Results for “Tests” 825 found
Was the Indian caste system efficient?
A new paper looks at some of the efficiency properties of castes:
The caste system in India has been dated to approximately 1000 B.C. and still affects the lives of a billion people in South Asia. The persistence of this system of social stratification for 3000 years of changing economic and social environments is puzzling. This paper formalizes a model of the caste system to better understand the institution and the reasons for its persistence. It argues that the caste system provided a tool for contract enforcement and facilitated trade in services, giving an economic reason for its persistence. A caste is modeled as an information-sharing institution, which enforces collective action. Trade is modeled as a version of the one-sided prisoner’s dilemma game, where the consumer has an opportunity to default. Consumers who default on a member of a caste are punished by denying them services produced in the caste. Various features of the caste system like occupational specialization by caste, a purity scale, and a hierarchy of castes are shown to be equilibrium outcomes that improve the efficiency of contract enforcement. The implications of the model are tested empirically using unique census data from Cochin (1875), Tirunelveli (1823) and Mysore (1941).
In other words, other caste members enforce norms on you and if you don’t follow them you are kicked out and you cannot easily join another caste. Sounds like my idea of fun. I have a few points:
1. No way should this paper spend so much time on a formal model.
2. The tests proffered on p.36 are related only tangentially to the paper’s main propositions.
3. When it comes to normative issues, the author can do no better than to write: "This should not be interpreted as saying that the case system was free of inefficiencies." And that comes only on p.46. Ha!
4. The paper commits the fallacies of excess functionalism.
5. Virtually any destructive institution which keeps economic transactions on a smaller scale may make contract enforcement "easier" in some regards.
6. This is nonetheless interesting work, and many more people should do research on this and related topics. But in terms of emphasis this paper is way off base.
The pointer is from New Economist blog, which offers related links. Readers, are any of you willing to defend the caste system, if only in part, on economic grounds?
The New Invisible Competitors
That is the title of my piece in the new Wilson Quarterly, not on-line anytime soon and yes you should subscribe. The piece looks at how people emotionally respond to the move from neighborhood, face-to-face competition to competition at a distance, or what I call invisible competition. Some people will fare better in this new environment than others; for instance people who rely on adrenalin to compete will find it harder to motivate themselves in this new and more impersonal environment:
The greatest gains in this new world are likely to go to people who are methodical planners or who love the game for its own sake. Some people plot their competitive strategies far in advance. These planners–be they crazy or just highly productive–don’t need anyone breathing down their necks, and indeed they often work best alone or in very small groups. Bill Gates is a classic example. Planners’ behavior may manifest itself in very competitive forms, but their underlying psychology is often not very rivalrous at all. They are ordering their own realities, usually for their individual psychological reasons, rather than acting out of a desire to trounce the competition. Early risers will also be favored. These people enjoy being first in line, or first to use a new idea, for its own sake.
Of course many of us miss face to face competition, so we try to recreate it in trivial ways, sometimes using our children:
As the concrete manifestations of the more important contests of love and business vanish, we recreate up-close rivalry to make our lives feel more real. I suspect that this helps explain the growing appetite for televised athletics and organized sports for children as well as the vogue for reality TV series such as Survivor and American Idol, eating contests, and even spelling bees. Because children are a cheap labor supply and willing to engage in all sorts of behavior for a chance at a prize or parental approval, they often serve as the vehicle for parents who seek to live out their desire for head-to-head competition vicariously. Spelling, for example, does not interest many people (who sits around practicing?), but bees exemplify the competitive spirit in action. The challenge to spell autochthonous, panmyelopathy, or warison will bring one kid to tears and another to triumph.
Oomph v. Statistical Significance
For those after the full debate, see:
- McCloskey and Ziliak, "The Standard Error of Regressions," Journal of Economic Literature 1996.
- Ziliak and McCloskey, "Size Matters: The Standard Error of Regressions in the American Economic Review," Journal of Socio-Economics 2004.
- Hoover and Siegler, "Sound and Fury: McCloskey and Significance Testing in Economics," Journal of Economic Methodology, 2008.
- McCloskey and Ziliak, "Signifying Nothing: Reply to Hoover and Siegler."
McCloskey has been making this point for some time, and a longer list of papers is available here, including several shorter (yet unsurprisingly persuasive) pieces.
What is Intelligence?: Beyond the Flynn Effect
That is the new book by James R. Flynn. He suggests the following:
Today we have no difficulty freeing logic from concrete referents and reasoning about purely hypothetical situations. People were not always thus.
In other words, people in earlier times really were stupider when it came to abstract thought, but this was primarily for environmental reasons. These people also had more daily, practical skills, again for reasons of practice. We in contrast receive daily workouts with hypotheticals, rapidly moving images, and spatial reasoning. So Flynn is suggesting that IQ isn’t more multi-dimensional than it may seem. The Flynn Effect gains are in fact concentrated in the most spatial and abstract versions of IQ tests.
Flynn summarizes the "Dickens-Flynn" model, through which environment and IQ interact in multiplicative fashion. Smart people seek out environments which make them even smarter, and this helps reconcile the cross-sectional IQ data (adoption doesn’t change IQ so much) with the time series of increasingly higher IQ scores (environments are changing for everybody). This reconciliation was fuzzy to me, but I took Flynn to be claiming that separated identical twins will reimpose common environmental forces on themselves, thus keeping their IQs in relatively close long-run synch. I still don’t understand what kind of test (might it contrast permanent vs. temporary environmental shocks?) might falsify the Dickens-Flynn model.
Flynn also argues that the Chinese in America attained high levels of achievement before
above-average IQs.
This book doesn’t tie up all the loose ends, and it could have been written in a more organized fashion. Still it is one of the more interesting volumes of the year.
Addendum: I have long thought that the Germanic "Hausmusik" tradition was responsible for producing so many great composers in one relatively short period of time. Flynn’s book offers (unintended) hints about why it is so hard to reproduce the cultural blossomings of times past, and also why future creations will seem baffling to the old fogies.
The Fed’s Dirty Laundry and Yours
Not content to kill people with CAFE standards the Federal government is now messing up our laundry. So called "energy-efficiency" standards have severely reduced the cleaning ability of new laundry marchines. Who says? Here is Consumer Reports:
Not so long ago you could count on most washers to get your clothes
very clean. Not anymore. Our latest tests found huge performance
differences among machines. Some left our stain-soaked swatches nearly
as dirty as they were before washing. For best results, you’ll have to
spend $900 or more. (italics added)What
happened? As of January, the U.S. Department of Energy has required
washers to use 21 percent less energy, a goal we wholeheartedly
support. But our tests have found that traditional top-loaders, those
with the familiar center-post agitators, are having a tough time
wringing out those savings without sacrificing cleaning ability, the
main reason you buy a washer.
I too support the goal of having washers use 21 percent less energy. Hell, I support the goal of having washers use no energy at all. Let’s pass a law.
Energy efficiency sounds so nice. Who could be against efficiency? Tradeofs, however, cannot be avoided. Thus, energy-efficiency really means that the government is going to choose how white your shirts are gonna be.
Ironically, the law could well reduce cleanliness and increase energy use. If the new washers are as bad as Consumer Reports say they are people will just start to wash everything twice.
Addendum 1: Prominent members of a certain political party often promote the theory that "if we make them build it, the savings will come"
but, as we all know, ignoring tradeoffs is a sure sign of discredited crackpot economics.
Addendum 2: CEI suggests you email some virtual underwear to the Secretary of Energy in protest.
A Farewell to Alms, pp.1-112
1. Did hunter-gatherers really have living standards as high as people in 18th century England? By focusing on the long run, Clark neglects the pains of equilibration. Hunter-gatherers who survived to 30 maybe had decent lives, but population was very low. It was kept low, in part, by lots of brutal and painful death. We can’t just focus on the steady-state conditions in making welfare comparisons. Modern research is also discovering that primitive societies have very high levels of war and violent death; if we’re playing time travel games, I’m opting for 1800, and not just to have a chance of hearing Haydn. I’ll also take modern Tanzania over the hunter-gatherers, in a heartbeat, contra what Clark implies.
2. Why should we aggregate income comparisons by country (or the whole world) rather than by city? World history looks very different if we do the latter. Aren’t most countries relatively recent inventions anyway? More generally, I would like a more disaggregated look at the data. Big chunks of the urbanized human population — pre 1800 — seem to have violated Malthusian precepts for centuries on end. "Stadtluft macht frei" was the old German saying.
3. How long is the long run? This is one of my biggest questions about the work and about Malthusian predictions more generally. Are we just comparing 30,000 B.C. to 1800 A.D.? If so, we have only two data points. If we look at times in between, there is much more scope for non-Malthusian results, even if they hold for "only centuries."
4. Violent conflict and predation are not given enough (any?) importance. Cities that avoid violent conflict do pretty well. Admittedly, violence is itself endogenous to Malthusian considerations, but I’m not going to reduce war to population pressures (and certainly Clark never tries to.) Isn’t part of the historical inability to boost long-run living standards simply the result of recurring wars and depredations? 17th century European history, among other times, shows just how much war matters.
5. Should I reject the Julian Simon model I grew up with? In that view there are increasing returns to scale within cities, where people usually don’t starve. The countryside languishes in poor countries, in part because it is underpopulated. Rather than having a "one population model" with an aggregate "n," labor markets are local. The "plagued by diseconomies of scale rural folk" cannot sufficiently connect with the "economies of scale urban sophisticates," mostly because of bad institutions and backward infrastructure. And the cities prove unable to protect themselves against all ongoing predations. Doesn’t that model fit the data too, and fit the disaggregated and shorter-run data better?
6. I can’t find the single place where Clark directly tests the Malthusian model. I fear he will regard this observation as unfair, since there is argumentation and data of some kind on virtually every page. But I still am not satisfied. I see lots of evidence for "history shows mean-reversion and population pressures are one factor affecting wages." It is harder to find a) what "best alternative" the Malthusian model is being tested against, b) what evidence would adjudicate between models, c) what is the short-run claim about the response of population to real wages, and d) what in history are the "hard cases" for the Malthusian model and how does Clark handle them?
7. Charles Kenny argues that the Malthusian model does not explain observed short-run dynamics for population and real wages. I don’t regard this piece as a refutation of Clark by any means, but the evidence on how well real wages predict population growth seems to me murky rather than decisively in Clark’s favor. There’s just not a single, simple model at work here.
If you are coming to the book blind, here is a short piece by Clark. Here is my earlier column on the manuscript. Here is a survey paper on the Industrial Revolution and the Malthusian trap. Here is more good background. Peter Lindert considers how much real wages predict population growth in British history. Read this too.
What do you all think?
Surprising evidence on the Flynn Effect
1. Non-verbal IQ has risen more rapidly than has verbal IQ.
2. Performance gains are smallest on the most culturally specific tests, and largest on the most abstract tests.
3. Performance gains, as they occur over time, are roughly constant for all age groups.
4. Problem-solving abilities have seen the biggest performance gains.
5. Gains on the "Ravens" test started occurring before the TV era, much less the computer game era.
#3 is perhaps the biggest surprise to me, as it contradicts most of the obvious explanations for the Flynn effect.
Those results are summed up in the very interesting "The Flynn effect and its relevance to Neuropsychology," by Merrill Hiscock, Journal of Clinical and Experimental Neuropsychology, 2007. Here is Andrew Gelman’s post on that paper.
Hiscock puts it well: "..the Flynn effect constitutes a compelling example of large between-group IQ differences [across generations] that are completely environmental."
What accounts for reading speed?
To knock out sentence context, they changed word order (e.g.
“Contribute others. The of Reading measured”). To knock out whole word
recognition, they alternated capital and lower case (e.g. “ThIs tExT
AlTeRnAtEs iN CaSe”). And to knock out letter-by-letter decoding, they
substituted letters in such a way that word shape was maintained (e.g.
“Reading” becomes “Pcedirg”).Letter decoding was found to
account for 62 per cent of reading speed; whole word recognition 16 per
cent; and sentence context 22 per cent.
I wasn’t there for the tests, but I believe that is measuring reading speed at margins other than what we find on the printed page. "Knowing what is coming" is in my view most important for reading fast. (I like to say "It took me 45 years to read that book." If you think you "just started" the book in your hands right now, you are failing to understand the proper marginal unit.)
I find that when I try to read graphic novels, I am not a very fast reader at all. My eyes get confused from not knowing where the next block of text will appear.
I am also struck by an incidental remark toward the end of the article; we are getting closer to the truth:
…among the faster readers, predicting words from sentence context made a
bigger contribution to reading speed than among the slower readers.
Addendum: Here is my previous post on reading speed.
Bryan Caplan in *The New Yorker*
Louis Menand, who has written a book on pragmatism, writes in response to Caplan:
In the end, the group that loses these contests must abide by the outcome, must regard the wishes of the majority as legitimate. The only way it can be expected to do so is if it has been made to feel that it had a voice in the process, even if that voice is, in practical terms, symbolic. A great virtue of democratic polities is stability. The toleration of silly opinions is (to speak like an economist) a small price to pay for it.
There is much more at the link.
Addendum: Here is a good sentence from Menand: "People are less modern than the times in which they live, in other words, and the failure to comprehend this is what can make economists seem like happy bulldozers."
How to improve the Presidential debates
Slate.com lists some of the obvious suggestions, which try to inject greater intellectual content. I would prefer to see the following:
1. Allow all candidates to watch a short debate of experts — with a fraud or two thrown in — and ask them to evaluate what they just heard and why they reached the conclusion they did.
2. Test candidates for the ability to spot liars.
3. Give each candidate a substantive message and then give each two minutes to turn it into pure fluff. This tests communications skills, plus we can see the meat grinder in action.
4. Require each candidate to conduct an orchestra. Watch to what extent each candidate defers to the players, and to what extent he prefers "panache."
Your ideas?
Robin Hanson’s health care petition
Whereas, our single clearest data point regarding the marginal value of this spending, the US-funded RAND health insurance experiment,
where from 1974 to 1982, 7700 subjects were randomly assigned to 3 to 5
years of free or not free medicine, found no significant evidence of a
substantial health effect of more medicine, confirming the usual results of continuing aggregate health–medicine correlation studies,
We the undersigned petition the US to
publicly conduct a similar experiment again soon, this time with at
least ten thousand subjects treated for at least ten years, which
should be feasible for a half billion dollars, or one part in forty
thousand of annual medical spending. Whatever other purposes such an
experiment pursues, it should try to make clear the aggregate health
effects of variations in aggregate medical spending, variations induced
by feasible regimes of quality control, including free patient choice
induced by a varying aggregate price.
Here is the link. I doubt if upping the number of subjects will much change the results. As long as we are playing mad scientist, I would prefer some disaggregated tests, namely:
1. How much better off are the poor uninsured if they get health insurance? (Financially much better off but in health terms only slightly better off is my current guess, and yes there is already some evidence here.)
2. How much less healthy would the well-insured be if they had to consume thirty percent less health care?
3. How much healthier would we be if we retargeted expenditures to some commonly recommended areas, such as pre-natal care and prescription drugs?
And my favorite is:
4. How much would health care cost if we simply banned all health insurance and modified forms thereof?
Except possibly for #1, these are not easy experiments to run, and yes computational modeling would beg the relevant questions. But I think #3 — or even the thought thereof — poses the biggest problem for Robin’s worldview that medicine doesn’t do us much good. Robin is a real world innovator, a hands-on, duct tape kind of guy, so he can’t retreat into the claim that we cannot possibly parse current expenditures more effectively. Lots of health care does lots of good, and from there we can pick up the ball and run with it.
For more on Robin’s revisionist health care views just scroll through the last week’s entries on his blog.
FDA payola?
The FDA will soon stipulate that researchers who accept more than $50,000 in corporate grants, contracts and consulting fees cannot sit on FDA advisory committees. This will rule out many current advisors.
First, I wonder how this fits into the old Sam Peltzmann story that the FDA is too conservative in approving new drugs.
Second, what if we reformed in the opposite direction? Why not do away with all the mandatory drug trials and the like, and simply let drug companies purchase approval for new drugs? Think of the companies as posting bonds, and of course they still can be sued ex post if the drug harms somebody. The companies still will have reason to conduct their own tests. Set the price high if you wish.
To be sure, how much a company will pay for approval will depend on expected profits, not social welfare. But even with market power there is usually some connection between those two magnitudes. Or maybe the fear of lawsuits won’t deter poorly capitalized companies, but at the very least we could let the corporate giants take this path.
Some companies might be too overconfident about their drugs. If you believe that, I hope you are buying puts on them. Other companies might have excessively short time horizons. If you believe that, I hope you are loading up on drug companies with heavy R&D and raking in your excess returns.
So does this idea have any takers? If not, why not?
Addendum: Matt Yglesias argues regulation is a substitute for litigation.
Markets in everything, German edition
Man schickt eine SMS mit der
Bezeichnung des Straßenzuges und der Uhrzeit, und zehn Sekunden später
geht das Licht an – gesteuert wird das über ein Empfangsmodul, das in
die grauen Schaltschränke eingebaut wird. Auf der Teststrecke, die wir
eingerichtet haben, ist es dann fünfzehn Minuten lang hell. Das sind 30
Laternen auf 2,5 Kilometer. Den Nutzer kostet das 20 Cent, plus die
Kosten für die SMS.
In other words, you pay, using your cell phone, to have the street lights turned on. That is for the town of Lemgo. Here is the home page of the start-up.
Thanks to Martin for the pointer.
Good luck
To extend [health care] coverage without changing these [cost-inflating] dynamics would add on another $77 billion of spending beyond what it should cost.
That is Ezra Klein, his post has some interesting data. Note that while we might shift some of the financial burden of pharmaceuticals to Europe and elsewhere, this hardly qualifies as a global welfare improvement. There are plenty of other ways to redistribute money from foreigners. I am, however, struck by this bit:
Another $147 billion in increased spending, much of it a consequence of
the fee-for-service system, wherein doctors are paid based on how many
procedures they recommend and carry out. Doctors with equity in
facilities where they can co-refer cases conduct between two and eight
times more tests than those without equity interests.
Some of this is third-party payment, but more generally the consumer as monitor is often either insane or asleep. To get what is really wrong with health care markets, we must turn to the academics, not as analysts but rather as examples:
One 47-year-old professor, a classic blunter who had received a
diagnosis of prostate cancer, told me: "I would be insulted if some guy
read 15 papers on theoretical physics, my own field, and then came in
and asked me to help him design an experiment. And I expect the same of
my doctor. I pay her. Let her sit down and tell me exactly what I need
to know — what are my choices and what do they mean? That’s her job. I
have other things to do."
Many consumers just don’t want to face the stark realities of how they are doing. How about letting me make the health care decisions for a randomly chosen partner, and vice versa? Here is much more, via Craig Newmark. On related topics, here is Arnold Kling.
Not Normal on the New Deal
Readers will not be surprised to know that I am not normal. Indeed, I have not been normal for a long time as this post from 4 years ago attests:
Roosevelt and the Great Depression
I was amused to see Conrad Black writing with shock:
Jim Powell of the Cato Institute (cited approvingly in a recent column by Robert L. Bartley) argues in a new book that FDR actually prolonged the Depression!
Of course, Powell is correct. Imagine, increasing the power of
unions to strike and raise wages during a time of mass strikes and mass
unemployment. Imagine thinking that cartelizing whole industries
thereby raising prices and reducing output could improve the economy.
Not everything Roosevelt did was counterproductive – he did end
prohibition (although in order to raise taxes) – but plenty was and
worst of all was the uncertainty created by Roosevelt’s vicious attacks
on business. (See, for example, the work of Bob Higgs especially this important paper and historian Gary Dean Best’s overlooked classic Pride, Prejudice and Politics.)
Business investment failed to recover because business people
legitimately feared a regime change like that which had occured in
Germany and Italy. Sound extreme? Roosevelt himself threatened/promised
this in his first inaugural:
…if we are to go forward, we must move as a trained and
loyal army willing to sacrifice for the good of a common discipline,
because without such discipline no progress is made, no leadership
becomes effective. We are, I know, ready and willing to submit our
lives and property to such discipline, because it makes possible a
leadership which aims at a larger good… I assume unhesitatingly the
leadership of this great army of our people dedicated to a disciplined
attack upon our common problems….in the event that the Congress shall
fail to take one of these two courses, and in the event that the
national emergency is still critical, I shall not evade the clear
course of duty that will then confront me. I shall ask the Congress
for… the power that would be given to me if we were in fact invaded
by a foreign foe.