Been slow on the blogging with the start of the new semester. Here is some of what I've been doing in my real job:
"Is There Crowd Wisdom in the Judgment of Experts? Evidence from College Football Rankings"
My work on college football poll bias with Sarah Larson and Chad Wall. I blogged the abstract before, but the paper is now online for the first time.
"Robustness and Vulnerability of Community Irrigation Systems: The Case of the Taos Valley Acequias."
A paper grounded in the Bloomington School of Public Choice tradition by Michael E. Cox and I, as we study the complicated issue of property rights to water.
Comments are welcome, and contact information is on the title page if you have any you'd like to share.
Wednesday, September 30, 2009
If you look only at costs...things look pretty costly!
CNN reports on a new study put out by Economics of Climate Adaptation Working Group which states that climate related disasters have killed over 800,000 people and caused over $1 trillion in economic losses. You know where this is going-- humans are causing global warming, global warming kills people, so every day that you drive a car you're relegating your future self to that much more purgatory. We've talked about this before.
The main issue I have with this study-- and with global warming alarmism in general-- is that it's looking only at the cost side of the situation. Look at the case studies the report provides-- hurricanes in Florida, droughts in Africa, rising sea levels in Samoa. (Talk about bad timing on that last one.) I'm not denying that these events and costs could have occurred as a result of an increase in global temperature-- it's not exactly a ceteris paribus analysis, but for the sake of argument, let's say that's the case. The problem is that the analysis (from my perusing of the report) completely ignores the benefits of temperatures rising. What if the case studies were as follows: Crop proliferation in Canada, arable land impact in Ukraine, days of sun for youth baseball players in America. Wouldn't the end result look different? It may still be negative on net-- if that's the result you need, there is so much leeway in doing a global cost/benefit analysis of climate change that you can generate just about any result you like-- but in any case, it would have to be less than the stated result simply because you're adding benefits to the costs-only calculation.
The actual report itself is here and the executive summary is here.
The main issue I have with this study-- and with global warming alarmism in general-- is that it's looking only at the cost side of the situation. Look at the case studies the report provides-- hurricanes in Florida, droughts in Africa, rising sea levels in Samoa. (Talk about bad timing on that last one.) I'm not denying that these events and costs could have occurred as a result of an increase in global temperature-- it's not exactly a ceteris paribus analysis, but for the sake of argument, let's say that's the case. The problem is that the analysis (from my perusing of the report) completely ignores the benefits of temperatures rising. What if the case studies were as follows: Crop proliferation in Canada, arable land impact in Ukraine, days of sun for youth baseball players in America. Wouldn't the end result look different? It may still be negative on net-- if that's the result you need, there is so much leeway in doing a global cost/benefit analysis of climate change that you can generate just about any result you like-- but in any case, it would have to be less than the stated result simply because you're adding benefits to the costs-only calculation.
The actual report itself is here and the executive summary is here.
Tuesday, September 29, 2009
Juicing the Mitchell: Olympics Edition
In the post that started it all, I see that it was our own Will Luther that came up with the moniker "juicing the Mitchell." It should also be noted that was before he was a TPS member. So that seems to be the carrot: Come up with a good phrase, and you're part of the team.
Anyhow, here's the latest installment with more here.
A clip:
I couldn't imagine another move that would keep our country safer.
Anyhow, here's the latest installment with more here.
A clip:
"I think it's baffling that the president has time to travel to Copenhagen," said Sen. Kit Bond, R-Missouri. "[Obama's] got a lot of responsibilities. His number one responsibility is to keep our country safe."
I couldn't imagine another move that would keep our country safer.
Books That Make You Dumb
To clarify, 'you' refers to your school and 'make you dumb' implies that the average ACT/SAT score is lower. Fortunately, 'books' is not a proxy; we are actually talking about books.
Nonetheless, you should check out this quick and dirty regression. The result: school's who prefer Atlas Shrugged to Fahrenheit 451 also report higher test scores.
[HT: Libby]
Nonetheless, you should check out this quick and dirty regression. The result: school's who prefer Atlas Shrugged to Fahrenheit 451 also report higher test scores.
[HT: Libby]
Region Focus: On Credit Regulation
The latest issue of Region Focus is available, and mostly covers credit and financial regulation. It is well worth the time for those of us who would like a short primer on the subject. Here is an excerpt from Jeffrey Lacker on "On The (Limited) Role of Credit Ratings in the Financial Crisis":
One plausible reason investors bought these securities involves the incentives built into the capital requirements that financial institutions must observe. Credit ratings issued by the agencies were used to assign “risk weights” to the securities banks held. If the grade was high, banks could hold less capital as a buffer against losses. That gave banks an incentive to hold the highest-yielding (that is, riskiest) securities with any given rating — in short, potentially overrated securities.There is much more worth reading in the issue: a summary of Milton Friedman's contribution to global economic growth, the economics of speeding tickets, whether or not the line-item veto reduces state spending, what prolonged the Great Depression, and CEO (over?) compensation.
Monday, September 28, 2009
Presidential Lobbying
Do those on the receiving end of lobbying efforts become good lobbyists themselves? Has anyone looked at this? I'd love to see someone try to tackle that one. Maybe political returns to businesses with former Congressmen on their board of directors?
Anyway, here's Obama heading to Denmark in an attempt to get the Olympics in Chicago in 2016. (Which, I just realized, would be at the end of his second term, if he makes it that far, and would conceivably be a boon for the Democratic party in that fall's presidential election.)
Anyway, here's Obama heading to Denmark in an attempt to get the Olympics in Chicago in 2016. (Which, I just realized, would be at the end of his second term, if he makes it that far, and would conceivably be a boon for the Democratic party in that fall's presidential election.)
Arbitrary Ranking of the Day...
...because who likes those wily CEOs and all that money they make? Here's a listing of the 5 most overpaid, which, as best as I can tell, is determined by some arbitrary metric of salary and bonuses in light of stock performance.
The irony being, of course, that CEOs are generally compensated with stock options, meaning these folks got paid less due to the performance of their respective corporations. Maybe it's an argument for a higher variance pay structure-- less when companies perform poorer, more when companies do better. Something tells me that's probably not the case.
The irony being, of course, that CEOs are generally compensated with stock options, meaning these folks got paid less due to the performance of their respective corporations. Maybe it's an argument for a higher variance pay structure-- less when companies perform poorer, more when companies do better. Something tells me that's probably not the case.
Friday, September 25, 2009
Pilots, Flying and US Airways
I had the good fortune of sitting next to an operations manager on a recent flight; here's what I learned about US Air:
- US Air currently employs 3,000 pilots; this number seemed shockingly high to me, though the more I think about it the more I can get my head around it. And this number is down from 5,000 just a few years ago.
- Many pilots have other occupations; attorneys and doctors were the most common alternative jobs. Also surprising. Pilots schedules are pliable, same with attorneys (and I suppose with certain types of doctors as well), so I guess there was no reason to believe this couldn't occur. Pilots: More like NFL referees than you thought.
- It takes roughly a month to train the pilot of one aircraft to fly a different aircraft; think 737 moving to A320. I'd have thought this would be longer.
(The lesson, evidently, is that I knew far less about pilots than I had previously thought.)
- I entertained the possibility that, since the military can fly drones, airlines could be moving down the same path-- planes flown from remote locations. She doubted the possibility, but I think this could gain some traction in the future.
Since the technology exists, I don't believe incorporating it would be inordinately expensive. The larger issue would be who would be left to fly the plane from the remote location. Would we just shift pilots into these roles? If that's the case, the cost savings wouldn't be much, but if there's a more fully automated way to fly the planes then the bottom line impact could potentially be significant. She felt that someone would be needed on the plane in case of emergency; I can't think of a situation where having a pilot physically in the cockpit would be the difference between avoiding a disaster. (In the sense that if, say, the rudder fails, there is nothing that the pilot could do in the cockpit that a properly connected pilot in a remote location couldn't do.)
Which does bring up the issue of connectability. Losing remote connection could be catastrophic; I'm confident that advances in technology could mitigate this to a near zero probability.
In my mind, the largest hurdle would be the separation of the well-being of the pilot from the well-being of the passengers. If the pilot is on the plane with you, the incentives are nicely aligned-- there is much less need to worry about inordinately risky flying. Personally, I don't think this would be a large issue--but the mental security of it could be enough to make some passengers not want to fly.
Any thoughts?
- US Air currently employs 3,000 pilots; this number seemed shockingly high to me, though the more I think about it the more I can get my head around it. And this number is down from 5,000 just a few years ago.
- Many pilots have other occupations; attorneys and doctors were the most common alternative jobs. Also surprising. Pilots schedules are pliable, same with attorneys (and I suppose with certain types of doctors as well), so I guess there was no reason to believe this couldn't occur. Pilots: More like NFL referees than you thought.
- It takes roughly a month to train the pilot of one aircraft to fly a different aircraft; think 737 moving to A320. I'd have thought this would be longer.
(The lesson, evidently, is that I knew far less about pilots than I had previously thought.)
- I entertained the possibility that, since the military can fly drones, airlines could be moving down the same path-- planes flown from remote locations. She doubted the possibility, but I think this could gain some traction in the future.
Since the technology exists, I don't believe incorporating it would be inordinately expensive. The larger issue would be who would be left to fly the plane from the remote location. Would we just shift pilots into these roles? If that's the case, the cost savings wouldn't be much, but if there's a more fully automated way to fly the planes then the bottom line impact could potentially be significant. She felt that someone would be needed on the plane in case of emergency; I can't think of a situation where having a pilot physically in the cockpit would be the difference between avoiding a disaster. (In the sense that if, say, the rudder fails, there is nothing that the pilot could do in the cockpit that a properly connected pilot in a remote location couldn't do.)
Which does bring up the issue of connectability. Losing remote connection could be catastrophic; I'm confident that advances in technology could mitigate this to a near zero probability.
In my mind, the largest hurdle would be the separation of the well-being of the pilot from the well-being of the passengers. If the pilot is on the plane with you, the incentives are nicely aligned-- there is much less need to worry about inordinately risky flying. Personally, I don't think this would be a large issue--but the mental security of it could be enough to make some passengers not want to fly.
Any thoughts?
Wednesday, September 23, 2009
Why I Don't Worry About Information Cocoons
During Tyler Cowen's EconTalk on the personal narrative meme from his new book, I began to wonder how those concerned with information cocoons will respond to TC's view. Tyler sees us taking bits and pieces of information from a variety of sources, where we weave them together to create a story that is highly specific to what interests us.
I think this idea already existed, but with a much more critical outlook. For instance, Cass Sunstein brings up his concerns that the internet will create "information cocoons" in the form of a "Daily Me." In this view, part of my personal narrative may be to consume information that only fits my preconceptions of how the world should work, while isolating myself away from information that may undermine that worldview. In principle, Cowen and Sunstein are watching the same phenomenon, and Cowen is remarking on the cultural benefits of this change, whereas Sunstein is concerned about the consequences of our personal narrative on our ability to deliberate effectively.
I think the "information cocoon" concern is a reasonable one to entertain, but in practice its consequences are equally likely to create the opposite outcome. While it is perfectly reasonable for to expect that some people will cocoon themselves off from contrasting point of views, this does not seem to be the dominate model in the blogosphere. The most popular blogs seem to be the ones where the author's view may or may not be one-sided, but they package it in the form of contrasting their views with their opponents. Granted, the opposing opinion is only being brought up so that it may be ridiculed, but the issue at hand is exposing people to contrary points of view. This post by Megan McArdle is a nice example.
At the end of the day, the real question is whether or not people expose themselves to contrary points of view more often as a result of the information age. I think they do, but comments are open if you wish to demolish this cocoon of mine.
I think this idea already existed, but with a much more critical outlook. For instance, Cass Sunstein brings up his concerns that the internet will create "information cocoons" in the form of a "Daily Me." In this view, part of my personal narrative may be to consume information that only fits my preconceptions of how the world should work, while isolating myself away from information that may undermine that worldview. In principle, Cowen and Sunstein are watching the same phenomenon, and Cowen is remarking on the cultural benefits of this change, whereas Sunstein is concerned about the consequences of our personal narrative on our ability to deliberate effectively.
I think the "information cocoon" concern is a reasonable one to entertain, but in practice its consequences are equally likely to create the opposite outcome. While it is perfectly reasonable for to expect that some people will cocoon themselves off from contrasting point of views, this does not seem to be the dominate model in the blogosphere. The most popular blogs seem to be the ones where the author's view may or may not be one-sided, but they package it in the form of contrasting their views with their opponents. Granted, the opposing opinion is only being brought up so that it may be ridiculed, but the issue at hand is exposing people to contrary points of view. This post by Megan McArdle is a nice example.
At the end of the day, the real question is whether or not people expose themselves to contrary points of view more often as a result of the information age. I think they do, but comments are open if you wish to demolish this cocoon of mine.
Tuesday, September 22, 2009
Creative Destruction
I am not referring to the Schumpeterian kind, but rather the let's-find-a-way-to-avoid-tariffs kind. From the WSJ:
Several times a month, Transit Connect vans from a Ford Motor Co. factory in Turkey roll off a ship here shiny and new, rear side windows gleaming, back seats firmly bolted to the floor.The bottom line:
Their first stop in America is a low-slung, brick warehouse where those same windows, never squeegeed at a gas station, and seats, never touched by human backsides, are promptly ripped out.
The fabric is shredded, the steel parts are broken down, and everything is sent off along with the glass to be recycled.
Why all the fuss and feathers? Blame the "chicken tax."
The seats and windows are but dressing to help Ford navigate the wreckage of a 46-year-old trade spat.
Installing and removing unneeded seats and windows costs the company hundreds of dollars per van, but the import tax falls dramatically, to 2.5 percent, saving thousands.American ingenuity at it's best, no?
2009 Gus Rankings: Week 3
Week 3 of the Gus Rankings are out, you can find them here.
A few things of note:
- Again, points are the wins of your opponents you defeated less the losses of the teams that beat you, concerning only games with two I-A teams.
Washington, which currently sits also at the top, is a good team to look at. They have 4 points because they defeated two teams-- USC and Idaho-- that have themselves each defeated two other teams. Further, the team that Washington lost to (LSU) hasn't lost any games yet, so they lose nothing for that loss.
Consider the possibilities for the rest of the season. If USC and LSU have great seasons, this further helps Washington. If they slip up and have less than phenomenal seasons, this mitigates the value of those wins. Win value now is not the same as win value later; this is different than the traditional polls, and I think it's an advantage.
Which bring us to the Idaho victory that is really helping Washington at the moment--I would gather that many people feel they are not too strong. What does this mean? As the season winds on, they will end up with a lukewarm record-- maybe somewhere around .500, maybe even less. This reduces the value of the Idaho victory for Washington as the season moves on; again, values of wins and losses change from week to week.
- I'm debating a few of the tiebreakers. Namely, if two teams have the same number of points, should a 2-1 team be ranked ahead of a 1-0 team? As it sits now, they would be-- though their winning percentage is less, and that tends to be a default tiebreaker in many cases. I'm noting how the measures do in predicting games (see next bullet point), so it's of importance now...but moving towards the future, as the complexity of the points system emerges, this will subsequently become less important.
- The benchmark for the Gus Rankings are the Sagarin rankings, the go-to power rankings (in my opinon) in college football. Taking last week's rankings and simply seeing if the higher team won (again, only in games in which both teams were I-A), the Gus Rankings were 25-22 and Sagarin went 38-14. Sagarin is able to predict a few more games than us because he has no ties in his rankings. We had quite a few ties last week but, again, that will diminish as the season goes on (13 different ranking levels last week, 32 this week).
- Southern Methodist went from #8 last week to #81 this week. Yikes!
A few things of note:
- Again, points are the wins of your opponents you defeated less the losses of the teams that beat you, concerning only games with two I-A teams.
Washington, which currently sits also at the top, is a good team to look at. They have 4 points because they defeated two teams-- USC and Idaho-- that have themselves each defeated two other teams. Further, the team that Washington lost to (LSU) hasn't lost any games yet, so they lose nothing for that loss.
Consider the possibilities for the rest of the season. If USC and LSU have great seasons, this further helps Washington. If they slip up and have less than phenomenal seasons, this mitigates the value of those wins. Win value now is not the same as win value later; this is different than the traditional polls, and I think it's an advantage.
Which bring us to the Idaho victory that is really helping Washington at the moment--I would gather that many people feel they are not too strong. What does this mean? As the season winds on, they will end up with a lukewarm record-- maybe somewhere around .500, maybe even less. This reduces the value of the Idaho victory for Washington as the season moves on; again, values of wins and losses change from week to week.
- I'm debating a few of the tiebreakers. Namely, if two teams have the same number of points, should a 2-1 team be ranked ahead of a 1-0 team? As it sits now, they would be-- though their winning percentage is less, and that tends to be a default tiebreaker in many cases. I'm noting how the measures do in predicting games (see next bullet point), so it's of importance now...but moving towards the future, as the complexity of the points system emerges, this will subsequently become less important.
- The benchmark for the Gus Rankings are the Sagarin rankings, the go-to power rankings (in my opinon) in college football. Taking last week's rankings and simply seeing if the higher team won (again, only in games in which both teams were I-A), the Gus Rankings were 25-22 and Sagarin went 38-14. Sagarin is able to predict a few more games than us because he has no ties in his rankings. We had quite a few ties last week but, again, that will diminish as the season goes on (13 different ranking levels last week, 32 this week).
- Southern Methodist went from #8 last week to #81 this week. Yikes!
Markets In Everything: Renting Chief Financial Officers by the Hour
From the WSJ (Hat Tip Jason Oberle):
Some small-business owners in need of accounting help to balance their books and guide them out of a financial black hole are renting CFOs rather than hiring them. The strategy comes at a time when the deep recession has forced small companies to look for money-saving alternatives that can yield good returns yet avoid substantial overhead costs.
[...]
The average annual salary for a full-time CFO in a small- to medium-size businesses ranges from $94,250 to $175,750, according to a 2009 Salary Guide by Robert Half International Inc., a Menlo Park, Calif., staffing services firm that serves the accounting and finance fields. Renting one can be significantly cheaper.
B2B CFO Partners LLC, a Phoenix, Ariz., firm that has over 100 CFOs-for-rent, charges at least $300 to $400 per month for the service. The company has doubled the number of small- to mid-size business clients to 650 since 2007, says Jerry L. Mills, founder and chief executive.
Questions from the drive to work this morning
1) Bumper stickers are popular around election times and, of course, these linger well beyond the polling date. One of my neighbors' cars has a number of no-W stickers on his car; I presume he was content with the last election. Maybe he just doesn't like the letter W.
Anyway, if we were to track who gets in car accidents and what bumper stickers were on their cars, how do you think that would play out? I think there's more pro-Obama stickers out there to be had, so that needs controlling for, but I'd be curious to see the results.
And what do you think the bumper sticker distribution on redeemed cars in the cash-for-clunkers program was?
2) Why is it that when people write reviews online, the negative ones are so much more so in magnitude than the supportive ones? Do people really get that upset over something that didn't go their way? I know from writing op-eds that you're not going to ever get lukewarm responses to your work; cost-benefit wise, it's just not worth it to voice your opinion when you're not feeling strongly one way or the other.
I think it's based in surplus. If you buy something and you like it, you've got some surplus from the matter, but if you buy something and don't like it, you're put yourself in a worse-off state (at least in relation to where you thought you'd be). Maybe people react proportionately more strongly being worse off than better off, but I'd be willing to wager that if you were to measure the surplus of the situation, you'd be losing more than you'd be gaining. Granted, measuring surplus is going to be extremely difficult if not impossible, but let's put that aside for the moment. Maybe it's your perception of matter-- if you order a $200 suit, you feel enjoyment from it, but remember the $200 outlay. If you order a $200 suit and it somehow doesn't satisfy you, you feel like you're out $200-- perhaps perceiving value below cost is a difficult concept for the mind to grasp. I don't know...but there's got to be more to the matter of vicious negative reviews than "people respond more strongly to bad things than good things."
3) Per the post on Michael Moore's new movie, is he currently the most successful anti-capitalist around in a capitalist society? I suppose it's all in the definition; I view "anti-capitalist" in this sense as someone willing to plainly denounce the market process, and "successful" as gaining momentum in people accepting his views.
Anyway, if we were to track who gets in car accidents and what bumper stickers were on their cars, how do you think that would play out? I think there's more pro-Obama stickers out there to be had, so that needs controlling for, but I'd be curious to see the results.
And what do you think the bumper sticker distribution on redeemed cars in the cash-for-clunkers program was?
2) Why is it that when people write reviews online, the negative ones are so much more so in magnitude than the supportive ones? Do people really get that upset over something that didn't go their way? I know from writing op-eds that you're not going to ever get lukewarm responses to your work; cost-benefit wise, it's just not worth it to voice your opinion when you're not feeling strongly one way or the other.
I think it's based in surplus. If you buy something and you like it, you've got some surplus from the matter, but if you buy something and don't like it, you're put yourself in a worse-off state (at least in relation to where you thought you'd be). Maybe people react proportionately more strongly being worse off than better off, but I'd be willing to wager that if you were to measure the surplus of the situation, you'd be losing more than you'd be gaining. Granted, measuring surplus is going to be extremely difficult if not impossible, but let's put that aside for the moment. Maybe it's your perception of matter-- if you order a $200 suit, you feel enjoyment from it, but remember the $200 outlay. If you order a $200 suit and it somehow doesn't satisfy you, you feel like you're out $200-- perhaps perceiving value below cost is a difficult concept for the mind to grasp. I don't know...but there's got to be more to the matter of vicious negative reviews than "people respond more strongly to bad things than good things."
3) Per the post on Michael Moore's new movie, is he currently the most successful anti-capitalist around in a capitalist society? I suppose it's all in the definition; I view "anti-capitalist" in this sense as someone willing to plainly denounce the market process, and "successful" as gaining momentum in people accepting his views.
Monday, September 21, 2009
Small State Bias
Here's a new paper concerning the small state bias, from the abstract:
The time frame they look at is from 1978-2002. Bill Shughart has done work in this area as well, this comes immediately to mind. I particularly like that Shughart, et al., paper because it looks at different time frames and isolates when we may be seeing a small state bias and when we can likely eliminate the existence of such a bias. Namely, there may be evidence in the 1970s, but not afterwards. In light of this result, the above paper seems to be driving home a similar point.
Most of the estimated impact is not a scale but a change effect. Rather than evidence of ”small state advantage", we find that states with fast growing population are penalized in the allocation of the federal budget independently of whether they are large or small.
The time frame they look at is from 1978-2002. Bill Shughart has done work in this area as well, this comes immediately to mind. I particularly like that Shughart, et al., paper because it looks at different time frames and isolates when we may be seeing a small state bias and when we can likely eliminate the existence of such a bias. Namely, there may be evidence in the 1970s, but not afterwards. In light of this result, the above paper seems to be driving home a similar point.
Pre-Smith Arguments for Capitalism
Interesting blog post in the form of a book review at Sociological Imagination. A nugget:
Social thinkers in the 16th and 17th century were anxious to come up ways to tame the “passions” of kings and aristocrats that had wrecked havoc over Europe during the middle ages. Writers such as Bacon (1561-1626) and Spinoza (1632-1677) speculated that that the expansion of commerce might just do the trick. Commerce, they observed, tends to pit people’s greed (or “interests”) against their “passions” (such as lust, jeaously, pride, religiosity, bravado). A social order that gave maximum scope for people to pursue their interests would also subdue their destructive passions. Doux-Commerce (”Commerce Sweetens”) as the French writer Montesquieu (1689-1755) put it. The hope was held out for a more peaceful world.
[...]
It is ironical, Hirschman notes, that the current social critics denigrate capitalism for promoting people’s money-making proclivities at the cost of other impulses such as loyalty, religiosity, love, or in other words–their “passions.” It was exactly this aspect of capitalism that held attraction for the social thinkers three centuries ago.
Income Inequality Exageration?
Misperceptions About the Magnitude and Timing of Changes in American Income Inequality by Robert J. Gordon - #15351 (EFG LS PR)
Abstract:
Abstract:
The rise in American inequality has been exaggerated both in magnitude and timing. Commentators lament the large gap between the growth rates of real median household income and of private sector productivity. This paper shows that a conceptually consistent measure of this growth gap over 1979 to 2007 is only one-tenth of the conventional measure. Further, the timing of the rise of inequality is often misunderstood. By some measures inequality stopped growing after 2000 and by others inequality has not grown since 1993. This cessation of inequality's secular rise in 2000 is evident from the growth of Census mean vs. median income, and in the income share of the top one percent of the income distribution. The income share of the 91st to 95th percentile has not increased since 1983, and the income ratio of the 90th to 10th percentile has barely increased since 1986. Further, despite a transient decline in labor's income share in 2000-06, by mid-2009 labor's share had returned virtually to the same value as in 1983, 1991, and 2001.
Recent contributions in the inequality literature have raised questions about previous research on skill-biased technical change and the managerial power of CEOs. Directly supporting our theme of prior exaggeration of the rise of inequality is new research showing that price indexes for the poor rise more slowly than for the rich, causing most empirical measures of inequality to overstate the growth of real income of the rich vs. the poor. Further, as much as two-thirds of the post-1980 increase in the college wage premium disappears when allowance is made for the faster rise in the cost of living in cities where the college educated congregate and for the lower quality of housing in those cities. A continuing tendency for life expectancy to increase faster among the rich than among the poor reflects the joint impact of education on both economic and health outcomes, some of which are driven by the behavioral choices of the less educated.
Friday, September 18, 2009
Blockquoting X
X = David Romer:
If you find yourself thinking 'But that's how the game is played,' slap yourself. If that doesn't work, take up sheep farming.
Gender, Corruption and Development
I'm not sure that I like the policy suggestions that could come from this study, but it's interesting nonetheless:
Numerous studies have found negative connection between corruption level and economic development. At the same time few of them demonstrate correlation between women representation in politics and corruption level. This paper analyzes correlation between gender and corruption for a specific sample of countries, sharing common cultural and historical legacy – transition countries. Relationship between higher number of women in parliament and decreasing level of corruption is supported by data. Relations with other forms of women social activity were found to be insignificant. Contribution of this paper to the research literature on this topic is twofold. First analysis on gender and corruption in transition economies has previously not been done. Second, this study could also be used for the practical policies on fighting corruption by application of gender quotas.
My Top 10 Non-Munger EconTalk's
This is based on a request from a student. The list is geared towards students or others without an econ background, that I would use to try and get them interested in the subject. It is "non-Munger" because it is easy enough to just say "all the ones with Munger are excellent." If I get a chance soon, I will rank my favorite Munger episodes, just for the fun of it.
- Roberts on the Least Pleasant Jobs
- Michael Lewis on the Hidden Economics of Baseball and Football
- Bruce Yandle on Bootleggers and Baptists
- The Economics of Religion
- The Economics of Organ Donations
- Boettke on Katrina and the Economics of Disaster
- Caplan on Discrimination and Labor Markets
- McKenzie on Prices
- Sowell on Economic Facts and Fallacies
- Caplan on the Myth of the Rational Voter
Thursday, September 17, 2009
2009 Gus Rankings: Week 2
As promised, we here at TPS will be following the college football season with our own version of ranking teams-- the Gus Rankings. The outline of the methodology is here.
Here are the rankings for Week 2 (after the second week of games).
Some points of interest:
- The rankings incorporate information only from this season and only from games played. Thus, since there's only been two weeks of games, there isn't much information to incorporate. That is why you see a lot of ties. That being said, there is a decent amount of variation amongst the teams-- there are 13 different levels after just 2 weeks. Variation will increase dramatically with each week, as more teams play more games and, more importantly, teams' opponents will have played more games. Note also that after only two weeks, the rankings discern a single worst team-- Washington State. Recall that the BCS rankings-- those rankings used to determine who plays for the National Championship-- are released only after 6 or 7 weeks, largely (I presume) for the information shortcomings I just described.
- The rankings are as follows: Most points, then sorted by most wins, then sorted by least losses. Ties that are still tied after that are simply listed alphabetically at the same ranking. There are a lot of ties, so there are a lot of tiebreakers sorted in the above manner. Again, expect the ties to diminish rapidly over the upcoming weeks.
- For this season, games against FCS opponents (previously I-AA) won't be counted. The above methodology for adding wins and subtracting losses doesn't hold when considering teams from other divisions. That means wins and losses against teams in I-AA simply mean the team had a bye that week. I think this is the best way to handle the situation. Rankings matter most at the upper end of the distribution, and most FBS teams (previously I-A) will win their games against FCS opponents; those that lose are likely to be nearer the bottom of the rankings, and will not be the focus of rankings in general.
It will be interesting to see how the rankings develop over the course of the season. Given its simplicity and plain objectivity, there are a lot of reasons to like it.
Here are the rankings for Week 2 (after the second week of games).
Some points of interest:
- The rankings incorporate information only from this season and only from games played. Thus, since there's only been two weeks of games, there isn't much information to incorporate. That is why you see a lot of ties. That being said, there is a decent amount of variation amongst the teams-- there are 13 different levels after just 2 weeks. Variation will increase dramatically with each week, as more teams play more games and, more importantly, teams' opponents will have played more games. Note also that after only two weeks, the rankings discern a single worst team-- Washington State. Recall that the BCS rankings-- those rankings used to determine who plays for the National Championship-- are released only after 6 or 7 weeks, largely (I presume) for the information shortcomings I just described.
- The rankings are as follows: Most points, then sorted by most wins, then sorted by least losses. Ties that are still tied after that are simply listed alphabetically at the same ranking. There are a lot of ties, so there are a lot of tiebreakers sorted in the above manner. Again, expect the ties to diminish rapidly over the upcoming weeks.
- For this season, games against FCS opponents (previously I-AA) won't be counted. The above methodology for adding wins and subtracting losses doesn't hold when considering teams from other divisions. That means wins and losses against teams in I-AA simply mean the team had a bye that week. I think this is the best way to handle the situation. Rankings matter most at the upper end of the distribution, and most FBS teams (previously I-A) will win their games against FCS opponents; those that lose are likely to be nearer the bottom of the rankings, and will not be the focus of rankings in general.
It will be interesting to see how the rankings develop over the course of the season. Given its simplicity and plain objectivity, there are a lot of reasons to like it.
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