Recent trends in top income shares
You may recall that some time ago Alan Reynolds (Reynolds responds here) challenged the results of Piketty and Saez on rising income inequality in the United States. There has now been a systematic look at biases in the data, with the goal being to reconcile data from the Current Population Survey with IRS measurements. Burkhauser, Feng, Jenkins and Larrimore report their results:
Although the vast majority of US research on trends in the inequality of family income is based on public-use March Current Population Survey (CPS) data, a new wave of research based on Internal Revenue Service (IRS) tax return data reports substantially higher levels of inequality and faster growing trends. We show that these apparently inconsistent estimates can largely be reconciled once one uses internal CPS data (which better captures the top of the income distribution than public-use CPS data) and defines the income distribution in the same way. Using internal CPS data for 1967–2006, we closely match the IRS data-based estimates of top income shares reported by Piketty and Saez (2003), with the exception of the share of the top 1 percent of the distribution during 1993–2000. Our results imply that, if inequality has increased substantially since 1993, the increase is confined to income changes for those in the top 1 percent of the distribution.
An ungated version is here. As I read this paper, the Piketty and Saez result, with some modifications for 1993-2000, basically holds up. It's also worth noting that recent increases in inequality do relate mostly to the top one percent. That's all for pre-crash times, of course.
Assorted links
1. Paul Graham on writing by enumeration.
2. Doing Business: Rwanda's is the world's top reformer of business regulation this year.
3. New Malcolm Gladwell book of collected essays.
4. Why do so few U.S. college students graduate?
5. Ho-hum: James Patterson signs 17-book deal.
6. "…you'd rather add 17 more items to the line than one other person": a statistical look at when the express lane is faster. Remember: the y-intercept isn't zero!
Nose jobs
According to a number of sources, Iran is the "nose job capital of the world" probably because other signals of beauty are shrouded (by law). Iran also has plenty of well-educated doctors. Gene Expression has some links and a few alternative hypotheses.
Why do universities grant honorary doctorates?
A longstanding MR reader writes to me:
My father will be granted
an honorary doctorate from a European university. While he is
undoubtedly deserving of the honor (he is a well-known professor in his
field), I don't understand the European institution's incentives in
granting the doctorate. My father in not from Europe, holds no degrees
from there, has never worked there, and is unlikely to attract others
to go there. Outside of altruism, why is he being honored? More
broadly, why would any university grant an honorary degree, especially
relatively high-status universities of the Stanford/MIT/Oxbridge ilk?
Especially when conferred to non-academics, don't such degrees dilute
the brand value of the university?
I can think of a few reasons for honorary doctorates:
1. The recipient is a major donor or potential major donor or friend of major donors.
2. The awarding of the doctorate creates press releases and attracts attention for the university. If the recipient is sufficiently prestigious, this involves no reputational cost for the granting institution and perhaps it creates slight reputational benefits. The university also has some chance to make a favorable impression on famous people.
3. Awarding the degree signals the strength of interest groups within the university. Some universities have squabbled over whether President Obama should be given an honorary degree. Last year St. Ambrose, a Catholic school in Iowa, awarded an honorary degree to a "pro-abortion activist," as it was described. In 1985 Oxford broke precedent and refused to award Margaret Thatcher an honorary degree, as the school had done with previous Prime Ministers. They were upset that she had cut funding for British universities.
4. An honorary degree may spur student interest in the school and in the graduation ceremonies, such as when Knox College awarded Stephen Colbert an honorary degree in 2006. Keep in mind that current students are often future donors, so you want to give them a ceremony to remember.
5. Honorary degrees are often a lure to attract commencement speakers.
Cambridge University has given honorary degrees to Albert Einstein, Nelson Mandela, Bill Gates, and now its roadsweeper. I guess they don't want to seem intellectually elitist. Yale gave Paul McCartney an honorary degree.
The UC system gave 700 honorary degrees to former Japanese-American students, namely the ones who were placed in concentration camps during WWII. They thought this was the right thing to do and it may have garnered them points with some local Asian communities.
The question in my mind is the opposite of the reader's: why does anyone accept honorary degrees? Maybe it's hard to say no. David Schindler, a leading environmental scientist, has the right idea:
…there is a saturation limit. I've started to turn down about half of
the honorary degree invitations. I feel badly about it, but each one
takes at least three days, including travel, and I am starting to feel
anxious about the few years I have left to accomplish things that I
want to do.
The practice of honorary degrees dates back to medieval times. The Archbishop of Canterbury has the power to award (non-honorary) degrees, in what I am not sure.
Al Lewis, who played Grampa Munster, claimed to have a Ph.d. in child psychology but it seems this was neither honorary nor real.
Alex’s conniptions
The Voluntary City: Choice, Community and Civil Society, edited by David Beito, Peter Gordon, and Alex Tabarrok. It's very much anti-zoning. Here you can look inside the book. I am genuinely puzzled by this progressive meme that GMU economists don't speak out adequately against zoning and in favor of more diverse, more vital, and more practical urban environments.
Conniptions from me on urban economics
Matt Yglesias, picking up from Ryan Avent, writes:
…some libertarian economists at George Mason University go so far as to
laud America’s large houses and plentiful parking specifically as
evidence of the superiority of America’s free market economic policy,
blissfully unaware that in the United States pervasive regulation
requires the construction of bigger houses and more parking spaces than
the market would provide.
Matt refers to:
…the kind of libertarians who one would expect to go into conniptions if
Fairfax County, Virginia were to propose a stringent rent control law seem surprisingly blasé
about the vast array of land use restrictions that infringe economic
liberty in that county and most other American jurisdictions.
Just for the record, I'd like to add my conniptions on the issue:
1. I would not have brought the U.S. down the path of water subsidies, many of which are pro-suburban. (Admitted they are not always easy to repeal.)
2. I think pollution externalities should be priced in Pigouvian fashion; this would penalize many suburban developments.
3. I oppose the widening of Route 7 at Tysons Corner and I expect a disaster from the current plans.
4. I favor school choice and charter schools, which would make many U.S. cities livable again for couples with children.
5. I would price many roads for congestion, although as Bryan points out this could either help or hurt cars as a mode of transport.
6. I would allow U.S. cities to become much taller, thereby accommodating more residents. I would weaken many urban building codes in the interests of a greener America.
7. I much preferred the time when I lived near a gas station and a 7-11.
Maybe Matt and Ryan are picking on Bryan Caplan rather than me but I suspect Bryan would agree with most of this list, maybe all of it.
If I don't throw conniptions on these issues more often, it is because I regard them as unlikely or in some cases they are simply not issues I follow closely. Fairfax County zoning has such strong political support, most of all from the wealthy Democrats who supported Obama but from Republicans too. If you find anyone in Fairfax screaming about the horrors of zoning, that person is likely to be a libertarian and not a blase one. Or maybe they are a Best Buy shareholder.
But today is the day of conniptions. I truly wish that Fairfax County were more like central Arlington or for that matter Falls Church City and I curse those who have made it otherwise.
Here is a picture of The Conniptions. Don't forget them. They are mine! My conniptions.
Fairfax, by the way, did have rent control before 1973. Oddly, my main post on rent control is a chat with Tyrone, who of course favors the idea.
Assorted links
1. Ben Casnocha chats with Penelope Trunk.
2. Buy and sell words on Twitter (but not with real money).
4. Many world records were set in Mexico this year.
6. Markets in everything: the office kid.
7. Bruce Bartlett joins Capital Gains and Games.
Sentences to ponder
The Required Reports Prepared by State Agencies and Institutions of Higher Education is not itself listed in the Required Reports Prepared by State Agencies and Institutions of Higher Education.
That is from Texas, where they must file a report on all the reports they have filed. Here is more. That report is itself 580 pages and it recommends the abolition of 318 reports and the consoldiation of 58 others. It is promised:
The next edition of this report will contain a full assessment of all required reports.
I thank Catfish for the pointer.
The Politics of Bearing Arms
Historian David Beito, writing at The Beacon, reminds us:
The controversy about carrying guns in public is not new. In 1967, however, the political alignments on this issue were completely different. Many conservatives (and others) objected when the Black Panthers insisted on exercising this right. In response, Governor Ronald Reagan signed the Mulford Act banning the carrying of guns in public.
What I’ve been reading
1. Why Photography Matters as Art as Never Before, by Michael Fried. The text is weak (and mostly skippable), but still this had high value for me. It's a look at how photography has become the centerpiece of contemporary art, starting with Jeff Wall and offering well-chosen color images from the leading creators. I had been needing a book like this.
2. The Narcissism of Minor Differences: How American and Europe are Alike, by Peter Baldwin. This book offers an onslaught of facts and statistics, toward the aim of showing that the United States and Europe aren't so different after all. You also can read it as a critique of purely statistical reasoning. At the very least, it's a good reference work even though I wasn't convinced by the central thesis.
3. Total Recall: How the E-Memory Revolution Will Change Everything, by Gordon Bell and Jim Gemmell. This is an exciting and prophetic book about taking the ideas of self-experimentation and self-recording to an extreme. Record your entire life and then do…?…with the data. Something, they'll figure it out. Just record the recorders and run regressions on what ends up working.
4. The Perfect Fruit: Good Breeding, Bad Seeds, and the Hunt for the Elusive Pluot by Chip Brantley. There is now a "go-to" book on the pluot and this is it. It explains why plums vary so much in quality, why plums are usually bad these days, how the pluot was intended as a replacement, and why some stores call them plumcots. I paid attention the whole way through.
5. The Informers, by Juan Gabriel Vasquez. I loved the first part, about the guy's relationship with his dying father, but found the wartime blacklist story only "good." Still, this is one of the better Colombian novels and I could imagine the author writing a truly great novel someday. Here is one good review.
6. Lorrie Moore, A Gate at the Stairs. Has any novel this year received better or more unanimous critical reviews? The writing is smart, beautiful, and quirky and Moore is not afraid to let her main character be weird. Still, I lost interest within one hundred pages and stopped reading. I am willing to admit the fault may be mine and over Christmas I'll try it again. Somehow I need more analytic structure in my fiction. If you look at the Amazon reader reviews, they make related points. Here is some background information on the book. Do let me know if you loved it.
7. Joyce Appleby, The Relentless Revolution: A History of Capitalism. My mouth watered at the thought of a popular (Norton) Joyce Appleby book on the origins of capitalism. It is intelligent throughout but it wasn't teaching me anything so I put it down. Skimming did not alter this impression. It is more a disappointment than a bad book but it is a disappointment nonetheless. All of a sudden she's afraid to take chances.
8. Strength in What Remains, by Tracy Kidder. It bored me and I stopped. It's OK but I view it as an inefficient blend of narrative and mild information about East African ethnic cleansing. Most critics praised it.
The new Pamuk book, due out in October, is phenomenal and is getting better each day.
Tyler Cowen and Russ Roberts podcast
I always enjoy chatting with Russ. Russ describes the dialogue as follows:
Tyler Cowen of George Mason University and author of Create Your Own Economy talks with EconTalk host Russ Roberts
about the ideas in his recent book. The conversation ranges across a
wide array of topics related to information, the arts, and the culture
of the internet. Topics include how autistics perceive information and
what non-autistics can learn from them, what Buddhism might teach us
about our digital lives, the pace of change in the use of technology,
Nozick's experience machine and the relative importance of authenticity
and what the Alchian and Allen theorem has to do with the internet and
culture.
Assorted links
2. Markets in everything: lingerie football.
3. Receiving income payments can kill you.
Nova Scotia markets, not in everything
Maple syrup curry, which I have now seen on three restaurant menus in so many days.
Amateur crafts are extremely common, as in New Zealand. It is a plausible claim that the blueberries here are the world's best. Natives claim it has Canada's warmest winter.
At Peggy's Cove a ragged Scot-looking woman blew loudly into bagpipes, thereby competing for donor attention with a ragged Scot-looking woman punching an accordion and wailing, all to the detriment of the Coase theorem.
For a while George Washington held out hope that Nova Scotia would join in the rebellion against the British crown. Later American ships attacked Lunenberg several times, starting in 1782, mostly for reasons of plunder.
In 1790 black Nova Scotians were strongly encouraged to move to what is now Sierra Leone. There was a second "purge" of black residents in the 1960s, when the neighborhood of Africville was torn down and its residents were encouraged to leave. Black residents were prominent in the history of Nova Scotia although it seems this is being forgotten.
Overall this is an underrated tourist destination (it is an easy direct flight from Dulles) and I recommend Lesley Choyce's Nova Scotia: Shaped by the Sea.
Don Boudreau is prominently represented in the Halifax museum collection.
They don't do much with it (avoid the cream sauce), but arguably Nova Scotia has the best seafood in all of NAFTA. No way do they ship the good lobsters out.
The IMF has a new blog
You'll find it here. Remember the good ol' days when everyone wondered whether the IMF had anything to do?
What is conservatism?
I've already done What is Progressivism? so here is another installment. This isn't what conservatives today necessarily believe, it's a retranslation of a mishmash of conservatism into a language which I can understand and, in part, present to others. Here goes:
1. Evil is real and there exist evil nations in the world; the relatively virtuous Western powers require strong states to fend off such evils. This distinct from "big government" in the sense advocated by modern liberals.
2. In international affairs, in the twentieth century, the United
States in particular has been unselfish to a remarkable degree. We
therefore should trust the United States with unprecedented power. In
fact we have no alternative. Some cultures really are better than
others.
3. The spread of nuclear weapons, and other forms of WMD, to irrational, evil and undeterrable
powers is the number one foreign policy issue. It runs the risk of
equalizing the balance of power between virtuous and evil agents in the
world.
4. On the domestic front, education is the keystone issue. Societies succeed if strong family structures support an emphasis on learning and acculturation. While this does not rule out public sector education, if public sector education works the credit is not to be found in the public sector.
5. When in doubt, side with the laws and customs that have, over time,
been associated with the Western powers and their growth into powerful
and durable societies. It's hard to judge a lot of customs using pure,
unadulterated reason, as Oakeshott and Hayek have suggested. Defending traditional values is an enterprise which itself requires a mix of law and custom. If you're focused mainly on "policy proposals," you are missing the point.
7. We do not have either the resources or the norms to remake society in the direction of a fully-comfortable-for-everyone social democracy. We do need welfare states to keep a polity in running order, but we should be modest about what such regimes can accomplish. They cannot overcome a fundamental lack of proper values as found in many poor or disadvantaged communities.
8. Fiscal conservatism is part and parcel of conservatism per se. A state wrecked by debt is a state due to perish or fall into decay. This is a lesson from history. States must "save up their powder" for true crises and it is a kind of narcissistic arrogation to think that the personal failures of particular individuals — often those with weak values — meet this standard.
9. For conservatism, small government is a means, not an end. It is a means to the values which lie behind Western civilization and it is a means toward the prosperity we need to live well and defend ourselves. Capitalism is important but capitalism itself relies upon particular values held by the citizenry.
10. Responsibility is a more important value than either liberty or equality.
Here is Julian Sanchez on what such exercises might mean. I don't know exactly what they mean. For me they are a means of thinking through ideas.
Addendum: Arnold Kling comments.