John List’s summer institute in field experiments

by  Tyler Cowen in

The Summer Institute on Field Experiments (SIFE) is a highly selective and innovative program at the University of Chicago that brings together the brightest young economists in the world and companies interested in using rigorous field experiment methods and behavioral economics to design solutions to problems they face. Organization partners will share their business challenges, and the Institute’s academics help them to scientifically test new ideas and solutions. The third edition of SIFE will take place at the University of Chicago, July 9-13 2017.

More information can be found here: https://economics.uchicago.edu/content/sife2017

Monday assorted links

by  Tyler Cowen

1. Interview with Amos Oz.

2. New Harvard student group dedicated to inviting controversial speakers.

3. Understanding loan aversion in education.

4. Profile of Leonard Leo.

5. The most underrated place in every state?

6. My macro-complacency podcast with David Beckworth, more of a macro angle on complacency ideas than anyone else has done.  I consider for instance why ngdp targeting is not more popular, and other such macro issues.

Today is a good day to remember the great Julian Simon

by  Alex Tabarrok in

Today is a good day to remember the great Julian Simon. Here’s a piece on just one of his many accomplishments.

Julian Simon helped revolutionize the airline industry by popularizing the idea that carriers should stop randomly removing passengers from overbooked flights and instead auction off the right to be bumped by offering vouchers that go up in value until all the necessary seats have been reassigned. Simon came up with the idea for these auctions in the 1960s, but he wasn’t able to get regulators interested in allowing it until the 1970s. Up until that time, Litan writes, “airlines deliberately did not fill their planes and thus flew with less capacity than they do now, a circumstance that made customers more comfortable, but reduced profits for airlines.” And this, of course, meant they had to charge passengers more to compensate.

By auctioning off overbooked seats, economist James Heins estimates that $100 billion has been saved by the airline industry and its customers in the 30-plus years since the practice was introduced.

Claims about cities, with special reference to San Francisco, NY, and London

by  Tyler Cowen in

From Oswald Spengler’s The Decline of the West, vol.II, p.99, from “The Soul of the City”:

The stone Colossus “Cosmopolis” stands at the end of the life’s course of every great Culture.  The Culture-man whom the land has spiritually formed is seized and possessed by his own creation, the City, and is made into its creature, its executive organ, and finally its victim.  This stony mass is the absolute city.  Its image, as it appears with all its grandiose beauty in the light-world of the human eye, contains the whole noble death-symbolism of the definitive thing-become.  The spirit-pervaded stone of Gothic buildings, after a millennium of style-evolution, has become the soulless material of this daemonic stone-desert.

These final cities are wholly intellect.

And on p.107, these cities are described as:

Rootless, dead to the cosmic, irrevocably committed to stone and to intellectualism, it develops a form-language that reproduces every trait of its essence — not the language of becoming and growth, but that of a becomeness and completion, capable of alteration certainly, but not of evolution.

Good thing this is such a silly book!

Claims about British geography

by  Tyler Cowen in

“The clue to many contrasts in British geography,” wrote the geographer Halford Mackinder in 1902, “is to be found in the opposition of the south-eastern and north-western — the inner and outer faces of the land.  Eastward and southward, between the islands and the continent, are the waters known to history as the Narrow Seas; northward and westward is the Ocean.”  The happy conclusion he drew from this is that Britain has the best of both: “as liberty is the native privilege of an island people, so wealth of initiative is characteristic of a divided people.”

Tradition divides Britain diagonally, demarcating the south/east from the north/west, and imputes great significance to the contrast between these regions in the composition of British identity.  For some, the tension between the two is creative, and Britain’s ingenuity benefits from facing both the Atlantic and Europe.  Celtic was the term coined in the eighteenth century for the Atlantic-facing arc of Scots, Welsh, Manx and Irish…

This is of note:

Since 1821 the population of the Celtic arc of the north and west has declined as a proportion of the population of the United Kingdom, from 46 per cent in 1831, to 20 per cent in 1911, to 16 per cent in 2014, due to famine, independence and emigration.  This is a configuration of the country which we have been losing for nearly two centuries.

That is from the rewarding Love of Country: A Hebridean Journey, by Madeleine Bunting.

Fairness > equality

by  Tyler Cowen in

Here is from a new research paper by Christina Starmans, Mark Sheskin, and Paul Bloom:

…despite appearances to the contrary, there is no evidence that people are bothered by economic inequality itself. Rather, they are bothered by something that is often confounded with inequality: economic unfairness. Drawing upon laboratory studies, cross-cultural research, and experiments with babies and young children, we argue that humans naturally favour fair distributions, not equal ones, and that when fairness and equality clash, people prefer fair inequality over unfair equality.

As I said in a talk at Harvard Business School a few days ago, “if you hear the word “inequality,” the chance that what follows will be wrong is at least 3/4.”

For the pointer I thank Michelle Dawson.

Beginnings loom larger than endings of past and recurrent events

by  Tyler Cowen in

That is the theme of new research by Karl Halvor Teigen, et.al., here is the abstract:

Events are temporal “figures”, which can be defined as identifiable segments in time, bounded by beginnings and endings. But the functions and importance of these two boundaries differ. We argue that beginnings loom larger than endings by attracting more attention, being judged as more important and interesting, warranting more explanation, and having more causal power. This difference follows from a lay notion that additions (the introduction of something new) imply more change and demand more effort than do subtractions (returning to a previous state of affairs). This “beginning advantage” is demonstrated in eight studies of people’s representations of epochs and events on a historical timeline as well as in cyclical change in the annual seasons. People think it is more important to know when wars and reigns started than when they ended, and are more interested in reading about beginnings than endings of historical movements. Transitional events (such as elections and passages from one season to the next) claim more interest and grow in importance when framed as beginnings of what follows than as conclusions of what came before. As beginnings are often identified in retrospect, the beginning advantage may distort and exaggerate their actual historical importance.

Now let me tell you how I first became interested in this paper…we’ll leave aside why it didn’t quite convince me…

Food consumption now has higher entry barriers than does music consumption

by  Tyler Cowen in

Marco Bresba emails me:

I loved your post on how Food has displaced Music in pop culture (March 29)

I’ve been thinking about the topic for years, and I believe complacency is pertinent.

Musical taste (like one’s taste in wine, food, books, etc.) provides a measure of social currency. It’s a way into a clique you want to join but admittance requires work.

Music no longer provides much of an effort barrier. Mention the most obscure band and I can become an expert in a few hours.

This was not always the case. Rewind to 1985: a classmate mocks me with “I bet you never heard of The Smiths.” He’s right. How do I get up to speed and become cool?

None of my radio stations play the Smiths. One channel teases me with a 3-hour alternative block every Sunday. The cool indie store is a bus ride away. And their inventory is spotty. The good stuff is imported form the UK. A domestic compilation is rumored for next year. Until then, would I be interested in the latest Cure single? They have one copy left. Only $9.99. I pick up the NME instead.

I hit a bunch of used record stores. Every second day. Two weeks later, I find one of the Smiths’ less popular singles. At this rate, I’ll be a fan by the time I graduate high school.

In our age of convenience, food still requires long term planning. At least the stuff foodies value. Will anyone care if I order Massaman Curry on Uber Eats? No. In order to become an elite foodie, I have to leave the house. I must shed my complacency in various ways:

  • I accept a 90 mins line-up to nab a seat at a Celebrity Chef Pop Up.
  • I have to befriend an annoying waiter at a hipster party just to find out how to secretly order raw pork at a suburban joint 45 mins away.
  • I worry I don’t have enough referrals to get invited to the newest alternative supper club.
  • I depend on the cheesemonger that only works on Saturdays to point out the best seasonal stinky varieties.
  • I stay up till midnight that one night Pied de Cochon accepts resos for their Sugar Shack months away.
  • I scold myself for not planning my Italian trip a year in advance –  my bucket list meal at Osteria Francescana now in jeopardy.

In addition to the reasons you mentioned, food obsession will always hold currency because it still requires plenty of legwork. Music just needs an internet connection.

Saturday assorted links

by  Tyler Cowen

1. Singapore Robocop.

2. The RNA editing of the octopus.  Recommended.

3. Cowen’s Second Law: optimal rat tickling edition.

4. Export price elasticity > tariff elasticity > exchange rate elasticity.

5. After the Storm is the best movie I’ve seen so far this year, it is a study in Japanese “complacency,” the reviews are positive but none are insightful.

6. The museum of failed innovations.

7. “Besides, he points out, Scotland is closer to Newfoundland than Hawaii is to California.“

Globalization is more robust and stable than you think

by  Tyler Cowen in

That is the topic of my latest Bloomberg column, here is one bit from it:

The most surprising result from the research on trade and distance is that the ability of trade patterns to surmount barriers of distance has not in fact increased over time. You might think that with the internet, highly efficient ports and powerful multinationals, geographic distance would predict trade patterns less well over time, but that has not been the case. As one study noted, according to a meta-analysis, “trade decreases with distance by at least the same amount today than thirty years ago.”

Again, to put that into concrete form, the tendency of the U.S. to trade with Canada or Mexico, relative to trading with Australia or Turkey, is at least as pronounced as it used to be.

And this:

The pessimistic reading of trade clustering is that human beings simply have not spread their wings very far. But these days, I find the gravity equation to be a comfort. Given that our ability to trade across great distances has not outraced our ability to trade nearby, I am not expecting any kind of a major trade snapback or correction. The evolution of trade, rather than throwing out fragile, delicate spokes, has instead made some fairly hardy connections, sturdy enough it seems to survive Trump’s rhetoric.

Do read the whole thing.

Moving to China and how to do it

by  Tyler Cowen in
A loyal MR reader writes to me:
I’m planning on…spending the summer in China before starting the program in Beijing in September…
How much emphasis should I spend generally on language study vs. travel in China vs. reading in English about the country? For this summer, I was thinking of holing up in one city and finding tutors to do 10hrs/day of study, traveling around the country, or some combination of the two.
Here’s how one blogger described what three months of intensive gave him: “My level of Chinese is sufficient to deal with most basic necessities of living, travel, make new friends and have interesting conversations entirely in Chinese. I can also read most of simple emails, menus and signs, although my reading still lags behind my speaking ability. I’m still not at a level where I could easily understand group conversations, movies, television or read books or newspapers.”
Also, any cities in particular you’d like to spend three months in?
What type/mix of books should I be reading over the next few months in the states to prep? Any particular titles come to mind?
Ideas for Master theses in economics that would benefit from being in-country even with relatively limited language ability?

TC here: Tough questions!  I would offer a few points:

1. You can’t study a foreign language for ten hours a day, as you need to intersperse more rewards to keep yourself motivated (like most things!).  The best way to learn Chinese is how I learned German, namely through a romantic partner.  That probably implies having a home base city for a big chunk of your time.

2. You need to ask how well you can handle air pollution, especially for the winter months.  Overall, I prefer Western China, which also tends to be less polluted.  Yunnan province is to me one of the very best visits in the world, and the environment there is downright pleasant, but everywhere I’ve gone in China was worth visiting.  Of course Beijing, Shanghai, and Shenzhen are where much of the action is at, of those three I enjoy Beijing the most (by far) but would pick Shanghai to live, mostly because it has less air pollution.

3. It is hard to tackle China through books, and single titles don’t get you very far (but here are a few recommendations).  Maybe start with John Keay for an overview, but finish up by reading it yet again.  Along the way, pick a few particular pre-communist topics, such as the Taiping rebellion, the history of a part of the country, Christianity in China, the Great Divergence, or the Grand Canal (understudied!), rather than just pawing through dozens of basically similar books on “where China is at right now.”  If I had to suggest one topic, maybe it would be “reading Chinese history through the lens of the state capacity idea,” as my colleague Mark Koyama has been working on.

4. The economic history of China is an area where economics research is making some very rapid advances from a pretty low base of knowledge.

5. Ask someone who has moved to China.