China fact of the day home market effect
China has overtaken the US as home to the most dollar billionaires, according to the latest Hurun Rich List, with Wang Jianlin, the real estate tycoon, overtaking Jack Ma, Alibaba’s founder, as the mainland’s wealthiest person.
Mr Wang also overtook Li Ka-shing, the Hong Kong tycoon, as the richest person in Greater China. Hurun values Mr Wang, 61, at $34.4bn, up 52 per cent from a year earlier, versus $32.7bn for Mr Li and $22.7bn for Mr Ma. Mr Wang topped the mainland list in 2013 but lost the title to Mr Ma last year.
China added 242 dollar billionaires in 2015, bringing its total to 596, against 537 in the US, according to the annual ranking of China’s wealthy. If Hong Kong, Macau and Taiwan are included, the Greater China total reaches 715.
That is from Gabriel Wildau at the FT. As with the United States, much of this is paper wealth, although for China that may matter more, at least if you believe the Chinese government props up various asset prices more than the American government does.
Friday assorted links
1. American Museum of Tort Law.
2. Are “bedchamber” and “amidst” becoming more popular words?
3. Angus Deaton’s consumer theory (boring link but well done).
Personalized Medicine and the FDA
In my post A New FDA for the Age of Personalized, Molecular Medicine I wrote:
Each patient is a unique, dynamic system and at the molecular level diseases are heterogeneous even when symptoms are not. In just the last few years we have expanded breast cancer into first four and now ten different types of cancer and the subdivision is likely to continue as knowledge expands. Match heterogeneous patients against heterogeneous diseases and the result is a high dimension system that cannot be well navigated with expensive, randomized controlled trials. As a result, the FDA ends up throwing out many drugs that could do good.
The Manhattan Institute has today taken out a full-page ad in the New York Times calling for a discussion about how to integrate personalized medicine with the FDA. The ad reads in part:
A new era in science and medicine calls for a new approach at the federal Food and Drug Administration, which determines whether any new treatment is safe and effective.
Every American has a stake in this change – because everyone will be a patient someday.
Congress should lay the foundation for a 21st century FDA by creating an external advisory network drawing on the expertise of the scientific and patient communities to assist the FDA in setting standards for how biomarkers can be better integrated into the drug development process.
This is a call for collaboration on an unprecedented scale to help the FDA chart a safe path for advancing biomarkers from discovery in a lab to your doctor’s office. We echo previous recommendations made by the President’s Council of Advisors on Science and Technology, the National Institutes of Health, a report from the National Research Council – and senior staff at the FDA itself.
The ad is signed by former FDA commissioner Andrew von Eschenbach, Peter Huber, (whose excellent book The Cure in the Code lays out the science and policy of biomarkers), Eric Topol, and myself among others.
See Project FDA for more.
Orszag and Furman on rents and inequality
I haven’t read through this new paper yet (pdf), but the authors and title make it self-recommending. Here is one bit taken from a quick perusal:
Figure 8 presents the distribution of the return on invested capital (ROIC) for publicly traded non-financial U.S. firms from 1965 through 2014, excluding good will (an intangible asset reflecting the excess of the price paid to acquire a company over the value of its net assets). This analysis excludes financial firms, where ROIC data is considerably more scarce. As the chart shows, the 90th percentile of the return on invested capital across firms has grown markedly since around the early 1990s. The 90/50 ratio—that is, the ratio of the 90th percentile of the distribution of capital returns to the median—has risen from under 3 to approximately 10. In addition, the dramatic returns on invested capital of roughly 100 percent apparent at the 90th percentile, and even 30 percent apparent at the 75th percentile, at the very least raise the question of whether they reflect economic rents.
Do read the whole thing, as will I. Here is a related Peter Orszag Bloomberg piece.
Mind both your p’s and your q’s
Here is a new and very clear Diane Coyle piece about whether gdp and CPI statistics are failing us. Perhaps we are overestimating the rate of inflation and thus underestimating real wage growth, as many of the economic optimists suggest. Yet I do not find that “the q’s” support this case made for “the p’s.” For instance the employment-population ratio remains quite low, though with some small recent upticks. If real wages were up so much, you might expect a larger adjustment from the q’s, namely the quantities of labor supplied.
Similarly, there is net Mexican migration out of the United States. You might not expect that if recent innovations were creating significant unmeasured real wage gains.
Investment performance, while hard to measure, also seems sluggish.
Again, a closer look at the q’s makes it harder to be very optimistic about the p’s.
*The Invention of Science*
That is the new, magisterial and explicitly Whiggish book by David Wootton, with the subtitle A New History of Scientific Revolution.
I wish there were a single word for the designator “deep, clear, and quite well written, though it will not snag the attention of the casual reader of popular science books because it requires knowledge of the extant literature on the history of science.” Here is one excerpt, less specific than most of the book:
My argument so far is that the seventeenth-century mathematization of the world was long in preparation. Perspective painting, ballistics and fortification, cartography and navigation prepared the ground for Galileo, Descartes and Newton. The new metaphysics of the seventeenth century, which treated space as abstract and infinite, and location and movement as relative, was grounded in the new mathematical sciences of the fifteenth and sixteenth centuries, and if we want to trace the beginnings of the Scientific Revolution we will need to go back to the fourteenth and fifteenth centuries, to double-entry bookkeeping, to Alberti and Regiomontanus. The Scientific Revolution was, first and foremost, a revolt by the mathematicians against the authority of the philosophers.
769 pp., recommended — for some of you.
I had to order my copy from UK, in the US it comes out in December and can be pre-ordered.
The self-tracking pill
Some morning in the future, you take a pill — maybe something for depression or cholesterol. You take it every morning.
Buried inside the pill is a sand-sized grain, one millimeter square and a third of a millimeter thick, made from copper, magnesium, and silicon. When the pill reaches your stomach, your stomach acids form a circuit with the copper and magnesium, powering up a microchip. Soon, the entire contraption will dissolve, but in the five minutes before that happens, the chip taps out a steady rhythm of electrical pulses, barely audible over the body’s background hum.
The signal travels as far as a patch stuck to your skin near the navel, which verifies the signal, then transmits it wirelessly to your smartphone, which passes it along to your doctor. There’s now a verifiable record that the pill reached your stomach.
This is the vision of Proteus, a new drug-device accepted for review by the Food and Drug Administration last month. The company says it’s the first in a new generation of smart drugs, a new source of data for patients and doctors alike. But bioethicists worry that the same data could be used to control patients, infringing on the intensely personal right to refuse medication and giving insurers new power over patients’ lives. As the device moves closer to market, it raises a serious question: Is tracking medicine worth the risk?
That is from Russell Brandom.
Thursday assorted links
1.The internet hermit. And is your house the most disruptive technology of the last century?
2. The economics of Playboy droppings its nudes.
3. Model this: “The Philippines’ leading fast-food giant Jollibee Foods announced on Tuesday it had acquired 40 percent of an upmarket US hamburger chain [Smashburger] for $99 million.”
4. New algorithm can erase tourists from your photos.
There is a new Clay Shirky book
Americas fact of the day
…the flow of Europeans to the New World before 1800 did not stand out, at least numerically. Somewhere between 1 million and 2 million Europeans came to the New World between 1500 and 1800; by contrast, over 8 million Africans came via the slave trade. (The predominantly European population of North America resulted from very high birth rates…while wretched conditions and an absence of females kept the African population down.)
That is from Kenneth Pomeranz and Steven Topik, The World That Trade Created, second edition, p.56. And here is Alex’s earlier post on textbooks and slavery.
Leo Strauss’s greatness, according to Dan Klein
1. A sense of virtue/justice/right that is large and challenging.
2. An appreciation of wisdom as something different than progressive research programs/specialized academic fields and disciplines.
3. An understanding of the sociology of judgment, in particular the role of great humans.
4. An epic narrative, from Thucydides to today.
5. Rediscovery, analysis, elaboration, and instruction of esotericism.
6. Close readings and interpretations of great works.
7. Inspiring, cultivating serious students and followers.
I should add that Dan also is developing a counterpart list, of weaknesses in Strauss’s outlook and approach.
Wednesday assorted links
1.Another good reason for not trusting Mundell-Fleming intuitions, this one from Olivier Blanchard and Co.
2. Migration can counteract global warming costs in middle income but not poor countries.
3. Izabella Kaminska transcribes the Star Trek conversation.
5. More on the relative impotence of more progressive taxes.
A conversation with Angus Deaton about RCTs
The interrogator is Timothy N. Ogden, here is one bit from Deaton:
Something I read the other day that I didn’t know, David Greenberg and Mark Shroder, who have a book, The Digest of Social Experiments, claim that 75 percent of the experiments they looked at in 1999, of which there were hundreds, is an experiment done by rich people on poor people. Since then, there have been many more experiments, relatively, launched in the developing world, so that percentage can only have gotten worse. I find that very troubling.
If the implicit theory of policy change underlying RCTs is paternalism, which is what I fear, I’m very much against it.
The conversation is interesting throughout. Tim indicates:
This is a chapter from the forthcoming book Experimental Conversations, to be published by MIT Press in 2016. The book collects interviews with academic and policy leaders on the use of randomized evaluations and field experiments in development economics. To be notified when the book is released, please sign up here.
The book will contain an interview with me as well.
Economics and the Modern Economic Historian
That is a new NBER paper by Ran Abramitzky, the abstract is here:
I reflect on the role of modern economic history in economics. I document a substantial increase in the percentage of papers devoted to economic history in the top-5 economic journals over the last few decades. I discuss how the study of the past has contributed to economics by providing ground to test economic theory, improve economic policy, understand economic mechanisms, and answer big economic questions. Recent graduates in economic history appear to have roughly similar prospects to those of other economists in the economics job market. I speculate how the increase in availability of high quality micro level historical data, the decline in costs of digitizing data, and the use of computationally intensive methods to convert large-scale qualitative information into quantitative data might transform economic history in the future.
I have for a while been pleased that GMU has one of the largest collections of economic historians (I would say four,) of any department around, UC Davis being another major presence in that area.
What is stupid?
Should there not be more research on this apparently simple yet elusive question? Here is a new paper by Acezel, Palfi, and Kekecs:
This paper argues that studying why and when people call certain actions stupid should be the interest of psychological investigations not just because it is a frequent everyday behavior, but also because it is a robust behavioral reflection of the rationalistic expectations to which people adjust their own behavior and expect others to. The relationship of intelligence and intelligent behavior has been the topic of recent debates, yet understanding why we call certain actions stupid irrespective of their cognitive abilities requires the understanding of what people mean when they call an action stupid. To study these questions empirically, we analyzed real-life examples where people called an action stupid. A collection of such stories was categorized by raters along a list of psychological concepts to explore what the causes are that people attribute to the stupid actions observed. We found that people use the label stupid for three separate types of situation: (1) violations of maintaining a balance between confidence and abilities; (2) failures of attention; and (3) lack of control. The level of observed stupidity was always amplified by higher responsibility being attributed to the actor and by the severity of the consequences of the action. These results bring us closer to understanding people’s conception of unintelligent behavior while emphasizing the broader psychological perspectives of studying the attribute of stupid in everyday life.
What do you think people, a smart paper or a stupid paper?
For the pointer I thank Michelle Dawson.