Category Archive: Sources

  1. The Braid

    Comments Off on The Braid

    CONSTRAINED POSSIBILITIES

    On the relationship between academic economics and public policy

    ⤷ Metaresearch

    In a recent working paper, ELIZABETH POPP BERMAN discusses the interconnected fields of academic economics and public policy. The paper conceptualizes the translation of certain academic ideas into public policy, clarifying the relation by describing different economic theories as having certain “affordances”:

    “I borrow the concept of affordances, which has been used widely to describe how particular technologies proved the potential for some kinds of action but not others. I suggest that knowledge, like technologies, may afford some possibilities but not others. In particular, some theories produce knowledge that, simply because of the kind of knowledge it is, is useful and usable for particular actors in the policy field, while others, regardless of their truth or the accuracy with which they describe the world, do not.”

    The paper also examines the gap between academic theory and policy application and includes takeaways for those interested in the role of academic experts in the process of policy creation:

    “It is important to recognize the relative autonomy of the academic field from the policy field. While outside groups may support one school of thought or another, the development of academic disciplines is not determined solely by who has the most money, but also by stakes—including intellectual stakes—specific to the academic field. Similarly, while the academic and policy fields may be linked in ways that facilitate the transmission of people and ideas, the academic dominance of a particular approach does not translate to policy dominance, even given influential champions.”

    Link to full paper. ht Michael

    • This work builds off a 2014 paper Berman co-authored with David Hirschman, which also explores the degree to which economists, their tools and ideas, influence and create policy. Similar to the concept of “affordances”, Berman and Hirschman argue that “economic style can shape how policymakers approach problems, even if they ignore the specific recommendations of trained economists.” Link.
    • A 2010 paper offers a new framework for properly assessing research impact, which includes quantifying conventional citation data as well as other qualitative outputs. Link.
    ‡ metaresearch policy antitrust

    PRESCIENT HEGEMON

    Branko Milanovic with a speculative paper on globalization from the turn of the millennium

    ⤷ Guaranteed Income

    Back in 1999, economist Branko Milanovic wrote a (“several times rejected”) paper proposing three periods of globalization—the third being the present one—and the countervailing ideologies that sprang up to contest the first two. From the paper:

    “We are currently standing at the threshold of the Third Globalization. the Roman-led one of the 2nd-4th century, the British-led one of the 19th century, and the current one led by the United States. Each of them not only had a hegemon country but was associated with a specific ideology. However, in reaction to the dominant ideology and the effects of globalization (cultural domination, increasing awareness of economic inequities) an alternative ideology (in the first case, Christianity, in the second, Communism) sprang up. The alternative ideology uses the technological means supplied by the globalizers to subvert or attack the dominant ideological paradigm.”

    Read the full paper here.

    • For more Milanovic on the politics of globalization, slides from a recent presentation of his on global inequality and its political consequences features much of relevance to this vintage paper. Some of its broader questions: “Does global equality of opportunity matter? Is ‘citizenship rent’ morally acceptable? What is the ‘optimal’ global income distribution? Can something ‘good’ (global middle class) be the result of something ‘bad’ (shrinking of national middle classes and rising income inequality)? Are we back to Mandeville?” Link.
    ‡ Globalization history

    +++

    • Matt Bruenig has published a proposal for a Social Wealth Fund. (More to come on this in next week’s newsletter.) Link.
    • The Ontario government cancelled its basic income pilot. Now a class action lawsuit is being filed. Link. ht Lauren For an interesting deep-dive into the Ontario pilot design and public feedback, see these notes from 14 public discussions around the province in 2016-2017. Link. ht Will
    • From National Geographic, a story about an oft-forgotten climate change accelerant, melting permafrost. “Permafrost collapse can begin feeding on itself, releasing more greenhouse gases, which fuel more warming.” Link.
    • From VoxEU: “What is the effect of firms’ beliefs on their decisions and performance? Firms’ input decisions and subsequent profit and productivity are found to react strongly to expectations of macroeconomic conditions, while significant heterogeneity in forecast accuracy across firms appears to be related to observable characteristics such as productivity, size, age, and governance structure. The results highlight a key role of firms’ forecasting ability for micro and macro performance.” Link.
    • More from Frank Pasquale, this time on facial recognition software, in Communications of the Association for Computing Machinery. Link.
    • A post at AEIR discusses a recent “Central Banking For All” proposal, and raises Canada’s 99% banking penetration rate as a case worth examining when thinking through addressing underbanked communities in the US. Link.
    • “This research follows the £20 million paid in compensation by the British government in 1834 to former slave-owners for the loss of their human property. It shows that slave-owners in places such as Jamaica, Guyana, South Africa and Mauritius used the money they received not just to pay off their debts, but also to set up new banks, which created credit by issuing bank notes and then supplied the planters with cash and credit. By investing their slavery compensation money in banks that then offered cash and credit, the planters could prolong and even expand their place in economies and societies built on the plantation system and the exploitation of black labor.” Link.
    • Corey Robin wrote a Times op-ed on “The New Socialists” (Sanders, Ocasio-Cortez, Salazar, and the current movement’s ideology). Brad DeLong posted a takedown: Link. In his rebuttal, DeLong suggests a “vastly, vastly superior” 2012 Crooked Timber post by Cosma Shalizi for a more complex discussion of markets and domination. That sprawling piece tackles Red Plenty, linear programming, industrial planning, and the political conflict approached in Robin’s op-ed: “Human beings confront all the structures which emerge from our massed interactions in this way. A bureaucracy, or even a thoroughly democratic polity of which one is a citizen, can feel, can be, just as much of a cold monster as the market.” Link to the Crooked Timber post. (Also: see Paul Krugman’s defense of Robin’s piece here.)
    • A Shelterforce post co-authored by several people from community-based tenants groups like the Anti-Eviction Mapping Project critiques Matthew Desmond’s Eviction Lab, arguing the project failed to meaningfully engage with community groups whose data it was collecting. This resulted in, they allege, an undercounting of eviction rates in California. The post raises a number of important questions for conducting large-scale social research of this kind. Link. ht Will
    • Timothy Taylor with a post on summer vacation: “Why did summer vacation arise as a standard pattern during the second half of the 19th century, when it had not been common in either rural or urban areas before that?” Link.

  2. A Ship So Big, A Bridge Cringes

    Comments Off on A Ship So Big, A Bridge Cringes

    SPATIAL PARAMETERS

    On place-based and adaptable public policy

    ⤷ Guaranteed Income

    A recent report published by BROOKINGS INSTITUTE discusses the potential effectiveness of place-based policies for strengthening the economies of depressed areas. Co-authored by Harvard’s BENJAMIN AUSTIN, EDWARD GLAESER, and LAWRENCE H. SUMMERS, the report emphasizes that region-specific, flexible policies may best foster a nation-wide equilibrium:

    “Traditionally, economists have been skeptical towards [place-based] policies because of a conviction that relief is best targeted towards poor people not poor places, because incomes in poor areas were converging towards incomes in rich areas anyway, and because of fears that favoring one location would impoverish another. This paper argues for reconsidering place-based policies …

    Indeed, even the most diehard opponent of place-based redistribution should see the logic of tailoring Federal policies to local labor market conditions. Standard social policy rules, like the Bailey (1976)—Chetty (2006) formula for unemployment insurance, depend on parameters that differ across space. If non-employment is particularly harmful in one location and particularly sensitive to public policies, then that diehard could still support a place-based revenue-neutral twist that reallocates funds from benefits that subsidize not working to benefits that encourage employment, without encouraging migration or raising housing prices.”

    Link popup: yes to full paper. The two main policy recommendations are an expanded EITC and subsidies for employment.

    The paper reviews the literature on enterprise zones and empowerment zones, which bear some similarities to the new Opportunity Zone policy, in that there they combine tax benefits (to businesses or investors) with a place-based approach. Do they work? Not resoundingly: “In the past twenty years, the literature on state enterprise zones has grown, but results seem to be quite sensitive to the time period and approach” (44).

    • A Nonprofit Quarterly post explains the key differences between Opportunity Zones and the Clinton-era Empowerment Zones: “The new program differs from the Empowerment Zone program in two key aspects: 1) It won’t be limited to a few cities and could benefit rural areas, as well as urban areas; 2) the tax benefits flow to investors (i.e., through deferred capital gains) rather than involving direct tax credits to businesses that locate in the designated communities.” Link popup: yes.
    • There is a growing literature exploring concerns about the federal project. A February blog post from Brookings considers whether these zones will help foster economic development or expedite residential and commercial gentrification. Link popup: yes. However, EIG says “less than 4 percent of zones have recently experienced high levels of socioeconomic change, a proxy for gentrification and displacement risk. The average Opportunity Zone’s housing stock has a median age of 50 years, more than ten years older than the U.S. median—a sign that many of these neighborhoods urgently need reinvestment.” Link popup: yes. ht Cody Evans
    • At the Tax Policy Center, Steven Rosenthal writes, “The fundamental problem with Opportunity Zones is the disconnect between the size of the potential tax costs, which are uncapped, and the social benefits from the investments, which will be hard to measure.” Link popup: yes. 
    • A recent interview with Stanford’s Rebecca Lester suggests that stimulating community-beneficial investment in Opportunity Zones relies not only on investors, but on public officials as well: “The extent to which these projects actually help low-income residents will in some ways be a function of how local governments participate in directing the investment.” Link popup: yes. (And see her initial analysis of Opportunity Zones published in June. Link popup: yes.)  
    • The New Localism released a list of guiding principles that “enable the greatest job creation potential and the most advantages for lower income resident employment, both, inside and outside the eligible zones.” Link popup: yes.
    • In a 2015 Washington Monthly article, Phillip Longman chronicles the history of American geographical economic disparity. Link popup: yes.
    ‡ place_based_policies taxes

    CONJOINT MODEL

    New discussion around workers’ councils and codetermination 

    ⤷ Guaranteed Income

    In a paper from 1992, economists RICHARD B. FREEMAN and EDWARD P. LAZEAR articulate a marked lack of research around the effects of workers’ councils and cite an atmosphere that urgently requires more attention to the topic—concerns still relevant nearly three decades on:

    “The most recent article on councils in a major economics journal was Paul Douglas’s 1921 piece in the Journal of Political Economy (JPE). In part, the neglect of councils reflects economists’ traditional unwillingness to look inside the black box of the firm and lack of adequate theoretic tools to treat organizational issues. In part also, it reflects the absence of empirical studies or observations that are needed for parsimonious theorizing. Such neglect of works councils can no longer be justified. The precipitous fall in private sector unionism in the United States, declining unionism in the United Kingdom, and concerns about how different labor relations systems fare in a global marketplace have renewed interest in councils as a workplace institution.” 

    Read their full paper, which demonstrates a set of related models describing various positive and negative effects of works councils and “the problems councils might face in a decentralized American or British labor system,” here popup: yes. (See also the collected volume popup: yes of research on works councils in which it was included, edited by JOEL ROGERS and WOLFGANG STREECK.) 

    • This paper surfaced amidst discussion around codetermination—the practice of including worker representatives on boards—following Elizabeth Warren’s proposed Accountable Capitalism Act popup: yes, which, among other things, would allow for workers to elect 40 percent of the membership of their board of directors. (The idea is very popular popup: yes, polling well in every single house district.) At the Roosevelt Institute, Leonore Palladino wrote a post on codetermination and the possibility of an end to shareholder primacy. Link popup: yes. At Vox, Matthew Yglesias provides a thorough account of Warren’s bill and the research and debate around codetermination. Link popup: yes. 
    • Much of the empirical work on codetermination has been done in the German context. From economist Felix Hörisch, a paper on the macro-economic effects of codetermination on income equality. Among the various notable results: codetermination is a stronger predictor of more equitable income disparities than high union density. Link popup: yes. Another paper from 2006 finds that labor representation on the supervisory board reduces corruption and agency costs within a firm. Link popup: yes. A review paper of codetermination policies throughout Europe finds lower share prices and positive impacts on innovation and productivity. Link popup: yes. 
    • Some brief but interesting commentary popup: yes on the Warren proposal from Raffaella Sadun of the Harvard Business school, who also shared the Freeman and Lazear paper on Twitter: “I have a hard time seeing this implemented: Besides feasibility, 2 concerns: 1) when they exist, these arrangements are likely to be an expression of trust between management and employees, not its cause. Getting cause and effect right matters; 2) These arrangements work when they fit with the system.” A counterpoint from another thread popup: yes from economist Gabriel Burdin: “Historical accounts of the implementation of German codetermination laws indicate employers strongly opposed to them at the beginning. Not sure whether trust is a prerequisite or an outcome of these arrangements.” 
    ‡ future_of_work microstructure corporate_governance

    +++

    • Stockton’s basic income demonstration has released its discussion paper with details for the pilot. “Beginning in 2019, the Demonstration will provide approximately 100 Stocktonians with a guaranteed income of $500 per month for 18 months. The income will be unconditional, meaning there are no work requirements and no restrictions on how the money can be spent.” Link popup: yes. And link popup: yes to coverage in Business Insider. (JFI contributed to this research.)
    • New research on Facebook and anti-refugee attacks in Germany. Among other things, research finds that towns in which Facebook usage rose a standard deviation above the national average, attacks increased by 50 percent. Link popup: yes to a report in the Times, link popup: yes to the study. On Twitter, economist Dean Eckles poses some questions popup: yes: “How relevant are short-run effects of outages in this case? If, say, a group is organizing via phone and the phones go down for a day, liked [sic] they’d do less that day. But if (a) phones hadn’t existed or (b) you banned them from phones, what would happen?” 
    • Brad DeLong’s list of worthy reads on equitable growth. Link popup: yes to the list. 
    • A remarkably lucid evidence review on the effects of voter ID laws from FiveThirtyEight. Link popup: yes.
    • The Urban Institute is tracking the presence of work requirements for enrollees in public assistance programs. Link popup: yes to their tracking tool, and link popup: yes to a December report that provides a more in-depth survey of existing policies. ht Will 
    • “Scholars and policymakers have highlighted institutions that enable community participation as a potential buffer against existing political inequalities. Yet, these venues may be biasing policy discussions in favor of an unrepresentative group of individuals.… To explore who participates, we compile a novel data set by coding thousands of instances of citizens speaking at planning and zoning board meetings concerning housing development. We match individuals to a voter file to investigate local political participation in housing and development policy. We find that individuals who are older, male, longtime residents, voters in local elections, and homeowners are significantly more likely to participate in these meetings.” On the policy effects of skewed participation in local government. Link popup: yes. ht Will
    • On austerity and health outcomes, by Roberto Perotti. Link popup: yes. 
    • A 2017 paper by David Autor, David Dorn, Gordon Hanson, and Kaveh Majlesi looks at the electoral effects of international trade exposure. Link popup: yes. 
    • Frank Pasquale with some foundational questions about algorithmic accountability: “Energy that could be put into better public transit systems is instead diverted to perfect the coding of self-driving cars. Anti-surveillance activism transmogrifies into proposals to improve facial recognition systems to better recognize all faces. To help payday-loan seekers, developers might design data-segmentation protocols to show them what personal information they should reveal to get a lower interest rate. But the idea that such self-monitoring and data curation can be a trap, disciplining the user in ever finer-grained ways, remains less explored. Trying to make these games fairer, the research elides the possibility of rejecting them altogether.” Link popup: yes. 

  3. House Fronts

    Comments Off on House Fronts

    COMPENSATION TREATMENT

    In Iran, cash transfers don’t reduce labor supply

    ⤷ Guaranteed Income

    A new study examines the effects of Iran’s changeover from energy subsidies to cash transfers. From the abstract, by DJAVAD SALEHI-ISFAHANI and MOHAMMED H. MOSTAFAVI-DEHZOOEI of the ECONOMIC RESEARCH FORUM:

    “This paper examines the impact of a national cash transfer program on labor supply in Iran. […] We find no evidence that cash transfers reduced labor supply, in terms of hours worked or labor force participation. To the contrary, we find positive effects on the labor supply of women and self-employed men.”

    Most recent version here. The ungated working paper is available here.

    • Another paper co-authored by Salehi-Isfahani further details the energy subsidies program and the role that cash transfers played in the reforms, with a specific focus on differences in take-up. Link.
    • We’ve previously shared work from Damon Jones and Ioana Marinescu on the Alaska Permanent Fund dividend, which found that “a universal and permanent cash transfer does not significantly decrease aggregate employment.” Link.
    • In other Basic Income news, petitions and protests are being organized in response to the cancellation of the Ontario pilot.
    ‡ cash_transfers labor

    PERSPECTIVE DISCONNECT

    A 2007 study offers a lesser-known lineage of governmental aid programs

    ⤷ Guaranteed Income

    A recent Upshot column in the NEW YORK TIMES by EMILY BADGER highlights the work of SUZANNE METTLER, who studies Americans’ seemingly paradoxical opinions about aid and the federal government:

    “Americans are far less likely today than 40 years ago to say in surveys that they trust the government to do what is right or to look out for people like them. At the same time, the share of Americans using nearly all of these other programs has risen.”

    Mettler’s new book, The Government-Citizen Disconnect, deals with the contradiction of widespread reliance on public programs of all kinds while public trust and support for such programs is perilously low. In a paper from 2007, co-authored with ANDREW MILSTEIN, Mettler provides a history of federal aid programs and tracks their relationship to ordinary individuals’ lives, exploring how a citizen’s relationship to the government shapes their civic identity and political preferences. From the paper:

    “Studies routinely illuminate how policies influence the political roles of elites and organized groups, but barely touch on how the state shapes the experiences and responses of ordinary individuals. As a result, we know little about how governance has influenced citizenship over time or how those changes have, in turn, affected politics.

    As a first step in addressing this void, we have amassed data that begin to measure the timing and extent of U.S. federal government’s presence in citizens’ lives historically. We present these data in this research note in an effort to help facilitate a bridge between scholarship on American political development and the study of mass political behavior. Although the government-citizen relationship can be studied through other lenses, including the qualifications for legal citizenship, civil rights, or voting rights, or the terms of conscription for military service, we choose to focus on the coverage and benefit rates of major programs through which government offers financial assistance, goods, and/or services or otherwise directly affects their standard of living. In addition to such obvious choices as social insurance and public assistance programs, we consider a wide array of programs including agricultural subsidies, veterans’ educational benefits, and tax deductions for home mortgage interest.

    Government programs might influence citizens’ attitudes about government, and fluxuation in programs could help explain changes in such views over time. Citizens’ experiences as beneficiaries might affect their trust and confidence in government, their perceptions of their own political efficacy, and the extent to which government is responsive to people like them.”

    Link to the study. ht Will for the links in this spotlight.

    • In her own op-ed in the Times, Mettler examines public imagination around welfare, finding that perception of welfare is correlated with perception of the government at large: “One factor, however, did consistently shape Americans’ views about government: their perception of ‘welfare.’ Those who had highly unfavorable opinions of welfare, regardless of how many social benefits they themselves had received, held much more negative views about government. People seemed to view welfare as a microcosm of government: If they perceived it as a ‘handout’ for the undeserving, or felt that they were unfairly denied benefits because they earned too much, they held government in low esteem. Conservatives capitalize on the willingness of many Americans to blame ‘welfare’ recipients, while ignoring the pillaging of the public sector by the affluent through tax cuts and tax code benefits.” Link.
    • There is a substantial social science literature on perceptions of welfare that explores the racialized nature of public opinion regarding various assistance programs. This 2006 paper by Nicholas Winter looks at racial perceptions of Social Security versus “welfare,” and this 2014 paper by Martin Gilens finds that “racial attitudes are the single most important influence on whites’ welfare views.”
    • “Questions of dessert are necessarily moral questions—‘what do we owe each other’ is simply another way of framing the fundamental question of justice.” Link.
    ‡ welfare

    + + +

    • An enlightening review paper from Sam Corbett-Davies and Sharad Goel covers the recent literature on fairness in machine learning: “We show that all three popular definitions of algorithmic fairness—anti-classification, classification parity, and calibration—suffer from deep statistical limitations.” Link.
    • On some failed monetary technologies, from the excellent Moneyness blog. Link.
    • From Adam Tooze, America’s Political Economy: Inequality in 2D and 3D: “Did inequality really surge in the US from the 1970s? Did earnings for the majority really flatline from the bicentennial?” Link.
    • Trevon D. Logan with a new paper co-authored by Lisa Cook and John Parman that looks at the relationship between rural segregation and lynching in the south. Using the “next door neighbor segregation measure,” they find “racially segregated counties were much more likely to experience lynchings.” Link.
    • Martin Ravallion’s new working paper with the Center for Global Development wades into the RCT debates, asking “Should the Randomistas (Continue to) Rule?” Link.
    • New work from the Urban Institute and AEI provides detailed analysis of the trends and processes of defaulting on student loans, and advocates for simple and clear default processes that would lower the default rate. Link to a summary blog post, link to the Urban Institute report, link to the AEI report.
    • Did austerity cause Brexit? Link.
    • A new paper from the Human Capital and Economic Opportunity working group provides a comprehensive overview of research on discrimination in mortgage underwriting, covering disparate impact legal cases, the Supreme Court’s “Inclusive Communities” decision, CFPB regulations, and recent developments in FinTech. Link. ht Will
    • A new paper by Rebecca Goldstein, Michael Sances, and Hye Young You finds that local police departments that collect greater shares of their revenue from fee and fines solve violent and property crimes at significantly lower rates. Link. (For more on fee and fine farming and criminal justice debt, see this newsletter from March.)
    • A short but insightful thread from economist Scott Cunningham on descriptive research: “Descriptive work is really more of a public good. How often did I hear people say that Piketty’s book was valuable if only for the documenting of wealth inequality? Why? Because descriptive work creates research agendas. In that sense, description can function like theory.” Link.

  4. Constellation

    Comments Off on Constellation

    ALCHEMIST STOCK

    Automation, employment, and capital investment

    ⤷ Guaranteed Income

    At his blog STUMBLING AND MUMBLING, CHRIS DILLOW discusses recent reporting on rapid automation fears in the United Kingdom:

    “‘More than six million workers are worried their jobs could be replaced by machines over the next decade’ says the Guardian. This raises a longstanding paradox – that, especially in the UK, the robot economy is much more discussed than observed.

    What I mean is that the last few years have seen pretty much the exact opposite of this. Employment has grown nicely whilst capital spending has been sluggish. The ONS says that ‘annual growth in gross fixed capital formation has been slowing consistently since 2014.’ And the OECD reports that the UK has one of the lowest usages of industrial robots in the western world.

    My chart, taken from the Bank of England and ONS, puts this into historic context. It shows that the gap between the growth of the non-dwellings capital stock and employment growth has been lower in recent years than at any time since 1945. The time to worry about machines taking people’s jobs was the 60s and 70s, not today.… If we looked only at the macro data, we’d fear that people are taking robots’ jobs – not vice versa.”

    Link to the post. ht Sidhya

    Dillow offers some possible theories for declining capital stock. Among the various possible causes are the findings from a 2005 paper by WILLIAM NORDHAUS, which shows that innovation doesn’t pay well except for a small fraction of firms. Link to that paper.

    • Robert Gordon in 2012 on the links between capital investment, innovation, and economic growth: “The paper is about “how much further could the frontier growth rate decline?” The analysis links periods of slow and rapid growth to the timing of the three industrial revolutions (IR’s), that is, IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present. It provides evidence that IR #2 was more important than the others and was largely responsible for 80 years of relatively rapid productivity growth between 1890 and 1972. Once the spin-off inventions from IR #2 (airplanes, air conditioning, interstate highways) had run their course, productivity growth during 1972-96 was much slower than before. In contrast, IR #3 created only a short-lived growth revival between 1996 and 2004.” Link.
    • A paper on the decline in research productivity from Nicholas Bloom, Charles I. Jones, John Van Reenen, and Michael Webb, whose work on investment and innovation we’ve linked to previously. Link.
    • Mark Paul’s ambitious Roosevelt Institute report on labor and automation, “Don’t Fear the Robots,” which we shared here on its publication in June, examines the situation and offers broad policy proposals for the management of technology’s effect on labor—rapid or otherwise. Link.
    ‡ automation r_and_d future_of_work

    CONFOUNDING VARIABLES

    Contrasting two study methodologies

    ⤷ Metaresearch

    A paper by DAMON JONES, DAVID MOLITOR, AND JULIAN REIF, covered in a widely-shared New York Times article, shows the enduring importance of randomized controlled trials, and emphasizes that observational analyses are prone to selection bias and so do not provide an accurate assessment of impact, here on wellness programs’ effectiveness. From the Times:

    “The results [from the randomized controlled trial] were disappointing. There seemed to be no causal effects. Here’s the nerdy fun part, though. In addition to this analysis, the researchers also took the time to analyze the data as if it were an observational trial.”

    These methodological issues have specific consequences here, as they likely do elsewhere:

    “The prior literature has overlooked important questions regarding selection into wellness programs. Wellness incentives may shift costs onto unhealthy or lower-income employees if these groups are less likely to participate in wellness programs. Furthermore, wellness programs may act as a screening device by encouraging employees who benefit most from these programs to join or remain at the firm—perhaps by earning rewards for behaviors they already enjoy.”

    Link to the full paper.

    • On the observational vs. RCT debate: a systematic overview of over one thousand education-related RCTs conducted between 1980 and 2016, addressing major criticisms of the use of RCTs in education contexts. Link.
    • In 2014, Cochrane published a systematic review of RCTs vs. observational studies in the healthcare context. “Our results underscore that it is important for review authors to consider not only study design, but the level of heterogeneity in meta-analyses of RCTs or observational studies…In order to understand why RCTs and observational studies addressing the same question sometimes have conflicting results, methodological researchers must look for explanations other than the study design per se.” Link.
    ‡ metaresearch

    + + +

    • The Electronic Frontier Foundation exposes the Sacramento Country Department of Human Assistance’s startling misuse of automated license plate readers to track welfare recipients in Sacramento County. Link.
    • A new study on solar geoengineering examines expected impacts on crops. Link. ht Bobby and Jack
    • An AMA from a participant in the (now cancelled) Ontario basic income pilot: “A person deserves the chance to realise the potential they have irrespective of the barriers they face. What that potential is will vary from person to person, but it is in society’s best interest to extract it, and the best interest of the individual to bring it forward. I find it baffling that some cannot look past the dollar figures. This is about equality of opportunity, not equality of results, yet the detractors of progressive policy claim it to be exactly the opposite.” Link. ht Lauren
    • “Branchless banking”: Examining the effects of India’s recent financial inclusion drive, which increased rural access to financial institutions through mobile technologies. Link.
    • A 2013 paper from Suresh Naidu and Noam Yuchtman examines law and the labor market in industrial Britain: “British Master and Servant law made employee contract breach a criminal offense until 1875… Positive shocks in the textile, iron, and coal industries increased prosecutions. Following the abolition of criminal sanctions, wages differentially rose in counties that had experienced more prosecutions, and wages responded more to labor demand shocks.” Link.
    • A new paper published by Equitable Growth and co-authored by Mark Paul (already referenced above), Khaing Zaw, Darrick Hamilton, and William Darity Jr. (whose work we’ve shared several times in the past) on intersectionality and the wage gap. “There is no single ‘gender’ or ‘race’ wage penalty… holding multiple identities cannot readily be disaggregated in an additive fashion. Instead, the penalties associated with the combination of two or more socially marginalized identities interact in multiplicative or quantitatively nuanced ways.” Link.
    • From Growth Econ, a review of Mariana Mazzucato’s new book The Value of Everything. Link.
    • Rachel Thomas at Fast.AI has written a clarion response to Alex Miller’s HBR piece “Want less biased decisions? Use algorithms.” Thomas writes: “Miller’s HBR article points out (correctly) that humans are very biased, and then compares our current not-so-great approaches to see which is less terrible. The article does not ask the question, how can we develop less biased ways to make decisions (perhaps using some combination of humans and algorithms)? which is a far more interesting and important question.” Link.
    • Religious prophesying glitch from Google Translate. Link. ht Margarita
    • In an unprecedented data visualization project, Mapping Inequality offers access to the HOLC’s “security maps” and explores the New Deal’s lasting effects on intergenerational poverty and spatial segregation. Link.
    • New research by Katherine Eriksson and Zach Ward examines trends in spatial segregation and the rate of immigration assimilation in the late 19th and early-20th century. “New methods and newly digitized data suggest that segregation in the US between 1850 and 1940 was both higher and more widespread than previously thought. However, despite slow rates of spatial assimilation, immigrants tend to assimilate culturally at a fast rate.” Link.

  5. The Great Abundance

    Comments Off on The Great Abundance

    ENERGY BOOM

    A new carbon tax proposal and a big new carbon tax research report

    ⤷ Geoengineering

    Representative Carlos Curbelo (R-FL) introduced a carbon tax bill to the House last week (though it is “sure to fail” with the current government, it’s unusual to see a carbon tax proposed by a Republican). According to Reuters popup: yes, “Curbelo said the tax would generate $700 billion in revenue over a decade for infrastructure investments.” A deep analysis popup: yes is available from The Center on Global Energy Policy at Columbia SIPA, which started up a Carbon Tax Initiative this year.

    For a broader look at carbon taxes, earlier this month the Columbia initiative published a significant four-part series on the “economic, energy, and environmental implications of federal carbon taxes” (press release here popup: yes).

    The overview covers impacts on energy sources:

    “The effects of a carbon tax on prices are largest for energy produced by coal, followed by oil, then natural gas, due to the difference in carbon intensity of each fuel. Every additional dollar per ton of the carbon tax increases prices at the pump by slightly more than one cent per gallon for gasoline and slightly less than one cent per gallon for diesel.”

    And examines a few possible revenue uses:

    “How the carbon tax revenue is used is the major differentiating factor in distributional outcomes. A carbon tax policy can be progressive, regressive, or neither.”

    Overview here popup: yes. Link popup: yes to report on energy and environmental implications; link to report popup: yes on distributional implications; link to report popup: yes on implications for the economy and household welfare.

    • The economy/welfare report imagines a few possibilities as to how a carbon tax could reduce payroll taxes or provide rebates to households. To give a sense of the scale of lump-sum rebates to households: “For the benchmark case, these rebates are initially $1,751 per household and increase to 2,091 USD per household by 2029, to 2,945 USD per household by 2039, and to 5,985 USD per household by 2069.” Though this is a “quite progressive” option, the modeling finds negative macroeconomic effects because “labor supply and the capital stock decrease” (30, 29). Link popup: yes.
    • At Vox, David Roberts has a piece on carbon taxes in general, including quotes from Noah Kaufman, who runs the Carbon Tax Initiative at Columbia. One of the key points from the article is the insufficiency of conventional economic modeling. Roberts asks why carbon tax scenarios are usually modeled as revenue neutral: “Why not rebate (or reduce payroll taxes) enough to protect low- and middle-income Americans and then use the rest for clean energy infrastructure and transition assistance for vulnerable communities?” Kaufman responds: “‘Economic models in this space are typically not designed to do revenue positive scenarios,” he told me, ‘and in my experience, modelers are uncomfortable with the idea of projecting the economic impacts of additional government spending.’ He hopes, as do I, that modelers get a little more adventurous in this respect. Of all the reasons to make a carbon tax revenue-neutral, ‘difficulty modeling anything else’ is among the worst.” Link popup: yes.
    ‡ carbon_tax climate

    EXCHANGE SERIES

    A newly published data set captures world trade back to 1800

    ⤷ National Metrics and GDP

    Economists GIOVANNI FEDERICO and ANTONIO TENA-JUNGUITO have published The World Trade Historical Database, a compiled set of import and export data for trading polities beginning in the year 1800. 

    From a post at VoxEU introducing the project: 

    “Since 2007, the apparently unstoppable growth of world trade has come to a halt, and the openness of the world economy has been stagnating, or even declining. The recent prospect of a trade war is fostering pessimism for the future. Some people are hinting at a repetition of the Great Depression. These historical parallels are fascinating, although somewhat risky. At the very least, one should know exactly what happened to trade in the past. This is fairly easy for recent years, but the series available for the pre-1938 period are incomplete, obsolete, and sometimes just wrong.”

    Link popup: yes to the post. The project involved compiling data from a wide range of historical sources and estimates from the secondary literature. Their methods paper provides an overview of existing series and the deficiencies their new work addresses.  

    Link popup: yes to the project website; link popup: yes to the paper.

    • A 2017 paper by Federico and Tena-Junguito uses the data to compare globalization waves prior to 2007. “We describe trends in trade and openness, investigate the proximate causes of change in openness and estimate the gains from trade from the early nineteenth century onwards. Our results suggest that the conventional wisdom has to be revised.” Link popup: yes. 
    • The 18th World Economic History Congress took place in Boston July 29 – August 3rd, with the theme Waves of Globalization. “The political world looks very different today than it did just a few years ago, even if the fundamentals of the international economy have not changed much. This strikes me as exactly the moment when the work of economic historians is of greatest importance.” Link popup: yes to the conference page with program listings, and link popup: yes to a Q&A with Professor Anne McCants.
    ‡ history economic_history trade

    +++

    • In Nature, an interview with Brent Hecht, who recently proposed an intervention in the peer-review process to foster ethical considerations of new computer science research: “the computer-science community should change its peer-review process to ensure that researchers disclose any possible negative societal consequences of their work in papers, or risk rejection.” Link popup: yes to the interview, link popup: yes to the proposal.
    • A great resource that assumes no prior knowledge: the 2018 edition of the Handbook on European Data Protection Law. “Explains key case law, summarising major rulings of both the Court of Justice of the European Union and the European Court of Human Rights. In addition, it presents hypothetical scenarios that serve as practical illustrations of the diverse issues encountered in this ever-evolving field.” Link popup: yes. 
    • Doug Ford has cancelled Ontario’s basic income pilot program. Link popup: yes. And link popup: yes to ESP’s Taylor Jo Isenberg’s Medium post on the news. 
    • The Data Transfer Project—a collaboration between Facebook, Google, Microsoft, and Twitter focussed on the development of an open-source data portability platform—has released its white paper. Link popup: yes. And link popup: yes to some coverage in the Verge. 
    • On the path-dependency of town locations, from Roman Britain and France to the present: “The divergent paths of these two urban networks makes it possible to study the spatial consequences of the ‘resetting’ of an urban network, as towns across Western Europe re-emerged and grew during the Middle Ages.” Link popup: yes. 
    • A post at VoxEU explores the history and revenue effects of computerized VAT enforcement in China. Link popup: yes. 
    • Income-contingent university loans. “The objective of this system is to share the costs of education between beneficiaries and the government…. Risks are also shared. If the education provided is of poor quality, and the return is low, the cost is borne by the public sector. This suggests that the public sector will have a greater incentive to monitor the quality of education under the system, since it bears more of the cost of bad outcomes.” Link popup: yes. 
    • A report from the Aspen Institute: 16% of suicides in America are related to financial obligations. Link popup: yes.  ht Barry
    • A New America economist gives a left-leaning interpretation of globalization. “The conventional wisdom is there have been two globalizations in the modern era. The first began around 1870 and ended in 1914. The second began in 1945 and is still underway. This paper challenges that view and argues there have been three globalizations, not two…. The Victorian first globalization and Keynesian era second globalization were driven by gains from trade, and those gains increased industrialized country real wages. The neoliberal third globalization has been driven by industrial reorganization motivated by distributional conflict. Trade theory does not explain the third globalization; capital’s share has increased at the expense of labor’s; and there can be no presumption of mutually beneficial country gains from the third globalization.” Link popup: yes. 
    • From Brookings, a paper on the effects of closing local newspapers: “Three years after a newspaper closure, municipal bond yields in that county increase by 0.05 to 0.11 percentage points… newspaper closures are associated with deterioration in many government efficiency metrics, including government wage rates, government employees per capita, and tax dollars per capita.” Link popup: yes to an explanatory blog post, link popup: yes to the paper. 
    • History of economics: “Hayek, Hicks, Radner, and Three Equilibrium Concepts.” Link popup: yes.
    • On his blog, Kevin Bryan explains how this year’s Fields medal relates to economics. “The history of economics has been a long series of taking tools from the frontier of mathematics… We are now making progress on pricing issues that have stumped some of the great theoretical minds in the history of the field.” Link popup: yes.

  6. Jetty

    Comments Off on Jetty

    BANKING AS ART

    On the history of economists in central banks 

    ⤷ Metaresearch

    A recent paper by FRANÇOIS CLAVEAU and JÉRÉMIE DION applies quantitative methods to the historical study of central banks, demonstrating the transition of central banking from an “esoteric art” to a science, the growth of economics research within central banking institutions, and the corresponding rise in the dominance of central banks in the field of monetary economics. From the paper: 

    “We study one type of organization, central banks, and its changing relationship with economic science. Our results point unambiguously toward a growing dominance of central banks in the specialized field of monetary economics. Central banks have swelling research armies, they publish a growing share of the articles in specialized scholarly journals, and these articles tend to have more impact today than the articles produced outside central banks.”

    Link to the paper, popup: yes which contains a vivid 1929 dialogue between Keynes and Sir Ernest Musgrave Harvey of the Bank of England, who asserts, “It is a dangerous thing to start giving reasons.” 

    ht to the always-excellent Beatrice Cherrier who highlighted this work in a brief thread popup: yes and included some visualizations, including this one showing the publishing rate of central banking researchers: 

    • Via both Cherrier and the paper, a brief Economist article on the crucial significance of the central banking conference in Jackson Hole, hosted by the Federal Reserve Bank of Kansas City: “Davos for central bankers.” Link popup: yes. (And link popup: yes to an official history of the conference.) 
    • Another paper co-authored by Claveau looks at the history of specialties in economics, using quantitative methods to map the importance of sets of ideas through time. “Among our results, especially noteworthy are (1) the clear-cut existence of ten families of specialties, (2) the disappearance in the late 1970s of a specialty focused on general economic theory, (3) the dispersal of the econometrics-centered specialty in the early 1990s and the ensuing importance of specific econometric methods for the identity of many specialties since the 1990s, and (4) the low level of specialization of individual economists throughout the period in contrast to physicists as early as the late 1960s.” Link popup: yes. 
    ‡ risk history metaresearch

    TRUE PREFERENCES

    Behavioral economics in policy

    ⤷ Guaranteed Income

    From Elsevier’s upcoming Handbook on Behavioral Economics, a chapter by DOUGLAS BERNHEIM and DMITRY TAUBINSKY includes an illuminating overview of different concepts of welfare, then an in-depth overview of the use of behaviorial economics (“nudges” and much more) in policy.

    “This handbook chapter summarizes the emerging field of BPE [Behavioral Public Economics]. A comparison with Bernheim and Rangel (2007), which assessed the state of the nascent field roughly a dozen years ago, reveals that progress has been dramatic. Our focus is on the normative questions that have historically played central roles in the field of Public Economics; we are not primarily concerned with research that only aims to describe the positive effects of government policies. There are at least two ways to organize such a chapter: we could focus on substantive policies, considering relevant behavioral phenomena in each instance, or on behavioral phenomena, describing the various policy implications in each instance. Consistent with our substantive focus, we adopt the first of these approaches. The challenge for BPE that we seek to highlight throughout this chapter is the need to maintain the tight link between empirically measurable statistics and welfare estimates, while moving beyond the revealed preferences assumption.”

    Link popup: yes to NBER; link popup: yes to free copy.

    • Stefano DellaVigna is also contributing a chapter to the handbook, on “the role of structural estimation in behaviorial economics.” “As the policy application of behavioral ideas goes mainstream in the policy world, and as its ideas are used by governments on the right and on the left, in the academic literature there still are remarkably few cases of welfare evaluations of policy applications of behavioral findings. Yet, welfare evaluations are important, just as they matter within standard economics, and in fact even more, given the conceptual difficulties of handling, for example, multiple selves in self-control models, or individuals with wrong beliefs. I review here some of contributions in six areas in which there are relevant insights from a welfare evaluation based on structural estimation.” Link popup: yes to NBER; link popup: yes to free copy.
    • Richard Thaler’s personal history of behavioral economics, a modified version of his Nobel Prize speech from 2017, is full of anecdotes from a lifetime of study. “We were only trying to discern what citizens consider to be unfair; that is, we were after a descriptive model of fairness. Put simply, what actions by firms make people angry? One key factor is whether people think the firm is taking away something to which people believed they were entitled; such actions are coded as losses. We learned that many subtleties influence whether an action is considered to be imposing a loss.” Free copy available here popup: yes.
    ‡ welfare behavioral_economics

    POWER GRADIENTS

    Brad DeLong on Chinese economic history 

    ⤷ National Metrics

    On his blog, BRAD DELONG has been posting outtakes from Slouching Towards Utopia?, his upcoming book popup: yes. He writes at great length on the frequently-asked question, “Why was the 20th century not a Chinese century?”

    “The fact is that, outside the charmed circles created by the extraterritorial foreign concessions, and to a slight degree the immediate span of control of the few modernizing governors, modern industries did not develop and modern technologies were simply not applied in late imperial China. The typical Qing bureaucrat was hostile. But the typical Qing bureaucrat was also interested. There was rough equilibrium in how much money Qing bureaucrats were expected to squeeze from landlords (not that much), merchants and traders (significant but limited), and others who needed government action (as much as they could grab).”

    Full post here popup: yes. The rest of DeLong’s notes and outtakes from the book are available here popup: yes.

    • Tangentially related, Mark Dincecco and Yuhua Wang’s recent paper, “Violent Conflict and Political Development Over the Long Run: China Versus Europe popup: yes,” looks to history to explain why China did not develop representative government. The paper elicited a response from the Scholar’s Stage: “The problems comes when you attempt to apply Tilly’s famous framing outside the European experience. War is a constant of human history. Strong states are not. Strong states with representative institutions are even more difficult to find. If Tilly’s ‘bellicist’ model of state formation is valid, then why doesn’t it work outside of Europe?” Link popup: yes.
    • For a brief look at more recent history, Julian Gewirtz takes stock of the 40-year anniversary of “Reform and Opening”: “Xi envisions China becoming a superpower with the Party firmly in control over all aspects of life.” Link popup: yes.
    ‡ history

    +++

    • Breyon Williams finds that the effects of student aid differ for high-income and low-income students. “Among merit-aid recipients, student aid benefits low-income students only, increasing their GPAs and graduation prospects. These students may respond to the additional aid by working less.” Link popup: yes. ht Barry
    • Annie Lowrey writes about Opportunity Zones: “Across the country, states, mayors, and development officials have scrambled to identify those in-between places and figure out how to shepherd the private dollars that might get spent in them.” Link popup: yes.
    • Tim Dutton rounds up national AI strategies. There’s huge variation between nations, but many countries are preparing guidelines, frameworks, or regulations around ethics. Link popup: yes. ht Margarita
    • Student debt’s impact on entrepreneurship: “Our results document a significant adverse effect of student loans on a crucial engine of economic growth–high impact, venture capital backed startups–highlighting a major policy-relevant concern related to student loans.” Link popup: yes. ht Will
    • From Gabriel Zucman popup: yes et al, further work on the macro evidence and impact of offshore tax havens: “The equivalent of 10% of world GDP is held in tax havens globally, but this masks a great deal of heterogeneity… We use these estimates to construct revised series of top wealth shares in ten countries, which account for close to half of world GDP.” Link popup: yes.
    • At Data & Society, danah boyd and Michael Golebiewski describe “data voids,” how search engine results can be manipulated or misleading. Link popup: yes. ht Lauren
    • Diane Coyle writes about three way regulation can improve an economy. Link popup: yes.
    • An upcoming study from Tatjana Meschede, Joanna Taylor et. al. continues an examination of racial wealth disparities among college grads, focusing on the cost of attaining  a college degree and the impact of intergenerational “transformative asset” transfers (i.e. inheritance). Link popup: yes. ht Jack
    • “Can investing in children who faced adverse events in early childhood help them catch up?” New evidence using data from the PROGRESA experiment looks at the (ameliorative) effects of cash transfers on outcomes for children in agrarian communities who suffered from adverse rainfall early in their lifetimes. Link popup: yes. 
    • “We study the causal connection between trade and development using one of the earliest massive trade expansions: the first systematic crossing of open seas in the Mediterranean during the time of the Phoenicians.” Link popup: yes.

  7. High Noon

    Comments Off on High Noon

    ALTERNATIVE ACTUARY

    History of risk assessment, and some proposed alternate methods 

    ⤷ Digital Ethics

    A 2002 paper by ERIC SILVER and LISA L. MILLER on actuarial risk assessment tools provides a history of statistical prediction in the criminal justice context, and issues cautions now central to the contemporary algorithmic fairness conversations:  

    “Much as automobile insurance policies determine risk levels based on the shared characteristics of drivers of similar age, sex, and driving history, actuarial risk assessment tools for predicting violence or recidivism use aggregate data to estimate the likelihood that certain strata of the population will commit a violent or criminal act. 

    To the extent that actuarial risk assessment helps reduce violence and recidivism, it does so not by altering offenders and the environments that produced them but by separating them from the perceived law-abiding populations. Actuarial risk assessment facilitates the development of policies that intervene in the lives of citizens with little or no narrative of purpose beyond incapacitation. The adoption of risk assessment tools may signal the abandonment of a centuries-long project of using rationality, science, and the state to improve upon the social and economic progress of individuals and society.”

    Link popup: yes to the paper.

    A more recent paper presented at FAT* in 2018 and co-authored by CHELSEA BARABAS, KARTHIK DINAKAR, JOICHI ITO, MADARS VIRZA, and JONATHAN ZITTRAIN makes several arguments reminiscent of Silver and Miller’s work. They argue in favor of causal inference framework for risk assessments aimed at working on the question “what interventions work”:

    “We argue that a core ethical debate surrounding the use of regression in risk assessments is not simply one of bias or accuracy. Rather, it’s one of purpose.… Data-driven tools provide an immense opportunity for us to pursue goals of fair punishment and future crime prevention. But this requires us to move away from merely tacking on intervenable variables to risk covariates for predictive models, and towards the use of empirically-grounded tools to help understand and respond to the underlying drivers of crime, both individually and systemically.”

    Link popup: yes to the paper. 

    • In his 2007 book Against Prediction popup: yes, lawyer and theorist Bernard Harcourt provided detailed accounts and critiques of the use of actuarial methods throughout the criminal legal system. In place of prediction, Harcourt proposes a conceptual and practical alternative: randomization. From a 2005 paper on the same topic: “Instead of embracing the actuarial turn in criminal law, we should rather celebrate the virtues of the random: randomization, it turns out, is the only way to achieve a carceral population that reflects the offending population. As a form of random sampling, randomization in policing has significant positive value: it reinforces the central moral intuition in the criminal law that similarly situated individuals should have the same likelihood of being apprehended if they offend—regardless of race, ethnicity, gender or class.” Link popup: yes to the paper. (And link popup: yes to another paper of Harcourt’s in the Federal Sentencing Reporter, “Risk as a Proxy for Race.”) 
    • A recent paper by Megan Stevenson assesses risk assessment tools: “Despite extensive and heated rhetoric, there is virtually no evidence on how use of this ‘evidence-based’ tool affects key outcomes such as incarceration rates, crime, or racial disparities. The research discussing what ‘should’ happen as a result of risk assessment is hypothetical and largely ignores the complexities of implementation. This Article is one of the first studies to document the impacts of risk assessment in practice.” Link popup: yes. 
    • A compelling piece of esoterica cited in Harcourt’s book: a doctoral thesis by Deborah Rachel Coen on the “probabilistic turn” in 19th century imperial Austria. Link popup: yes.
    ‡ risk digital_ethics

    AGGREGATE PATTERNS

    A new organization provides scholars access to Facebook data

    ⤷ Metaresearch

    “Social Science One implements a new type of partnership between academic researchers and private industry to advance the goals of social science in understanding and solving society’s greatest challenges. The partnership enables academics to analyze the increasingly rich troves of information amassed by private industry in responsible and socially beneficial ways. It ensures the public maintains privacy while gaining societal value from scholarly research. And it enables firms to enlist the scientific community to help them and produce social good, while protecting their competitive positions.”

    Link popup: yes to the overview. A paper by GARY KING and NATE PERSILY details the conceptualizing, structuring, and funding of Social Science One, as well as its ethics standards. Link popup: yes. ht Will

    Here’s the first data set Social Science One has arranged to make accessible to researchers:

    “The data describes web page addresses (URLs) that have been shared on Facebook starting January 1, 2017 and ending about a month before the present day. URLs are included if shared by at least 20 unique accounts, and shared publicly at least once. We estimate the full data set will contain on the order of 2 million unique urls shared in 300 million posts, per week.”

    Link popup: yes to the dataset, which was posted earlier this month and has been downloaded hundreds of times.

    • Social science is increasingly preoccupied with, as SSO puts it, “enabl[ing] academics to analyze the increasingly rich troves of information amassed by private industry.” Just in the past six months we’ve spotlighted research in the same vein from Dan Herbst popup: yes (linking Transunion credit bureau data with student loan servicing files), Ozan Jaquette popup: yes (scraping travel data from college admissions counselors), and Matt Desmond popup: yes (combining formal eviction records with county-level data on landlord-tenant cases).
    • Last month, professors at Princeton and Duke (with funding from Russell Sage and Sloan) hosted the second-annual Summer Institute in Computational Social Science popup: yes, a 13-day workshop that trains early-career scholars in digital field experiments, web scraping, and mass collaboration. Gary King and Sendhil Mullainthan were among the speakers. Syllabus and slides here popup: yes.
    • Yale’s sociology department—the oldest in America—recently posted popup: yes multiple tenure track job openings for “applicants whose work uses quantitative methods to study social inequality.” There’s a new popup: yes (launched January 2018) Journal of Computational Social Science as well.
    ‡ data privacy metaresearch

    +++

    • Where Historians Work, an interactive database which “tracks the current employment status (as of 2017) of history and history of science PhDs who graduated from all 161 history PhD-granting departments in the United States from 2004 to 2013.” Link popup: yes.
    • On a similar note, an interactive map from the Hamilton Project shows wage variation, sortable by occupation, across the country. Link popup: yes. 
    • Tort law and the internet: “IoT devices enable both familiar and new opportunities for harmful industry overreach, with the added twist that these practices can now cause physical harm and property damage. Simultaneously, there is little government oversight or routes of recourse for injured consumers under extant law.” Link popup: yes.
    • UBI news: In Chicago, alderman Ameya Pawar has introduced legislation to create a UBI pilot. Link popup: yes. Obama mentioned his support for the idea in a speech in South Africa. Link popup: yes.
    • An overview of ISAs in the Economist. Link popup: yes. ht  Will
    • For the mobility files: New work from Card, Domnisoru and Taylor suggests “an important causal role for school quality in mediating upward mobility.” Link popup: yes.
    • Economist Trevor Logan with a paper on the marriage rates and patterns of enslaved African Americans in Louisiana, using unique hospital records. Link popup: yes. 
    • The Matthew effect in NIH research funding. “Prestigious institutions had on average 65% higher grant application success rates and 50% larger award sizes, whereas less-prestigious institutions produced 65% more publications and had a 35% higher citation impact per dollar of funding.” Link popup: yes. 
    • “Mexican manufacturing job loss induced by competition with China increases cocaine trafficking and violence, particularly in municipalities with transnational criminal organizations.” Link popup: yes. 
    • From Ken Opalo’s Africanist Perspective blog: “Is Somalia’s Al Shaabab better at tax collection than most low-income states?” Link popup: yes. 
    • “Can technological change contribute to political turnover?… High-yielding variety (HYV) crops strengthened the incentives and capacity of a politically excluded group, in this case agricultural producers, to seek greater political representation and played a role in the rise of agrarian opposition parties and decline of single-party dominance.” Link popup: yes. 
    • “Why randomized controlled trials inevitably produce biased results.” Link popup: yes. ht Sidhya
    • Our friends and collaborators at the Stanford Basic Income Lab are hiring a project manager. Job description here popup: yes.  

  8. Traveling Light

    Comments Off on Traveling Light

    DATA IS NONRIVAL

    Considerations on data sharing and data markets 

    ⤷ Guarantee Income

    CHARLES I. JONES and CHRISTOPHER TONETTI contribute to the “new but rapidly-growing field” known as the economics of data:

    “We are particularly interested in how different property rights for data determine its use in the economy, and thus affect output, privacy, and consumer welfare. The starting point for our analysis is the observation that data is nonrival. That is, at a technological level, data is not depleted through use. Most goods in economics are rival: if a person consumes a kilogram of rice or an hour of an accountant’s time, some resource with a positive opportunity cost is used up. In contrast, existing data can be used by any number of firms or people simultaneously, without being diminished. Consider a collection of a million labeled images, the human genome, the U.S. Census, or the data generated by 10,000 cars driving 10,000 miles. Any number of firms, people, or machine learning algorithms can use this data simultaneously without reducing the amount of data available to anyone else. The key finding in our paper is that policies related to data have important economic consequences.”

    After modeling a few different data-ownership possibilities, the authors conclude, “Our analysis suggests that giving the data property rights to consumers can lead to allocations that are close to optimal.” Link to the paper popup: yes.

    • Jones and Tonetti cite an influential 2015 paper by Alessandro Acquisti, Curtis R. Taylor, and Liad Wagman on “The Economics of Privacy”: “In digital economies, consumers’ ability to make informed decisions about their privacy is severely hindered, because consumers are often in a position of imperfect or asymmetric information regarding when their data is collected, for what purposes, and with what consequences.” Link popup: yes.
    • For more on data populi, Ben Tarnoff has a general-interest overview in Logic Magazine, including mention of the data dividend and a comparison to the Alaska Permanent Fund. Tarnoff uses the oil industry as an analogy throughout: “In the oil industry, companies often sign ‘production sharing agreements’ (PSAs) with governments. The government hires the company as a contractor to explore, develop, and produce the oil, but retains ownership of the oil itself. The company bears the cost and risk of the venture, and in exchange receives a portion of the revenue. The rest goes to the government. Production sharing agreements are particularly useful for governments that don’t have the machinery or expertise to exploit a resource themselves.” Link popup: yes.
    ‡ data privacy

    ANCESTRAL INSTABILITY

    Linking climate fluctuations to the pace of cultural change

    ⤷ Geoengineering

    Economics researchers PAOLA GIULIANO and NATHAN NUNN look into 1,500 years of variations in temperatures and drought conditions and a variety of cultural practices, and find that “populations with ancestors who lived in more variable environments place less importance on tradition today.” This supports assumptions already in use:

    “Our findings also provide empirical validation of a class of models from evolutionary anthropology that provide a foundation for the assumptions made in the models used in cultural economics […]. Within this class of evolutionary models, under general circumstances, some proportion of the population finds it optimal to rely on social learning – that is, culture – when making decisions. This result provides a justification for the assumption in models of cultural evolution that parents choose to and are able to influence the preferences of their children. The only previous empirical tests of these models, as far as we are aware, is done in a laboratory setting using either rats […] or students.”

    Full working paper available here popup: yes.

    • Murat Iyigun and Jared Rubin build on the above work: “Our model suggests the complement to [Giuliano and Nunn’s] argument, indicating that there is a positive correlation between traditional values and uncertainty related to positive economic shocks.” Their paper offers some examples from history: “Historical analytic narratives support the theory, including Ottoman reform initiatives, the Japanese Tokugawa reforms and Meiji Restoration, and the Tongzhi Restoration in Qing China.” Link popup: yes.
    • To facilitate research linking history and economics, Giuliano and Nunn have constructed “a publicly accessible database that measures the economic, cultural, political, and environmental characteristics of the ancestors of current population groups. Specifically, we construct measures of the average pre-industrial characteristics of the ancestors of the populations in each country of the world.” This paper popup: yes describes the database project.
    ‡ climate history

    +++

    • J.W. Mason on the economics of decarbonization: “The economics of climate change look quite different from a Keynesian perspective, in which demand constraints are pervasive and the fundamental economic problem is not scarcity but coordination. In this view, the real resources for decarbonization will not have to be withdrawn from other uses. They can come from an expansion of society’s productive capabilities, thanks to the demand created by clean-energy investment itself.” Link popup: yes, and Mason’s follow-up response popup: yes to commenters.
    • Air pollution’s impact on health in China. Link popup: yes. On Twitter, Alexander Berger points out popup: yes, “Methods on this one are crazy—they got the universe of credit and debit card transactions in China to measure healthcare spending.”
    • Annie Lowrey makes the case for basic income in a New York Times op-ed. Link popup: yes. Lowrey links to a study on the negative income tax from Wiederspan, Rhodes, and Schaefer. Link popup: yes (paywalled).
    • Also on UBI, Ray Dalio has posted a primer on the idea (which, however, covers only one possibility for paying for it). Link popup: yes. 
    • Market failure in kidney exchange: “This paper shows that, despite significant success, the kidney exchange market suffers from market failures that result in hundreds of lost transplants per year. Our descriptive evidence shows that the market is fragmented and operates inefficiently.” Link popup: yes.
    • Cross-state variation in social safety nets. Link popup: yes.
    • Dietrich Vollrath blogs on the industrial revolution and labor hours, then and now: “You could argue that recent innovations have made time-intense consumption items (e.g. Netflix or video games) cheaper. And in a mirror image response to the 1600’s, people are substituting more time-intense consumption for goods-intense consumption. This means that they willingly withdraw labor from the market in order to enjoy those time-intense activities.” Link popup: yes.
    • Adam Tooze provides an overview of key works and thinkers in conceptualizing the national economy: “One of the things that makes me impatient with much ‘radical’ political economy is that it falls so far behind the curve of what mainstream social scientists and economists are doing right now. To answer the present by monotonously reproducing the classics is to follow the inspiration of those great texts in the worst possible way.” Link popup: yes. 
    • The importance of doctor diversity: “Our findings suggest black doctors could help reduce cardiovascular mortality by 16 deaths per 100,000 per year — leading to a 19% reduction in the black-white male gap in cardiovascular mortality.” Link popup: yes.
    • Cathy O’Neil takes stock of “Intensive Partnerships for Effective Teaching” from the Gates Foundation: “Keeping assessment formulas secret is an awful idea, because it prevents experts from seeing their flaws before they do damage.” Link popup: yes.
    • Alex Tabarrok posts a striking chart on car manufacturing to show “trade war costs in a supply-chain world.” Link popup: yes.
    • Another good chart, this one tweeted by Arvind Narayanan: what numerical probabilities do people assign to words like “often” and “possibly”? Link popup: yes.
    • An alternative economics summer reading list, with works “by scholars approaching economics with alternative theoretical frameworks and by scholars from groups that tend to be excluded from the field.” Link popup: yes. ht Ankit
    • Just for fun, cropmarks: “As the drought has persisted across Wales, scores of long-buried archaeological sites have been revealed once again as ‘cropmarks’, or patterns of growth in ripening crops and parched grasslands.” Link popup: yes.

  9. Quodlibet

    Comments Off on Quodlibet

    EVIDENCE PUZZLES

    The history and politics of RCTs 

    ⤷ Guaranteed Income

    In a 2016 working paper, JUDITH GUERON recounts and evaluates the history of randomized controlled trials (RCTs) in the US, through her own experience in the development of welfare experiments through the MDRC and the HHS: 

    “To varying degrees, the proponents of welfare experiments at MDRC and HHS shared three mutually reinforcing goals. The first was to obtain reliable and—given the long and heated controversy about welfare reform—defensible evidence of what worked and, just as importantly, what did not. Over a pivotal ten years from 1975 to 1985, these individuals became convinced that high-quality RCTs were uniquely able to produce such evidence and that there was simply no adequate alternative. Thus, their first challenge was to demonstrate feasibility: that it was ethical, legal, and possible to implement this untried—and at first blush to some people immoral—approach in diverse conditions. The other two goals sprang from their reasons for seeking rigorous evidence. They were not motivated by an abstract interest in methodology or theory; they wanted to inform policy and make government more effective and efficient. As a result, they sought to make the body of studies useful, by assuring that it addressed the most significant questions about policy and practice, and to structure the research and communicate the findings in ways that would increase the potential that they might actually be used.” 

    Link popup: yes to full paper. ht Will

    • In a 2000 paper titled “The Politics of Random Assignment,” Gueron delves into further historically-informed questions about experimental methodology: “Pointing to the conservative effect on policymakers of disputes among experts, [Henry Aaron] asked: ‘What is an ordinary member of the public to do when the witch doctors (the scientists and scholars) disagree?’ He went further, arguing that such conflict not only paralyzes policy but also undercuts the ‘simple faiths’ that often make action possible. Random assignment, because of its unique methodological strengths, can help avoid this kind of conflict—what Aaron called ‘self-cancelling research.” Link popup: yes. 
    • An article from last summer by leading anti-poverty researchers Mary Ann Bates and Rachel Glennerster takes up the “generalizability puzzle” in the global development context, tackling four “common, but misguided” approaches to evidence-based policy, and presents their work—in the form of a “generalizability framework”—as a model for resolving these issues. Link popup: yes. 
    • A 2014 entry in the RCT wars from noted skeptic Lant Pritchett (whose work we’ve linked to previously popup: yes) makes the case against trials, specifically discussing Glennerster’s work at the Abdul Latif Jameel Poverty Action Lab: “An Homage to the Randomistas.” Link popup: yes. (And here’s the link popup: yes to a video of Pritchett’s February presentation at NYU’s Development Research Institute, previously noted in this space.)  
    • And link, again, to an excellent 2017 paper by Angus Deaton and Nancy Cartwright that threads the needle between the opposing sides of the RCT debate. Link popup: yes. 
    ‡ labor randomized_controlled_trials metaresearch future_of_work

    VERTICAL DESPOT

    “How the connectedness of a social network affects the coevolution of despotism in leaders and tolerance to despotism in followers”

    ⤷ Digital Ethics

    CEDRIC PERRET of EDINBURGH NAPIER UNIVERSITY et. al examine how the levels of clique influence, centralization, and connectedness among members of a social network relate to increased or decreased despotism.

    From the conclusion:

    “Social systems organized in hierarchy tend to develop into despotism with inequality created by and for the leaders. It has been proposed that the sole asymmetrical distribution of power is enough to lead to such transition. In particular, the leader and its influential clique could bias the opinion of weakly connected followers, ultimately crippling the followers’ capacity to control the leader’s decision. Yet, this scenario was missing of a model integrating and testing explicitly these mechanisms… Our results have demonstrated that the centralization of a social network would lead to higher despotism and inequality. It predicts that a transition from equality to despotism will happen in presence of (i) highly influential individuals with a preferential access of resources; and (ii) lowly connected followers. In addition, our model demonstrates how a low-level process such as opinion formation can strongly drive the evolution of a higher property, here the group organization.”

    Link popup: yes to the preprint on Arxiv.

    • For more on social networks generally, a 2015 paper by Stefano Tasselli et al provides an overview of “the microfoundations of organizational social networks,” emphasizing “dynamic process of reciprocal influence” between the structure of the network and the individuals within it. Link popup: yes.
    • Work from 2012 by Cedric Sueur et al looks at social networks among primates as well: “We … showed a link between the type of social network and the resulting consensus. By comparing our theoretical data with data on five groups of primates, we confirmed that this relationship between social network and consensus also appears to exist in animal societies.” Link popup: yes.
    ‡ climate digital_ethics social_networks

    +++

    • From Stanford’s Computational Policy Lab, specific recommendations for making pretrial risk assessments more fair in the context of the California Bail Reform Act. Link popup: yes.
    • In the New Yorker, Nathan Heller reviews a variety of books on Universal Basic Income. Link popup: yes.
    • A novel paper on SNAP examines the geographic variation in the purchasing power of food stamps across states, and looks at the effects of those disparities on child health. The findings: “Lower SNAP purchasing power leads to lower utilization of preventive health care and more days of school missed due to illness.” Link popup: yes. 
    • “My analyses are unequivocal that racial resentment is reliably the largest and most precise predictor of attitudes toward immigration.” Link popup: yes.
    • A compelling essay at Aeon about visual attention studies: “Are humans truly blind to the obvious? Recent research suggests otherwise. It suggests that this claim—so important to much of the cognitive sciences, behavioural economics, and now AI—is wrong. So, how could such an influential claim get it so wrong?” Link popup: yes. Relevant to the above RCT links, Dani Rodrik comments: “Theory comes first before evidence can count as evidence. The article applies this conclusion to AI’s limitations. I’d also add RCTs, which are often assumed to ‘let the evidence speak for itself.’ They don’t. Not without an interpretive frame.” Link popup: yes. 
    • A large group of digital ethics researchers and advocates signed an open letter petitioning the White House Office of Science and Technology Policy to solicit public comments on AI policy. Link popup: yes. 
    • Andrew Gelman posts about a flawed algorithm used by Illinois’s Department of Children and Family Services–and how numerical probabilities revealed the issue. Link popup: yes.
    • For the monopsony file: a new IMF paper by Federico Diez, Daniel Leigh, and Suchanan Tambunlertchai finds an average increase of 39 percent in markups in advanced economies since 1980, with those higher markups being correlated to decreasing investment, innovation, and labor share. Link popup: yes. (And link popup: yes to an accompanying chart of the week post.) 
    • A characteristically excellent, detailed, and barely prompted thread from Pseudoerasmus on the British enclosures. Link popup: yes. 
    • Channeled attention and stable errors: “While many costly errors are prone to persist, in some situations a person will recognize her mistakes via “incidental learning”: when the data she values given her mistaken theory happen to also tell her how unlikely her theory is.” Link popup: yes. 
    • A 2016 paper by Christopher Beauchamp discusses the “forgotten history of the first patent litigation explosion” in light of our own present one. Link popup: yes. 
    • “Can stronger political competition improve rural livelihoods in developing countries? We explore this question in rural Pakistan, showing that greater political competition predicts significantly better access to publicly-provided infrastructure and amenities …It also predicts higher land values, greater land wealth, and lower land wealth inequality. Further, political competition increases land rental, possibly indicating improved functionality of land markets.” Link popup: yes. 
    • From Lukas Schlogl and Andy Sumner at the Center for Global Development, a paper on automation and the future of work in developing countries: “The Rise of the Robot Reserve Army.” Link popup: yes. ht Sidhya 
    • More future of work thoughts from Shane Greenstein at Digitopoly: Adjusting to Autonomous Trucking. Link popup: yes. 
    • “In an effort to woo the faithful, competing confessions advertised their superior ability to protect citizens against worldly manifestations of Satan’s evil by prosecuting suspected witches.” A post at EHS’s The Long Run blog on new research examining post-Reformation witch hunts. Link popup: yes. 

  10. The Duel

    Comments Off on The Duel

    CLIMATE PREDICTION MARKET

    How to link a carbon tax to climate forecasting

    ⤷ Geoengineering

    A 2011 paper by SHI-LING HSU suggests a way of using a carbon tax to generate more accurate predictions of future climate conditions:

    “The market for tradable permits to emit in the future is essentially a prediction market for climate outcomes. And yet, unlike prediction markets that have been operated or proposed thus far, this prediction market for climate outcomes operates against the backdrop of an actual and substantial tax liability. Whereas prediction markets have heretofore largely involved only recreational trading, this prediction market will operate against a regulatory backdrop and thus will provide much stronger incentives for traders to acquire and trade on information.”

     Link popup: yes to the full paper.

    A 2018 paper by GARY LUCAS and FELIX MORMANN suggests using similar predictions for climate policies beyond carbon taxes:

    “We explain how both the federal and state governments could use prediction markets to help resolve high-profile controversies, such as how best to allocate subsidies to promote clean technology innovation and which policy strategy promises the greatest reduction in carbon emissions.” 

    Link popup: yes to their paper.

    • In 2016, a group of researchers modeled the way that information would converge in a climate prediction market, and found “market participation causes most traders to converge quickly toward believing the ‘true’ climate model, suggesting that a climate market could be useful for building public consensus.” Link popup: yes.
    • Tyler Cowen wrote about Hsu’s paper in 2011: “I think of such fine-tuning as a misguided approach. Is there such a good ‘basket’ measure of climate outcomes with sufficiently low short-term volatility?” Link popup: yes.
    • A 2017 paper by Michael Thicke makes a similar point about prediction models for science generally: “Prediction markets for science could be uninformative or deceptive because scientific predictions are often long-term, while prediction markets perform best for short-term questions.” Link popup: yes.
    ‡ climate

    HARD BARGAIN

    The changing landscape of labor organizing in the US 

    ⤷ Guaranteed Income

    The Supreme Court ruled in Janus v. AFSCME this week, finding that public sector workers can no longer be compelled to pay union dues. 

    Link popup: yes to SCOTUSblog coverage of the case and the ruling. 

    A 2016 article in YALE LAW JOURNAL by KATE ANDRIAS assesses the paltry state of labor in America and uses the Service Employees International Union’s Fight for $15 campaigns as a case study in what may be a way forward for American labor that bears resemblances to European sectoral bargaining:

    “American labor unions have collapsed. While they once bargained for more than a third of American workers, unions now represent only about a tenth of the labor market and even less of the private sector.… For many reasons, current law offers little hope for reversing the trend. The familiar explanation, and the focus of most attempts at labor law reform, is that the National Labor Relations Act’s (NLRA) weak enforcement mechanisms, slight penalties, and lengthy delays—all of which are routinely exploited by employers resisting unionization—fail to protect workers’ ability to organize and bargain collectively with their employers.
    The new labor law would combine social bargaining—i.e., bargaining that occurs in the public arena on a sectoral and regional basis—with both old and new forms of worksite representation. It is a more inclusive and political model of labor relations, with parallels to regimes in Europe and elsewhere.”

    Link popup: yes to the paper.

    • Back to Tyler Cowen: in February, Cowen wrote about Janus v. AFSCME, noting that the decision will also seriously affect electoral politics and policy. Link popup: yes. JFI covered the impacts of right-to-work legislation on political participation in a January newsletter. Link popup: yes.
    • A 2007 paper by Benjamin Sachs in the Harvard Law and Policy Review covers similar territory to Andrias’, arguing that “the dysfunctionality of the National Labor Relations Act has led not to ‘ossification’—as many believe—but to a hydraulic effect: unable to find an outlet through the NLRA, the continuing demand for collective action has forced open alternative legal channels.” Link popup: yes. And a 2015 report from the Roosevelt Institute makes a systematic policy argument for multi-employer labor organizing. Link popup: yes. 
    • At Vox, an article by Dylan Matthews reflects on the wave of wildcat teachers strikes from this past spring and explains American enterprise-level bargaining and the European sectoral model, including wage boards, works councils, codetermination, and union-administered unemployment insurance. Link popup: yes. 
    • To that last item, Matthews links to a 2016 report for the Aspen’s Future of Work Initiative by David Rolf, Shelby Clark, and Corrie Watterson Bryant. The authors endorses the Ghent system, in which unions provide unemployment insurance, alongside a number of other ambitious proposals for a strengthened and “portable” 21st century safety net. Link popup: yes to the report. And a 2012 article by Matthew Dimick examines the Ghent system’s applicability to the US. Link popup: yes. 
    • New Labor in New York, a 2014 book edited by Ruth Milkman and Ed Ott, examines some of these new organizing trends through the lens of 13 case studies of workers centers and sectoral campaigns in New York City, where the rate of unionization is roughly double the national average. Link popup: yes. 
    ‡ labor future_of_work

    +++

    • A new post at Princeton CITP’s blog by Arvind Narayanan on browser fingerprinting. Link popup: yes. 
    • Forthcoming popup: yes in the AER by Joshua Blumenstock, Michael Callen, and Tarek Ghani: a report on “an experiment examining why default options impact behavior,” using a mobile money-based savings wallet in Afghanistan. Link popup: yes to the paper, link popup: yes to a write-up on the findings. ht Sidhya  
    • The effect of institutional origin on inventors’ attention to science. Link popup: yes. 
    • The New York Times reports on Americans for Carbon Dividends, a new group including Trent Lott and Janet Yellen. Link popup: yes. As we noted in a previous newsletter popup: yes, some climate scientists are adamant that a universal dividend with carbon tax revenue wastes the opportunity to build on the tax’s effects by pouring the money back into subsidies or investment in renewables. Here’s David Roberts’s highly skeptical response popup: yes to the Lott and Yellen news: “It certainly makes sense to use a portion of the revenue to shield middle- and low-income taxpayers from the regressive effects of a carbon tax. But that leaves plenty of revenue left over.”
    • Adam Tooze: “Trade and Finance – Two Different Visions of the 21st Century Global Condition.” Link popup: yes. 
    • On the growth of the palm oil trade in Southeast Asia in the early 1900s: “This analysis stresses the historical dimension of clusters, which has been neglected in the previous management and strategy works, by connecting cluster emergence to the business history of trading firms.… the rise of this cluster occurred parallel, and intimately related, to the product specialization within international trading houses.” Link popup: yes. (And link popup: yes to an excellent discussion of the paper at the NEP-HIS blog.) 
    • A paper examining the effects of Walmarts on food security: “Results suggest that closer proximity to a Walmart Supercenter improves the food security of households and children, as measured by number of affirmative responses to a food insecurity questionnaire and an indicator for food insecurity.” Link popup: yes. 
    • A post by David Levinson on the opportunity cost of land used for roads: “At the margins, what is the value of road space, and how might that cost look on a per vehicle-km traveled basis?” Link popup: yes. 
    • A new paper on how to de-bias training data gathered “in the wild.” Link popup: yes. ht Margarita 
    • A couple weeks ago we shared a link to slides from a presentation by Gabriel Zucman titled “The Missing Profits of Nations.” This week at the HLS Forum for Corporate Governance and Financial Regulation blog, a post by Zucman and co-authors introducing a paper on the same subject. Link popup: yes to the post, link popup: yes to the paper. 
    • From EHS The Long Run: on the medieval origins of Spain’s economic geography. Link popup: yes.