Results for “becker” 166 found
On sleep, in my email, from Asher Meir
I don’t think we economists have quite gotten to the bottom of sleep. To the extent we think of it at all, I think we are inclined to think of it as an input in a kind of Gary Becker way. More sleep = less time for production and consumption, but too little sleep harms the productivity of both production and consumption. Solve for the optimum (in which you will be slightly over-tired all the time).In this model the objective function is to maximize the present value of all future WAKING consumption. Adopting this approach, studies showing that more sleep = longer life are not very persuasive, because the effect would have to be huge before more total hours would translate into more waking hours, particularly since the old-age hours are highly discounted. (Of course some people believe the decades-away future may bear huge positive shocks – new therapies, new kinds of experiences, etc.- and this would offset the discount.)I don’t find this model very convincing. Many people don’t view time spent sleeping as time wasted. Is enjoying a good nap merely a synonym for enjoying subsequent consumption more intensively, or do we perhaps actually enjoy a good nap? (My 17 year old son is adamant that he enjoys sleeping and sometimes it seems to be his favorite activity.)
And he follows up with this:
…My conjecture is that these wake drugs will mostly change the intertemporal substitutability of sleep. It will be easy to “borrow” wakefulness the night before an exam, during an extended battle, etc. But the total amount of lifetime sleep will be little affected. Qui vivra, verra.Could also be related to the frequency and pleasantness of dreams. I have frequent and sometimes quite interesting dreams so giving up on sleep would be more of a sacrifice for me than for someone who has few dreams or frightening ones.
University of Chicago follows George Mason
The University [of Chicago] turns a former seminary into a new home for economics.
…When the refurbished building reopens in 2014, the economics department and Becker Friedman Institute for Research in Economics will have a spectacular space. Planned upgrades include a cloister café, LEED certification, high-tech classrooms in old library and chapel areas, and more.
Some of you will know that the Fairfax offices of Alex and me are in the space of a former church (scroll down to 1960)…
Here is more information and an interview with the architect. For the pointer I thank Mike Tamada.
Assorted links
1. Smiling fighters are more likely to lose.
2. Posner on automation and employment.
3. Is it a mistake to Punjabify Thai food, and what is wrong with the North Indian palate anyway? And a short piece on how much Indian women drink alcohol (not that much).
4. What New Zealand has become.
6. Choosing the right seat, and does capital accumulate and labor not?
Assorted links
1. Charles C. Mann reviews Bernard Bailyn.
2. Becker and Murphy on whether we have lost the war on drugs.
3. How loud should religious announcements be?
4. A paper on lead exposure and crime, internationally (pdf), and some predictions here, including that Latin American crime will fall sharply.
5. Is it too easy to meet someone new?
Economists who support the arts
Hi Tyler (we are Facebook friends),
I am working on a blog posting for my new blog (www.wormwood-and-honey.com) and I want to write about instances where economists supported the arts in some special way. So far I have four cases: Professor Norton T. Dodge and his support of the Russian avant grade artists; Professor Alexander Gershenkron for his great review of Nabokov’s abominable translation of” Eugene Onegin”, Professor Gregory Grossman at Berkeley for inviting and supporting the Polish poet Alexander Wat who dictated his great book “My Century” while visiting there; and lastly, John Maynard Keynes for his support of theater, ballet and dance. Could you think of other cases? Or articles/books on the subject?
Thanks,
Julian Berengaut
Richard Caves collects Picasso, Bill Landes collects Charles Burchfield, and William Baumol did a good deal of wood sculpture, but I do not know that any of them have served as patrons of living artists. Assar Lindbeck also works as a painter, as does Robert Mundell. Spencer MacCallum (not an economist but he has written on economic issues) has been an important patron and promoter of Mexican pottery, and my own patronage efforts in Mexico are discussed in my book on the economics of Mexican art.
Roderick Deane is a New Zealand businessman, economist, and a supporter of New Zealand artists. Marie-Josée Kravis is an economist and also a patron of the arts, mostly for Canadian artists I believe. Georges Menil, of the Menil family, is an economist in Paris. Wayne Cox (not an economist) writes on tax issues and has been an important supporter and collector of Jamaican Intuitive art. Henry Kaufman is an economist who has donated a good deal of money to the arts. Henry Raeburn painted a portrait of 19th century economist Francis Horner, but it was paid for by Horner’s brother rather than by Francis. Maybe there was a Beckerian or Coasian bargain behind the scenes.
Richard D. Bodig was a singer, scholar of Renaissance music, and also an economist. How about this headline?: “Jazz singer Olesya Yalunina on how jazz freed her from a career in economics.” Stephen Dubner used to play in a rock band.
That is what comes to mind. Who am I missing?
Does the dismal science deserve federal funding?
Here is today’s WSJ Op-Ed by Gary Becker and James Heckman. In general I am sympathetic to government funding for science, but I’d like to tack on a few points to these arguments in particular.
1. There is not a peep about supply elasticity. A lot of economics research comes pretty cheaply and presumably without direct government subsidy. Isn’t the implied conclusion to invest a lot in data gathering and RCTs/field experiments, but not so much in large swathes of economics? Should we not start by listing all those branches of economics which should not be eligible for subsidy?
2. Is there possibly a higher external benefit to directing the attention of economists to teaching or community service rather than research? Somehow this argument ends up underplayed when economists discuss subsidies. Or how about subsidies for economics bloggers? Presumably there is lots of good economics research which remains underpublicized and underutilized. Isn’t that often the relevant choke point, not lack of new research ideas and findings?
3. Economics research is already highly subsidized through our tax code and legal treatment of non-profits. An argument for subsidy is not the same as an argument for further subsidy.
4. I find it easy to believe the subsidies for economists would bring higher returns than the worst uses of federal funds. But surely larger subsidies for economists are not the highest return projects before us. Isn’t it worth listing which projects would be even better than subsidies for economists (or at least acknowledging that they exist)? How about reporting “Subsidies for economists are better than farm subsidies, but not as good as medical R&D subsidies or 347 other uses of the funds”? Presumably the goal is to bring about the best outcome possible, not just to advocate further subsidies for economists, right? Right? Right? After all, that is what the economic method is all about.
Right?
Sentences to ponder
… in America’s system of gridlock-based government priority is now on buck passing rather than achieving policy goals. Democrats are putting a higher priority on a desire to get Republicans to vote for tax increases than they are on a desire to have taxes be higher. Republicans, conversely, are trying to avoid voting for tax increases rather than trying to prevent tax increases from taking place.
That is from Matt. I wonder what underlying model of politics this is evidence for. Could it be that the real rewards from office holding come from one’s interest groups, later on? But why is the reward so closely tied to measures of loyalty rather than actual results? Are the external interest groups such poor monitors? If so, that would help explain why the observed Beckerian political bargains are so inefficient and so subject to polarized bickering.
I agree with this post of Matt’s too, 2008 was worse than we had thought. Now let’s apply some (finite) backward induction. How about 2007? Was that year worse than we thought? 2006 anyone? I think of 2008 and 2009 as when the crumminess of some of the preceding years was revealed as common knowledge. The real mistakes of the Commerce Dept. were about the previous years and that is only beginning to sink in.
Further papers on signaling and education
Pursuing this topic, here are some of the good or interesting papers I discovered:
This UK piece reframes the David Card IV literature in terms of signaling and with UK data estimates that signaling accounts for one-third of the educational wage premium. It uses a “compulsory” instrumental variable from earlier UK schooling reforms.
Here is the Hanming Fang paper (IER): “…productivity enhancement accounts for close to two-thirds of the college wage
premium.” It uses very different techniques, based on simulations, not IV and the like.
This paper shows that rank measure in class doesn’t affect earnings, contrary to what signaling theories should predict. This may be a puzzle for learning theories as well.
Here is a good piece (it ended up in the JPE) which shows signaling must have some import; it does not attempt to estimate how much of the educational wage premium is due to signaling.
This paper suggests that signaling may be especially important for MBAs.
German education helped drive their Industrial Revolution.
This Carneiro, Heckman, and Vytlacil paper I found impressive. It redoes much of the IV Angrist and Card work with greater emphasis on heterogeneous agents and also heterogeneous margins. It seems to be the current peak of the IV approach and finds rates of return in the 15-20 percent range and that is for college. It also finds that lower ability individuals are harder to educate and therefore reap lower (though still high) marginal rates of return, contra some of the simpler IV papers.
This very interesting Kevin Lang paper argues that signaling theories do not diminish the case for education and also that they do not create particular problems for measuring the social rate of return on education.
Who are the favorite economic thinkers, journals, and blogs?
The piece, by Daniel Klein, et.al., has this abstract:
A sample of 299 U.S. economics professors, presumably random, responded to our survey which asked favorites in the following areas: Economic thinkers (pre-twentieth century, twentieth century now deceased, living age 60 or older, living under age 60), economics journals, and economics blogs. First-place positions as favorite economist in their respective categories are Adam Smith (by far), John Maynard Keynes followed closely by Milton Friedman, Gary Becker, and Paul Krugman. For journals, the leaders are American Economic Review and Journal of Economic Perspectives. For blogs, the leaders are Greg Mankiw followed closely by Marginal Revolution (Tyler Cowen and Alex Tabarrok). The survey also asked party-voting and 17 policy-view questions, and we relate the political variables of respondents to their choice of favorites.
The favorite twentieth century economists are Keynes, Friedman, Samuelson, and Hayek, in that order. Kenneth Arrow doesn’t do as well as he should, though he comes in second, after Gary Becker, in the category, favorite living economists, sixty years or older.
As for favorite living economists, under age sixty, Paul Krugman wins by a long mile, followed by Greg Mankiw, then Acemoglu, Levitt, and David Card. I do not deserve my position at #16, but thanks if you voted for me! Scroll to p.13 for that list.
On p.14 there is a fascinating chart about the political orientations of the voters for various favorite economists. Krugman for instance is more popular among left-wing economists.
The votes for favorite journal are on p.16, no surprises there. p.17 has the favorite blogs chart. Krugman and DeLong are third and fourth, after Mankiw and MR.
It is a fascinating paper which says much about our profession.
That is all from the latest issue of Econ Journal Watch, the link to the whole issue is here. Here is a good piece about the embarrassment of Richard T. Ely.
Assorted links
1. Gary Becker’s entire Human Capital class on YouTube.
2. No gains from trade, the worst date ever? (with lots of euphemisms, I love Date Lab).
Does immigration account for relatively stagnant median income?
It's a common claim that increasing immigration accounts for the slowdown in U.S. median income growth. No, I don't mean the claim that immigrants lower wages. Even according to George Borjas, that effect isn't large enough to much budge the median and most of it is concentrated on workers without a high school degree. Rather I am referring to the mere addition of immigrants to the rolls, which itself shifts the median of the distribution.
I don't see that the immigration effect explains much of the data.
1. Look at Dew-Becker and Gordon, p.62. They consider panel data for hourly compensation, and they still find a stagnant median. Also see p.78, where they summarize their results that the stagnation extends upward through the 90th percentile of the income distribution. The U.S. didn't come close to taking in enough immigrants to produce that result.
2. Look at Lane Kenworthy's figures, p.41. Median income growth for the category "White, non-Hispanic" is only barely better than for the general population.
3. This paper measures the effect of immigration on the Gini coefficient and finds that a given year's worth of immigration has a peak effect on the Gini at four years' time and the effect disappears altogether within six years' time.
4. Researchers who work in this field are well aware of the phenomenon of immigration and generally they do not use it to dismiss the issue of declining median income growth.
I've heard from one reader that the eBook is now available in France, from another that it is in Australia, but Canada will take a little more time.
Joseph Gibson on how to improve Congress
Chug refers me to this new book. A few of the ideas are:
1. Make Congress a temporary job, a bit more like jury duty or serving in the military.
2. Allow all financial contributions but require full disclosure on the internet.
3. Lower or eliminate the fixed allotment for Congressional staff, to limit the "bubble" which surrounds Congressmen.
4. Do not allow fundraising while Congress is in session, to make sessions more urgent.
5. Require that bills be written in plain English.
6. Allow formal vote-trading, so minority legislators could have some prospect of promoting their better ideas.
7. Make it easier to repeal unnecessary laws.
8. Eliminate the "hold" and make filibusters much harder.
9. Make confirmations quicker and easier.
10. Make the House smaller.
There is more, but that is a start.
In general I find Congressional reform proposals, including filibuster abolition, difficult to evaluate. There is no simple model at hand. Sometimes the median voter model is useful, but in most cases it implies the reforms don't matter, a conclusion which I would not wish to accept so readily. Multi-dimensional cycling models often imply that either a) it still doesn't matter (the agenda setter remains in charge), or b) it matters some huge amount in a way which is difficult to forecast but the entire political equilibrium can shift and not just locally.
There are many "near median voter models," perhaps too many.
There is also the Becker QJE 1983 model about the bargaining power of different interest groups. Still, when it comes to outlining exactly how the procedural reforms shift the political bargain, we are again looking at a black box. The first cut version of the model seems to imply that political procedures don't much matter.
The overall problem is that plausible models generate either no changes or large, non-local changes. Maybe we should take those results seriously, but then in the former case it doesn't matter and in the then-more-relevant latter case we still can't predict the nature or even the direction of the non-local shift.
Assorted links
1. Update on Arizona Medicaid transplant rationing.
2. Fear of one's own glance, from Japan.
3. Read both Pirrong and Steve Waldman here, on OTC clearinghouses. And Felix Salmon.
4. The world's best presentations?
5. Occasionally obscene, NSFW cartoon video on Becker-Murphy rational choice theory of addiction. It's funny.
6. David Epstein, Columbia scholar of political economy, is charged under the law. It's not funny.
An Irish-American disclaimer
In a footnote to his paper on Irish famines, Edward J. O'Boyle writes:
It is commonplace in economic research to assume that the investigator has removed all traces of personal values from his/her work. As Becker (1961, p.10) implies, that could be a serious error. For that reason, let me state at the outset that I am a first-generation Irish-American, holding dual citizenship in the United States and the Republic of Ireland. My mother and father both were born and raised in County Mayo — the poorest county in western Ireland where the toll in human lives lost during the Great Famine was staggering. I do not know how many of my own Irish ancestors suffered and died during the Great Famine. What I do know and acknowledge is that my selection of this topic clearly is related to that family background which also very likely influenced the way I have interpreted the evidence presented herein. I concede that someone else sifting through the evidence might come to different conclusions, but I know of no other way to proceed. Supportive comments by Hans Jensen and Peter Danner on earlier drafts are gratefully acknowledged, as are the suggestions made by the editor and an anonymous referee. Any remaining errors are entirely mine.
My 2010 Industrial Organization reading list
Industrial Organization I, Tyler Cowen (x2312, 4910), [email protected]
METHODS OF EVALUATION:
There will be weekly quizzes, a paper, and a final exam.
I. Firm behavior, antitrust, and vertical and horizontal control.
Asker, John, “A Study of the Internal Organization of a Bidding Cartel,” American Economic Review, (June 2010), 724-762.
Bresnahan, Timothy F. “Competition and Collusion in the American Automobile Industry: the 1955 Price War,” Journal of Industrial Economics, 1987, 35(4), 457-82.
Bresnahan, Timothy and Reiss, Peter C. “Entry and Competition in Concentrated Markets,” Journal of Political Economy, (1991), 99(5), 977-1009.
Timothy Bresnahan, “Empirical Studies of Industries with Concentrated Power,” Handbook of Industrial Organization, vol.II.
Tirole, Jean. “Vertical Control.” In Theory of Industrial Organization, Chapter 4.
Klein, Benjamin and Leffler, Keith. “The Role of Market Forces in Assuring Contractual Performance.” Journal of Political Economy 89 (1981): 615-641.
Breit, William. “Resale Price Maintenance: What do Economists Know and When Did They Know It?” Journal of Institutional and Theoretical Economics (1991).
McKenzie, Richard B. and Lee, Dwight, In Defense of Monopoly, chapter four, “Welfare-Enhancing Monopolies,” on reserve.
Tirole, Jean. “Information and Strategic Behavior: Reputation, Limit Pricing, and Predation.” In Theory of Industrial Organization, Chapter 9, on reserve.
Sproul, Michael. “Antitrust and Prices.” Journal of Political Economy (August 1993): 741-754.
McCutcheon, Barbara. “Do Meetings in Smoke-Filled Rooms Facilitate Collusion?” Journal of Political Economy (April 1997): 336-350.
Hazlett, Thomas W. “Is Antitrust Anticompetitive?” Harvard Journal of Law and Public Policy, (Spring 1986).
Crandall, Robert and Whinston, Clifford, “Does Antitrust Improve Consumer Welfare?: Assessing the Evidence,” Journal of Economic Perspectives (Fall 2003 ), 3-26, available at http://www.brookings.org/views/articles/2003crandallwinston.htm.
Holmstrom, Bengt and Tirole, Jean. “The Theory of the Firm,” in Handbook of Industrial Economics, vol.I.
Holmstrom, Bengt and Roberts, John. “The Boundaries of the Firm Revisited.” Journal of Economic Perspectives 12, 4 (Fall 1998): 73-94.
Gibbons, Robert. “Incentives in Organizations.” Journal of Economic Perspectives (Fall 1998): 115-132.
Montgomery, Cynthia. “Corporate Diversification,” Journal of Economic Perspectives (Summer 1994): 163-178.
Hansemann, Henry. “The Role of Non-Profit
Lazear, Edward P. “Leadership: A Personnel Economics Approach,” NBER Working Paper 15918, 2010.
Oyer, Paul and Schaefer, Scott, “Personnel Economics: Hiring and Incentives,” NBER Working Paper 15977, 2010.
Van den Steen, Eric, “Interpersonal Authority in a Theory of the Firm,” American Economic Review, 2010, 100:1, 466-490.
Ben-David, Itzhak, and John R. Graham and Campbell R. Harvey, “Managerial Miscalibration,” NBER working paper 16215, July 2010.
AER Symposium, May 2010, starts with “Why do Firms in Developing Countries Have Low Productivity?,” runs pp.620-633.
Glenn Ellison, “Bounded rationality in Industrial Organization,” http://cemmap.ifs.org.uk/papers/vol2_chap5.pdf
Xavier Gabaix and David Laibson, “Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets,” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=728545.
Charness,
Cowen,
III. Capital structure and control
Miller, Merton, and commentators. “The Modigliani-Miller Propositions After Thirty Years,” and comments, Journal of Economic Perspectives (Fall 1988): 99-158.
Myers, Stewart. “Capital Structure.” Journal of Economic Perspectives (Spring 2001): 81-102.
Hart, Oliver. “Financial Contracting.” Journal of Economic Literature (December 2001): 1079-1100.
Easterbrook, Frank H. “Two Agency-Cost Explanations of Dividends.” American Economic Review (September 1984).
Baker, Malcolm and Wurgler, Jeffrey. “A Catering Theory of Dividends,” Journal of Finance (2004), available at http://pages.stern.nyu.edu/~jwurgler/.
Baker, Malcolm and Ruback, Richard. “Behavioral Corporate Finance: A Survey,” found at http://www.wcfia.harvard.edu/seminars/pegroup/BakerRubackWurgler.pdf
MacKinlay, A.C. (1997), “Event Studies in Economics and Finance”, Journal of
Economic Literature 35(1), 13-39.
Andrade, Gregor, et. al. “New Evidence and Perspective on Mergers.” Journal of Economic Perspectives (Spring 2001): 103-120.
Holmstrom, Bengt and Kaplan, Steven. “Corporate Governance and Merger Activity in the
Gompers, Paul and Lerner, Josh. “The Venture Capital Revolution.” Journal of Economic Perspectives (Spring 2001): 145-168.
Stein, Jeremy C. “Efficient Capital Markets, Inefficient Firms: A Model of Myopic Corporate Behavior.” Quarterly Journal of Economics 104 (November 1989): 655-670.
Stein, Jeremy C. “Takeover Threats and Managerial Myopia.” Journal of Political Economy (1988): 61-80.
Scharfstein, David S. and Stein, Jeremy C. “Herd Behavior and Investment.” American Economic Review 80 (June 1990): 465-479.
Hall, Brian and Murphy, Kevin J, “The Trouble with Stock Options,” Journal of Economic Perspectives, Summer 2003, also at http://www-rcf.usc.edu/~kjmurphy/HMTrouble.pdf.
Murphy, Kevin J. and Zaboznik, Jan. “CEO Pay and Appointments,” American Economic Review, May 2004, also at http://www-rcf.usc.edu/~kjmurphy/CEOTrends.pdf
Jensen, Michael, Murphy, Kevin J., and Eric Wruck. “Remuneration: Where We've Been, How We Got to Here, What are the Problems, and How to Fix Them,” available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=561305#PaperDownload.
Robert J. Gordon and Ian Dew-Becker, “Unresolved Issues in the Rise of American Inequality,” http://www.people.fas.harvard.edu/~idew/papers/BPEA_final_ineq.pdf
McKay, Alisdair and Reis, Ricardo, “The Brevity and Violence of Contractions and Expansions,” NBER Working Paper, 12400, 2010.
Gorton, Gary B. Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1401882, published on-line in 2009.
IV. Theory and Regulation of Natural Monopolies
pp. 21-275.
Demsetz, Harold. “Why Regulate Utilities?” Journal of Law and Economics (April 1968): 347-359.
Williamson, Oliver. “Franchise Bidding for Natural Monopolies – in General and with Respect to CATV.”
Crandall, Robert W. “An End to Economic Regulation?” available at http://www.brookings.org/views/papers/crandall/20030721.pdf.
Parente, Stephen L. and Prescott, Edward. “Monopoly Rights: A Barrier to Riches.” American Economic Review 89, 5 (December 1999): 1216-1233.
Shleifer, Andrei. “State vs. Private Ownership.” Journal of Economic Perspectives (Fall 1998): 133-151.
Chang, Roberto, Constantino Hevia, and Norman Loayza, “Privatization and Nationalization Cycles,” NBER Working Paper 16126, June 2010.
Berg and Tschirhart, pp. 480-522.
Associated other topics in regulation, depending on your interests; reading suggestions will follow later in the semester.