Sunday, October 31, 2010

Penn State 41, Michigan 31

Unlike Washington, Michigan showed some signs of life, having brought an offense to Happy Valley but no defense. Still, it was not really as close as the score, in part because class act Joe Paterno turned off the engine at the end and had his quarterback take a knee inside the Michigan 5 yard line.

Now, suppose, as seems reasonably likely, that Michigan loses all its remaining games other than that against hapless Purdue, and so is bowl eligible having beaten only Purdue, Indiana and four glorified high school teams. Should it go to a bowl if one is offered?

Rally for Sanity / Fear

I know three people who went to the rally - I am sure many other people I know also went but I know of three for sure - and one of the three is interviewed in this video!

Small world.

Taxing the rich

One problem with taxing the rich is that both they, and their income and assets, can often move around. They also have the incentive, and the resources, to keep up with the tax laws and exploit every mistake that gets made when they are composed by some sleep-deprived Yale political science major policy wonk at 2 AM, just short minutes before they get voted into law.

Example 1: Rolling Stones

Example 2: Famous athletes

The second example is doubly troubling as apparently the UK government has given up on the rule of law in this policy area, setting tax rates for events based on the whim of some bureaucrat at HM Treasury (or, more likely, based on the gifts received by some politician).

Dammit! Why won't people just lay there and take it like they are supposed to?

Via: Mankiw and Marginal Revolution

Stanford 41, Washington 0

I thought we were done with the "first since " business. Yet this was the first home shutout since 1976.

To quote a friend on Facebook, we was "Willinghammed".

Yikes, says a columnist at the Seattle Times, and I heartily agree.

And despite the score, it was the defense that played better than the offense.

Next week in Eugene is not going to be pretty. Will the betting line be 50? 60?

The last two weeks have been backward steps.

Saturday, October 30, 2010

Meanwhile, in Denver ...

Delicious direct democracy does Denver.

My favorite bit:
Recognizing that ET contact protocols aren't foremost in the minds of voters these days, Mr. Peckman has refined his pitch on Initiative 300. These days, he promotes it as a jobs bill.

He envisions sci-fi film directors flocking here, space-travel researchers, and engineers hoping to pry the secrets of intergalactic technology from space visitors.

Councilman Charlie Brown is skeptical. "That's not the kind of job we want to create," he says.

But Kelly Brough, president of the Denver Metro Chamber of Commerce, says she's game: "We are open for business to all other planets."

Hat tip: Nat Wilcox

UM grads doing well, particularly ones called Brian

Congratulations to recent UM doctorates Brian Cadena and Brian Kovak on winning a young investigator award from the Center for Poverty Research Center at the University of Kentucky.

Here is the description of their research:
Drs. Cadena and Kovak’s proposal is titled U.S. Mexico Local Labor Market Integration: Evidence from the Housing Bust. In this study, the authors propose to determine whether the housing bust created incentives for potential immigrants to avoid entering certain local labor markets and whether immigration flows responded as expected. The results will have implications for determining if the decrease in the inflow of immigrants can mitigate the negative labor market consequences of shocks, such as the recent recession.

Assorted links

1. Bill Clinton, restaurant maven. I like Georgia Brown's too.

2. Should any university be paying Jill Zarin $15,000?

3. Search models of the relationship market.

4. Shacking up is apparently no longer selective. Which is to say that the negative effect of living together on marital success has gone away, but I always assumed it was just selection bias anyway.

5. Tax poetry - see At the Revenue Museum on page 3.

I think the first one is via marginal revolution. The last one is a hat tip to Joel Slemrod.

People who don't know history

can easily be made to look like idiots.

Funniest reason video - maybe ever. Perfect!

Can we got over the moralizing now and return to mud-slinging as usual?

Via: the Agitator

On matching

Chris Blattman has a fine rant about matching as a statistical method for program evaluation. That in turn engendered a response from Andrew Gelman and a reply from Blattman. This post is my response to them both and to the broader questions they raise in their post.

Perhaps the nice thing about all this is that the three of us generally agree on the main point: matching is not a magic bullet. Just because you estimate a propensity score and then run psmatch2 in Stata does not make the selection on observed variables assumption any more true than it was when you were running a linear regression of the outcome variable on the conditioning variables and a treatment indicator.

In my graduate applied econometrics class, we are just finishing the discussion of matching and weighting methods. In my lectures, I make the point that parametric linear regression and matching methods differ in four main ways:

1. Matching relaxes the functional form restrictions inherent in parametric linear regression the way in which it is normally used in applied work, which is to say with each conditioning variable entered linearly and few, if any, higher order terms.

2. Matching focuses attention on the so-called overlap or "common support" condition, which considers whether there are untreated units that "look like" each treated unit in terms of their observed characteristics. With a parametric model, it is easy to rely on the functional form to fill in where the data are absent without knowing that you are doing so. Matching makes that much harder.

3. In one of the "usual" notations, parametric linear regression requires E(U | X, D) = 0 while matching requires E(U | X, D = 1) = E(U | X, D = 0), where U is the "error" term, X are conditioning variables and D is the treatment indicator. This difference in conditions may affect the set of reasonable X. For example, a lagged Y might satisfy the matching condition but not the parametric linear regression condition.

4. As noted by one of the commenters at Gelman's blog, in a heterogeneous effects world, parametric linear regression and matching have different estimands. Matching estimates the impact of treatment on the treated (in the usual case) while parametric linear regression estimates a different weighted average of treatment effects. Angrist has been making this point for a while - see his 1998 Econometrica paper and his new Mostly Harmless Econometrics book with Steve Pischke - but it remains under-appreciated within economics. Perhaps oddly, it is widely understood by sociologists.

A few other points:

1. Thinking about matching as a way of selecting comparison observations is really just a special case of thinking about matching as a weighting estimator. It is a special case because all the weights are integers (or, in the case of single nearest neighbor matching without replacement, they are all one of just two integers: 0 and 1). See equation (10) of Smith and Todd (2005) Journal of Econometrics.

2. One reason to prefer thinking about matching as a version of weighting is that it pushes you away from doing nearest neighbor matching, which the literature pretty clearly shows to have inferior performance relative to its alternatives in terms of mean squared error. For the latest on that literature, see the papers by Busso, DiNardo (get well soon!) and McCrary on McCrary's web page at Berkeley law school.

3. One reason to prefer thinking about matching as an application of non-parametric regression, which is how I teach it in my class, rather than in terms of comparison group selection, is that it makes clear that matching fits much more neatly into our existing stock of econometric and statistical knowledge than it might at first seem.

4. I don't think we fully understand the statistical properties of matching treated as a "pre-processor" in the sense of this paper by Ho, Imai, King and Stuart, which Gelman seems to have in mind in part of his discussion. We do know that doing some statistical procedure on a sample obtained by some sort of matching and not taking note of the pre-processing in the construction of the standard errors will make for misleading inferences.

5. Sometimes you can learn about what conditioning variables are required to make unconfoundedness hold in particular substantive contexts by running experiments. Indeed, to me this is one of the major values of experiments. For this reason, I argue that experiments should often be accompanied by parallel collection of the data required for a non-experimental evaluation designed to shed light on the variables that are, and are not, required for "selection on observed variables" to hold in a given context. For instance, we have learned a great deal about the variables required for selection on observed variables to hold in the context of evaluating job training programs in precisely this way. See, e.g., Heckman, Ichimura, Smith and Todd (1998) Econometrica (gated).

6. Contra Gelman, what you want is not all the variables that determine participation, but rather all the variables that determine both (not either but both) participation and outcomes. A variable that affects participation and not outcomes (other than through an effect on participation) is an instrument. If you have one, you should be using it to do an instrumental variables analysis. You do not want to be in the business of matching on instruments. Also, if you literally had all of the variables that determine participation, you could not do matching, because there would be no common support. Put more prosaically, in such a case, all of the treated observations would have estimated propensity scores of one and all the untreated units would have estimated propensity scores of zero.

7. I really like Gelman's point about the two tribes: those who think unobserved variables are always important, so that selection on observed variables is always wrong enough to lead to substantively important bias, and those who think that selection on observed variables can be true enough in particular, well-motivated contexts to yield reasonable results. I count myself a member of the second tribe, but have many (economist) friends in the first tribe. There is also a third tribe, which I think of as the "benevolent deity" tribe. They believe that whatever variables happen to be in the data set they are using suffice to make "selection on observed variables" hold. This tribe has a lot of members, particularly outside of economics. Indeed, it is probably the largest of the three tribes in the academy as a whole. If you do not believe this, read the chapters in Linda Waite's The Case for Marriage book that survey literatures untouched by economists.

Hat tip: Jess Goldberg

Friday, October 29, 2010

It's hard to higher good help

From the University of Michigan's Record Update on 10/28/10:
Gerald Meyers, adjunct professor of management and organizations, appeared on American Public Media’s "Marketplace" speaking about Ford Motor Co.'s announcement that it will higher 1,200 Michigan workers if the state provides the company with $400 million in tax relief.

Life in the think tank world

Strobe Talbot in the Onion on his lost day.

Hat tip: Ken Troske

Wednesday, October 27, 2010

On Republicans, and how they compare to Democrats

It is rare that I disagree with P.J. O'Rourke, but on this I do. I also disagree with this fellow, who seems to have already forgotten a lot of the horrors of the Bush II regime, which included its own poorly designed and only vaguely funded health care reform.

On the other hand, I agree with this. A taster:
Politics is a ridiculous profession populated by ridiculous people. Maybe if we elect increasingly clownish candidates, the public will eventually come to realize this, and finally realize that it’s probably not a good idea to put larger and larger portions of our lives and livelihoods in the hands of people who have achieved success in a field that rewards character traits you spend your entire tenure as a parent trying to teach out of your kids.

On China and the election

I am pretty disappointed by ads like this one from the people at Citizens Against Government Waste and this one from Washington State US Senate candidate Patty Murray. Any one who watches television - even just football - has seen dozens like them.

I'll be glad when the election is over and all the China-bashing political ads, which manage to combine racism and fear-mongering with ignorance of basic economics, come to a close.

In my view, these sorts of ads represent a real embarrassment, both to those who fund and produce them and to the nation as a whole. Ads like these would not make it outside the production process if they did not engender the reactions their producers hope for.

The economic growth that has come to China, India, Mexico and many other developing countries in recent decades has done more to eliminate poverty and improve human welfare than ten thousand blow-dried politicians peddling hope, change, or a return to some non-existent past. We should be celebrating this amazing growth, not blaming it for problems we brought on ourselves.

Mankiw's students fight back

There is an ongoing discussion in the blogosphere about Mankiw's NYT column on the effect of increased taxes on his work effort. I've been meaning to say something substantive about it, but for the moment this video by some of his Harvard undergrads must suffice.

Say hello to our dear leader for me

The Economist goes to North Korea.

Sounds even more dreary than when I went to the Soviet Union in 1979.

Monday, October 25, 2010

Keystone cops

Competence and professionalism at the FBI.

Even when they should be embarrassed, they still want to flaunt their little bit of power.

Via: The Agitator

David Warsh on Ferguson and Summers

David Warsh reflects on the corruptions of economists and on Larry Summers in particular in this week's column at Economic Principals.

A fundamental problem here is distinguishing between

"economist X, who has worked in the financial industry, often supports the positions of the financial industry because s/he is a shill"


"economist X, who has worked in the financial industry, often supports the positions of the financial industry because s/he came to those positions sincerely based on theory and evidence and then was hired by the financial industry in part because s/he holds those positions"


"economist X, who has worked in the financial industry, often supports the positions of the financial industry becasue of the knowledge s/he gained while working in the industry"

Rather than devoting a lot of effort to sorting among these ill-identified alternatives, why not devote the effort to actually thinking about the economics and evidence related to the positions themselves?

Colbert on tax cuts and Mankiw

The Colbert ReportMon - Thurs 11:30pm / 10:30c
Tax Shelter Skelter
Colbert Report Full Episodes2010 ElectionMarch to Keep Fear Alive

This is funny and also illustrates some points. First, again note the use of "rich" along with images relevant to idle people - Kennedy grandchildren say, or Paris Hilton - to mislead the audience away from thinking about the tax cuts as applying to doctors, lawyers and economists and a large fraction of all two-professional couples in high income cities such as NYC or DC. Taking all of the money from all of the actual rich people, idle or not, just does not yield all that much in the way of funds, because there just are not that many of them. Also, in the Goolsbee segment, note the wording that suggests that the government would be borrowing to cover the tax cuts, rather than the spending. This is again rhetorical play designed to distract the listener away from thinking about what the government is actually spending money on and towards class conflict.

Via Greg Mankiw

Sunday, October 24, 2010

The hobbies of others - military dress-up edition

This surprises me as they are pretty tight at the Big House.

The lingering question, of course, is why?

Hat tip: Dann Millimet

The hobbies of others.

Am I happy or sad to know that there is something called the Junior Roller Derby Association?

Most of my affection, such as it is, for roller derby comes from fond memories of the classic individualist movie dystopia Rollerball. My affection for Bach's organ music is partly drawn from that movie as well.

I am free associating a bit; my excuse is that it is Sunday evening before a pretty busy week.

Hat tip: FB friend whose offspring apparently play junior roller derby.

Movie: Nowhere Boy

Nowhere Boy is a biopic covering John Lennon's life from around age 15 to when the band leaves for Hamburg. The NYT review, which seems to have had its ending hacked off by some cruel, misguided editor, gets things about right. The movie has its moments, and is easily worth it just for the music, the loving period setting, and Anne-Marie Duff as John's mother. But it is good, not great.

Recommended unless you (gasp!) don't like the Beatles.

Saturday, October 23, 2010

More political advertising - Canadian content edition

This is not "real" whatever that might mean.

Hat tip: Jon Lanning

Humor? At Mother Jones?

The usually humorless, lefty scolds at Mother Jones offer up this entertaining quiz: can you tell the difference between rappers and libertarians?

I got 8 out of 10.

Hat tip: Nat Wilcox


Yesterday was the first meeting of the Technical Working Group (TWG) for Mathematica's evaluation of the Teacher Incentive Fund (TIF) on behalf of the Institute for Education Sciences of the US Department of Education. I have the good fortune to be on the TWG.

This evaluation will complement the one I blogged on a few weeks ago. I can't, of course, discuss design details, but the interaction at the meeting was lively and interesting. I like doing consulting that I learn from and that helps me think about research ideas, even though this sort of consulting pays less than, say, consulting about people's earnings in court cases related to death or injury on the job.

Canadian census long form (continued)

You can sign a petition regarding either (or both) political interference with Statistics Canada in general or the elimination of the Canadian Census long form in particular. I signed the first of the two petitions.

And you can read articles in Canadian Public Policy on that very topic as well. The pieces on the Census long form controversy are ungated for now. Click on "Show Access Options" and then access them via Metapress.

Richard Epstein

Thanks to a friend on the law school faculty I was able to attend Thursday's lunch presentation at the law school by Richard Epstein as a guest. I read Epstein's Takings early on in graduate school and it had a big effect on my thinking about constitutional law and about the relationship between law and liberty more generally. Reading classical liberal legal theorists is an excellent complement to reading economics. They think about things differently and often in ways that add depth and insight to simple economic models.

Epstein spoke about a new book he is writing on constitutional interpretation. The bits I found most interesting were his contrast between libertarian and classical liberal views on legal theory. The parts that were most entertaining were his denunciations of various supreme court decisions he doesn't like. The best line of the hour was "I'm not crazy. I'm just controversial."

Even relative to other law professors, who as a group are very good at speaking without notes, Epstein's ability to construct well organized verbal arguments on the fly is impressive. Back in the day, when Dora Costa and I were running the U of Chicago student libertarian group, we had Epstein come and give a talk. He gave us a topic in advance. When he arrived, he asked how long he had to talk. We told him, and he gave a marvelous, well-organized, no notes lecture of *exactly* that duration. Those same skills were on display on Thursday.

I also learned that the law school has Zingerman's cater their lunches. Clearly, I need to be spending more time over there. All other seminar lunches will now pale by comparison (other than, perhaps, the ones I construct myself from goodies purchased at Morgan and York).

Tuesday, October 19, 2010

The worst system, but for all the others?

Behold the glories of democracy!

Given how we choose our "leaders", it truly is a wonder that anything works at all.

And it is truly amazing that anyone takes any of these people, red or blue, left or right, "liberal" or conservative, at all seriously.

And do watch the ads.

I love this stuff!

Monday, October 18, 2010

Tea party karma

Best piece on the tea party movement I have seen.

It is not a libertarian movement, though there are some in it and some trying to co-opt it.

A political science point as well: it is amazing how much richer and deeper an analysis it can be when it drops the ridiculous notion of a one-dimensional left-right political spectrum.

Hat tip: reader Don, who says the same on Facebook.

CATO on excess burden

CATO makes the (easy) case for doing cost-benefit analysis correctly by taking account of the "excess burden" also known as the marginal social cost of public funds. A dollar of public funds costs society more than a dollar of output both because of the direct costs of running the tax system - IRS agents are not free - and because our tax system reduces the size of the pie by distorting individual choices away from their unconstrained optima. For example, income taxes distort individual choices between work and leisure.

There is nothing really political here, it is just that doing cost-benefit analyses incorrectly furthers the agendas of those who want the government to spend more on activities that do not pass cost-benefit tests.

Peter Diamond

A nice discussion of Peter Diamond's contributions from Economic Principals.

PAC-10 mysteries

What is up with that crazy PAC-10 anyway?

Sunday, October 17, 2010

Assorted links

1. You think "rich whitey" can't win in Chicago?

2. Alan Krueger heads back to Princeton. My take: in the end, being a professor is just a lot more fun than working inside the beltway.

3. An (interesting but only partially successful) attempt at making the French demonstrators look like something other than spoiled children who want to live in a make-believe world with no budget constraint.

4. There are so many substantive things to criticize the current president about (just like there were with the last one, though a subset of them are different), why bother with this sort of rubbish, which serves mainly to make the president look good by suggesting that this is all the critic could come up with?

Hat tip on #1 to Dann Millimet. I think #2 and #3 are via Marginal Revolution.

Elite economists and the revolving door problem

I've just read the discussion that starts with a Chronicle piece by documentarian Charles Ferguson and continues with a response by Will Wilkinson, an (unusually odd) bit from Brad DeLong and a further response from Will Wilkinson.

Reading the original piece by Ferguson served mainly to convince me not to bother with his movie. He gets so many basic facts wrong in a relatively short text that it would be impossible to trust anything in his movie. As Wilkinson points out, he completely miscasts Summers as some sort of laissez-faire ideologue. He also gets wrong the story of Summers' comments about women and science. And he gets wrong the story of Summers' departure from the Harvard presidency, which had little to do with those comments. Shouldn't someone in the documentary business actually be checking on facts?

In addition to factual errors, he seems to have some conceptual troubles as well. For example, Ferguson seems to hold the view that financial derivatives per se are somehow evil and bad. This suggests a deep misunderstanding of the substantive context underlying his movie and, most likely, the replacement of research with ideological presupposition in its production. Ferguson even somehow finds it sinister that Summers supported legislation that prohibited the regulation of derivatives under state gambling statutes. While it surely would be entertaining in some perverse sense to watch a collection of state attorney generals undertake securities regulation, it is hard to see how it could turn out well.

Having said all that, had someone who was both intellectually honest and in possession of the background required to understand the relevant economics addressed these issues, I think there is likely much to talk about. I am an advocate of having academics move in and out of government, as with the chief economist at the Department of Labor, as I think it represents a relatively inexpensive way to inject research into the policy process, to place people inside government organizations who will push against policies based on narrow political concerns, and to give academics useful lessons in applied public choice theory. But there are surely potential costs to these interactions as well, particularly when they also include interactions with well-heeled private sector organizations, costs that would merit informed discussion. It is too bad that we do not get such a discussion from Ferguson's essay.

Washington 35, Oregon State 34 (2OT)

Wow! Washington starts out 21-0, then OSU catches up, then the defenses arrive and things go scoreless for a long time, then two overtimes. In the end, Mike Riley decides to go for two in the bottom of the second overtime and the Beavers just can't do it.

Lots of gritty play from Washington on both sides of the ball.

Now Washington runs a gauntlet of Arizona, Stanford and Oregon, with Arizona and Oregon as away games. If they can win one of the three, they will be in a very good position for their final three games with Cal, UCLA and WSU and in a very good position to get to a bowl at either 6-6 or, better, 7-5.

As an aside, what happened to BYU? They are 2-5 despite being hyped a lot prior to their season-opening win over the Huskies. It would be great to have that one back ...

As another aside, I was impressed with Brock Huard's work as part of the ESPN coverage team as well. He is still pretty new in his job but had smart, reasonable things to say. Of course, Oregon State fans watching the game may not have been that excited by a team that included a former Washington QB and a former Oregon coach!

Iowa 38 Michigan 28

Michigan largely took itself out of this one with mistakes.

The bright side was the continued fine play of Tate Forcier, who came into the game as the backup after an injury to Denard Robinson.

Michigan has a much-needed bye week next week, then travels to Penn State.

Friday, October 15, 2010

Movie: Waking Ned Devine

This is just as much fun as the NYT review suggests. Don't expect anything very deep, but do expect gorgeous scenery and a lot of gentle character humor. Elizabeth liked it too.


Thursday, October 14, 2010

Ann Arbor institutions

Some Dominick's history (not the grocery store chain in Chicago but rather the restaurant diagonally across from Lorch Hall, home of the economics department).

The sangria is delicious, as are the minimalist - meat, cheese and lettuce (and onions but I skip those) Italian subs.

Economist on pubs

The Economist ponders the state of play in Britain's pubs and offers up this gem:
But not all the news is grim—and it is not just their owners that are casting around for ways to keep Britain’s pubs open. Just as pubs are diversifying, officialdom is beginning to view them more benignly: as linchpins of their neighbourhoods, which help to foster vague but politically fashionable goods such as community spirit and social cohesion. The Labour government, universally hated by publicans, appointed a “minister for pubs” a few months before it lost the general election in May. The Conservatives’ manifesto gave pubs the status of “essential services”, alongside facilities such as post offices, and promised powers for people to club together to buy boozers threatened with closure. More recently, as part of its drive to cut public spending, the new Conservative-Liberal Democrat coalition floated the idea of merging pubs with public libraries.
Pubs and libraries! Just the kind of bold, innovative thinking one expects from a non-traditional coalition like the tories and the lib dems. Among the many possible benefits: watching the normally shy librarians cut loose after a few pints and a few chapters of Jane Austen. But does this mean privatizing the libraries or socializing the pubs?

Hat tip: Charlie Brown

IZA European Summer School in Labor Economics

European graduate students (including Europeans studying at universities in North America) should consider applying for the European Summer School in Labor Economics (ESSLE) that his held by the IZA each summer.

Each year's version of the summer school has two different faculty members; this year they are Shelley Lundberg and Jean-Marc Robin, both excellent economists. I taught at the summer school several years ago and the person I taught with, Chris Pissaridies, just won the Nobel prize! That class was also where I met frequent hat tip recipient (and very fine economist) Lars Skipper, impressive young Danish labor economist Marianne Simonsen and my new Michigan colleague Manuela Angelucci along with many other fine students. That is all by way of saying that (perhaps excepting me) the faculty and students are worth getting to know.

The IZA web page with more details is here.

Cheap Talk on self-abuse

Cheap Talk mounts an evolutionary defense of wanking. I had never thought of comparing it to tickling, which is the key point in the argument. Clever!

Seems appropriate to link to this as well.

Book: Girl with the Dragon Tattoo

I bought this in the Borders at the Detroit Airport on my way to Sweden. I am not usually a reader of mysteries - my genre fiction tastes concentrate on science fiction - but it is by a Swedish author and set in Sweden and I sometimes am in the mood for reading that is not too intellectually taxing when I am on the road. Plus someone at the meeting I was at in DC early in the day had recommended it.

The book has gotten a lot of hype, and a movie on top of it, but I share the implicit view of the NYT reviewer that it is not clear just why. Learning that the original Swedish title was "men who hate women" clarifies a lot. This is very much a "men bad, women good" sort of book. The author also is not shy or subtle about sharing his feelings about business people (or, indeed, about business journalists). This is good (mostly) but not great genre fiction.

Economist on the music industry

An interesting status report on the music industry from the Economist.

Here is a teaser:

In a sense, the recorded-music market is not so much dying as greying. In 2002 people aged 12 to 19 accounted for 16.4% of all spending on albums in Britain, according to TNS Worldpanel. That was almost double the share of people aged 60 or over (8.8%). The two groups have now switched positions. By 2008 teenagers accounted for just 12% of spending on albums, whether digital or physical. By contrast, the older fans’ share had gone up to 13.8%. The over-60s do not just spend more on music albums than teenagers. They spend more on pop-music albums.

The consequences can be seen in the pop charts. America’s bestselling album since 2000 is “1”, a collection of Beatles hits from the 1960s. At one point last year four of the top ten albums in Britain were Beatles recordings and the number-one album was a collection of songs by Vera Lynn, who was then 92 years old. The bestselling album worldwide last year was “I Dreamed a Dream” by Susan Boyle, a middle-aged Scot. Universal Music’s bestselling album in Japan in the first half of this year was “Vocalist 4” by Hideaki Tokunaga, Japan’s answer to Harry Connick Jr. If most of your fans are middle-aged, CD sales are holding up well.

Via Marginal Revolution

Monday, October 11, 2010

Arizona State 24, Washington 14

Washington should have won but did not. Not a good day, and no Husky birthday present for yours truly. Maybe next year. It is a pretty tough road to a bowl now but not impossible. They'll need some more days like they had against USC.

Michigan State 34, Michigan 17

I caught the first part of the game, missed the middle, and then caught a bit at the end that I should have just skipped. Michigan finally ran into a good team and it showed up their weaknesses. I remain unsure as to what the poll voters thought was going on when they ranked them. They are not a top 25 team. It will be interesting to see how well they do against Iowa this week.

Movie: The Town

The NYT review gets it right. Watchable and fun but nothing too deep.

An entertaining story about Austan Goolsbee ...

... and a dead fish.

Hat tip: Charlie Brown

Nobel prize

Per my predictions a few days ago: not obscure, not political, and search.

Congratulations to Peter Diamond, Dale Mortensen and Chris Pissarides!

Some additional bits:

The official Nobel announcement is here, and the page also includes a short video of Prof. Per Krussell explaining the winners' contributions.

Tyler and Alex at marginal revolution have a set of very fine posts about the winners that I will not try and duplicate. You can find posts on Diamond, Mortensen, and Pissarides as well as a general post or two.

On the personal side, I've met Mortensen a couple of times - once in graduate school at a joint Chicago / Northwestern conference for graduate students and once at a conference in Montreal for macro / labor types. He is a great economist and a happy, genial fellow - the sort of guy you can imagine talking to for hours over a beer (or two or three). Pissarides and I co-taught the IZA European Summer School in Labor Economics (ESSLE) a few years ago. He gave some very clear lectures on the basics of search theory drawn from his book. I've never met Diamond.

Mankiw on taxes

A fine NYT column on taxes from Greg Mankiw.

The literature on optimal income taxation suggests higher rates on those who supply their labor inelastically so as to minimize the behavioral response to the taxation. This is, of course, just a special case of the general point that you want to tax things that will not change in response to the taxes. Rather obviously, this conflicts with distributional concerns, but it is worth keeping in mind nonetheless.

Greg's piece also implicitly points out that estate taxes are a boon for the higher education sector, as it allows wealth, or at least the capacity to create wealth, to be passed on without paying the inheritance tax.

Addendum: responses from Tyler Cowen and from Greg Mankiw.

I think Tyler is correct to raise the moral dimension. As marginal tax rates as high as 90 percent can have little justification other than incompetence or envy, it is hard not to see them as immoral as well as inefficient.

Saturday, October 9, 2010

Marijuana legalization in California

Here is a report from the Rand Corporation.

Here is a very silly op-ed from a bunch of former drug czars, rightly mocked by the folks at reason.

From the conclusion to the Rand study:
The pretax retail price of marijuana will substantially decline, likely by more than 80 percent. The price consumers face will depend heavily on taxes, the structure of the regulatory regime, and how taxes and regulations are enforced.

Consumption will increase, but it is unclear how much because we know neither the shape of the demand curve nor the level of tax evasion (which reduces revenues and the prices that consumers face).

Tax revenues could be dramatically lower or higher than the $1.4 billion estimate; for example, uncertainty about the federal response to California legalization can swing estimates in either direction.

There is considerable uncertainty about the impact that legalizing marijuana in California would have on public budgets and consumption, with even minor changes in assumptions leading to major differences in outcomes.
Those are reasonable and important conclusions and come along with a healthy dose of uncertainty. There just is not really any variation in the available data that looks like re-legalization. Marijuana was last legal in the US early in the 20th century and there were not a lot of social scientists around back then doing surveys on drug use.

Inside baseball: Peter Reuter, one of the co-authors of the Rand report, is a former colleague at Maryland and a very impressive fellow.

Hat tip: DeForest McDuff

Parody of newspaper articles covering scientific papers

This offering from the Guardian is fabulous!

Two teasers:
In this paragraph I will state in which journal the research will be published. I won't provide a link because either a) the concept of adding links to web pages is alien to the editors, b) I can't be bothered, or c) the journal inexplicably set the embargo on the press release to expire before the paper was actually published.
This paragraph contained useful information or context, but was removed by the sub-editor to keep the article within an arbitrary word limit in case the internet runs out of space.
Read the whole thing - I was laughing out loud.

Hat tip: Taylor Hui

Is this even allowed in most states?

Pancakes with kale .... oh dear.

Hat tip: one of our amazing, multi-talented gradual students

Thursday, October 7, 2010

Burning down the house

Tyler writes the post I was planning to write about the house left to burn by the public fire department for non-payment of fees, and does it better than I would have. Here is reason's somewhat more (dare I say it) incendiary take on the matter.

This has nothing to do with public or private, or libertarianism or even morality more broadly. It simply does a nice job of sorting out people who make judgments based on the direct and the sentimental and those who make judgments based on the indirect and the practical. As Tyler rightly notes, sometimes you have to punish people for payments systems to work.

Of course, it would be preferable if the town had some large fee that people could pay ex-post to save their houses. But that is bad system design, not a contradiction to the main point that if you do not impose some penalty on non-payers, too few people will pay.

Wednesday, October 6, 2010

Assorted links

1. Gulliver mocks rogue state pavilions at the Shanghai expo.

2. Hope and change.

3. On the 9/11 museum.

4. Housing policy rant from Megan McArdle (a bit delayed)

5. Evidence that Russia still has a ways to go. And why no calendar for ECONJEFF's birthday?

Hat tip on #5 to Lars Skipper.

More on Notre Dame economics offers up some thoughts on the Notre Dame economics department, that I think miss several boats.

First, ND is not short on money. They have already invested a huge amount of money in the new neoclassical economics department and have seen a real payoff from that money in terms of the quality of the people being hired. They now have quite nice groups in both labor and macro.

Second, ND's real problem in raising the quality of the department is not money, it is getting people to come to South Bend. It is not a major urban area (though it is a relatively easy train ride from Chicago) which means not so many urban amenities and a tough time solving joint match problems. They share this difficulty with every other university not located in a big city.

Third, ND is not trying to please other economists by maximizing prestige. It is trying to please students, parents and donors by offering a course of study the leads to jobs and good graduate programs in business and other fields.

I am not unsympathetic to the idea of building strength in areas presently somewhat out of fashion. Arizona did this when it built up in experimental economics before that subfield became hot. I have argued for doing the same here at Michigan in economic history. But heterodox economics is not just out of fashion; most of it is just plain awful. Moreover, students can often obtain much of the intellectual value (e.g. thoughtful critiques of neo-classical economics) they would get from learning non-awful heterodox economics by attending courses in other disciplines.

Addendum: An anonymous reader provides the "Chicago" translation of my remarks:
the post you blogged about was the stupidest post imaginable. You have a discipline like economics where you can train kids to go out and earn a very good living. It gets captured by a bunch of unproductive, shallow Marxists so the Dean at ND is supposed to roll over let them to continue to not train their students? Why? Because in 30 years someone might cite their work. Hmmm."

Tuesday, October 5, 2010

Hail to the hackers valiant ....

Michigan students meet electronic voting.

Airplane solitude

Therapists apparently run a risk of receiving unwanted life stories from the passengers sitting next to them on airplanes.

I like this deterrence strategy:

Niranjan S. Karnik, a psychiatrist and sociologist who teaches at the University of Chicago, said he often told seatmates, “ ‘I’m a sociologist.’ That’s an effective conversation-ender.”

My strategy is to read an article with lots of math in it. That deters nearly all would-be conversationalists.

Via: U of Chicago magazine email

Math humor

Tom Lehrer on Nicolai Lobachevsky.

Younger readers may not know about Lehrer, who has a large body of humorous work that well repays investigation.

Hat tip: Jess Goldberg

On Atlas Shrugged

A fine rant from John Scalzi, whose writing for the Chicago Maroon was notably good back in my graduate student (and his undergraduate) days.

I like this bit:
So that’s how it susses out for me. As a pulpy, fun read about an unrealistic world that could never happen, I give Atlas Shrugged a thumbs up. As a foundational document for a philosophy for living in reality with other actual live human beings, I rank it below Jonathan Livingston Seagull and The Secret, both of which also have the added value of being shorter.
Really, though, Jonathan Livingston Seagull is much, much better than The Secret.

And as to the jerks and thugs from high school (or, in my case, mostly junior high) who feature in Scalzi's rant, living well is a much more satisfying revenge than being a Randian.

Nobel predictions

Tyler Cowen offers his predictions and critiques those from Thomson-Reuters.

A few of my own:

1. GMM prize - Lars Hansen

2. Search prize - Dale Mortensen and Chris Pissarides

3. Structural prize - John Rust and Ken Wolpin

4. Allocation mechanism prize - Al Roth

At some point in the future we will, of course, see

5. Experiments in development prize - Esther Duflo and maybe Michael Kremer

My guess is that this year's prize will be neither political (like Paul Krugman) nor obscure (like last year's winners).

If the committee is in a humorous mood, they will give it to Nuriel Roubini.

Addendum: On further reflection, I'll add:

6. Bounds ("set identification") / statistical treatment rules / identification: Chuck Manski

Monday, October 4, 2010

Learning from the ordering of Nobel prizes

A fine post from Cheap Talk on what can be inferred from the temporal ordering of Nobel prizes.

Michigan 42, Indiana 35

A titantic defensive struggle in which Michigan came out on top mainly because the game ended at the right time.

This week the schedule gets serious with Michigan State visiting Ann Arbor. They looked pretty strong in defeating Wisconsin. We will learn a lot.

Where chicken nuggets come from

The sad, pink truth.

Hat tip: Dann Millimet

German academic title question

On page 7 of the quarterly report of the ZEW in Mannheim (one of the major German economic research institutes) you will find a box with a statment from institute director Wolfgang Franz that lists his title as:

"Professor Dr. Dr. h.c. mult. Wolfgang Franz"

Franz is a fine fellow but that fact is unrelated to my question, which is, what does "h.c. mult." mean?

By the way, the "Dr. Dr." is not a typo, it means he has two doctorates.

Saturday, October 2, 2010

Washington 32, USC 31

Worth getting up for the fourth quarter at 5 AM in Uppsala? Oh yeah.

Addendum: coverage from the Seattle Times here and here.

Thought of the moment

Very cool: watching the Michigan game on my laptop in my hotel room in Uppsala via ESPN3. The picture is surprisingly clear.

Not so cool: Michigan 14 Indiana 14 close to halftime.

IZA Prize in Labor Economics

Congratulations to Francine Blau on winning the 2010 IZA Prize in Labor Economics!!!