Depression and shopping behavior
By Katherine Meckel and Bradley Shapiro:
Using a large survey panel that connects household shopping behavior with individual health information, this paper documents correlations between self reported depression and the size and composition of shopping baskets. First, we find that roughly 16% of individuals report suffering from depression and over 30% of households have at least one member who reports suffering from depression. Households with a member suffering from depression exhibit striking differences in shopping behavior: they spend less overall, visit grocery stores less and convenience stores more frequently and spend a smaller share of their baskets on fresh produce and alcohol but a larger share on tobacco. They spend similar shares on unhealthy foods like cakes, candy, and salty snacks. These cross-sectional correlations hold within counties, suggesting that they are not driven by region specific demographics or preferences that are incidentally correlated with depression status. They also hold when considering only single-member households. However, we rule out large differences in shopping behavior within households as they change depression status throughout the sample. Further, using the take-up of antidepressant drugs as an event, we document little change in shopping in response to treatment. With our results, we discuss the takeaways for health policy, decision modeling and targeted marketing.
There should be much more research on the intersection between economics and mental health.
More energy shocks, and it was crazy to move away from nuclear power
The global energy crunch forced a German electricity producer to halt a power plant after it ran out of coal.
Steag GmbH closed its Bergkamen-A plant in the western part of the country this week due to shortages of hard coal, it said by email. The closure is the first sign that Europe may need to count on mild and windy weather to keep the lights on as the continent faces shortages of natural gas and coal is unlikely to come to rescue.
Energy prices are soaring from the U.S. to Europe and Asia as economies rebound from a pandemic-induced lull and people return to the office. The shortage is so acute that China ordered its state-owned companies to secure supplies at all costs and Europe is burning more of its already depleted stocks of the dirtiest of fossil fuel, a move that may complicate climate talks next month.
Here is much more from at Bloomberg. Coal is trading at record-high prices, but is this doing us or the environment much good? You need something to substitute into!
I would like to repeat my earlier question in earnest. Was anyone forecasting all these energy shortages even a month ago?
Via Anton Maier.
Sunday assorted links
1. Bills before Congress — “model this” (if you dare).
2. Claims about pending crypto regulation. How exactly is all that supposed to work? Makes no sense to me!
3. Ross D (NYT), worth reading and thinking about.
4. Water markets, the Colorado River, and the Walton Foundation (WSJ).
5. “According to his official biography, he is related to every royal family in Europe.” (NYT, interesting throughout) LOTR makes an appearance too.
6. Power cuts in China (WSJ). And from the FT: “Power crunch looms in India as coal stocks reach crisis point. More than half the country’s power plants have less than three days of supplies remaining.” Is this now “a thing”? Was anyone predicting this a month ago?
7. Steve Levitt does personal interviews with his two oldest daughters.
From Kalshi Markets
I wanted to reach out and provide some updates about new markets on the Exchange that may be of interest. We have a new market on whether the FDA will approve a vaccine for kids, in addition to a market on whether the CDC will identify a “variant of high consequence” (Delta is only a “variant of concern”). We also have markets about whether the Fed will taper at its next meeting, whether the U.S. will raise the debt ceiling before October 19, and whether or not Jerome Powell will be replaced….We also have markets on whether the capital gains and corporate tax will be raised, in case that’s of interest.
Go trade!
New issue of Econ Journal Watch
In this issue:
Critical condition: Robert Kaestner examines two articles in the Quarterly Journal of Economics on the effects of health insurance on mortality, saying that both lack statistical power and raising issues of external validity and anomalous results. Jacob Goldin, Ithai Lurie, and Janet McCubbin reply to the criticisms of their QJE article, and Sarah Miller and Laura R. Wherry reply to the criticisms of theirs.
Nonconvergence on machine learning and corporate fraud detection: In the previous issue, Stephen Walker investigated findings for the effectiveness of machine learning in detecting accounting fraud, and Yang Bao, Bin Ke, Bin Li, Y. Julia Yu, and Jie Zhang replied to Walker. Here, Walker explains why he finds the reply unsatisfying.
Classical liberalism in Finland in the nineteenth century: Jens Grandell tells of the blooming of liberalism in nineteenth-century Finland, highlighting the issue of language (Finnish versus Swedish) and the related issue of nationhood for Finland, then within the Russian empire. The article extends the Classical Liberalism in Econ, by Country series to 21 articles.
The General Directing of Trade Cannot Be a Science: Benoît Malbranque presents an essay by René Louis de Voyer de Paulmy, Marquis d’Argenson (1694–1757), arguing against the general directing of economic affairs and against what Friedrich Hayek would one day call the fatal conceit. First appearing in 1751 and in English in 1754 and 1762, d’Argenson’s article was a commentary on another article extolling work by Girolamo Belloni. The anonymous author of that article subsequently replied to d’Argenson. Rendered here into English by Malbranque is that reply, in which the anonymous Bellonian argues that government influence over the economy is inevitable and is improved by science.
Hume’s Manuscript Account of the Extraordinary Affair Between Him and Rousseau: Published here is David Hume’s original manuscript account of his tangle with Jean-Jacques Rousseau. Hume was quite dissatisfied with the rushed version of the account, published in London in 1766, which, apart from the letters therein, was a retranslation of a French translation of Hume’s manuscript. Hume “expresses himself bluntly and forcibly,” as one scholar said about this never-before-published manuscript.
To Tolerant England and a Pension from the King: Daniel Klein proffers an explanation for the remarkable lengths to which Hume went to settle Rousseau in England with a pension from King George III, namely, that Hume felt that doing so would diminish Rousseau’s influence and legacy, and consequently improve the lot of humankind.
EJW Audio:
Jens Grandell on Liberalism in Finland in the Nineteenth Century
Who are the best Irish artists?, part IV, other names
Francis Bacon was born in Ireland, but not of Irish parents, he did not grow up in Ireland, and he did not consider himself Irish. So I do not count him as a contender for my exercise.
Sean Scully is a contemporary abstract painter of renown, and his works are held by many major museums. He was born in Dublin, and now his paintings may go for $600,000-$800-800. To me they seemed like a bargain, in the 1990s, at one tenth that price. I like his work, but to my eye he could just as easily be a “New York painter” and in a way he is. He even pops up on Google as “American artist.” His family moved to England when he was four years old, and Wikipedia calls him a “British artist.” Whatever. I’m not going to award him first prize, but if you are curious here is one not atypical image:
Louis le Brocquy (1916-2012) counts as a “real Irish artist,” and some of his best works sell for a million pounds or more. I can’t help but find his major work clunky rather than revelatory. To me the figures are not so much “ugly,” as was suggested in Ireland during his time, but rather pointless. He is somehow not even a true radical. And dare I confess that I prefer my Irish artists not entirely cosmopolitan? Here is one image of his:
Nope, he won’t be my number one. I’ll be considering two more individuals in this series, coming soon I hope.
Saturday assorted links
1. Salary history bans don’t look so great.
2. Dominic Cummings on how to change government and save America. Very good piece.
3. Did communism smash the patriarchy?
5. German electoral maps, and other observations.
*The Many Saints of Newark*
Much better than its reviews, though the drama only works for those with an intricate knowledge of The Sopranos proper, and perhaps of Northern New Jersey as well. The performances are uniformly excellent and the historical detail remarkable (where did they get that Bamberger’s delivery truck? The store disappeared in 1986.) The younger versions of the characters are simply uncannily accurate, though perhaps young Carmela struck me as a bit too modern looking? I view the core theme as one of unfreedom and determinism. As a viewer, you see the characters as unfree because you already know what is going to happen to them. As the story unfolds, you see how much they are unfree in a more fundamental sense as well. No one talks conceptually, except for the uncle in prison, who also is the only free person in the story. Recommended, but probably for the dedicated only. To really follow and understand the film, you need to have all the images of the earlier Sopranos scenes, including settings and not just characters, filed away in your mind.
Do inflation expectations matter for inflation?
Many people (NYT) are talking about the new paper by Jeremy Rudd on exactly this topic — Rudd is skeptical that they matter very much. So I went to read the paper, and I have to say I am baffled. It didn’t change my priors at all. I didn’t see new empirical estimates, or new theoretical arguments, and furthermore I didn’t see the most relevant factors discussed much. I did see a lot of pokes at Friedman, Phelps, and Lucas (and there is also an introductory assertion that, even given enough time, markets with flexible prices do not clear. Then he goes on to deny that the theory of household choice is sufficient to derive downward-sloping demand…why do that???).
I would start by looking at the clearest cases where inflationary expectations do matter. If inflation rates become quite high (say above forty percent?), many people switch to alternate currencies. Or in hyperinflations the velocity of money, after some point, accelerates very dramatically, thereby fueling the inflation further. So inflation expectations really do matter, as supported by both theory and evidence. Contrary to Rudd, the theoretical case is there, though the question of magnitude at lower inflation rates is largely an open one. But let’s not slip from “open” to “we are justified in thinking they don’t matter very much at all.”
You can even put aside velocity and the demand for money and the theory for inflation expectations mattering still is there. For instance, if I look at the simple and fairly general menu costs models, suppliers know they won’t be changing their prices very often. So they form an expectation of inflation when deciding where to put the price right now, knowing that level will have to be “close enough” for some time to come. That’s a very simple theoretical mechanism! No, that is not a priori but it carries a lot of force and Rudd does not consider it.
If I ask “which papers do I, as outsider, already know in this area?” I hit upon Michael F. Bryan, et.al. “The inflation expectations of firms: What do they look like, are they accurate, and do they matter?”, 2015, not so ancient and from the Atlanta Fed. There is lots of careful estimation in this paper, and here is part of the abstract:
Next we show that, during our three-year sample, firm inflation expectations appear to be unbiased predictors of their year-ahead observed (perceived) inflation. We also show that firms know what they don’t know—that the accuracy of firm inflation expectations is significantly and negatively related to their uncertainty about future inflation. And lastly, we demonstrate, by way of a cross-sectional Phillips curve, that firm inflation expectations are a useful addition to a policymaker’s information set. We show that firms’ inflation perceptions depend (importantly) on their expectations for inflation and their perception of firm-level slack.
That doesn’t prove that inflation expectations matter a great deal, but it is certainly consistent with them mattering, as theory would lead us to expect. It seems to go much further than Judd, and it is not cited by Judd.
Or how about the NBER survey by Olivier Coibion, et.al.: “Empirical evidence suggests that inflation expectations of households and firms affect their actions but the underlying mechanisms remain unclear, especially for firms.” There is a whole section of the paper “Do inflation expectations affect economic decisions/”, with the answer mostly being “yes,” in part with the caveat that inflationary expectations are hard to measure precisely.
That all is consistent with my rather basic understanding of the matter. Again, this paper is not cited by Rudd. It’s not that I think a contribution has to cite every paper out there, but when you play the “no estimation of my own, just going to poke holes in various claims, and focusing from people decades ago…”…a reader such as I is going to want to see you cite and rebut the main recent attempts to establish relevance for inflationary expectations.
And here is commentary from Joseph Gagnon. Here is commentary from Ricardo Reis, some good points though I think he overstates the indeterminacy issue.
Most of all, I don’t feel I have a horse in this race. I am very comfortable with the idea that we, as economists, have a poor understanding of regime shifts, including shifts in inflation regimes. But when I am told that, as a result of agnosticism, I should infer inflationary expectations are not very relevant…then I feel someone has jumped the gun.
Ringo says
“The other side of that is – I was telling someone the other day – if Paul hadn’t been in the band, we’d probably have made two albums because we were lazy boogers.
“But Paul’s a workaholic. John and I would be sitting in the garden taking in the color green from the tree, and the phone would ring, and we would know, ‘Hey lads, you want to come in? Let’s go in the studio!’
“So I’ve told Paul this, he knows this story, we made three times more music than we ever would without him because he’s the workaholic and he loves to get going. Once we got there, we loved it, of course, but, ‘Oh no, not again!'”
There you go, that is a very simple and correct theory of The Beatles. I don’t care if you like “I am the Walrus” more than “Penny Lane.”
And via Bill Benzon, here is the new The Journal of Beatles Studies. And here is my earlier post Paul McCartney as Management Study.
Friday assorted links
1. How did 30,000 Haitians get to Texas?
2. “I am here.” “Missing man in Turkey accidentally joins his own search party before realising he was the person they were looking for.”
3. LaBoissiere podcast chatted with me. And Noah interviews Jason Crawford about Roots of Progress (written).
6. More on the new results on inflation expectations and their possible irrelevance (NYT).
Molnupiravir against Covid
Molnupiravir against Covid (Bloomberg). It might cut the death rate in half, the market has been boosting the Merck share price. And more here: “…molnupiravir works by introducing genetic errors that garble the coronavirus’s genetic code. That means it may be more resistant to mutation, and may even work on other coronaviruses or RNA viruses.” And StatNews here.
How Much Would Bach Make on Spotify?
Bach gets 6.7 million streams a month which pay .0037 per stream or about $25,000 a month or nearly 300k a year. (That is the total payment, however, composer royalties would be lower but he could also sell some T-shirts.) Not superstar earnings but much more than they earned in their lifetimes even after adjusting for inflation.
In other news, an AI working with a group of musicologists is about to release a newly completed Beethoven’s tenth symphony.
Hat tip: Ted Gioia.
Who are the best Irish artists?, part III, Mainie Jellett
Mainie Jellett, 1897-1944, born in Dublin to a well-to-do Protestant family of Huguenot origin. She studied with William Orpen in Dublin and then moved to England, where she developed an attractive figurative style. But soon thereafter her work turned abstract when she studied Cubism in Paris in the early 1920s. She was part of what might be the most significant (and rapid) revolution in the history of art, although the Irish branch of that revolution usually receives little attention. She and Evie Hone led the introduction of modern art to Ireland, and arguably still represent the peak of that tradition. “Like James Joyce, who had ‘not become modern to the extent that he ceased to be Irish’, Jellett made modernism Irish.” (source)
She blended cubism on top of Christian devotional ideas and also structures and images from the Book of Kells and other medieval Celtic sources. At its best, her work is just perfect — you would not wish for the curves or angles or colors to go any other way. Here is a classic Jellett image, also drawing on some Chinese influences:
Here is her painting “Abstract Crucifixion”:
For a point of contrast, see her homage to Fra Angelico. Her Anglo-Irish background led to some hostility, and her deliberate invocation of specifically Catholic images is sometimes interpreted as a project for Irish cultural reconciliation.
Here is a less typical but still fine representational work:
I can’t bring myself to call her the greatest Irish artist ever, as perhaps she is not tops in breadth or multiplicity of perspectives, but she was one of the very best and I do not tire of viewing her work. She is the equal of many of the better-known modernist artists from other countries and she excelled also in watercolors and sketches. Her life was cut tragically short by pancreatic cancer.
Thursday assorted links
1. Claims about paid leave (NYT). How come no one is willing to compare it to just giving families the cash? Somehow that question is not part of “the science” for this one.
2. Are Indians getting shorter?
3. Measurement of construction productivity.
4. Does pre-K improve child achievement?