Wednesday, June 15, 2016

The Recycling Industrial Complex

A common theme of opportunity cost:  if you use more resources to "save" something than it takes to throw it away, that's not saving.

In the North State Journal, my piece claiming that mandatory recycling is a violation of the separation of church and state....here.  It's gated, but you can register for free.

Thursday, June 09, 2016

Unloading the Dishwasher is Foreplay


The Gendered Division of Housework and Couples' Sexual Relationships: A Reexamination 

Daniel Carlson et al.
Journal of Marriage and Family, forthcoming

Abstract: Although contemporary couples increasingly express preferences for egalitarian unions, previous research has suggested that sexual intimacy decreases when routine housework is shared. Yet this research was conducted on data that are decades old. To update this work, the authors compared data from the 2006 Marital and Relationship Survey (MARS) and Wave 2 of the National Survey of Families and Households (NSFH2), collected in 1992–1994. The results indicated change in the association between housework arrangements and sexual intimacy across surveys. Although egalitarian arrangements were associated with lower sexual frequency compared to conventional arrangements in the NSFH2, no such difference was found in the MARS. In fact, reported sexual frequency increased across surveys among egalitarian couples only. In addition, how housework was arranged mattered more for sexual satisfaction among MARS couples than NSFH2 couples. These changes appear to result from the increasing role of perceived equity as a mechanism linking the division of housework to sex.

Wednesday, June 08, 2016

Sunday, June 05, 2016

David French: Can He Actually WIN?

Surprisingly, yes..

Sure, it's a long shot.  But more possible than you might think.

Or, so I claim, in the Cleveland Plain Dealer...

Excerpt:

...if the race is close, and the "third" candidate manages to take a couple of states, it's possible nobody wins a majority. The 12th Amendment would then send the election to the House of Representatives, where voting is one-state, one-vote, and the possible candidates would be restricted to the top three Electoral College vote-getters. Up until now, we have been focused on a brokered convention. But if an outsider catches fire, there might be a brokered election. Remember: The Republicans control 32 House delegations outright. If David French wins just two or three states, he could still wind up as president.

Saturday, June 04, 2016

Selfie Regard


Selfie Indulgence: Self-Favoring Biases in Perceptions of Selfies 

 Daniel Re et al. 
Social Psychological and Personality Science, forthcoming 

Abstract: People often perceive themselves as more attractive and likable than others do. Here, we examined how these self-favoring biases manifest in a highly popular novel context that is particularly self-focused - selfies. Specifically, we analyzed selfie-takers' and non-selfie-takers' perceptions of their selfies versus photos taken by others and compared these to the judgments of external perceivers. Although selfie-takers and non-selfie-takers reported equal levels of narcissism, we found that the selfie-takers perceived themselves as more attractive and likable in their selfies than in others' photos, but that non-selfie-takers viewed both photos similarly. Furthermore, external judges rated the targets as less attractive, less likable, and more narcissistic in their selfies than in the photos taken by others. Thus, self-enhancing misperceptions may support selfie-takers' positive evaluations of their selfies, revealing notable biases in self-perception. 

Nod to Kevin Lewis



Friday, April 22, 2016

The Problem with Macro in one blogpost


Apparently, Nick Rowe slipped up and wrote something about Macro in plain English. David Andalfatto was understandably quite upset and tried to fix things by adding "a bit of formalism".

Then away he goes:


There is a representative agent (this is not necessary, but makes things easy) with additively-separable log preferences defined over consumption sequences {c(t), t = 0,1,...,∞}, with discount factor β. Let R(t) denote the gross real rate of interest (risk-free) earned on a bond held from date t to date t+1. Assume that all individuals can borrow/lend freely at the risk-free rate.

and then this:

Let me consider an endowment economy where each individual is endowed with a deterministic sequence {y(t), t = 0,1,...,∞}.


OK, everybody got that. Representative agent? check. Perfect capital markets? check, lifetime income fixed and known with certainty? check. Time-separable preferences? check.

AAARRRRGGGGHHHHH!!

People, it would be one thing if models like this fit the data, but they don't.

The consumption CAPM is not an accurate predictor of asset prices, The degree of risk aversion required to make the numbers work in the equity premium puzzle is something on the order of 25 or above, the literature is littered with papers rejecting PIH.

So we are being harangued by a model that is unrealistic in the theory and inaccurate to the extreme in its predictions.

And that's pretty much modern macro in a freakin' nutshell.

Mamba out.

Monday, April 18, 2016

Headline Meme: Florida Memorial Edition


People, eating Floridians is tough work. Just ask the tiger referred to in this classic headline:


Tiger recovering after killing Florida zoo worker


Sunday, April 10, 2016

Angus 3:16: Careful with that Ax, Eugene!

I see that "improve your WB ease of doing business score" policy advice has cropped up again on the interwebs (I'm lookin' at you, Alex T.).

In my own special bombastic way, I've had a lot to say on this topic so I thought I'd collect much of it here and expand on the issue/problem.


1. To the extent there is a correlation between the "doing business" index and per-capita GDP, it is a very loose relationship whereby countries with very similar scores have very different outcomes.

Sadly, this is true of almost all institutional indicators, as Hausmann, Pritchett and Rodrik showed us lo these many years ago.


2. Even though there may be a historical correlation between "doing business" and incomes, it is far from clear that it is either causal or exploitable. The exploitability point is kind of a Lucas Critique point. If we see such a reduced form relationship in historical data, treating it as exploitable (i.e. targeting index improvements as a path to higher incomes) is pretty risky. Incredibly, some countries are making improving their scores a policy goal. Ricardo Hausmann has a nice piece on why this can be problematic. And, Matt Andrews has written a book about how countries are adopting "good looking" but not actually good, governance.


3. As Dreimeier & Pritchett show, it is often the case that the outcomes reported by the index, which is compiled by surveying "experts"  are not really related to the actual experience of business people in the country under study. This is the usual de facto vs. de jure issue that plagues many expert compiled indices.

People, we know that North Korea is poor and South Korea is rich. We know that East Germany was poor when West Germany was rich. But we really do not know in any reliable way, what macro policy advice will ensure development success. Really and truly. "Adopt the observed policies and forms of the rich countries" has been offered as advice by the IFIs for decades with very uneven results. Measures of institutions across countries are converging, but per-capita output across countries is not.