Category: Uncategorized
Why don’t more people go to college?
This new piece in American Economic Journal: Macroeconomics seems to be channeling some parts of Bryan Caplan’s argument:
Despite increases in the college earnings premium to persistently high levels, investment in college education remains low. We can understand this apparent puzzle by considering the risk of attending college and, in particular, the possibility of failing to graduate. Students with a reasonable probability of completing college already enroll, and for those who do not enroll, the low chance of completion blunts the impact of the rising college premium. In the absence of improved college readiness, our quantitative results suggest that continuing long-standing trends in skill-biased technological change can be expected primarily to increase earnings inequality rather than college attainment.
From Kartik Athreya and Janice Eberly. The implied discontinuity in the de facto talent distribution also echoes some themes from my own Average is Over.
Further estimates on the cost of climate change and global warming
Sea level rise will cause spatial shifts in economic activity over the next 200 years. Using a spatially disaggregated, dynamic model of the world economy, this paper estimates the consequences of probabilistic projections of local sea level changes. Under an intermediate scenario of greenhouse gas emissions, permanent flooding is projected to reduce global real GDP by 0.19 percent in present value terms. By the year 2200, a projected 1.46 percent of the population will be displaced. Losses in coastal localities are much larger. When ignoring the dynamic response of investment and migration, the loss in real GDP in 2200 increases from 0.11 percent to 4.5 percent.
That newly published paper is from Klaus Desmet, Robert E. Kopp, Scott A. Kulp, Dávid Krisztián Nagy, Michael Oppenheimer, Esteban Rossi-Hansberg and Benjamin H. Strauss in American Economic Journal: Macroeconomics. Am I wrong to feel a little…underwhelmed by those estimates? Here is an earlier recent paper on other cost estimates.
New issue of Econ Journal Watch
Volume 18, Issue 1, March 2021
In this issue (.pdf):
Will you live longer if you move to a place where people live longer? Commenting on an American Economic Review article, Robert Kaestner examines the causality behind an association between Medicare enrollees’ longevity and their post-Katrina migration from New Orleans to various destinations. Tatyana Deryugina and David Molitor reply to Kaestner.
Does machine learning improve corporate fraud detection? Commenting on a Journal of Accounting Research article, Stephen Walker investigates the findings for the effectiveness of machine learning in detecting accounting fraud. Yang Bao, Bin Ke, Bin Li, Y. Julia Yu, and Jie Zhang reply to Walker.
Is institutional quality impacted by immigration from poor or corrupt countries? Garett Jones and Ryan Fraser suggest overcontrol bias in works studying the issue, propose to investigate the matter using simpler evidence, and find indications of adverse impact on economic freedom. Jamie Bologna Pavlik, Estefania Lujan Padilla, and Benjamin Powell controvert the suggestion of overcontrol bias and provide new results finding against any such adverse impact.
Adam Smith in Love: Enrique Guerra-Pujol considers several pieces of evidence and concludes that Adam Smith very likely knew from personal experience what it meant to be in love with another person.
A final inning on colonial money: Ronald Michener has persistently challenged the scholarship of Farley Grubb on colonial money. Here, Professor Grubb replies to Michener’s last rejoinder, focused again on the experience of colonial New Jersey.
Against Standard Deviation as a Quality Control Maxim in Anthropometry: Austin Sandler discusses a pervasive practice in his field of anthropometry: Rejecting data sets in which standard deviations are ‘too big.’ He describes the origin and spread of this practice and its rationales, and argues against it.
Readworthy 2050: We complete the fielding of the question: What 21st-century works will merit a close reading in 2050? New responses are provided by Mitchell Langbert, Andrés Marroquín, Steven G. Medema, Alberto Mingardi, Paul D. Mueller, Stephen R. Munzer, Evan W. Osborne, Justin T. Pickett, Rupert Read and Frank M. Scavelli, Hugh Rockoff, Kurt Schuler, Daniel J. Schwekendiek, Per Skedinger, E. Frank Stephenson, Scott Sumner, Cass R. Sunstein, Slaviša Tasić, Clifford F. Thies, and Richard E. Wagner. (The first tranche is here.)
The History of Economic Thought as a Refined Liberal Art: Kevin Quinn reflects on intellectual history as a way of cultivating our humanity, with compliments for Don Lavoie.
EJW Audio:
Enrique Guerra-Pujol on Adam Smith’s Love Life
Lucas Berlanza on Liberalism in Brazil
Scott Drylie on Scholarship on Adam Smith on Schooling and Government
Call for papers:
Commentaries on Smith/Hume scholarship
Who should get the Nobel Prize in economics, and why?
EJW invites ‘journal watch’ submissions beyond Econ.
EJW fosters open exchange. We welcome proposals and submissions of diverse viewpoints.
Read the March 2021 issue in full (.pdf)
Thursday assorted links
In praise of Alex Tabarrok
Here’s a question I’ve been mulling in recent months: Is Alex Tabarrok right? Are people dying because our coronavirus response is far too conservative?
I don’t mean conservative in the politicized, left-right sense. Tabarrok, an economist at George Mason University and a blogger at Marginal Revolution, is a libertarian, and I am very much not. But over the past year, he has emerged as a relentless critic of America’s coronavirus response, in ways that left me feeling like a Burkean in our conversations.
He called for vastly more spending to build vaccine manufacturing capacity, for giving half-doses of Moderna’s vaccine and delaying second doses of Pfizer’s, for using the Oxford-AstraZeneca vaccine, for the Food and Drug Administration to authorize rapid at-home tests, for accelerating research through human challenge trials. The through line of Tabarrok’s critique is that regulators and politicians have been too cautious, too reluctant to upend old institutions and protocols, so fearful of the consequences of change that they’ve permitted calamities through inaction.
Tabarrok hasn’t been alone. Combinations of these policies have been endorsed by epidemiologists, like Harvard’s Michael Mina and Brown’s Ashish Jha; by other economists, like Tabarrok’s colleague Tyler Cowen and the Nobel laureates Paul Romer and Michael Kremer; and by sociologists, like Zeynep Tufekci (who’s also a Times Opinion contributor). But Tabarrok is unusual in backing all of them, and doing so early and confrontationally. He’s become a thorn in the side of public health experts who defend the ways regulators are balancing risk. More than one groaned when I mentioned his name.
But as best as I can tell, Tabarrok has repeatedly been proved right, and ideas that sounded radical when he first argued for them command broader support now. What I’ve come to think of as the Tabarrok agenda has come closest to being adopted in Britain, which delayed second doses, approved the Oxford-AstraZeneca vaccine despite its data issues, is pushing at-home testing and permitted human challenge trials, in which volunteers are exposed to the coronavirus to speed the testing of treatments. And for now it’s working: Britain has vaccinated a larger percentage of its population than the rest of Europe and the United States have and is seeing lower daily case rates and deaths.
Mistrust of the CBO is unfortunately a growing bipartisan avocation
That is the topic of my latest Bloomberg column, here is one excerpt:
Recently the CBO issued a working paper considering what would happen if U.S. government expenditures were to consume an additional 5% to 10% of GDP. The results are pretty grim: By 2030, because of higher taxes and higher borrowing, the level of GDP would be 3 to 10 percentage points lower. The largest losses are suffered by young Americans, who would go through more of their lives with a lower capital stock, leading to lower wages. Worse yet, the losses are highest when the spending is financed by progressive taxation — a very popular idea in today’s Democratic Party.
As with the CBO’s minimum-wage analysis, you may not agree with every aspect of this study. The authors themselves note that it neglects any productivity gains that might follow from the expenditures. Still, these estimates represent a real challenge to those who favor more government spending.
This analysis has mostly been ignored rather than attacked, which is unfortunate for those of us who would prefer a robust debate. In the meantime, “If you can’t even convince the CBO” seems like a good standard of proof for Democrats to accept — and one they themselves insisted on not very long ago.
For the pointer to the new CBO study I thank Corey Frederick Kallen.
Godzilla vs. Kong (no real spoilers)
In Florida, even when Godzilla attacks, the schools stay open. It seems the intransitivity of sovereignty is underrated. There is a case for UBI for very large creatures. If your country depopulates too much, they no longer feature your cities being destroyed. The best and most interesting Godzilla movies focus on the Japanese bureaucracy, not the special effects. Hollywood movie-making continues to become worse, soundtracks all the more so.
*Island On Fire*
A good book, recent winner of the National Book Award for non-fiction, the author is Tom Zoellner and the subtitle is The Revolt that Ended Slavery in the British Empire. Here is one excerpt about Jamaica, the central theater for the book:
Among the staple crop civilizations of the nineteenth century, Jamaica was noteworthy for what it didn’t have in abundance: granite monuments, private gardens, schools, parks, beautiful churches, columned public halls.Nobody thought to bring a printing press until sixty-six years after the British takeover. Graceful mansions like those built in the American South were less common in Jamaica and generally seen only around Kingston and on the shore of St. James Parrish, where the wealthier planters aimed to impress their neighbors with bloodwood floors, wine cellars, silverware, china sets, and ancestral portraits on the walls. But the master’s “Great House” was more commonly made of crude materials and sometimes looked no better than a barn with windows. As a government secretary described them, many country estates were “miserable, thatched hovels, hastily put together with wattles and plaster, damp, unwholesome and infested with every species of vermin.”
Recommended.
Wednesday assorted links
2. New types of research organization.
3. Which famous economist has views closest to yours?
4. Danny Kaye bits, including some calypso with Harry Belafonte. And with Lucille Ball and Louis Armstrong. And 56 Russian composers.
5. Should Amsterdam limit tourism? (NYT)
6. More good news from the UK. And Nigeria has 500 Scrabble clubs.
What I’ve been reading
1. Devaki Jain, The Brass Notebook. What is it like to grow up in a Tamil Brahmin family, be molested by relatives and Nobel Prize winners, and go on to be an economist? Short and extremely readable. The personal tale is very charming, the politics (Nyerere and Castro, never repudiated) are not.
2. Walter Isaacson, The Code Breaker: Jennifer Doudna, Gene Editing, and the Future of the Human Race. This excellent book is exactly as you think it is going to be.
3. S.M. Ulam, Adventures of a Mathematician. Memoir involving many of the 20th century’s top mathematicians and physics types, including von Neumann, Gamow, Banach, Edward Teller, and Ulam himself, among others. Scintillating on every page, as a historical chronicle, as biography, and as a look into how a brilliant mathematician thinks.
4. Eric Berger, Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX. A fun and informative treatment of what the title promises. I hadn’t know that Musk met personally with the first three thousand employees of SpaceX, to make sure the company was hiring the right kind of people. He thought he could detect a good hire within fifteen minutes of conversation.
5. Matthew E. Kahn, Adapting to Climate Change: Markets and the Management of an Uncertain Future. I read this some time ago, it is just published, here is my blurb: “Are you looking for an approach that recognizes the costs of climate change, and approaches the entire question with an economic and political sanity? Matthew E. Kahn’s new book is then essential reading.”
The new Peter Boettke book is The Struggle for a Better World, which is his best statement of classical liberalism to date.
Tuesday assorted links
Misdemeanor Prosecution
Misdemeanor Prosecution (NBER) (ungated) is a new, blockbuster paper by Agan, Doleac and Harvey (ADH). Misdemeanor crimes are lesser crimes than felonies and typically carry a potential jail term of less than one year. Examples of misdemeanors include petty theft/shoplifting, prostitution, public intoxication, simple assault, disorderly conduct, trespass, vandalism, reckless driving, indecent exposure, and various drug crimes such as possession. Eighty percent of all criminal justice cases, some 13 million cases a year, are misdemeanors. ADH look at what happens to subsequent criminal behavior when misdemeanor cases are prosecuted versus non-prosecuted. Of course, the prosecuted differ from the non-prosecuted so we need to find situations where for random reasons comparable people are prosecuted and non-prosecuted. Not surprisingly some Assistant District Attorneys (ADAs) are more lenient than others when it comes to prosecuting misdemeanors. ADH use the random assignment of ADAs to a case to tease out the impact of prosecution–essentially finding two similar individuals one of whom got lucky and was assigned a lenient ADA and the other of whom got unlucky and was assigned a less lenient ADA.
We leverage the as-if random assignment of nonviolent misdemeanor cases to Assistant District Attorneys (ADAs) who decide whether a case should move forward with prosecution in the Suffolk County District Attorney’s Office in Massachusetts.These ADAs vary in the average leniency of their prosecution decisions. We find that,for the marginal defendant, nonprosecution of a nonviolent misdemeanor offense leads to large reductions in the likelihood of a new criminal complaint over the next two years.These local average treatment effects are largest for first-time defendants, suggesting that averting initial entry into the criminal justice system has the greatest benefits.
… We find that the marginal nonprosecuted misdemeanor defendant is 33 percentage points less likely to be issued a new criminal complaint within two years post-arraignment (58% less than the mean for complier” defendants who are prosecuted; p < 0.01). We find that nonprosecution reduces the likelihood of a new misdemeanor complaint by 24 percentage points (60%; p < 0.01), and reduces the likelihood of a new felony complaint by 8 percentage points (47%; not significant). Nonprosecution reduces the number of subsequent criminal complaints by 2.1 complaints (69%; p < .01); the number of subsequent misdemeanor complaints by 1.2 complaints (67%; p < .01), and the number of subsequent felony complaints by 0.7 complaints (75%; p < .05). We see significant reductions in subsequent criminal complaints for violent, disorderly conduct/theft, and motor vehicle offenses.
Did you get that? On a wide variety of margins, prosecution leads to more subsequent criminal behavior. How can this be?
We consider possible causal mechanisms that could be generating our findings. Cases that are not prosecuted by definition are closed on the day of arraignment. By contrast, the average time to disposition for prosecuted nonviolent misdemeanor cases in our sample is 185 days. This time spent in the criminal justice system may disrupt defendants’ work and family lives. Cases that are not prosecuted also by definition do not result in convictions, but 26% of prosecuted nonviolent misdemeanor cases in our sample result in a conviction. Criminal records of misdemeanor convictions may decrease defendants’ labor market prospects and increase their likelihoods of future prosecution and criminal record acquisition, conditional on future arrest. Finally, cases that are not prosecuted are at much lower risk of resulting in a criminal record of the complaint in the statewide criminal records system. We find that nonprosecution reduces the probability that a defendant will receive a criminal record of that nonviolent misdemeanor complaint by 55 percentage points (56%, p < .01). Criminal records of misdemeanor arrests may also damage defendants’ labor market prospects and increase their likelihoods of future prosecution and criminal record acquisition, conditional on future arrest. All three of these mechanisms may be contributing to the large reductions in subsequent criminal justice involvement following nonprosecution.
So should we stop prosecuting misdemeanors? Not necessarily. Even if prosecution increases crime by the prosecuted it can still lower crime overall through deterrence. In fact, since there are more people who are potentially deterred than who are prosecuted, general deterrence can swamp specific deterrence (albeit there are 13 million misdemeanors so that’s quite big). The authors, however, have gone some way towards addressing this objection because they combine their “micro” analysis with a “macro” analysis of a policy experiment.
During her 2018 election campaign, District Attorney Rollins pledged to establish a presumption of nonprosecution for 15 nonviolent misdemeanor offenses…After the inauguration of District Attorney Rollins, nonprosecution rates rose not only for cases involving the nonviolent misdemeanor offenses on the Rollins list, but also for those involving nonviolent misdemeanor offenses not on the Rollins list (and for all nonviolent misdemeanor cases)…. the increases in nonprosecution after the Rollins inauguration led to a 41 percentage point decrease in new criminal complaints for nonviolent misdemeanor cases on the Rollins list (not significant), a 47 percentage point decrease in new criminal complaints for nonviolent misdemeanor cases not on the Rollins list (p < .05), and a 56 percentage point decrease in new criminal complaints for all nonviolent misdemeanor cases (p < .05).
It’s unusual and impressive to see multiple sources of evidence in a single paper. (By the way, this paper is also a great model for learning all the new specification tests and techniques in the “leave-out” literature, exogeneity, relevance, exclusion restriction, monotonicity etc. all very clearly described.)
The policy study is a short-term study so we don’t know what happens if the rule is changed permanently but nevertheless this is good evidence that punishment can be criminogenic. I am uncomfortable, however, with thinking about non-prosecution as the choice variable, even on the margin. Crime should be punished. Becker wasn’t wrong about that. We need to ask more deeply, what is it about prosecution that increases subsequent criminal behavior? Could we do better by speeding up trials (a constitutional right that is often ignored!)–i.e. short, sharp punishment such as community service on the weekend? Is it time to to think about punishments that don’t require time off work? What about more diversion to programs that do not result in a criminal record? More generally, people accused and convicted of crimes ought to find help and acceptance in re-assimilating to civilized society. It’s crazy–not just wrong but counter-productive–that we make it difficult for people with a criminal record to get a job and access various medical and housing benefits.
The authors are too sophisticated to advocate for non-prosecution as a policy but it fits with the “defund the police,” and “end cash bail” movements. I worry, however, that after the tremendous gains of the 1990s we will let the pendulum swing back too far. A lot of what counts as cutting-edge crime policy today is simply the mood affiliation of a group of people who have no recollection of crime in the 1970s and 1980s. The great forgetting. It’s welcome news that we might be on the wrong side of the punishment Laffer curve and so can reduce punishment and crime at the same time. But it’s a huge mistake to think that the low levels of crime in the last two decades are a permanent features of the American landscape. We could lose it all in a mistaken fit of moralistic naivete.
Vaccine Roundup
1. Politico: The Biden administration is rethinking a costly system of government-run mass vaccination sites after data revealed the program is lagging well behind a much cheaper federal effort to distribute doses via retail pharmacies….The vaccination hubs, which are run by FEMA and staffed in part by National Guard troops and other Pentagon personnel, have administered…about 67,000 shots a day, according to a series of internal FEMA briefing documents and data sets obtained by POLITICO….By comparison, the federal retail pharmacy program reported March 11 it had administered nearly 1 million doses over a single day.
Using the retail pharmacies is what Scott Duke Kominers and I argued for in mid-February in our piece titled, America’s Pharmacies Can Do a Lot More Vaccinations. Good to see the Biden administration is making adjustments. Nothing wrong with the clinics, by the way, only use the pharmacies more.
2. New CDC study of health care workers in the United States shows that the first dose of the Moderna or Pfizer vaccine is 80% effective within two weeks. Big cuts in transmission as well. N.B. not an RCT.
3. One common criticism of delaying the second dose or of using the AstraZeneca vaccine or of making or not making other changes was that this would increase “vaccine hesitancy.” Frankly, in my view this was just an all-purpose rationalization for inaction. I thought that delaying the second dose could just as easily reduce vaccine hesitancy as increase it–not that I knew this would happen, I simply knew what would happen was uncertain. More generally, I thought that we should do the thing designed to save the most lives simpliciter, address vaccine hesitancy directly, and not try to do some complicated bank-shot based on ill-informed psychological speculation. Well Britain did everything that people were worried about–Britain delayed the second dose, used the AstraZeneca vaccine, used the AstraZeneca in the elderly and didn’t halt the use of the AZ vaccine and the result is the least vaccine hesitancy of 26 countries surveyed.
If UFOs are alien beings, are they just doing mood affiliation in visiting us?
Robin Hanson has a long and very interesting blog post on that question. The point is not to argue that the UFOS are alien beings of some kind, but rather if they were which kinds of theories might help us understand them? Here is just part of Robin’s much longer take:
If the main block to believing in UFOs as aliens is a lack of a plausible enough social theory of aliens, then it seems a shame that almost no one who studies UFOs is a social science theorist. So as such a person, why don’t I step in and try to help? If we can find a more plausible social theory, we could become more willing to believe that UFOs are aliens…
Stylized fact #2: Aliens are rare and self-limited, and yet are here now.
Indirection – We can think of a number of plausible motives for rare limited aliens to make an exception to visit us. First, they may fear us as rivals, and so want to track us and stand ready to defend against us. Second, if their limitation policies are intentional, then they’d anticipate our possibly violating them, and so want to stand ready nearby to enforce their limitation policies on us.
In either of these two cases, aliens might want to show us their power, and even make explicit threats, to deter us from causing problems. And there’s the question of why they don’t just destroy us, instead of waiting around. Third, independent alien origins could be a rare valuable datapoint about far-more-capable aliens who they may fear eventually meeting. In this case they’d probably want to stay hidden longer.
My best bet is this. The vehicles would be “unmanned” drone probes, if only because the stresses of long trips through space would keep the actual alien beings close to home. So the relevant social science question is what kind of highly generalized software instructions you would give such drones. “Seek out major power sources, including nuclear, and seek out rapid flying objects, and then send information back home” would be one such set of instructions roughly compatible with the stylized facts on the ground (or in the air). Of course the information sent back to alien worlds will not be arriving for a very, very long time, so long that the concrete motives of the aliens may not be the major consideration. Collecting the information about other planets across some very long time frame might simply seem worthwhile, relative to the cheap cost of the drone probes. It reminds me a bit of that “put the DNA of all the species on the moon” project we have started, or those seed banks up in the Arctic. Why exactly did we do it? Why not I say!? And yet most humans do not even know those projects are going on.
A further generalized software instruction would be “if approached or confronted, run away fast.” Indeed that is what those flying vehicles seem to do.
The drone probes do not destroy us, because of Star Trek-like reasons: highly destructive species already have blown themselves up, leaving the relatively peaceful ones to send drones around. The drones probably are everywhere, in the galactic sense that is. Yet given the constraints imposed by the speed of light, it is difficult to do much with them that is very useful to the decision-makers that send (sent?) them out. So the relevant theory is one of how advanced civilizations allocate their surplus when there is a lot of discretion and not much in the way of within-lifetime costs and benefits to determine a very particular set of plans and goals. Not even for the grandkids.
In this hypothesis, of course, you have to be short immortality. And short usable wormholes.
By the way, don’t those photos of the drone probes make them look a bit like cheap crap? No tail fins, no “Close Encounters of the Third Kind” music signature, no 3-D holograms, just a superfast vehicle. Like something a second-rate alien non-profit picked up at the local Walmart and sent off into space en masse with solar-powered self-replication. Which is consistent with the view of them being a discretionary resource allocation stemming from projects with fairly fuzzy goals.
A problematic question for any theory is whether competing drone navies have come to visit us, and if so are they fighting over the spoils? Colluding? Hiding from each other? Or what? If aliens are afoot, why should it be only one group of them? That would seem strange, as in most things there are multitudes, at least speaking in Bayesian terms. Aren’t there at least both Klingon probes and Romulan probes, maybe Federation probes too.
Robin’s hypothesis, that they are elatively local panspermiacs, who feel some stake in us, appeals to me. Bayesian logic suggests in any case that the chance of us having resulted from panspermia is pretty high; there are lots of baby civilizations for each parent, so why deny you are probably a baby?
Perhaps our visitors are exercising some “mood affiliation” in wishing to visit and record us! They could be the parents, or perhaps another baby civilization.
Of course since the photos are of such poor quality, and since there is no corroborating evidence of any kind, these UFO sightings probably are not of alien creations, so all of this is pure fantasy anyway.
Monday assorted links
1. The FATF crypto recommendations.
4. Survey on body-worn police cameras, mostly positive results.
5. Funny (yet sort of true?) that I (along with @pmarca!) am viewed as the big socializer on this list.
6. Vaccinated people should return to greater socializing. And good news on the South African strain.