The economics of research, looking forward
Chris Blattman writes:
I joke with my graduate students they need to get as many technical skills as possible as PhD students because the moment they graduate it’s a slow decline into obsolescence. And of course by “joke” I mean “cry on the inside because it’s true”.
Take experiments. Every year the technical bar gets raised. Some days my field feels like an arms race to make each experiment more thorough and technically impressive, with more and more attention to formal theories, structural models, pre-analysis plans, and (most recently) multiple hypothesis testing. The list goes on. In part we push because want to do better work. Plus, how else to get published in the best places and earn the respect of your peers?
It seems to me that all of this is pushing social scientists to produce better quality experiments and more accurate answers. But it’s also raising the size and cost and time of any one experiment.
This should lead to fewer, better experiments. Good, right? I’m not sure. Fewer studies is a problem if you think that the generalizabilty of any one experiment is very small. What you want is many experiments in many places and people, which help triangulate an answer.
The entire post is of interest, and that of course is also probably the biggest problem with RCTs as they are practiced in economics, namely they lead to a greater centralization of knowledge generation and validation. Chris also cites this new and very important piece by Alwyn Young (pdf). You can’t always believe what you read, as my grandmother used to say.
Monday assorted links
China fact (estimate) of the day
The China Medical Doctors’ Association recently found that 13 per cent of doctors surveyed had been physically attacked in the past year.
The FT article by Andrew Ward and Patti Waldmeir is interesting throughout, here is another bit:
Doctors are paid on average one-fifth the amount received by their counterparts in Europe and are required to see up to 150 patients a day.
Overall the Chinese health care system is considered to be extremely corrupt.
What I’ve been reading, and not reading
1. Michael Denning, Noise Uprising: The Audiopolitics of a World Musical Revolution. How recording began to revolutionize “world music” in the 1920s, a bit scattershot but still an interesting conceptual book about the history of music.
2. Mary Beard, SPQR: A History of Ancient Rome. I have only browsed this one, but it does appear to be one of the best and most readable overall histories of Rome. I’m keeping it in the basement and someday I’ll go back to it.
3. Peter Turchin, Ultra Society: how 10,000 years of war made humans the greatest cooperators on earth: “The central idea of this book is that it was competition between groups, usually taking the form of warfare, that transformed humanity from small-scale foraging bands and farming villages into huge societies with elaborate governance institutions and complex and highly productive economic life.” Basically true, in my view,and this book argues for that position persuasively.
4. Karthik Ramanna, Political Standards: Corporate Interest, Ideology, and Leadership in the Shaping of Accounting Rules for the Market Economy. Here is one opening summary bit: “With the financialization of the U.S. economy, particularly since the 1990s, we see a growing impact of investment banks and asset-management firms in accounting rule-making. These groups are more likely to propose rules that accelerate financial-statement recognition of anticipated economic gains — that is, fair-value accounting rules. Under certain circumstances, this can result in higher compensation to executives in these firms.” Most generally, the amount of lobbying over accounting rules seems to be increasing. Here is an NYT Op-Ed by Ramanna. Underdiscussed topics, I have only pawed through this one but it appears to be wel-informed.
Claire Adida, David Laitin, and Marie-Anne Valfort respond to my review
This is in the comments section at MR, in my view an authorial response to a negative review should not be buried, so here it is:
Dear Tyler,
Thank you for taking the time to read our book and blog about it. We take your review and critique seriously, and understand that our title – which generalizes beyond France to “Christian-heritage societies” – might appear to some as a bit of a reach.
Nonetheless, we have two responses to your review. First, any frank discussion of external validity should, in our mind, address the reasons why the scope might be limited. As we explain in Parts I and II of our book, our challenge was to identify whether we could say anything at all about Muslim integration. Our belief is that work to date cannot, because it confounds discrimination due to religion with discrimination due to region-of-origin. Our book’s primary contribution is to isolate the religious factor. To do so, we had to study a specific group of immigrants who hail from the same country, who migrated at the same time and in the same way, and who differ only in their religious membership. None of the examples you cite – Pakistanis or Bosnians in America – offer such a counterfactual. We therefore cannot evaluate how well those groups have integrated due to, or in spite of, their religious membership.
Second, your critique of our efforts at generalizability ignores our analysis of the European Social Survey, a representative sample of respondents in 17 Western European countries; this analysis corroborates our claim that there is a Muslim disadvantage to integration in Christian-heritage societies. Finally, your focus on a single indicator in the Detroit Arab-American Study – “Proud to be an American” – ignores the relevant point we have tried to make, which is that on a number of different measures and in a number of different contexts, the pattern consistently points toward the same direction: that Muslim immigrants, relative to comparable Christian immigrants, integrate less, and that this situation does not improve over time. It is this pattern, not any single difference on any single indicator, that we find disconcerting.
Thank you, again, for your thoughts and consideration. Best, Claire Adida, David Laitin and Marie-Anne Valfort
My initial review of their book on Muslim integration in Christian heritage societies was here.
Sunday assorted links
1. Andrew Batson’s best books list. And Carlos Lozada’s varied books list, including the whiniest book of the year.
2. Ross Douthat on liberalism’s gun problem.
3. Jury duty.
4. The U.S. Post Office will now email you photos of your mail before the mail arrives.
How did China’s Cultural Revolution affect adolescent outcomes for the rusticated?
Yes, I thought this year it was time to search the job market candidates at National University of Singapore. I ran across some fascinating work by Huihua Xie:
Does a difficult environment in early life shape people’s core beliefs and values? We examine the long-term impact of the send-down movement during China’s Cultural Revolution, when urban educated youths were forced out of cities to work and live in undesirable rural areas. The mandatory policy applied to urban youth who graduated from junior or senior high school between 1966 and 1976. We identify the send-down effect by regression discontinuity, comparing individuals who graduated just before and just after the implementation of the policy. Using individual-level survey data, we find that rusticated individuals value family and relationships more highly, are less likely to believe in luck as the most important factor for success, and support social equality more strongly.
The paper, with Jie Gong and Yi Lu, is here, under resubmission at the JPE. She also has an interesting paper on how being rusticated during the Cultural Revolution led to later problems with chronic illness and mental health. Yet another paper considers whether and how the education of your sibling can make you better off or worse off, using regression discontinuity methods.
Europe pollution fact of the day
Europe’s air is less corrosive than it once was, and much less foul than China’s or India’s. Industrial decline and clean-air policies since the 1950s have brought levels of many pollutants, such as sulphur dioxide, fine particulate matter (a dust that can irritate lungs), and nitrogen oxides down over the past few decades. Yet more than 400,000 Europeans still die prematurely each year because of air pollution, according to the European Environmental Agency. In 2010 the health-related costs were thought to be between €330 billion ($437 billion) and €940 billion, or 3%-7% of GDP.
Nine out of ten European city-dwellers are exposed to pollution in excess of guidelines produced by the World Health Organisation (WHO). Some of the highest levels of nitrogen dioxide are found in London; several cities in Turkey are choked with high levels of PM10 (particulate matter of at most 10-micron diameter). But some of the worst pollution is in Eastern Europe (see map). Coal-fired power stations are still common there, and some pollutants blow in from the rest of Europe. The commission is prosecuting 18 governments for infringing pollution limits.
Researchers at King’s College London have found that a child born in London in 2010 can expect to have his life cut short by nine months as a result of breathing its high levels of PM2.5—the very finest particulate matter—if pollution levels do not change.
That article excerpt is from The Economist.
A guaranteed annual income for Finland?
The Finnish government is currently drawing up plans to introduce a national basic income. A final proposal won’t be presented until November 2016, but if all goes to schedule, Finland will scrap all existing benefits and instead hand out 800 euros per month—to everyone.
It sounds far-fetched, but it’s looking likely that Finland will carry through with the idea. Whereas several Dutch cities will introduce basic income next year and Switzerland is holding a referendum on the subject, there is strongest political and public support for the idea in Finland.
A poll commissioned by the government agency planning the proposal, the Finnish Social Insurance Institution or KELA, showed that 69% support (link in Finnish) a basic income plan. Prime minister Juha Sipilä is in favor of the idea and he’s backed by most of the major political parties.
There is more here, by Olivia Goldhill, via Matt Yglesias.
Saturday assorted links
Denmark fact of the politically incorrect paper of the day
Using Danish matched employer-employee data, this paper estimates the relative productivity of men and women and finds that the gender “productivity gap” is 12 percent–seventy five percent of the 16 percent residual pay gap can be accounted for by productivity differences between men and women.
That is from the job market paper of Yana Gallen, a job market candidate from Northwestern.
High skilled migration and global innovation
Another argument against the brain drain hypothesis is that bringing talented workers to the “frontier” countries will boost the supply of global public goods. Rui Xu, in her job market paper from Stanford (pdf), considers exactly this effect. Here are her main results:
Science and engineering (S&E) workers are the fundamental inputs into scientific innovation and technology adoption. In the United States, more than 20% of the S&E workers are immigrants from developing countries. In this paper, I evaluate the impact of such brain drain from non-OECD (i.e., developing) countries using a multi-country endogenous growth model. The proposed framework introduces and quantifies a “frontier growth effect” of skilled migration: migrants from developing countries create more frontier knowledge in the U.S., and the non-rivalrous knowledge diffuses to all countries. In particular, each source country is able to adopt technology invented by migrants from other countries, a previously ignored externality of skilled migration. I quantify the model by matching both micro and macro moments, and then consider counterfactuals wherein U.S. immigration policy changes. My results suggest that a policy – which doubles the number of immigrants from every non-OECD country – would boost U.S. productivity growth by 0.1 percentage point per year, and improve average welfare in the U.S. by 3.3%. Such a policy can also benefit the source countries because of the “frontier growth effect”. Taking India as an example source country, I find that the same policy would lead to faster long-run growth and a 0.9% increase in average welfare in India. This welfare gain in India is largely the result of additional non-Indian migrants, indicating the significance of the previously overlooked externality.
In other words, the brain drain argument is overrated. You might also wish to sample our MRUniversity video on the brain drain argument.
Why older halls for symphony orchestras sound better than new ones?
According to Witold Rybczynski, it is partly a matter of size and shape. Older halls were more likely in a shoe-box shape, such as Musikvereinsaal (1870),the Concertgebouw (1888), and Symphony Hall (1900). The orchestra is at the narrow end of the hall, and “Sound is reflected to the listener from the two parallel walls (which are about sixty to eighty feet apart) as well as from the ceiling. Because the concertgoer is relatively close to the musicians, the atmosphere is intimate, visually as well as acoustically.”
The need for greater seating capacity, because of revenue, swells the halls to as large as 3,000 seats and renders these properties more difficult to achieve. Most of all, it is now difficult “to reflect bass notes from the side walls.”
Different halls also have different “reverberation” times, and thus the more that a hall is used for different kinds of music, the more the design of that hall reflects a compromise. In theory there should be different halls for playing Gorecki and Bach, so an all-purpose hall will sound ideal only rarely.
That is all from his new book Mysteries of the Mall and Other Essays, pp.188-192.
Friday assorted links
1. Can epigenetics influence sperm?
2. The Marc Andreessen productivity guide.
3. Russ Roberts chats with Mitch Weiss on the economics of the Broadway musical.
4. What it’s like to visit Cuba now, as an American.
5. Which kinds of books actually sell?
6. Music of Adele without overproduction, it is a shame what we are losing.
Level effects vs. growth rate effects
Here is an excellent blog post by John Cochrane on that topic, here are some scattered summary bits:
As it turns out, the difference between “growth” and “level” effects in growth theory and facts is not so strong. Many economists remember vaguely something from grad school about permanent “growth” effects being different and much larger than “level” effects. It turns out that the distinction is no longer so clear cut; “growth” is smaller and less permanent than you may have thought, and levels are bigger and longer lasting than you may have thought.
…But “temporary” “short-run” or “catch-up” growth can last for decades. And it can be highly significant for people’s well-being. From 2000 to 2014, China’s GDP per capita grew by a factor of 7, from $955 per person to $7,594 per person, 696%, 14.8% annual compound growth rate (my, compounding does a lot). And they’re still at 15% of the US level of GDP per person. There is a lot of “growth” left in this “level” effect!
…So where are we? There is no magic difference between permanent growth effects and one-time level increases. All we have are distortions that change the level of GDP per capita.
Do read the whole thing.