Tyler Cowen's Blog, page 93

Older articles are growing in impact

That is the conclusion from Alex Verstak et.al., here are some sentences to ponder:

…the impact of older articles has grown substantially over 1990-2013. In 2013, 36% of citations were to articles that are at least 10 years old; this fraction has grown 28% since 1990. The fraction of older citations increased over 1990-2013 for 7 out of 9 broad areas and 231 out of 261 subject categories. Second, the increase over the second half (2002-2013) was double the increase in the first half (1990-2001).

The full abstract and article is here.  For the pointer I thank Dan Getz.

Intimate Partner Violence in the Great Recession

Daniel Schneider, Kristen Harknett, and Sara McLanahan have been working on this topic.  The result is not surprising, but nonetheless worthy of note:

In the United States, the Great Recession has been marked by severe negative shocks to market conditions. In this study, we combine longitudinal data from the Fragile Families and Child Wellbeing Study with Bureau of Labor Statistics data on local area unemployment rates to examine the relationship between adverse labor market conditions and intimate partner violence between 1999 and 2010. We find that rapidly worsening labor market conditions are associated with the prevalence of violent controlling behavior in marriage. These effects are most pronounced among whites and those with at least some secondary education. [emphasis added]  Worsening economic conditions significantly increase the risk that white mothers and more educated mothers will be in violent/controlling marriages rather than high quality marital unions.

The working paper is here (pdf).

Assorted links

1. Does gender fairness hold in most of the sciences?

2. Iceland fact of the day: “…since then [1990], more than 107 million tree seedlings have been put in the ground. ”

3. The brain of the spider.

4. Why we kill.  And grandma the murderer.

5. The hamburger returns to the culture that is Germany.

A Rare (Earth) Case of Wisdom

Four years ago we were being warned that China’s monopoly on rare earths was a threat to the United States. Since rare earths are key resources for both national defense and green technology, the crisis united right and left in fear and anger.

Paul Krugman titled his column Rare and Foolish and he was hardly alone when he wrote:

You really have to wonder why nobody raised an alarm while this was happening, if only on national security grounds. But policy makers simply stood by as the U.S. rare earth industry shut down….The result was a monopoly position exceeding the wildest dreams of Middle Eastern oil-fueled tyrants.

…, the affair highlights the fecklessness of U.S. policy makers, who did nothing while an unreliable regime acquired a stranglehold on key materials.

Yet you probably haven’t heard much about this crisis recently. Why not? Ans: The crisis was exaggerated and what wasn’t exaggerated the market alleviated. Eugene Gholz of CFR has a balanced examination of what happened. I summarize:

The Chinese government might or might not have wanted to take advantage of their temporary monopoly power (it’s still unclear what the fishing incident was all about) but Chinese producers did a lot to evade export bans both legally and illegally.
Firms that had been using rare earths when they were cheap decided they didn’t really need them when they were expensive.
New suppliers came on line as prices rose.
Innovations created substitutes and ways to get more from using less.

Even the government did some good by funding competitions to support basic and applied research in substitute products and processes. Gholz draws a simple lesson:

…policymakers should not succumb to pressure to act too quickly or too expansively in the face of raw materials threats.

I agree but would add that at the time it was almost surreal how quickly nominal free traders and internationalists merged into war hawks. We did surprisingly well to not overreact politically and instead let market forces solve the problem. A disruption in our trade partnership with China would have been far more dangerous to our national security than a dispute over rare earths. I’d say that’s a rare earth case of wisdom.

Addendum: Bonus points to Tim Worstall, economist blogger and rare earth dealer, who in 2010 at the height of the crisis pointed out that rare earths were neither rare nor earths and China’s monopoly had been won only by low prices that accrued to our benefit. “If Beijing wants to raise its prices and start using supplies as geopolitical bargaining chips,” he wrote, “so what? The rest of the world will simply roll up its sleeves and ramp up production, and the monopoly will be broken.” Nailed it.

When do economists laugh and what does it mean?

Here is the new paper by Michael Reay in Social Forces:

Analyses of the multiple cognitive structures and social effects of humor seldom look at why these tend to center on particular topics. The puzzle of how humor can be highly varied yet somehow constrained by its source “material” is explored using a corpus of over 600 incidents, not of deliberate jokes, but of the “wilder,” unplanned laughter that occurred during a set of interviews with economists—professionals who at the time (1999–2000) enjoyed an unprecedented degree of status and influence. The analysis finds that the source material for this laughter typically involved three kinds of socially structured contradiction: between ideals and reality, between different socially situated viewpoints, and between experiences occurring at different times. This illustrates how particular kinds of content can have a special laughter-inducing potential, and it suggests that wild laughter may at root be an interactional mechanism for dealing with social incongruity—even for members of relatively powerful groups. It is argued that this could not only help solve the larger puzzle of simultaneous variety and constraint in deliberate comedy, but also explain why the characteristic structures of humor are associated with a particular range of social effects in the first place.

Reading that abstract caused me to engage in some unplanned (silent) laughter.

For the pointer I thank the excellent Kevin Lewis.

Assorted links

1. Meet Elmus Wicker.

2. An eBook, product placement, and Sweet ‘N Low.

3. Expats rank countries (speculative).  The full report is here (pdf).

4. Do colliding worlds give rise to quantum mechanics? (very speculative)

5. A Schumpeterian model of top income inequality.

6. Christianity in an age of Average is Over (beyond speculative).

Charter schools get better over time

There is a new NBER paper by Patrick L. Baude, Marcus Casey, Eric A. Hanushek, and Steven G. Rivkin, the abstract is no surprise but it is nice to see common sense intuition confirmed:

Studies of the charter school sector typically focus on head-to-head comparisons of charter and traditional schools at a point in time, but the expansion of parental choice and relaxation of constraints on school operations is unlikely to raise school quality overnight. Rather, the success of the reform depends in large part on whether parental choices induce improvements in the charter sector. We study quality changes among Texas charter schools between 2001 and 2011. Our results suggest that the charter sector was initially characterized by schools whose quality was highly variable and, on average, less effective than traditional public schools. However, exits from the sector, improvement of existing charter schools, and positive selection of charter management organizations that open additional schools raised average charter school effectiveness over time relative to traditional public schools. Moreover, the evidence is consistent with the belief that a reduction in student turnover as the sector matures, expansion of the share of charters that adhere to a No Excuses philosophy, and increasingly positive student selection at the times of both entry and reenrollment all contribute to the improvement of the charter sector.

There are ungated copies here.

The world’s biggest and most important ideological battle

Religion in China.  That was the topic of a recent excellent Economist article.  Here is one good excerpt:

It is hard even to guess at the number of Christians in China. Official surveys seek to play down the figures, ignoring the large number who worship in house churches. By contrast, overseas Christian groups often inflate them. There were perhaps 3m Catholics and 1m Protestants when the party came to power in 1949. Officials now say there are between 23m and 40m, all told. In 2010 the Pew Research Centre, an American polling organisation, estimated there were 58m Protestants and 9m Catholics. Many experts, foreign and Chinese, now accept that there are probably more Christians than there are members of the 87m-strong Communist Party. Most are evangelical Protestants.

Predicting Christianity’s growth is even harder. Yang Fenggang of Purdue University, in Indiana, says the Christian church in China has grown by an average of 10% a year since 1980. He reckons that on current trends there will be 250m Christians by around 2030, making China’s Christian population the largest in the world. Mr Yang says this speed of growth is similar to that seen in fourth-century Rome just before the conversion of Constantine, which paved the way for Christianity to become the religion of his empire.

In the 1980s the faith grew most quickly in the countryside, stimulated by the collapse of local health care and a belief that Christianity could heal instead. In recent years it has been burgeoning in cities.

Read the whole thing.  You will note that when individuals engage in a “portfolio” approach to religion, social evolution can occur much more rapidly.  Not everyone has to fully convert to Christianity, or to embrace Confucianism wholeheartedly, for those approaches to suddenly acquire much more influence.

Is it harder for high-caste men to coordinate?

A new paper (pdf) by Benjamin A. Brooks, Karla Hoff, Priyanka Pandey runs at least one set of tests suggesting the answer is yes:

In an experiment in India, high-caste and low-caste men repeatedly played the Stag Hunt coordination game. This game has two equilibria, only one of which is efficient. Compared to low-caste men, high-caste men were significantly less likely to coordinate on the efficient equilibrium, and they were also 29 percentage points less likely to keep trying for efficient coordination after getting the “loser’s payoff”—the payoff to a player who attempts efficient coordination when his partner does not. We explain both findings in a model of learning where high-caste, but not low-caste men, see the loser’s payoff as an insult rather than an accident. These findings provide evidence that cultural construals can impede efficient coordination, which is a key component of economic development.

I find the distinction here between “low payoffs as insult” and “low payoffs as accident” to be especially interesting and in the broader literature underexplored.

A very good sentence (Arnold Kling policy theater)

Afterward, I found myself with a lot of negative feelings.

The first act of the (short) tale can be found here.  Here is one bit:

I asked Baily, as an expert on productivity statistics, whether he thought that any economist would claim to have a reliable measure of bank output. “Of course not,” he replied, nearly breaking into a laugh. I was glad to hear that response, because it reinforced my view that econometric estimates of scale economies in banking are not reliable. When you measure economies of scale, you are comparing the ratio of output to inputs at different-sized firms. It’s rather difficult to do that if you cannot measure the numerator.

The substantive upshot was this:

The panel was called to discuss a research paper commissioned for the Center and written by Martin Baily, Doug Elliot, and Phillip Swagel. The paper says that (a) we have little reason to worry about too-big-to-fail, because the FDIC is on its way to having enough authority to resolve big bank failures, (b) there are economies of scale in banking at the very highest levels, (c) there are transition costs to breaking up big banks, in that employees and customers would be left hanging waiting to see how the re-org falls out, and (d) breaking up big banks would not get rid of systemic risk, anyway.

I agree entirely with (d). I thought that (c) was a fair point, but there is such a thing in the corporate world as a spin-off, and it can be done. I disagreed with (a) and I was unpersuaded by (b).

Recommended, and here is more from Arnold on the same topic.