Category: Uncategorized
New results on social capital and interconnectedness
There are two new NBER papers written by large teams, headlined by Raj Chetty. Here is an excerpt from the first paper:
The fraction of high-SES friends among low-SES individuals—which we term economic connectedness—is among the strongest predictors of upward income mobility identified to date, whereas other social capital measures are not strongly associated with economic mobility. If children with low-SES parents were to grow up in counties with economic connectedness comparable to that of the average child with high-SES parents, their incomes in adulthood would increase by 20% on average.
And this as a general introduction to the project:
….we measure and analyze three types of social capital by ZIP code in the United States: (i) connectedness between different types of people, such as those with low vs. high socioeconomic status (SES); (ii) social cohesion, such as the extent of cliques in friendship networks; and (iii) civic engagement, such as rates of volunteering. These measures vary substantially across areas, but are not highly correlated with each other.
The core data are taken from Facebook and anonymized. And from the second paper:
We show that about half of the social disconnection across socioeconomic lines—measured as the difference in the share of high-socioeconomic status (SES) friends between low- and high-SES people—is explained by differences in exposure to high- SES people in groups such as schools and religious organizations. The other half is explained by friending bias—the tendency for low-SES people to befriend high-SES people at lower rates even conditional on exposure.
There is then this concrete result:
…friending bias is higher in larger and more diverse groups and lower in religious organizations than in schools and workplaces.
Here is a tweet storm with a relevant map. These papers are sure to have considerable influence on how we think about social connections. Yes this is sociology, but has not this team done it better?
What should I ask Jeremy Grantham?
I will be doing a Conversation with him. If you do not know here is Wikipedia:
Robert Jeremy Goltho Grantham CBE (born 6 October 1938) is a British investor and co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO), a Boston-based asset management firm. GMO had more than US$118 billion in assets under management as of March 2015.[GMO has seen this number half to US$65 billion in assets under management as of Dec 2020. He has been a vocal critic of various governmental responses to the Global Financial Crisis from 2007 to 2010. Grantham started one of the world’s first index funds in the early 1970s.
And there is more. So what should I ask him?
Sunday assorted links
1. Job ad: Marginal Revolution University seeks marketing director (from distance is fine).
2. The New Yorker reviews The Rehearsal.
3. Scott Sumner on the new bill, and whether we should raise taxes on investment. A good post.
5. Defining use for the metaverse?
6. Esquire lists eighty books it thinks every man should read.
Geoff Brennan, we hardly knew ye, RIP
Geoff has long been one of my favorite economists, and he was perhaps the single most underrated economist around. For all of Geoff’s brilliance, wisdom, and contributions, he never quite made it into mainstream renown (maybe living and teaching in Australia hurt him?).
The three Brennan contributions that have influenced me most are:
1. His account of expressive voting with Loren Lomasky, showing how politics can generate a measured concern that people may not care about all that much. That was also a big influence on Bryan Caplan’s book on voting.
2. His arguments with Jim Buchanan about the limitations of optimal tax theory (Amazon, when I search for this book, why do you summon up as the first pick “Sol de Janeiro Brazilian Bum Bum Body Cream“?). If government policy is misaligned with social welfare, “more efficient” forms of taxation, such as the Ramsey rules, will not in general be more efficient. In particular they can make it too easy for the government to maximize revenue and transfer resources to the public sector. The profession as a whole still refuses to recognize this point, but it should be front and center of most analyses. One side of the coin is that the French government is too large a share of gdp, but it would be interesting to flip the argument and try to apply it to Mexico…
3. Geoff’s book The Economy of Esteem (with Philip Pettit), which analyzed approbational incentives, building upon Adam Smith’s TMS.
Geoff was one of the few scholars comfortable in economics, philosophy, and also political science. Two of his main books, listed above, are co-authored with philosophers. Here is Geoff on scholar.google.com.
Personally, Geoff was popular with just about everybody. He is also one of the few people to have worked with Buchanan and come out of the experience intact. If he was at a conference dinner, he would be sure to find the occasion to sing a song for everybody, and he had a wonderful voice.
Geoff Brennan, we shall miss ye.
Saturday assorted links
*The Case Against the Sexual Revolution*
The author is Louise Perry and the subtitle is A New Guide to Sex in the 21st Century. Definitely recommended, here is Louise’s brief summary of part of the book’s arguments:
In this book I’m going to ask — and seek to answer — some questions about freedom that liberal feminism can’t or won’t answer: Why do so many women desire a kind of sexual freedom that so obviously serves male interests? What if our bodies and minds aren’t as malleable as we might like to think? What do we lose when we prioritise freedom above all else? And, above all, how should we act, given all this?
Some of my conclusions might not be welcome, since they draw attention to the hard limits on our freedom that can’t be surmounted, however much we try. And I start from a position that historically has often been a source of discomfort for feminists of all ideological persuasions: I accept the fact that men and women are different, and that those differences aren’t going away.
This book is very well written and I believe it will make a big splash. I am closer to a consent, libertarian viewpoint than is the author but still I read this eagerly. Here is Louise Perry debating Aella about the sexual revolution on YouTube. A smart set of exchanges.
Friday assorted links
1. An AI avatar makes a video pitch to me. So far I have declined.
2. “In 1858 the Foreign Office had a staff of 43. By 1902, at the almost peak for the British Empire the headcount was down to 42. Today it’s somewhere over 10,000.” Link here.
4. Does just thinking of uncertainty make uncertainty worse?
5. Alice Evans podcast with Daron Acemoglu.
6. The new temperance movement.
7. Howard Rosenthal has passed away.
8. A CWT parable. Related to Honduras and charter cities.
*The Messenger*
The author is Peter Loftus, and the subtitle is Moderna, the Vaccine, and the Business Gamble That Changed the World. An excellent book, here is one very short excerpt:
The FDA usually follows a rigid process of interacting with the drug companies it regulates. Normally, it can take months for a company to schedule an in-person meeting with the FDA.
Culture dies hard, here is Alex on the Invisible Graveyard. And this:
…Moderna executives expressed confidence they could hit the enrollment targets without significantly slowing down overall enrollment. But Fauci and Slaoui said they actually wanted Moderna to slow down overall enrollment in order to ensure they enrolled more minorities.
The book estimates the delay here at three weeks — how many lives was that in winter of 2020/2021?
Thursday assorted links
1. Ed Coulson, an urban/housing economist at UC Irvine, now has a Jeopardy winning streak.
2.”We’re currently running a prize at Open Philanthropy (https://www.causeexplorationprizes.com) for people to suggest new cause areas for us to explore on the global health and wellbeing side. We’ve extended the deadline for submissions to August 11th, and we’d love to see as many people applying as possible!”
3. Who deserves a festschrift more than David Gordon?
4. How Wikipedia influences judicial decisions.
5. NYT covers Barbados at length. Parts are very good, but it no longer seems allowed to criticize Caribbean nations for making their own policy mistakes. A useful but in some ways deeply misleading article. At what level does the “censorship” enter? The incentives of the writer or the world view of the writer? I suspect it is the latter.
The Covidization of science?
The COVID-19 pandemic saw a massive mobilization of the scientific workforce. We evaluated the citation impact of COVID-19 publications relative to all scientific work published in 2020 to 2021, finding that 20% of citations received to papers published in 2020 to 2021 were to COVID-19–related papers. Across science, 98 of the 100 most-cited papers published in 2020 to 2021 were related to COVID-19. A large number of scientists received large numbers of citations to their COVID-19 work, often exceeding the citations they had received to all their work during their entire career. We document a strong covidization of research citations across science.
Here is the full article, by John P.A. Ionnidis, et.al., via Michelle Dawson.
My Conversation with Leopoldo López
Here is the audio, video, and transcript. Here is the CWT summary:
As an inquisitive reader, books were a cherished commodity for Leopoldo López when he was a political prisoner in his home country of Venezuela. His prison guards eventually observed the strength and focus López gained from reading. In an attempt to stifle his spirit, the guards confiscated his books and locked them in a neighboring cell where he could see but not access them. But López didn’t let this stop him from writing or discourage his resolve to fight for freedom. A Venezuelan opposition leader and freedom activist, today López works to research and resist oppressive autocratic regimes globally.
López joined Tyler to discuss Venezuela’s recent political and economic history, the effectiveness of sanctions, his experiences in politics and activism, how happiness is about finding purpose, how he organized a protest from prison, the ideal daily routine of a political prisoner, how extreme sports prepared him for prison, his work to improve the lives of the Venezuelan people, and more.
And one excerpt:
COWEN: In 1970, you were richer than Spain, Greece, or Israel, which I find remarkable. But do you, today, ever look, say, at Qatar or United Arab Emirates, Dubai, and think the problem actually was democracy, and that here are oil-rich places that have stayed stable, in fact, but through autocratic rule, and that it’s the intermediate situation that doesn’t work?
LÓPEZ: Well, I think that I, personally, will always be in favor of a democratic regime, a democratic system that promotes a rule of law, the respect for human rights, the respect of freedoms. I think that’s a priority. For me it is, and I believe it’s a priority also for the large, large majority of the Venezuelan people that want to live in a democracy.
However, there has been great mismanagement due to misconceptions of the economy, to a state-led economy that did not open possibilities for a private sector to flourish independently of the state, but also with the level of corruption that we have seen, particularly over the past 22 years — it’s what has led Venezuela to the situation in which we are.
In Venezuela, you could argue that we did much, much better economically, and in terms of all of the social and economic standards, than what happened during these last 20 years of autocracy. This autocracy had the largest windfall and the largest humanitarian crisis.
During the democratic period of 40 years, Venezuela became one of the most literate countries in Latin America, with the largest amount of professionals being graduated every year, with the best in social, health, and education standards, vaccination rates, housing programs that were in Latin America. So, we did perform much better under the democratic period than has been the performance by any means in the autocratic regimes of the last 22 years.
Interesting throughout.
Ireland fact of the day
It appears that, in 2020, Ireland overtook South Africa as having the latest marrying couples worldwide.
The average age for a groom is 37.8 and for a bride is 35.7, for opposite-sex couples. This is the fairer comparison because same-sex marriages obviously aren’t allowed everywhere and are less relevant to reproduction.
37.8!
If you consider first-time marriages only, the average age of grooms marrying for the first time was 35.7 years and for brides the average age was 34.2 years. By comparison, for first-time marriages the United States is 30.5 for males and 28.6 for females.
That is from Sam Enright, with an assist from Fergus McCullough.
Wednesday assorted links
1. Jimena Hurtado interviews me (briefly) about my life, and Colombia.
2. Significant new academic paper on the impact of sanctions on the Russian economy.
3. Possibly Germany is rethinking its nuclear power exit? (FT)
4. “I Share, Therefore I Know? Sharing Online Content — Even Without Reading It — Inflates Subjective Knowledge.” Link here. Has to be true, right?
Incentives matter, installment #5637
America needs more than 5 million new houses to meet demand, according to a study last year by Realtor.com. With sales of existing homes slowing, the need for more new houses is only growing. Florida, my home state, might have found part of the solution: Reform the permitting process so that building houses is easier.
Last year, Gov. Ron DeSantis (R) signed a bill that fundamentally changes the state’s permitting process for home building. It requires local jurisdictions to post online not only their permitting processes but also the status of permit applications. The transparency takes a good amount of mystery out of what can be an inscrutable branch of bureaucracy.
More important, the reforms also created a system that strongly incentivizes cities and counties to approve new home permits in a timely way. When a builder or property owner submits an application to build a new home, cities and counties have 30 business days to process it or request corrections.
If the government offices fail to respond in that time frame, the locality must refund 10 percent of the application fee for every additional business day of silence. Application fees can vary widely by locality, but the average cost in Florida is nearly $1,000, according to HomeAdvisor.com. If officials request corrections to the application, they have 10 business days to approve or disapprove of the resubmitted application. Blowing past that deadline leads to an automatic 20 percent refund, with a further 10 percent added for each additional missed day, up to a five-day cap.
And this:
A study of housing sales in southwest Florida between 2007 and 2017 by the James Madison Institute found that permitting delays added as much as $6,900 to the cost of a typical house. That’s a de facto tax on Florida families; now the Sunshine State is making cities and towns pay for their own delays.
Here is the full story, via the excellent Kevin Lewis.