Category: Economics
The rise and decline of Wikipedia?
Halfaker, Geiger, Morgan, and Riedl have a new paper on this topic (pdf), here is the abstract:
Open collaboration systems like Wikipedia need to maintain a pool of volunteer contributors in order to remain relevant. Wikipedia was created through a tremendous number of contributions by millions of contributors. However, recent research has shown that the number of active contributors in Wikipedia has been declining steadily for years, and suggests that a sharp decline in the retention of newcomers is the cause. This paper presents data that show that several changes the Wikipedia community made to manage quality and consistency in the face of a massive growth in participation have ironically crippled the very growth they were designed to manage. Specifically, the restrictiveness of the encyclopedia’s primary quality control mechanism and the algorithmic tools used to reject contributions are implicated as key causes of decreased newcomer retention. Further, the community’s formal mechanisms for norm articulation are shown to have calcified against changes – especially changes proposed by newer editors.
This is an interesting paper, but I think it undervalues the hypothesis that potential contributors simply prefer to be in on things which are both new and cool. Wikipedia, which is no longer new, cannot be so cool. That is why Beethoven’s 5th does not top the pop charts, though if it were new it might.
For the pointer I thank David Siegel.
Do Juvenile Curfews Increase Crime?
Washington, DC has a juvenile curfew law. Anyone “under the age of 17 cannot remain in or on a street, park or other outdoor public place, in a vehicle or on the premises of any establishment within the District of Columbia during curfew hours.” (There are exemptions for juveniles accompanied by a parent and for travel for jobs (no detours allowed.))
Curfew laws keep some juveniles off the streets during curfew hours but which ones? The criminals seem the least likely to be deterred and with fewer people on the street perhaps the criminals are emboldened.
The DC curfew switches from midnight to 11 pm on Sept 1 of every year. In a working paper, Jennifer L. Doleac and Jillian Carr test the effect of DCs juvenile curfew on gun violence by looking at the number of gunshots heard in the 11pm to midnight “switching hour” just before and just after Sept 1. From a summary:
…the September 1 change provides a clean natural experiment. If curfews reduce gun violence, then when the curfew shifts to 11:00 p.m. rather than midnight, gunfire between 11:00 p.m. and midnight should go down. Does it?
Just the opposite. Using data on gunfire incidents from ShotSpotter (acoustic gunshot sensors that cover the most violent neighborhoods in D.C.), we find that after the curfew switches from midnight to 11:00 p.m., the number of gunshot incidents increases by 150 percent during the 11:00 p.m. hour. This amounts to 7 additional gunfire incidents city-wide per week, during that hour alone. Jane Jacobs was right: the deterrent effect of having lots of people out on the streets is powerful. This makes juvenile curfew policies counter-productive.
The use of ShotSpotter data is innovative and avoids some problems with issues of police enforcement. Calls to 911, however, don’t show the same pattern as the ShotSpotter data which is worrying.
I’d also like to see more information on the proposed mechanism. Is it really the case that significantly fewer people are out on the streets at say 11:30 pm after the curfew has been lowered to 11pm than when the curfew was set at midnight? The curfew only directly affects people under 17 and, as noted above, there are quite a few exemptions. Also what are the ages of those typically arrested on the basis of ShotSpotter alerts?
By the way, on a typical day in DC there are almost 15 gunfire incidents heard by ShotSpotter (data here, the authors report 8 but that may be from a restricted sample). A lot of gunfire is heard around a handful of schools. The ShotSpotter system is quite accurate. Although it misses some shots it distinguishes shots from car backfires better than people do. I also found this note from the Washington Post amusing in a frightening way:
About a third of detected gunshot incidents in the city happen on New Year’s Eve or around July 4. Officials explain the high rate as celebratory gunfire.
Spite
This is from Eliana Zeballos, who is on the job market this year from UC Davis and appears to be a very interesting candidate. Here is part of the abstract of her job market paper (pdf):
The experimental games were conducted in Bolivia among285 dairy farmers. Results show that when participants were presented with their ranking and the earnings of others in their group, those below the group mean increased their effort whereas those above the group mean decreased their effort. When destructive actions were allowed, 55 percent of the participants were willing to forego own-consumption in order to burn others’ output; 58 percent were victims of destructive actions and lost, on average, a third of their earnings. There is an asymmetry in the direction of destruction: almost all of the highest earners suffered some destruction while only a quarter of the lowest earners were victims of destructive actions. Finally, the threat of destructive actions reduced the highest earning participants’ effort by 5.8 percent.
For the pointer I thank Ben Southwood.
NinjaEconomics on Tinder (from the comments)
I’m not convinced women who are on Tinder who say “no hookups” actually mean that.
First of all, Tinder is for young people and young women don’t have a hard time meeting men in real life. So, for someone to go to a place that is known to be where casual sex seekers meet and announce THEY aren’t at all interested in casual sex seems fishy. If I’m not in the market to buy shag carpeting that’s full of vomit and fleas, I don’t go shopping at the used carpet store that specializes in shag carpeting that’s full of vomit and fleas. I certainly don’t go there and ask where I can find silk hand-knotted rugs from Central Persia for basically the same price and get offended when I’m offered vomit and fleas.
More likely, these women are interested in hooking up (or at least open to some opportunities of it happening) but don’t want their friends and colleagues knowing this should someone come across their profile, so like the Playboy readers who buy the magazine for the articles, these women are on Tinder “just for the lulz.”
Which brings me to my second point: Despite their loud claims, women are not on Tinder to find their husbands. Getting married is easy. It is so easy that almost anyone can do it! Very unattractive, very poor, mentally unstable people can do it. Now, you might not be able to marry someone who meets all the required characteristics but if Tinder women were sincere in husband-hunting, rather than just stating “no hookups”, which is spectacularly unhelpful, they’d actually list their requirements in order to speed up the process.
And, if the internet (and online dating in particular) is so hostile to women, why would any reasonable woman who has above-average chances of meeting someone in traditional ways subject herself to unbearable and avoidable sexual harassment online? If she’ll assume the risk of verbal abuse from potential suitors, she must be very motivated to meet someone using this platform and I doubt she will be in the top 5-10% of all available women (or perhaps she’s more resilient and online interactions are not emotionally harmful to her). So compared to the top 5-10% of the men she’s vying for (attractive, educated, marriage-minded men in their 20s are quite rare), she won’t have the upper hand, so making brusque dismissals right out of the gate just seems more like an attempt to demonstrate dominance. The point is, the women who really don’t want to hook up aren’t on Tinder and the ones who do say that on Tinder aren’t being honest.
That is from NinjaEconomics, the original post is here.
How to fix restrictions on building
Stephen Smith, a well-known urban blogger, writes in the comments to Interfluidity:
Finally, I think you’re not giving us enough credit for thinking through the political challenges to urban land use deregulation. I’m well aware of the entrenched interests opposing it, and the most promising solution I’ve seen is to shift the level of governance upwards. Washington and Oregon have much stronger state-level planning laws than California, and permit about twice as much housing as a result, with much lower urban housing prices. Ontario also has strong provincial planning, and Toronto has a torrential housing stock growth rate and very low housing prices compared to similar US cities. And in Japan, the central government has a huge hand in land use regulation and localities are relatively powerless, and Japan is literally the market urbanist promised land, which a mind-blowing housing stock growth rate in Tokyo, to the point where their private railroads are profitable and one is able to undertake an incredible capital expansion project, practically without subsidies.
The pointer is from Reihan. And here is a story from my own northern Virginia: “The century-old congregation decided to sell its building, parking lot and grounds to the Arlington Partnership for Affordable Housing, which will tear down the stone structure and replace it with 173 affordable apartments.” Bravo.
The Top Ten MR Posts of 2015
Here are the top ten MR posts from 2015, mostly as measured by page views. The number one viewed post was:
- Apple Should Buy a University. People really like to talk about Apple and this post was picked up all over the web, most notably at Reddit where it received over 2500 comments.
Next most highly viewed were my post(s) on the California water shortage.
2. The Economics of California’s Water Shortage followed closely 4) by The Misallocation of Water.
3. Our guest blogger Ramez Naam earned the number 3 spot with his excellent post on Crispr, Genetically Engineering Humans Isn’t So Scary.
5. My post explaining why Martin Shkreli was able to jack up the price of Daraprim and how this argued in favor of drug reciprocity was timely and got attention: Daraprim Generic Drug Regulation and Pharmaceutical Price-Jacking
6. What was Gary Becker’s Biggest Mistake? generated lots of views and discussion.
7. Tyler’s post Bully for Ben Carson provided plenty of fodder for argument.
8. The Effect of Police Body Cameras–they work and should be mandatory.
9. Do workers benefit when laws require that employers provide them with benefits? I discussed the economics in The Happy Meal Fallacy.
10. Finally, Tyler discussed What Economic Theories are Especially Misunderstood.
Posts on immigration tend to get the most comments. The Case for Getting Rid of Borders generated over 700 comments here and over 1700 comments and 57 thousand likes at The Atlantic where the longer article appeared.
Other highly viewed posts included two questions, Is it Worse if foreigners kill us? from Tyler and Should we Care if the Human Race Goes Extinct? from myself.
The Ferguson Kleptocracy and Tyler’s posts, Greece and Syriza lost the public relations battle and a Simple Primer for Understanding China’s downturn (see also Tyler’s excellent video on this topic) were also highly viewed.
I would also point to Tyler’s best of lists as worthy of review including Best Fiction of 2015, Best Non-Fiction of 2015 and Best Movies of 2015. You can also see Tyler’s book recommendations from previous years here.
Guyana fact of the day
Exxon Mobil, under contract from the Guyanese government, announced the discovery of vast amounts of oil in the disputed Essequibo region. The finding could be worth more than 10 times Guyana’s current economic output.
The story is here.
What happens if you expand higher education?
This is based on Italian data from the 1960s:
However, I also find that those induced to enroll earned no more than students in earlier cohorts who were denied access to university. I reconcile these surprising results by showing that the education expansion reduced returns to skill and lowered university learning through congestion and peer effects. I also demonstrate that apparently inframarginal students were significantly affected: the most able of them abandoned STEM majors rather than accept lower returns and lower human capital.
Uh-oh. The good news, however, is that the children of these individuals seem to have ended up in higher-paying jobs.
That is from Nicola Bianchi (pdf), he is now at Northwestern. For the pointer I thank Robin Gaster.
How much does assortative mating matter for income inequality?
The astute Kurt Mitman noted that Greenwood, et.al. issued a later corrective (pdf) to their earlier 2014 AER piece (ungated here), and therefore their estimates in that piece (which I very recently cited) contain no real information. I apologize for having cited the piece, as I was not aware of the later correction.
It would be incorrect to conclude, however, that assortative mating has no connection to income inequality. Some of the other evidence for that connection is cited in my piece, but more specifically Greenwood et. al. have since revised their own revision (pdf), and produced a more integrated model. A gated version of this piece was just published in American Economic Journal: Macroeconomics this last week.
In the integrated model, the focus is on family and labor supply decisions more generally. For instance, let’s say a couple keeps its income up by not divorcing: is that “no divorce” or rather “assortative mating” which is contributing to income inequality? After all, high income, high education, well-paired couples do divorce a lot less, so that may be a semantic distinction from a causal point of view. The authors suggest that their integrated family model explains about a third of the rise in income inequality from 1960-2005 (see for instance p.46, with a summary of their overall approach and results starting on p.47), and assortative mating is very much a part of their bigger-picture story.
A Bitcoin Magic Trick
I love this scene from Digital Gold, Nathaniel Popper’s entertaining book on the history of and people behind Bitcoin. Wences Casares, a successful internet entrepreneur and Bitcoin enthusiast, is at a party of millionaires and billionaires and he wants to impress the crowd:
To prove how easy this all was, Wences asked Blodget to take out his phone and helped him to create an empty Bitcoin wallet. Once it was up, and Wences had Blodget’s new Bitcoin address, Wences used the wallet on his own phone to send Blodget $250,000..the money was then passed to the phones of other people around the table once they had set up wallets. Anyone could have run off with Wences’s $250,000, but that wasn’t a risk with this particular crowd. Instead, as the money went around, Wences saw the guests’ laughter and wide-eyed amazement at what they were watching.
Wences is something of a character. Russ Roberts did a good interview with him on EconTalk.
Do Tinder and related services increase assortative mating?
Under one model, Tinder teaches you the joys of tussling with those from “the other side of the tracks,” and pulls you away from marrying a fellow Ph.d. — “once you’ve tried Mack, you’ll never go back.”
My intuition differs. You use Tinder in bars, venues, and neighborhoods you have chosen. So you end up tussling with, or mating with, or just chatting with, the more attractive members of your own preferred socioeconomic group. If your group wasn’t on average so sexy to begin with, well at least at the top end it just got a big upgrade in terms of your actual access to attractiveness. So on net the high socioeconomic groups become sexier, at least for those “at the top” with the most choice.
(I am assuming by the way that male photos can to some extent signal status, income, and education, and not just looks; furthermore the male follow-up can demonstrate this readily. And many “connection” services post this information in one form or another as part of the profile. If need be, in general equilibrium bars can adjust their exclusiveness levels to match better to a world-with-Tinder, so that bar patrons are not lured into socioeconomically mistaken “honey pot” marriages.)
Most of all, Tinder gets you out more. You sample more people, even if you don’t end up meeting them through the Tinder app itself. Going to a bar or public space is a better way to spend time than before, and that draws others out too. That’s right, “thick market externalities.” The resulting extra meetings tend to favor assortative mating, just compare such plenitude to a corner solution where you meet only one potential spouse your entire life, namely the proverbial girl next door.
Put it this way: George Clooney or a Silicon Valley billionaire can do better — especially better, compared to others — choosing from 500 people than from five. He (she) has a very good chance of getting his (her) absolute top favorite pick, or close to it. The local milkman also does better from a larger sample size, if only because of match and compatibility issues, but can’t expect to move up so much and of course the pool as a whole can’t “move up” at all. (If you wish, break this down into a positive-sum compatibility component and a competitive zero-sum component; unlike Clooney the milkman may not gain on the latter.)
Finally, Tinder may make it easier for married people to find casual sex, again if they have the right qualifications. Therefore those marrieds may, earlier on, decide to choose a spouse on the grounds of IQ and education, again boosting assortative mating in terms of those features.
In sum, I expect Tinder to boost assortative mating, at least at the top end of the distribution in terms of IQ and education.
And please note, I suspect this increase in assortative mating is a good thing. The abilities of top achievers have a disproportionate impact on the quality of our lives, due to innovation being a public good.
In any case, file under speculative.
Addendum: An interesting twist on the model is to assume that men have some willingness to marry down in terms of education, in return for beauty or other forms of household production, but women do not. An increase in the total sampling of potential partners therefore boosts the marriage prospects of very beautiful women, at the expense of less beautiful women of a given level of educational attainment. In percentage terms, very beautiful women of decent but not extraordinary educational achievement gain the most. Men who are indifferent to such forms of female beauty end up with the smartest children.
Second addendum: Yesterday brought an ongoing twitter exchange on these issues, you might start with tweets by @ninjaeconomics and @modestproposal.
Sweden fact of the day
Bills and coins now represent just 2 percent of Sweden’s economy, compared with 7.7 percent in the United States and 10 percent in the euro area. This year, only about 20 percent of all consumer payments in Sweden have been made in cash, compared with an average of 75 percent in the rest of the world, according to Euromonitor International.
Cards are still king in Sweden — with nearly 2.4 billion credit and debit transactions in 2013, compared with 213 million 15 years earlier. But even plastic is facing competition, as a rising number of Swedes use apps for everyday commerce.
At more than half of the branches of the country’s biggest banks, including SEB, Swedbank, Nordea Bank and others, no cash is kept on hand, nor are cash deposits accepted. They say they are saving a significant amount on security by removing the incentive for bank robberies.
Here is the full NYT story by Liz Alderman.
The marriages of power couples reinforce economic inequality
That is my latest Upshot column for the NYT, here is an excerpt:
Of all the causes behind growing income inequality, in the longer run this development may prove one of the most significant and also one of the hardest to counter.
For instance, the achievement gap between children from rich and poor families is higher today than it was 25 years ago, according to a recent study from the Pew Research Center. Furthermore, higher income and educational inequality increase the incentive to seek out a good marriage match, so the process may become self-reinforcing.
…The numbers show that assortative mating really matters. One study indicated that if the marriage patterns of 1960 were imported into 2005, the Gini coefficient for the American economy — the standard measure of income inequality — would fall to 0.34 from 0.43, a considerable drop, given that the scale runs from zero to one…
A study of Denmark by Gustaf Bruze…showed that about half of the expected financial gain of attending college derived not from better job prospects but from the chance to meet and marry a higher-earning spouse.
…a recent paper by Robert D. Mare, a professor of sociology at the University of California, Los Angeles, showed that assortative mating was relatively more common in America’s Gilded Age, fell and reached a much lower level in the 1950s, and afterward started and continued to rise.
The G.I. Bill may have helped lower assortative mating, because it gave opportunities for upward mobility to economic classes that had not enjoyed it. In general, the greater the number of men entering the middle class, the more socioeconomic mixing will occur.
In 1950 it was also the case that marriage ages were especially young, meaning that couples often paired off from high school and may have had less of a sense how to match to each other by expected income or education. And most women had fewer chances to earn very much, so few if any men were searching hard to find future law partners or doctors.
I would put it this way. I frequently read the Sunday marriage pages of The New York Times, and I never feel that I am tearing myself away from social science research.
Do read the whole thing.
From the comments, on sexist pricing
See Pashigian, B. P.. (1988). Demand Uncertainty and Sales: A Study of Fashion and Markdown Pricing. The American Economic Review, 78(5), 936–953. Retrieved from http://www.jstor.org/stable/1807158
Basic idea: there are more and better priced clearance sales for items that quickly go out of fashion, fewer clearance sales for non-fashionable items (e.g., white shirts, blue blazers, grey pants.)
That is from Hal Varian, on the topic of “sexist pricing.”
Why did economists ignore the rise of the top one percent for so long?
Daniel Hirschman at the University of Michigan wrote a dissertation chapter on that topic, in the field of sociology, here is the abstract:
In the 2000s, academics and policymakers began to discuss the growth of top incomes in the United States, especially the “top 1%.” Newly analyzed data revealed that top income earners in the 1990s received a larger share of income than at any point since the Great Depression, and that their incomes had begun a dramatic upward climb in the early 1980s. This paper investigates why it took two decades for this increase in top incomes to become politically and academically salient. I argue that experts assembled two “regimes of perceptibility” (Murphy 2006) for producing knowledge about income inequality, and that neither of these regimes was capable of tracking movements in top incomes. Macroeconomists focused on labor’s share of national income, but did not examine the distribution of income between individuals. Labor economists, on the other hand, drew on newly available survey data to explain wage disparities in terms of education, age, work experience, race, and gender. By relying on surveys, these scholars unintentionally eliminated top incomes from view: surveys top-coded high incomes, and thus were incapable of seeing changes in the top 1%. Studies of top incomes that relied on income tax data thus fell by the wayside, creating the conditions under which experts, policymakers, and the public alike could be surprised by the rise of the 1%. This historical narrative offers insights into the political power of economic expertise by clarifying the complex linkages between observations, stylized facts, causal theories, and policy attention.
The chapter is here (pdf). There is too much general background in this piece, and it is silly for the author to say that macroeconomics did not exist before 1930. Most of all, that the import of the growth of incomes in the top one percent remains underexplained I think is outside his framework. Nonetheless there are some points of interest throughout the chapter.
Here is Dan Hirschman’s home page.
Pointers run through Marshall Steinbaum and Henry Farrell.