Monday, July 31, 2006
A Tribute to David Ortiz
2004 ALCS Game 4 - Yankees and Red Sox - Fenway Park
So to you David Ortiz I say ...
Does TiVo Cause You to Watch More TV?
Theory makes no clear prediction about how DVRs should affect total TV viewing. DVRs lower the price of TV viewing -- both by reducing the time needed to watch a program and by allowing people to watch programs when it is most convenient (i.e., the opportunity costs are lowest). These potentially allow me to increase the number of shows I commit to watching and increase the total amount of TV watched. Alternatively, as I discussed previously, DVRs lower the price of alternative activities because I no longer have to worry if I am going to miss an episode of 24 or Lost if I make plans for a Monday or Wednesday night. I know my TiVo is going to record them, and I can watch it whenever I feel like. As such, I only end up watching the shows I really want to watch and not the other crap that I was only watching because I didn't have anything else to do before or after the show I actually cared to watch.
So the theoretical effect of a DVR is ambiguous. Ultimately, the lack of random assignment of DVRs makes resolving this ambiguity impossible. I think David's suggestion to use the availability of cable provided DVRs (in the comments to my previous post) may be the best bet to actually resolve this question.
Economists' Sexiness Takes A Hit
Second (and more importantly), the mysterious Jill from Crate and Barrel in Cambridge has apparently lost interest in the hot young economists at the NBER (perhaps someone pointed out to her that, while hot, economists are still somewhat dorky). It turns out, a former student of mine and occasional reader of this blog was responsible for printing and posting Jill's original message in the NBER kitchen (I should have known that one of my students was behind this). A friend of her's responded to Jill (twice), but received no reply. Jill, it seems, has lost interest.
My former student and friends are still interested in crossing the street to ferret her out. They are seeking suggestions on how to get "Jill" to reveal herself if anyone has any.
Sunday, July 30, 2006
Politics and Religion
In support of their argument, Ansolabehere, Rodden and Snyder show that people's opinions about specific economic issues do a better job of predicting voting for Republicans than their opinions about social issues. Underlying this analysis, however, is the assumption that people exogenously form opinions and then vote the for candidate that best represents their opinions. Glaeser and I disagree with this assumption (see footnote 7 of our paper for our "full" response). We believe that people's opinions on a issues are frequently shaped by their party affiliation (and not the other way around). E.g., I become a Republican because my parents were or because they take the position I agree with on some important issue, and this leads me to adopt the Republican position on other issues (likely because I want my "team" to win).
The NYTimes provides an interesting glimpse into the modern church-politics relationship that provides some anecdotal support for our positions (both that churches are important political organizers and people take their cues about what to believe from the party) in its profile of evangelical minister Gregery Boyd's attempt to separate evangelical Christianity from the Republican Party and politics:
[Boyd] said he first became alarmed while visiting another megachurch’s worship service on a Fourth of July years ago. The service finished with the chorus singing “God Bless America” and a video of fighter jets flying over a hill silhouetted with crosses.
“I thought to myself, ‘What just happened? Fighter jets mixed up with the cross?’ ” he said in an interview.
Patriotic displays are still a mainstay in some evangelical churches. Across town from Mr. Boyd’s church, the sanctuary of North Heights Lutheran Church was draped in bunting on the Sunday before the Fourth of July this year for a “freedom celebration.” Military veterans and flag twirlers paraded into the sanctuary, an enormous American flag rose slowly behind the stage, and a Marine major who had served in Afghanistan preached that the military was spending “your hard-earned money” on good causes.
In response to the increasing co-mingling of politics and religion, Mr. Boyd preaches that "the role of Christians was not to seek “power over” others — by controlling governments, passing legislation or fighting wars. Christians should instead seek to have “power under” others — “winning people’s hearts” by sacrificing for those in need, as Jesus did."
When he started preaching this he lost 1000 members (or 20%) of his congregation. The family pastor at Boyd's church reports that some of the people who left said, "You’re not doing what the church is supposed to be doing, which is supporting the Republican way."
This last quote, if true, suggests that a substantial proportion of people expect their churches to serve as political organizers, and, potentially (one can interpret the quote in a number of ways) that people take their cues on what to believe from the party and expect their church to line up behind those views and not the other way around (I suspect this is particularly true of non-social issues -- e.g., Glaeser reported to me that he found that our measure of evangelicalism in 1926 strongly predicts the adoption (or lack thereof) of zoning regulations in the 1970s, 80s, and 90s).
Past Public Opinion
One repeating issue is war. A new analysis of Gallup Poll data indicates that Americans' attitudes toward the Iraq War today parallel Americans' attitudes toward Vietnam in 1970. I wasn't alive in 1970, so I lack much of the relevant cultural knowledge to put this into context, but I thought it was interesting regardless:
The most recent Gallup poll this month found that 52% of adult Americans want to see all U.S. troops out of Iraq within a year, with 19% advocating immediate withdrawal. In the summer of 1970, Gallup found that 48% wanted a pullout within a year, with 23% embracing the "immediate" option. Just 7% want to send more troops now, vs. 10% then.
At present, 56% call the decision to invade Iraq a "mistake," with 41% disagreeing. Again this echoes the view of the Vietnam war in 1970, when that exact same number, 56%, in May 1970 called it a mistake in a Gallup poll.
While the U.S. involvement in the Korean war is often labeled unpopular, the highest number calling it a mistake in a Gallup poll was 51% in early 1952. That number actually declined to 43% by the end of that year.
And, in case it is not obvious, support for the Iraq War pales in comparison to support for WWII (data from private polls conducted for FDR, not from Gallup):
(h/t Glenn Greenwald via C&L)
Approval for President Roosevelt's conduct of the war continued at around 70% where it had been for years. The number of people who said they had a clear idea of what the war was about was at about the same level and appears to have been rising. Support for a negotiated peace with Hitler remained around the anemic levels it had been for years -- at around 15%.
Friday, July 28, 2006
Why I Like New Experiences
In my view, there are two main reasons to try new things. First, there may be some risk loving (convex utility) involved in choosing meals (and to a lesser extent vacations) because people like to consume the adventure of trying something new. However, I will point out that the phenomenon of always trying someplace new is really a Manhattan (or large urban area) specific dilemma. Because restaurants must be high quality to survive in Manhattan’s crowded food market, there really is not a whole lot of risk involved. The average restaurant in Manhattan is probably better than the best restaurant in 90 percent of the US. Most people in most places are like Tony V. They have a short list of places they like and the visit those restaurants over and over; only occasionally trying something new to see if it is worthy of visiting again. There are a few really risk loving people who will eat anything from anywhere, but your basic “adventurous” foodie primarily wants to try new, but clearly high quality (i.e., relatively low risk) food. They can do this in Manhattan, but it is difficult to do most anywhere else.
The second (and more important) reason to try new stuff are memories (which make that experience a durable good). The memory value of new experience, I think, explains the rapidly diminishing returns which in turn explain the need to keep looking for new stuff. By visiting a restaurant or vacation location once, I get several valuable things – I’ve now seen, heard, smelled, tasted, and felt that place and can recall these experiences later either to enjoy on my own or (and this is essential) to share with others. Now many argue (correctly) that to really know a restaurant or place one needs to spend a fair amount of time there, but one can get pretty far with a short visit. I spent 3 days in Rome once. Does this mean that I really know Rome? Certainly not, but I can still remember what it was like and have several specific stories that I have told many times to many people. To reach the next level of understanding likely requires that I actually live in Rome for awhile. As such, I get a big kick in memory value from one short visit. This implies that there are fairly rapidly diminishing returns to goods that derive a large fraction of their value from memory.
Thus, for me, it is easy to see how in many situations the expected marginal utility of a new, “risky” experience is larger than the expected utility of repeat experiences -- particularly when, as is the case with Manhattan restaurants and most vacation spots, there is not an enormous amount of variation in the quality of the choices.
Wednesday, July 26, 2006
Health Care, the Long-Tail, and Social Networking Websites
A little over a year ago, my younger sister joined the large number of Americans (according to the article over 25 million) with a rare medical condition. For weeks and weeks, she was unable to function -- growing weaker and more distressing shades of grey every day. Doctors kept diagnosing things and prescribing medications that failed to improve her condition. After several months and losing probably one-third of her body mass, she was finally correctly diagnosed and given the correct medication leading to a relatively speedy recovery.
My sister was in, what the article describes as, the long tail of medicine:
Since most patients are not fortunate enough to have a repository of knowledge of all rare diseases, like Dr. Gregory House, for their doctor, improving care for those with rare diseases involves allowing physicians to access the collective wisdom of the medical community more efficiently. This is where, the author of the article believes, social networking websites will help.
In healthcare, it is the left side of this distribution curve which inspires (for better or worse) Wal-Mart, Target, and others to offer "Doc In A Box" services - Allergies, Bladder Infections, Bronchitis, Ear Infections, Pink Eye, Sinus Infections, and a full battery of vaccines -- all served up for a fixed price while you wait.
On the right hand end of the curve though, the NIH Office of Rare Disease classifies over 6,000 conditions, each afflicting fewer than 200,000 Americans. Along this part of the curve, things do indeed get very ambiguous in a hurry -- both for patients and physicians. Specialization is a response to this range of ailments ("nichefication" in Anderson's terms), and brings physicians repeated cases of a particular nature --
giving them the confidence that they can routinely diagnose and treat a high percentage of these patients. However, even within a particular specialty area, cases will naturally follow a distribution curve from typical to atypical. Unto themselves -- atypical cases are just that -- one of a kind aberrations that force physicians to go outside their typical "comfort zone" of diagnosis and treatment. For each individual physician, these atypical cases feel like the exception rather than the rule. What the Long Tail suggests though, is that taken in their entirety, these rare cases actually compromise a large percentage of all medical cases. In fact, over 25 million Americans suffer from a "rare" condition.
Traditionally, when presented with a challenging case, doctors proceed as the characters on House do. They start talking with their closest colleagues about the problem and/or start searching the internet/library for help. The close colleague method is limited in the case of rare disorders because usually close ties within social networks access the same information. The internet must have substantially improved the diagnosis of rare disorders, but the article may be correct that internet searches frequently produce too much information to be processed efficiently.
The author believes that his social network website for doctors will help improve the diagnosis of rare diseases by increasing the flow of information between social networks. Social network theorists have long subscribed to Mark Granovetter's belief in the "strength of weak ties" -- the idea that close ties don't provide much new information (I already know most of what they know), rather new information comes from more distant ties who have access to the information set in other networks. One of the principles behind social networking websites is that awareness of the structure of the social networks allows individuals easier access to these different social networks. This occurs because these websites allow individuals to identify the network they want to access as well as the shortest social path to it.
Randomly contacting strangers and extracting information from them has a low probability of success; however, contacting people through people they are socially connected with or referring to the shared social connection when introducing yourself (so the person knows that their behavior in this interaction will be reported to others within their social network) should substantially improve the quality of the social interaction and the likelihood that the person initiating the contact receives what they need. As such, the author believes networking websites for doctors can lead to better diagnosis and care for people with rare disorders.
This seems pretty reasonable. I hope they are successful at getting doctors to participate and creating the forum to facilitate the spread of information.
On an unrelated note, I thought I would highlight a paragraph from the article that illustrates a point I made in an earlier post about an article on the supposed decline in confidants. I didn't think the trend seemed correct, and I argued, in part, that there had likely been a large growth in support from on-line communities. The author also believes that the internet changes the structure of social support:
On a more encouraging note, patients stuck along the right-side of the curve with a "niche disease" are using the extraordinary reach of the Web to discover that they are not so atypical after all. It's probably no surprise to THCB readers that patients are banding together around wikis, chat rooms, blogs and social networks to offer each other information, empathy, and inspiration. (This is not so different in network theory terms from when fans of a niche band find each other on MySpace). Some of these disease state patient networks are sponsored by pharma marketing, while others are grass-roots efforts, usually led by a parent or family member related to one of the patients.
The Effect of Kids on Parents
Several years ago, my friend Keith Chen mentioned that some evolutionary biologists he knew were trying to understand the bizarre finding that the men who have served as President of the United States had substantially more sons than daughters. As evolutionary biologists, they, naturally, focused on figuring out if alpha-males somehow had different sperm that led them to produce more males (and figuring out why dominant males evolved this way). Keith and I, being economists, felt that the biologists were likely asking the wrong question. Rather than asking what about the alpha-male led them to have more sons, why not ask what about having a son might affect the odds of becoming the alpha-male (or at least the President)?
We developed two main hypotheses for the finding. First, the electorate may have preferred voting candidates with sons. Second, having sons might motivate fathers to work harder and achieve more. This might occur if sons cost more to raise (and one can imagine that might have been true in a period where sons were more likely to go to school), if fathers care more that their sons are proud of them, or (as the Dahl and Moretti evidence that daughters cause divorce might suggest) sons improve marriage quality allowing fathers to devote more energy to work (alternatively fathers may work more to compensate their wives for providing them something they value).
For reasons that I no longer remember, we chose to investigate the second. Given that child gender is exogenous, we planned to compare changes in post-birth labor market outcomes for men who had sons to men who had daughters. Unfortunately for us, just as we were starting our work, I randomly discovered a working paper (that would eventually be published in the AER -- ouch!) by Shelly Lundberg and Elina Rose that did exactly what we were going to do. Consistent with our hypothesis, Lundberg and Rose find that fathers who have sons increase their labor supply by more and earn higher wages than fathers who have daughters:
Our most notable results relate to the effects of child gender on men's labor market outcomes. Sons increase men's annual hours of work and wage rates significantly more than do daughters. Fathers of both cohorts respond differently to sons and daughters, though the gender effects are more pronounced in the hours worked of the late cohort and the hourly wage rates of the early cohort. We find little evidence of an effect of child gender on the labor market outcomes of mothers, and are unable to explain our results in terms of differences in the expected pecuniary returns to boys and girls in the United States. Our results are consistent with a model in which the gender composition of a couple's offspring affects the returns to marriage, and this has implications for future research.I, much like Lundberg and Rose, am not sure what is going on, but the combination of the effect of sons on divorce and men's labor market outcome certainly merits further research -- specifically into what's causing these effects and whether or not they have changed in recent years.
In order to balance out (a little) these results (and perhaps suggest another possible explanation for them), let me also direct you to an interesting paper by Ebonya Washington that finds that Congressmen who have daughters are more supportive of women's issues (a very similar result to the roommates paper discussed previously):
I think this is good, although if having daughters hurts you at the polls ...
Economists have long concerned themselves with environmental influences, such as neighborhood, peers and family on individual's beliefs and behaviors. However, the impact of children on parents' behavior has been little studied. Parenting daughters, psychologists have shown, increases feminist sympathies. I test the hypothesis that children, much like neighbors or peers, can influence adult behavior. My laboratory is the United States congress. I demonstrate that conditional on total number of children, each daughter increases a congress person's propensity to vote liberally on reproductive rights issues. The effect is better explained by a shift in parental preferences, than by a shift in knowledge of constituency views or in the cost of living under a conservative reproductive rights regime. The result demonstrates not only the relevance of child to parent behavioral influence, but also the importance of personal ideoloa legislatorslator's voting decisions as it is not explained away by voter preferences.
Tuesday, July 25, 2006
Economists Drive the Ladies Wild!
This morning in the NBER kitchen, I discovered some new evidence that economists are causing women to swoon. Someone had printed out and hung up the following recent posting from Boston’s Craig’s List (the post has expired, so there’s no link):
What is the NBER (1050 Mass. Ave.)?Well “Jill”, I hope the fact that your post expired indicates you were successful in your quest, although the fact that no one has contacted me suggests that you must have failed.
I work at the Crate and Barrel on Mass. Ave. Every morning I watch a stream of cute young men walk into a place called the NBER. I’ve Googled it – looks like a bunch of economists from academia. What’s “National” about it? Is this a Harvard outfit? Is there anyone out there on CL who can help me meet some of the people in it?
Jill (not my real name)
Monday, July 24, 2006
Are Parents Today More Worried?
Over the weekend, I was discussing this phenomenon with a friend who grew up half-a-world away in Portugal, and he felt the same way. Together we reminisced about the long list of activities that were common kid behaviors that are typically unacceptable today (many of which were clearly stupid); e.g., riding in the front seat of cars (without seatbelts) or in the back of pickup trucks, riding bicycles without helmets, playing (particularly swimming) far from the watchful eyes of trusted adults, playing with things like BB guns or wrist-rockets, and on and on.
Maybe we are imagining things, but it seemed to us that there has been a substantial and fairly rapid shift in parenting norms. I am curious about two things: (1) what drives these changes (assuming they are real) and (2) what effects, if any, do these changes have on individuals’ human and social capital acquisition?
I think that much of the growth in parents’ safety consciousness is a natural part of the quantity-quality tradeoff. As parents have fewer kids and invest more time, money, and effort in each of them they worry more about protecting their investments. I am one of 4 children, so perhaps my parents’ tolerance was due to the fact that they had 3 spare kids should anything have happened to me. Today, social norms may have responded to the fact that parents are less likely to have several spare children. (Update -- ok, spare is clearly a poor choice of words -- it implies a certain amount of disuse and substitutability that is clearly not present in this case. I am merely trying to, inartfully, point out that additional children provide parents with some measure of distraction and comfort that is not available to parents who lose their only child).
However, even if the value of keeping one’s children alive increased, given the massive changes in the survival probabilities from advances in health care and “safety” technology (e.g., auto safety), it is somewhat surprising that parents still feel the need to expend great deals of effort protecting their children from some very low probability bad outcomes. Other technologies have reduced the risks associatied with their raising kids, why are parents continuing to expend effort trying to marginally increase their child's safety?
Growth in parent safety consciousness may result from changes in parents’ beliefs about dangers. Parents today have more information about potential dangers. Information provided by the media may caution among parents either by providing them with a more accurate sense of the distribution of dangers or by inflating their sense of potential dangers (by making them seem much more likely than they actually are). Further, it is possible the cost of losing children has increased. As child death has become less common, perhaps, it is now harder for parents to cope with the loss of a child because it is more unexpected and there are fewer people in their close social network who can relate to their loss.
Finally, to evaluate and understand this (hypothetical) trend, we want to also understand how more freedom during childhood affects children’s long term outcomes. I am not even sure what I expect, but I thought this was an interesting question, so I pose it to you.
Friday, July 21, 2006
The Long Tail
Thursday, July 20, 2006
Monday, July 17, 2006
TV and Social Capital
In "Bowling Alone," Putnam (1995) famously argued that the rise of television may be responsible for social capitalÂs decline. I investigate this hypothesis in the context of Indonesian villages. To identify the impact of exposure to television (and radio), I exploit plausibly exogenous differences in over-the-air signal strength associated with the topography of East and Central Java. Using this approach, I find that better signal reception, which is associated with more time spent watching television and listening to radio, is associated with substantially lower levels of participation in social activities and with lower self-reported measures of trust. I find particularly strong effects on participation in local government activities, as well on participation in informal savings groups. However, despite the impact on social capital, improved reception does not appear to affect village governance, at least as measured by discussions in village-level meetings and by corruption in a village-level road project.
The only question I have, which I did not see addressed in my quick perusal of the paper, is whether people who like TV (and are less prone to participate in the activities Ben examines) are more likely to leave areas with bad TV reception -- I totally would do something like that. However, I doubt that this effect is very prevalent in this area, and it almost certainly is not enough to invalidate Ben's conclusions.
I think it is very fitting that at some point this dude puts on a Yankees jersey.
Saturday, July 15, 2006
You've Got Meow
Pet owners can be a little weird; however, if sites like these help people (and animals) find others whose company they enjoy, I say great. Just another example of how the internet can allow people to socialize more efficiently.
On Sept. 21, 2001, rescuers dug through the smoldering remains of the World Trade Center. Across town, families buried two firefighters found a week earlier. At Fort Drum, on the edge of New York's Adirondacks, soldiers readied for deployment halfway across the world. Boards of directors of scores of American companies were also busy that day. They handed out millions of bargain-priced stock options to their top executives.I'd really like to know what these folks did to earn this money.
A Wall Street Journal analysis shows how some companies rushed, amid the post-9/11 stock-market decline, to give executives especially valuable options. A review of Standard & Poor's ExecuComp data for 1,800 leading companies indicates that from Sept. 17, 2001, through the end of the month, 511 top executives at 186 of these companies got stock-option grants. The number who received grants was 2.6 times as many as in the same stretch of September in 2000, and more than twice as many as in the like period in any other year between 1999 and 2003.
Ninety-one companies that didn't regularly grant stock options in September did so in the first two weeks of trading after the terror attack. Their grants were concentrated around Sept. 21, when the market reached its post-attack low. They were worth about $325 million when granted, based on a standard method of valuing stock options."
P.S. This seems like a reasonable time to highlight the new Saez-Piketty income inequality graph (Mark Thoma has more):
Friday, July 14, 2006
Hey Congressman, What's Your Sign?
Ok, we might also wonder why people born under these signs are more likely to end up in Congress? It is tempting to think that age based cut-off dates might explain this phenomenon. A few weeks ago, the Freakonomics blog discussed how the distribution of World Cup soccer players exhibits a similarly skewed pattern. They argue:
…because the FIFA cutoff date for determining a child’s age for international play is January 1, we would expect that a disproportionate number of the players in the World Cup would be born in the early part of the year. The idea is that these kids will get special treatment and attention when they are teenagers because they will be developmentally almost a full year ahead of kids born in the latter part of the year.Perhaps more relevant for our purposes, Elizabeth Dhuey and Stephen Lipscomb recently produced a paper which shows that kids who are older within their school cohort are more likely to hold leadership positions in high school:
Economists have identified a substantial adult wage premium attached to high school leadership activity. Unresolved is the extent to which it constitutes human capital acquisition or proxies for an "innate" unobserved skill. We document a determinant of high school leadership activity that is associated purely with school structure, rather than genetics or family background. That determinant is a student's relative age. State-specific school entry cut-offs induce systematic within-grade variation in student maturity, which in turn generate differences in leadership activity. We find that the relatively oldest students are four to eleven percent more likely to be high school leaders.Can school kindergarten cutoffs also explain the concentration of congressional birth signs in certain months? This would seem like a plausible explanation since we might expect holding leadership positions while in school to positively correlate with winning Congressional elections.
Table 1 in the Dhuey and Lipscomb paper presents the cut-off dates for each state for children entering kindergarten in 1947-49, 1959, and 1967-1969. During 1947-1949, most states had a Jan. 1 or Nov. 1 cut-offs (with a few Oct. 1 or Feb. 1). Only New York was very different with a May 1 cut-off. In the 50s and 60s states moved their cut-off dates around (and some stopped mandating them at the state level altogether), but they were still predominantly concentrated in the fall.
Thus, if the social and physical advantages of being relatively old within one’s grade affect one’s likelihood of winning a Congressional seat, we would expect to observe disproportionate concentrations of Congressional births in the late fall and early winter – at least among the three quarters of congress born during the years around these three periods.
The table below presents the birth month (not zodiac sign) for all members of the 109th Congress separated by birth cohorts (note the total percentages are slightly different then what Tony V. presents because I also include Senators; I also include the actual birth rates from 1978 so people have a better sense of how these percentages differ from what might otherwise be expected). Given that cut-off dates vary over time and across states, focus on the 1940-1945 column which roughly corresponds to a period where we know the cutoff dates for all states, and they are concentrated is a small range. The concentrations in November and December may be explained by states with Nov. 1 cutoffs, but the concentrations in May and June cannot be explained by school cut-offs (there are not enough people born in NY around this time for New York’s May 1 cut off to explain these concentrations).
Ultimately, school cut-offs may explain a small fraction of this pattern, but most of it likely requires some other explanation. I think (in spite of the odds) it may simply be an anomaly. I’d hoped to figure out if the same pattern exists over a longer period using biographical data from a larger set of Congresses, but month of birth is not included in the large datasets covering congressional biographies I found, and I am not ambitious enough to enter that by hand. Ideally, one would add the school cut-off and birth month data to one of the large congressional biographical dataset that includes birth state (a proxy for state where started school) and look carefully identify whether or not members of Congress tended to be very old for their class. This would more conclusively explain if age advantages during school affect the likelihood of ending up in Congress.
Update -- in a comment at Econball, someone asks for the distribution by Chinese zodiac sign -- here it is (I couldn't easily find the US population distribution by birth year, so I, unfortunately, am not able to compare this distribution to the distribution of Chinese zodiac signs in the whole US population):
Thursday, July 13, 2006
I Am Not Alone ...
Social Influences on Price -- Food and Wine Edition
While I understand that often these differences stem from social preferences (i.e., we value certain products and experiences more because other members of our reference group are doing them as well), I still think it is semi-tragic that many consumers buy products that are ill-suited for their tastes and many suppliers (who would be increasing the set of choices available) are unable to succeed as a result.
In particular, it is frustrating how often such inefficiencies are purely the result of difficulties disseminating information. Historically, when person A went to restaurant X or purchased product Y, they may have shared their thoughts on the experience with a few members of their social network, and their friends may have, in turn, spread the information a little further. However, frequently, the members of A's extended social network aren't that interested in X or Y or they know that A's tastes are not well aligned with their own. As such, only a limited amount of information accumulates.
At some point, the economy became specialized enough that we started to employ experts whose job entails sampling products and reporting their opinions using mass media. While this system improves the amount of information available, this arrangement is not flawless. Reviewers can be corrupted (see payola scandals), and typically people had access to only a small set of experts (frequently there was only one expert per industry per area). As such, the distribution of reviewer preferences only weakly correlates with the distribution of preferences in the population, so many people are still unable to cheaply discover products that are well suited to their tastes.
Fortunately, we now have the internet. Since any fool can now publish and distribute their opinions worldwide at very low cost, the distribution of information and opinion is more likely to reflect the true underlying distribution. As such, as we learn how to effectively summarize the information available on the internet and find the people whose preferences align well with our own, I would expect (and hope) the return (above what we would expect based on quality) from things like Michelin stars to fall.
Wednesday, July 12, 2006
Fear of Terrorism
Today's release of the report on the National Asset Database (aka the terror target list) provides an interesting glimpse of these differences. The headlines are awash in some of the more absurd potential terror targets like Old MacDonald’s Petting Zoo, the Amish Country Popcorn factory, the Mule Day Parade, the Sweetwater Flea Market. Meanwhile, presumably important sites like the Statue of Liberty and Times Square fail to make the list. Apparently, much of the list was submitted by the states. As such, the differences in what places listed as potential targets reflects, with a fair amount of noise, how different places think about terrorism.
Ultimately, when I added the data on number of "assets" by state to data on population and support for George W. Bush in 2004 and plotted assets per capita against percent voting for W., I was not surprised to find the relationship depicted below.
I am not sure how to interpret this, but I thought it was interesting.
A Good Question.
During the school year, we have one set of child care buildings in the private sector that sit there mostly empty doing nothing all day but waiting for school to get out. Some do run before school care programs in the mornings and pre-school kids fill some of the space during the school day, but they are still largely below capacity. Somewhere else there is another set of buildings run by the government, the schools, overflowing with kids.
Then, at 2:30 and 3:30 each Monday through Friday there is a massive transfer of kids from one set of buildings, the schools, to the child care facilities in the private sector. Cars, small buses with names like Kindercare, La Petite Academy, and Krayola Kids on the sides all line up, pick up the kids, then crowd the roads all over town as they move the kids from one place to another in a brief flurry of activity. The opportunity cost of those buildings, vehicles, and the people who run the private day care centers are sufficiently high so as to make private care expensive for the typical family. The schools have a few after school care programs in gyms, etc., but mostly they sit empty once the school day ends.
In summer it's pretty much the same without the daily transfer. For several months, the school buildings sit there doing little, they handle some summer school, sports, etc., but mostly they are pretty empty while the private sector buildings are full.
So here's a question for my school board member father and child care provider sister? Why aren't school district facilities available for after school (and in-service day and summer, and ...) child care?
Prof. Thoma thinks this service should be free, but, given that it is not free to provide, I am not sure I agree with that. However, given that schools can conceivably provide better facilities (playgrounds, gyms, libraries, kitchens) at essentially no cost, why not go into this business? You merely have to charge enough to pay for teachers, supplies (which you can buy in bulk), and administrative costs and you can provide an experience that is likely better than most after-school centers at a fraction of the cost. (Plus, the district probably ends up saving money on school buses because fewer children need to ride the bus.)
Many people advocate for child care subsidies, why not provide them at no additional cost to taxpayers simply by getting more out of capital that's already paid for. This seems like too good of a deal to pass up.
Tuesday, July 11, 2006
In Defense of the American Association of Wine Economists
For me, this is a simple economic story. A group of people decide that there is demand for something (in this case an organization to bring researchers with similar interests together and provide an outlet for their ideas in the form of a journal) and decide to supply it. While I may find some markets weird (e.g., why is there mayonnaise; that stuff is gross), I do not think it is ok to be outraged at certain markets’ existence and invective hurled at the suppliers unless it is clear that there are significant external costs associated with the existence of this market.
According to these other economists, this organization is an elitist vanity project of no academic value. They argue that it exists solely to allow a bunch of elite senior faculty to use their research budgets to travel to France and drink wine. Further, struggling faculty are forced to feign interest in wine and spend money they don’t have traveling to conferences in Bordeaux because advancing one’s career depends critically on sucking up to these elite senior faculty. As such, this organization must be opposed vigorously because it is both useless and unfair.
I disagree with both of these points. Let me start with the claim of uselessness. I think this is for the market to decide. If there is sufficient demand for the product (and there may not be this is all very new), then I can’t see how it can be called useless or of no academic value. To me, this is simply an example of the increasingly common phenomenon of a niche market associated with a long tail (something I’ve been wanting to blog about for awhile, for now, see Chris Anderson’s website).
They argue that the demand for this product has nothing to do with scholarship and everything to do with cronyism and wasting research money drinking wine. At the time, I was not informed enough to refute this statement, but I was highly skeptical of its merits (and ultimately unless you can convince me that there is real harm from this, I am not going to get all that worked up over even this stuff – more on that later). Now that I have been to the organization’s website and perused their journal, I don’t see how one can draw such a conclusion. The journal they have produced seems to have completely reasonable articles that I imagine address some demand (indeed, a random commenter at the freakonomics blog was very interested in the article on Champagne). Moreover, the journal’s website indicates that the financial support for this endeavor was provided by Whitman College. I find in unreasonable to argue that Whitman College, a liberal arts college in Walla Walla, WA, would devote scarce resources supporting something that lacked merit. In fact, given the attachment of some high profile faculty and the large interest in wine around the world, I would argue that this was a very smart investment. It raises Whitman’s profile, its connection to some important people, and helps a small place carve out a niche for itself.
As for the claim that this group represents an elitist, exclusionary club which harms the prospects of struggling faculty, every part of this argument is easily refuted. As mentioned previously, during the discussion, the organization was represented as consisting of a bunch of elite senior faculty that would only hold meetings in far off locales like Bordeaux. Further, it was argued that getting ahead in academics requires that one invest heavily in forming social connections with these elites. As such, struggling faculty must feign interest in wine and waste their scarce research budgets on expensive trips because otherwise no one will pay attention to their work.
The first (and most essential) assumption in this argument is that this will be a group of super elites worthy of schmoozing with. However, as yet, it is unclear who will join this group. It is true that a couple of high profile people are involved, but the list of editors and editorial advisory board members hardly suggests that this is some super elitist organization. The same is true of the scientific committee and list of presenters from 1st Conference of the Society on Quantitative Gastronomy (a highly related group – whose papers also appear to be quite interesting and not devoid of academic merit -- see the previous post for an example). Given the lack of evidence that this group includes a disproportionate number of elite faculty, I fail to see how there is some extra incentive to attend its conferences in order to network. Until proven otherwise, I can only assume that the people who will join this group will be those who are actually interested in this topic.
The second assumption is that participation in the meetings of this group will require travel to expensive locations. I believe this assumption stems from the fact that 1st International Conference on Quantitative Gastronomy (which the AAWE linked to) was held in Bordeaux. Of course, that group (based on who formed the scientific committee, who presented, and who organized it) appears to be heavily European. So holding a conference in Europe would seem reasonable. While the AMERICAN Association of Wine Economists has yet to meet, it seems reasonable to assume that they might meet in the US (e.g., some place like Napa or, better, Oregon’s Willamette Valley). As such, I don’t see how one can conclude that participation in this group will be prohibitively expensive.
Finally, I strongly reject the notion that attending a conference for the sole reason of sucking up to elite faculty is likely to produce any additional advancement in academics. While it is certainly important to raise one’s profile in one’s field, simply chatting with random “big name” economists is, at best, a small part of this. As in all social relationships, the essential part of developing a useful relationship with important faculty involves providing them something of value. In academics this usually means that you write papers and make comments that they find interesting and important (although doing lackey work for them is also common). Focusing on doing good work in one’s own area of interest and working hard to market yourself and your ideas are the essential means to achieving meaningful relationships with academics. Pretending to be interested in a topic in order to have the opportunity to maybe chat with some important faculty member (who maybe doesn’t even work in your field) is extremely unlikely to increase one’s social capital and is a very poor strategy for career advancement.
Thus any outrage over the existence of such a group is misplaced. While it may seem silly to some, I see no evidence that its existence is harmful or inefficient. In fact, it seems like a natural result of changes in technology which have dramatically increased the supply of economic research and the growth in demand (perhaps related to price changes from the growth of supply) for economic research outside of academic economists. I suspect that many similar niche areas will arise in the coming years, so my fellow economists should probably get used to this sort of thing.
Monday, July 10, 2006
Why is American Food So Bad?
He argues that food in America got hammered by prohibition (forced fine dining establishments out of business), immigration restrictions (cut off both the supply and some of the demand for good ethnic food), TV (raised the opportunity cost of cooking and encouraged cultural homogenization), working moms (obvious), and spoiled children (the indulgence of children post WWII included favoring the sweet, bland food kids like), and developments in transportation and food storage (makes processed food more appealing than fresh). It is very well reasoned, although I would love to see more detailed empirical support for his arguments.
Sunday, July 09, 2006
I Don't Get It -- Men at College Freakout Edition
The article presents this trend as a problem that needs to be solved, but it never presents a reason why. The whole article seems based on the assumption that college should have equal proportions of men and women. But I don't see why this should be the case?
In fact, more women than men at college seems like the "natural" outcome. The article itself points out that young men face higher opportunity costs because they can make reasonably good salaries using their muscles. Further, apparently, men don't like school as much, so the effort cost of college is higher for them. Finally, according to the article, women earn higher financial returns from attending college. So men face higher marginal costs and lower marginal benefits than women, shouldn't we expect fewer men than women to attend college?
I am happy to consider arguments for why we should be concerned about this, but right now I don't get it.
Saturday, July 08, 2006
Total Eclipse of My Heart
(h/t Atrios for both)
Returns to Social Capital -- Avoiding a Jail in Dubai Edition
Also on the social capital front, both the NY and LA Times ran stories this morning describing how the internet, by dramatically reducing the costs of social connection, increases social connections and strengthen social ties among both distant and close friends.
First, the LATimes describes the success of an online "preunion" for the Claremont, CA high school class of 1976. A simple yahoo group started by one class member grew to include half of the class of 500 and has passed 10,000 messages over the past few months and led to the creation of variety of new social ties (as well as the re-establishment of old ones).
Second, the NYTimes describes how the internet keeps soldiers stationed overseas connected to their families back home:
From 6,000 miles away, Sergeant Grelak, 35, drew flowers with Sara, Katie's older sister, and witnessed, almost in real time, her first day of preschool. The soldier and his wife, Jennifer, 26, even bought a house in Baltimore together, e-mailing pictures and appraisals back and forth. Through instant messaging, they discussed the new landscaping and camping equipment as if they were sitting just across the kitchen table from each other.This represents a remarkable leap forward in social relationships. Soldiers are able to enjoy many of the benefits of their previous social investments and slow the depreciation that naturally accompanies spending time far away by maintaining their involvement in their lives at home. I am curious to know if the availability of such technology has improved the relationships of soldiers serving today relative to soldiers in past conflicts. E.g., are soldiers today less likely to suffer divorce, etc. then similar soldiers who lacked these technologies?
Friday, July 07, 2006
Who Said This?
I have enormous regard for the men and women of the U.S. military. ... No one has a higher regard than I do for them. It's irresponsible to suggest we shouldn't have that debate, that we should ignore what is a major, major concern [...]
There is no more important responsibility for a President of the United States than his role as Commander in Chief. When he decides when to send our young men and women to war. When we send them without the right kind of training, when we send them poorly equipped or with equipment that's old and broken down, we put their lives at risk.
Seriously, just guess.
Female Labor Force Participation
Contrary to popular theory, Labor Department data do not show a rising proportion of women dropping out of the workforce to spend time with their families. Indeed, the participation rate has fallen since 2000 for both women with children and women without children.
While non-working women are still much more likely than men to cite "home responsibilities" as their reason for not holding or seeking a job, that's actually less true now than it was in the past. The share of women aged 25 to 54, considered to be in their "prime" working years, who gave that reason for not seeking employment has shrunk for more than a decade. The share of men citing that reason has edged up over the same period, according to a Labor Department analysis of census survey figures from 1990 to 2003.
Oh well, the need to move beyond anecdote and really understand long term trends in the labor force outcomes of highly talented and educated women has kept me employed this year. To read more about the basic trends in labor force participation among highly educated women, check out Claudia Goldin's (one of my co-investigators on the Harvard and Beyond Project) recent op-ed in the NYTimes.
Thursday, July 06, 2006
Certainly, nagging will inevitably be part of any relationship, and it will even work sometimes. The problem with nagging is its overuse -- particularly at the expense of more efficient (and effective) strategies.
Nagging is popular because it is cheap. When someone engages in behavior that reduces our welfare, we get upset (typically in proportion to how much welfare we've lost). When we feel bad, it is normal to want to "let off some of the steam." Nagging is an easy way to do this (while also trying to prevent the situation from arising in the future). As such, it is common.
However, this does not imply that it is efficient. While I will assume that nagging is rational for the nagger (i.e., the expected benefits of nagging outweigh the costs), the relationship as a whole may be worse off because the costs imposed on the nagged may be greater than the net benefit to the nagger. Further, because nagging is frequently not effective at eliminating unwanted behaviors (e.g., the threat of nagging is not enough to overwhelm habits), the nagging escalates which only increases the net loss to the relationship by reducing the net benefit to the nagger and imposing larger costs on the nagged. Inevitably the loss of relationship surplus associated with this puts the relationship on a trajectory toward larger blow ups and potential break-up.
In light of nagging's limited potential, it is important to think about other strategies for altering relationship behaviors because no matter how hard you search there is no perfect mate this stuff is gonna come up. This article from the NYTimes describes some nice substitutes for nagging that the author, Amy Sutherland, learned while writing a book on animal training. As she puts it:
The central lesson I learned from exotic animal trainers is that I should reward behavior I like and ignore behavior I don't. After all, you don't get a sea lion to balance a ball on the end of its nose by nagging. The same goes for the American husband.
She describes three lessons in the article:
1) Instead of changing behavior through nagging (raising costs), raise the benefits associated with not doing the undesirable thing (e.g., kiss your partner for picking up their clothes -- a win-win for everyone)
2) Create incompatible behaviors which make engaging in the annoying task impossible (obviously this won't work in all situations, but in the article she describes creating tasks on the other side of the kitchen to occupy her husband in order to prevent him from crowding her while cooking).
3) Ignore stuff (Least Reinforcing Syndrome) -- "The idea is that any response, positive or negative, fuels a behavior. If a behavior provokes no response, it typically dies away."
Ultimately, all three of these strategies are themselves limited. The point, though, is to think creatively about how to deal with thoughtless or annoying partners. Nagging is natural and cheap, but can be destructive to the relationship. Try and figure out if there is an alternative response which might produce the desired outcome with lower long term costs on you and the relationship.
Wednesday, July 05, 2006
The Movie Biz
Arthur De Vany, recently retired professor of economics.... De Vany likes to illustrate the oddities of the film business by comparing films to breakfast cereal. If breakfast cereals were like films... our typical cereal breakfast would consist of a product we had never before tried, and very well might not like, but bought because we heard about it from friends or read of it in the newspaper cereal section. That's precisely how films behave in the marketplace. If we hear good things, we go and perhaps tell others; if we hear bad things, we stay away. It's that process—-the way consumers learn from others about the expected quality of the product—-that De Vany found is the key to the odd behavior of the film business today. Economists call it an "information cascade." "People's behavior is simple," De Vany says, "but in the aggregate it leads to a complex system, a system bordering on chaos."...
If hits are so hard to predict, why does it often appear that certain people, at certain times, have a hot hand? The work of former UC Berkeley professor Daniel Kahneman helps explain this.... Not only are people bad at recognizing random processes, they also are easily fooled into thinking they are controlling them....
(h/t Brad Delong)
The Experts' View of the War on Terra
Despite today's highly politicized national security environment, the index results show striking consensus across political party lines. A bipartisan majority (84 percent) of the index's experts say the United States is not winning the war on terror. Eighty-six percent of the index's experts see a world today that is growing more dangerous for Americans. Overall, they agree that the U.S. government is falling short in its homeland security efforts. More than 8 in 10 expect an attack on the scale of 9/11 within a decade. These dark conclusions appear to stem from the experts' belief that the U.S. national security apparatus is in serious disrepair. "Foreign-policy experts have never been in so much agreement about an administration's performance abroad," says Leslie Gelb, president emeritus of the Council on Foreign Relations and an index participant. "The reason is that it's clear to nearly all that Bush and his team have had a totally unrealistic view of what they can accomplish with military force and threats of force."Group me in with the experts. Can somebody ask Karl Rove (or any number of other Republican leaders or Fox news commentators) if this makes me some sort of traitor? So hard to tell these days.
(h/t Kevin Drum)
Blatter believes bringing in a second referee will help eradicate mistakes and reduce controversy.
Yes. That is exactly right. I cannot think of a single good reason not to do this. In fact, I think there should be three referees (in addition to the assistants).
Additional refs would also reduce the uproar over diving because players would have fewer incentives to dive. As is, because diving is effective, it is hard to blame players for working on their diving skills.
Monday, July 03, 2006
Nearly 10 million people now drive more than an hour to work, up 50 percent from 1990.
I maybe wouldn't mind riding a train for an hour (but not much more), but driving 2 hours every day to get to and from work. No thanks. I don't like driving that much. I will gladly settle for a smaller home.
Is Soccer Boring?
These arguments seem inconsistent. All sports, even soccer, provide a variety of statistics that, to some degree, tell the story of the game. It is only because Tyler is a cognoscenti of basketball that he knows which statistics are important and how to interpret them.
If there is a difference between soccer and other sports, it may be the importance of augmenting statistics (like time of possession, corners, shots, shots on goal, etc.) with description (e.g., "The French were so much better at playing Brazil's natural, free-flowing game that the result never seemed in doubt ..."). To people familiar with soccer, such description serves essentially the same purpose that various statistics do.
So I disagree with the argument that soccer is boring because it is harder to quickly understand than other sports. If anything, soccer is much easier to understand than just about any other sport. After 6 years, I am still trying to explain parts of baseball and American football to my international friends. Soccer is pretty basic -- it is a big game of directed keep away where you can't use your hands.
If soccer is boring, it is boring in the same way baseball might be considered boring. It is all about the build up. If you don't care about the outcome, waiting for something pivotal to happen probably doesn't make for great television. However, if you do care about the outcome, nothing is more exciting. Watching the Red Sox in the playoffs or elimination matches in the World Cup is exhausting. Because the whole game can turn in an instant, you hang on the edge of your seat (if you can even sit down, I don't think I sat down after about the 60th minute of the Germany-Argentina match on Friday).
For me, watching soccer or baseball on TV requires that I care about the outcome. Otherwise, I tend to lose interest and get bored. Oddly, this same condition does not apply to watching these sports live. I will happily go to any major (and most minor) league ballparks to watch baseball, and the atmosphere at soccer matches seems insane enough that I can't imagine being bored there (although I've never been). I find football and basketball to be the exact opposite. I will happily watch most any teams play football or basketball on TV, but unless I care deeply about the teams involved I get bored at live football or basketball games. I am not sure what this says, but I think it is interesting.
Ultimately, if soccer has a problem it is that referees make the results somewhat arbitrary because they posess the power to change the game dramatically (by awarding penalty kicks or sending players off) yet, much of they time, they can't even see most of the fouls properly because there aren't enough of them on the field.
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