Saturday, April 30, 2011

Assorted links

1. Brian Dougherty on the non-interventionist right.

2. Cool, but sadly inactive, blog about old malls.

3. Top Five's version of Obama's long form birth certificate.

5. Etiquette for women dating multiple men.

6. The last typewriter factory shuts down.

Faculty and staff salary growth at UM

The original Detroit Free Press piece and the university response.

I think the university is largely correct here though they do undermine the air of transparency with meaningless (and potentially misleading) bits such as:
In two of the last six years (FY 2004 and FY 2010), the president, provost, vice presidents, and deans received no increase in their base salaries.
That is a bit like pointing out (correctly) that there have been literally thousands of days on which I worked at UM but did not receive a raise. Yes, sure, but irrelevant to any of several possible questions of interest.

My own experience with the university's salary and benefits system, both as a regular faculty member and as part of an internal salary study team, is that the university's administrative systems related to payroll are so arcane as to make Fizzbin look like checkers by comparison. It is not at all surprising that the Free Press messed things up, though perhaps they should have been more careful before publishing to make sure they understood what they were doing.

Of course, neither the original article nor the university response address deeper questions about whether the levels of administrative faculty employment and pay, or their arrangement across levels and task areas, are the correct ones.

Authorial thought experiments

What if Ayn Rand and Dr. Seuss co-authored a book?

Foiled by FOIA

The UM's official publication attempts to explain what, exactly, is covered by state and federal Freedom of Information Act requirements.

Unfortunately, the article does more to illustrate the sometimes inability of university administrators to communicate clearly than anything else. After reading the article, for example, I am still unclear about whether or not an email I sent to a co-author about the Wisconsin demonstrations would have to be released or not, which seems like the key question surrounding the Mackinac Institute's FOIA request, and whether or not the answer to that question depends on, for example, whether I am a faculty member in a labor-related unit and/or whether or not I am engaged in research on issues related to unions.

The key paragraph is this one:
Email messages are considered public records under the FOIA if they deal with university business or are maintained by the university related to university business. The law specifically excludes computer software from the definition of public record.
So, my hypothetical email is presumably not university business, but it is "maintained" by the university in the sense that it sits (essentially forever, as I rarely delete emails) on the university's disks. Or maybe it is university business if I work at a unit that studies labor relations or if my research has to do with unions? Does it matter if my union-related research is funded by a grant run through the university? The line about software seems oddly irrelevant - how many faculty will write a program to express their views?


Determinants of airfares

An interesting piece on the determinants of airfares.

Just ignore all the bits about what is "fair" or not. There is no real normative question here, but the positive question surely warrants attention. More narrowly, the author seems not to understand that the high airfares in small places such as, to use a personal example, London, Ontario, are implicitly reflected in local wages and house prices as part of the grand general equilibrium of mobility that sorts people and firms among places.

Via: Economist Gulliver blog; here is the original Gulliver post.

Friday, April 29, 2011

Assorted links

1. A guide to the real world for Harvard graduates.

2. Semengate. Sigh.

3. When brand names don't transfer well across boundaries.

4. Innovations in brewing from the UK.

Compelling evidence on college dropout

I happened to read this paper over the past few days:
Learning about academic ability and the college drop-out decision

Todd Stinebrickner
The University of Western Ontario

Ralph Stinebrickner
Berea College

Abstract: We use unique data to examine how college students from low income families form expectations about grade performance/academic ability and to examine the role that learning about these factors plays in the college drop-out decision. With respect to beliefs, at college entrance students are considerably overoptimistic. Subsequent updates depend on both initial beliefs and new information arriving in the form of grades, with individual heterogeneity in the weights assigned to initial beliefs and grades depending on individual-specific views about the underlying reasons for grade performance that are suggested to be of importance by a Bayesian model. While students with the worst grade performance update dramatically, they tend to remain overoptimistic because they understate the importance of permanent factors in determining their performance. With respect to drop-out, we find that learning about grade performance/ability plays a very prominent role; our predictions suggest that drop-out would be reduced by 41% if no learning occurred about these factors. Finally, the paper contributes directly to a recent literature examining gender differences in educational attainment and gender differences in other behavior. We find that the substantial gender difference in drop-out in our sample is predicted almost entirely by academic differences (1st year grades and beliefs about future grades), and we find direct evidence of gender differences in effort and gender differences in the non-pecuniary cost of effort. As to why poorly performing males decided to enter college, we find that, at entrance, males are substantially more overoptimistic than females.
The paper relies on the unique data from the Berea Panel Survey that the two Stinebrickner's designed and continue to field. This work, and a string of other papers using the same data, really illustrate the value of thoughtful data collection that is well-informed by the recent literature on measurement - particularly expectations measurement in this case, by the relevant theoretical literature, and by specific questions of academic and policy interest.

The results of the study suggest that many students enter college with remarkably misguided ideas about their own ability and about the workload required to succeed in college. It seems to me that high schools ought to be able to provide this information relatively cheaply and that doing so would be of great social benefit. While some learning at college is both inevitable and optimal, four year colleges in particular are very expensive for society to provide and having large numbers of students attend for only one or two years in order to learn that they are poorly suited for college-level work is a serious waste of resources.

Full disclosure: Todd is a friend and former colleague.

Jake Locker

Jake Locker becomes the first University of Washington quarterback to be drafted in the first round of the NFL draft, despite those puzzlingly low scores on the Wonderlic. This is no small achievement given that the list of past UW quarterbacks to play in the NFL includes Warren Moon and Mark Brunell.

Uncle Bonsai tomorrow at the Ark

Uncle Bonsai is my favorite folk group, so much so that I am skipping the Society of Labor Economists meetings (one of my very favorite conferences) in Vancouver (one of my very favorite cities) to be in Ann Arbor for their show tomorrow, Saturday, April 30 at the Ark.

On beauty and bargaining power

A thoughtful post from Marina Adshade on the costs and benefits of having a partner who is attractive to others and about research on how the inherent trade-off plays out in practice.

The video presents the musical version of the post. I chose it because it looked like the couple is having so much fun. The poster at youtube claims the song was the bride's idea.

A longer title for yours truly

As of yesterday, and subject to approval by the Regents of the university, I now have a "zero budget" appointment at the Gerald R. Ford School of Public Policy. A "zero budget" appointment is Michigan-speak for what most other places call a "courtesy appointment". Among other things, this means I can now refer to myself as "Professor of Economics and Public Policy."

I sought the appointment because I hope to become somewhat more involved at the Ford School. I taught at the Harris School at Chicago during my gradual student days and really enjoyed interacting with the MPP students there, as well as with the multi-disciplinary faculty. I expect the same to be true at Michigan.

One nice feature of both Michigan and Chicago is that their policy schools are not named after people I would be embarrassed to be associated with, like John F. Kennedy or Woodrow Wilson.

Tuesday, April 26, 2011

Thoughts on child-rearing

From a store in Palm Springs, where we spent the past few days visiting family and enjoying the warmth.

Monday, April 25, 2011

Movie: Hanna

Hanna is hip, stylish fun with very fine acting, engaging cinematography, some fine music and lots of scenes of Berlin's gritty underside.

It is (slightly) marred only by a couple of logical errors in the script, as when poor Hanna, who is scared by electricity and television in one scene, and lacks money for food in many others, wanders into an internet cafe in Berlin and does a bunch of research that indirectly helps fill in some of the background of the story.

The NYT review does not do it justice, and reminds me again that I wish A.O. Scott would do all of their reviews.

If you are in the mood for some high-end Hollywood thriller fun, Hanna is recommended.

On compensating differences and amateurs

A fine post from Will Wilkinson at the Economist's Democracy in America blog about the partial replacement of professional newspaper photography by high-end "amateurs" nicely illustrate a general point, which is that salaries will usually be low in fields in which there are lots of people who enjoy the job enough that they are willing to do it for little in the way of monetary payment.

I suspect, for example, that in the absence of unions, elementary school teachers would make less than middle school teachers precisely because it is more fun to teach little kids than tweens. A similar point applies to daycare workers. There are lots of pretty good amateurs without degrees in child development willing to do this job for low pay, because they like hanging out with children a lot more than standing at a retail counter or an assembly line, and so the wages stay low unless propped up by laws that limit entry via degree requirements.

This also explains why humanities professors make less than faculty in other fields, and why so many people are willing to spends years getting doctorates in the humanities even when the chances of ending up in a tenure track position are low. There are lots of people who think it would be great fun to spend all their time thinking about, and teaching about, and researching about, literature and art. Some people think that about economics and physics, too, but the person at the occupational margin who sets the compensating difference is less enthused, or at least has better outside options that give some of the same satisfaction.

Still more broadly, it is always worth remembering when people talk about inequality in wages or incomes that any proper moral theory should be concerned with inequality in utility, rather than wages, and that in some cases more wage equality can mean less equality of utility. This will necessarily be the case if wages for jobs that are more fun are made equal to those in jobs that are less fun.

Saturday, April 23, 2011

Movie: Atlas Shrugged, Part 1

As it turned out, the movie at the multiplex that best fit our schedule was Atlas Shrugged, Part I. As noted yesterday, the critics and the audiences differ here: as I write, the tomato meter based on the critics sits at 6% out of 100 while that based on the viewers sits at 85% out of 100. I suspect that this may be the only movie ever to get 6% out of 100 at which the majority of the audience, at least at the theater we went to, applauded at the end of the movie.

A big part of the problem on both ends is that neither the critics nor the audience is really judging the movie as a movie. Instead, they are expressing their support or disdain for the political viewpoints of Ayn Rand (something many of the critics, I suspect, know only in parody).

Another big part of the problem, and I say this knowing that it is quite a statement indeed, is that the movie is much, much less well written than the book. Yes, Ayn Rand is hardly Jane Austen or even Charles Dickens, but she is a reasonable writer of genre fiction. In contrast, the writing in the movie is just plain awful.

Here is Roger Ebert's review from the Chicago Sun-Times. It is clear that he doesn't like Ayn Rand's political views, but he still gives a pretty good summary of what is not right with this movie. It was made on the cheap, with weak writing, sometimes mediocre acting and a very low budget. Hence all the landscape shots and soap opera interiors.

My own view is that this was an opportunity missed and missed badly. I do not agree with much of Ayn's philosophy - I support altruism the way I define it, I don't care for her atheism, and I prefer my rationalism to her romanticism. But one could have made a really great movie that mocked those in politics and in the broader cultural world who pander to envy and sloth and who denigrate achievement while elevating mediocrity. Ayn Rand mocks such people in her books with icy enthusiasm; in the movie the corresponding characters come off as simply drones playing their parts in the great beltway pork machine, and thus more banal than evil. Also, Ayn's attacks were aimed directly at the people and ideas of her time. One of her later books contains a chapter that pairs similar quotations from JFK and Hitler, for example. There is none of that in the movie. The bad guys are generic and boring. The only one you really hate at the end of the movie is Hank Rearden's ball-busting wife and you hate her not for her philosophy, as Ayn would have wanted, but just for treating her husband so poorly.

So, if you have read the book, it is worth going to see what they do with it. If not, take a pass.

Friday, April 22, 2011

Atlas Shrugged reviews

I don't think I've ever seen a bigger divergence between the ratings of the critics on Rotten Tomatoes and the ratings of the viewers than the one for Atlas Shrugged, Part I. The problem, of course, is that the critics' ratings are biased downward for political reasons while the viewers' ratings are biased up due to self-selection on political views. In formal jargon, this means that the "true" rating is only set-identified, and the set is a big one. Put somewhat less technically, the two sets of ratings bound the truth and in this case, as in so many others, the bounds are too wide to be informative.

Really good writing advice

I like this column on academic writing a lot.

I think the most useful point is the first one, which I would reword to say that learning-by-doing is the way to learn to write. Reading is helpful too, and reading in particular with an eye toward the structure of the argument rather than just to the substance.

I would add three other bits:

11. Even if your paper is not as good as the last paper you read by Heckman (or the alternative famous and brilliant scholar of your choice) it can still be a really useful scientific contribution. There are plenty of great papers out there that never see the light of day because their authors compare them to the best one percent of papers and find them wanting. That is not the relevant standard. The relevant standard is: does this paper add to the existing body of knowledge?

12. I find that giving talks is really helpful in writing papers in the sense that I find it easier and more natural to develop the "story" aspect of papers in the context of a seminar presentation than when writing. Once I have the story, the writing is much easier.

13. Blogging is really good writing practice.

Thursday, April 21, 2011

A Mencken story

Regular readers will know I am a big fan of H.L. Mencken.

From the Good S**t blog comes a story I had not read before.

Jonathan Levin: John Bates Clark Medal

Congratulations to Jonathan Levin of Stanford who recently won the John Bates Clark medal for the best economist under the age of 40.

It is testament to the size of the academic economics world, and to the fact that we practice the division of labor that we preach, that I had never even heard of Levin until he won the award.

Readers prone to envy should note that, according to his AEA bio, Levin is set to become chair at Stanford starting this coming academic year. Seems an odd way for Stanford to deploy the time of its hottest intellectual asset, but then I am surely no expert in departmental management.

Tuesday, April 19, 2011

Happy Birthday

... to Jim Heckman!

Assorted links

1. Their taste in pets really stinks.

2. Good fences make good neighbors: on the niceness of supporters of redistribution. Of course, this could just be a coastal / flyover omitted variable problem.

3. I have no objection to not working as long as people do it on their own dime.

4. Lemon James - we saw here at a concert a couple of weeks ago.

5. Sex experts in love from Spousonomics.

6. Cool map of Ann Arbor from a long time ago.

7. A sad meditation on the decline of desire.

Conspiratorial fun

Did Sarah Palin fake the birth of Trig Palin? Apparently not.

But the real thrill of conspiracy theories, like this one and its intellectual sibling the Obama "birther" conspiracy recently revived by Donald Trump, is going deeper. Perhaps the Republicans really started the conspiracy theory about Trig Palin so that the Obama "birther" people would look less stupid by comparison? Surely the Koch brothers have been sending checks to the professor at Northern Kentucky University (Go Norse!) whose paper has revived the Trig conspiracy? Where is the expose from the Huffing-and-puffing Post or Mother Jones? Maybe the Koch brothers are secretly paying them off too? Or maybe the federal reserve is somehow involved? Or the Illuminati? Or the Holy Grail? Or Elvis? Or aliens?

Good to know there is nothing important to talk about instead, like the budget.

Sunday, April 17, 2011

Medical methodology, cellphones and cancer

MR points to this excellent article about the unsuccessful search for a link between cell phone use and brain cancer. It is well worth reading and does a very fine job of illustrating the important role of "multiple lines of evidence" in building a scientific case.

I also liked the emphasis on non-classical measurement error. The study described in the article about cancer patients who "remember" eating diets higher in fat than they themselves reported prior to the appearance of the cancer shows the power of lay theory at work. The women had adopted a popular theory regarding the cause of cancer and then (unconsciously) adjusted their reports of past eating behavior to match the theory.

I would have liked to learn more about what variables were conditioned on in the "case-control" studies. The natural reaction of economists to the odd findings from these studies would have been to go hunting for unobserved confounders.

Finally, I was a bit puzzled by this bit:
What is clearly needed, experts agree, is a single, definitive, unbiased study — “one trial,” to borrow Paget’s terminology.
Having one (supposedly) definitive study is great for journalists as it reduces their reading load and simplifies their story lines. And in contexts where larger randomized trials on humans with reasonable external validity are possible, perhaps the one grand study really is the goal. But what is described in the article is an animal study so there will always be external validity concerns. In the world of economics, journalistic focus on the "one easily explained, well-published study by famous people at a leading university" sometimes leads to the provision of a very misleading picture of the overall body of evidence and the overall level of agreement in the field. Better to do the work of actually reading, and reporting, the literature.

Starting at community college

The New York Times has a useful article that provides advice to students who want to save money by doing the first two years of a four-year undergraduate degree at a community college.

I would add that students thinking of pursuing this path should be aware that the fraction of students who say they want a BA or BS, start at a two year college, and actually obtain a BA or BS is really low. This is true even if you condition on lots and lots of observed characteristics, as in this paper by my student Lock Reynolds. The NYT story provides a handful of success stories. They could have found many more stories of failure.

In thinking about why this might be, I would highlight three factors: peer quality, instructor quality and living at home / hanging out with friends from high school. Peer quality may be more important indirectly, through its effect on the level and pace at which courses are taught than any direct effect via personal interactions. I teach a harder and faster econometrics course at Michigan than I did at Maryland because the students are, on average, stronger here. I am sure that the course at Washtenaw Community College is easier and slower than the one I taught at Maryland.

While that college in Massachusetts noted in the article may have people who used to teach at Harvard (as teaching assistants?), I suspect most community college faculty have very different observed characteristics than faculty at four year schools. This is likely a mixed blessing for students. In some cases, community college faculty may have more time and enthusiasm for teaching than the research-and-tenure distracted faculty at four-year schools. In other cases, they will be teaching part-time to supplement whatever else they are doing.

My sense is that part of what makes four-year schools different from two-year schools is that students usually, though not always, do not live at home when they attend them. This adds to the cost, of course, but it also helps marginal students break away from their high school peer group and mindset and to form a new network more heavily weighted with the academically talented and ambitious. I suspect that this has positive effects on outcomes, though of course exogenous variation in living at home to use in teasing out causal effects is hard to come by. I would be interested in pointers to the literature - surely there must be some - on this point.

Finally, some of the advice, such as paying very close attention to the sequences of courses required to attain one's educational goals within four years, carry over to students who start at four-year schools. Bound, Lovenheim and Turner convinced me that institutional barriers due to limited capacity have real effects on time-to-degree.

Hat tip: Nora Dillon

Waiting at the border

A piece in the most recent Canadian Public Policy (the policy journal of the Canadian Economic Association) estimates the cost of border delays between the US and Canada.

When I fume about border delays, which is to say every time I go to Canada, I focus on the delays for people crossing the border, but the costs associated with delays on the movement of goods are likely to be much larger in the aggregate.

I would note, as I often do in conversation, that the Europeans have done much better than we have on this dimension. Crossing from Germany into France, two countries that have fought three majors wars in the last 150 years and, truth be told, still don't really like (or, what is not unrelated, understand) each other very much, one does not have to stop at all. I've done it. You just drive right by some rusting remains of a border crossing station.

In contrast, Canada and the US, probably the two most similar separate countries on earth, who have not fought a war in 199 years, with integrated telecommunications and energy systems, still subject their residents, and their goods, to long delays, inane border questioning and, in the case of goods, heaps of bureaucracy on top of it. We can and should do better.

As an aside, estimating the costs on individual travelers would make a fine paper, too.

Saturday, April 16, 2011

Friday, April 15, 2011

Rule of Law, Austrian edition

An arduous tale of legal abuse by local officials in an Austrian town. But there is a happy ending!

Hat tip: Lars Skipper

Thursday, April 14, 2011

Pair matching in other contexts

I want to be clear that my dissing of pair matching yesterday was in the context of non-experimental evaluations relying on unconfoundedness assumptions. In that context, the alternatives are other procedures for conditioning on observed covariates, such as inverse propensity weighting or parametric linear regression.

In contrast, pair matching, treated as a special binary case of blocking prior to random assignment, is a very useful idea indeed, as described in a post from a blog at the Wild Bank. In the experimental context, pair matching can improve power relative to simple random assignment, especially in cases where the units being randomly assigned are relatively heterogeneous. The idea is to do random assignment within matched pairs (or, more generally, blocks of similar observations).

Hat tip: Jess Hoel

Evaluating NDLP

In the post by Matt Khan that I blogged about a few weeks ago, he argues that one purpose of a blog is publicize one's own research. I have not done much of that, other than in a very broad sense, but it is probably a good idea.

So, in that spirit, I note this paper, which I recently circulated as an IZA working paper:
The Impact of the UK New Deal for Lone Parents on Benefit Receipt

Peter Dolton
Royal Holloway College, University of London,
London School of Economics and IZA

Jeffrey Smith
University of Michigan,

This paper evaluates the UK New Deal for Lone Parents (NDLP) program, which aims to return lone parents to work. Using rich administrative data on benefit receipt histories and a “selection on observed variables” identification strategy, we find that the program modestly reduces benefit receipt among participants. Methodologically, we highlight the importance of flexibly conditioning on benefit histories, as well as taking account of complex sample designs when applying matching methods. We find that survey measures of attitudes add information beyond that contained in the benefit histories and that incorporating the insights of the recent literature on dynamic treatment effects matters even when not formally applying the related methods. Finally, we explain why our results differ substantially from those of the
official evaluation of NDLP, which found very large impacts on benefit exits.
This is an old paper. It got started in the late 1990s as a result of the two of us being on the technical advisory panel for the official UK government evaluation of the NDLP. The results of that evaluation were so positive that even the government agency sponsoring the evaluation did not quite believe them (a high bar indeed!) and so Peter and I, along with his gradual student Joao Pedro Azevedo who is now at the Wild Bank, were retained to reanalyze the data.

Filled with hubris, we expected that if we just redid the analysis and tweaked the methods a bit, the results would change dramatically. This turned out to be wrong. Neither varying the matching method nor worrying a lot about survey non-response moved the estimates very much at all. Changing the outcome variable from "leaving income support within six months" to a monthly measure of benefit receipt did matter some. We document these findings in this report for the UK Department of Work and Pensions.

We continued to pursue the mystery of the oddly high impacts. The paper reflects the additional work we did after writing the report for the DWP. In the end, using just the administrative data, we are able to get the impact estimates down to levels that are likely still a bit too high, but at least within the range of plausibility suggested by the literature. Our analysis reinforces the message from some of my earlier work with Heckman and others regarding the importance of flexibly conditioning on pre-program outcomes. We also indirectly show the value of recent developments in the literature on dynamic treatment assignment, as in the important paper by Barbara Sianesi (2004) Review of Economics and Statistics. We were surprised to find that questions about attitudes toward work do surprisingly well as conditioning variables, while variables related to local labor markets matter very little, contrary to the findings using the JTPA data in Heckman, Ichimura, Smith and Todd (1998) Econometrica. This latter point merits further investigation: when do local labor markets matter in evaluating active labor market programs and when do they not?

Given the heavy UK content, we sent the paper to the Economic Journal, which is the journal of the Royal Economic Society.

Regular readers will note that our estimator in this paper is drawn from the curio cabinet. That is to say, we rely on nearest neighbor matching. The reason for this is essentially path dependence. When we started the work in the early noughties, the gain in speed from using nearest neighbor matching in preference to kernel matching - inverse propensity weighting was not on the radar screen at that point - was large enough that it seemed the correct choice. Once we started down that path, we never quite got around to changing estimators to something better. We'll see what the referees think about that.

Doctoral fellowship at MDRC

This would be a lot of fun!

MDRC is one of the very best social science research organizations, with a primary focus on random assignment evaluations of social and educational programs.

4/15/11: Link fixed.

A short history of grading at UM

I would not have guessed that UM was completely pass / fail into the 20th century.

I like this bit about early UM president James Angell:
Over his 38 years as president he argued repeatedly that "broader, heartier, better work" was done by those who studied simply "for the sake of learning" than by those who were merely scrapping for grades. "A collegiate course cannot be wisely shaped with primary reference to driving drones to work," he declared. "It should provide every manly and noble incentive to worthy achievement."
There is no question that it is more fun to teach students who actually care about learning. And the fraction of such students is surprisingly high at Michigan. I suspect those students learn more, and learn more usefully, than their grade-grubbing, future-salary obsessed colleagues.

Movie: Win, Win

A delightful and quirky dramedy (with most of the weight on the comedy side) that raises questions about the link between being in control and being happy.

To quote A.O. Scott's fine NYT review "a good movie about trying to be good" (in New Jersey). Paul Giamatti's performance is memorable.


Wednesday, April 13, 2011

Movie: White Material

A lush, thoughtful, and indirectly violent study of civilization slipping away in French colonial Africa.

The NYT review captures it well.

This will surely be in my top five for the year.


Monte Carlo analyses of matching and weighting estimators

I happened to read this paper earlier this week:
How to Control for Many Covariates? Reliable Estimators Based on the Propensity Score by Martin Huber, Michael Lechner, Conny Wunsch (October 2010)

We investigate the finite sample properties of a large number of estimators for the average treatment effect on the treated that are suitable when adjustment for observable covariates is required, like inverse probability weighting, kernel and other variants of matching, as well as different parametric models. The simulation design used is based on real data usually employed for the evaluation of labour market programmes in Germany. We vary several dimensions of the design that are of practical importance, like sample size, the type of the outcome variable, and aspects of the selection process. We find that trimming individual observations with too much weight as well as the choice of tuning parameters is important for all estimators. The key conclusion from our simulations is that a particular radius matching estimator combined with regression performs best overall, in particular when robustness to misspecifications of the propensity score is considered an important property.
The paper presents a thoughtful Monte Carlo analysis of various matching and weighting estimators for treatment effects. Unlike most Monte Carlo analyses, which specify relatively simple DGPs, this Monte Carlo is based on real data: in this case, the sort of German administrative data used to evaluate active labor market programs. This feature makes it a useful complement to the two Monte Carlo studies by Busso, DiNardo and McCrary (2009a,b).

Two finding stood out to me. First, like the other studies in the literature, including the important paper by Froelich (2004) Review of Economics and Statistics, Huber et al. find that single nearest neighbor matching (also called pair matching) performs very poorly relative to other estimators in mean squared error terms. It really is time to put this estimator (which is one of the, if not the, most widely used estimator in practice) away in the curio cabinet of obsolete statistical procedures. Second, I liked the authors' suggestion of a new trimming method to deal with the instability that sometimes results when matching or weighting on the propensity score (the conditional probability of treatment) in cases where some scores are very close to zero. Their scheme awaits a thorough theoretical econometric treatment, but it has nice features and works well in their Monte Carlo.

This paper, and the Busso et al. papers, are all well worth reading for those interested in the estimation of causal effects using identification strategies based on "selection on observed variables" or unconfoundedness.

When prosecutors misbehave

We could no doubt have a lively discussion of the optimal amount of punishment for various forms of misbehavior by public prosecutors, but I am pretty sure that it is not zero.

Explaining the variance in tax compliance

Casey Mulligan reports on a Chicago dissertation that examined how "tax compliance" - the formal term for whether or not you pay all the taxes you owe - varies with the amount of integrity required in different occupations, as rated by an external source.

My quick internet investigation suggests that Oscar now works at the Ministry of Finance in Mexico.

On-the-job training in Congress

It did not take the new crop of legislators in DC long to learn that the road to success is paved with deceit. It is key to note that both those bragging about the "biggest cuts in history" and those who were crying bloody murder about the draconian slashing of less than one percent of the budget were lying through their teeth.

Planned Parenthood sex ad

This ad is cute ... I am glad to know our students are having sex and are happy about it, but it seems designed more to make people who already support Planned Parenthood feel good about themselves than to change the minds of those who do not.

As I have noted on this blog before, my view is that as long as we have decided that anyone who can attract a sex partner can have a child, expenditures on Planned Parenthood to provide abortions for those who cannot otherwise afford them (and who thus are surely ill-suited to having a child, at least at present) seems like tax money well spent.

A more convincing ad would not (implicitly) focus on Planned Parenthood's service to non-poor undergraduates at Michigan and would also mention that one can give to the organization voluntarily, via donations, as well as involuntarily via the tax system. I would feel better about Planned Parenthood if I knew they were doing their best to build up an endowment so that their services would not depend on the whims of the legislature.


This is the 100th anniversary of Frank Lloyd Wright's Taliesin residence in Wisconsin. Here is the economist on the difficulties of preservation.

My wife and I visited there about seven years ago, when I was on the job market deciding between moving to Wisconsin or Michigan or staying at Maryland. It is about a 45 minute drive south of Madison and well worth the trip.

Tuesday, April 12, 2011

Coffee liberation

Allen Sanderson at Chicago demands that we end our dangerous dependence on foreign stimulants.

One can only dream about the political career that Allen cast aside to work as an economist.

Hat tip: Ken Troske

Mandatory school lunches

Well this is pretty horrifying. Some Chicago schools are prohibiting kids from bringing lunch from home. I was very fortunate in that I ate only 10 school lunches in my entire primary and secondary career, all on days when my parents were off on vacation and I was staying with friends. I still remember the awfulness of the food. I also still remember how many kids threw out all or a good part of their school lunch.

On the plus side, I can think of few more promising ways to create a cohort of little libertarians.

Monday, April 11, 2011

Hypocritical politicians, Indonesian edition.

Anti-porn politician photographed watching porn in parliament. There truly is no upper bound on the hubris of the political class.

Hat tip: Daniel Marcin

Sunday, April 10, 2011

Bernie Sanders, nationalist

Turns out that self-professed "socialist" Bernie Sanders is also a nationalist, as explained in this video about him bullying the Smithsonian into carrying fewer items made in China in their gift shops. Let's see ... socialism plus nationalism ... perhaps that's already been tried?

And didn't socialists used to be internationalists?

Assorted links

1. David Warsh of Economic Principals figures out Facebook.

4. Tax Movie Night! Sounds like a party. We should have one here at UM.

5. Government shutdown pick-up lines - just save them for the next one.

6. Vacant homes in well-off Detroit suburbs.

7. Some interesting thoughts on the Cola Wars in the Atlantic.

Entitlement reform

I don't usually sign the sorts of "500 economists agree with X" statements that I am invited to sign every few months, but I did decide to add my name to this one on entitlement reform.

I agree with basically all it has to say, though I would add that we also need a major rethink of, and reduction in, our ideas about military involvement overseas. Welfare to farmers and corporations should go as well. The bright side of having our public finances run by drunks for the last 10 years is that opportunities for budget cutting are literally everywhere.

Another reason I signed this particular petition is the involvement of Doug Holtz-Eakin, who is doing a very good thing indeed by devoting himself to improving public policy rather than cashing in on his experience in the Bush II administration.

Ron Ehrenberg on elite colleges

The Ithaca Times summarizes Ron's views on higher education research and policy. Ron is a very distinguished labor economist who has written and edited an astounding number of books, and is co-author on one of the leading undergraduate labor economics texts.

I think the room in the picture in the article is the same one I gave my seminar in last week.

Saturday, April 9, 2011

Mark Steyn on Lindsey Graham on free speech.

It is amazing how much free speech the people retain. We have the Supreme Court to thank for that (however bad they are on many other issues) rather than our elected politicians, who always seem to be chomping on the bit to limit speech for whatever non-crisis the prestige press is freaking out about on a given day.

Thursday, April 7, 2011

Multiple comparisons

The multiple comparisons problem arises when doing large numbers of statistical tests. For example, one might estimate the impact of some treatment on 100 different outcomes. Ignoring correlations among the outcomes, in a world where the population treatment effect equals zero for all 100 outcomes, one would still expect five estimates to be statistically significant at the five percent level.

My friend (and fellow Heckman student) Peter Schochet of Mathematica prepared a very nice (and very accessible) survey of the related literature for the Institute of Education Sciences.

Movie: Rango

Rango is good, quirky fun.

The excellent A.O. Scott review in the New York Times has the perfect summary:
... the spirit is closer to those old Bugs Bunny cartoons in which Bugs would cross paths with real movie stars or perform Wagnerian opera.

I should note that the adults in our family enjoyed it more than the four-year old, who got a bit fidgety at times.


Reasons to get a payday loan

The enterprising folks at suggest getting a payday loan for that upcoming bachelor party you've been invited to. After all:
Let’s be realistic here – it is NEVER a good thing to attend a bachelor party and not have any money to spend. Not only will you be singled out as the “cheap” guy amongst your friends, but the ladies at the bachelor party will not pay any attention to you. What fun is that?
This prompts, of course, some scolding from the nannies at the New York Times.

Hat tip: Ken Troske

Sunday, April 3, 2011

Belated April Fool's Day

A fine April Fool's post from Brookings. My favorite bit:
Scholar calls for lowering Social Security retirement age
Bloomberg – While many budgetary experts inside the beltway have called for cuts to entitlements, Brookings senior fellow Isabel Sawhill argues that the retirement age at which Social Security benefits kick in should be lowered. “Did you know that almost 10 percent of all federal dollars are spent on children?” Sawhill said. “That’s just wacko spending that much money on kids. These $300 billion or so should be in the pockets of the elderly. Obama has all this nonsense talk about winning the future. What does that even mean? Let’s give AARP a win.”
What's AARP's win-loss record at these days, 500-0?

Saturday, April 2, 2011

Neoclassical liberalism

I am not quite sure yet how to fit this definition of neoclassical liberalism into what I think of as my Hayekian rule utilitarianism, but it is surely worth thinking about. I do think that "high liberals" often downgrade economic liberties both because they sometimes do not understand much economics and because their personal experience outside the academic and government worlds is often limited.

I wish I had more time to read philosophy. I read a fair amount of political philosophy in my undergrad and early (i.e. pre-Heckman) graduate student days but not very much since then.

Ratios matter in search markets

Dollars and Sex summarizes recent research on the effects of student body sex composition on college student social behavior.

Of course, this analysis assumes that students do not heavily weight the student body sex composition when deciding where to attend. That's likely not a bad approximation, but worth studying. More broadly, publicizing results like this might be the most effective policy tool for pushing the sex composition back toward equality.

Assorted links

1. Miley Cyrus doesn't like competition.

3. Humorous sociology t-shirts from I like the one about formalization.

4. On empirical evidence of the failure of capitalism. My example is White Castle.

5. The Honest Courtesan on unchanging human nature and the "other". I'm more optimistic than she is on this one, in large part because of the amazing change in the cultural treatment of homosexuality in the US during my lifetime.

What's your golden parachute (African dictator edition)?

An interesting tidbit from an article on the fighting in Ivory Coast to displace the recalcitrant predecessor to the democratically elected incoming president.
In the four months since the disputed election, the international community has repeatedly offered [defeated president] Gbagbo a golden parachute, only to be rebuffed. He twice refused to take a phone call from President Barack Obama, who offered him a teaching position at a Boston university if he agreed to peacefully step aside.

Several thoughts come to mind:

1) Is the Kennedy School developing a new MA program for dictators? Will it offer a "Masters in Dictatorial Administration"? I bet there would be a good market in this, and they could charge high fees (with a separately priced option, of course, for personal assistance with the master's thesis).

2) Maybe Gbagbo thought the teaching load was too high? Or perhaps they could not find a lecturing position for his spouse?

3) Is there some reason to think that a teaching position in "a Boston university" would be more attractive than, say, a villa in some central american country?

Worth taking a moment here, too, to be grateful for the social capital in the Western democracies that leads to the peaceful and regular political transitions we take for granted. It doesn't have to be that way.

Hat tip: Lars Skipper

Green policy advances

Two Western Washington university economists take the (sadly, gated) natural next step after Buy Local!

Hat tip: Jason Winfree

Kevin Drum, tool

You can choose between Radley Balko's takedown and Brian Doherty's takedown.

It really isn't about which team wins this week. It is actually about trying to get the best policies.