Category Archive: Sources

  1. Yielding Stone

    Comments Off on Yielding Stone

    VISIBLE CONSTRAINT

    Including protected variables can make algorithmic decision-making more fair 

    ⤷ Digital Ethics

    A recent paper co-authored by JON KLEINBERG, JENS LUDWIG, SENDHIL MULLAINATHAN, and ASHESH RAMBACHAN addresses algorithmic bias, countering the “large literature that tries to ‘blind’ the algorithm to race to avoid exacerbating existing unfairness in society”:  

    “This perspective about how to promote algorithmic fairness, while intuitive, is misleading and in fact may do more harm than good. We develop a simple conceptual framework that models how a social planner who cares about equity should form predictions from data that may have potential racial biases. Our primary result is exceedingly simple, yet often overlooked: a preference for fairness should not change the choice of estimator. Equity preferences can change how the estimated prediction function is used (such as setting a different threshold for different groups) but the estimated prediction function itself should not change. Absent legal constraints, one should include variables such as gender and race for fairness reasons.

    Our argument collects together and builds on existing insights to contribute to how we should think about algorithmic fairness.… We empirically illustrate this point for the case of using predictions of college success to make admissions decisions. Using nationally representative data on college students, we underline how the inclusion of a protected variable—race in our application—not only improves predicted GPAs of admitted students (efficiency), but also can improve outcomes such as the fraction of admitted students who are black (equity).

    Across a wide range of estimation approaches, objective functions, and definitions of fairness, the strategy of blinding the algorithm to race inadvertently detracts from fairness.”

    Read the full paper here popup: yes.

    • Another paper by Kleinberg, Lakkaraju, Leskovec, Ludwig, and Mullainathan from 2017 compares algorithmic decisions to human decisions regarding bail, and finds that they are often at odds. “The goal of our paper is not to identify new ways of optimizing the machine learning algorithm. Instead our goal is to understand whether these machine learning predictions can help us understand and improve judges’ decisions.” Link popup: yes. 
    • A recidivism risk assessment tool that was slated to be introduced in Pennsylvania this summer has been delayed after pushback from community and legal groups. Link popup: yes to an excellent post by Suresh Venkatasubramanian, who was commissioned by the ACLU to review the tool. And link popup: yes to news coverage of the public hearings surrounding the tool.  
    • Tangentially related to automated decision systems, but highly relevant for the broader digital ethics conversation, Friday’s Supreme Court ruling in Carptenter v. United States held that accessing cell-site location records from a telecom provider was “a search within the meaning of the Fourth Amendment, for which the government would generally have to obtain a warrant.” Link popup: yes to discussion of the decision on SCOTUS Blog. 
    ‡ automation history workforce climate

    INDISPENSABLE OBJECTS

    Administrative data and social science research

    ⤷ Metaresearch

    In a 2011 NATIONAL SCIENCE FOUNDATION white paper, DAVID CARD, RAJ CHETTY, MARTIN FELDSTEIN, AND EMMANUEL SAEZ discuss the value of administrative data for social science research: 

    “Governments create comprehensive micro-economic files to aid in the administration of their tax and benefit programs.… A rich archive of information covering most aspects of socio-economic behavior from birth to death, including education, earnings, income, workplace and living place, family composition, health and retirement, is recorded in administrative data.”

    The authors note a dearth of access to United States administrative data when compared to several European countries, and argue for a reinvigorated access infrastructure to foster forward-thinking policy-minded work in the social sciences.

    “We emphasize that direct access to micro-data is critical for success. Based on experiences from other countries and pilot initiatives, we believe that five conditions must be satisfied to make a data access program sustainable and efficient: 
        (a) fair and open competition for data access based on scientific merit
        (b) sufficient bandwidth to accommodate a large number of projects simultaneously
        (c) inclusion of younger scholars and students in the research teams that can access the data
        (d) direct access to de-identified micro data through local statistical offices or remote connections
        (e) systematic electronic monitoring to allow immediate disclosure of statistical results.” 

    Link popup: yes to the paper. 

    • An extremely detailed and enlightening 2017 chapter on the use and potential of government administrative data for federal statistics in the United States, from a NAS panel popup: yes publication on innovations in federal statistics. Link popup: yes. 
    • In a blog post from September 2017, researcher Chantale Tippett discusses the access problem, highlighting a handful of systematic difficulties and offering some examples of ad hoc access strategies that have led to breakthrough research (including Chetty’s). “Data access considerations are not solely technical in nature—that is, that they can be created and broken down by power dynamics and relationships. The need for political clout and/or connections, as well as long time frames to access data, are frequently ill-suited to individual project timelines or budgets.” Link popup: yes. (The post was written in the context of a report for the European Commission on data mining and policy making, available here popup: yes.) 
    • Chetty et al cite Denmark as a country with a well-developed, centralized administrative data bank for research purposes. Link popup: yes to Statistics Denmark’s website. And link popup: yes to a presentation paper on the collection, linkage, and use of administrative data in Nordic National Statistical Offices. 
    • For context, a recent essay in the Economist on rapidly declining response rates to household surveys across rich countries. Link popup: yes. We were tipped off to this essay by historian Adam Tooze, who tweeted popup: yes: “The rise of administrative data as an alternative to surveys and census is a recent trend, but not without historical precedent,” and cited his own work on the politics of admin data in Germany from the Kaiserreich to the Nazis. Link popup: yes to that book. 
    ‡ automation metaresearch data

    +++

    • Martin Wolf in the Financial Times with a piece on the productivity slowdown. “When I look at the weighty presence in the modern economy of labor-intensive service sectors, such as health, education and care of children and the elderly, I conclude that the technological transformation will be slow. If I am wrong, it will be disruptive. At the moment, however, we have the worst of both worlds: significant disruption but near stagnation in average incomes.” Link popup: yes.
    • Related to the above, a VoxEU post from 2017 from Nicholas Bloom, Chad Jones, John Van Reenen, and Michael Webb looks at the costs of maintaining innovation. “We show that the costs of extracting ideas have increased sharply over time…. In other words, the innovation bang for the R&D buck (or ‘research productivity’) has declined… low productivity growth in the economy is a direct consequence of research effort failing to increase fast enough to offset declining research productivity.” Link popup: yes. For more on R&D trends, see this popup: yes recent newsletter.  
    • Italian tobacco monopolists in the 19th century. Link popup: yes. 
    • A crucial new article in Stanford Law Review by Rebecca Wexler examines the introduction of intellectual property claims in the criminal justice system and “offers the first-wide ranging account of trade secret evidence in criminal cases.” Link popup: yes. 
    • How economic history has infiltrated economics. By Claude Diebolt and Michael Haupert. Link popup: yes. 
    • In These Times magazine has published a set of columns taking the still-very-active Job Guarantee Debates off of Twitter threads and into paragraph form. Rohan Grey and Raúl Carrillo of the National Jobs for All Coalition write in favor, and Matt Bruenig writes a rebuttal. Link popup: yes.
    • New NBER paper co-authored by Avner Greif on the Industrial Revolution and the Great Divergence. “A market-size-only theory of industrialization cannot explain why England developed nearly two centuries before China…. Once we incorporate the incentives of factor suppliers’ organizations such a craft guilds, industrialization no longer depends on market size, but on spatial competition between the guilds’ jurisdictions.” Link popup: yes. 
    • An excellent thread from Dave Guarino, director of Code for America’s GetCalFresh popup: yes food stamps enrollment initiative, on complexity in public policy, with a focus on SNAP. “Public programs are changed over time: new laws are passed, new rules promulgated, new edge cases and problems found that require changes. But almost all these changes are ADDITIVE: making the program more complex to accommodate an outlier.” Link popup: yes. 
    • A paper co-authored by CEPR fellow Klaus Desmet on language diversity and public goods provision. The paper “predicts that a country’s provision of public goods (i) decreases in its overall linguistic fractionalization, and (ii) either increases or decreases in how much individuals locally learn about other groups.” Link popup: yes. 
    • Historical exposure to violent colonial health campaigns conducted by the French military in Cameroon and and former French Equatorial Africa predicts reduced trust, demand, and uptake for healthcare. Link popup: yes. 
    • Examining the short- and long-run effects of resources on economic outcomes between states. Link popup: yes. 
    • At LPE Blog, Frank Pasquale with a piece on data nationalization and China’s Social Credit System, and “reputational economies” more broadly. Link popup: yes to the post. Link popup: yes to an ACLU post summarizing some elements of China’s SCS. 

  2. Phantom Perspective

    Comments Off on Phantom Perspective

    ROLL CALL 

    A new report from Fordham CLIP sheds light on the market for student list data from higher education institutions

    ⤷ Digital Ethics

    From the paper authored by N. CAMERON RUSSELL, JOEL R. REIDENBERG, ELIZABETH MARTIN, and THOMAS NORTON of the FORDHAM CENTER ON LAW AND INFORMATION POLICY: 

    “Student lists are commercially available for purchase on the basis of ethnicity, affluence, religion, lifestyle, awkwardness, and even a perceived or predicted need for family planning services.

    This information is being collected, marketed, and sold about individuals because they are students.”

    Drawing from publicly-available sources, public records requests from educational institutions, and marketing materials sent to high school students gathered over several years, the study paints an unsettling portrait of the murky market for student list data, and makes recommendations for regulatory response: 

    1. The commercial marketplace for student information should not be a subterranean market. Parents, students, and the general public should be able to reasonably know (i) the identities of student data brokers, (ii) what lists and selects they are selling, and (iii) where the data for student lists and selects derives. A model like the Fair Credit Reporting Act (FCRA) should apply to compilation, sale, and use of student data once outside of schools and FERPA protections. If data brokers are selling information on students based on stereotypes, this should be transparent and subject to parental and public scrutiny.
    2. Brokers of student data should be required to follow reasonable procedures to assure maximum possible accuracy of student data. Parents and emancipated students should be able to gain access to their student data and correct inaccuracies. Student data brokers should be obligated to notify purchasers and other downstream users when previously-transferred data is proven inaccurate and these data recipients should be required to correct the inaccuracy.
    3. Parents and emancipated students should be able to opt out of uses of student data for commercial purposes unrelated to education or military recruitment.
    4. When surveys are administered to students through schools, data practices should be transparent, students and families should be informed as to any commercial purposes of surveys before they are administered, and there should be compliance with other obligations under the Protection of Pupil Rights Amendment (PPRA).”

    Link popup: yes to the study. 

    • A 2016 report by Dalia Topelson Ritvo from the Berkman Klein Center for Internet & Society’s Cyberlaw Clinic reviews existing legislation governing student data collected through networked ed-tech. Link popup: yes. Another Berkman Klein paper, from 2015, looks at emerging data privacy issues for K-12 learning environments. Link popup: yes. 
    • H.764, a recently-passed bill in Vermont that makes an appearance in the Fordham study, sets out the first regulations for data brokers in the country. These include mandatory registration with the government, strict disclosure rules for data breaches, and a set of new legal liabilities if broker data leads to a crime (like race-based loan discrimination, for example). Link popup: yes to bill text. And an even broader law has been proposed in California. Link popup: yes to coverage of both bills. 
    ‡ digital_ethics media higher_education

    IMMINENT REBALANCE

    A new report on automation and job loss tackles the lump-of-labor fallacy

    ⤷ Guaranteed Income

    The ROOSEVELT INSTITUTE has published a new report by MARK PAUL that discusses automation’s potential effects in the context of long-term wage and productivity stagnation and the historical relationship between technology and job displacement:

    “A narrative of imminent mass unemployment and economic insecurity due to rising automation, also known as ‘the robot revolution,’ is gripping policymakers, workers, and the media. Conflicting reports hype up the supposed inevitability of a large-scale displacement of workers by the robots.
    Workers in the U.S. seem to be skeptical of potential technological change, perhaps because the link between economic growth and broad-based wage gains is broken in this country. If the rules of the economy are not changed to rebalance worker power, future technological developments will likely further exacerbate inequality and displace workers in our already deeply divided country. However, little work has challenged the impending doom narrative and sought to find another path forward. After all, automation has historically been a job creator, a critical way the U.S. remains competitive in an increasingly global economy, and a primary driver of rising living standards.
    But while technological change in aggregate increases living standards and has the potential to improve job quality, we must ask ‘for whom?’ The job of policymakers is to handle these challenges in a socially desirable way, ensuring that the overall gains from technology are shared, and the potential losers, such as the people displaced by technological advances, are compensated, transitioned to new jobs, and included in the ensuing growth.”

    Paul identifies a handful of policies that he argues can remedy the two primary concerns of technological change: unemployment and inequality. These include full employment, revising IP law, active government direction of R&D, work sharing policies, and a right to education and training.

    Link popup: yes to the full report.

    • Neil Irwin covered the report for the Times: “While these ideas are coming from a decidedly left-of-center place, it’s striking how some of them overlap with the goals of centrist business interests and even some conservative thinkers.” Link popup: yes. 
    • Paul links to a Deloitte report from 2015 that examines the effects of technological change on the labor market in England and Wales over 144 years, finding that technology has created more jobs than it has destroyed. Link popup: yes. 
    • An interesting article that we linked to several newsletters ago examines the projected geographic differences in automation’s displacement effects: “Small cities will undertake greater adjustments, such as worker displacement and job content substitutions. We demonstrate that large cities exhibit increased occupational and skill specialization due to increased abundance of managerial and technical professions. These occupations are not easily automatable, and, thus, reduce the potential impact of automation in large cities.” Link popup: yes. 
    • In a 2011 CEPR paper, Dean Baker advocates for work sharing as a solution to unemployment and reviews existing instances of the practice. Link popup: yes. (A more comprehensive paper from 1999 by Jennifer Hunt examines the German case. Link popup: yes.) 
    ‡ automation workforce

    +++ 

    • Two years after an unsuccessful referendum for a nationwide basic income, a small village in Switzerland is considering implementing a crowdfunded UBI experiment for its residents. Link popup: yes.
    • Decompressing History published a pair of timely posts on the historical economic entanglements of two sets of World Cup opponents: Spain v. Portugal and France v. Australia. (More of these to come, we hope.) Link popup: yes, link popup: yes. 
    • A post by Gwern Branwen on tech and competition recapitulates and riffs on a 2002 insight from former MS product manager Joel Spolsky: Commoditize Your Complement. Link popup: yes. 
    • The UK has released its latest Data Ethics Framework, a document that explains how to mobilize the emerging field of data ethics as guidance for data use in government and the public sector. Link popup: yes. 
    • “Does special interest influence decline when policy is chosen using direct democracy, without involvement of representatives?” A Stigler Center working paper by John Matsusaka on the effect of referenda and initiatives on regulatory capture. Link popup: yes. (And link popup: yes to an explanatory post on the findings by at ProMarket.) 
    • Slides from a recent Gabriel Zucman (author of The Hidden Wealth of Nations popup: yes) presentation: “The Missing Profits of Nations.” Link popup: yes. 
    • “Economic and technological progress is neither linear nor universal. For much of human history, economic growth was slow, and it gathered pace only in the last five hundred years. As economic and technological change is nonlinear, scholars have explored whether certain social structures (cities and markets) are more conducive to rapid progress, as they enable greater social interaction and learning between strangers. The transition of the northwest European economy from guild-based to market-based was one such case of transformation that put the region on a path of rapid progress and modernity. What were the factors that triggered this transition?” Link popup: yes.
    • Following an editorial board op-ed popup: yes last weekend on the subject, the Times published a second piece advocating for ranked-choice voting, with Maine’s implementation of the system for its primaries earlier this week providing context. By Amartya Sen and Erik Maskin. Link popup: yes. (Link popup: yes, also, to a Twitter thread from Sally Hudson we shared back in March, which discusses the system in the context of Santa Fe’s mayoral elections from that month.) 
    • A paper by Diego Daruich at the Human Capital and Economic Opportunity Working Group popup: yes examines the macro effects of early childhood development policies. Link popup: yes. 
    • José Azar and Xavier Vives “develop a macroeconomic framework in which firms are large and have market power with respect to both products and factors…. When there are multiple sectors, due to an intersectoral pecuniary externality, an increase in common ownership can stimulate the economy when labor market oligopsony power is low relative to product market oligopoly power. We find that neither the monopolistically competitive limit of Dixit and Stiglitz nor the oligopolistic one of Neary (when firms become small relative to the economy) are attained unless there is incomplete portfolio diversification.” Link popup: yes. 
    • An evaluation of Community Driven Development interventions, by the International Initiative for Impact Evaluation. Link popup: yes. 
    • A nice post at are.na popup: yes‘s blog by Claire Evans on poet Judy Malloy and hypertext developer Cathy Marshall, who collaborated at Xerox PARC in the early-1990s. “Judy was a poet who wrote FORTRAN as elegantly as verse; Cathy an engineer with an English degree. Judy used databases to string together fragments of literature. At PARC, Cathy built systems to organize thought.” Link popup: yes. 
    • “In 1973 Albert Otto Hirschman proposed an explanation of changing tolerance for inequality associated with different ‘stages’ of the development process. In this post I’ll revisit Hirschman’s theory and link it to emerging studies of how inequality is perceived in China.” Link popup: yes. 

  3. Ego

    Comments Off on Ego

    PAVEMENT, NURSING, MISSILES

    Algorithm Tips, a compilation of “potentially newsworthy algorithms” for journalists and researchers

    ⤷ Digital Ethics

    DANIEL TRIELLI, JENNIFER STARK, and NICK DIAKOPOLOUS and Northwestern’s Computational Journalism Lab created this searchable, non-comprehensive list of algorithms in use at the federal, state, and local levels. The “Methodology” page explains the data-scraping process, then the criteria for inclusion:

    “We formulated questions to evaluate the potential newsworthiness of each algorithm:

    Can this algorithm have a negative impact if used inappropriately?
    Can this algorithm raise controversy if adopted?
    Is the application of this algorithm surprising?
    Does this algorithm privilege or harm a specific subset of people?
    Does the algorithm have the potential of affecting a large population or section of the economy?

    If the answers for any of these questions were ‘yes’, the algorithm could be included on the list.”

    Link popup: yes. The list includes a huge range of applications, from a Forest Service algorithmic ranking of invasive plants, to an intelligence project meant to discover “significant societal events” from public data—and pavement, nursing, and missiles too.

    • Nick Diakopolous also wrote a guide for journalists on investigating algorithms: “Auditing algorithms is not for the faint of heart. Information deficits limit an auditor’s ability to sometimes even know where to start, what to ask for, how to interpret results, and how to explain the patterns they’re seeing in an algorithm’s behavior. There is also the challenge of knowing and defining what’s expected of an algorithm, and how those expectations may vary across contexts.” Link popup: yes.
    • The guide is a chapter from the upcoming Data Journalism Handbook popup: yes. One of the partner organizations behind the guide has a website of advice and stories popup: yes from the data-reporting trenches, such as this popup: yes on trying to figure out prescription drug deaths: “The FDA literally found three different ways to spell ASCII. This was a sign of future surprises.”
    • In other technical journalism news, Julia Angwin and Jeff Larson announced in April that they were leaving ProPublica to start a nonprofit newsroom. From NiemenLab: “‘We will cover the impact of technology on society,’ Angwin told me. ‘That includes covering the big platform companies, but also the tech that is used in other aspects of life—hopefully through investigations like the ones we did of the racial bias in software popup: yes used in criminal justice and the algorithms that generate unjustifiably higher car insurance prices in minority neighborhoods popup: yes.'” Link popup: yes. 
    ‡ digital_ethics media

    SUPPRESSION CHAIN

    The effect of monopsony power on downstream seller wages 

    ⤷ basic income

    A new paper by NATHAN WILMERS published in the AMERICAN SOCIOLOGICAL REVIEW finds a connection between buyer concentration and stagnating wages through the supply chain: 

    “Since the 1970s, market restructuring has shifted many workers into workplaces heavily reliant on sales to outside corporate buyers. These outside buyers wield substantial power over working conditions among their suppliers. During the same period, wage growth for middle-income workers stagnated. By extending organizational theories of wage-setting to incorporate interactions between organizations, I predict that wage stagnation resulted in part from production workers’ heightened exposure to buyer power.

    Panel data on publicly traded companies shows that dependence on large buyers lowers suppliers’ wages and accounts for 10 percent of wage stagnation in nonfinancial firms since the 1970s. These results are robust to a series of supplementary measures of buyer power; instrumental variable analysis using mergers between buyers; corrections for selection and missing data; and controls for individual worker characteristics like education and occupation. The results show how product market restructuring and new forms of economic segmentation affect workers’ wages. The spread of unequal bargaining relations between corporate buyers and their suppliers has slowed wage growth for workers.”

    Get the full paper here popup: yes. 

    • From a companion post by Wilmers for Equitable Growth: “Understanding wage stagnation requires attention to changing contracting relationships between companies. The organizational context of workers’ jobs—what kind of company and workplace they are employed by—also affects workers’ power to bargain about wages. This organizational context goes beyond immediate, within-organization characteristics.… Relationships between organizations are also factors in the organizational context that affect workers’ jobs and pay. In an era of outsourcing and market concentration, these between-organization relationships are increasingly important for setting workers’ wages.” Link popup: yes.
    • Yale Law Journal has published an excellent new set of articles on antitrust, a perennially cited tool by those hoping for an enforcement correction to monopsony conditions. Contributions come from Lina Khan, Sandeep Vaheesan, and Aaron Edlin. Link popup: yes. (And link popup: yes to the much larger collection “Unlocking Antitrust Enforcement,” which this new set responds to.)  ht Will
    • From that collection, an article by C. Scott Hemphill and Nancy Rose tackles the possibility of antitrust enforcement for the supply chain effects detailed in Wilmer’s article: “We show that lost upstream competition is an actionable harm to the competitive process. Our central claim is that harm to sellers in an input market is sufficient to support antitrust liability. We defend this conclusion against the contrary view that demonstrated harm to the merging firms’ downstream purchasers or final consumers is an essential element of any antitrust claim. Nor is it necessary for plaintiffs to demonstrate a reduction in the input quantity transacted. We further argue that claimed ‘efficiencies’ premised on a reduction in buy-side competition are not efficiencies at all.” Link popup: yes. 
    ‡ monopsony antitrust

    +++

    • An exciting new study from David Keith and Carbon Engineering suggests a relatively cheap new way to remove carbon from the air and remake it into fuel. From the Atlantic: “‘If these costs are real, it is an important result,’ said Ken Caldeira popup: yes, a senior scientist at the Carnegie Institution for Science. ‘This opens up the possibility that we could stabilize the climate for affordable amounts of money without changing the entire energy system or changing everyone’s behavior.'” Link popup: yes. Study available here.
    • A great thread from Fordham Law’s John Pfaff on the impact of elections on judicial behavior. Link popup: yes.
    • What happens when government gender quotas are instituted? A study examines results worldwide: “We find that substantial quota shocks—those associated with a large increase in women’s parliamentary representation—are followed by increased government expenditures toward public health. Further, we find that increases in health spending are offset by relative decreases in military spending and other spending categories.” Link popup: yes.
    • Copy and paste lawmaking. Link popup: yes. 
    • Fascinating historical paper on the history of macroeconometric modeling, by Juan Acosta and Erich Pinzón-Fuchs of Duke University’s Center for the History of Political Economy. Link popup: yes.  
    • JW Mason reviews Quinn Slobodian’s new book The Globalists popup: yes in the Boston Review: “For these thinkers, the most important argument for free movement of goods and especially finance was not their direct material benefits, but the limits they imposed on the autonomy of national governments.” Link popup: yes. 
    • “Across developing countries, a higher mean income comes with a higher floor. The bulk of this income effect is direct rather than via higher spending on social protection. That spending generally lifts the floor though this is mainly due to social insurance; on average, social assistance adds only 1.5 cents per day to the floor. Turning to the US, the paper finds that the floor has been sinking over the last 30 years, associated with an inequitable growth process.” New working paper on public spending and social protection from Martin Ravallion, Dean Jolliffe, Juan Margitic. Link popup: yes.
    • Who benefits from productivity growth? Link popup: yes.
    • At Niskanen, Ed Dolan’s libertarian perspective on universal health care: “Rather than asking how much any given health care plan would cost, it is more useful to ask, ‘What is the best plan we could design for what we are politically willing to spend?’ If we set that amount somewhere close to what the government now spends on health care, universal catastrophic coverage looks rather good.” Link popup: yes. popup: yes
    • A 2007 paper on donor fragmentation and development bureaucracy by Aminur Rahman and Stephen Knack. Link popup: yes. (Via this thread popup: yes by Garett Jones on the Marshall Plan and “monopsonistic” development aid structures.) 
    • From 1885, an interview with Henry George on his work and the theory of taxing land value. Link popup: yes. 

  4. Even With Closed Eyes

    Comments Off on Even With Closed Eyes

    ARTIFICIAL INFERENCE

    Causal reasoning and machine learning 

    ⤷ Digital Ethics

    In a recent paper titled “The Seven Pillars of Causal Reasoning with Reflections on Machine Learning”, JUDEA PEARL, professor of computer science at UCLA and author of Causality popup: yes, writes:

    “Current machine learning systems operate, almost exclusively, in a statistical or model-free mode, which entails severe theoretical limits on their power and performance. Such systems cannot reason about interventions and retrospection and, therefore, cannot serve as the basis for strong AI. To achieve human level intelligence, learning machines need the guidance of a model of reality, similar to the ones used in causal inference tasks. To demonstrate the essential role of such models, I will present a summary of seven tasks which are beyond reach of current machine learning systems and which have been accomplished using the tools of causal modeling.” 

    The tasks include work on counterfactuals, and new approaches to handling incomplete data. Link popup: yes to the paper. A vivid expression of the issue: “Unlike the rules of geometry, mechanics, optics or probabilities, the rules of cause and effect have been denied the benefits of mathematical analysis. To appreciate the extent of this denial, readers would be stunned to know that only a few decades ago scientists were unable to write down a mathematical equation for the obvious fact that ‘mud does not cause rain.’ Even today, only the top echelon of the scientific community can write such an equation and formally distinguish ‘mud causes rain’ from ‘rain causes mud.’”

    Pearl also has a new book out, co-authored by DANA MCKENZIE, in which he argues for the importance of determining cause and effect in the machine learning context. From an interview in Quanta magazine about his work and the new book:

    “As much as I look into what’s being done with deep learning, I see they’re all stuck there on the level of associations. Curve fitting. That sounds like sacrilege, to say that all the impressive achievements of deep learning amount to just fitting a curve to data. If we want machines to reason about interventions (‘What if we ban cigarettes?’) and introspection (‘What if I had finished high school?’), we must invoke causal models. Associations are not enough—and this is a mathematical fact, not opinion.

    We have to equip machines with a model of the environment. If a machine does not have a model of reality, you cannot expect the machine to behave intelligently in that reality. The first step, one that will take place in maybe 10 years, is that conceptual models of reality will be programmed by humans.”

    Link popup: yes to the interview. (And link popup: yes to the book page.) 

    • The interview caused much discussion among researchers. Twitter machine learning researcher Ferenc Huszár responded to the discourse with a post on his blog introducing and explaining the basics of Pearl’s do-calculus. “It’s basic hygiene for people working with data and conditional probabilities to understand the basics of this toolkit, and I feel embarrassed for completely ignoring this throughout my career. Pearl’s comments may be unhelpful if interpreted as contrasting deep learning with causal inference. Rather, you should interpret it as highlighting causal inference as a huge, relatively underexplored, application of deep learning.” Link popup: yes.
    • A 2015 paper by Harvard’s Samuel Gershman on causal modeling in reinforcement learning. (NB: Huszár suggests that Pearl’s criticisms “conveniently ignore” reinforcement learning). Link popup: yes.  ht Sara
    • For more context on Pearl and causality debates, see his critique popup: yes of Don Rubin’s framework, and Andrew Gelman’s post popup: yes about the differences between the two (don’t miss the comments section). ht Margarita  
    ‡ machine_learning causality

    SEEK CHANGE

    A legacy program at CUNY is exceptionally helpful to academically disadvantaged students

    ⤷ Postsecondary Education Finance

    New work from Raj Chetty, John Friedman, et al reveals the startling success of a CUNY college success program that has been running for decades.

    “The economists tracked more than 10,000 students who had been admitted to a CUNY program called SEEK that helps academically borderline, low-income students complete a four-year degree. They found that SEEK students earned more money as adults in their late 20s and early 30s than academically similar students from higher-income families.

    ‘Giving them access to the SEEK program is giving them $4,000 a year,’ said Friedman. ‘Maybe there are more impactful things that could be done. But those data suggest that something does seem to be working well in the SEEK program.’

    The results are interesting because the SEEK program, which stands for Search for Education, Elevation and Knowledge, has been around for more than 50 years and was an early attempt at CUNY to give low-income students a boost.  Today, CUNY invests more resources in newer and sometimes more expensive programs to help struggling low-income students. However, this research shows that old ideas can still work.”

    Overview in the Hechinger Report here popup: yes.

    ht Will, who comments:

    “The disadvantages of poverty aren’t erased on the schoolhouse steps. Increasing postsecondary enrollment among low-income students is a noble objective, but too few of America’s colleges and universities are prepared to serve those students when they walk into the classroom. In this context, the SEEK program is remarkable. The students who enter CUNY through SEEK come from families that earn an average of $27,000 per year. Low grades and test scores foreclose any other pathway for them onto CUNY’s campuses. Yet as alumni, SEEK graduates earn just as much as low-income students with stronger academic profiles – and they earn more than wealthier students with the same grades and test scores. All at a per-student program cost that is a fraction of the total increased earnings generated for participants. Programs like SEEK are a pivotal component of a postsecondary education ecosystem that is broadly accessible and oriented toward economic mobility. And by connecting SEEK student data with Mobility Report Card data, Raj and John have given us a new way of illustrating the significant effects that programs like these can have on the trajectories of low-income Americans.”

    • More publications on this will be available in the future—for now, you can view a few slides from the researchers hosted on our Dropbox here popup: yes.
    • The CUNY page on the history of the program. Link popup: yes.
    ‡ higher_education college_success

    +++

    • From Peter S. Goodman in the New York Times, a long new story about the basic income demonstration in Stockton, California. “As the first American city to test so-called universal basic income, Stockton will watch what happens next. So will governments and social scientists around the world as they explore how to share the bounty of capitalism more broadly at a time of rising economic inequality.” Link popup: yes.
    • In a NYMag interview, Yanis Varoufakis expresses support for a Universal Basic Dividend: “We need to face up to the fact that [corporate] profits are increasingly produced socially; a result of cooperative, collaborative large-scale projects, many of them financed by the state and state institutions and many of them generated surreptitiously by each one of us. Every time you search something on your Google engine, you’re contributing to the capital of Google. A part of their shares [would] be contributed to a public growth fund so that we can produce a universal basic dividend, distributed to members of society that have contributed — maybe inadvertently — to the production of that social capital.” Link popup: yes.  ht Lauren
    • An excellent post at Andreessen Horowitz’s blog on mortgages. Link popup: yes. 
    • Further work on the “industrious revolution” theory by Douglas Hay: “The law of master and servant, to use the technical term, shifted markedly between 1750 and 1850 to advantage capital and disadvantage labour. Medieval in origin, it had always been adjudicated in summary hearings before lay magistrates, and provided penal sanctions to employers (imprisonment, wage abatement, and later fines), while giving workers a summary remedy for unpaid wages. The law always enforced obedience to employers’ commands, suppressed strikes, and tried to keep wages low. Between 1750 and 1850 it became more hostile to workers through legislation and judicial redefinition; its enforcement became harsher through expansion of imprisonment, capture of the local bench by industrial employers, and employer abuse of written contracts. More work in manuscript sources is needed to test the argument, but it seems likely that intensification of labour inputs during industrialisation was closely tied to these legal changes.” Link popup: yes. 
    • A new report from The Century Foundation finds a 29 percent increase in “‘borrower defense’ claims—applications for loan relief from students who maintain that they have been defrauded or misled by federally approved colleges and universities.” Link popup: yes.  ht Will
    • On faculty hiring networks, prestige, and epistemic inequality: “Relatively little is known about how structural factors influence the spread of ideas, and specifically how where an idea originates can influence how it spreads.” Link popup: yes.  
    • At Developing Economics, a post reflecting on Marx’s legacy, the “dismal science”, and the published responses to his recent 200th birthday. Link popup: yes. 
    • A paper addresses how machine learning in medicine can make uncertainties falsely appear to be objectively settled. “We cope with some form of uncertainty when we cannot pinpoint a phenomenon exactly or when we cannot measure it precisely (i.e., approximation, inaccuracy); when we do not possess a complete account of a case (incompleteness, inadequacy); when we cannot predict what it will come next (unpredictability for randomness or excessive complexity); when our observations seem to contradict each other (inconsistency, ambiguity); and, more generally, when we are not confident of what we know. In clinical practice, all of these phenomena occur on a daily basis, several times.” Link popup: yes.
    • From Simon-Wren Lewis at Mainly Macro: nominal wages are not real wages, and why that matters for ongoing debates regarding labor and immigration in the UK. Link popup: yes. 
    • Chris Bertram at Crooked Timber outlines the arguments in his just-released new book: Do States Have Rights to Exclude Immigrants? Link popup: yes. 
    • Crowdsourcing neuroscience: “Since Eyewire’s launch in 2012, more than 265,000 people have signed onto the game, and they’ve collectively colored in more than 10 million 3-D ‘cubes,’ resulting in the mapping of more than 3,000 neural cells, of which about a thousand are displayed in the museum.” Link popup: yes.

  5. Correction of the Lines

    Comments Off on Correction of the Lines

    SHOCK-LEVEL-ZERO

    Jobs guarantees vs. basic income

    ⤷  Guaranteed Income

    In a characteristically lengthy and thorough post, SCOTT ALEXANDER of SLATE STAR CODEX argues for a basic income over a jobs guarantee, in dialogue with a post by SIMON SARRIS.

    Here’s how Alexander addresses the claim that “studies of UBI haven’t been very good, so we can’t know if it works”:

    “If we can’t 100% believe the results of small studies – and I agree that we can’t – our two options are to give up and never do anything that hasn’t already been done, or to occasionally take the leap towards larger studies. I think basic income is promising enough that we need to pursue the second. Sarris has already suggested he won’t trust anything that’s less than permanent and widespread, so let’s do an experiment that’s permanent and widespread.”

    Link to the full piece on Slate Star.

    For another angle on the same question, MARTIN RAVALLION recently published a paper at the CENTER FOR GLOBAL DEVELOPMENT looking at employment guarantees and income guarantees primarily in India:

    “The paper has pointed to evidence for India suggesting that the country’s Employment Guarantee Schemes have been less cost effective in reducing current poverty through the earnings gains to workers than one would expect from even untargeted transfers, as in a UBI. This calculation could switch in favor of workfare schemes if they can produce assets of value (directly or indirectly) to poor people, though the evidence is mixed on this aspect of the schemes so far in India.”

    Ravallion takes a nuanced view of arguments for the right to work and the right to income, as well as the constraints of implementation, and concludes, “The key point is that, in some settings, less effort at fine targeting may well prove to be more cost-effective in assuring economic freedom from material deprivation.” Full study available here. ht Sidhya

    • Simon Sarris responds to Alexander in the Slate Star comments: “The point of something like Basic Jobs is that giving people the option, but not the obligation, may result in better outcomes for some people at the margins. It’s not a panacea, it is definitely not a Utopian alternative to the largely Utopian plans of UBI because I do not think any Utopian plan as described is wise. It’s a suggestion of mere incrementalism, something to try on top of the hodge-podge of welfare that currently exists. A splint is safer than a spleen removal, as they say.” Link.
    • The NYTimes on Democrats’ embrace of basic jobs: “Behind the stampede is Democrats’ desire for tangible programs to offer to working-class voters, which they could contrast to Mr. Trump’s racially divisive immigration appeals to white workers.” Link.
    • Ed Glaeser and Larry Summers in the NYTimes on a wage subsidy: “Many economists have argued for a universal basic income or more generous earned-income tax credit. We would support an E.I.T.C. expansion. But the most direct way to encourage work is with a new wage subsidy that benefits workers and encourages companies to replace joblessness with employment.” Link.
    ‡ ubi cash_transfers

    CATALOG AND COMPARE

    A directory of the wide variety of agencies’ adjudication practices

    ⤷  digital ethics

    In 2015, the Administrative Conference of the United States, in tandem with Stanford Law School, launched a thorough database of federal agencies’ administrative adjudication procedures. From the contemporaneous press release:

    “Administrative proceedings are one of the most common ways in which citizens interact with the United States government. Just one agency, the Social Security Administration, conducted nearly 800,000 such proceedings in fiscal year 2013 alone.

    Professor Asimow explained that the new database brings transparency to an area of the law that previously had not been mapped. ‘For example,’ he said, ‘the U.S. currently receives hundreds of thousands of claims from veterans as well as those facing deportation. The Federal Administrative Adjudication database enables individuals filing veterans or immigration claims – or claims with 85 other agencies – to understand who can represent them in these disputes, who determines the outcome and how they can participate fully in the process.'”

    The database outlines adjudication practices across 133 agencies, and provides information on caseload statistics, type of adjudicator, cross-examination practices, discovery regulations, and much else.

    Link to the database, link to the press announcement, and link to the report published based on the database, written by administrative law expert MICHAEL ASIMOW for the ACUS. 

    • A paper by Asimow from 2015 tackles the wide variety of adjudication procedures across different countries’ administrative regimes: “This Article proposes a methodology for classifying such systems. It identifies four key variables: combined-function agencies or separate tribunals, adversarial or inquisitorial procedure, judicial review that is either open to introduction of new evidence or closed to new evidence, and judicial review by generalized or specialized courts.” Link. 
    • An interesting 2017 paper by Nestor Davidson in Yale Law Journal addresses another gap in administrative law knowledge: local government agencies. “To read the voluminous literature on administrative law is to inhabit a world focused almost exclusively on federal agencies. This myopic view, however, ignores the wide array of administrative bodies that make and implement policy at the local-government level. The administrative law that emerges from the vast subterranean regulatory state operating within cities, suburbs, towns, and counties has gone largely unexamined.” Link.
    ‡ regulation law

    +++

    • From co-authors Arindrajit Dube, Jeff Jacobs, Suresh Naidu, Siddharth Suri, a VoxEU column on monopsony in online labor markets. “In many ways, [online labor markets] appear as frictionless settings with a large number of participants, where information about pay is easily observed and costs of switching across tasks seem to be low.… We can benefit from a clear proof that labour market power exists, especially outside of ‘company towns’ or specific, highly concentrated markets.” Link.
    • On state-level policy polarization. “Party control increasingly predicts socioeconomic outcomes in the polarized area of health care, but not in the nonpolarized area of criminal justice.” Link. ht Will
    • A NBER working paper by Alma Cohen and Crystal Yang looks at the sentencing effects of a political judiciary. “Exploiting random case assignment, we find that Republican-appointed judges sentence black defendants to 3.0 more months than similar non-blacks and female defendants to 2.0 fewer months than similar males compared to Democratic-appointed judges, 65 percent of the baseline racial sentence gap and 17 percent of the baseline gender sentence gap, respectively.” Link.
    • A new Data & Society report by Whitney Phillips on media coverage of far-right groups. Link. (And link to coverage in Wired.) 
    • “Moral rhetoric on Twitter may signal whether a protest will turn violent, according to a USC-led study.” Link. h/t   Margarita
    • A great post at the JStor Blog compiles some papers on the effects of Amazon’s Mechanical Turk on survey research practices. Link. One of the highlighted papers examines the representativeness of panels administered through MTurk, as opposed to in-person convenience samples or other Internet alternatives. Link. Another looks at the implications of crowd-sourcing for labor law. Link. 
    • From the American Association for University Women: a new report on the gender gap in student loan debt. Link. 
    • 300 years of pro-cyclical regulation, by Jihad C. Dagher of the IMF. “I examine the political economy of financial policy during ten of the most infamous financial booms and busts since the 18th century…. Financial booms—and risk-taking during these episodes—were often amplified by political regulatory stimuli, credit subsidies, and an increasing light-touch approach to financial supervision. Financial crises led to a massive regulatory backlash, which sometimes suffocated finance. The regulatory response can be best understood in the context of the political ramifications of such crises. Link. (And link to the paper under discussion.)
    • A post at EHS The Long Run on pollution and mortality rates in 19th century England. Link. 
    • On financial regulation and industrial policy in developing economies. “In the Pakistani case, the withdrawal of state control over the financial sector led to a deterioration of outcomes. This resulted in the allocation of credit away from the productive sectors; and in the health of the financial sector not improving as expected, with non‐performing loans and corruption remaining a problem, and banks actually becoming a greater burden on government finances.” Link.
    • Tracking the philanthropic spending on climate change. Link. 
    • A post at the Center for Budget and Policy Priorities estimates that adopting a version of the Canadian Childcare Benefit in the United States would cut child poverty by more than half. Link. 
    • Jared Rubin reviews The Invisible Hand?: “Van Bavel’s framework can be conceptualized as an economics counterpart to Ibn Khaldun’s political cyclical theory of empires. The (somewhat neo-Marxian) argument suggests that economic decline is a natural consequence of the type of economic growth that happens via factor markets. In other words, the growth of factor markets is a self-undermining process. This is a fairly significant departure from conventional economic history accounts, which largely view the development of market economies as more of a linear process.” Link.

  6. Modelled Eye

    Comments Off on Modelled Eye

    EACH POINT ON THE CHAIN

    Arguments for Value-Added Tax in the US, and using VAT to fund basic income

    ⤷  Basic Income

    The Wall Street Journal lays out the basics popup: yes: “Unlike a traditional sales tax, a VAT is a levy on consumption that taxes the value added to a product or service by businesses at each point in the chain of production.”

    VATs are ubiquitous—except in the United States. According to a 2013 Hamilton Project report popup: yes, “In recent years, the VAT has raised about 20 percent of the world’s tax revenue (Keen and Lockwood 2007). This experience suggests that the VAT can raise substantial revenue, is administrable, and is minimally harmful to economic growth.”  The TPC notes popup: yes that “every economically advanced nation except the United States” has a VAT. Countries adopted VATs over time: the EU first unified all its VATs in the 1970s, China adopted a VAT in 1984, Canada in 1991, and so on. Now the US is the only country in the OECD without one.

    Why is there no VAT in the US? 

    “Back in 1988, Harvard economist Larry Summers […] explained popup: yes that the reason the U.S. doesn’t have a VAT is because liberals think it’s regressive and conservatives think it’s a money machine. We’ll get a VAT, he said, when they reverse their positions.” (Forbes popup: yes.)

    A VAT could certainly be a revenue-raising powerhouse. According to the CBO popup: yes, a 5% VAT could raise 2.7 trillion dollars in 2017-2026 with a broad base, or 1.8 trillion with a narrow base—the most massive of all the options for revenue popup: yes in their 2016 report.

    And as for the regressive concerns, VAT proposals usually suggest adjusting other taxes or credits commensurately. A 2010 Tax Policy report popup: yes considers a VAT in the context of lowering payroll or corporate taxes, and the Hamilton Project suggests popup: yes adding tax credits or straightforward cash to low-income households.

    VATs are appealing beyond their ability to raise a lot of money. They’re also easier to administer and document than other tax forms. A 2014 study popup: yes by Dina Pomeranz examines the way the VAT is documented in Chile, and finds that “forms of taxation such as the VAT, which leave a stronger paper trail and thereby generate more information for the tax authority, provide an advantage for tax collection over other forms of taxation, such as a retail sales tax.” Beyond that, Michael Graetz argues popup: yes in the Wall Street Journal, “shifting taxes from production to consumption would stimulate jobs and investments and induce companies to base headquarters here rather than abroad.” The Tax Foundation has advocated popup: yes for a VAT to replace the Corporate Income Tax for similar reasons.

    VAT and UBI

    In a Medium post popup: yes, Santens explains the benefits of a 10% VAT to fund UBI: “For those who fear the idea of people taking their basic incomes and earning no additional income, it would mean that aside from the other 90% that gets transformed into wages and salaries through purchases of goods and services, 10% of their basic incomes would go right back into funding everyone else’s basic income.”

    In a 2012 paper popup: yes, Philippe Van Parijs and Yannick Vanderborght make the case that a VAT is preferable to income tax for funding UBI in the European Union. “Whether in developed or in less developed countries, the main advantages claimed for VAT over the income tax at the national level are that it has a tax base that extends more widely beyond wages and that it turns out to be, if anything, less regressive than actual income tax schemes, adulterated as these tend to be by exemptions, discounts, the separate taxation of capital income, loopholes and sheer evasion.”

    Per Scott Santens on Twitter popup: yes, other than its massive scale and ease of administration, VAT matches UBI because it prevents the perception that the government is giving out money, then removing it via income taxes. 

    • Andrew Yang’s campaign platform proposes a 10% VAT to fund UBI. Link popup: yes.
    • Miles Kimball takes issue with common arguments about VAT’s regressiveness. Link popup: yes.
    • At Bloomberg, Jason Mast tells the history of Michigan’s failed VAT attempts. Intriguingly, Howard Heideman, one of the tax’s creators, thinks an easily remediable accounting decision was a large reason for the failure: “I think had Michigan administered its VAT using the invoice credit method, it would still be in effect.” Link popup: yes.
    • The USCIB has a list of rates popup: yes around the world.
    • Center for Global Development on redistribution in developing nations: “In the rich world, the poorest citizens tend to be net financial recipients from the government—they get more in transfers than they pay in taxes. But that’s not true in some developing countries…. The mechanics of a VAT are easier to implement for a weak state, and so organizations like the IMF have pushed countries down this path, prioritizing the need for revenue over a concern for equity.” Link popup: yes.
    • VoxDev on the role of discretion in tax-collecting. Link popup: yes.
    • Brad DeLong smacks down John Cochrane on VAT arithmetic. Link popup: yes.
    ‡ ubi cash_transfers taxes

    WAY TOO SHORT

    How Parent PLUS loans worsen the racial wealth divide

    ⤷ ISAs

    RACHEL FISHMAN of NEW AMERICA scrutinizes Parent PLUS loans, federal loans with high borrowing limits which parents can take out to help their children attend college.

    KEVIN CAREY summarizes popup: yes on Twitter: “Instead of making college affordable for black students, the federal government is making what are arguably predatory loans… Parent PLUS has become yet another ‘universal’ program that, in reality, makes the black/white wealth gap worse.”

    From the report:

    “New analysis of Education Department data show just how risky PLUS loans are for these families. This analysis also shows that when parent loans and student loans are considered together, federal student loan policies are driving an intergenerational accumulation of debt that burden the neediest families.

    This report looks at the Parent PLUS loan program and how it exacerbates the racial wealth divide by promoting debt among low-income Black families. The report focuses on Black families because they experience a wider racial wealth divide, and there is alarming new evidence that they also have the worst student loan repayment outcomes of any racial or ethnic demographic. The first part of the report examines the demographics of Parent PLUS families using Education Department data. It looks at average intergenerational debt for those families who borrow using PLUS and student loans.

    This analysis reveals that low-income Black families are burdened with large intergenerational education debts compared to their white peers. The second part of this report focuses on the implications of the racial wealth gap and how policies like PLUS have widened it. It shows how the PLUS program has come roaring back to life after the credit check regulation was weakened.”

    Full report here popup: yes. ht Will

    • At the end of the report popup: yes, Fishman makes policy recommendations: “Add an ability-to-pay measure using [Expected Family Contribution],” “Prevent institutions from listing PLUS loan amounts in financial aid letters,” “Hold colleges accountable for Parent PLUS default rates,” and more.
    • Judith Scott-Clayton’s January report for Brookings looks at student debt over time, and adds to the picture of racial student-loan gaps. “The new data allow for the most comprehensive assessment to date of student debt and default from the moment students first enter college, to when they are repaying loans up to 20 years later, for two cohorts of first-time entrants…Focusing on borrowers only and projecting default rates out through year 20 (as shown in Figure 3) suggests that 70 percent of black borrowers may ultimately experience default.” Link popup: yes.
    ‡ higher_education student_debt

    OPACITY PROFILE

    Transparency and governance

    ⤷ Digital Ethics

    In a recent article for the YALE LAW JOURNAL, legal scholar DAVID POZEN charts an “ideological drift” of transparency in government from the Progressive era to the present: 

    “In the formative periods of American “open government” law, the idea of transparency was linked with progressive politics. Advocates of transparency understood themselves to be promoting values such as bureaucratic rationality, social justice, and trust in public institutions. Transparency was meant to make government stronger and more egalitarian. In the twenty-first century, transparency is doing different work. Although a wide range of actors appeal to transparency in a wide range of contexts, the dominant strain in the policy discourse emphasizes its capacity to check administrative abuse, enhance private choice, and reduce other forms of regulation. Transparency is meant to make government smaller and less egregious.

    Many factors have played a part [in this transition], including corporate capture of freedom of information laws, the exponential growth in national security secrecy, the emergence of the digital age and associated technologies of disclosure, the desire to facilitate international trade and investment, and the ascendance of market-based theories of regulation. Perhaps the most fundamental driver of this ideological drift, however, is the most easily overlooked: the diminishing marginal returns to governmental transparency. As public institutions became subject to more and more policies of formal openness and accountability, demands for transparency became more and more threatening to the functioning and legitimacy of those institutions and, consequently, to progressive political agendas.

    This area of law and advocacy has become on balance substantially more libertarian, in both cultural and functional terms, than it used to be.”

    Link popup: yes to the paper. 

    • A 2016 paper co-authored by Kate Crawford and Mike Ananny offers a critical examination of transparency in the realm of data ethics and algorithmic accountability: “Being able to see a system is sometimes equated with being able to know how it works and govern it… But can ‘black boxes’ ever be opened, and if so, would that be sufficient?” Link popup: yes. 
    • For more on transparency in the digital ethics realm, a paper from Lilian Edwards and Michael Veale that addresses the “transparency fallacy” at the heart of the “right to explanation” discourse guiding European data legislation. Link popup: yes. 
    ‡ transparency politics digital_ethics

    +++

    • New reports from the New York Fed on household wealth, debt, and credit. Under discussion: “(1) an overview of recent developments on household balance sheets, with a focus on housing values and mortgage debt; (2) a discussion of how housing wealth has changed over time and how it is distributed across households; and (3) facts on the changing nature of how households have used their home equity.” Link popup: yes. ht Will
    • A new study looks at the differences between how people respond to trolley problems and in real life: “Our results indicate that responses to hypothetical dilemmas are not predictive of real-life dilemma behavior, but they are predictive of affective and cognitive aspects of the real-life decision.” Link popup: yes.
    • Please don’t ignite the earth’s atmosphere. Link popup: yes. ht Jay
    • From VoxEU: “Who evades taxes in developed economies? The question matters a great deal for the study of inequality because scholars typically rely on tax records to estimate the concentration of income and wealth). If the rich dodge taxes more than the poor, tax records will underestimate inequality.” Link popup: yes.
    • “We identify significantly higher growth in economic activity in constituencies that elect women. Probing mechanisms, we find evidence that women legislators are less likely to be criminal and corrupt, more efficacious, and less vulnerable to political opportunism. We find no evidence of negative spillovers to neighbouring (male-led) constituencies, consistent with net growth.” Link popup: yes. 
    • “Attitudes toward globalisation have emerged as a new dimension of political alignment, alongside – or even instead of – the traditional left-right cleavage.… Highly skilled individuals approve of their government more when high skill-intensive exports increase, but approve of it less when high skill-intensive imports rise. More generally – and contrary to the conventional wisdom – unskilled workers do not oppose imports and blame their leaders for failing to protect markets.” Link popup: yes.
    • “We find that extreme traffic increases the incidence of domestic violence, a crime shown to be affected by emotional cues, but not other crimes.” Link popup: yes. 
    • Ross Perlin of the Endangered Language Alliance popup: yes with an essay about technology and endangered languages: “No technology developed so far can rival the intensive, unsung process of language transmission that takes place between adults and young children, almost always at home.” Link popup: yes. 

  7. Lay of the Land

    Comments Off on Lay of the Land

    LABOR-LEISURE TRADE-OFF

    A new paper on the labor effects of cash transfers

    SARAH BAIRD, DAVID MCKENZIE, and BERK OZLER of the WORLD BANK review a variety of cash transfer studies, both governmental and non-governmental, in low- and middle-income countries. Cash transfers aren’t shown to have the negative effects on work that some fear:

    “The basic economic model of labor supply has a very clear prediction of what should be expected when an adult receives an unexpected cash windfall: they should work less and earn less. This intuition underlies concerns that many types of cash transfers, ranging from government benefits to migrant remittances, will undermine work ethics and make recipients lazy.

    Overall, cash transfers that are made without an explicit employment focus (such as conditional and unconditional cash transfers and remittances) tend to result in little to no change in adult labor. The main exceptions are transfers to the elderly and some refugees, who reduce work. In contrast, transfers made for job search assistance or business start-up tend to increase adult labor supply and earnings, with the likely main channels being the alleviation of liquidity and risk constraints.”

    Link popup: yes to the working paper. Table 2—which covers the channels through which cash impacts labor, is especially worth a read—as many studies on cash transfers don’t go into this level of detail.

    • A study on a large-scale unconditional cash transfer in Iran: “With the exception of youth, who have weak ties to the labor market, we find no evidence that cash transfers reduced labor supply, while service sector workers appear to have increased their hours of work, perhaps because some used transfers to expand their business.” Link popup: yes.
    • Continuing the analysis of Hauschofer and Schapiro’s controversial results popup: yes from a cash study transfer in Kenya, Josh Rosenberg at GiveDirectly has, at the end of his overview, some thoughtful questions for continuing research: “Is our cost-effectiveness model using a reasonable framework for estimating recipients’ standard of living over time?… GiveDirectly provides large, one-time transfers whereas many government cash transfers provide smaller ongoing support to poor families. How should we apply new literature on other kinds of cash programs to our estimates of the effects of GiveDirectly?” Link popup: yes.
    ‡ ubi cash_transfers

    POSITIVE NET

    A pro-union argument from the right: unions’ net fiscal impact

    AARON SOJOURNER and JOSE PACAS of the UNIVERSITY OF CHICAGO look at how unions affect net fiscal impact (taxes paid vs. benefits received) of individual workers.

    In a blog post popup: yes, Sojourner explains: “The main takeaway is that we have new evidence that unions move families towards a middle-class model of earning sufficient private income, paying taxes, and staying clearer of the public safety net. If family self-sufficiency is an important value to you as a policymaker or a citizen and you are looking for tools to increase it, don’t overlook unions. They help families stay clear of the worst economic outcomes by increasing private income and insurance coverage.”

    From the paper:

    “Union members appear to pay more every year in federal, state, and local taxes than do similar non-union workers, which is connected to the fact that they earn thousands more dollars in annual private income on average. Furthermore, union members appear to receive less in public benefits on average…. This is the first analysis focusing on or quantifying this effect of unions. Though the prevalence of unionization is declining, this evidence suggests that nearly 15 million American union members are contributing an average of between $540 and $1,300 more annually to the public balance sheet than they would otherwise be. If the U.S. union membership rate stayed at its 1994 level of 17.4 percent, 8.4 million non-union workers in 2015 would have been union members.”

    Link popup: yes to the full working paper.

    • For more on unions, see Suresh Naidu’s recent talk popup: yes on unions and inequality, and his 2017 paper (with Dan Herbst et al) which used data from Gallup opinion polls and found that “unions have had a significant, equalizing effect on the income distribution over the twentieth century.” Link popup: yes.
    ‡ unions public_benefits labor

    DATA CHAIN

    Ag tech, big data, and the right-to-repair

    The buzzy advent of precision agriculture—tech-augmented farming—has raised a number of interesting questions about data and ownership. A 2017 article from MOTHERBOARD explores the world of black market software for John Deere tractors, illuminating many dimensions of the situation: 

    “A license agreement John Deere required farmers to sign in October forbids nearly all repair and modification to farming equipment, and prevents farmers from suing for ‘crop loss, lost profits, loss of goodwill, loss of use of equipment… arising from the performance or non-performance of any aspect of the software.’ The agreement applies to anyone who turns the key or otherwise uses a John Deere tractor with embedded software. It means that only John Deere dealerships and ‘authorized’ repair shops can work on newer tractors.

    ‘If a farmer bought the tractor, he should be able to do whatever he wants with it,’ Kevin Kenney, a farmer and right-to-repair advocate in Nebraska, told me. ‘You want to replace a transmission and you take it to an independent mechanic—he can put in the new transmission but the tractor can’t drive out of the shop. Deere charges 230 USD, plus 130 USD an hour for a technician to drive out and plug a connector into their USB port to authorize the part.’

    ‘What you’ve got is technicians running around here with cracked Ukrainian John Deere software that they bought off the black market,’ he added.”

    Link popup: yes to the article. (For more on right-to-repair, see this popup: yes Forbes article from last year.) ht reader Dena Y.

    A 2016 paper by MICHAEL SYKUTA of the UNIVERSITY OF MISSOURI provides a higher-level overview of the ongoing debates regarding data ownership in agriculture, which span privacy, property, and competition issues:

    “In some respects, farmers’ concerns about use of their farm data are no different than general consumer concerns about the security and privacy of data in the cloud: Can other people (and who) see my data? And how are my data being used? While farm production data may not represent the identity theft risk of some consumer data, production data may be used by ag service providers not only to benefit producers by providing managerial decision support, but also to price discriminate by the nature of their recommendations.”

    Link popup: yes to the paper.  

    • A brief history of John Deere’s central role in the early days of precision ag. Link popup: yes. 
    • Sykuta’s article discusses the development of industry standards for data transparency. Industry groups led by the American Farm Bureau Federation have developed the Ag Data Transparency seal, granted to firms who pledge and comply with several “core principles” related to their data collection and usage practices. The principles can be found here popup: yes. 
    • A recent Wired article details a new push in the use of satellite imagery to yield data and make conclusions about crops. Link popup: yes. (And link popup: yes to the company website of Granular, whose work is featured heavily in the piece.) 
    • A paper from last month details the state of the field of big data in agriculture. Link popup: yes. 
    ‡ big_data data farming

    +++ 

    • An example of an algorithmic audit by Cathy O’Neil, for the company Rentlogic popup: yes: “As part of the audit, O’Neil created a tool she calls an ethical matrix, a worksheet that helps companies think through the consequences—intended and otherwise—of the algorithm’s results. Across the top of the matrix are a half-dozen traits—accuracy, consistency, bias, transparency, fairness and timeliness. The vertical axis lists the stakeholders Rentlogic must consider in its model: building owners, renters, the company, and NYC officials. O’Neil says the matrix creates ‘a conversation around what you might need to worry about.'” Link popup: yes.
    • A new cash transfer study, Baby’s First Years, will give $333 a month to new mothers for 40 months. “The experiment is unique in two aspects. One is its exclusive focus on the impacts of income, unrelated to employment. The other is its focus on the first three years of a child’s life.” Link popup: yes.
    • At Slate, detailed and positive coverage of three studies on the effects of cash transfers (including health effects) from Canada, the US, and Colombia. Link popup: yes. ht Lauren
    • A report from the Friends Provident Foundation in the UK provides an overview of the social wealth fund landscape and offers three models—a Citizen’s Wealth Fund, a Social Investment Wealth Fund, and an Urban Wealth Fund—for implementation. Link popup: yes. 
    • Last week we shared several articles related to the push for postal banking in the United States. This week, in Bloomberg, Noah Smith issues some cautions based on the case of Japan’s (now privatized) postal bank. Link popup: yes. 
    • Quantifying the pace of urban life: among other variables, pedestrian walking speed increases with the population of a city. Link popup: yes. 
    • “Using new county-level estimates of intergenerational economic mobility for children born between 1980 and 1986, we exploit the uneven expansions of Medicaid eligibility across states to isolate the causal effect of this specific policy change on mobility outcomes.” Link popup: yes.
    • The CBPP has a new roundup of policies to help reduce inequality, with mention of CUNY ASAP and other effective training programs. Link popup: yes.
    • The Verge on Google’s uncannily realistic new robot voice: “If robots can freely pose as humans the scope for mischief is incredible; ranging from scam calls to automated hoaxes.” Link popup: yes. Linked within, another take from Alexis Madrigal: “For decades now, we’ve been forcing human service workers to act like robots. This makes many service interactions unpleasant enough that people want to avoid them, so now, Google will provide everyone with a robot that can act like a human.” Link popup: yes. Zeynep Tufekci responds on Twitter: “This is straight up, deliberate deception. Not okay.” Link popup: yes.
    • The latest report from People’s Policy Project makes a compelling argument for extending franchise to the incarcerated. Link popup: yes.
    • On competition and public goods provision. Link popup: yes.
    • “The rise and fall of empires over the last 5,000 years – from the Afsharid Dynasty to the British Empire – still influences world trade patterns today. New data on the rise and fall of 140 empires across the world over the last 5,000 years reveals that present-day trade flows between countries that were once in a common empire are on average 70% larger than that between unrelated countries.” Link popup: yes.

  8. Aesthetic Integration

    Comments Off on Aesthetic Integration

    POSTAL OPTION 

    Renewed interest in an old model 

    Last week we linked to the widely publicized news popup: yes that SENATOR KIRSTEN GILLIBRAND would be pushing legislation to reintroduce government-run commercial banking through the United States Postal Service.

    Link popup: yes to the announcement, and link popup: yes to Gillibrand’s Twitter thread on the plan.

    In a 2014 article for the HARVARD LAW REVIEW, law professor and postal banking advocate MEHRSA BARADARAN describes the context that makes postal banking an appealing solution: 

    “Credit unions, S&Ls, and Morris Banks were alternatives to mainstream banks, but they were all supported and subsidized by the federal government through targeted regulation and deposit insurance protection.

    Banking forms homogenized in the 1970s and 1980s, leaving little room for variation in institutional or regulatory design. Eventually, each of these institutions drifted from their initial mission of serving the poor and began to look more like commercial banks, even competing with them for ever-shrinking profit margins.

    The result now is essentially two forms of banks: regulated mainstream banks that seek maximum profit for their shareholders by serving the needs of the wealthy and middle class, and unregulated fringe banks that seek maximum profits for their shareholders by serving the banking and credit needs of the poor. What is missing from the American banking landscape for the first time in almost a century is a government-sponsored bank whose main purpose is to meet the needs of the poor.”

    Link popup: yes to the full article. 

    • Baradaran has written widely on this issue. Another 2014 article, in Slate, gives a broad overview of the history of the US Postal Savings Service, which was operational from 1911 to 1966. Link popup: yes. A brief post at the Harvard University Press blog discusses her work in the context of Gillibrand’s announcement, and features of a video of her discussing banking disparity in the US. Link popup: yes. See also Baradaran’s book How The Other Half Banks popup: yes, which surveys the American retail banking landscape and advocates for a government option. 
    • From the past week, Matthew Klein looks at the pros and cons of Gillibrand’s plan in Barron’s (link popup: yes), and an article in The Week raises some lightweight but worthy counterarguments on postal banking (l popup: yesink popup: yes). (Similar sentiments are more succinctly captured in a few tweets from Matt Yglesias. Link popup: yes.)
    • Central to the postal banking discussion has been a 2014 white paper produced by the USPS Inspector General which proposes the various financial services and delivery methods that could compose a postal banking system. Link popup: yes. 
    • For context, an interactive mapping tool of data collected by the Federal Deposit Insurance Corporation in 2015 gives detail on the extent of the problem: 7% of American households are unbanked, and nearly 20% are underbanked. Link popup: yes. And, from the Urban Institute, details on the data for the New York City area. Link popup: yes.
    • A Pew Research Trust presentation maps the geographic distribution of post offices alongside un- and underbanked regions, providing strong evidence for the infrastructural capacity of the postal service to address service gaps: 10% of census tracts have no bank branches within 5 miles, and of those tracts, 76% have a Post Office closer than the nearest bank. Link popup: yes.
    ‡ banking public_services

    STABLE RELEASE

    Can public benefits programs keep people out of prison?

    A new paper by CODY TUTTLE of the UNIVERSITY OF MARYLAND, forthcoming from the American Economic Journal: Economic Policy, looks at how access to Food Stamps affects recidivism rates. 

    “It may not come as a surprise that half of releasees are back in prison within five years of their release and three-quarters are re-arrested within five years. Recidivism in America may be at least partly the consequence of barriers to reentry.

    In this paper, I focus on one of those barriers, the SNAP ban, and ask how it affects recidivism outcomes, defining recidivism as a return to prison after release. It is particularly critical that we understand the effect of the SNAP ban because it is currently in effect in 30 states, and because survey evidence suggests SNAP is an important resource for offenders post-release. Approximately 70% of the former inmates in the Boston Reentry Study report receiving SNAP benefits even just two months after release. 

    To study the effect of the SNAP ban on recidivism, I use a federal policy change (as it was implemented in Florida) that imposed a lifetime ban from SNAP receipt on offenders who committed drug trafficking on or after August 23, 1996.

    I find the SNAP ban has increased the probability of recidivism among drug traffickers.”

    Full paper here popup: yes.

    • Tuttle’s findings dovetail with research we shared earlier this year on the effects of minimum wage laws and the Earned Income Tax Credit on recidivism rates: “We find that the average minimum wage increase of 8% reduces the probability that men and women return to prison within 1 year by 2.8%… The availability of state EITCs also reduces recidivism, but only for women. Given that state EITCs are predominantly available to custodial parents of minor children, this asymmetry is not surprising.” Link popup: yes. 
    • Jennifer Doleac, a researcher whose work we’ve linked to in the past, has written a series of edifying Twitter threads summarizing a lit review on evidence from recidivism interventions for the William T. Grant Foundation popup: yes and The Lab popup: yes @ DC popup: yes. The topics compiled span mental health and employment interventions. Link popup: yes to the master thread of threads. 
    • An especially interesting thread features research on “wrap-around” programs that encompass a variety of reentry assistance interventions, attempting to close service gaps in other more targeted programs. Doleac writes: “These studies suggest that we should be very cautious about continuing to implement wrap-around programs without rigorous evaluation. Perhaps programs that try to address many needs at once wind up doing a mediocre job on all fronts, thus having little impact. This is also a caution for nonprofits that start w[ith] one focus and add on bells and whistles as they realize how multi-faceted the challenge is. I’ve seen this happen in real time, & it always comes from a good place. But trying to do everything makes it tough to do any of it well.” Link popup: yes.  
      ‡ criminal_justice

      MOTIVATED AGENTS

      Modeling prosocial motivation and incentives

    TIMOTHY BESLEY of the LONDON SCHOOL OF ECONOMICS and MAITREESH GHATAK of the CANADIAN INSTITUTE FOR ADVANCED RESEARCH review literature on prosocial behavior and propose new incentive models: 

    “There is a need… to shift the focus away from government versus market provision and instead look at the wider incentives that providers face to generate insights into how public goods and services should be provided. Studying this requires a better understanding of the frictions that prevent an efficient allocation of goods and services with significant social returns. This review builds a framework to develop the main ideas in an emerging literature that studies incentives in organizations with three core features: (a) the good or service being produced has a significant social component that is not captured by its market value; (b) outcomes and inputs are difficult to measure; and (c) some of those whose effort is needed are motivated agents, i.e., agents who care about the output that they produce.”

    The conclusion makes the excellent suggestion of bringing other disciplines to bear on these questions:

    “There is the potential to unify the more standard approach to the economics of incentives with more sociologically and psychologically informed approaches.”

    Full paper here popup: yes.

    • Recent work on the formation of prosocial groups, from Ernst Fehr at the University of Zurich and Tony Williams: “Migration opportunities and normative consensus building are key to the quick emergence of an efficient culture of universal cooperation because the more prosocial subjects populate the two efficient institutions first, elect prosocial judges (if institutionally possible), and immediately establish a social norm of high cooperation. This norm appears to guide subjects’ cooperation and punishment choices, including the virtually complete removal of antisocial punishment when judges make the sanctioning decision.” Link popup: yes.
    ‡ prosocial_institutions metrics

    +++

    • Chris Hughes on sharing the profits from data: “We should not only expect that these companies better protect our data – we should also ensure that everyone creating it shares in the economic value it generates. One person’s data is worth little, but the collection of lots of people’s data is what fuels the insights that companies use to make more money or networks, like Facebook, that marketers are so attracted to. Data isn’t the ‘new oil’, as some have claimed: it isn’t a non-renewable natural resource that comes from a piece of earth that a lucky property owner controls. We have all pitched in to create a new commonwealth of information about ourselves that is bigger than any single participant, and we should all benefit from it.” Link popup: yes.
    • The Bureau of Labor Statistics and Census Bureau are working together to fill a data gap on productivity: “Dispersion in productivity across businesses may provide information about the nature of competition and frictions within sectors and about the sources of rising wage inequality across businesses. There are currently no official statistics that provide this level of detail.” Link popup: yes.  ht Will
    • The Wall Street Journal on how some towns are paying young people to move to them: “Relocate to Hamilton and the city promises 5,000 dollars to help pay student loans. Pack up for Grant County, Ind., and claim 5,000 dollars toward buying a home. Settle in North Platte, Neb., and the chamber of commerce will hold a ceremony in your honor to present an even bigger check.” Link popup: yes.
    • Hiba Hafiz in the New York Times reveals a surprising fact: the National Labor Relations Board cannot hire economists. “Congress cut the division’s funding, effectively ending its work, and in 1947 it barred the board from hiring experts in economic analysis.”  Link popup: yes.
    • David Dayen on funding a job guarantee: “The one critique that cannot really be put on the federal job guarantee is that it costs too much. Or at least, you cannot say this without ignoring the mountain of taxpayer money we already employ for that intended purpose.” Link popup: yes.
    • Frances Coppola summarizes new work on government debt: “A new working paper from the IMF popup: yes casts serious doubt on the entire basis for the austerity mantra. Far from default being inevitable if debt rises too high, it may never happen at all. For advanced economies in good standing, the government’s debt capacity appears to be infinite.” Link popup: yes.
    • Government and AI, Part 1: Statements and video from the recent congressional hearing on Artificial Intelligence and Public Policy. (The emphasis is more on economic and labor impact than on the ethics of algorithmic decision-making.) Link popup: yes.
    • Government and AI, Part 2: A 183-page report from the UK House of Lords’ Select Committee on Artificial Intelligence. From coverage in TechCrunch popup: yes: “The report popup: yes also calls for the government to take urgent steps to help foster ‘the creation of authoritative tools and systems for auditing and testing training datasets to ensure they are representative of diverse populations, and to ensure that when used to train AI systems they are unlikely to lead to prejudicial decisions’ — recommending a publicly funded challenge to incentivize the development of technologies that can audit and interrogate AIs.” Link to the full report popup: yes. ht Sara
    • Jeffrey Sachs at the Niskanen Center dispels—in detail and with new data sets—much of the hysteria around the campus free speech ‘crisis’. Link popup: yes. 
    • On the (substantial) welfare effects of Colombia’s rapid-transit bus system, with greater modeled effects of transit expansion in tandem with a value capture scheme. Link popup: yes. 
    • On pension reform in China: “Both our theoretical and empirical results confirm that pension privatization is adversely associated with local public spending on education in China. Private pension subsidies, moreover, magnify this effect. Our study supports the theoretical assertion and selective empirical findings of a negative intergenerational effect of pension privatization.” Link popup: yes.
    • “In contrast to the prediction of basic theory, income tax increases in OECD countries have led people to spend less time working and more time on leisure activities, with little change in hours of household work.” Link popup: yes.
    • After Chetty, Jesse Rothstein examines the impact of children’s educational outcomes on mobility: “I find little evidence that the quality of schools is a key mechanism driving variation in intergenerational mobility… this points to job networks and the structure of local labor and marriage markets, rather than the education system, as likely factors influencing intergenerational economic mobility.” Link popup: yes. ht ankit 
    • A great post on the oddities of the helium market by Timothy Taylor at Conversable Economist. Link popup: yes.

  9. The Inaccessible Rock

    Comments Off on The Inaccessible Rock

    ONTARIO FOR ALL

    Canada calculates expanding Ontario’s guaranteed income to the entire nation

    Canada’s Parliamentary Budget Office looks at the cost of expanding the Ontario pilot nationwide. Full report here popup: yes. ht Lauren

    ANDREW COYNE of the NATIONAL POST summarizes the findings (all figures are in Canadian dollars):

    “The results, speculative as they are, are intriguing. The PBO puts the cost of a nationwide rollout of the Ontario program, guaranteeing every adult of working age a minimum of 16,989 CAD annually (24,027 CAD for couples), less 50 per cent of earned income—there’d also be a supplement of up to 6,000 CAD for those with a disability—at 76.0 billion CAD.

    “Even that number, eye-watering as it is (the entire federal budget, for reference, is 312 billion CAD), is a long way from the 500 billion CAD estimates bandied about in some quarters.

    “But that’s just the gross figure. The PBO estimates the cost of current federal support programs for people on low-income (not counting children and the elderly, who already have their own guaranteed income programs) at $33 billion annually. Assuming a federal basic income replaced these leaves a net cost of 43 billion CAD. That’s still a lot—one seventh of current federal spending.”

    Full article here popup: yes.

    • A few features of the Ontario model differentiate it from a a prototypical (universal) basic income: 1) the Ontario pilot is not universal: only those “living on low income (under 34,000 per year if you’re single or under 48,000 per year if a couple”) are eligible, according to the Ontario government popup: yes. 2) It functions as a negative income tax—50% of any earned income above a set threshold is subtracted from the benefit. 3) If implemented, this guaranteed basic income would popup: yes “replace Ontario Works and the Ontario Disability Support Program.” The PBO report uses similar parameters expanded to the federal level.
    • In an article in Fast Company from February on the pilot, Ontario premier Kathleen Wynne explains the thinking behind using basic income to replace other social assistance: “‘I’ve met lots of people on social assistance who give a lot to the community and I have often thought ‘why aren’t we paying you to do this?’ Wynne says. ‘I envision a world where we help people to do the work that they can do. By work, I mean involvement in human society. I hope that, as we go through this project, we will see how that will work better.’” Link popup: yes.
    • A HuffPost article imagines other ways the guaranteed income might cost even less over time: “This raw cost estimate is a very simplified snapshot. It just models what the government would have to spend to deliver the basic income, if nothing else changed. But with a basic income, plenty would change. First, we could expect a steep drop in the poverty rate. And that, in turn, could mean big savings for governments, because poverty is a major expense—particularly when it comes to health care.” Link popup: yes.
    ‡ ubi guaranteed_income

    PREFERENCE MECHANISM

    How new information can change opinions on redistribution 

    A new paper looks at the way Americans (mis)understand their wealth in a global context. Accurate information makes them much more generous regarding foreign aid:

    “Study participants profoundly underestimate how affluent they are in comparison to most of the world. While the median respondent is in the top decile of the world’s purchasing power adjusted for income distribution, she places herself at the 60th percentile of the distribution and estimates the global median income at $20,000 per year. Participants underestimate their percentile rank in the global income distribution by 27 points on average and overestimate the global median income by a factor of 10.

    Respondents who were randomly assigned to information on the global income distribution supported higher spending on foreign aid and cuts in agricultural trade protections at larger rates. A behavioral measure validates these survey data—donations to charities abroad rise by 55% relative to the control group.” 

    Link popup: yes to the paper by GAUTAM NAIR of YALE UNIVERSITY.  

    • Another recent paper by economist Bastian Becker examines similar dynamics, but at the domestic level. Becker argues that information about the magnitude of income gaps serves as an index of unequal economic opportunity (as opposed to simply unequal incomes), knowledge of which leads to greater support for redistributive programs. Link popup: yes. 
    • A 2016 paper by Asli Cansunar of Duke University surveys the evidence on the (mis)perceptions of the income distribution, and finds “that in making decisions about taxation policies, individuals often rely on misperceptions of income distribution, income inequality and their standing in the economy; they do not use factual information.” It goes on to suggest that the provision of accurate information can be used as a treatment for the effects of these widely held misperceptions. Link popup: yes. 
    • A 2017 NBER working paper looks at “frontier culture” attitudes towards redistribution: “Many decades after the closing of the frontier, counties with longer historical frontier experience exhibit more prevalent individualism and opposition to redistribution and regulation. We take several steps towards a causal interpretation, including an instrumental variables approach that exploits variation in the speed of westward expansion induced by national immigration inflows.” Link popup: yes. 
    ‡ traffic inequality

    PHYSICAL IMPACT

    On the place of hardware in the AI conversation 

    A new paper by TIM HWANG, Director of the HARVARD-MIT ETHICS AND GOVERNANCE OF AI INITIATIVE popup: yes, explores the role that hardware plays in the broad societal impact of artificial intelligence. He writes: 

    “To the extent that computational power is mentioned, it is typically addressed simply as an enabling factor in the emergence of machine learning.… Such a shorthand enables a focus on the numerous problematic ways that machine learning might be applied and the implications of those applications for justice, equity, and a host of other values.

    However, it also flattens out the role that computational power plays in these issues to simply that of a trigger for technological progress. This may miss the significant and nuanced ways that hardware influences the impact of AI on these broader values and social concerns. 

    Hardware actively shapes the landscape of what can be done with the technology of machine learning, and plays a significant role in influencing how it will evolve going forwards. These impacts turn on more than simply the amount of processing power available, but on the details of computational architecture, supply chains, and the co-evolution of the machine learning field itself.”

    The final, more speculative, section introduces a compelling discussion about how hardware figures in to debates over governance and AI: 

    “Computational power is intimately linked to a nexus of issues in civil rights, consumer safety, geopolitical competition, labor policy, and corporate power. In contrast to the software and data that the practice of machine learning relies on, hardware and its production is more centralized, more able to be monitored, and less able to evade efforts to govern it. Hardware therefore offers one tangible point of control for those seeking to find levers on which to base policy and effectively shape the social impact of the technology.”

    Link popup: yes to the paper. 

    • For more on the landscape of chip development and the race to produce the most effective AI hardware, see this popup: yes Wired article from 2017, and this popup: yes one from 2016. And, from chip manufacturer NVIDIA, a post on the immense performance advantage of GPUs over CPUs. Link popup: yes.
    • News from last week: Facebook is looking to join Apple, Google, and Amazon with in-house chip development for a variety of potential applications (including AI, per tweets popup: yes from neural network pioneer and Facebook engineer Yann LeCun). Link popup: yes. 
    ‡ metrics machine_learning

    +++

    • On the value of Manhattan’s land: “A new study popup: yes by economists from Rutgers University tackles this question with a methodology that not only provides an estimate for the current value of the land, but also its growth in value over time.” The study estimates that “the developable land in Manhattan” was worth $1.74 trillion in 2014. Link popup: yes to coverage in CityLab.
    • Cory Booker’s new job guarantee pilot bill: “The Federal Jobs Guarantee Development Act, announced by Booker [last] Friday, would establish a three-year pilot program in which… every adult living [in a pilot area] is guaranteed a job paying at least $15 an hour (or the prevailing wage for the job in question, whichever’s higher) and offering paid family/sick leave and health benefits.” Link popup: yes.
    • On the wage effects for joining the public sector during a recession. Link popup: yes. 
    • Quantifying the unequal effects of climate change: “For changes in regional heat extremes, the pattern is particularly stark. Africa, large parts of India and most of South America are likely to experience changes clearly attributable to climate warming early on, after a 1.5-degree increase in global temperatures. But mid-latitude regions—where most greenhouse gases are produced—won’t see such pronounced changes until the global temperature rise hits 3 degrees or so.” Link popup: yes.
    • Preqin is out with a giant and expensive popup: yes new report on Sovereign Wealth Funds. A 12-page sample is available here popup: yes. At Pro Rata, Dan Primack writes some takeaways: “If it feels like sovereign wealth funds are popping up in more and more large transactions, it’s probably because they now manage a ridiculous amount of cash. Assets under management for SWFs now totals a whopping 7.45 trillion USD, up 13% from last year, according to a new report from Preqin. Of that, $5.49 trillion is managed by just 10 funds.” Link popup: yes.
    • Does tax evasion have an effect on the crime rate? Link popup: yes. 
    • A comprehensive report co-authored (with six others) by Darrick Hamilton tackles the racial wealth gap and persistent myths about how to fix it. From the intro: “We contend that the cause of the gap must be found in the structural characteristics of the American economy, heavily infused at every point with both an inheritance of racism and the ongoing authority of white supremacy. There are no actions that black Americans can take unilaterally that will have much of an effect on reducing the racial wealth gap. For the gap to be closed, America must undergo a vast social transformation produced by the adoption of bold national policies.” Link popup: yes. (See also this older paper, in which Hamilton and co-author William Darity Jr. propose baby bonds as a targeted solution for closing the gap. Link popup: yes.)
    • Noah Smith at Bloomberg takes up the above report and speculates that a familiar emerging idea—the social wealth fund—could be a vehicle for distributing reparations to black Americans. Link popup: yes. 
    • A quick look at possibilities for Universal Basic Assets: “At bottom, the idea of UBA seeks new ways to raise money without resorting to new taxes. It’s about opening up assets and bringing the market into more areas of life, empowering individuals, and recognizing the public goods that we currently give away to corporations.” Link popup: yes. ht Jay
    • “Successful individuals either act as partners or as rivals.” Link popup: yes. 
    • On conflict and interregional resources: “Our study highlights the idea that the likelihood of conflict (and through conflict, the path of economic development) depends not only on a region’s own resources, but also the resources of its neighbours.” Link popup: yes.
    • Pandora Music has released results from a large-scale RCT they’ve conducted on user sensitivity to advertising: “We estimate a demand curve that is strikingly linear, with the number of hours listened decreasing linearly in the number of ads per hour (also known as the price of ad-supported listening).” Link popup: yes. 
    • Senator Kirsten Gillibrand announced a bill to (re)introduce postal banking in the United States: “Gillibrand’s bill would allow the postal service to make small loans at low interest rates and would almost certainly compete payday lenders out of business.… Even by global standards, they’re setting an ambitious goal.” Link popup: yes. 

  10. Nightmare

    Comments Off on Nightmare

    NON-ZERO PRICE

    “Digital goods have created large gains in well-being that are missed by conventional measures of GDP and productivity”

    A new paper by ERIK BRYNJOLFSSON et al. suggests using massive online choice experiments as a method to find the true impact of digital goods on well-being. The background section gives an example of the impact that is currently unmeasured:

    “… [in] a number of sectors … physical goods and services are being substituted with digital goods and services. An apropos example of such a transition good is an encyclopedia. Since the 2000s, people have increasingly flocked to Wikipedia to get information about a wide variety of topics updated in real time by volunteers. In 2012, Encyclopedia Britannica, which had been one of the most popular encyclopedias, ceased printing books after 244 years (Pepitone 2012). Wikipedia has over 60 times as many articles as Britannica had, and its accuracy has been found to be on par with Britannica (Giles 2005). Far more people use Wikipedia than ever used Britannica—demand and well-being have presumably increased substantially. But while the revenues from Britannica sales were counted in GDP statistics, Wikipedia has virtually no revenues and therefore doesn’t contribute anything to GDP other than a few minimal costs for running servers and related activities and some voluntary contributions to cover these costs…For such transition goods, consumer surplus increases as free access spurs demand, but revenue decreases as prices become zero. Hence GDP and consumer welfare actually move in opposite directions.”

    One finding of note: “50% of the Facebook users in our sample would give up all access to Facebook for one month if we paid them about $50 or more.” Link to paper on NBER here popup: yes. A free draft is available here popup: yes.

    ‡ metrics productivity

     

    PROPRIETARY SPECIMEN

    “Progressive property” and the ownership of personal data 

    Legal researcher JESSICA ROBERTS brings the “progressive property” school of thought to bear on the thorny debates over the ownership of genetic data: 

    “People historically have not had meaningful ownership rights in their genetic data.… However, recently the patent stranglehold that biotech has had on genetic information has weakened, as individuals are gaining what look like de facto property interests in their DNA. People who contribute specimens for research are beginning to demand “biorights,” including compensation, access rights, and continuing control.

    …

    By some estimates, biobanks in the United States alone house over 500 million biospecimens with that number increasing by 20 million every year. New spheres of ownership are rare in property law. Virtually all of the world’s territory is already spoken for, so the possibility of a new brand of entitlement, creatio ex nihilo, presents a particularly compelling opportunity to apply this new school of thought.”

    Full paper here popup: yes.

    • The above argument relies on “progressive property” theory, a burgeoning legal literature that aims to “look to the underlying human values that property serves and the social relationships it shapes and reflects” in order to move beyond personal property rights “as the sole basis for resolving property conflicts or for designing property institutions.” Link popup: yes.
    • Another paper treats the ownership question in the context of health records data: “Raw patient data are not the valuable resource; these data acquire value only through the application of infrastructure services.… The right question is not who owns health data. Instead, the debate should be about appropriate public uses of private data and how best to facilitate them while adequately protecting individuals’ interests.” Link popup: yes. 
    ‡ machine_learning data_ethics digital_ethics biodata

    THE CONTEXT OF SPRAWL

    On the manufacture and study of vehicle traffic 

    In a 2015 post on the fantastic and sadly inactive Urban Kchoze popup: yes blog, traffic engineer SIMON VALLÉE lays out a critique of traffic studies, which often rely on standardized vehicle trip data: 

    “By using that data as is, there are a flurry of assumptions that are made:

    All locations of a given land use with similar floor area (or other quantitative feature) will have a similar number of trips generated, it doesn’t matter if it’s a restaurant in the heart of a city or in a tiny town in the boondocks. Essentially all trips generated or attracted by the location will be made in cars.
    Congestion level and traffic conditions will have no effect on the number of trips made to and from that location.

    Now, people may point out that these assumptions aren’t always, or even frequently, true, but these still form the basis of most traffic studies. Why? Well, engineers are taught during their formation that being “conservative” with their calculations is always the best option.

    …

    This approach and the assumptions that support it make traffic studies a self-fulfilling prophecy: over-designing roads while neglecting non-car travel ensures that almost all trips in the area will be made by car, confirming the initial assumptions of quasi-universal car use, because cars are the only mode of travel the road design caters to.”

    Link popup: yes to the post. In a related piece, Vallée sketches out a broader argument about traffic engineering, and proposes congestion should be approached through an economic lens: 

    “The typical approach of seeing congestion or vehicle traffic as an engineer problem is supposing that vehicle flows are essentially static, a known input into the model. XXXX vehicles per hours come at the intersection by the south and then go through the intersection towards the north. This value is taken as a constant: no matter how congested the intersection, the same number of people will want to make this movement, at the same vehicle flow.… The economic approach sees congestion as a matter of demand (number of vehicle trips) exceeding supply (road capacity), which can be compensated either by increasing supply (increasing road capacity) or increasing the price of using roads (through higher travel times and/or direct monetary costs) to decrease demand, rather than merely a matter of a static load applied to a fixed system.”

    Link popup: yes to the post in full. 

    • Todd Schneider recently updated his analysis of over a billion cab and Uber rides in NYC (using open-source data): “The Taxi & Limousine Commission’s monthly aggregate reports popup: yes have shown for some time that ride-hailing apps have surpassed taxis in total popularity, but the granular trip-level dataset paints a more complete picture, allowing us to explore geographic trends, and the fallout from the January 2017 protest at JFK airport popup: yes and the ensuing #DeleteUber social media campaign popup: yes.” Link popup: yes. 
    • For a different view on traffic design, a mathematics research group at MIT modeled different kinds of “phantom” traffic jams. L4ink popup: yes to their project. Included in their compendium is work conducted by a Japanese research team that studied popup: yes congestion unrelated to bottlenecks, with a nice video of their experimental evidence. Link popup: yes. 
    • A 2017 paper co-authored by Daron Acemoglu and Asu Ozdaglar examines whether Braess’s Paradox popup: yes applies to the information available to drivers about possible routes. Link popup: yes. 
    ‡ traffic miscellany

    +++

    • The 2018 Clark Medal citation on Parag Pathak’s work in market design and education: “Pathak has developed creative empirical tools to evaluate the impacts of various policy issues facing the educational environment; examples being the case for charter schools and the impact of exam schools and voucher systems.” Link popup: yes. ht Will
    • “In fragile states, LIPW programs are also presumed to contribute to social and political stability. The developed infrastructure allows for the implementation of other development and peacekeeping activities, while employment opportunities may help prevent at-risk youth from being recruited by armed groups.” Early and encouraging findings from the effects of LIPW programs. Link popup: yes. ht Sidhya
    • How did the introduction of the telegraph affect international markets? “In order to understand how well markets are integrated, one can check how well the ‘law of one price’ (LOP) is satisfied.… The price difference between New York and Liverpool for the same type of cotton is much more volatile before the telegraph. Large fluctuations disappear completely after the telegraph is established.” Link popup: yes.
    • On the effects of infrastructure development for worker mobility. Link popup: yes.
    • “What is a successful data analysis?” Link popup: yes. ht Sidhya
    • A VoxDev post summarizes studies of the relationship between political boundaries and ethnic conflict, finding that redrawing borders has the potential to both reduce and exacerbate divisions. Link popup: yes. For a related history of the management of ethnic division through policy, see Mahmoud Mamdami’s Define and Rule popup: yes (Reviewed here popup: yes.)  
    • Realizing the dream of fully open citation data. Link popup: yes. (And link popup: yes to the Institute For Open Citations.) 
    • Justin Sandefur with a measured look at the controversial results popup: yes from the GiveDirectly cash transfer: “The totality of the evidence seems to point in the direction many governments are already headed: toward  sustained, periodic cash transfers as a social safety net that is carefully targeted or even universal, rather than once-off cash drops to encourage everyone to become an entrepreneur.” Link popup: yes.
    • A new primer from Data & Society on algorithmic accountability. Link popup: yes. ht Sara