea overall.

Still, many people prefer to abide by fixed rules and principles. Once they learn them and lecture others about them, they are unlikely to change their minds. “Masking is good!” is a simple precept. “Exactly how good masking is depends on how much safer the near future will be!” is not. Yet the latter statement is how the economist is trained to think.

And this:

Some of the consequences of intertemporal substitution are a bit ghastly, and you won’t find many people willing to even talk about them.

For example: Say you are immunocompromised, and you either can’t or won’t get vaccinated. You might be justly mad about all the unvaccinated knuckleheads running around, getting Covid, and possibly infecting you. At the same time, you wish to minimize your required degree of intertemporal substitution.

So if you are (perhaps correctly) afraid to go out very much, you are better off if those same knuckleheads acquire natural immunity more quickly. Yes, it would be better if they got vaccinated. But barring that, a quick pandemic may be easier for you to manage than a long, drawn-out pandemic, which would require heroic amounts of intertemporal substitution.

Recommended.  And yes there is a “don’t overload your health system” qualifier (most of the U.S. is OK on this front right now), which I’ve written about multiple times including as early as January 2020.

Operation Warp Speed: A Story Yet to be Told

Operation Warp Speed was by far the most successful government program against COVID. But as of yet there is very little discussion or history of the program. As just an indication I looked for references in a bunch of pandemic books to General Perna who co-led OWS with Moncef Slaoui. Michael Lewis in The Premonition never mentions Perna. Neither does Slavitt in Preventable. Nor does Wright in The Plague Year. Nor does Gottlieb in Uncontrolled Spread. Abutaleb and Paletta in Nightmare Scenario have just two index entries for Perna basically just stating his appointment and meeting with Trump.

Yet there are many questions to be asked about OWS. Who wrote the contracts? Who chose the vaccines? Who found the money? Who ran the day to day operation? Why was the state and local rollout so slow and uneven? How was the DPA used? Who lifted the regulations? How was the FDA convinced to go fast?

I don’t know the answer to these questions. I suspect when it is all written down, Richard Danzig will be seen as an important behind the scenes player in the early stages (I was involved with some meetings with him as part of the Kremer team). Grogan at the DPC seems under-recognized. Peter Marks at the FDA was likely extremely important in getting the FDA to run with the program. Marks brought people like Janet Woodcock from the FDA to OWS so you had a nominally independent group but one completely familiar with FDA policy and staff and that was probably critical. And of course Slaoui and Perna were important leaders and communicators with the private sector and the logistics group but they have yet to be seriously debriefed.

It’s also time for a revisionist account of President Trump’s Council of Economic Advisors. Michael Kremer and I spoke to the DPC and the CEA early on in the pandemic and argued for a program similar to what would later be called OWS. The CEA, however, was way ahead of the game. In Sept of 2019 (yes, 2019!) the CEA produced a report titled Mitigating the Impact of Pandemic Influenza through Vaccine Innovation. The report calculates the immense potential cost of a pandemic and how a private-public partnership could mitigate these costs–all of this before anyone had heard the term COVID. Nor did that happen by accident. Thomas Philipson, the CEA chair, had made his reputation in the field of economic epidemiology, incorporating incentives and behavioral analysis in epidemiological models to understand HIV and the spread of other infectious diseases. Eric Sun, another CEA economist, had also written with Philipson about the FDA and its problems. Casey Mulligan was another CEA chief economist who understand the danger of pandemics and was influenced by Sam Peltzman on the costs of FDA delay. So the CEA was well prepared for the pandemic and I suspect they gave Trump very good advice on starting Operation Warp Speed.

In short, someone deserves credit for a multi-trillion-dollar saving government program! More importantly, we know a lot about CDC and FDA failure but in order to know what we should build upon we also need to know what worked. OWS worked. We need a history of how and why.

The Ig Nobel Prizes

img-z2-1_357.jpgThe Ig Nobel Prize in Economics this year went to Pavlo Blavatskyy for Obesity of politicians and corruption in post-Soviet countries:

We collected 299 frontal face images of 2017 cabinet ministers from 15 post-Soviet states (Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan). For each image, the minister’s body-mass index is estimated using a computer vision algorithm. The median estimated body-mass index of cabinet ministers is highly correlated with conventional measures of corruption (Transparency International Corruption Perceptions Index, World Bank worldwide governance indicator Control of Corruption, Index of Public Integrity). This result suggests that physical characteristics of politicians such as their body-mass index can be used as proxy variables for political corruption when the latter are not available, for instance at a very local level.

The Transportation prize went to researchers led by Cornell University’s Robin W. Radcliffe for determining that it is safe to transport an airborne rhinoceros upside down.

Other prizes here.

You may laugh but don’t forget that the great Andre Geim won an Ig Nobel prize in 2000 for levitating a frog and then won a Nobel prize in 2010 for graphene. I consider this one of the greatest accomplishments in all of science.

Photo Credit: Journal of Wildlife Diseases.

My appearance on the Ezra Klein Show

Talking with Ezra is always both fun and enlightening for me, here is his partial summary of the episode:

So we begin this conversation by discussing the case for and against economic growth, but we also get into lots of other things: why Cowen thinks the great stagnation in technology is coming to an end; the future of technologies like A.I., crypto, fourth-generation nuclear and the Chinese system of government; the problems in how we fund scientific research; what the right has done to make government both ineffective and larger; why Cowen is skeptical of universal pre-K (and why I’m not); whether I overestimate the dangers of polarization; the ways in which we’re getting weirder; the long-term future of human civilization; why reading is overrated and travel is underrated; how to appreciate classical music and much more.

Here is the link, full transcript here, definitely recommended!

Secret Danish markets in everything

Denmark has paid the UK an undisclosed sum to accept 23 Afghan refugees who worked as interpreters for the Danish state for eight years.

According to a report by Swedish broadsheet Svenska Dagbladet, the interpreters were granted a residence permit in the UK after twelve of them had their visa applications to Denmark rejected and eleven wanted to travel to the UK themselves.

Even though the interpreters were technically employed by the British military, they worked for the Danes, wearing Danish uniform and received a Danish salary.

The amount — paid for in secret by the Danish state — has been calculated according to what it would cost the British to evacuate the interpreters, integrate them into society and pay social costs for five years. The payment has been confirmed by the Danish Ministry of Defence to SvD.

Here is the full story.

My Conversation with Ed Glaeser

I did David Cutler and Ed sequentially, based on their new co-authored book, here is the joint episode but there is also a separate link concerning Cutler.  Here is one excerpt from the general summary:

They joined Tyler for a special joint episode to discuss why healthcare outcomes are so correlated with education, whether the health value of Google is positive or negative, why hospital price transparency is so difficult to achieve, how insurance coding systems reimburse sickness over health improvement, why the U.S. quit smoking before Europe, the best place in America to get sick, the risks that come from over-treatment, the possible upsides of more businesses moving out of cities, whether productivity gains from remote work will remain high, why the older parts of cities always seem to be more beautiful, whether urban schools will ever improve, why we shouldn’t view Rio de Janeiro’s favelas as a failure, how 19th century fights to deal with contagious diseases became a turning point for governance, Miami’s prospects as the next tech hub, what David and Ed disagree on, and more.

And from my exchange with Ed:

COWEN: Let’s start with a simple question. All this enthusiasm about cities and agglomeration benefits — the pandemic comes along. A lot of people transition to work from a distance, and then we see big measured productivity gains. What has gone on there?

GLAESER: It reminds us that for many jobs, in a static sense, you can do this long-distance. You can make things work. I think many of us found this. We wrote this book in eight months over the pandemic year, distinctly away from each other, partially because there were no distractions, and all that was good.

However, you also need to recognize the limits of long-distance living. The most important of those limits is just it’s much less fun. It’s much less joyful, but while it seems as if it’s fine for static productivity, it seems distinctly more problematic for people learning and for onboarding new talent.

Let me just give you two types of studies, one of which is we have the call center studies. The father of that was the Nick Bloom paper, which was a randomized control trial in China. A more modern version is done by our students, Natalia Emanuel and Emma Harrington, which looks into American call centers.

Both of them find the same thing in terms of static productivity. If anything, it goes up, but the workers who go remote are much less likely to be promoted in both studies. One interpretation of this is that promotion in the call center work means that you actually are given the job of handling more difficult calls.

How would your boss know that you are good at handling difficult calls if they weren’t in the same room with you? How would you learn how to do those difficult calls if you weren’t around other people? So while the static productivity remains, you lose the dynamic benefits of being around other people.

Second piece of evidence it comes from Burning Glass Technologies and new hires. Even though Microsoft tells us that its programmers were just as productive, overall, new hires for programmers were down 42 percent between November 2019 and November 2020. Firms were clearly unwilling to take the same kind of risks of hiring new workers that they couldn’t inculcate in their corporate culture or screen them properly, or do any of those other things.

Even though measured productivity did well during the pandemic, there were still lots of disruptions. In particular, many younger workers who came of age really lost out as a result of this.

COWEN: If work from a distance goes fine in the short run, what’s the cross-sectional prediction about where it will persist in the future? Is it firms facing bankruptcy, firms with immediate projects now, possibly start-ups who will then later transition to all being together in one big happy family, but they’re afraid they’re going to fail before then? What should we expect?

GLAESER: I think we should expect young workers to be more likely to be brought together. Young firms, as well, because you’re very much at this learning, creative phase. I think the optimal work-from-home strategy is a couple of partners who are in an accounting practice and have decided they know each other perfectly well and are delighted to Zoom it in from wherever they are.

I think, unquestionably, working from home will remain a part of the economy. It may well be many workers end up spending 20 percent of their time working from home, even if they’re part of a generally full-time job. But for younger workers, for firms that are just getting started, I think being live is likely to continue being a major part of the work environment.

It also depends a lot on what your home environment is like. If you’re like us —  if you are a middle-aged professor who’s likely to have a comfortable home office, and maybe even not having kids at home anymore, certainly not kids who are crying all the time at home anymore — working at home is a lot more pleasant than if you’re a 23-year-old and live in a studio apartment in Somerville or New York or London.

Recommended!

My Conversation with David Cutler

I did Cutler and Ed Glaeser sequentially, based on their new co-authored book, here is the joint episode but I will create another link concerning Glazer.  Here is one excerpt from the general summary:

They joined Tyler for a special joint episode to discuss why healthcare outcomes are so correlated with education, whether the health value of Google is positive or negative, why hospital price transparency is so difficult to achieve, how insurance coding systems reimburse sickness over health improvement, why the U.S. quit smoking before Europe, the best place in America to get sick, the risks that come from over-treatment, the possible upsides of more businesses moving out of cities, whether productivity gains from remote work will remain high, why the older parts of cities always seem to be more beautiful, whether urban schools will ever improve, why we shouldn’t view Rio de Janeiro’s favelas as a failure, how 19th century fights to deal with contagious diseases became a turning point for governance, Miami’s prospects as the next tech hub, what David and Ed disagree on, and more.

And from David:

COWEN: But even if we adjust for that, education seems to matter a lot. It’s also puzzling to me — in your own work, it matters more at younger ages. You would think the returns are cumulative: it would really pay off when you’re 67 because you’ve invested in a stock portfolio for decades, but it matters most when you’re young. What’s your best micro account of that?

CUTLER: One of the things that’s super interesting is that, for example, people who live in cities — where there are more better-educated people — smoke less, even conditional on your own education. The same thing is true about age and so on.

I think it’s partly that cities and areas are run by upper-middle-class folks often. For example, the environment is set up in a way that’s more conducive to health when you have more upper-middle-income people. It’s much more difficult to smoke. There are healthier behaviors in general. There are parks and things like that. I think part of it is just that society is shaped by higher-income, higher-SES people, and that can be good for everyone who lives around those areas.

COWEN: To the extent education makes you healthier by lowering your stress and raising your relative status — which is a possible hypothesis — what are the policy implications of that? What should we do?

CUTLER: Part of what we’re learning over time is that social insurance programs are actually having a bigger and more sustained effect on health than we had thought they did. For example, we’ve always thought of Medicare and Medicaid as being the primary social insurance programs that affect health, but then there’s research that the WIC program — Women, Infants, and Children — affects health, that food stamp programs affect health, that TANF benefits affect health, that housing policies can affect health.

COWEN: And you think that’s through lowering stress as one mechanism?

Recommended!

Strategic Citing

Amir Rubin and Eran Rubin have a clever new paper in the JPE on strategic citations (SSRN). In order to obtain publications in top-tiered journals, get invited to conferences, become a reference and so forth:

…authors may cite top-tier journals as a way to enhance their relationships with those journals.They may further consider the preferences of top-tier journals’ referees for such citations. Typically, these referees serve more than one top-tier journal, which they potentially even more appreciate as quality signals and whose top-tier status they wish to preserve by receiving citations. Consequently, authors may consider the expected positive impact of top-tier journal citations in satisfying referees.

Rubin and Rubin have a unique test of this behavior. For administrative reasons, the Journal of Business, a top journal in finance, stopped publication in 2006. Thus, after 2006, there were fewer strategic reasons to cite JOB papers even though the scientific reasons to cite these papers remained constant. The authors test this by matching articles in the JOB with articles in similar journals published in the same year and having the same number of citations in the two years following publication–thus they match on similar articles with a similar citation trajectory. What they find is that post-2006 the citation count of the JOB articles falls substantially off the expected trajectory. The figure below illustrates.

The finding is robust to controlling for self-citations, own-journal citations, and a variety of other possibilities. The authors also show that deceased authors get fewer citations than matched living authors. For example, living Nobel prize winners get more citations than dead ones even when they were awarded the prize jointly.

Rubin and Rubin suggest this bias might be correctable with more metadata on citations. Negative citations, for example, can be very informative about the development of a scientific field. I am not sure the problem is big enough to worry about but I was impressed by how much strategic behavior can be uncovered by clever data analysis. I was also convinced I should be more strategic in my citations.

Organic Disaster

Sri Lanka’s President abruptly banned chemical fertilizers earlier this year in a bid to become 100% organic. The ban has resulted in reduced production and soaring prices that, together with declining tourism and the pandemic, have created an economic crisis.

According to major Sri Lankan tea conglomerate Herman Gunaratne, one of 46 experts picked by President Rajapaksa to spearhead the organic shift, the move’s consequences for the country are unimaginable.

“The ban has drawn the tea industry into complete disarray… If we go completely organic, we will lose 50 per cent of the crop, (but) we are not going to get 50 per cent higher prices,” he reportedly said.

…Former central bank deputy governor W.A. Wijewardena reportedly termed the organic plan as a “dream with unimaginable social, political and economic costs”. He said Sri Lanka’s food security had been “compromised” and without foreign currency, it’s “worsening day by day”.

An island-wide survey of farmers found out that 90 per cent use chemicals for farming and 85 per cent expected sizable reductions in their harvest if disallowed to use fertilisers. Moreover, the survey said that only 20 per cent farmers had the knowledge to transition to completely organic production.

It also found that 44 per cent farmers are experiencing a decline in harvests, and 85 per cent are expecting a fall in the future.

The survey also revealed that many key crops in Sri Lanka depend on heavy use of chemical input for cultivation, with the highest dependency in paddy at 94 per cent, followed by tea and rubber at 89 per cent each.

With the shift from chemical to organic cultivation, Sri Lanka needs a large domestic production of organic fertilisers and biofertilisers. However, the situation is very bleak.

The government has responded to the soaring prices not by reversing its decree but in the usual way by imposing price controls, attacking “hoarders” and seizing stocks of agricultural commodities like sugar.

Organic farming has its place but it takes a lot of human capital to make it work and overall it results in lower yield and thus more land used. Nor is organic farming less polluting per unit of output. See this piece from the Annual Review of Resource Economics.

Organic agriculture is often perceived as more sustainable than conventional farming. We review the literature on this topic from a global perspective. In terms of environmental and climate change effects, organic farming is less polluting than conventional farming when measured per unit of land but not when measured per unit of output. Organic farming, which currently accounts for only 1% of global agricultural land, is lower yielding on average. Due to higher knowledge requirements, observed yield gaps might further increase if a larger number of farmers would switch to organic practices. Widespread upscaling of organic agriculture would cause additional loss of natural habitats and also entail output price increases, making food less affordable for poor consumers in developing countries. Organic farming is not the paradigm for sustainable agriculture and food security, but smart combinations of organic and conventional methods could contribute toward sustainable productivity increases in global agriculture.

Gaming is coming to get us

That is the theme of my latest Bloomberg column, the first part concerns culture, but here is the section on government regulation:

The self-contained nature of games also means they will be breaking down government regulation. Plenty of trading already takes place in games — involving currencies, markets, prices and contracts. Game creators and players set and enforce the rules, and it is harder for government regulators to play a central role.

The lesson is clear: If you wish to create a new economic institution, put it inside a game. Or how about an app that gamifies share trading? Do you wish to experiment with a new kind of stock exchange or security outside the purview of traditional government regulation? Try the world of gaming, perhaps combined with crypto, and eventually your “game” just might influence events in the real world.

To date the regulators have tried to be strict. It is currently difficult to build fully realized new worlds without creating something that is legally defined as an unregistered security. Those regulations don’t receive a lot of attention from the mainstream media, but they are rapidly becoming some of the most significant and restrictive rules on the books.

At the same time, regulators are already falling behind. Just as gaming has outraced the world of culture, so will gaming outrace U.S. regulatory capabilities, for a variety of reasons: encryption, the use of cryptocurrency, the difficulties of policing virtual realities, varying rules in foreign jurisdictions and, not incidentally, a lack of expertise among U.S. regulators. (At least the Chinese government’s attempt to restrict youth gaming to three hours a week, while foolhardy, reflects a perceptive cultural conservatism.)

Both the culture-weakening and the regulation-weakening features of games follow from their one basic characteristic: They are self-contained worlds. Until now, human institutions and structures have depended on relatively open and overlapping networks of ideas. Gaming is carving up and privatizing those spaces. This shift is the big trend that hardly anyone — outside of gaming and crypto — is noticing.

If the much-heralded “metaverse” ever arrives, gaming will swallow many more institutions, or create countervailing versions of them. Whether or not you belong to the world of gaming, it is coming for your worlds. I hope you are ready.

And the piece has a good footnote on how gaming relates to postmodernism.