Tuesday assorted links
1. There are no elected officials left in Haiti.
2. Was the T. Rex actually pretty smart?
3. The Microsoft deal with OpenAI will be big.
4. Non-drinking is on the rise amongst the English.
6. Anti-war Russians, living in Latin America.
7. How the human walk evolved for endurance, not speed (Wired).
8. “A Dutch supermarket chain introduced slow checkouts for people who enjoy chatting, helping many people, especially the elderly, deal with loneliness. The move has proven so successful that they installed the slow checkouts in 200 stores.” Link here.
Why did the gender wage gap stop narrowing?
During the 1980s, the wage gap between white women and white men in the US declined by approximately 1 percentage point per year. In the decades since, the rate of gender wage convergence has stalled to less than one-third of its previous value. An outstanding puzzle in economics is “why did gender wage convergence in the US stall?” Using an event study design that exploits the timing of state and federal family-leave policies, we show that the introduction of the policies can explain 94% of the reduction in the rate of gender wage convergence that is unaccounted for after controlling for changes in observable characteristics of workers. If gender wage convergence had continued at the pre-family leave rate, wage parity between white women and white men would have been achieved as early as 2017.
That is from a new NBER working paper by Peter Q. Blair and Benjamin Posmanick. Might the gender wage gap be one economics topic where a naive, mood-affiliated view on it best predicts a bunch of other bad views on totally separate topics?
How much did pre-ACA Medicaid expansions matter?
This paper examines the impact of Medicaid expansions to parents and childless adults on adult mortality. Specifically, we evaluate the long-run effects of eight state Medicaid expansions from 1994 through 2005 on all-cause, healthcare-amenable, non-healthcare-amenable, and HIV-related mortality rates using state-level data. We utilize the synthetic control method to estimate effects for each treated state separately and the generalized synthetic control method to estimate average effects across all treated states. Using a 5% significance level, we find no evidence that Medicaid expansions affect any of the outcomes in any of the treated states or all of them combined. Moreover, there is no clear pattern in the signs of the estimated treatment effects. These findings imply that evidence that pre-ACA Medicaid expansions to adults saved lives is not as clear as previously suggested.
That is a new NBER working paper from Charles J. Courtemanche, Jordan W. Jones, Antonios M. Koumpias, and Daniela Zapata.
Here are some relevant pictures. Now, would you expect subsequent Medicaid expansions to have higher, lower, or the same marginal value?
What should I ask Rick Rubin?
I will be doing a Conversation with him, here is Wikipedia:
Frederick Jay Rubin is an American record producer. He is the co-founder (alongside Russell Simmons) of Def Jam Recordings, founder of American Recordings, and former co-president of Columbia Records.
Rubin helped popularise hip hop by producing records for acts such as the Beastie Boys, Geto Boys, Run-DMC, Public Enemy, and LL Cool J. He has also produced hit records for acts from a variety of other genres, predominantly heavy metal (Danzig, System of a Down, Metallica, and Slayer), alternative rock (The Cult, Red Hot Chili Peppers, The Strokes, and Weezer), and country (Johnny Cash and The Chicks).
In 2007, Rubin was called “the most important producer of the last 20 years” by MTV and was named on Time‘s list of the “100 Most Influential People in the World“.
So what should I ask?
And I am excited for his new book The Creative Act: A Way of Being.
Where are all the workers?
The subtitle of the paper is “From Great Resignation to Quiet Quitting”, here is the abstract:
To better understand the tight post-pandemic labor market in the US, we decompose the decline in aggregate hours worked into the extensive (fewer people working) and the intensive margin changes (workers working fewer hours). Although the pre-existing trend of lower labor force participation especially by young men without a bachelor’s degree accounts for some of the decline in aggregate hours, the intensive margin accounts for more than half of the decline between 2019 and 2022. The decline in hours among workers was larger for men than women. Among men, the decline was larger for those with a bachelor’s degree than those with less education, for prime-age workers than older workers, and also for those who already worked long hours and had high earnings. Workers’ hours reduction can explain why the labor market is even tighter than what is expected at the current levels of unemployment and labor force participation.
Dain Lee, Jinhyeok Park, and Yongseok Shin wrote that new NBER working paper, important work for understanding our current time.
Monday assorted links
1. AEA vs. EJMR? (Bloomberg).
2. Chollet with some GPT skepticism.
3. Noma in Copenhagen is closing (NYT). “…Mr. Redzepi admitted to bullying his staff verbally and physically, and has often acknowledged that his efforts to be a calmer, kinder leader have not been fully successful.”
4. “Using a 3-second sample of human speech, it can generate super-high-quality text-to-text speech from the same voice. Even emotional range and acoustic environment of the sample data can be reproduced. Here are some examples.” Link here.
5. Joshua Kim comment on my higher education worries. I think he is saying they don’t get enough money!?
The Extreme Shortage of High IQ Workers
At first glance it seems peculiar that semiconductors, a key item of national strategic interest, should be produced in only a few places in the world, most notably Taiwan, using devices produced only in Eindhoven in the Netherlands by one firm, ASML. Isn’t the United States big enough to be able to support all of these technologies domestically? Yes and no.
Semiconductor manufacturing is the most difficult and complicated manufacturing process ever attempted by human beings. A literal spec of dust can ruin an entire production run. How many people can run such a factory? Let’s look at the United States. The labor force is approximately 164 million people which sounds like a lot but half of the people in the labor force have IQs below 100. More specifically, although not everyone in semiconductor manufacturing requires a PhD, pretty much everyone has to be of above average intelligence and many will need to be in the top echelons of IQ.
In the entire US workforce there are approximately 3.7 million workers (2.3%) with an IQ greater than two standard deviations above the mean. (Mean 100, sd, 15, Normal dist.) Two standard deviations above the mean is pretty good but we are talking professor, physician, attorney level. At the very top of semiconductor manufacturing you are going to need workers with IQs at or higher than 1 in a 1000 people and there are only 164 thousand of these workers in the United States.
164 thousand very high-IQ workers are enough to run the entire semiconductor industry but you also want some of these workers doing fundamental research in mathematics, physics and computer science, running businesses, guiding the military and so forth. Moreover, we aren’t running a command economy. Many high-IQ workers won’t be interested in any of these fields but will want to study philosophy, music or English literature. Some of them will also be lazy! I’ve also assumed that we can identify all 164 thousand of these high-IQ workers but discrimination, poverty, poor health, bad luck and other factors will mean that many of these workers end up in jobs far below their potential–the US might be able to place only say 100,000 high-IQ workers in high-IQ professions, if we are lucky.
It’s very difficult to run a high-IQ civilization of 330 million on just 100,000 high-IQ workers–the pyramid of ability extends only so far. To some extent, we can economize on high-IQ workers by giving lower-IQ workers smarter tools and drawing on non-human intelligence. But we also need to draw on high-IQ workers throughout the world–which explains why some of the linchpins of our civilization end up in places like Eindhoven or Taiwan–or we need many more Americans.
What is an optimum degree of LLM hallucination?
Ideally you could adjust a dial and and set the degree of hallucination in advance. For fact-checking you would choose zero hallucination, for poetry composition, life advice, and inspiration you might want more hallucination, to varying degrees of course. After all, you don’t choose friends with zero hallucination, do you? And you do read fiction, don’t you?
(Do note that you can ask the current version for references and follow-up — GPT is hardly as epistemically crippled as some people allege.)
In the meantime, I do not want an LLM with less hallucination. The hallucinations are part of what I learn from. I learn what the world would look like, if it were most in tune with the statistical model provided by text. That to me is intrinsically interesting. Does the matrix algebra version of the world not interest you as well?
The hallucinations also give me ideas and show me alternative pathways. “What if…?” They are a form of creativity. Many of these hallucinations are simple factual errors, but many others have embedded in them alternative models of the world. Interesting models of the world. Ideas and inspirations. I feel I know what question to ask or which task to initiate.
Oddly enough, for many queries what ChatGPT most resembles is…don’t laugh — blog comments. Every time I pose a query it is like putting a blog post out there, or a bleg, and getting a splat of responses right away, and without having to clog up MR with all of my dozens of wonderings every day. Many of those blog comment responses are hallucinations. But I learn from the responses collectively, and furthermore some of them are very good and also very accurate. I follow up on them on my own, as it should be.
LLMs are like giving everyone their own comments-open blog, with hallucinating super-infovores as the readers and immediate response and follow-up when desired. Obviously, the people with some background in that sector, if I may put it that way, will be better at using ChatGPT than others.
(Not everyone is good at riding a horse either.)
Playing around with GPT has in fact caused me to upgrade significantly my opinion of MR blog comments — construed collectively — relative to other forms of writing.
Please do keep in mind my very special position. The above may not apply to you. I have an RA to fact-check my books, and this process is excellent and scrupulous. Varied and very smart eyes look over my Bloomberg submissions. MR readers themselves fact-check my MR posts, and so on. Having blogged for more than twenty years, I am good at using Google and other methods of investigating reality. At the margin, pre-LLM, I already was awash in fact-checking. If GPT doesn’t provide me with that, I can cope.
And I don’t take psychedelics. R-squared is never equal to one anyway, not in the actual world. And yet models are useful. Models too are hallucinations.
So if GPT is doing some hallucinating while at work, I say bring it on.
Sunday assorted links
1. Nathan Labenz on Gary Marcus and AI. Here is Gary Marcus, responding and critical of GPT.
2. And top AI conference bans the use of AI to write papers for the conference. And GPT in your email, and more, coming soon? And a new open source LLM — how good is it? And Stanford course on LLMs.
3. Classical music markets are pretty efficient! (the top-performed composers).
4. Ezra Klein on flying cars and the fear of energy (NYT).
5. Scott Aaronson skeptical about the latest quantum reports.
Do pay transparency laws raise wages?
It seems not:
Labour advocates champion pay-transparency laws on the grounds that they will narrow pay disparities. But research suggests that this is achieved not by boosting the wages of lower-paid workers but by curbing the wages of higher-paid ones. A forthcoming paper by economists at the University of Toronto and Princeton University estimates that Canadian salary-disclosure laws implemented between 1996 and 2016 narrowed the gender pay gap of university professors by 20-30%. But there is also evidence that they lower salaries, on average. Another paper by professors at Chapel Hill, Cornell and Columbia University found that a Danish pay-transparency law adopted in 2006 shrank the gender pay gap by 13%, but only because it curbed the wages of male employees. Studies of Britain’s gender-pay-gap law, which was implemented in 2018, have reached similar conclusions.
Another misconception about pay-transparency laws is that they strengthen the bargaining power of workers. A recent paper by Zoe Cullen of Harvard Business School and Bobby Pakzad-Hurson of Brown University analysed the effects of 13 state laws passed between 2004 and 2016 that were designed to protect the right of workers to ask about the salaries of their co-workers. The authors found that the laws were associated with a 2% drop in wages, an outcome which the authors attribute to reduced bargaining power. “Although the idea of pay transparency is to give workers the ability to renegotiate away pay discrepancies, it actually shifts the bargaining power from the workers to the employer,” says Mr Pakzad-Hurson. “So wages are more equal,” explains Ms Cullen, “but they’re also lower.”
Here is more from The Economist.
Nathan Labenz on AI pricing
I won’t double indent, these are all his words:
“I agree with your general take on pricing and expect prices to continue to fall, ultimately approaching marginal costs for common use cases over the next couple years.
A few recent data points to establish the trend, and why we should expect it to continue for at least a couple years…
- OpenAI reduced core LLM pricing by 2/3rds last year.
- StabilityAI has recently reduced prices on Stable Diffusion down to a base of $0.002 / image – now you get 500 images / dollar. This is a >90% reduction from OpenAI’s original DALLE2 pricing.
- OpenAI has also recently reduced their embeddings price by 99.8% – not a typo! You can now index all 200M+ papers on Semantic Scholar for $500K-2M, depending on your approach.
- Emad from StabilityAI projects ~1M fold cost improvement over next 10 years – responding to Chamath who had predicted 1000X improvement
Looking ahead…
- continued application of RLHF and similar techniques – these techniques create 100X parameter advantage (already in use in force at OpenAI, Anthropic, and Google – but limited use elsewhere)
- the CarperAI “Open Instruct” project – also affiliated with (part of?) StabilityAI, aims to match OpenAI’s current production models with an open source model, expected in 2023
- 8-bit and maybe even 4-bit inference – simply by rounding weights off to fewer significant digits, you save memory requirements and inference compute costs with minimal performance loss
- pruning for sparsity – turns out some LLMs work just as well if you set 60% of the weights to zero (though this likely isn’t true if you’re using Chinchilla-optimal training)
- mixture of experts techniques – another take on sparsity, allows you to compute only certain dedicated sub-blocks of the overall network, improving speed and cost
- distillation – a technique by which larger, more capable models can be used to train smaller models to similar performance within certain domains – Replit has a great writeup on how they created their first release codegen model in just a few weeks this way!
- distributed training techniques, including approaches that work on consumer devices, and “reincarnation” techniques that allow you to re-use compute rather than constantly re-training from scratch
And this is all assuming that the weights from a leading model never leak – that would be another way things could quickly get much cheaper… ”
TC again: All worth a ponder, I do not have personal views on these specific issues, of course we will see. And here is Nathan on Twitter.
“Unveiling the Price of Obscenity”
Does legitimating sinful activities have a cost? This paper examines the relationship between housing demand and overt prostitution in Amsterdam. In our empirical design, we exploit the spatial discontinuity in the location of brothel windows created by canals, combined with a policy that forcibly closed some of the windows near these canals. To pin down their effect on housing prices, we apply a difference-in-discontinuity (DiD) estimator, which controls for the precise location of brothel windows and the effect of other policies and local developments. Our results show that the housing prices are discontinuous at the bordering canals, and this discontinuity nearly disappears after closures. The discontinuity is also found to decrease with the distance to brothels, disappearing after 300 yards. Our estimates indicate that homes right next to sex workers were 30 percent cheaper before the closures. This result seems unrelated to the presence of other businesses, such as bars and cannabis shops. Instead, the price discount is partly explained by petty crimes. However, 73 percent of the effect remains unexplained after controlling for many forms of crime and risk perception. Our findings suggest that households tend to be against the visible presence of sex workers and related nuisances, reaffirming their marginalization.
That is from a new paper by Erasmo Giambona and Rafael P. Ribas, via a highly reputable man.
Ngi Hamba Mabuse
By Dorothy Masuka.
Saturday assorted links
2. Chat with historical figures, 20,000 of them. When will they do economists? And using GPT for therapy, how do you think it did? People preferred the GPT, until they found out they were speaking with a machine.
3. What some top chess players won in prize money.
4. Claims about quantum computing.
5. Rasheed Griffith on where to eat in Panama.
6. “The use of a longitudinal database of Famine immigrants who initially settled in New York and Brooklyn indicates that the Famine Irish had far more occupational mobility than previously recognized. Only 25 percent of men ended their working careers in low-wage, unskilled labor; 44 percent ended up in white-collar occupations of one kind or another—primarily running saloons, groceries, and other small businesses.” Link here.
GPT and my own career trajectory
For any given output, I suspect fewer people will read my work. You don’t have to think the GPTs can copy me, but at the very least lots of potential readers will be playing around with GPT in lieu of doing other things, including reading me. After all, I already would prefer to “read GPT” than to read most of you. I also can give it orders more easily. At some point, GPT may substitute directly for some of my writings as well, but that conclusion is not required for what follows.
I expect I will invest more in personal talks, face to face, and also “charisma.” Why not?
Well-known, established writers will be able to “ride it out” for long enough, if they so choose. There are enough other older people who still care what they think, as named individuals, and that will not change until an entire generational turnover has taken place.
I expect the entire calculus here is very different for someone who is twenty years old, and I hope to write more on that soon.
Today, those who learn how to use GPT and related products will be significantly more productive. They will lead integrated small teams to produce the next influential “big thing” in learning and also in media. Most current contributors will miss that train almost entirely, just as so many people missed the importance of the internet for learning and also for media. But we still don’t know how important this “next big thing” will be, for instance, compared to YouTube.
In the short run, using GPT for ideas and inspiration will be more important than using it for copy. Like blogging, I am happy when people attack it, because that raises the moat surrounding it.
Overall the trajectory of change is very difficult to predict, as are the forthcoming technological developments themselves.