Tyler Cowen's Blog, page 602

Facts about India

Four decades after the Green Revolution seemed to be solving India's food problems, nearly half of Indian children age 5 or younger are malnourished.

And:

There is no agribusiness of the type known in the United States, with highly mechanized farms growing thousands of acres of food crops, because Indian laws and customs bar corporations from farming land directly for food crops. The laws also make it difficult to assemble large land holdings.

Yet even as India's farming still depends on manual labor and the age-old vicissitudes of nature, demand for food has continued to rise — because of a growing population and rising incomes, especially in the middle and upper classes. As a result, India is importing ever greater amounts of some staples like beans and lentils (up 157 percent from 2004 to 2009) and cooking oil (up 68 percent in the same period).

The story is here.

Better than the filibuster?

To avoid a vote on a proposal to limit collective bargaining rights in the state of Wisconsin, 14 legislators have fled the state, to an undisclosed location. I am not sure if there is a precedent for this. The reason they crossed state lines was to dodge the Wisconsin police.

It turns out that "Republicans hold a 19-14 majority, but they need at least one Democrat to be present before voting."  The link is here and for the pointer I thank Brian Hooks.

Arnold Kling quiz of the day

Which of the following impediments to economic adjustment do you believe to be the most important?

a) the cost of establishing a new enterprise
b) the cost of integrating new workers and equipment into an existing enterprise
c) the cost of adapting physical and human capital to new circumstances
d) the cost of whiting out an old price list (menu) and updating it with new prices

If you answered (d), then congratulations--you have shown your New Keynesian bona fides.

Arnold, by the way, does not answer (d).  The link is here.  Elsewhere at EconLog, here is a very good Bryan Caplan post on the evolution on punditry and the political spectrum.

A theory of liberal churches

From Michael Makowsky:

There is a counterintuitive gap in the club theory of religion. While it elegantly accounts for the success of strict sectarian religious groups in recruiting members and maintaining commitment, it is less satisfactory when attempting to account for groups requiring neither extreme nor zero sacrifice. Moderate groups are always a suboptimal choice for rational, utility maximizing agents within the original representative agent model. The corner solutions of zero and absolute sacrifice, however, are rarely observed empirically compared to the moderate intermediate. In this paper, we extend the original model to operate within an agent-based computational context, with a distribution of heterogeneous agents occupying coordinates in a two dimensional lattice, making repeated decisions over time. Our model offers the possibility of successful moderate groups, including outcomes wherein the population is dominated by moderate groups. The viability of moderate groups is dependent on extending the model to accommodate agent heterogeneity, not just within the population of agents drawn from, but heterogeneity within groups. Moderate sacrifice rates mitigate member free riding and serve as a weak screening device that permits a range of agent types into the group. Within-group heterogeneity allows agents to benefit from the differing comparative advantages of their fellow members.

Also via Kevin Lewis, here is an interesting Dan Ariely paper on who benefits from religion.  And here is a rational choice model of papal infallibility.

Assorted links

1. Jerry Brito on TGS.  Nick Schulz on Watson and TGS.  Umair Haque of HBR on TGS.  And more from Ryan Avent.  Bryan Caplan complains.

2. Where are the jobs coming back?

3. The economics of LCD Soundsystem.

4. Plans for the capitol of South Sudan.

5  Profile of Gene Sharp, father of revolutionary ideas.

6. Econ blogger outlook, from Kaufmann.

The evolution of American federalism

Refresh my memory, are we expanding or contracting Medicaid?  Why is it that I can't seem to remember!?

The Obama administration would permit a controversial plan by Arizona's governor to cut an estimated 250,000 impoverished adults from Medicaid, despite a provision in the new health-care law barring states from tightening their eligibility standards for the program, federal officials said Wednesday.

Here is more.  In a not totally unrelated development, Florida's governor rejects $2 billion in federal aid for a high-speed rail line linking Tampa and Orlando.  What's the implicit MRS on federal funds vs. unrestricted funds here?

What will "the new federalism" look like?  I see rapid evolution.

The Great Stagnation in medicine

Here is one bit from a very good Robert Gordon essay (which I will cover again in a while):

...if one starts down the road of comparing changes in life expectancy, the yearly rate of increase in life expectancy at birth during 1900–50, resulting in substantial part from the inventions of the Second Industrial Revolution, was 0.72 percent per year, the 0.24 percent annual rate during 1950–95.

James Le Fanu, in his 2000 history of modern medicine, lists definitive moments of modern medicine.  In the 1940s there are six such moments, seven moments in the 1950s, six moments in the 1960s, a moment in 1970 and 1971 each, and from 1973-1998, a twenty-five year period, there are only seven moments in total.

For his "Dates of the discovery and sources of the more important antibiotics," the list starts in 1929-1940 with penicillin and ends in...1963, with Gentamicin.

Ezra has a very good post on penicillin.  Megan has a very good post and piece on the drying up of the pharmaceutical pipeline.  Andrew Jack has a very good and scary piece on the withering of pharmaceuticals innovation in the UK.

As Le Fanu writes: "Currently most medical researchers would concede that progress has slowed in recent years..."

As an aside, this has a number of political economy implications for health care reform, none of them cheery.  In both Washington and in the blogosphere, we're very focused on insurance and coverage issues, but is not the innovation pipeline more important?  Does it receive one-tenth the discussion?  One-fiftieth?  Does a slow pipeline mean that health care policy is doomed to be unpopular?

Quick quiz: is health care a growing or a shrinking part of the U.S. economy?

Rescuing Jews is a normal good

From Mitchell Hoffman, based on Holocaust data:

I find that (1) Richer countries had many more rescuers than poorer ones, and (2) Within countries, richer people were more likely to be rescuers than poorer people. The individual-level effect of income on being a rescuer remains significant after controlling for ease of rescue variables, such as the number of rooms in one's home, suggesting that the correlation of income and rescue is not solely driven by richer people having more resources for rescue. Given that richer people might be thought to have more to lose by rescuing, the evidence is consistent with the view that altruism increases in income.

Hat tip goes to BPS Digest.

Government is raising the value of a life

The Environmental Protection Agency set the value of a life at $9.1 million last year in proposing tighter restrictions on air pollution. The agency used numbers as low as $6.8 million during the George W. Bush administration.

The Food and Drug Administration declared that life was worth $7.9 million last year, up from $5 million in 2008, in proposing warning labels on cigarette packages featuring images of cancer victims.

The article is here.  If the goal is to give current people what they want, arguably this makes sense and perhaps it does not go far enough.  Death is...BAD.  If the goal is to maximize real gdp per capita, or most other macroeconomic indicators, it makes sense to value human life at replacement cost (and here) and this policy change does not make sense.  I'm not arguing for either standard and indeed I think they both lead to absurdities.  Instead the point is this: theoretical ordinal welfare economics and applied welfare economics, as represented by wealth measures, do not coincide as much as many economists like to think.  This gap becomes increasingly important as health care and safety provision increase, relative to the size of the economy as a whole.

What the Chinese have done is to neglect health care investments (until very recently) and basically maximize gdp growth.  They wanted to have fewer people anyway, so why spend money to keep ailing people around?  We find this horrible when presented in such explicit terms, and yet we admire their achievement of the end of growth maximization.

Markets in everything -- who buys this stuff?

They do:

Like many women who buy runway styles, Ms. Berkowitz wears much of what she buys to charity galas. She gets multiple wearings out of her gowns, including a red Zac Posen one-shoulder gown and a silvery Marc Jacobs dress with a dark-brown sash. She carefully keeps track of which she has worn where and rotates them from season to season.

Christine Chiu wears most items only once. The 28-year-old, who is married to the founder of Beverly Hills Plastic Surgery, goes to events every night of the week—often making multiple wardrobe changes in a single night.

"If you're going to a gala for some kind of disease and then you go to a hip art event, you can't wear the same thing," Ms. Chiu says.

I loved this article, recommended.