How Many Homicides were there in 2010?
How many homicides were there in 2010 in the United States? Well, that’s easy. Let’s just do some Googling:
Between the smallest and largest figures there is a difference of 3,292 deaths or 25%!
The differences are striking but not entirely arbitrary or without explanation. I assume the second figure adds late additions to the 2010 data and so should be considered more authoritative but that is a relatively small difference.
The difference between 2 and 3 is puzzling and seems to be that the number in 2 is drawn from the Supplementary Homicide Report (SHR) statistics on victims while the larger figure is drawn from homicide reports in the UCR. Not all agencies collect the more detailed statistics in the SHR while the UCR is nearly complete. Thus the victim figure is smaller than the report figure (this doesn’t appear to conform exactly to where the data is supposed to be sourced but it’s what the FBI tells me). It’s unclear why the FBI would report both figures when they know one is misleading.
The difference between 3 and 4 comes from different definitions of homicide. The FBI collects data on crimes. If a killing is ruled justified, i.e. not a crime, it doesn’t go into the FBI homicide statistics. The CDC collects data from death certificates which list as homicide any death caused by “injuries inflicted by another person with intent to injure or kill, by any means.” Thus, the CDC data includes justifiable homicide. In 2010 according to the FBI there were 387 justifiable homicides by law enforcement and 278 by private citizen for a total of 665 justifiable homicides, so that accounts for some but not all of the difference.
(By the way, the 278 justifiable homicides in 2010 by private citizens compared to 387 by law enforcement and 14,720 unjustifiable homicides would seem to be an important context for many claims about stand your ground laws. N.b. this doesn’t mean that the laws couldn’t be associated with more unjustifiable homicides).
The FBI (3) and NVSS (4) figures track each other closely over time but its important to be aware of the differences and to be consistent in one’s calculations.
Which kinds of music are encouraged by streaming vs. downloads?
Let’s compare iTunes downloads to a mythical perfect streaming service which lets you listen to everything for a fixed fee each month or sometimes even for free. In the interests of analytical clarity, I will oversimplify some of the actual pricing schemes associated with streaming and consider them in their purest form.
Streaming seems to encourage the demand for variety, so the website vendor wants to make browsing seem really fun, perhaps more fun than the songs themselves. (An alternative view is that the information produced by streaming services, and the recommendations, allow for in-depth exploration of genres and that outweighs the “greater ease of sampling of variety” effect. Perhaps both effects can be true for varying groups of listeners with somehow the “middle level of variety-seeking left in the lurch, relatively speaking.)
The music creators are incentivized to create music which sounds very good on first approach. Otherwise the listener just moves on to further browsing and doesn’t think about going to your concert or buying your album.
Streaming, with its extremely large menu, also means commonly consumed pieces will tend to be shorter or more easily broken into excerpts. This will favor pop music and I think also opera, because of its arias.
Advertising is a more important revenue source for streaming than it is for downloads. The music promoted by streaming services thus should contribute to the overall ambience and coolness of the site, and musicians who can meet that demand will find that their work is given more upfront attention. It encourages music whose description evokes a response of “Oh, I’ve never had that before, I’d like to try it.” Even if you don’t really care about it.
People who purchase advertised products are, on average, older than the people who purchase music. Streaming services thus should slant product and product accessibility on the site toward the musical tastes of older people.
Since streaming divides up revenues among a greater number of artists, that should encourage solo performers with low capital costs, who can keep their (tiny) share all for themselves. It also may require that the artists on streaming services can make a living or partial living giving concerts, even more so than under the previous world order.
This music industry source suggests that streaming boosts album sales in a way that downloads do not. It also questions whether that boost will be long-lived, as streaming services take over more of the market.
When the marginal cost of more music is truly zero, does that make musical choices more or less socially influenced?
Hannah Karp shows that in the new world of streaming, mainstream radio stations are responding by playing the biggest hits over and over again. Ad-supported media require the familiar song to grab and keep the attention of the listener. Risk-aversion is increasing, which probably pushes some marginal listeners, who are interested in at least some degree of exploration, into further reliance on streaming.
The top 10 songs last year were played close to twice as much on the radio than they were 10 years ago, according to Mediabase, a division of Clear Channel Communications Inc. that tracks radio spins for all broadcasters. The most-played song last year, Robin Thicke’s “Blurred Lines,” aired 749,633 times in the 180 markets monitored by Mediabase. That is 2,053 times a day on average. The top song in 2003, “When I’m Gone” by 3 Doors Down, was played 442,160 times that year.
So the differing parts of the market are interdependent here.
What do you think?
Traffic Forecasts
Official DOT forecasts of road traffic with actual road traffic.
Hat tip to Andrew Gelman, who compares it with some other famous forecasts.
Good Marc Andreessen piece on the broader implications of Bitcoin
Marc writes:
Think about content monetization, for example. One reason media businesses such as newspapers struggle to charge for content is because they need to charge either all (pay the entire subscription fee for all the content) or nothing (which then results in all those terrible banner ads everywhere on the web). All of a sudden, with Bitcoin, there is an economically viable way to charge arbitrarily small amounts of money per article, or per section, or per hour, or per video play, or per archive access, or per news alert.
Another potential use of Bitcoin micropayments is to fight spam. Future email systems and social networks could refuse to accept incoming messages unless they were accompanied with tiny amounts of Bitcoin – tiny enough to not matter to the sender, but large enough to deter spammers, who today can send uncounted billions of spam messages for free with impunity.
Finally, a fourth interesting use case is public payments. This idea first came to my attention in a news article a few months ago. A random spectator at a televised sports event held up a placard with a QR code and the text “Send me Bitcoin!” He received $25,000 in Bitcoin in the first 24 hours, all from people he had never met. This was the first time in history that you could see someone holding up a sign, in person or on TV or in a photo, and then send them money with two clicks on your smartphone: take the photo of the QR code on the sign, and click to send the money.
There is more here, interesting throughout.
Robert J. Barro on aggregate demand
There has been a recent kerfluffle over whether Robert Barro rejects the notion of aggregate demand, which he had written with quotation marks as “aggregate demand.” Scott Sumner surveys the back and forth.
I say use The Google to find out what Barro really thinks and indeed he has written a whole piece on the topic (jstor), namely “The Aggregate-Supply/Aggregate Demand Model,” from the mid 1990s, and here is the abstract:
In recent years, many macroeconomic textbooks at the principles and intermediate levels have adopted the aggregate-supply/aggregate-demand (AS-AD) frame- work [Baumol and Blinder, 1988, Ch. 11; Gordon, 1987, Ch. 6; Lipsey, Steiner, and Purvis, 1984, Ch. 30; Mankiw, 1992, Ch. 11]. The objective was to allow for supply shocks in a Keynesian framework and to generate more satisfactory predictions about the behavior of the price level. The main point of this paper is that the AS-AD model is unsatisfactory and should be abandoned as a teaching tool.
In one version of the aggregate-supply curve, the components of the AS-AD model as usually used are contradictory. An interpretation of the model to eliminate the logical inconsistencies makes it a special case of rational-expectations macro models. In this mode, the model has no Keynesian characteristics and delivers the policy prescriptions that are familiar from the rational-expectations literature.
An alternative version of the aggregate-supply curve leads to what used to be called the complete Keynesian model: the goods market clears but the labor market has chronic excess supply. This model was rejected long ago for good reasons and should not be resurrected now.
If you read the paper, you will see three things. First, Barro is fully aware of “AD-like” phenomena and does not reject that notion. Second, Barro seems to prefer the IS-LM model to AS-AD, albeit with some caveats about possible false predictions of IS-LM and also noting in footnote two that he prefers his own presentation in his 1993 text. Third, Barro’s criticism is (whether you agree or not) that AD-AS collapses too readily into standard rational expectations models and doesn’t really provide an independent foundation for sticky price macroeconomics. In a nutshell “The AS-AD model is logically flawed as usually presented because its assumption that the price level clears the goods market is inconsistent with the Keynesian underpinnings for the aggregate-demand curve.”
Krugman had written this:
If you read Barro’s piece, what you see is a blithe dismissal of the whole notion that economies can ever suffer from am inadequate level of “aggregate demand” — the scare quotes are his, not mine, meant to suggest that this is a silly, bizarre notion, in conflict with “regular economics.”
I believe that is not a good characterization of Barro’s views and it is also an object lesson in the importance of the Ideological Turing Test. I would cite not only this piece, but also forty years of journal articles, many of which study the importance of nominal shocks and demand, albeit without (in general) using textbook AD-AS terminology. Indeed, Barro working with Herschel Grossman is one of the founding fathers of quantity-constrained Keynesian sticky-price macro and he is still citing this work favorably in his mid-1990s piece; see for instance Barro and Grossman (1971, 1974) and also their book from 1976: “This is a textbook on macroeconomic theory that attempts to rework the theory of macroeconomic relations through a re-examination of their microeconomic foundations. In the tradition of Keynes’s General Theory of Employment, Interest and Money…”
On the UI issue, I would note that the multiplier from transfers is likely unimpressive relative to the multiplier from government consumption.
Harford Strikes Back
Tim Harford is speaking about his new book, The Undercover Economist Strikes Back, at Cato at noon on Thursday Jan. 23. I will be commenting. More info and to register here.
If you can’t make it to the Cato Institute, you can watch this event live online at www.cato.org/live.
Here is Cato’s announcement.
In his new book, Tim Harford attempts to demystify macroeconomics in the same way his earlier bestseller, The Undercover Economist, demystified microeconomics. Using his characteristic conversational style, Harford will discuss abstract macroeconomic ideas, explaining the most common models of recessions and the difficulty of discriminating between them on empirical grounds. For example, was the crisis of 2008 driven by supply- or demand-side factors? And why do failures of the financial sector seem to have such severe economic consequences? He will not shy away from other topics, including income inequality, or the growing interest in alternative measures of economic well-being, such as self-reported happiness. Please join us for a discussion of what macroeconomists believe about the economy and of why those beliefs often seem to lead to bad public policy.
Teen employment and the minimum wage: sixty years of experience
Kevin Erdmann relates:
There is much more here. Kevin concludes: “Is there any other issue where the data conforms so strongly to basic economic intuition, and yet is widely written off as a coincidence?”
Where are the missing gains from trade?
There is a new and probably important paper by Marc J. Melitz and Stephen J. Redding on this topic. For this piece I find a segment in the middle to be more illuminating than the abstract:
Trade has a fractal-like property in this model, in which there are gains from trade at each intermediate stage of production. If one falsely assumes a single stage of production, when production is in fact sequential, these gains from trade at each intermediate stage show up as an endogenous increase in measured domestic productivity. As the number of production stages converges towards infinity, the welfare gains from trade become arbitrarily large. This captures the idea that trade involves myriad changes in the organization of production throughout the economy and the welfare costs from forgoing this pervasive specialization can be large.
As the domestic trade share for an individual production stage becomes arbitrarily small, the welfare gains from trade also becomes arbitrarily large. This captures the idea that some countries may have strong comparative advantages in some stages of production and the welfare losses from forgoing this specialization can be large.
Here is an ungated version of the paper. I would note this idea holds out the hope of integrating the technology diffusion literature with the more traditional international trade theory approaches.
Will Wilkinson, we miss ye
Here is part of Will’s new post:
…the fact is, mundane liberalism is flatly incompatible with the security state, as we know it. That anyone spurred to action against the illiberal security state by the democratic jusificatory ethos of mundane liberalism has come to seem a little “libertarian,” and may even therefore confess some personal “libertarian” sympathies, suggests to me a problem with “liberalism” as it is embodied in actual political discourse and practice. It suggests that liberalism is effectively a corrupt form of statist institutional conservatism, and that the democratic justificatory ethos of mundane liberalism has somehow survived within the ethos of “libertarianism,” even if, as an explicit doctrinal matter, libertarians are generally hostile to the ideas of democracy and the legitimate liberal state. It’s nice that libertarians have kept liberalism alive, but it would be even nicer if it were possible for liberals to espouse liberalism without therefore being confused for libertarians.
We all hope for more.
F.A. Hayek, *The Market and Other Orders*
That is the new University of Chicago Press volume of Hayek’s collected works, this time volume 15. It is the best single-volume introduction to Hayek’s thought, if you are going to buy or read only one. It has the best of the early essays, as you might find in Individualism and Economic Order, and then the best later essays which build upon those earlier insights.
Here is Bruce Caldwell’s introduction to the volume, for e-purchase. The book’s table of contents is here. Here is our MRU course on Friedrich Hayek.
Assorted links
1. Fun Twitter source of German words.
2. Not safe for work uses of Google Glass.
3. “Cataluña tiene un superávit de 4.000 millones.”
4. The true power of the Blockchain?
5. Update on The Orange County Register.
6. Too negative, too polemic, and too unreasonable, but if you wish to read an argument that Jane Austen was not in fact a game theorist, here goes.
Venezuela fact of the day
I knew gas in Venezuela was underpriced, but I had not known by how much. Nick Miroff brings us the latest:
Venezuela sits atop the world’s largest oil reserves, and its government sets the price of premium gasoline at about 5 cents a gallon. Its real price — adjusted to the soaring street value of the U.S. dollar — is half a penny per gallon.
But rest assured, there will be a move toward international prices:
The projected price hike is likely to push gas closer to 17 cents a gallon, at unofficial exchange rates.
There is more here.
How well does a minimum wage boost target the poor?
There has been a recent kerfluffle over the Sabia and Burkhauser paper (ungated here) suggesting that minimum wage increases do not very much help the American poor. Sabia and Burkhauser report facts such as this:
Only 11.3% of workers who will gain from an increase in the federal minimum wage to $9.50 per hour live in poor households…Of those who will gain, 63.2% are second or third earners living in households with incomes three times the poverty line, well above 50,233, the income of the median household in 2007.
That’s what I call not very well targeted toward helping the poor. To the best of my knowledge, these numbers have not been refuted or even questioned.
There has been a significant campaign lately to elevate this Arindrajit Dube piece (pdf) into a rebuttal of Sabia and Burkhauser. I’ve now read through it, and while it is pretty dense, I don’t see that it supplies any such effective rebuttal (it is however a valuable paper, and survey paper, in its own right).
Here is an excerpt from the Dube paper:
An additional contribution of the paper is to apply the recentered influence function (RIF) regression approach of Firpo, Fortin and Lemieux (2009) to estimate unconditional quantile partial effects (UQPEs) of minimum wages on the equivalized family income distribution.
Dube also writes:
The elasticity of the poverty rate with respect to the minimum wage ranges between -0.12 and -0.37 across specifications with alternative forms of time-varying controls and lagged effects; most of these estimates are statistically significant at conventional levels.
Dube in fact counts up twelve papers on the side of “minimum wage hikes can make a reasonably-sized dent in poverty.”
Now, I don’t intend this as any kind of snide, anti-theory, or anti-technique comment, but when there is a clash between simple, validated observations and complicated regressions, no matter how state of the art the latter may be, I don’t always side with the regressions.
One interpretation of the Dube results is:
a) although a minimum wage hike applies only to some members of a community, its morale or network effects spread its benefits much more widely, or,
b) through some kind of chain link effect, a minimum wage hike pushes up the entire distribution of wages for lower-income workers
Alternatively, I would try
c) the public choice critique of econometrics is correct, these minimum wage hikes are all endogenous to complex factors, and no one has a properly specified model. We are seeing correlations rather than causation, despite all attempts to adjust for confounding variables.
So far I am voting for c). And there is a very simple story to tell here, namely that states which are good at fighting poverty, through whatever means, also tend to have higher minimum wages for political economy reasons. It seems unlikely that controls are going to pick up that effect fully.
Or try another model, more tongue in cheek but instructive nonetheless. If government is quite benevolent and omniscient, and has always done exactly the right thing in the past, we will see in the data that the minimum hikes of the past are at least somewhat effective in fighting poverty. At the same time, the remaining options on possible minimum wage hikes will not help at all.
Dube’s paper, econometrically speaking, is a clear advance over Sabia and Burkhauser. But Dube pays little heed to integrating econometric results with common sense facts and observations about the economy. As Bryan Caplan has stated, the knowledge and judicious invocation of simple facts about the economy is one of the most underrated skills in professional economics.
I also get a bit nervous when the number of studies on one side of a question is counted and weighed up against common facts. Some of these pieces are simply measuring the same correlation in (somewhat) differing ways, and the number of them says more about the publication process than anything else. These pieces also are not all in what I would call great journals. Maybe that is an unfair metric of judgment — I am writing this on a blog, after all. Nonetheless I looked at the list of cited sources and pulled out the two clumps with what appeared to be the highest academic pedigree, in terms of both economist and outlet.
The first clump is a group of papers by David Neumark, with co-authors. I find that Neumark does not himself think that minimum wage hikes do much if anything to help poverty, and he has a good claim at being the world’s number one expert on the economics of minimum wages. In fairness to Dube, he does have some good (although I would not say decisive) criticisms of one of Neumark’s papers pushing this line.
The second source is a paper by Autor, Manning, and Smith, an NBER working paper. They write “…the implied effect of the minimum wage on the actual wage distribution is smaller than the effect of the minimum wage on the measured wage distribution.”
Of course that hardly settles it.
You might call this one a draw, but then we return to the question of where the burden of proof lies. I’m still stuck on, to repeat the above quotation, this:
Only 11.3% of workers who will gain from an increase in the federal minimum wage to $9.50 per hour live in poor households…Of those who will gain, 63.2% are second or third earners living in households with incomes three times the poverty line, well above 50,233, the income of the median household in 2007.
Unemployment benefits and Google job search
I had not known of this Scott R. Baker and Andrey Fradkin paper until recently, here is the abstract:
The large-scale unemployment caused by the Great Recession has necessitated unprecedented increases in the duration of unemployment insurance (UI). While it is clear that the weekly payments are beneficial to recipients, workers receiving benefits have less incentive to engage in job search and accept job offers. We construct a job search activity index based on Google data which provides the first high-frequency, state-specific measure of job search activity. We demonstrate the validity of our measure by benchmarking it against the American Time Use Survey and the comScore Web-User Panel, and also by showing that it varies with hypothesized drivers of search activity. We test for search activity responses to policy shifts and changes in the distribution of unemployment benefit duration. We find that search activity is greater when a claimant’s UI benefits near exhaustion. Furthermore, search activity responses to the passage of bills that increase unemployment benefits duration are negative but short-lived in most specifications. Using daily data, we estimate that an increase by 1% of the population of unemployed receiving additional benefits results in a decrease in aggregate search activity of 1.7% lasting only one week.
One way (not the only way) of reading these results is to wonder if some of the unemployed feel they ought to increase their shirking in response to an extension of benefits, but they actually don’t really want to do so. They shirk a bit more, for a short while, not to feel like fools, and then return either to active search or fruitless despondent search, as the case may be. For better or worse, habit dies hard.
For the pointer I thank John Horton.
Conor Sen, by the way, tells us that “ask for a raise” is at a post-recession high on Google Trends.
Is ACA leading to less hiring?
There is a new study from West Michigan (pdf), by Leslie A. Muller, Paul Isely, & Adelin Levin, based on questionnaire responses. I would take this with a grain of salt, but still it is useful information to throw into the pot. Here is one excerpt:
Many firms have decided however to minimize their exposure to ACA costs by limiting the employees that must be covered. Questions 14a – 14c show that 36 percent of firms are considering (or using) temporary workers, 44 percent are considering or have reduced/limited hiring over the next 12 months, and 51 percent are considering or have already reduced/limited hours so that the employee is considered part-time.
You may find the tables on the last few pages of the paper of interest. The results are based on fewer than 180 observations and presumably involve some selection bias as well.
The pointer is from W.E. Heasley.