nhaliday + cracker-econ   132

Effects of Education on Political Opinions: An International Study | International Journal of Public Opinion Research | Oxford Academic
Education and Political Party: The Effects of College or Social Class?: https://www.jstor.org/stable/2778029
The impact of education on political ideology: Evidence from European compulsory education reforms: https://www.sciencedirect.com/science/article/pii/S0272775716301704
correlation is with leftism, causal effect is shift to right

Greg thinks there are some effects: https://pinboard.in/u:nhaliday/b:5adca8f16265



Bryan Caplan has written a very persuasive book suggesting that retention/transfer of learning is very low. how do we know it’s not the same with the “PoMo ethos”
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february 2018 by nhaliday
Understanding differences in life expectancy inequality - Marginal REVOLUTION
The life expectancy gap at age 40 between high income and low income individuals is substantial. I explore how medical expenditures and unhealthy behaviors account for the life expectancy gap. The data reveals the following. First, low income individuals tend to spend more on healthcare than high income individuals at all ages. Moreover, health disparities by income is salient due to differences in unhealthy behaviors such as heavy smoking. To answer how much dierences in access to medical services and unhealthy behaviors can explain in light of these stylized facts, I construct a life cycle model. The distinctive features of the model are that it flexibly incorporates unobserved, potentially correlated initial human and health capital stocks and embed unhealthy behaviors. Furthermore, the model includes two health systems: private health insurance and Medicare. The main findings are i) differences in access to medical care driven by income inequality potentially accounts for 12.5% of the life expectancy gap, ii) health insurance increases longevity for low income individuals, but modestly, iii) the health condition when young shapes the trend in average medical expenditures by income groups and iv) the impact of differences in unhealthy behaviors is predominant in understanding the life expectancy gap.

Health spending negatively correlated with health outcomes: http://www.arnoldkling.com/blog/health-spending-negatively-correlated-with-health-outcomes/
Pointer from Tyler Cowen. In the paper, Katera argues that the lower life expectancy of lower-income individuals reflects differences in their behavior rather than differences in access to medical services. My thoughts:

1. This seems consistent with Hansonian medicine, in which on average the benefits of more health care spending are about zero. But it also could suggest a counter to the Hanson view. That is, it could be that at the margin everyone benefits from more health care spending, but because the people who spend more tend to be people who behave in unhealthy ways, the benefits of more spending are difficult to tease out from the data. It is like trying to measure the relationship between policing and crime. If areas with a lot of crime tend to require more police, then a simple correlation analysis might suggest that adding police does not help to reduce crime.

2. Katera’s findings are not politically correct. I am on the record as saying that academic economics is headed toward a state in which findings like this will make one almost unemployable. Imagine trying to get Katera hired in a sociology department. Katera’s experience as a job candidate will be help to indicate how far along we are on this path.
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november 2017 by nhaliday
Disaggregating the economy: cost of living | askblog
here are the US states color-coded according to per capita GDP with an adjustment for Regional Price Parities: that is, it’s a measure of income adjusted for what it actually costs to buy housing and other goods. With that change, California, New York, and Maryland are no longer in the top category. Hoever, a number of midwestern states like Kansas, Nebraska, South Dakota, and my own Minnesota move into the top category. A number of states in the mountain west and south that were in the lowest-income category when just looking at per capita GDP move up a category or two when the Regional Price Parities are taken into account.
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november 2017 by nhaliday
The Constitutional Economics of Autocratic Succession on JSTOR
Abstract. The paper extends and empirically tests Gordon Tullock’s public choice theory of the nature of autocracy. A simple model of the relationship between constitutional rules governing succession in autocratic regimes and the occurrence of coups against autocrats is sketched. The model is applied to a case study of coups against monarchs in Denmark in the period ca. 935–1849. A clear connection is found between the specific constitutional rules governing succession and the frequency of coups. Specifically, the introduction of automatic hereditary succession in an autocracy provides stability and limits the number of coups conducted by contenders.

Table 2. General constitutional rules of succession, Denmark ca. 935–1849

To see this the data may be divided into three categories of constitutional rules of succession: One of open succession (for the periods 935–1165 and 1326–40), one of appointed succession combined with election (for the periods 1165–1326 and 1340–1536), and one of more or less formalized hereditary succession (1536–1849). On the basis of this categorization the data have been summarized in Table 3.

validity of empirics is a little sketchy

The graphic novel it is based on is insightful, illustrates Tullock's game-theoretic, asymmetric information views on autocracy.

Conclusions from Gorton Tullock's book Autocracy, p. 211-215.: https://astro.temple.edu/~bstavis/courses/tulluck.htm
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october 2017 by nhaliday
GOP tax plan would provide major gains for richest 1%, uneven benefits for the middle class, report says - The Washington Post
Trump tweets: For his voters.
Tax plan: Something else entirely.
This is appallingly stupid if accurate


Treasury Removes Paper at Odds With Mnuchin’s Take on Corporate-Tax Cut’s Winners: https://www.wsj.com/articles/treasury-removes-paper-at-odds-with-mnuchins-take-on-corporate-tax-cuts-winners-1506638463

Tax changes for graduate students under the Tax Cuts and Jobs Act: https://bcide.gitlab.io/post/gop-tax-plan/
H.R.1 – 155th Congress (Tax Cuts and Jobs Act) 1 proposes changes to the US Tax Code that threatens to destroy the finances of STEM graduate students nationwide. The offending provision, 1204(a)(3), strikes section 117(d) 2 of the US Tax Code. This means that under the proposal, tuition waivers are considered taxable income.

For graduate students, this means an increase of thousands of dollars in owed federal taxes. Below I show a calculation for my own situation. The short of it is this: My federal taxes increase from ~7.5% of my income to ~31%. I will owe about $6300 more in federal taxes under this legislation. Like many other STEM students, my choices would be limited to taking on significant debt or quitting my program entirely.

The Republican War on College: https://www.theatlantic.com/business/archive/2017/11/republican-college/546308/

Trump's plan to tax colleges will harm higher education — but it's still a good idea: http://www.businessinsider.com/trump-tax-plan-taxing-colleges-is-a-good-idea-2017-11
- James Miller

The Republican Tax Plan Is a Disaster for Families With Children: http://www.motherjones.com/kevin-drum/2017/11/the-republican-tax-plan-is-a-disaster-for-families-with-children/
- Kevin Drum

The gains from cutting corporate tax rates: http://marginalrevolution.com/marginalrevolution/2017/11/corporate-taxes-2.html
I’ve been reading in this area on and off since the 1980s, and I really don’t think these are phony results.

Entrepreneurship and State Taxation: https://www.federalreserve.gov/econres/feds/files/2018003pap.pdf
We find that new firm employment is negatively—and disproportionately—affected by corporate tax rates. We find little evidence of an effect of personal and sales taxes on entrepreneurial outcomes.

nobody in the comments section seems to have even considered the comparison with universities

The GOP Tax Bills Are Infrastructure Bills Too. Here’s Why.: http://www.governing.com/topics/transportation-infrastructure/gov-republican-tax-bills-impact-infrastructure.html
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september 2017 by nhaliday
Is the economy illegible? | askblog
In the model of the economy as a GDP factory, the most fundamental equation is the production function, Y = f(K,L).

This says that total output (Y) is determined by the total amount of capital (K) and the total amount of labor (L).

Let me stipulate that the economy is legible to the extent that this model can be applied usefully to explain economic developments. I want to point out that the economy, while never as legible as economists might have thought, is rapidly becoming less legible.
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august 2017 by nhaliday
Immigrants and Everest, Bryan Caplan | EconLog | Library of Economics and Liberty
Immigrants use less welfare than natives, holding income constant. Immigrants are far less likely to be in jail than natives, holding high school graduation constant.* On the surface, these seem like striking results. But I've heard a couple of smart people [Garett Jones] demur with an old statistics joke: "Controlling for barometric pressure, Mount Everest has the same altitude as the Dead Sea." Sometimes controls conceal the truth rather than laying it bare.
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august 2017 by nhaliday
Inherited Trust and Growth - American Economic Association
This paper develops a new method to uncover the causal effect of trust on economic growth by focusing on the inherited component of trust and its time variation. We show that inherited trust of descendants of US immigrants is significantly influenced by the country of origin and the timing of arrival of their forebears. We thus use the inherited trust of descendants of US immigrants as a time-varying measure of inherited trust in their country of origin. This strategy allows to identify the sizeable causal impact of inherited trust on worldwide growth during the twentieth century by controlling for country fixed effects. (JEL N11, N12, N31, N32, O47, Z13)

key data:
Table 1, Figure 1, Figure 3, Figure 4

Trust Assimilation in the United States, Bryan Caplan: http://econlog.econlib.org/archives/2017/05/trust_assimilat.html

How Durable are Social Norms? Immigrant Trust and Generosity in 132 Countries: http://www.nber.org/papers/w19855
We find that migrants tend to make social trust assessments that mainly reflect conditions in the country where they now live, but they also reveal a significant influence from their countries of origin. The latter effect is one-third as important as the effect of local conditions. We also find that the altruistic behavior of migrants, as measured by the frequency of their donations in their new countries, is strongly determined by social norms in their new countries, while also retaining some effect of the levels of generosity found in their birth countries. To show that the durability of social norms is not simply due to a failure to recognize new circumstances, we demonstrate that there are no footprint effects for immigrants’ confidence in political institutions. Taken together, these findings support the notion that social norms are deeply rooted in long-standing cultures, yet are nonetheless subject to adaptation when there are major changes in the surrounding circumstances and environment.

The autocratic roots of social distrust: http://sci-hub.tw/https://www.sciencedirect.com/science/article/pii/S0147596717300951
This paper identifies a new source of social distrust: an individual’s autocratic
 Individuals whose ancestors migrated from countries with higher autocracy
levels are less likely to trust others and to vote in presidential elections in the
 The impact of autocratic culture on trust lasts for at least three generations
whereas the impact on voting disappears after one generation.
 The results are not driven by selection into migration or other factors such as the
GDP, education, or the strength of family ties in home countries in the U.S.
 Autocratic culture also has similar impacts on trust and voting across Europe.
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july 2017 by nhaliday
the mass defunding of higher education that’s yet to come – the ANOVA
Meanwhile, in my very large network of professional academics, almost no one recognizes any threat at all. Many, I can say with great confidence, would reply to the poll above with glee. They would tell you that they don’t want the support of Republicans. There’s little attempt to grapple with the simple, pragmatic realities of political power and how it threatens vulnerable institutions whose funding is in doubt. That’s because there is no professional or social incentive in the academy to think strategically or to understand that there is a world beyond campus. Instead, all of the incentives point towards constantly affirming one’s position in the moral aristocracy that the academy has imagined itself as. The less one spends on concerns about how the university and its subsidiary departments function in our broader society, the greater one’s performed fealty to the presumed righteousness of the communal values. I cannot imagine a professional culture less equipped to deal with a crisis than that of academics in the humanities and social sciences and the current threats of today. The Iron Law of Institutions defines the modern university, and what moves someone up the professional ranks within a given field is precisely the type of studied indifference to any concerns that originate outside of the campus walls.


TBH, if people like Ben Shapiro need $600k security details, universities are on borrowed time. There will be a push to defund

It's interesting that this bill was passed at Wisconsin.
I'm not sure how familiar you guys are with what's been going on there, but the University system in Wisconsin has been the site of some serious, really playing-for-keeps, both-sides-engaged-and-firing-on-all-cylinders culture war the last 8 years. Anyone interested in Freddie de Boer's claims about the significant threat Universities face from plummeting support from conservatives should probably be familiar with Wisconsin, as it's been a real beachhead.

Republicans Stuff Education Bill With Conservative Social Agenda: https://www.nytimes.com/2018/02/01/us/first-amendment-education-bill.html
Religious colleges would be able to bar openly same-sex relationships without fear of repercussions.
Religious student groups could block people who do not share their faith from becoming members.
Controversial speakers would have more leverage when they want to appear at colleges.


lost in "left v. right free speech" debate is that right="don't agree with BLM"; left: "white men deserve to die" @jttiehen @iamcuriousblue
the left needs free speech protections not just bc it "has less power", contra FDB and others, but because it says far more egregious shit
fact is, it's a "microaggression" to say america's a land of opportunity, scholarly&woke to say white males are fragile idiots, deserve pain

On Tommy Curry: https://necpluribusimpar.net/on-tommy-curry/
A few days ago, Rod Dreher wrote a piece in The American Conservative about a 4 year old interview of Tommy Curry, a professor of philosophy at Texas A&M University. (I would like to add that, although I’m going to criticize Dreher’s article, I think The American Conservative is actually a pretty good publication. In particular, on foreign policy, it’s one of the few publications in the US where sanity has not totally disappeared.) In that article, among other things, Dreher quotes Curry as saying that “in order to be equal, in order to be liberated, some white people might have to die”.


With the context, it’s clear that, in the statement quoted by Dreher, Curry wasn’t necessarily expressing his own view, but lamenting what he takes to be the erasure of the fact that, throughout American history, many black leaders have taken seriously the possibility of resorting to violence in order to protect themselves. (I actually think he is right about that, but that’s a pretty common phenomenon. Once a political/cultural figure becomes coopted by the establishment, he is turned into a consensual figure, even though he used to be quite controversial. This happened to Martin Luther King and Gandhi, but also to Charles De Gaulle and Winston Churchill, so despite what Curry seems to think I doubt it has much to do with race.)


Although he deserves censure for misrepresenting Curry’s interview, there is one thing Dreher says which strikes me as correct. Indeed, even if you don’t misrepresent what Curry said, it’s clear that any white person saying even half of it would immediately become the object of universal vilification and be cast out of polite society. Indeed, it’s striking how bigoted and, let’s say it, racist and/or sexist language has become on the left, which is apparently okay as long as no minority is targeted.

Texas College Op-Ed Calls For Ethnic Cleansing: http://www.theamericanconservative.com/dreher/texas-college-op-ed-calls-for-ethnic-cleansing/

Opposing Liberal Academia Doesn't Make One 'Anti-Intellectual': http://www.nationalreview.com/corner/444031/opposing-liberal-academia-doesnt-make-one-anti-intellectual
David French on David Gelernter
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july 2017 by nhaliday
My Simplistic Theory of Left and Right, Bryan Caplan | EconLog | Library of Economics and Liberty
1. Leftists are anti-market. On an emotional level, they're critical of market outcomes. No matter how good market outcomes are, they can't bear to say, "Markets have done a great job, who could ask for more?"

2. Rightists are anti-leftist. On an emotional level, they're critical of leftists. No matter how much they agree with leftists on an issue, they can't bear to say, "The left is totally right, it would be churlish to criticize them."

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june 2017 by nhaliday
Nancy MacLean Owes Tyler Cowen an Apology – Russ Roberts – Medium
lol: https://twitter.com/tcjfs/status/879717516184080384
hmm: https://twitter.com/razibkhan/status/891134709924868096
So any political regime premised on defending property rights is race-biased. If you want to call that racist, I think it's justified.

lmao wut


The Bizarre Conspiracy Theory Nominated for a National Book Award: http://www.nationalreview.com/article/453408/nancy-macleans-democracy-chains-will-conspiracy-theory-win-national-book-award

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june 2017 by nhaliday
Majors | West Hunter
Sometimes we touch upon the question of what people know or don’t know. Probably this has something to do with what they study, assuming that they remember any of what they are exposed to in school.

So what do college students major in?

I have national figures, as well as recent numbers for Harvard.

College as signaling – exceptin’ always Steam: https://westhunt.wordpress.com/2016/08/27/college-as-signaling-exceptin-always-steam/
Some economists [like Bryan Caplan] are now arguing that the benefits of college are almost entirely signaling – showing that you can learn and how much crap you can swallow – rather than conferring knowledge that makes you better at doing something people would pay you for. Ideally, something genuinely useful.

This cannot be entirely true, at least if you consider education in the broadest sense. Once upon a time nobody knew how to build a decent steam engine. After James Watt developed one, other people learned about it at some point in their lives – maybe not in college, but somewhere. Acquiring that knowledge increased their human capital.

But it’s mostly true. If you look at college majors, it is easy to see most college instruction is not very useful. 21% business majors, 10% social sciences and history, 7% educational majors, 6% psych majors, 5% in visual and performing arts, 5% in “communication, journalism, and related programs”, 3% English and literature – well over half at first cut. When I looked at a more detailed breakdown, I had a hard time arguing that the useful fraction was as high as 20%. Even when someone studies a subject that is potentially useful, there’s a significant probability that they’ll end up doing something entirely different. And then there’s forgetting – I don’t think most people retain much of what they studied in school, unless they use it in their work or happen to find a subject fascinating.

Majors, II: https://westhunt.wordpress.com/2018/01/07/majors-ii/
I talked about what people major in earlier, but this is useful, I think. I’m revving up for some posts about education.

A question: I’d like to hear some thoughts about which degrees are worthless. Define you terms. For example< I can imagine degrees that teach you to do things that are useful but somehow out of fashion, useless but highly in demand, useful to you but worse than useless to society as a whole, etc.
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june 2017 by nhaliday
Young Men Are Playing Video Games Instead of Getting Jobs. That's OK. (For Now.) - Reason.com
This is like a reversal of the industrious revolution studied in my JEBO paper: new consumption technologies are money cheap but time pricey

participation has changed along an understudied margin of labor supply. I find that “in-and-outs”—men who temporarily leave the labor force—represent a growing fraction of prime age men across multiple data sources and are responsible for roughly one third of the decline in the participation rate since 1977. In-and-outs take short, infrequent breaks out of the labor force in between jobs, but they are otherwise continuously attached to the labor force. Leading explanations for the growing share of permanent labor force dropouts, such as disability, do not apply to in-and-outs. Instead, reduced-form evidence and a structural model of household labor supply both indicate that the rise of in-and-outs reflects a shift in labor supply, largely due to the increasing earnings of men’s partners and the growth of men living with their parents.

Pointer from Tyler Cowen. My thoughts:

1. When we think of labor force participation declining, we think of, say, John Smith, deciding to never work again. What this paper is saying is that the statistics reflect something different. One month Smith takes a break, then next month he gets a job and Tom Jones takes a break.

2. I think we have always had a large number of workers who are not fully employed year round. That is, there have always been a lot of workers who take breaks between jobs. This is common in construction work, for example.

3. I don’t know if this matters for the phenomenon at hand, but we used to have inventory recessions. In those cases, workers would be out of a job for a while, but they would still be in the labor force, because they were waiting to be recalled by the firm that had laid them off.

4. It seems to me that this is an important paper. Re-read the last sentence in the quoted excerpt.

Job outlook growing worse for young American men: https://www.courier-journal.com/story/opinion/contributors/2018/01/02/job-outlook-growing-worse-young-american-men-opinion/996922001/
As one might imagine, the absence of a job, quality education, or spouse has not bred otherwise productive citizens. Multiple studies have found that young men have replaced what would otherwise be working hours with leisure time at a near 1-1 ratio. Erik Hurst, an economist at the University of Chicago, found that young men spent a startling 75 percent of this leisure time playing video games, with many spending more than 30 hours a week gaming and over 5 million Americans spending more than 45 hours per week.

Higher suicide rates, violent crime, and drug addiction among young men have followed. Suicide rates in the United States are at a 30-year high, with men more than three and a half times more likely to take their own lives than women. Around the United States, violent crimes, homicide in particular, has increased in two-thirds of American cities, with overwhelming young male perpetrators driving the increase. A 2015 Brookings Institute study estimated that nearly half of working-age American men who are out of the labor force are using painkillers, daily.

These problems have been “invisible” for too long.

As video games get better, young men work less and play more: http://review.chicagobooth.edu/economics/2017/article/video-games-get-better-young-men-work-less-and-play-more

Why Are Prime-Age Men Vanishing from the Labor Force?: https://www.kansascityfed.org/~/media/files/publicat/econrev/econrevarchive/2018/1q18tuzemen.pdf

Prime-Age Men May Never Return to U.S. Workforce, Fed Paper Says: https://www.bloomberg.com/news/articles/2018-02-23/prime-age-men-may-never-return-to-u-s-workforce-fed-paper-says
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june 2017 by nhaliday
Kling on the Three Languages of Politics | EconTalk | Library of Economics and Liberty
So what I claim is that Progressives organize the good and the bad in terms of oppression and the oppressed, and they think in terms of groups. So, certain groups of people are oppressed, and certain groups of people are oppressors. And so the good is to align yourself against oppression, and the historical figures that have improved the world have fought against oppression and overcome oppression. The second axis is one I think Conservatives use, which is civilization and barbarism. The good is civilized values that have accumulated over time and have stood the test of time; and the bad is barbarians who try to strike out against those values and destroy civilization. And the third axis is one I associate with Libertarians, which is freedom versus coercion, so that good is individuals making their own choices, contracting freely with each other; and the bad is coercion at gunpoint, particularly on the part of governments.

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june 2017 by nhaliday
Tyler Cowen on Brexit, Steven Pinker, and Joseph McCarthy | askblog
Also, in my other post today, I mention an event on plutocracy co-sponsored by the Hudson Institute and The American Interest. Tyler Cowen makes remarks that have little or nothing to do with the article that he wrote for the event. Two of his more provocative opinions:

1. Steven Pinker may be wrong. Rather than mass violence following a benign trend, it could be cyclical. When there is a long peace, people become complacent, they allow bad leaders to take power and to run amok, and you get mass violence again. (Cowen argues that there are more countries now run by bad people than was the case a couple of decades ago)

2. Joseph McCarthy was not wrong. There were Soviet agents in influential positions. Regardless of what you think of that, the relevant point is that today Chinese and Russian plutocrats may have their tentacles in the U.S. and may be subtly causing the U.S. to be less of a liberal capitalist nation and more of a cronyist plutocracy.

hmm, the USPS stuff here: https://pinboard.in/u:nhaliday/b:fc443b256b1a
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june 2017 by nhaliday
Double world GDP | Open Borders: The Case
Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?: https://www.aeaweb.org/articles?id=10.1257/jep.25.3.83
The Openness-Equality Trade-Off in Global Redistribution: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2509305
Immigration, Justice, and Prosperity: http://quillette.com/2017/07/29/immigration-justice-prosperity/

Some Countries Are Much Richer Than Others. Is That Unjust?: http://quillette.com/2017/07/23/countries-much-richer-others-unjust/
But we shouldn’t automatically assume that wealth disparities across the world are unjust and that the developed world owes aid as a matter of justice. This is because the best way to make sense of the Great Divergence is that certain economic and political institutions, namely those that facilitated economic growth, arose in some countries and not others. Thus perhaps the benevolent among us should also try to encourage – by example rather than force – the development of such institutions in places where they do not exist.

An Argument Against Open Borders and Liberal Hubris: http://quillette.com/2017/08/27/argument-open-borders-liberal-hubris/
We do not have open borders but we are experiencing unprecedented demographic change. What progressives should remember is that civilisation is not a science laboratory. The consequences of failed experiments endure. That is the main virtue of gradual change; we can test new waters and not leap into their depths.

A Radical Solution to Global Income Inequality: Make the U.S. More Like Qatar: https://newrepublic.com/article/120179/how-reduce-global-income-inequality-open-immigration-policies

Why nation-states are good: https://aeon.co/essays/capitalists-need-the-nation-state-more-than-it-needs-them
The nation-state remains the best foundation for capitalism, and hyper-globalisation risks destroying it
- Dani Rodrik
Given the non-uniqueness of practices and institutions enabling capitalism, it’s not surprising that nation-states also resolve key social trade-offs differently. The world does not agree on how to balance equality against opportunity, economic security against innovation, health and environmental risks against technological innovation, stability against dynamism, economic outcomes against social and cultural values, and many other consequences of institutional choice. Developing nations have different institutional requirements than rich nations. There are, in short, strong arguments against global institutional harmonisation.
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june 2017 by nhaliday
The make-or-buy decision with respect to human capital | askblog
Note, however, that this supposed decrease in the share of long-term relationships between employers and employees is not so evident in the data.

Still, I think that the trend is toward firms making more and more use of generic software. (I predicted this almost twenty years ago.) In fact, software-development specialists make more and more use of generic software.

Gary Becker developed the distinction between specific human capital, which is tied to a particular firm, and generic human capital, which can be used anywhere. The more that firms outsource non-core functions and make use of generic software the less they need to invest in specific human capital. Thus, they will tend to do less talent-building and act more like “consumers of work.”
econotariat  cracker-econ  prediction  trends  labor  automation  human-capital  long-short-run  microfoundations  big-peeps 
june 2017 by nhaliday
The Behavioral Econ of Paperwork, Bryan Caplan | EconLog | Library of Economics and Liberty
If X is good, we can noticeably encourage it by modestly simplifying the paperwork. So yes, cut red tape for employment, construction, travel, and adoption. If X is bad, though, we can noticeably discourage it by modestly complicating the paperwork. Indeed, complexity is a viable substitute for explicit means-testing: If you lack the patience to fill out ten forms, you probably don't really need the money.
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june 2017 by nhaliday
Why I see academic economics moving left | askblog
I have a long essay on the scientific status of economics in National Affairs. A few excerpts from the conclusion:

In the end, can we really have effective theory in economics? If by effective theory we mean theory that is verifiable and reliable for prediction and control, the answer is likely no. Instead, economics deals in speculative interpretations and must continue to do so.

Young economists who employ pluralistic methods to study problems are admired rather than marginalized, as they were in 1980. But economists who question the wisdom of interventionist economic policies seem headed toward the fringes of the profession.

This is my essay in which I say that academic economics is on the road to sociology.

Property Is Only Another Name for Monopoly: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2818494
Hanson's take more positive: http://www.overcomingbias.com/2017/10/for-stability-rents.html

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may 2017 by nhaliday
Interview: Mostly Sealing Wax | West Hunter

- conformity and Google, defense and spying (China knows prob almost all our "secrets")
- in the past you could just find new things faster than people could reverse-engineer. part of the problem is that innovation is slowing down today (part of the reason for convergence by China/developing world).
- introgression from archaics of various kinds
- mutational load and IQ, wrath of khan neanderthal
- trade and antiquity (not that useful besides ideas tbh), Roman empire, disease, smallpox
- spices needed to be grown elsewhere, but besides that...
- analogy: caste system in India (why no Brahmin car repairmen?), slavery in Greco-Roman times, more water mills in medieval times (rivers better in north, but still could have done it), new elite not liking getting hands dirty, low status of engineers, rise of finance
- crookery in finance, hedge fund edge might be substantially insider trading
- long-term wisdom of moving all manufacturing to China...?
- economic myopia: British financialization before WW1 vis-a-vis Germany. North vs. South and cotton/industry, camels in Middle East vs. wagons in Europe
- Western medicine easier to convert to science than Eastern, pseudoscience and wrong theories better than bag of recipes
- Greeks definitely knew some things that were lost (eg, line in Pliny makes reference to combinatorics calculation rediscovered by German dude much later. think he's referring to Catalan numbers?), Lucio Russo book
- Indo-Europeans, Western Europe, Amerindians, India, British Isles, gender, disease, and conquest
- no farming (Dark Age), then why were people still farming on Shetland Islands north of Scotland?
- "symbolic" walls, bodies with arrows
- family stuff, children learning, talking dog, memory and aging
- Chinese/Japanese writing difficulty and children learning to read
- Hatfield-McCoy feud: the McCoy family was actually a case study in a neurological journal. they had anger management issues because of cancers of their adrenal gland (!!).

the Chinese know...: https://macropolo.org/casting-off-real-beijings-cryptic-warnings-finance-taking-economy/
Over the last couple of years, a cryptic idiom has crept into the way China’s top leaders talk about risks in the country’s financial system: tuo shi xiang xu (脱实向虚), which loosely translates as “casting off the real for the empty.” Premier Li Keqiang warned against it at his press conference at the end of the 2016 National People’s Congress (NPC). At this year’s NPC, Li inserted this very expression into his annual work report. And in April, while on an inspection tour of Guangxi, President Xi Jinping used the term, saying that China must “unceasingly promote industrial modernization, raise the level of manufacturing, and not allow the real to be cast off for the empty.”

Such an odd turn of phrase is easy to overlook, but it belies concerns about a significant shift in the way that China’s economy works. What Xi and Li were warning against is typically called financialization in developed economies. It’s when “real” companies—industrial firms, manufacturers, utility companies, property developers, and anyone else that produces a tangible product or service—take their money and, rather than put it back into their businesses, invest it in “empty”, or speculative, assets. It occurs when the returns on financial investments outstrip those in the real economy, leading to a disproportionate amount of money being routed into the financial system.
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may 2017 by nhaliday
O Canada! | West Hunter
Imagine a country with an average IQ of 100, some average amount of education (with some distribution), some average amount of capital per head (with some distribution of ownership of capital). Now add immigrants – 10% of the population – that are the same in every way. Same average IQ, same distribution of IQ, same average amount of capital and same distribution. They speak the same language. They have similar political traditions. In other words, it is as if the US had just peacefully annexed an imaginary country that’s a lot like Canada.

Would the original inhabitants gain economically from this merger? Strikes me that this could only happen from economies of scale – since nothing has changed other than a 10% increase in overall size. There might be some diseconomies of scale as well. I wouldn’t expect a big payoff. Except for Nawapa, of course.

Contrast this with a situation in which the extra 10% is fairly different – lower average IQ, much less education on average, don’t speak English. They don’t bring along a lot of capital. They have and bring along their native political traditions, like everyone, but theirs stink. I can easily see how those immigrants might have improved their economic lot but it’s kindof hard to see how bringing in people with low human capital benefits the original citizens more than bringing in people with considerably higher human capital. Yet it must, because adding more of the same clearly has a small effect, while adding in lower-skilled must have a big positive effect. Practically all the economists say so.

place of birth for the foreign-born population of the US, 2013:
all of Latin America, ~25 million China, ~2.5 million

Caplan’s full of shit. Prosperity through favelas? Hasn’t worked anywhere else.

The countries that look somewhat like our likely demographic destination ( considering recent trends) do worse economically than the United States, including the subgroups with high human capital. Brazil, say.

On the other hand, if you’re talking positional wealth, bringing in people with low human capital definitely works. Servants.

Sponsor An Immigrant Yourself: https://www.politico.com/magazine/story/2018/02/13/immigration-visas-economics-216968
No, really: A new kind of visa would let individual Americans—instead of corporations—reap the economic benefits of migration.

I’ve always wanted my own sla—immigrant.......
I feel like people are neglecting the fact that this was written by Eric Posner....
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april 2017 by nhaliday
Educational Romanticism & Economic Development | pseudoerasmus


Did Nations that Boosted Education Grow Faster?: http://econlog.econlib.org/archives/2012/10/did_nations_tha.html
On average, no relationship. The trendline points down slightly, but for the time being let's just call it a draw. It's a well-known fact that countries that started the 1960's with high education levels grew faster (example), but this graph is about something different. This graph shows that countries that increased their education levels did not grow faster.

Where has all the education gone?: http://citeseerx.ist.psu.edu/viewdoc/download?doi=




The Case Against Education: What's Taking So Long, Bryan Caplan: http://econlog.econlib.org/archives/2015/03/the_case_agains_9.html

The World Might Be Better Off Without College for Everyone: https://www.theatlantic.com/magazine/archive/2018/01/whats-college-good-for/546590/
Students don't seem to be getting much out of higher education.
- Bryan Caplan

College: Capital or Signal?: http://www.economicmanblog.com/2017/02/25/college-capital-or-signal/
After his review of the literature, Caplan concludes that roughly 80% of the earnings effect from college comes from signalling, with only 20% the result of skill building. Put this together with his earlier observations about the private returns to college education, along with its exploding cost, and Caplan thinks that the social returns are negative. The policy implications of this will come as very bitter medicine for friends of Bernie Sanders.

Doubting the Null Hypothesis: http://www.arnoldkling.com/blog/doubting-the-null-hypothesis/

Is higher education/college in the US more about skill-building or about signaling?: https://www.quora.com/Is-higher-education-college-in-the-US-more-about-skill-building-or-about-signaling
ballpark: 50% signaling, 30% selection, 20% addition to human capital
more signaling in art history, more human capital in engineering, more selection in philosophy

Econ Duel! Is Education Signaling or Skill Building?: http://marginalrevolution.com/marginalrevolution/2016/03/econ-duel-is-education-signaling-or-skill-building.html
Marginal Revolution University has a brand new feature, Econ Duel! Our first Econ Duel features Tyler and me debating the question, Is education more about signaling or skill building?

Against Tulip Subsidies: https://slatestarcodex.com/2015/06/06/against-tulip-subsidies/




Most American public school kids are low-income; about half are non-white; most are fairly low skilled academically. For most American kids, the majority of the waking hours they spend not engaged with electronic media are at school; the majority of their in-person relationships are at school; the most important relationships they have with an adult who is not their parent is with their teacher. For their parents, the most important in-person source of community is also their kids’ school. Young people need adult mirrors, models, mentors, and in an earlier era these might have been provided by extended families, but in our own era this all falls upon schools.

Caplan gestures towards work and earlier labor force participation as alternatives to school for many if not all kids. And I empathize: the years that I would point to as making me who I am were ones where I was working, not studying. But they were years spent working in schools, as a teacher or assistant. If schools did not exist, is there an alternative that we genuinely believe would arise to draw young people into the life of their community?


It is not an accident that the state that spends the least on education is Utah, where the LDS church can take up some of the slack for schools, while next door Wyoming spends almost the most of any state at $16,000 per student. Education is now the one surviving binding principle of the society as a whole, the one black box everyone will agree to, and so while you can press for less subsidization of education by government, and for privatization of costs, as Caplan does, there’s really nothing people can substitute for it. This is partially about signaling, sure, but it’s also because outside of schools and a few religious enclaves our society is but a darkling plain beset by winds.

This doesn’t mean that we should leave Caplan’s critique on the shelf. Much of education is focused on an insane, zero-sum race for finite rewards. Much of schooling does push kids, parents, schools, and school systems towards a solution ad absurdum, where anything less than 100 percent of kids headed to a doctorate and the big coding job in the sky is a sign of failure of everyone concerned.

But let’s approach this with an eye towards the limits of the possible and the reality of diminishing returns.

The real reason the left would support Moander: the usual reason. because he’s an enemy.

I have a problem in thinking about education, since my preferences and personal educational experience are atypical, so I can’t just gut it out. On the other hand, knowing that puts me ahead of a lot of people that seem convinced that all real people, including all Arab cabdrivers, think and feel just as they do.

One important fact, relevant to this review. I don’t like Caplan. I think he doesn’t understand – can’t understand – human nature, and although that sometimes confers a different and interesting perspective, it’s not a royal road to truth. Nor would I want to share a foxhole with him: I don’t trust him. So if I say that I agree with some parts of this book, you should believe me.


Caplan doesn’t talk about possible ways of improving knowledge acquisition and retention. Maybe he thinks that’s impossible, and he may be right, at least within a conventional universe of possibilities. That’s a bit outside of his thesis, anyhow. Me it interests.

He dismisses objections from educational psychologists who claim that studying a subject improves you in subtle ways even after you forget all of it. I too find that hard to believe. On the other hand, it looks to me as if poorly-digested fragments of information picked up in college have some effect on public policy later in life: it is no coincidence that most prominent people in public life (at a given moment) share a lot of the same ideas. People are vaguely remembering the same crap from the same sources, or related sources. It’s correlated crap, which has a much stronger effect than random crap.

These widespread new ideas are usually wrong. They come from somewhere – in part, from higher education. Along this line, Caplan thinks that college has only a weak ideological effect on students. I don’t believe he is correct. In part, this is because most people use a shifting standard: what’s liberal or conservative gets redefined over time. At any given time a population is roughly half left and half right – but the content of those labels changes a lot. There’s a shift.

I put it this way, a while ago: “When you think about it, falsehoods, stupid crap, make the best group identifiers, because anyone might agree with you when you’re obviously right. Signing up to clear nonsense is a better test of group loyalty. A true friend is with you when you’re wrong. Ideally, not just wrong, but barking mad, rolling around in your own vomit wrong.”
You just explained the Credo quia absurdum doctrine. I always wondered if it was nonsense. It is not.
Someone on twitter caught it first – got all the way to “sliding down the razor blade of life”. Which I explained is now called “transitioning”

What Catholics believe: https://theweek.com/articles/781925/what-catholics-believe
We believe all of these things, fantastical as they may sound, and we believe them for what we consider good reasons, well attested by history, consistent with the most exacting standards of logic. We will profess them in this place of wrath and tears until the extraordinary event referenced above, for which men and women have hoped and prayed for nearly 2,000 years, comes to pass.

According to Caplan, employers are looking for conformity, conscientiousness, and intelligence. They use completion of high school, or completion of college as a sign of conformity and conscientiousness. College certainly looks as if it’s mostly signaling, and it’s hugely expensive signaling, in terms of college costs and foregone earnings.

But inserting conformity into the merit function is tricky: things become important signals… because they’re important signals. Otherwise useful actions are contraindicated because they’re “not done”. For example, test scores convey useful information. They could help show that an applicant is smart even though he attended a mediocre school – the same role they play in college admissions. But employers seldom request test scores, and although applicants may provide them, few do. Caplan says ” The word on the street… [more]
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april 2017 by nhaliday
The Numbers Speak: Foreign Language Requirements Are a Waste of Time and Money, Bryan Caplan | EconLog | Library of Economics and Liberty
25.7% of respondents speak a language other than English. Within this sample, 41.5% claim to speak the other language "very well." Within this sub-sub-sample, just 7.0% say they learned to speak this foreign language in school. If you multiply out these three percentages, you get 0.7%. The marginal product of two years of pain and suffering per high school graduate: less than one student in a hundred acquires fluency. (And that's self-assessed fluency, which people almost surely exaggerate).

If you lower the bar from "very well" to "well" the picture remains grim: merely 2.5% of GSS respondents claimed to reach this level of foreign language competence in school.

confirms my intuition

Language is Culture: https://bloodyshovel.wordpress.com/2017/08/30/language-is-culture/
First of all, LKY, peace be with him, was not a “self-taught linguist”. He’s a guy who learned some languages as an adult. That doesn’t make him a linguist. This makes him a language learner. There’s billions of those across the world. Lee Kuan Yew certainly wasn’t very good at it; the ability to learn foreign languages doesn’t correlate very strongly with IQ.

Mr. Lee held the popular idea that language was a zero-sum game? No, Mr. Lee understood the commonsensical idea that your brain has limited storage capacity. Like anything else. Your brain is made of atoms. It is not made of magic. It is not made of godly dust. It is a material thing. It is, in a sense, a container of information, and information takes space. It obviously does in computers; pray tell, NYT, why the brain should have infinite capacity? It doesn’t make sense.

Now I don’t know if LKY thought of it in these terms. I think that, as a language learner, he went by experience. I guess the more time he spent practicing Mandarin, or Hokkien, or Malay, the worse his English prose got. And that’s exactly how it works. Happens to me all the time, and happens to anyone who uses 2 or more languages regularly. The more different the languages, the less commons structures they share, the more acute the problem. Again, there is no reason why it should not be so. Information takes space. It isn’t hard.

Alas, it is true that academic linguists will not tell you this, even though they probably did in the 1950s. That is not because common sense has been “refuted”. It is because since the 1960s academia has morphed into a worldwide racket of fraud and deceit. If you read this blog you already know that; economics is bogus, climate science is bogus, psychology is bogus; even more than half of medical papers are bogus. Well, surprise surprise, linguistics is also bogus. The language learning industry is huge. There’s a lot of money in telling people that the brain is made of magic dust, that they can learn whatever they want whenever they want, as long as they give you money. 3 languages at the same time? Go for it! Kids are like sponges, they can learn anything. No, they can’t.
econotariat  cracker-econ  org:econlib  language  foreign-lang  education  efficiency  error  data  critique  cost-benefit  analysis  learning  multi  gnon  right-wing  zero-positive-sum  retention  tradeoffs  studying  cynicism-idealism  culture  society  polisci  politics  asia  developing-world  polis  conquest-empire  diversity  general-survey  quixotic 
april 2017 by nhaliday
Annotating Greg Cochran’s interview with James Miller
opinion of Scott and Hanson: https://westhunt.wordpress.com/2017/04/05/interview-2/#comment-90238
Greg's methodist: https://westhunt.wordpress.com/2017/04/05/interview-2/#comment-90256
You have to consider the relative strengths of Japan and the USA. USA was ~10x stronger, industrially, which is what mattered. Technically superior (radar, Manhattan project). Almost entirely self-sufficient in natural resources. Japan was sure to lose, and too crazy to quit, which meant that they would lose after being smashed flat.
There’s a fairly common way of looking at things in which the bad guys are not at fault because they’re bad guys, born that way, and thus can’t help it. Well, we can’t help it either, so the hell with them. I don’t think we had to respect Japan’s innate need to fuck everybody in China to death.

2nd part: https://pinboard.in/u:nhaliday/b:9ab84243b967

some additional things:
- political correctness, the Cathedral and the left (personnel continuity but not ideology/value) at start
- joke: KT impact = asteroid mining, every mass extinction = intelligent life destroying itself
- Alawites: not really Muslim, women liberated because "they don't have souls", ended up running shit in Syria because they were only ones that wanted to help the British during colonial era
- solution to Syria: "put the Alawites in NYC"
- Zimbabwe was OK for a while, if South Africa goes sour, just "put the Boers in NYC" (Miller: left would probably say they are "culturally incompatible", lol)
- story about Lincoln and his great-great-great-grandfather
- skepticism of free speech
- free speech, authoritarianism, and defending against the Mongols
- Scott crazy (not in a terrible way), LW crazy (genetics), ex.: polyamory
- TFP or microbio are better investments than stereotypical EA stuff
- just ban AI worldwide (bully other countries to enforce)
- bit of a back-and-forth about macroeconomics
- not sure climate change will be huge issue. world's been much warmer before and still had a lot of mammals, etc.
- he quite likes Pseudoerasmus
- shits on modern conservatism/Bret Stephens a bit

- mentions Japan having industrial base a tenth the size of the US's and no chance of winning WW2 around 11m mark
- describes himself as "fairly religious" around 20m mark
- 27m30s: Eisenhower was smart, read Carlyle, classical history, etc.

but was Nixon smarter?: https://www.gnxp.com/WordPress/2019/03/18/open-thread-03-18-2019/
The Scandals of Meritocracy. Virtue vs. competence. Would you rather have a boss who is evil but competent, or good but incompetent? The reality is you have to balance the two. Richard Nixon was probably smarter that Dwight Eisenhower in raw g, but Eisenhower was probably a better person.
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april 2017 by nhaliday
Jonathan Parker Discusses Financial Behavior | askblog
There is a significant portion of the population with above-median income and close to zero saving. I think it is hard to tell a story that explains that in terms of rational behavior. Remember, we are talking about a lot of people, not just a few random exceptions.
econotariat  cracker-econ  economics  time-preference  temperance  data  personal-finance  money  compensation  wealth  commentary  quotes 
april 2017 by nhaliday
Interview Greg Cochran by Future Strategist

- IQ enhancement (somewhat apprehensive, wonder why?)
- ~20 years to CRISPR enhancement (very ballpark)
- cloning as an alternative strategy
- environmental effects on IQ, what matters (iodine, getting hit in the head), what doesn't (schools, etc.), and toss-ups (childhood/embryonic near-starvation, disease besides direct CNS-affecting ones [!])
- malnutrition did cause more schizophrenia in Netherlands (WW2) and China (Great Leap Forward) though
- story about New Mexico schools and his children (mostly grad students in physics now)
- clever sillies, weird geniuses, and clueless elites
- life-extension and accidents, half-life ~ a few hundred years for a typical American
- Pinker on Harvard faculty adoptions (always Chinese girls)
- parabiosis, organ harvesting
- Chicago economics talk
- Catholic Church, cousin marriage, and the rise of the West
- Gregory Clark and Farewell to Alms
- retinoblastoma cancer, mutational load, and how to deal w/ it ("something will turn up")
- Tularemia and Stalingrad (ex-Soviet scientist literally mentioned his father doing it)
- germ warfare, nuclear weapons, and testing each
- poison gas, Haber, nerve gas, terrorists, Japan, Syria, and Turkey
- nukes at https://en.wikipedia.org/wiki/Incirlik_Air_Base
- IQ of ancient Greeks
- history of China and the Mongols, cloning Genghis Khan
- Alexander the Great vs. Napoleon, Russian army being late for meetup w/ Austrians
- the reason why to go into Iraq: to find and clone Genghis Khan!
- efficacy of torture
- monogamy, polygamy, and infidelity, the Aboriginal system (reverse aging wives)
- education and twin studies
- errors: passing white, female infanticide, interdisciplinary social science/economic imperialism, the slavery and salt story
- Jewish optimism about environmental interventions, Rabbi didn't want people to know, Israelis don't want people to know about group differences between Ashkenazim and other groups in Israel
- NASA spewing crap on extraterrestrial life (eg, thermodynamic gradient too weak for life in oceans of ice moons)
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march 2017 by nhaliday
Health Insurance: Where are the Goal Posts? | askblog
Everyone is talking about how many households have insurance and acting as if the main challenge is to get healthy people to buy insurance. If Cutler is right, then health care policy boils down to:

1. Finding a fair way to share financial the burden of chronic illnesses. (Obviously, “fair” involves value judgments.)

2. Putting resources into public health measures and efforts to induce people to comply with behavioral advice that would help to prevent chronic illness.
econotariat  cracker-econ  healthcare  money  policy  medicine  links  quotes  commentary  summary  insurance  wonkish  current-events  justice  distribution  disease  pareto  epidemiology  public-health  chart 
march 2017 by nhaliday
Redistributing from Capitalists to Workers: An Impossibility Theorem, Garett Jones | EconLog | Library of Economics and Liberty
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february 2017 by nhaliday
Considerations On Cost Disease | Slate Star Codex
ratty  yvain  ssc  economics  education  higher-ed  healthcare  efficiency  money  analysis  inequality  faq  trends  winner-take-all  multi  reddit  social  hn  commentary  data  visualization  rent-seeking  econotariat  2017  p:null  wonkish  malaise  cost-disease  news  org:mag  org:bv  noahpinion  org:biz  chart  zeitgeist  the-bones  housing  org:ngo  org:anglo  automation  labor  marginal-rev  scott-sumner  market-failure  gnon  counter-revolution  cracker-econ  techtariat  gray-econ  randy-ayndy  poast  list  links  supply-demand  government  policy  regulation  econ-productivity  planning  long-term  parenting 
february 2017 by nhaliday
Will Your Job Be Done By A Machine? : Planet Money : NPR
news  org:mag  automation  economics  objektbuch  prediction  database  search  data  technology  dynamic  planning  definite-planning  speedometer  tools  the-bones  labor  calculator  org:rec  org:anglo  org:biz  visualization  distribution  trends  heavy-industry  80000-hours  analysis  econotariat  cracker-econ  commentary  left-wing  multi  org:sci  chart  longform  investing  money  scale  org:edu  ratty  futurism  iteration-recursion  multiplicative  autor 
january 2017 by nhaliday
Are Risk Aversion and Impatience Related to Cognitive Ability?
relevant thread (discussion of Matt Bruenig's passive income thing): https://twitter.com/GarettJones/status/815644778641571842
other study: https://www.aeaweb.org/articles?id=10.1257/089533005775196732

Our main finding is that risk aversion and impatience both vary systematically with cognitive ability. Individuals with higher cognitive ability are significantly more willing to take risks in the lottery experiments and are significantly more patient over the yearlong time horizon studied in the intertemporal choice experiment. The correlation between cognitive ability and risk aversion is present for both young and old, and for males and females, although the relationship is somewhat weaker for females and younger individuals.
study  economics  spearhead  behavioral-econ  psychology  cog-psych  iq  🎩  multi  risk  rationality  cracker-econ  econotariat  discipline  twitter  social  field-study  values  time-preference  hive-mind  garett-jones  decision-making  wonkish  objective-measure  s:*  commentary  high-variance  investing  patience  outcome-risk  stylized-facts  broad-econ  wealth  s-factor  chart  wealth-of-nations  microfoundations 
january 2017 by nhaliday
Adam Elkus: The Twilight of the Elites?
Read the whole essay. I interpret one of the main points to be that the bond of trust between elites and the public has been broken, so that there is no longer a shared truth concerning the interpretation of events. I interpret his conclusion as being that we need to discover a new elite, one which has credibility. Easier said than done, to say the least.

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january 2017 by nhaliday
Why Aren't the Italians Libertarians?, Bryan Caplan | EconLog | Library of Economics and Liberty
Do Italians cheat on their taxes more than Swedes?: http://marginalrevolution.com/marginalrevolution/2016/05/the-culture-that-is-swedish-italian.html

Also bureaucracy = big weak state as opposed to small strong state. Anarchotyranny is Sam Francis's idea that combines bureaucracy w anarchy

The modern world's sickness in one tweet

Last night proved, once again, that there is no anxiety or sadness or fear you feel right now that cannot be cured by political action.

Here’s a post I wrote in 2009 (no indent) that I will update today:

In an interesting paper, Aghion, Algan, Cahuc and Shleifer show that regulation is greater in societies where people do not trust one another. The graph below, for example, shows that societies with a greater level of distrust have stronger minimum wage laws. Note that the result is not that distrust in markets is associated with stronger minimum wages but that distrust in general is associated with greater regulation of all kinds. Distrust in government, for example, is positively correlated with regulation of business. Or to put it the other way, trust in government (as well as other institutions) is associated with less regulation.

Aghion et al. argue that the causality flows both ways on the regulation-distrust nexus. Distrust makes people turn to government but in a society with a lot of distrust government is often corrupt and this makes people distrust even more. Crucially, when people distrust others they invest not in the highest return projects but in human and physical capital that is complementary to distrust–for example, they invest in human capital that helps them bond with their group/tribe/family rather than in human capital that helps them to bond with “outsiders” and they invest in physical capital that is more difficult to expropriate rather than in easier to expropriate capital, even though in both cases the latter investments may be the all-else-equal higher return investments. Such distrust traps are quite similar to Bryan Caplan’s idea traps.

Thus, societies with a lot of distrust generate regulation and corruption and citizens who don’t have the skills or preferences to break out of the distrust equilibrium. Consider, for example, that in societies with a lot of distrust parents are less likely to consider it important to teach their children about tolerance and respect for others.

The update should be obvious. More and more this appears to be describing the United States. More distrust in government, more regulation, lower growth and more people who are so distrustful of one another that they can’t cooperate to break out of the bad equilibrium. Here drawn from Our World in Data is interpersonal trust in the United States.

org:econlib  econotariat  cracker-econ  randy-ayndy  politics  polisci  government  poll  data  regulation  institutions  civic  ideology  social-capital  microfoundations  trust  mediterranean  managerial-state  anarcho-tyranny  n-factor  leviathan  multi  study  twitter  social  commentary  gnon  unaffiliated  right-wing  society  usa  migration  marginal-rev  diversity  putnam-like  trends  the-bones  spearhead  garett-jones  polarization  rot  corruption  civil-liberty  economics  growth-econ  broad-econ  org:ngo  obama  alesina  business  law  thiel  ranking  econ-metrics  wonkish  wealth-of-nations  madisonian  political-econ  backup  metrics  the-watchers  culture  socs-and-mops  summary  macro  group-level  taxes  crooked  cooperate-defect  europe  nordic  pop-diff  org:popup 
january 2017 by nhaliday
Improving Economic Research | askblog
To make a long story short:

1. Economic phenomena are rife with causal density. Theories make predictions assuming “other things equal,” but other things are never equal.

2. When I was a student, the solution was thought to be multiple regression analysis. You entered a bunch of variables into an estimated equation, and in doing so you “controlled for” those variables and thereby created conditions of “other things equal.” However, in 1978, Edward Leamer pointed out that actual practice diverges from theory. The researcher typically undertakes a lot of exploratory data analysis before reporting a final result. This process of exploratory analysis creates a bias toward finding the result desired by the researcher, rather than achieving a scientific ideal of objectivity.

3. In recent decades, the approach has shifted toward “natural experiments” and laboratory experiments. These suffer from other problems. The experimental population may not be representative. Even if this problem is not present, studies that offer definitive results are more likely to be published but consequently less likely to be replicated.
econotariat  cracker-econ  study  summary  methodology  economics  causation  social-science  best-practices  academia  hypothesis-testing  thick-thin  density  replication  complex-systems  roots  noise-structure  endo-exo  info-dynamics  natural-experiment  endogenous-exogenous 
january 2017 by nhaliday
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