Crime vs. disorder
A similar pattern emerged in my recent report on crime in Washington, D.C. There, too, there are signs that disorder has risen, relative to both the pandemic and pre-pandemic, as the police have attended to it less. Unsheltered homelessness, unsanitary conditions, shoplifting, farebeating—all seem to have become more common in D.C. And those problems have come as a smaller police force has deprioritized order enforcement—if you look at table 2 of that report, you’ll see that arrests for minor crimes were down as much as 99% in 2023 relative to 2019.
I increasingly think this is a more general phenomenon. Disorder is not measured like crime—there is no system for aggregating measures of disorder across cities. But if you look for the signs, they are there. Retail theft, though hard to measure, has grown bad enough that major retailers now lock up their wares in many cities. The unsheltered homeless population has risen sharply. People seem to be controlling their dogs less. Road deaths have risen, even as vehicle miles driven declined, suggesting people are driving more irresponsibly. Public drug use in cities from San Francisco to Philadelphia has gotten bad enough to prompt crack-downs.
These are fuzzy signals, but they jive with my personal experience (for whatever that is worth). In the half-dozen cities I’ve visited in the past year, visible disorder has been a common feature.
Here is more from Charles Fain Lehman.
Friday assorted links
1. “men do okay, but women usually win…”
2. Ed Glaeser on the Jon Hartley podcast.
3. Is bad service the sign of a better world?
4. Bari Weiss media start-up valued at $100 million.
5. Malcolm Gladwell on his new book and his development (NYT).
6. Scott Sumner on artistic styles.
7. As the worker shortage in Tokyo grows, workers are demanding ever-shorter commutes (FT). Prices are adjusting accordingly.
8. The Brian Eno AI movie (FT).
On the price of Ozempic
That is the topic of my latest Bloomberg column, here is one excerpt:
As for consumer prices for the current obesity drugs, they are not as high as is often reported, once the various ways to get a discount are taken into account. Despite reports that the drugs cost $1,000 per month, the reality is more favorable. Even putting aside insurance coverage, readily available discounts can cut that price in half. Eli Lilly & Co. recently introduced online sales of Zepbound vials for $399 a month.
Lurking in the background are “compounded” versions of these drugs, which are pharmacy-produced copies, permitted by law when there is a shortage of the core drugs. These compounds do not undergo the same inspection processes as the brand names, and their safety and efficacy has been questioned. But they are easy to get and relatively cheap. This is an example of competition, however imperfect and in need of oversight, lowering prices — and in a less clumsy manner than a government price control.
Are we right now getting anything close to optimal price discrimination, or not?
“Despair” and Death in the United States
Increases in “deaths of despair” have been hypothesized to provide an important source of the adverse mortality experiences of some groups at the beginning of the 21st century. This study examines this possibility and uncovers the following primary findings. First, mental health deteriorated between 1993 and 2019 for all population subgroups examined. Second, these declines raised death rates and contributed to the adverse mortality trends experienced by prime-age non-Hispanic Whites and, to a lesser extent, Blacks from 1999-2019. However, worsening mental health is not the predominant explanation for them. Third, to extent these relationships support the general idea of “deaths of despair”, the specific causes comprising it should be both broader and different than previously recognized: still including drug mortality and possibly alcohol deaths but replacing suicides with fatalities from heart disease, lower respiratory causes, homicides, and conceivably cancer. Fourth, heterogeneity in the consequences of a given increase of poor mental health are generally more important than the sizes of the changes in poor mental health in explaining Black-White differences in the overall effects of mental health on mortality.
Cutting welfare for immigrants
That is quite a popular policy, including with libertarian open borders types, but it does not always work out well:
This paper studies the effects of a large welfare benefit reduction on the children in the affected families. The welfare cut targeted adult refugees who received residency in Denmark, and it reduced their disposable income by 30 percent on average over the first five years. We show that children exposed to the welfare cut during preschool and school-age obtained lower GPAs, experienced reduced well-being and overall education levels, and suffered lower employment and earnings as adults. Children in their teens at exposure faced large increases in conviction probabilities for violent and property crimes.
That is from a new AEJ piece by Christian Dustmann, Rasmus Landersø, and Lars Højsgaard Andersen, and here are less gated copies of the work. A variety of different groups will not like it when I say this, but at least sometimes immigration flows and a welfare state are complements.
Thursday assorted links
1. The new Mozart piece (to me not impressive)
2. How baseball line-ups are changing.
3. The new Meta glasses (to me impressive).
4. Are these the world’s coolest neighborhoods?
5. China or Russia? What do you think?
Is assortative mating by education declining?
Recent social and economic trends in the United States, including increasing economic inequality, women’s growing educational advantage, and the rise of online dating, have ambiguous implications for patterns of educational homogamy. In this research note, we examine changes in educational assortative mating in the United States over the last eight decades (1940 to 2020) using the U.S. decennial censuses and the American Community Survey, extending and expanding earlier work by Schwartz and Mare. We find that the rise in educational homogamy noted by Schwartz and Mare has not continued. Increases in educational homogamy stalled around 1990 and began reversing in the 2000s. We find a growing tendency for marriages to cross educational boundaries, but a college degree remains the strongest dividing line to intermarriage. A key trend explaining this new pattern is women’s increasing tendency to marry men with less education than themselves. If not for this trend, homogamy would have continued increasing until the early 2010s. We also show substantial heterogeneity by race, ethnicity, and nativity and among same- versus different-sex couples.
That is from a new paper by Noah Hirschl, Christine R. Schwartz, and Elia Boschetti, via the excellent Kevin Lewis.
Are We Adapting to Climate Change?
Not so much, at least not yet:
We study whether the sensitivity of economic, health, and livelihood outcomes to climate extremes has declined over the last half century, consistent with adaptation. Understanding whether such adaptation is already occurring is central to anticipating future climate damages, to calibrating the level of ambition needed for emissions mitigation efforts, and to understanding additional investments in adaptation that could be required to avoid additional damages. Using comprehensive panel data across diverse geographies and outcomes, including data on mortality, agricultural productivity, crime, conflict, economic output, and damages from flooding and tropical cyclones, we find limited systematic evidence of adaptation to date. Across 21 outcomes we study, six show a statistically significant declining sensitivity to a changing climate, five show an increasing sensitivity, and the remainder show no statistically significant change. Our results do not imply that specific documented adaptation efforts are ineffective or certain locations have not adapted, but instead that the net effects of existing actions have largely not been successful in meaningfully reducing climate impacts in aggregate. To avoid ongoing and future damages from warming, our results suggest a need to identify promising adaptation strategies and understand how they can be scaled.
That is from a new NBER working paper by Marshall Burke, et.al.
What should I ask Neal Stephenson?
Yes I will be doing another Conversation with him, in honor of his forthcoming book Polostan, which initiates a new series. It is set in the 1930s, has some spies in it, and parts are set in the town of Magnetogorsk in the Ural mountains, as well as Montana and WDC in the U.S. So far I like the first thirty pages very much.
Here is my 2019 Conversation with Neal Stephenson. So what should I ask him?
Wednesday assorted links
1. How do Greenland sharks live for 400 years? (NYT)
2. John Cochrane on AI regulation. Trenchant.
3. Uh-oh. Which Commandment was broken here?
4. Have economists gone out of fashion in Washington?
Avian Flu is Bad for Cows
FarmProgress: With a closed herd and all his heifers artificially inseminated — no outside bulls needed — Nathan Brearley was confident his 500-cow dairy farm in Portland, Mich., would be spared from the avian flu strain that’s affecting dairies.
He was wrong. Nearly six months later after an infection on his farm, milk production still hasn’t recovered.
“I was quite surprised. I never saw any other disease this widespread affect the cattle like it did,” Brearley said during a recent webinar on dairy avian flu, put on by the Pennsylvania Center for Dairy Excellence.
…Brearley said the first signs of problems were in April when the SmaxTec boluses in his cows, which keep track of temperature and other health parameters, started sending high-temperature alarms to his phone and computer. Half the herd looked like it was getting sick.
“Looking at data, the average temperature rise was 5.1 degrees above normal,” he said. “Outlying cows were even higher with temperature.”
The cows were lethargic and didn’t move. Water consumption dropped from 40 gallons to 5 gallons a day. He gave his cows aspirin twice a day, increased the amount of water they were getting and gave injections of vitamins for three days.
Five percent of the herd had to be culled.
“They didn’t want to get up, they didn’t want to drink, and they got very dehydrated,” Brearley said, adding that his crew worked around the clock to treat nearly 300 cows twice a day. “There is no time to think about testing when it hits. You have to treat it. You have sick cows, and that’s our job is to take care of them.”
Testing eventually revealed that his cows did indeed contract H5N1. But how they contracted it, he said, is still a mystery.
Brearley said an egg-laying facility a mile and a half away tested positive for H5N1 and had to depopulate millions of birds. The birds were composted in windrows outside the facility, “and I could smell that process.”
The farm averaged 95-100 pounds of milk per head with 4.0% butterfat and strong solids before the outbreak. During the first three weeks of infection, milk production fell to 75 pounds a head and has been slow to recover.
“Honestly, we haven’t recovered since, though my forages have been stable,” Brearley said. “I cannot get back to our baseline again.”
Reproduction was also challenged. Right off the bat, his cows aborted their calves.
And how about this kicker:
He didn’t test his cows until two weeks after the first high temperatures entered his herd, fearing that his milk processor wouldn’t accept his farm’s milk.
Why do I get the feeling that we are sleepwalking?
Why “Buy American” is not such a great idea
That is the topic of my latest Bloomberg column, here is one excerpt:
Then there is the money. European and South Korean infrastructure companies, for example, tend to be much less expensive than US firms. The Buy American Act often prevents them from bidding on US contracts. And when the federal government is spending more on contracts for US suppliers, it has less money to invest elsewhere.
And:
Under current law, as has been supported by the administrations of both Donald Trump and Joe Biden, the domestic-content requirement is slated to rise to 75% in 2029. That is likely to raise the cost of Buy American provisions even more, especially in a world where more countries are entering the market as cost-effective producers. Furthermore, the higher that percentage, the more likely it is that the US is protecting sectors that spend their money on capital goods, rather than on US labor. Job creation or job protection is likely to dwindle accordingly. In the future, use of the program may cost between $154,000 and $237,000 per job.
The column draws on this NBER working paper by
Behavioral attenuation
We report a large-scale examination of behavioral attenuation: due to information-processing constraints, the elasticity of people’s decisions with respect to economic fundamentals is generally too small. We implement more than 30 experiments, 20 of which were crowd-sourced from leading experts. These experiments cover a broad range of economic decisions, from choice and valuation to belief formation, from strategic games to generic optimization problems, involving investment, savings, effort supply, product demand, taxes, environmental externalities, fairness, cooperation, beauty contests, information disclosure, search, policy evaluation, memory, forecasting and inference. In 93% of our experiments, the elasticity of decisions to fundamentals decreases in participants’ cognitive uncertainty, our measure of the severity of information-processing constraints. Moreover, in decision problems with objective solutions, we observe elasticities that are universally smaller than is optimal. Many widely-studied decision anomalies represent special cases of behavioral attenuation. We discuss both its limits and why it often gives rise to the classic phenomenon of diminishing sensitivity.
That is from a new and very important working paper by Benjamin Enke, Thomas Graeber, Ryan Oprea, and Jeffrey Yang.
It could be said that incentives matter, but they do not matter enough. This is likely one of the most important economics papers of the year.
Tuesday assorted links
2. Peter Jay, RIP (the avid reader will recall that Peter has a cameo appearance in GOAT).
3. Cosmos Ventures, a bit like EV but for AI.
4. Sam Altman on the intelligence age.
5. Claims about quantum, blah blah blah who knows?
6. Top economist in China vanishes, after criticizing the regime (WSJ).
Marginal Revolution Podcast, my excellent conversations with Alex Tabarrok
Alex and I have started this, and today is the premiere of the first episode. Here is the audio, video, and transcript, as with CWT (which by the way will continue as usual). This episode covers the breakdown of monetary policy in the 1970s, and Alex and I have recorded a series of other episodes on the economics of the 1970s, among other topics.
Currently I think we have six (?) more episodes in the can. Unlike CWT, this won’t be released once every two weeks, rather every now and then Alex and I will do a batch and then release them as a set, sequentially in fairly close succession.
From the current episode here is an excerpt:
COWEN: Barbarous relic. Look, we had to get rid of the gold standard.
TABARROK: No, no, we did not.
COWEN: It’s not an accident that it collapsed.
TABARROK: No, no, no. It definitely wasn’t an accident. No, it was done on purpose. It was done on purpose so that the politicians could further stimulate the economy. You think about all of the things which were holding them back. One of them was this idea of prudence and frugality. Then the Keynesians come along and it’s like Chesterton’s Fence. They say, “Oh, what’s this fence doing here? We don’t need that.”
They didn’t understand what the fence was doing in the first place. The purpose of the fence was to hold back the political inclinations to spend more and to try and stimulate the economy to win reelection. You got rid of the prudence and frugality, and then you got rid of the gold standard, which was also holding them back. That was like the second fence, which was eliminated.
COWEN: Look, I don’t like the Keynesians, but Friedman for one, was very happy to see the gold standard go. Had we stayed on the gold standard, given subsequent volatility in the price of gold, there would’ve been phenomenal macroeconomic volatility. In fact, we would’ve just cut the tie anyway. It was never going to last.
There was this fundamental contradiction that Europe in particular relied on the US to keep on increasing the supply of dollars, because there was a dollar shortage over there, and it was their reserve currency. The other economies weren’t strong enough, and there was no euro. Yet at the same time, the dollar was to be convertible into gold.
In the short run, we solved that “problem” by just twisting the arms of them, especially the French, and saying, “We’re not actually going to let you convert your dollars into gold, and we’re going to keep on sending you dollars.” At some point, the French just said like, “No way.” They started converting and the thing collapsed. There was never a way to keep it going that I can see. Unless you just pose a lot of deflation on the global economy, which would’ve been worse than what we did.
TABARROK: No, the increase in the volatility of the price of gold, that was endogenous, that was caused by going off the gold standard.
COWEN: At first but later on it was China, other demands, right?
Recommended!
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