Predictious is the premier Bitcoin betting market
Via Maxim Lott, whose piece on Predictious is here.
Collaborating With People Like Me: Ethnic co-authorship within the US
That is the new NBER paper by Richard B. Freeman and Wei Huang and it is an object lesson in the benefits of cross-cultural collaboration:
This study examines the ethnic identify of the authors of over 1.5 million scientific papers written solely in the US from 1985 to 2008. In this period the proportion of US-based authors with English and European names fell while the proportion of US-based authors with names from China and other developing countries increased. The evidence shows that persons of similar ethnicity co- author together more frequently than can be explained by chance given their proportions in the population of authors. This homophily in research collaborations is associated with weaker scientific contributions. Researchers with weaker past publication records are more likely to write with members of ethnicity than other researchers. Papers with greater homophily tend to be published in lower impact journals and to receive fewer citations than others, even holding fixed the previous publishing performance of the authors. Going beyond ethnic homophily, we find that papers with more authors in more locations and with longer lists of references tend to be published in relatively high impact journals and to receive more citations than other papers. These findings and those on homophily suggest that diversity in inputs into papers leads to greater contributions to science, as measured by impact factors and citations.
I can think of at least two ways of interpreting these results. First, there are research profit opportunities from finding talented foreign collaborators, who perhaps are still undervalued in their home environments, relative to their total potential global productivity. Second, the globalization of your connections proxies for how elite you are, even after adjusting for other measures of researcher quality.
Do any of you find ungated versions?
Jugaad sentences to ponder
The budget of India’s Mars mission, by contrast, was just three-quarters of the $100 million that Hollywood spent on last year’s space-based hit, “Gravity.”
There is more here.
Assorted links
1. FantasySCOTUS.
2. “I don’t know how many levels there are after that.” Recommended.
3. South Korean control of the internet.
4. Do four goats have a Nash equilibrium? (video) And long video interview with Thomas Schelling, oral history of Harvard’s Kennedy School.
5. A kosher version of the barber paradox.
6. “You have a budget, and you have to prioritize.” (the culture that is Swiss)
Robert Gordon’s sequel paper on the great stagnation
You will find his NBER paper here, in which he responds to critics and outlines his core argument that U.S. growth is doomed to be slow and subpar for a long time to come. There is no point in summarizing this already-familiar debate, so let’s cut straight to the chase:
1. I agree with a great deal of this paper, to say the least, especially when it is compared to previous mainstream opinion on these topics. My favorite parts are his discussions of how multi-faceted were the waves of earlier progress starting in the 19th century, compared to some of the more recent and weaker tech revolutions. That said, in some key ways this piece falls short of meeting the standards of reasoned argumentation.
2. The single biggest question is how much the United States will be able to draw upon innovation from other countries, over the next say 40 years. Gordon doesn’t discuss this in a serious way. The rest of his paper simply lists a bunch of pessimistic factors (valid worries, I might add) and then declares he can’t think of anything else that might turn them around. Maybe that should shift your “p,” but one’s own failure to imagine shouldn’t imply a very firm conclusion about impossibilities.
3. There is a key passage on p.26: “My forecast of 1.3 percent annual total-economy productivity growth in the future does not require any foresight beyond suggesting that the past 40 years are a more relevant benchmark of feasible productivity growth than the 80 years of before 1972.” Fair enough, but how about looking at the last 120 years or last 120,000 years for that matter? The overall pattern is lots of pauses, followed by eventual new bursts of progress. That’s no proof of a future subsequent burst of progress, but so far history is not on the side of the long-term tech pessimists. It may be on the side of the short-term tech pessimists, at least for a while. Gordon, in 2003, wrote rather wisely: “But is it possible to be so sure which decades into the past are relevant for predictions…”
4. Gordon doesn’t know much about the literature on driverless vehicles and their potential, and yet he escalates his rhetoric to the point of giving the reader the impression that he approaches the entire question of tech progress with simple irritation: “This category of future progress is demoted to last place because it offers benefits that are so minor [compared to cars]…”
5. Advances in the biosciences are dismissed in two short paragraphs. For sure, I am myself somewhat in tune with the pessimistic perspective here. I think these advances were way over-promised and still may take longer than people think. Still, Gordon doesn’t offer any argument. His first sentence of that brief section says it all: “Future advances in medicine related to the genome have already proved to be disappointing.” This is a simple confusion of past and future tense.
7. Gordon still fails to credit the originators of the growth slowdown idea, as applied to contemporary times, namely Michael Mandel and Peter Thiel. The first sentence of his paper reads: “A controversy about the future of U.S. economic growth was ignited by my paper released in late summer 2012.” I would add, perhaps with a bit of peevishness, that a lot of the actual debate was kicked off by my own The Great Stagnation, published in January of 2011 and which was covered and commented on extensively. (And which by the way was dedicated to Mandel and Thiel, as well as citing them.) And if I did not credit Gordon more aggressively at that time, it is because I was all too well aware of his 2003 essay, “Exploding Productivity Growth,” the contents of which I do not need to relate any further but if you wish read at the link.
Gordon would do well to reflect a little more deeply on how and why he has changed his mind over the last ten years and what this implies for when a bit more agnosticism would be appropriate.
Addendum: I agree with Kevin Drum. Matt Yglesias comments too.
Is Robert Gordon underestimating the progress of automation?
In his recent NBER working paper, Robert Gordon wrote:
This lack of multitasking ability is dismissed by the robot enthusiasts – just wait, it is coming. Soon our robots will not only be able to win at Jeopardy but also will be able to check in your bags at the sky cap station at the airport, thus displacing the skycaps. But the physical tasks that humans can do are unlikely to be replaced in the next several decades by robots. Surely multiple-function robots will be developed, but it will be a long and gradual process before robots outside of the manufacturing and wholesaling sectors become a significant factor in replacing human jobs in the service or construction sectors.
So how is it with those skycaps? I queried Air Genius Gary Leff and he wrote this back to me:
There are still people picking up/loading bags onto the planes, but —
American Airlines has tested self-tagging of bags in Boston, Austin, and Orlando
http://boardingarea.com/aadvantagegeek/2012/11/14/american-airlines-orlando-mco-self-tagging-tag-bag-luggage-system-check-i/Qantas has permanent bag tags that work with RFID readers at the airport, you check in online and drop your bag at the bag drop and leave. This works for their Australian domestic flights. (I do have a “Q Bag Tag”)
http://www.qantas.com.au/travel/airlines/q-bag-tag/global/enBritish Airways is trialing an end to paper tags, they began with Microsoft employees in Seattle this past fall
http://boardingarea.com/viewfromthewing/2013/11/07/british-airways-new-electronic-baggage-tags/Brussels Airlines on intra-European flights departing Brussels
http://brusselsairlines.prezly.com/brussels-airport-and-brussels-airlines-test-automated-self-baggage-drop-off-BWI is working on their baggage systems to accommodate self-checking of bags
http://www.capitalgazette.com/news/general_assembly/bwi-moving-forward-with-new-hotel-self-bag-check-in/
And that required no more than a few minutes thought from Gary.
Employers are measuring the value of workers with ever-greater precision
Hannah Kuchler has a new piece in the FT on this topic, here is one bit:
Another pioneering outfit is Sociometric Solutions, which puts sensors in name badges to discover social dynamics at work. The badges monitor how employees move around the workplace, who they talk to and in what tone of voice.
One client, Bank of America, discovered that its more productive workers were those allowed to take their breaks together, in which they let off steam and shared tips about dealing with frustrated customers.
The bank took heed and switched to collective breaks, after which performance improved 23 per cent and the amount of stress in workers’ voices fell 19 per cent.
…David Lathrop, its director of research and strategy, says the sensors are now so cheap they can be put “practically everywhere”, arguing that employees could benefit by tracking their own performance.
As I have stressed in Average is Over, improved measurement of worker value is very likely to increase income inequality. When contributions are relatively vague, the natural tendency is to have weak egalitarian norms and relatively egalitarian pay structures. When relative contributions are more clear, pay structures will follow, in the longer run dragging norms along with them.
The world’s most valuable stamp is being auctioned
Sotheby’s New York will offer the most famous stamp in the world in a dedicated auction on 17 June 2014. No stamp is rarer than the sole-surviving example of the British Guiana One-Cent Magenta, a unique yet unassuming penny issue from 1856, and no stamp is more valuable: each of the three times it has been sold at auction, it has established a new record price for a single stamp. The British Guiana is equally notable for its legacy, having been rediscovered by a 12-year-old Scottish boy living in South America in 1873, and from there passing through some of the most important stamp collections ever assembled. The stamp comes to auction this spring with a pre-sale estimate of $10/20 million*, which would mark a new world auction record for a stamp…
Wikipedia describes the rarity as follows:
The issue came about through mischance. An anticipated delivery of stamps by ship did not arrive so the local postmaster, E.T.E. Dalton, authorised printers Joseph Baum and William Dallas, who were the publishers of the Official Gazette newspaper in Georgetown, to print an emergency issue of three stamps. Dalton gave some specifications about the design, but the printer chose to add a ship image of their own design to stamps. Dalton was not pleased with the end result, and as a safeguard against forgery ordered that all correspondence bearing the stamps be autographed by a post office clerk. This particular stamp was initialled E.D.W. by the clerk E.D. Wight.
And:
It is imperforate, printed in black on magenta paper, and it features a sailing ship along with the colony’s Latin motto “Damus Petimus Que Vicissim” (We give and expect in return) in the middle.
You can rest assured:
At one point, it was suggested that the 1c stamp was merely a “doctored” copy of the magenta 4c stamp of the 1856 series, a stamp very similar to the 1c stamp in appearance. These claims were disproven.
Assorted links
1. Factor price equalization, as further applied to services.
2. Good author blurbs for Cass Sunstein.
3. A long Ryan Avent post on what is wrong with our labor markets and how to fix them. Resists easy summarization but do read it. And inequality and guard labor, which is related to my theory of good food.
4. Boxbee. And the new Beck album is out.
5. There are whales alive today born before Moby Dick was written.
Headlines to warm an economist’s heart
Abba admit outrageous outfits were worn to avoid tax
Here is some explanation:
According to Abba: The Official Photo Book, published to mark 40 years since they won Eurovision with Waterloo, the band’s style was influenced in part by laws that allowed the cost of outfits to be deducted against tax – so long as the costumes were so outrageous they could not possibly be worn on the street.
In 2007 Ulvaeus was wrongly accused of failing to pay 85m kronor (£7.9m) in Swedish taxes between 1999 and 2005, and went on to successfully appeal against the decision.
“I am of course very happy that I have been informed in writing that I have always done the right thing concerning my taxes,” he said after the court victory.
The article is here, via Ted Gioia.
Indirect Bribing with Plausible Deniability
From a new working paper by Stefano Della Vigna, Ruben Durante, Brian Knight, and Eliana La Ferrara
We examine the evolution of advertising spending by firms over the period 1994 to 2009, during which Silvio Berlusconi was prime minister on and off three times, while maintaining control of Italy’s major private television network, Mediaset. We predict that firms attempting to curry favor with the government shift their advertising budget towards Berlusconi’s channels when Berlusconi is in power. Indeed, we document a significant pro-Mediaset bias in the allocation of advertising spending during Berlusconi’s political tenure. This pattern is especially pronounced for companies operating in more regulated sectors…
In the United States, Lyndon Johnson made his fortune, working through Lady Bird, in similar ways. As Robert Caro wrote in Means of Ascent:
As one businessman puts it: “Everyone knew that a good way to get Lyndon to help you with government contracts was to advertise over his radio station.”
Jack Shafer, drawing on Caro, summarizes the details in The Honest Graft of Lady Bird Johnson.
Hat tip: John van Reenen.
Freer trade in European and Spanish health care services
Spanish patients, like all Europeans, will now be able now choose which EU country to seek treatment in. The Cabinet last week approved a decree that implements an EU directive on cross-border healthcare. Under the system, patients will advance the money for their treatment abroad, but can request a reimbursement from their own country.
The directive aims to go one step beyond the emergency treatment already covered by the European Health Card and let patients choose another member state for specific, non-emergency treatment.
Spain however has concerns:
The State Council, the government’s key advisory body, has this week warned the government that the measure may put a major strain on Spain’s resources. “Given that our country is a recipient country for tourists, it seems likely that this could lead to an increase in demand for healthcare,” the State Council report on the law change says, which could result in “longer waiting lists.”
Additionally, reimbursement will not necessarily cover the total amount charged by the foreign hospital; instead Spanish authorities will use the official rates of each regional health service. Spain does not have a common set of rates; rather, each regional government sets its own public tariffs.
It might over time lead to higher prices. Here are some other possible implications:
Spain’s private health system could be the main beneficiary of this new system…This is because “prestigious and renowned” private health centers could get added clients now that member states have to reimburse their citizens. Of course foreigners could choose the public health system, but it would mean long waiting lists under the same conditions as Spanish patients.
Medical fees at both public and private hospitals in Spain are lower than in many other European countries. “It could well be that for Scandinavia it is cheaper to send patients to Spain,” notes Rivero.
There is more here. There is plenty of further information here, but only very recently has this cross-border directive been moving to a scale where it might make a real difference. Spain for instance seems to be a country which is cheap enough, sunny enough, and reliable enough to draw significant business.
Larry Summers on finance
It is certainly true that there has been a dramatic increase in the number of highly paid people in finance over the last generation. Recent studies reveal that most of the increase has resulted from an increase in the value of assets under management. (The percentage of assets that financiers take in fees has remained roughly constant.) Perhaps some policy could be found that would reduce these fees but the beneficiaries would be the owners of financial assets – a group that consists mainly of very wealthy people.
I hope you can fight through the FT gate here, the piece is interesting throughout.
Addendum: Ungated link is here.
Are genetics becoming more important for NBA success?
That’s hard to say, but a number of different models would predict that effect over time, as opportunities spread to a greater number of potential players. Here is a good article from Scott Cacciola:
For a growing number of fathers and sons, the N.B.A. is a family business. This season, 19 second-generation players have appeared in games — a total that represents 4.2 percent of the league, and is nearly twice as many players as a decade ago.
Consider that three second-generation players were selected to participate in Sunday night’s All-Star Game here: Stephen Curry of the Golden State Warriors, Kevin Love of the Minnesota Timberwolves and Kobe Bryant of the Los Angeles Lakers. (Bryant, voted in by the fans, will not play because of a knee injury.)
Even more progeny are on the way. Two of this country’s top college players — Andrew Wiggins, a freshman at Kansas, and Jabari Parker, a freshman at Duke — are sons of former N.B.A. players. Both are expected to be lottery picks whenever they decide to make themselves eligible for the draft.
Players and coaches cite several factors in the rise of second-generation players, who tend to benefit from genetics (it helps to be tall) and from early access to top-notch instruction. Steve Kerr, a former guard and front-office executive, likened the setting to being immersed in a “basketball think tank” from childhood.
Assorted links
1. Crowdsource dating advice, while you are on dates.
2. Seinfeld vs. LCD Soundsystem, or why many people succeed in their late 30s.
3. Extending unemployment benefits did increase joblessness, and the paper is here (pdf).
4. What really went wrong with the microfoundations of macroeconomics? Chris House writes: “The main thing New Keynesian research has been devoted to for the past 20 years is an exhaustive study of price rigidity. If anything was holding us back it was the extraordinary devotion of our energy and attention to the study of nominal rigidities. We now know more about the details of price setting than any other field in economics. As financial markets were melting down in 2008, many of us were regretting that allocation of our attention. We really needed a more refined empirical and theoretical understanding of how financial markets did or did not work.”
5. Chopin’s Heart.