Results for “department why not” 147 found
Medical Spending Variation: 1/2 Patients, 1/2 Places
In Miami, health care providers spent about $14,423 per Medicare patient in 2010. But in Minneapolis, average spending on Medicare enrollees that year was $7,819, just over half as much. In fact, the U.S. is filled with regional disparities in medical spending. Why is this?
One explanation focuses on providers: In some regions, they may be more likely to use expensive tests or procedures. Another account focuses on patients: If the underlying health or the care preferences of regional populations varies enough, that may cause differences in spending. In recent years, public discussion of this issue has largely highlighted providers, with the implication that reducing apparently excessive treatments could trim overall health care costs.
But now a unique study co-authored by MIT economists provides a new answer to the medical cost mystery: By scrutinizing millions of Medicare patients who have moved from one place to another, the researchers have found that patients and providers account for virtually equal shares of the differences in regional spending.
“We find it is about 50/50, half due to patients and half due to places,” says Heidi Williams, the Class of 1957 Career Development Associate Professor in MIT’s Department of Economics, and a co-author of a new paper detailing the study’s findings.
That’s MIT News ably summarizing the new Finkelstein, Gentzkow, and Williams paper, Sources of Geographic Variation in Health Care: Evidence From Patient Migration (ungated).
If the half of the variation that is due to place is inefficient (which could mean too low or too high but probably means too high given that the medical care curve is flat) then this puts an upper limit on the gains from standardization but still a quite high limit.
By the way, Finkelstein and Gentzkow are both recent John Bates Clark Medal awardees and Williams is a MacArthur “genius award” winner. Perhaps I should have titled this post, assortative co-authoring.
Facts about Jane Jacobs
1. Jacobs was born in Scranton, PA, but moved to NYC in 1932 and as early as 1935 she had published some of her impressions of the city in a multi-part series in Vogue magazine. Earlier, she had written poetry for the Girl Scouts’s magazine, American Girl.
2. She published a 1941 book on the intellectual foundations of the American Constitution, with Columbia University Press under her maiden name Jane Butzner and the title Constitutional Chaff. At about the same time her manuscript was being accepted, she was kicked out of Columbia for taking too many extended studies classes, and not allowed admission to Barnard.
3. In 1940 she wrote an article based on her study of the embossed acronyms on manhole covers.
4. She then worked as writer during WWII for the Office of War Information and the State Department. Before Pearl Harbor, she had been an isolationist.
5. Henri Pirenne’s work on medieval cities was one of the biggest influences on her.
6. In the 1940s, she also worked for a metals industry magazine, and smoked a pipe in her office. They started to wonder whether she was a troublemaker.
7. She married an architect in 1944, then taking the name Jacobs. They enjoyed bicycling and sociometry together. She had sons in 1948 and 1950.
8. Alger Hiss had been her superior at the State Department, and in the late 1940s Jacobs was investigated for possible Communist ties, in part because she had tried to apply for a visa to Siberia, using Hiss as her contact. She stated in response that she abhorred communism and favored radical decentralization.
There is much more! But that is a taste from the new and excellent Becoming Jane Jacobs, a runs-up-through 1972 biography by Peter L. Laurence, definitely one of the best books of the year. This is the biography of Jacobs I have wanted to read for forty years.
Addendum: There is a new Jane Jacobs movie coming to the Toronto film festival.
Friday assorted links
1. The economics of cyberextortion. Piddling returns, maybe the cost is low too.
3. What is it that former CEA economists all agree upon?
4. Department of Why Not?: artillery to fight forest fires. And report reveals staggering scale of iguana problem the culture that is Cayman.
5. Can driverless cars handle Pittsburgh bridges?
The Japanese Zoning System
In Laissez-Faire in Tokyo Land Use I pointed to Japan’s constitutional protection of property rights and it’s relatively laissez-faire approach to land use to explain why housing prices in Japan have not risen in past decades, as they have elsewhere in the developed world. A very useful post at Urban kchoze offers more detail on Japan’s zoning system. Here are some of the key points.
Japan has 12 basic zones, far fewer than is typical in an American city. The zones can be ordered in terms of nuisance or potential externality from low-rise residential to high-rise residential to commercial zone on through to light industrial and industrial. But, and this is key, in the US zones tend to be exclusive but in Japan the zones limit the maximum nuisance in a zone. So, for example, a factory can’t be built in a residential neighborhood but housing can be built in a light industrial zone.
…[the] Japanese do not impose one or two exclusive uses for every zone. They tend to view things more as the maximum nuisance level to tolerate in each zone, but every use that is considered to be less of a nuisance is still allowed. So low-nuisance uses are allowed essentially everywhere. That means that almost all Japanese zones allow mixed use developments, which is far from true in North American zoning.
…[The] great rigidity in allowed uses per zone in North American zoning means that urban planing departments must really micromanage to the smallest detail everything to have a decent city. Because if they forget to zone for enough commercial zones or schools, people can’t simply build what is lacking, they’d need to change the zoning, and therefore confront the NIMBYs. And since urban planning departments, especially in small cities, are largely awful, a lot of needed uses are forgotten in neighborhoods, leading to them being built on the outskirts of the city, requiring car travel to get to them from residential areas.
Meanwhile, Japanese zoning gives much more flexibility to builders, private promoters but also school boards and the cities themselves. So the need for hyper-competent planning is much reduced, as Japanese planning departments can simply zone large higher-use zones in the center of neighborhoods, since the lower-uses are still allowed. If there is more land than needed for commercial uses in a commercial zone, for example, then you can still build residential uses there, until commercial promoters actually come to need the space and buy the buildings from current residents.
In addition, residential means residential without discrimination as to the type or form of resident:
…In Japan…residential is residential. If a building is used to provide a place to live to people, it’s residential, that’s all. Whether it’s rented, owned, houses one or many households, it doesn’t matter.
This doesn’t mean that people can build 10-story apartment blocs in the middle of single-family houses (at least, not normally). As I mentioned, there are maximum ratios of building to land areas and FAR that restricts how high and how dense residential buildings may be. So in low-rise zones, these ratios mean that multifamily homes must also have only one to three stories, like the single-family homes around them. So in neighborhoods full of small single-family homes, you will often see small apartment buildings full of what we would call small studio apartments: one room with a toilet.>
In short, as the author concludes, Japan’s zoning laws are more rational, more efficient and fairer than those used in the United States.
More details in the post. Hat tip: Sandy Ikeda.
Being drafted during the Vietnam War also hurt your descendents
A decade after their military service, white veterans of the draft were earning about 15 percent less than their peers who didn’t serve, according to studies from MIT economist Josh Angrist.
Now, new research suggests that the draft did more than dim the prospects of that earlier generation: The children of men with unlucky draft numbers are also worse off today. They earn less and are less likely to have jobs, according to a draft of a report from Sarena F. Goodman, an economist with the Federal Reserve Board of Governors, and Adam Isen, an economist at the Treasury Department. (A copy was released by the Fed in December, but research does not reflect the opinions of the government.)
The researchers have not nailed down how, exactly, any of this is happening, nor why the disadvantage appears to be over twice as potent for sons than for daughters. But the work is valuable for showing how the circumstances of one’s parents can have lasting repercussions. This is one way that inequality persists through the generations.
That is from Jeff Guo at Wonkblog.
Damned if they do, damned if they don’t
The Syrian-Lebanese have a long history in Haiti, and in fact they account for most of Haiti’s very wealthiest families. They are also sometimes resented by the other Haitians for their extreme commercial success. Here is one illustrative but not fully objective account from Wikipedia:
Since the early twentieth century there was a Syrian community in Haiti. This consisted of roughly 500 people, mainly engaged in trade and many of them were Syrian Americans. The entire business community of Syrians, however, tended to sell their products to the United States. Over time, the importance of these merchant foreigners grew, reaching positions in the political order of the country. It is of enormous importance to the country, that surpassing most of the Haitians in government (one that was formed by the social elite of Haiti, against a poor majority), caused major uprisings against the Syrians and the idea widespread among Haitians was that they should be deported. Therefore, the Syrian American club sent a letter to the U.S. State Department of Washington D.C., explaining the reasons why the island was purchased for trade with the U.S. and asked for help and advice from the U.S. Federal Government. At that time the Syrians had also addressed the majority of imports of goods to Haiti, both in the field of provisions as in beverages. Syrian traders also were, at present, the only foreign traders willing to work under native conditions than other groups of traders that were rejected. So, they sold wholesale. However, these traders were occupied all trades with the country, which made them gain rejection of a significant part of the population. Thus, the Haitian government launched a new political program that limited the Syrian trade in the country.
Of course Haiti could take in more “Syrian-Lebanese” too, but this would be unpopular in some circles because…the previously Syrian-Lebanese have been…too successful.
Saturday assorted links
1. “I am not a story“– Galen Strawson.
2. At the margin. And communications training needed for Chinese central banker.
3. Chimp > drone.
4. Greg Mankiw on a carbon tax.
5. Review of Dani Rodrik’s new book on Economic Rules.
6. Markets in everything: “Hillary Clinton’s risky, extreme right-wing scheme to privatize the State Department’s email.” Didn’t she recently come out against so many federal contractors at the expense of federal employees?
Wednesday assorted links
1. Why are flamingos the most likely to escape a zoo successfully? (questions that are rarely asked)
3. Cheaper than dogs, department of why not? But will it increase the number of ZMP canines?
4. Yes, aquifers are subject to the tragedy of the commons and yes it does matter.
Are eSports real sports, a money pump, or both?
What are non-e sports for that matter? Via Liam Boluk, I read this from Prashob Menon:
Last year’s League of Legends championship, for example, drew nearly 30 million viewers, putting it in line with the combined viewership of the 2014 MLB and NBA finals, or the series finales of Breaking Bad and Two and a Half Men, plus the Season 4 finale of Game of Thrones. As with most sports, competitive gaming is now firmly entrenched in the US college system, with the country’s largest collegiate league counting more than 10,000 active players, some of whom are on full athletic scholarships. Eager to capitalize on growing interest in the sport, Major League Gaming (MLG) opened the first dedicated domestic eSports arena in October 2014, and major brands such as Ford, American Express and Coke have begun forming partnerships with game developers, teams, players, event organizers and video distributors. The US Department of State has been issuing athlete visas to competitive gamers since 2013.
It’s becoming increasingly difficult to say eSports aren’t “real” sports, but the bigger question is whether it even matters. The media business is about eyeballs, and audiences are turning up in droves for the likes of Defense of the Ancients and League of Legends.
The economics indeed do not look so bad:
Moreover, eSports fans, unlike linear TV viewers, are highly engaged in the content. Major League Gaming, for instance, consistently beats the industry average on key digital ad metrics such as completion rates (90% vs. 72%), click-through rates (4% vs. 2%), and ad viewability (99% vs. 44%).
Here is Wikipedia on eSports. I believe I have timed my birth at more or less the right time, so I will die of old age just when such institutions are taking over the world and pushing out baseball’s eight-team American League, as it ruled in 1968.
Comparing living standards over time
Scott Sumner writes:
Here’s one thought experiment. Get a department store catalog from today, and compare it to a catalog from 1964. (I recently saw Don Boudreaux do something similar at a conference.) Almost any millennial would rather shop out of the modern catalog, even with the same nominal amount of money to spend. Of course that’s just goods; there is also services, which have risen much faster in price. OK, so ask a millennial whether they’d rather live today on $100,000/year, or back in 1964 with the same nominal income. Recall the rotary phones and bulky cameras. The cars that rusted out frequently. Cars that you couldn’t count on to start on a cold morning. I recall getting cavities filled in 1964, without Novocaine. Not fun. No internet. Crappy TVs, where you have to constantly move the rabbit ears on top to get a decent picture. Lame black and white sitcoms, with 3 channels to choose from. Shorter life expectancy, even for the affluent. No Thai restaurants, sushi places or Starbucks. It’s steak and potatoes. Now against all that is the fact that someone making $100,000/year in 1964 was pretty rich, so your social standing was much higher than that income today. So it’s a close call, maybe living standards have risen for people making $100,000/year, maybe not. Zero inflation in the past 50 years may not be right, but it’s a reasonable estimate for a millennial, grounding in utility theory. In which period does $100,000 buy more happiness? We don’t know.
I say I prefer $100k today to $100k in 1964, that being a nominal rather than a real comparison. If you are not convinced, try comparing $1 million or $1 billion (nominal) today to 1964. For some income level, we have seen net deflation.
But here’s the catch: would you rather have net nominal 20k today or in 1964? I would opt for 1964, where you would be quite prosperous and could track the career of Miles Davis and hear the Horowitz comeback concert at Carnegie Hall. (To push along the scale a bit, $5 nominal in 1964 is clearly worth much more than $5 today nominal. Back then you might eat the world’s best piece of fish for that much.)
So for people in the 20k a year income range, there has been net inflation.
Think about it: significant net deflation for the millionaires, but significant net inflation for those earning 20k a year. In real terms income inequality has gone up much more than most of our numbers indicate.
Assorted Wednesday links
1. New blog from the research department of the IADB (much but not all is in Spanish).
2. Feline average is over. But there is a counter here.
3. NPR favorite albums of the year list.
4. Lingerie RCT, safe for work, sort of.
5. How a car door should sound.
6. What a Harvard Business School professor orders from a Sichuan restaurant. For all the fuss, he could have chosen better dishes (only the fish was a good selection), nor did the items as a whole have proper balance.
7. The now-full Cato forum on reviving economic growth. Videos of the panels are here.
My visit to Christie’s
Being briefly in New York City, I stopped in to visit the pre-auction viewing for the Contemporary Art sale at Christie’s. I was stunned but not surprised at how many quality works were on sale, compared to the historical average, having visited the same event numerous times in the past. Pre-crash, for instance, most of the sale was mediocre junk, albeit by big names, sold under the pretext that those names were worth owning for their own sake. And there were plenty of recycled mediocre works from the 1980s, say the dross by painters such as Eric Fischl (who does have some very good works, though a minority of his overall ouevre). This time I saw dozens of pieces which impressed me as good enough to be on display at first-rate museums, and those pieces filled even the “lesser” rooms upstairs rather than just the main showcase rooms.
The quality of the supply to me suggests that “finance” thinks trouble may be on the horizon. Otherwise, why sell now? Why not hold on to the best pieces, as collectors did in the old days, and wait for them to appreciate? Somebody senses a market peak. That said, finance is not always right, least of all about itself.
In any case the prices for the good works are indeed quite high. A very good Robert Ryman “white painting” (yes, that means it is white, more or less only white, but the textures are very good) these days goes for $8-12 million, as does a good de Kooning from his Alzheimer’s period. Those price estimates are without the buyer’s premia. A Twombly chalkboard painting was estimated in the $35-55 million range and no one was even bothering to look at it.
Whether or not you think these prices are justifiable on aesthetic grounds, quality Old Masters are far cheaper and arguably more likely to hold their value. For 200k (not long ago for 60-80k) you can buy a very good Delacroix painting and it is easier to hang and transport than many of these over-scaled contemporary works. I interpret this price difference as a status gradient. In the Old Masters field, you can’t hope to assemble a world class collection, as too many of the very best works are already in museums. In other words, the Mona Lisa will always make your collection seem unimpressive. You can buy excellent older works at excellent prices, but that alone doesn’t seem to count for much. In the Contemporary field, if you are wealthy, you really can buy top works from say the top half dozen artists — or more — in that area. Plus you can have the artists to your dinner parties, the works match how younger finance types like to decorate their apartments and homes, and their larger size makes them splashier purchases for a lot of museums.
Buyer’s hint: Those Alexander Calder sketches are underpriced at $40-60k, there is still time to bid on them.
Assorted links
1. Very unlikely markets in everything (not even sure I should believe it, though perhaps some of you have extreme faith in signaling and adverse selection models).
2. Clive Crook makes the best case for Scottish independence I have seen.
3. Attach your iPad directly to your face (department of why not?).
My interview with Ralph Nader
I interviewed him. You will find the full version here, the edited version here. Not surprisingly, I prefer the full version. Here is one excerpt:
TC: If I look back at your career, I see you’ve been fighting various kinds of wars or struggles against a lot of different injustices. If you look back on all those decades, during which time you’ve been right about many things, what do you think is the main thing you’ve been wrong about?
RN: Oh, a lot of things. Nobody goes through these kinds of controversies without making bad predictions. I underestimated the power of corporations to crumble the countervailing force we call government. We always knew corporations like to have their adherents to become elected officials; that has been going on for a long time. But I never foresaw the insinuation of corporatism as a policy in one agency after another in government. Franklin Delano Roosevelt foresaw some of this when he sent a message to Congress when he started the temporary national economic commission to investigate consecrated corporate power. That was in 1938. In his message he said that whenever the government is controlled by private economic power, that’s facism. Now, there isn’t a department or agency in Washington where anyone has more power—over it and in it, through their appointees, and on Congress, through lobbyists and political action committees. Nobody comes close. There’s no organized force that comes close to the daily power to twist government in the favor of Wall Street and corporatism, and to disable government from adequately defending the health, safety and economic well-being of the American people.
TC: Let’s say we look at the U.S. corporate income tax. The rate on paper is 35 percent, which is quite high. When you look at how much they actually pay after various forms of maneuvering or evasion, maybe they pay 17–18 percent, which is more or less in the middle of the pack of OECD nations. So if corporations have so much political power in the United States, why is our corporate income tax still so high?
…Sweden, a country you cited favorably, taxes capital income much more lightly than the United States does—not just on paper but in terms of what’s actually paid.
I also ask him about the Flynn effect, whether America needs a new kind of sports participation, and how much American churches have resisted corruption through corporatization, among a variety of other topics. I tried to avoid the predictable questions.
By the way, you can buy Nader’s new book, Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State. I very much enjoyed my preparation for this interview, which involved reading or rereading a bunch of his books and also a few biographies of him.
MIT’s rise to prominence in economics
There is a new paper (pdf) by Andrej Svorenčík on this topic:
The core question of MIT Economics Department’s history – why has MIT economics risen to prominence so quickly – requires an approach to history of economics that focuses on the role of the networks within which economists operate, their ideas diffuse, and gain scientific credit. By reconstructing the network of MIT economics Ph.Ds. and their advisors, this paper furnishes not just evidence of how MIT rose to prominence as documented by the numerous ties of Nobel Laureates, Clark Medalists, elected officials of the AEA or the Council of Economic Advisors to the MIT network. The MIT Economics Department is also revealed as a community of self-replicating economists who are to a large extent trained by a few key advisers who were mostly trained at MIT as well. MIT exhibits a large share of graduates who remain in American academia that is disproportionate to the number of graduates it has produced. It is hypothesized that this has been an important factor in MIT’s rise to prominence. On a methodological level this paper introduces prosopography or collective biography, a well-established historiographic method, to the field of history of economics.
When I was at Harvard in the 1980s, we typically thought of the MIT students as:
1. Smarter and harder working than we were
2. Better focused and better trained, and benefiting from a more collegial environment
3. More narrow
4. Somewhat less…um…modest, and thus you might prefer to have a Harvard student setting your economic policy.
Fortunately we all have moved on to broader and less prejudicial judgments.
The pointer is from @UdadisiSuperior.