Results for “cohort” 290 found
Hail Emily Oster!
The paper is titled "Hepatitis B Does Not Explain Male-Biased Sex Ratios in China"; here is the abstract:
Earlier work (Oster, 2005) has argued, based on existing medical
literature and analysis of cross country data and vaccination programs,
that parents who are carriers of hepatitis B have a higher offspring
sex ratio (more boys) than non-carrier parents. Further, since a number
of Asian countries, China in particular, have high hepatitis B carrier
rates, Oster (2005) suggested that hepatitis B could explain a large
share (approximately 50%) of Asia’s missing women". Subsequent work
has questioned this conclusion. Most notably, Lin and Luoh (2008) use
data from a large cohort of births in Taiwan and find only a very tiny
effect of maternal hepatitis carrier status on offspring sex ratio.
Although this work is quite conclusive for the case of mothers, it
leaves open the possibility that paternal carrier status is driving
higher sex offspring sex ratios. To test this, we collected data on the
offspring gender for a cohort of 67,000 people in China who are being
observed in a prospective cohort study of liver cancer; approximately
15% of these individuals are hepatitis B carriers. In this sample, we
find no effect of either maternal or paternal hepatitis B carrier
status on offspring sex. Carrier parents are no more likely to have
male children than non-carrier parents. This finding leads us to
conclude that hepatitis B cannot explain skewed sex ratios in China.
We should hold up Emily Oster as a role model of a truth-seeker. If the abstract does not make it clear, Emily Oster first won her fame by reporting the opposite result about sex ratios. Here are our previous posts on Emily Oster.
A more general lesson, of course, is simply how difficult it is to get at truth. This is a well-defined data set with a (more or less) well-defined answer. Most policy questions aren’t so tractable.
Andreessen on The Psychology of Human Misjudgment
Great insights from two legendary entrepreneurs – that’s what Marc Andreessen is offering up in a series of posts on Charlie Munger’s The Psychology of Human Misjudgment. Munger is Warren Buffet’s long-time partner and vice-Chairman at Berkshire Hathaway. Andreessen writes:
Mr. Munger’s magnum opus speech, included in the book, is The Psychology of Human Misjudgment
— an exposition of 25 key forms of human behavior that lead to
misjudgment and error, derived from Mr. Munger’s 60 years of business
experience. Think of it as a practitioner’s summary of human psychology
and behavioral economics as observed in the real world.
Here’s a taste of Munger:
…almost everyone
thinks he fully recognizes how important incentives and disincentives
are in changing cognition and behavior. But this is not often so. For
instance, I think I’ve been in the top five percent of my age cohort
almost all my adult life in understanding the power of incentives, and
yet I’ve always underestimated that power. Never a year passes but I
get some surprise that pushes a little further my appreciation of
incentive superpower.…We [should] heed the general lesson implicit in the injunction of Ben Franklin in Poor Richard’s Almanack:
"If you would persuade, appeal to interest and not to reason." This
maxim is a wise guide to a great and simple precaution in life: Never,
ever, think about something else when you should be thinking about the
power of incentives…
Andreessen is going through the speech and offering comment from his own experiences. Here’s Andreessen with an important example:
…the result of shifting from stock options to restricted stock should be obvious: current employees will be incented to preserve value instead of creating
value. And new hires will by definition be people who are conservative
and change-averse, as the people who want to swing for the fences and
get rewarded for creating something new will go somewhere else, where
they will receive stock options — in typically greater volume than
anyone will ever grant restricted stock — and have greater upside.
Read the whole thing, it’s the first post in a series I’m very much looking forward to reading.
“It’s not the economy, stupid”
America’s inequality problem — and I mean the stagnation at the lower end, not the hedge funds guys at the top — does indeed seem to stem from dysfunctional families and bad education:
We examine changes in the characteristics of American youth between the
late 1970s and the late 1990s, with a focus on characteristics that
matter for labor market success. We reweight the NLSY79 to look like
the NLSY97 along a number of dimensions that are related to labor
market success, including race, gender, parental background, education,
test scores, and variables that capture whether individuals transition
smoothly from school to work. We then use the re-weighted sample to
examine how changes in the distribution of observable skills affect
employment and wages. We also use more standard regression methods to
assess the labor market consequences of differences between the two
cohorts. Overall, we find that the current generation is more skilled
than the previous one. Blacks and Hispanics have gained relative to
whites and women have gained relative to men. However, skill
differences within groups have increased considerably and in aggregate
the skill distribution has widened. Changes in parental education seem
to generate many of the observed changes.
Here is the paper., ungated version here. The authors use a different method but their results suggest that the earlier Goldin and Katz paper, which focuses on the connection between inequality and the inability to spring into higher levels of education, is essentially correct. The problems with lower income stagnation do not stem fundamentally from trade, weak labor unions, or for that matter technical change. I won’t call this question settled, but the Goldin and Katz result is looking increasingly strong. I would also say that we, for better or worse, have more separating equilibria in today’s world.
Here’s an intuitive way to grasp the hypothesis Let’s say that today you are a young Korean-American, perhaps even a Korean-American from a non-wealthy family. Are your future income prospects good or bad? Is upward mobility still there for you, if you want it? Most people don’t even have to go to the numbers to answer these questions.
Here is a not unrelated article about the prospects for affirmative action. And, if you’re more worried about the growth in income inequality that comes from gains at the top, well, the last few months have remedied that just a bit.
The Power of Vouchers
Many studies of education vouchers have looked at the achievement of children who are given vouchers and who transfer to private schools. Generally these studies have found small but meaningful improvements (e.g. here and here). A voucher program, however, is about much more than transferring students from lousy public schools to better private schools it’s about creating incentives to improve the public schools.
Florida’s Opportunity Scholarship Program rated schools. Students at schools that received an F in multiple years became eligible for a voucher that allowed them to attend a private or higher-rated public school. In Feeling the Florida Heat? (ungated version) a paper sponsored by the Urban Institute Rouse et al. look at what happened at failing schools.
…we find that schools that received a grade of “F” in summer 2002 immediately improved the test scores of the next cohort of students, and that these test score improvements were not transitory, but rather remained in the longer term. We also find that “F”-graded schools engaged in systematically different changes in instructional policies and practices as a consequence of school accountability pressure, and that these policy changes may explain a significant share of the test score improvements (in some subject areas) associated with “F”-grade receipt.
Thus, this paper shows two things. First, that the test scores of the students in the public schools improved when vouchers gave the schools better incentives to perform. Second, at least some of the improvement comes from changes in how students are taught. The author’s note, for example:
…we find that schools receiving an “F” grade are more likely to focus on low-performing students, lengthen the amount of time devoted to instruction, adopt different ways to organize the day and learning environment of the students and teachers, increase resources available to teachers…
It is not true that "nothing can be done to improve the schools." Incentives matter.
Notice that Florida’s program worked even though the program was very weak. It offered vouchers only to students in the worst schools and only after those schools received F grades in multiple years. The vouchers were relatively small and could not be topped up. In addition, the program lasted only a few years before it was declared unconstitutional by Florida’s supreme court.
A true voucher program would be national, would not discriminate among students, would offer funding equal to that spent on students in public schools and would be permanent. Competition in such a system would be more intense and even more productive than in Florida’s program.
Facts and True Facts: More on Divorce
My
initial guest post noted that recent
divorce statistics were misinterpreted widely in both the media,
and by the academics interviewed by the press. The question is what went wrong with the latest data?
First, some necessary background. This
table was published by the Census Bureau counting the proportion of those
who had wed in each year who subsequently celebrated various
anniversaries. Here’s a quick test: Look
at the data, and decide for yourself what is happening to marital
stability. Or if you are lazier, let me
help with an example: the Census reported that 76.4% of men whose first wedding
occurred in 1985-89 had celebrated a tenth anniversary; this declined rather
dramatically to 70.0% among those who marrying in 1990-94. By jingo, it looks like recent marriages have
become much less stable!
Not so fast. The
marital history data were collected from July-September 2004, and hence those
who had married in, say, October 1994, simply
could not have reached their tenth anniversary by the survey date. Because this affected around one-in-ten of
those wed from 1990-94, this statistical factor alone explains what looked like
a decline in marital stability.
How do we interpret what happened?
- The
Census Bureau reported true and useful facts: The data are interesting, and
the table includes a small footnote, noting “Approximately 10 percent of the
cohort has not reached the stated age by the end of the latest specified time
period. Because of this, estimates for this group for the highest anniversary
are low.” With this qualification, one
should not conclude that divorce is rising. (But what should one conclude? No
guidance is given.) - The
Census Bureau reported true, but useless facts: The tables measure exactly
what it says it measures. The Census
Bureau is like Fox news:
We report, you decide. And we report,
even if the number we report is meaningless. - The Census
Bureau reported misleading facts: It is obvious that a qualifying footnote will
be ignored by most. Indeed, the New York
Times printed
the table but omitted the footnote. But
let’s not be too harsh on the NY Times: I talked about these data with several excellent
economists, and none even noticed the
footnote. Headline numbers deserve
headline qualifications. - The
survey was flawed: If the Census is interested in measuring the survival of
a set of marriages to their tenth anniversary, then failing to wait ten years after
a wedding to measure this is a surveying glitch.
So what is the mission of a statistical agency? If the Census’ job is to just report back
what we (the surveyed population) tell them, then they performed that task
adequately. If their job is to report
parameters – useful facts – then they failed miserably, as the data they
reported are hopeless biased indicators of marital stability. Alternatively, the question is: Does the
Census provide facts, or interpretation? I’m happy if they present only facts and leave the interpretation to experts. But is there an obligation to report only interpretable
facts?
Stephen Colbert’s term “truthiness“,
the reigning word of
the year, refers to what you
want the facts to be as opposed to what the facts are. I’m wondering, what is the right word is for something that is a fact but isn’t true? Untruthiness, anyone?
Eight more years until I am rational
Here is a new study of how age affects and channels decision-making abilities:
The sophistication of financial decisions varies with age: middle-aged
adults borrow at lower interest rates and pay fewer fees compared to
both younger and older adults. We document this pattern in ten
financial markets. The measured effects cannot be explained by observed
risk characteristics. The sophistication of financial choices peaks
around age 53 in our cross-sectional data. [emphasis added] Our results are consistent
with the hypothesis that financial sophistication rises and then falls
with age, although the patterns that we observe represent a mix of age
effects and cohort effects.
Here is the paper. Here are non-gated versions.
An early start in life is a good start
A’la James Heckman, the importance of early life for economic outcomes seems only to grow:
Is lifetime inequality mainly due to differences across people
established early in life or to differences in luck experienced over
the working lifetime? We answer this question within a model that
features idiosyncratic shocks to human capital, estimated directly from
data, as well as heterogeneity in ability to learn, initial human
capital, and initial wealth — features which are chosen to match
observed properties of earnings dynamics by cohorts. We find that as of
age 20, differences in initial conditions account for more of the
variation in lifetime utility, lifetime earnings and lifetime wealth
than do differences in shocks received over the lifetime. Among initial
conditions, variation in initial human capital is substantially more
important than variation in learning ability or initial wealth for
determining how an agent fares in life. An increase in an agent’s human
capital affects expected lifetime utility by raising an agent’s
expected earnings profile, whereas an increase in learning ability
affects expected utility by producing a steeper expected earnings
profile.
The emphasis is mine; here is the whole paper. Here is a non-gated version. In other words, treat your kids well, invest in them, and realize that determinism is not altogether crazy. Here is a related paper about how mental health problems in childhood plague later life and earnings.
Educated women don’t like globalization and trade as much
Michael Hiscox of Harvard reports:
We examine new survey data on attitudes toward international trade showing that women are significantly less likely than men to support increasing trade with foreign nations. This gender gap remains large even when controlling for a broad range of socio-economic characteristics among survey respondents, including occupational, skill, and industry-of-employment differences that feature in standard political-economy models of individuals’ trade policy preferences. Measures of the particular labor-market risks and costs associated with maternity do not appear to be related at all to the gender gap in trade preferences. We also do not find any strong evidence that gender differences in non-material values or along ideological dimensions have any affect on attitudes toward trade. The data do clearly reveal that the gender gap exists only among college-educated respondents and is larger among older cohorts. We argue that differences in educational experience – specifically, exposure to economic ideas at the college level – appear to be most plausible explanation for gender differences in attitudes toward trade. The findings suggest the possibilities of a renewed theoretical and empirical focus on the political roles played by ideas, not just among policymakers but also among the broader electorate. In practical terms, there are also implications for trade policy outcomes in different contexts and for how debates over globalization contribute to broader gender divisions in politics.
I considered titling this post "Your girls’ minds are being poisoned," but I’ve learned repeatedly that a big chunk of you don’t know when I am joking. I don’t however, see selective education as the relevant difference. Perhaps education is correlated with a female (and often male) decision to adopt a self-identity as a "caring person." Given the difference between the seen and unseen, a’la Bastiat, and the imperfect state of economics education, that makes those people critics of globalization.
Eight more years to go
The sophistication of financial decisions varies with age: middle-aged adults borrow at lower interest rates and pay fewer fees compared to both younger and older adults. We document this pattern in ten financial markets. The measured effects can not be explained by observed risk characteristics. The sophistication of financial choices peaks at about age 53 in our cross-sectional data. Our results are consistent with the hypothesis that financial sophistication rises and then falls with age, although the patterns that we observe represent a mix of age effects and cohort effects.
Here is the paper.
Why are people getting healthier?
The New York Times runs an excellent article. It is often forgotten how sick people used to be:
[Robert Fogel and colleagues] discovered that almost everyone of the Civil War generation was
plagued by life-sapping illnesses, suffering for decades. And these
were not some unusual subset of American men – 65 percent of the male
population ages 18 to 25 signed up to serve in the Union Army. “They
presumably thought they were fit enough to serve,” Dr. Fogel said.Even
teenagers were ill. Eighty percent of the male population ages 16 to 19
tried to sign up for the Union Army in 1861, but one out of six was
rejected because he was deemed disabled.
Heart disease rates and even cancer rates (per age cohort, I believe) were higher in times past.
The big question, of course, is why people are so much healthier (or for that matter smarter, see the Flynn Effect). It seems to be more than just better nutrition and sanitation. Scientists are focusing on time in the womb plus the first two years of life. Children born during the 1918 pandemic, for instance, fare much worse later in life in terms of health. The hypothesis is that the poor health of their mothers programmed them for later troubles.
The Netherlands is a land of giants. The people look quite healthy, despite high reported rates of disability. Average height is 6’1" or 6’2". And the Dutch are growing taller quickly. Why? Is it lots of Gouda cheese for Mommy? The mayonnaise on the french fries? Do small families play a role? The Protestants of the northern Netherlands are taller than the Catholics of the south. And if it is the cycling, are the teenagers in Davis, CA tall as well?
Private Education in India
Sebastian Mallaby has a good column on the explosion in private schooling in India and the implications for theories of development:
More than four out of five Indian engineering students attend
private colleges, whose potential growth seems limitless. …Something similar is happening to the Indian
school system…Since the early 1990s the percentage of 6-to-14-year-olds
attending private school has jumped from less than a tenth to roughly a
quarter of the total in that cohort, according to India’s National
Council of Applied Economic Research. And this number may be on the low
side. James Tooley of the University of Newcastle in Britain has found
that in some Indian slums about two-thirds of the children attend
private schools, many of which are not officially recognized and so may
escape the attention of nationwide surveys.The causes of this
private-school explosion shed interesting light on debates about
development, not just in India but throughout the poor world. The
standard assumption among anti-poverty campaigners is that education
leads to development…the recent private-education boom in India shows how causality can also
flow the other way…Since India embraced the
market in the early 1990s, parents have acquired a reason to invest in
education; they have seen the salaries in the go-go private sector, and
they want their children to have a shot at earning them… Once parents understand that education buys their kids into the new
India, they demand it so avidly that public money for schoolrooms
becomes almost superfluous.… Apparently unconnected development policies —
cuts in tariffs and oppressive business regulation, or projects to
build roads and power grids — can sometimes stimulate new educational
enrollment at least as much as direct investments in colleges or
schools.
See my earlier post for some more references.
I know that we have a number of readers in and from India so comments are open if you have further information.
The Idea Trap lasts a long time
Here is the latest by Alberto Alesina and Nicola Scheundeln:
Preferences for redistribution, as well as the generosities of welfare
states, differ significantly across countries. In this paper, we test
whether there exists a feedback process of the economic regime on
individual preferences. We exploit the "experiment" of German
separation and reunification to establish exogeneity of the economic
system. From 1945 to 1990, East Germans lived under a Communist regime
with heavy state intervention and extensive redistribution. We find
that, after German reunification, East Germans are more in favor of
redistribution and state intervention than West Germans, even after
controlling for economic incentives. This effect is especially strong
for older cohorts, who lived under Communism for a longer time period.
We further find that East Germans’ preferences converge towards those
of West Germans. We calculate that it will take one to two generations
for preferences to converge completely.
Here is Bryan Caplan on The Idea Trap, one of his best pieces.
Modern Germs
Guns, Germs, and Steel emphasized the role that germs played in the clash of civilizations of the early modern period, say up to about 1700. I was surprised to learn from John M. Barry’s excellent book The Great Influenza that germs continued to have a disproprtionate influence on the civilizations well into the twentieth century and perhaps even today.
The great influenza of 1918 probably killed 100 million people, about five percent of the entire world’s population. An even higher percentage of young people died and most shockingly all of this occured in about 12 weeks. Death was not evenly distributed:
The Western world suffered the least, not because its medicine was so advanced but because urbanization had exposed its population to influenza viruses so immune systems were not naked to it. In the United States, roughly 0.65 percent of the total population died, with roughly double that percentage of young adults killed. Of developed countries, Italy suffered the worst, losing approximately 1 percent of its total population….
The virus simply ravaged the less developed world. In Mexico the most conservative estimate of the death toll was 2.3 percent of the entire population, and other reasonable estimates put the death toll over 4 percent. That means between 5 and 9 percent of all young adults died.
In even more remote areas the death toll was much higher. One doctor visiting Inuit in Alaska found everyone dead in 3 villages and 7 other villages with a death toll of 85%. We don’t know how many people died in India and China but the rates were certainly higher than in the more urban United States.
By the way, an enterprising researcher should be able to make use of the 1918 influenza in Mexico (and elsewhere as well) as a shock to population that likely had important reverbations throughout the economy and society for decades.
Addendum: Bill Johnson at UVA points me to, Is the 1918 Influenza Pandemic Over? (NBER), a very recent paper by Douglas Almond. From the abstract:
In the 1960-1980 Decennial U.S. Census data, cohorts in utero during the height of the Pandemic typically display reduced educational attainment, increased rates of physical disability, lower income, lower socioeconomic status, as well as accelerated adult mortality compared with other birth cohorts. In addition, persons born in states with more severe exposure to the Pandemic experienced worse outcomes than those born in states with less severe Pandemic exposures. These results demonstrate that investments aimed at improving fetal health can have substantial long-term effects on subsequent health and economic outcomes.
Now consider, if the effects in the United States are large then in Mexico, not to mention India and China (where data will be much harder to gather), the effects could have been devastating on a macro scale.
The fall of Hollywood?
OK, Sith is now the tenth highest grossing film of all time, and probably headed toward number seven. But Wall Street is bearish on film stocks; on Monday Dreamworks shares fell more than 13%. The big fear is that DVD sales are falling, as Shrek 2 bombed in this market. Hollywood box office has been down for nineteen weeks out of twenty, and believe me Harry Potter won’t do Johnny Depp and Tim Burton any favors. Daniel Gross opined that Hollywood is the next Detroit. Others see a big mystery in falling receipts. Yet others blame blue-state bigotry. I will offer a few more fundamental hypotheses:
1. Hollywood cannot control its marketing costs or star salaries. The growing importance of DVDs increases the "needle in the haystack" problem for any single film and thus locks studios into more marketing, creating a vicious spiral.
2. TV is now so much better, and offers artists greater creative freedom. Why watch movies?
3. The Internet is outcompeting cinema, whether at the multiplex or on DVD.
4. Big TV screens are keeping people at home, which lowers box office receipts. This also hurts the long-term prospects of many DVDs.
5. The demand for DVDs has fallen because movie lovers have completed their core collections, just as the demands for classical CDs have fallen.
5. The demand for DVDs was due to fall in any case. Forget the collectors, you buy DVDs to have a stock on hand so you don’t have to run out to the video store on short notice. Now everyone has a stock. Stocks must be replenished every now and then, but there is no longer a large new cohort simultaneously building up a stock from scratch.
The bottom line: These trends do not appear reversible in the short run. It is not just that this year’s movies mostly stink.
Why did the baby boom occur?
We should thank Clarence Birdseye. Improvements in household technology, starting in the 1920s and 1930s, made kids easier to raise:
The mystery of the baby boom has not been cracked in economics. The fact that the baby boom was an atypical burst of fertility that punctuated a 200-year secular decline adds to the enigma. Conventional wisdom ascribes the baby boom to the effects of the Great Depression and/or World War II. This story has several shortcomings. First, for the U.S. and many OECD countries, it is hard to detect a strong structural break in fertility due to the Great Depression. Second, fertility in the U.S. and many OECD countries started to rise before World War II. Third, at the peak of the U.S. baby boom the most fertile cohort of women was just too young for the Great Depression or World War II to have had a direct effect on them.
The story told here attributes the secular decline in fertility to the tenfold rise in real wages that occurred over this time period. This increased the cost, in terms of foregone consumption, of raising children. The baby boom is accounted for by the invention of labor-saving household capital or other labor-saving household products and management techniques, which occurred during the middle of the last century…the increase in the efficiency of the household sector needed to explain the baby boom is not that large.
So let’s say you think demographic aging is a problem today. What is the policy implication? Subsidize complex robots? Let people genetic engineer their kids?
The above passage is from "The Baby Boom and Baby Bust," by Jeremy Greenwood, Ananth Seshadri, and Guillaume Vanderbroucke, American Economic Review, March 2005. Here is a free and earlier version of the paper.