Saturday assorted links

by  Tyler Cowen

1. What drives Russian men to volunteer to fight in Ukraine?

2. More on the economics of OnlyFans.

3. Abstract art comes from figurative art.  The Mondrian sequence is my favorite, and it has intrigued me for a long time.

4. The EU seems to be slowing down with its anti-AI regulations.  More information here.  Good for them.

5. The average age of a Ukrainian soldier is 43.

6. Can a GPT-4 Vision model do your Christmas shopping for you?

7. Nick Bostrom no longer the Antichrist.

8. Rohit Krishnan now has a generative book.

Low Income Drivers Gain from Congestion Pricing

by  Alex Tabarrok in

Cody Cook and Pearl Li write:

….there is disagreement about the distributional effects of highway toll lanes. On one side, policymakers refer to dynamic tolling as “value pricing” and emphasize that it provides choice to drivers (Samdahl et al., 2013). On the other side, opponents are concerned that “Lexus lanes” enrich the wealthy at everyone else’s expense (Astor, 2017; Rosendorf, 2018). Evaluation of these perspectives depends on two empirical objects: the distribution of driver preferences and what we call the “road technology”—the relationship between traffic quantities and travel times. When one lane becomes tolled, drivers substitute from the newly priced lane into the remaining unpriced ones, increasing travel times in the unpriced lanes. High peak-hour prices may also induce drivers to substitute toward driving off-peak (or not at all), which can increase average speeds when the road technology is convex. Finally, since tolling changes the predictability of travel times, having the option to take the priced lanes can serve as insurance against worse-than-expected traffic conditions.

In this paper, we study the aggregate and distributional impacts of dynamic tolling. To do this, we bring together data on toll transactions, historical traffic conditions, and driver characteristics from the I-405 Express Toll Lanes in Washington State. We begin by presenting two sets of descriptive facts: first, aggregate speed and throughput increased after the introduction of tolling on this highway, and second, low-income drivers face advantageous trade-offs between price and travel time savings in the toll lanes. Next, to quantify the equilibrium effects of tolling, we build and estimate a model of driver demand, the road technology, and the pricing algorithm. In particular, the demand model incorporates the features of dynamic tolling highlighted above: choices of where and when to drive, as well as uncertainty about prices and travel times. Using the estimated model, we find that low-income drivers in fact gain the most from status-quo tolling, and we explore how equilibrium outcomes would change under counterfactual pricing policies.

Pearl Li from Stanford is on the job market.

The Latin American option

by  Tyler Cowen in

Estimates for the number of Palestinians, Syrians, and Lebanese in Brazil range from 10 to 12 million, with a reasonable degree of uncertainty.  Most of them came over before those were distinct countries, for one thing.  Other Latin American countries also have migrants from that region, Panama in particular, and as you may know Bukele of El Salvador is of Palestinian origin.

I don’t know of any formal statistics, but by repute those individuals have done quite well in Latin America.  And it is hard to argue they have increased rates of violence or political disorder.

I would gladly see Brazil and other Latin polities open their immigration to current Palestinians in the Middle East.

The major Latin economies have very low fertility rates, about 1.55 for Brazil.  They will need more people, and more young people, in any case.  Now seems like a good time to act.

The U.S. should care about Europe too

by  Tyler Cowen in

That is the message of my latest Bloomberg column, yes Europe is falling behind but we should worry rather than gloat.  Here is one excerpt:

A deeper truth is that Europe still has unparalleled cultural and political capital, often along dimensions that the US cannot match. Europe was the center of the world for a long time, even if it no longer is, and has a detailed and emotionally vivid understanding of how distinct traditions and histories can coexist. Of course they often don’t, and that too is part of Europe’s lesson for the world.

On a more practical level, the US and other nations need a Europe that can defuse its populist right pressures, handle external migration from the Middle East and Africa, and provide a partial defense against Russian expansion in Ukraine and other parts of far eastern Europe. A Europe that is declining in relative economic importance is unlikely to be able to perform those roles well.

All of which is to say, a Europe striving to regain its place atop the global economy is a welcome development not just for Europeans but for small-d democrats everywhere. If only it would go about the task with a greater sense of urgency.

Empfehlenswert.

That was then, this is now

by  Tyler Cowen in

…the first German pogroms of the modern age, the so-called Hep-Hep riots, took place in 1819.  Jews were attacked on the streets and Jewish stores were ransacked.  It was a new and as yet unknown phenomenon in the German-speaking lands.  The riots were led by students, ostensibly the anti-absolutist and progressive force in German society.

That is from Shlomo Avineri’s Herzl’s Vision: Theodor Herzl and the Foundation of the Jewish State.  Here is a new bulletin from MIT.

Friday assorted links

by  Tyler Cowen

1. “His job market paper, “Inflation, Risk Premia, and the Business Cycle”, proposes a novel macro-finance model to rationalize the risk price puzzle — the previously undocumented empirical disconnect between inflation and risk premium shocks.”  J.R. Scott of MIT Sloan.

2. Oregon no longer requires a bar exam to practice law.

3. Ten minute video from hu.ma.ne.  The new AI pin, some call it.  Here is NYT coverage.  And an NYT review.  What do you all think?

4. The economics of visa-free travel to Kenya?

5. A 1599 view on how the moderns were outdoing the ancients.

6. Don’t waste your time reading this stuff.  Because, of all pieces, it comes closest to what I hear from insiders.

Unraveling the female thinness premium

by  Tyler Cowen in

That is a paper by Shasha Wang, who is on the job market from the University of Pennsylvania.  Here is the abstract:

This paper studies two mechanisms that jointly contribute to thinness premium in the marriage market: the economic mechanism and the non-economic mechanism. My empirical findings from the Panel Study of Income Dynamics (PSID) reveal that all else being equal, thinner females are more likely to marry richer males. A one-unit increase in BMI (Body Mass Index), roughly equivalent to a six-pound increase for a 5’6″ figure, is associated with a 3.9% decrease in the husband’s annual labor income for noncollege wives and a 4.3% decrease for college-educated wives. Using the Simulated Method of Moments to estimate a two-stage static matching equilibrium model, this paper determines whether the observed preference for thinner female partners in the marriage market is a result of assortative mating due to the thinness premium in the labor market or is driven by non-economic factors such as a preference for smaller body sizes or other traits associated with smaller body sizes, such as self-discipline, active social interactions, and positive social image. The estimation results indicate that the positive correlation between a husband’s income and his wife’s thinness is primarily attributed to a male preference for thinner spouses. Women with a BMI below 25 only earn 4% more income than those with a BMI above 25 (assuming all other factors are equal), but having a wife with a BMI below 25 significantly enhances a husband’s utility, akin to a 1.15 times increase in his consumption.

Please note that is not her job market paper.  Her main paper is a very interesting piece on when/where STEM gaps arise across men and women.

Claims about extinction and evolution

by  Tyler Cowen in

Advances in evolutionary theories (the Extended Synthesis) demonstrate that organisms systematically modify environments in ways that influence their own and other species’ evolution. This paper utilizes these theories to examine the economic consequences of human dispersal from Africa. Evidence shows that early humans’ dispersal affected the adaptability of animal species to human environments and, through this, the extinction of large mammals during Homo sapiens’ out-of-Africa migration. Empirical analyses explore the variation in extinction rates as a source of exogenous pressure for cooperation and innovation among hunter–gatherers and examine the impact of extinction on long-run development. The results indicate that extinction affects economic performance by driving continental differences in biogeography, disease environments, and institutions. Eurasia’s location along the out-of-Africa migratory path provided human and animal populations with coevolutionary foundations for domestication and agriculture, which gave Eurasians technological and institutional advantages in comparative development.

That is from a recent paper by Ideen A. Riahi, published in The Economic Journal.  Via the excellent Kevin Lewis.

Returns to Education for Women in the Mid-20th Century: Evidence from Compulsory Schooling Laws

by  Tyler Cowen in

Abstract: Women had a similar level of schooling to men during the mid-twentieth century United States, but research on the returns to education for women is scarce. Using compulsory schooling laws as instrumental variables, this paper examines the causal effect of education on women’s labor market and marriage market outcomes. I examine both outcomes because women frequently traded off employment and marriage due to marriage bars and gender norms against married women working. I show that an additional year of schooling increases women’s probability of gainful employment by 7.9 pp. and women’s wage earnings by 15 percent, which can be explained by women’s entry into skilled occupations. Given the large returns on earnings, education surprisingly does not increase women’s probability of never marrying, but it does increase the probability of divorce and separation. In addition, women’s education positively affects the husband’s and the household’s labor supply and earnings, conditional on marriage formation and the husband’s education.

That is from Sophie Li, who is on the job market from Boston University.  Her actual job market paper is: “The Effect of a Woman-Friendly Occupation on Employment: U.S. Postmasters Before WWII .”  Some of you will wince to hear me say this, but many of the most interesting job market papers this year are on the economics of gender.

Thursday assorted links

by  Tyler Cowen

1. “Let’s start with strawberries. I have a trio of questions on strawberries. Is it feminine to eat strawberries? Why do we eat strawberries with cream? And do you think the British consider strawberries a very British fruit and maybe the most British fruit we have?”  Here is the rest of the podcast, with transcript.

2. FT interview with Claudia Sahm.

3. University of Austin now accepting undergraduate applications, with some fellowships too.

4. Dan Klein on the history of the word “liberalism.”

5. New Iceland puffin documentary (New Yorker).

6. Can Seth write a good book about the NBA in thirty days?

7. Japanese Space-out competition, how would you do?

China estimate of the day

by  Tyler Cowen in

According to a report by the All-China Federation of Industry and Commerce, more than 80% of China’s 1 billion private enterprises are family-owned, with about 29% of these businesses in traditional manufacturing. From 2017 to 2022, around three-quarters of China’s family businesses are in the midst of a leadership transition, marking the largest succession wave in Chinese history.

Here is the full story, via Rich Dewey.

My Conversation with the excellent Brian Koppelman

by  Tyler Cowen in

Here is the audio, video, and transcript.  Here is the episode summary:

Brian Koppelman is a writer, director, and producer known for his work on films like Rounders and Solitary Man, the hit TV show Billions, and his podcast The Moment, which explores pivotal moments in creative careers.

Tyler and Brian sat down to discuss why TV wasn’t good for so long, whether he wants viewers to binge his shows, how he’d redesign movie theaters, why some smart people appreciate film and others don’t, which Spielberg movie and Murakami book is under appreciated, a surprising fact about poker, whether Jalen Brunson is overrated or underrated, Manhattan food tips, who he’d want to go on a three-day retreat with, whether movies are too long, how happy people are in show business, his unmade dream projects, the next thing he’ll learn about, and more.

Excerpt:

COWEN: Thank you. I have some very simple questions for you about the history of television to start with. I grew up in the 1970s and I’ve long wondered, “Why was TV so bad for so long before the so-called Golden Age?” Maybe you could date that to the 90s or the noughties, but why weren’t shows in the 70s and 80s better than they were? Would you challenge that premise?

KOPPELMAN: Well, I also grew up in the ’70s. I was born in ’66. I’m not sure that the hypothesis that it was bad is correct. It certainly wasn’t, in general, as an art form, operating on the level that cinema was operating on or the level that music, in part, was operating on during that time.

But if we look at, say, children’s television, I could argue that Jim Henson and Sesame Street, for what it was and aimed at what it was aimed at, was as important as any television that’s on today. I would say that Jim Henson moved the art form forward. He figured out a use case for TV that hadn’t really been done before, and he created a way of thinking about the medium that was really different.

Then, look, Hill Street Blues shows up in the ’80s and, I think, figures out how to use certain techniques of theater and cinema and novels to tell these TV stories. Like any other business, when that started to connect, then people in the business started to become aware of what was possible.

Yes, it was a function of three channels, to answer your question. Yes, in the main, of course, TV was worse. No doubt about it, but there were high points. I think those high points pointed the way toward the high points that came later. For me, NYPD Blue is the network show that’s fully on the level of any of these shows that came after. David Milch cut his teeth on Hill Street Blues.

There’s a wonderful book by Brett Martin, called Difficult Men, that’s about showrunners. It starts, in a way, with Bochco and Milch in that time period. It’s a great look into how this idea of showrunners created modern television. HBO needing something, all these business reasons underneath it, but how people who came up through, originally, Hill Street were able to go on and start this revolution.

COWEN: In your view, how good, really, was I Love Lucy? Is it just a few memorable moments, like Vitameatavegamin? Or is it actually a show where it’d be good episode after good episode, like The Sopranos?

And from Brian:

I don’t know Wes Anderson. I don’t know him, but I met him once. I love his movies, and I love that his movies are 90 minutes. The one time I met him, we were screening a film. He invited some people who happened to be in town, who he knew were film people, so I got to watch a movie with him. Afterwards, we were just talking about movies, and I said, “These movies of yours — they are 90 minutes,” and he said, “Yes. I found that the concepts I’m interested in don’t really support a journey that lasts longer than that.” He’s an incredibly disciplined filmmaker. I was like, “That makes total sense.”

Recommended, interesting and entertaining throughout.

Will we see less comovement in global economic growth?

by  Tyler Cowen in

That is the question behind my latest Bloomberg column.  China is now, and looking forward, less of a common growth driver around the world.  Oil price shocks may not be less important for humanitarian outcomes, but they matter less for many of the largest economies.  America is now an oil exporter, and the EU just made some major adjustments in response to the Russia shock.  More renewable energy is coming on-line, most of all solar.

The column closes with this:

In this new world, with these major common shocks neutered, a country’s prosperity will be more dependent on national policies than on global trends. Culture and social trust will matter more too, as will openness to innovation — and, as fertility rates remain low or decline, so will a country’s ability to handle immigration. A country that cannot repopulate itself with peaceful and productive immigrants is going to see its economy shrink in relative terms, and probably experience a lot of bumps on the way down.

At the same time, excuses for a lack of prosperity will be harder to come by. The world will not be deglobalized, but it will be somewhat de-risked.

Dare we hope that these new arrangements will produce better results than the old?

Or perhaps a more general rising tide was the only way many countries were going to make progress?