The One Day a Week Restaurant

by  Tyler Cowen in

Eric Crampton emails me:

Why don't we see more of this?  I went to the only Ethiopian restaurant in New Zealand last night.  It runs one day a week – Mondays – in a Burmese restaurant that otherwise was closed on Mondays.
 
http://offsettingbehaviour.blogspot.com/2010/02/one-day-week-restaurant.html
 
I can understand that this kind of arrangements would have risks for the host restaurant.  Ideally, you'd want it from a non-competing cuisine style.  But this is the first instance of it I've ever seen.  Have I just not been paying attention?  The story from the Dominion Post on how the place opened is very nice.  The woman running the Burmese restaurant was an immigrant from Burma who later started volunteering with an NGO that helped new migrants acclimatize.  She met a guy there who wanted to open an Ethiopean restaurant but had no capital; her restaurant was closed Mondays.
 
The other 6 days a week the Ethiopean restauranteur drives a cab. 

Ezra Klein summarizes the new health care push

by  Tyler Cowen in

There's not a lot of policy news in the president's new health-care plan. The changes are pretty much what we expected: more money going to subsidies (which are now being referred to as "the largest middle class tax cut for health care in history"), an excise tax that kicks in later and affects fewer plans, a new Health Insurance Rate Authority to oversee premium increases and reject them if they're unfair, the elimination of the Nebraska deal, and so on. There's no public option, nor any significant retrenchment. In fact, the cost of the bill has increased by $75 billion, the result of more generous subsidies.

What I'd like to see — if this is going to pass — is a tougher penalty for not signing up.  Ezra also discusses the politics of where it is headed.

Addendum: Megan McArdle says it won't happen.

“Three good books”

by  Tyler Cowen in

Tim Harford reports on his reading:

Tyler Cowen and Alex Tabarrok, Modern Principles of Economics (UK) – well-written, interesting, and some material not normally covered in econ. textbooks. I’ll try to find time to write more about this textbook, but guess students and professors will be the judges.

Ben Goldacre’s Bad Science. I’m a bit embarassed not to have read this until now, but the first few chapters are exceeded even my high expectations. Really very good indeed. Apparently a US edition is in the works – I’ve just been asked to blurb it. Will be a pleasure.

Jonah Lehrer’s The Decisive Moment (now republished as How We Decide). A nice science-and-stories approach to neuroscience, psychology and behavioural economics. I finished the book wanting to put it into action – not as easy as Lehrer makes out – and learned plenty I didn’t know I didn’t know.

All three are recommended.

Price controls for insurance companies

by  Tyler Cowen in

I'm confused by the recent discussions emanating from the Obama administration.  If something like the current proposals pass, and those proposals "work," low-risk individuals end up subsidizing the health care of high-risk individuals.  Prices for insurance won't need to go up at outrageous rates, or so we are told.

If current proposals fail to pass, insurance companies can still just dump people.  Forcing them to lower their prices will induce them to dump even more people and to have a tighter definition of preexisting conditions.

It seems to me this announcement is either just headline-seeking or an admission that, after the plan is passed, premia will continue to rise at high rates.  The latter case runs contrary to the narrative of how the plan will contain "the health insurance death spiral of the status quo."

Perhaps forthcoming details will clarify this matter.  (Is it for the transition period?)

The New Yorker profiles Paul Krugman

by  Tyler Cowen in

The article is here.  We learn that Krugman and his wife like St. Croix, they have cats named Doris Lessing and Albert Einstein, and there is an interesting discussion of how his wife edits his work.  Excerpt:

Last August, Krugman decided that before he and Wells departed for a bicycle tour of Scotland he would take a couple of days to speak at the sixty-seventh world science-fiction convention, to be held in Montreal. (Krugman has been a science-fiction fan since he was a boy.) At the convention, there was a lot of extremely long hair, a lot of blue hair, and a lot of capes. There was a woman dressed as a cat, there was a woman with a green brain attached to her head with wire, there was a person in a green face mask, there was a young woman spinning wool. There was a Jedi and a Storm Trooper. Those participants who were not dressed as cats were wearing T-shirts with something written on them: “I don’t understand–and I’m a rocket scientist,” “I see dead pixels,” “Math is delicious.” Krugman has always had a nerdy obsession with puns. (He is very proud of a line in one of his textbooks: “Efforts to negotiate a resolution to Europe’s banana split had proved fruitless.”) He also likes costumes. Once, he and Wells gave a Halloween party where the theme was economics topics–two guests came as Asian tigers, several came as hedge funds, one woman came as capital, dressed as a column. Sitting up onstage at the science-fiction convention, Krugman looked happy to be there. It seemed that these were, in some worrying sense, his people.

And this:

Krugman is not a keen traveller. After the fall of the Berlin Wall, many of his contemporaries set off for Eastern Europe–every economist wanted his own personal country to transition. Jeffrey Sachs, in particular, was all over the place, but Krugman was never tempted. “I know what Jeff does and I couldn’t do it,” he says. “Taking transport planes, living on yak meat for days–no. But I do write faster than anybody. You’ve got to figure out what you should be doing.”

Overall I thought this profile had a lot of substance in it.

Formaldehyde

by  Tyler Cowen in

Formaldehyde is a known irritant poison, capable of causing severe internal damage, and formic acid is equally destructive, best known to scientists as an essential part of the venom in bee stings.  People poisoned by methyl alcohol would often seem to recover from that first bout of dizzy sickness, feel better while the alcohol was being metabolized, and then ten to thirty hours later by poisoned again by the breakdown products.

First, their vision would blur.  The optic nerve and retina are acutely vulnerable to formic acid salts.  The nerve, with its continual processing of images, runs in a high metabolic state, causing blood to circulate through it rapidly — which causes poison to be delivered there continuously.  Autopsies often revealed a startling atrophy of the optic nerve area, the surrounding tissue swollen, bloody, and spongy.  Methyl alcohol and its by-products caused similar damage in the parietal cortex, a region of the brain essential in processing vision.  It concentrated as well in the hardworking lungs — the breakdown of pulmonary tissue was what usually killed people.

That is from the new and consistently interesting The Poisoners' Handbook: Murder and the Birth of Forensic Medicine in Jazz Age New York, by Deborah Blum.  Although she has won a Pulitzer Prize, she remains an underrated author.

Sources of funding for Nobel Prize work

by  Tyler Cowen in

Athina Tatsioni, Effie Vavva, and John P. A. Ioannidis have an interesting new paper:

Funding is important for scientists’ work and may contribute to exceptional research outcomes. We analyzed the funding sources reported in the landmark scientific papers of Nobel Prize winners. Between 2000 and 2008, 70 Nobel laureates won recognition in medicine, physics, and chemistry. Sixty five (70%) of the 93 selected papers related to the Nobel-awarded work reported some funding source including U.S. government sources in 53 (82%), non-U.S. government sources in 19 (29%), and nongovernment sources in 33 (51%). A substantial portion of this exceptional work was unfunded. We contacted Nobel laureates whose landmark papers reported no funding. Thirteen Nobel laureates responded and offered their insights about the funding process and difficulties inherent in funding. Overall, very diverse sources amounting to a total of 64 different listed sponsors supported Nobel-related work. A few public institutions, in particular the U.S. National Institutes of Health (with n=26 funded papers) and the National Science Foundation (with n=17 papers), stood out for their successful record for funding exceptional research. However, Nobel-level work arose even from completely unfunded research, especially when institutions offered a protected environment for dedicated scientists.

I thank Michelle Dawson for the pointer.

Sweden, Medicare, and what really matters

by  Tyler Cowen in

Tino writes:

Medicare was introduced 1965 in the US. Public health coverage for the elderly existed by 1950 in Sweden, but full universal coverage dates to 1955 in Sweden (a public health insurance was founded in 1891, and public municipal public health existed for even longer).

In 1950, before Medicare, and before Universal coverage in Sweden the difference was +2.6 at birth and +0.3 at 65. In 2001-2005 the difference between the Sweden and US was +2.7 at birth and +0.3 years at 65. Identical!

First, regarding the life expectancy at birth we can note that 50 years of different health policy, labor mark policy, welfare state coverage seems to have had zero effect on total outcome.

And:

Last note: around 1900, before the expansion of the welfare state, the estimated life expectancy at birth was 54.0 years in Sweden and 47.3 years in the US, a difference of 5.3 years, twice the current gap.

If you scroll through Tino's blog, you will find various critiques of The Spirit Level.  On the health care point, I would stress that Hansonian results also can be used to argue for the extreme exercise of monopsony power, so don't think the policy implications of this are so simple.

Alcohol Poisoning

by  Alex Tabarrok in

Deborah Blum writes about the Federal program to poison alcohol during prohibition:

Frustrated that people continued to consume so much alcohol even after it was banned, federal officials had decided to try a different kind of enforcement. They ordered the poisoning of industrial alcohols manufactured in the United States, products regularly stolen by bootleggers and resold as drinkable spirits. The idea was to scare people into giving up illicit drinking. Instead, by the time Prohibition ended in 1933, the federal poisoning program, by some estimates, had killed at least 10,000 people.

What Blum fails to mention is that the Federal program to poison alcohol continues to this day.  Drinking-alcohol is heavily taxed but ethanol is heavily subsidized so poisoning or denaturing is used to prevent arbitrage.  Even today some people occasionally go blind or die when they try to drink some form of denatured ethanol but this is rare since safe, drinking alcohol is readily available, even if expensive.

(FYI, Tyler and I mention this unusual method of preventing arbitrage in our chapter on price discrimination in Modern Principles.)

Latino immigrants and crime

by  Tyler Cowen in

The connection between Latino immigration and criminal behavior is much overstated.  Here is an excellent article, full of good information.  Excerpt:

The overall age-adjusted national imprisonment rates are shown in Chart 1. Hispanic incarceration rates are now between 13 and 31 percent above the white average, depending upon which age range we choose for normalization purposes.

And this:

Another important point to emphasize is the wide disparity in white incarceration rates throughout the country, even when adjusted relative to the number of whites in high-crime age ranges. For example, age-adjusted imprisonment rates for whites in large Southern states such as Florida, Texas, and Georgia may be 200 percent or even 300 percent higher than those for whites in large Northeastern or Midwestern states such as New York, New Jersey, or Illinois, as shown in Chart 5. Although it is impossible to disentangle completely how much of this gap may be due to higher criminality and how much due to harsher judicial systems, it seems likely that both play important roles. So even if the age-adjusted Hispanic incarceration rate is somewhat above the white rate–perhaps 15 percent higher on average–it still falls close to the center of the overall white distribution.

Don't forget this:

Nearly all of the most heavily Latino cities have low or even extremely low crime rates, and virtually none have rates much above the national average. Eighty percent Latino El Paso has the lowest homicide and robbery rates of any major city in the continental United States. This is not what we would expect to find if Hispanics had crime rates far higher than whites. Individual cities may certainly have anomalously low crime rates for a variety of reasons, but the overall trend of crime rates compared to ethnicity seems unmistakable.

And this:

…if we restrict our analysis to major cities of half a million people or more and compare the average crime rates for the five most heavily Hispanic cities–Albuquerque, Dallas, Los Angeles, San Antonio, and El Paso–to the those of the five whitest–Oklahoma City, Columbus, Indianapolis, Seattle, and Portland. This time, the more Hispanic cities are the ones with the lower crime rates–10 percent below the white cities in homicide and 15 percent lower in violent crime. A particularly remarkable result is that gigantic Los Angeles–50 percent Hispanic and frequently perceived as a dangerous urban hellhole–has violent crime rates close to those of Portland, Oregon, the whitest major city in the nation at 74 percent.

And finally:

Los Angeles today ranks as America’s least white European large city. Half of the population is Hispanic, and many of these are impoverished illegal immigrants and their families. Yet all crime rates have been falling steadily over the last two decades, with homicide dropping a further 18 percent just last year. As Chart 14 illustrates, most major crime categories are now back down to where they were in the early 1960s, when the population really did look very much like the actors appearing in “Dragnet” and “Leave It to Beaver.” And indeed, violent crime is now roughly the same as for Portland, Oregon, America’s whitest major city.

There is a lot more which I did not pass along, so read the whole thing.  I thank The Browser and Ezra Klein for the pointers.