Final Links of 2010. The only concrete resolution I have is that this time next year I want to be going into the field with some surveys on this day.
1. Tyler Cowen post on Economics and Mental Health Care
2. Danny McCoy (IBEC) and Paul Sweeney (ICTU) on rebuilding the Irish Economy in todays' ITimes.
3. Dan O'Brien on the economic situation heading into 2011.
4. Alan Matthews post on Irish financial sector imbalances.
5. Via MR, a hypothesis as to why the East side of cities are poorer
6. Krugman on why Ireland is like Nevada
7. Freakonomics on a new website called www.GiveItBackforJobs.org that allows people to donate their Bush-era tax cuts to organisations promoting jobs growth
Friday, December 31, 2010
Bertie Ahern's Farewell Speech
All accounts of the announcement of Bertie Ahern's retirement from parliamentary politics have noted his positive role in the development of a settlement in Northern Ireland and the clouds that have hung for several years over his personal finances. His own account is here and will be of interest to people with a stake or intellectual interest in Ireland over the period Ahern was in office. For people of my age, Ahern was the major figure in Irish politics for most of our adult life.
It is difficult to see the near to mid-future changing the assessments of either his role in the North or his finances to any great degree. It is unlikely that any major piece of news will suddenly show that he had no problems at all with who was financing him and why; and likewise even if things in the North became hairy again, it could never fully dampen the massive difference between the atmosphere prior to the settlement and the one prevailing for the last several years.
The economic and social legacies of his three administrations will be one of the most contested topics in Irish economic history for the forseeable future. It should be said that the period of prosperity that is often given the label "The Celtic Tiger" is largely agreed to have started in the early 90s before Ahern's first administration so it is another question as to who and what started the Celtic Tiger. The main question for Ahern is how his three administrations managed this historic opportunity.
By 1997 when Ahern first became Taoiseach, the Irish economy had already become one of the most vibrant in the history of the world and it continued apace during the first Ahern administration. The main worry from the 1997 to 2002 period was continued inflation partly fueled by interest rates that were too low, public sector pay agreements and an aggressive finance minister (Charlie McCreevy) who famously summed up his approach to fiscal policy with the phrase "if I have it I'll spend it". While the government did begin to amass a pension reserve fund and kept debt and deficits within Maastricht parameters, the failure to more agressively hedge the economy against potential future shocks surely will go down in history as a missed opportunity. Those who argue that economists only talk after the collapse should look at Philip Lane's output from around this time period. Not only was Philip writing theoretical work on what happens countries that get suddenly rich and the dangers therein, he was also pointing to very practical solutions for a country like Ireland such as building up a strong non-politicised pension fund and also amassing a rainy day fund e.g. this paper from 1998 is about as clear a policy recommendation as it possible for an economist to make.
Having said that, had Ahern resigned in 2002 (which wasn't on the cards) I think he would not have too much to worry about in terms of an economic legacy. Despite the inflationary pressures building up, most analysts believe that the economic growth experienced in Ireland during the first Ahern administration was still "real" in the sense of being driven by improvements in core economic activity. However, the second administration from 2002 to 2007 will be scrutinised for many years for a definitive account of how one of the world's most successful economies was left so completely vulnerable to a financial sector shock and then so completely wiped out by it. Ahern was leader, of course, through this period and he replaced his long-serving finance minister Charlie McCreevy with the current Taoiseach in 2004, meaning that Cowen began as finance minister as glaring financial vulnerabilities were becoming apparent. It is clear that something very dramatic took place in the Irish financial system during this period. The curve showing the amount Irish banks were borrowing from external institutions was practically vertical from 2004 to 2008 with much of this money ploughed into increasingly unviable property developments (see graph below from Honohan 2009), exposing the banking system to a potentially crippling reliance on the performance of domestic property loans. Morgan Kelly's VOX piece summarises what was happening at the time and it really does look shocking. Honohan's 2009 paper Resolving Ireland's banking crisis is more diplomatic in tone but equally hair-raising.
Most official commentators at the time were warning that the Irish economy had become too reliant on property taxes and some commentators were pointing out the reckless nature of some of the lending. In my view (and happy to take contrary views) nobody clearly and emphatically stated that the Irish banking system was so fragile due to the nature of its lending activities that it risked total collapse until Morgan Kelly's prophetic contributions from 2006 onwards. Kelly's original contributions led to one of Ahern's low points where he muttered that he didn't know how people with Kelly's view didn't commit suicide. Ascertaining who was at fault for the very sorry state the banks found themselves in by the time Ahern's third government took power in 2007 will fill many volumes nationally and internationally perhaps for centuries to come. By the time the full extent of the calamity began to be fully publicly acknowledged in late 2008, Ahern was out of the picture with his finance minister now assuming leadership. A sympathetic historian might remark that more prudent banking policies following Ahern's departure (such as immediately nationalising Anglo and offering debt-equity swaps to subordinated bondholders in the other banks) would have contained the damage caused by policies during his reign. Also, they might note that much of the damage could have been contained during Ahern's second and third administrations had a strong regulator noticed that the Irish banks were going crazy. But whatever your view on that, the culture of property, politics, banking and investment that Ahern was the figurehead for will unlikely come to be viewed positively and it is hard to see any assessment of the 2002 to 2008 period as it being anything other than a national financial failure of sizeable proportions. What is less clear is how the overall financial and economic performance during the Ahern years of 1997 to 2008 will be viewed. Critics will point, among other things, to the flaws in social partnerships agreements a failure to reform key public service and the failure to get to grips with educational inequalities that was masked by an artificially inflated public sector. If there is an attempt at rehabilitation, the continued strong performance of FDI into Ireland and exports, and the generally positive business environment maintained throughout the Ahern period might rescue some of his economic legacy.
In terms of the social record, while I have written a couple of papers showing that improvements in Irish subjective well-being and life satisfaction had largely stalled in the mid-1990s, I am with Ronan Lyons on the view that there are too many people exaggerating the failure to make social and health gains through the Celtic Tiger era. Life Expectancy gains among older people began to increase in 1986 and accelerated through the Celtic Tiger period with proportionate gains occurring during the Ahern years and Ronan lists a long record of other improvements in living standards that occurred during the period. Again, the extent to which any of this was due to Ahern's leadership is debatable and I doubt any econometrician would ever find an "Ahern effect" if they had enough time to mine health data-sets. But it is worth being cautious about a general public reaction against Ahern turning into a wider sense of despair about the real developments in human welfare attained in Ireland over the last 20 years. When we balance those against the ruined financial position that a lot of people have been left in as a consequence of the collapse of the property bubble and the fiscal and employment position in Ireland that threatens to leave behind a decade of stagnation, we will get someway toward evaluating the social legacy of the Ireland that Ahern was at the helm of.
It is difficult to see the near to mid-future changing the assessments of either his role in the North or his finances to any great degree. It is unlikely that any major piece of news will suddenly show that he had no problems at all with who was financing him and why; and likewise even if things in the North became hairy again, it could never fully dampen the massive difference between the atmosphere prior to the settlement and the one prevailing for the last several years.
The economic and social legacies of his three administrations will be one of the most contested topics in Irish economic history for the forseeable future. It should be said that the period of prosperity that is often given the label "The Celtic Tiger" is largely agreed to have started in the early 90s before Ahern's first administration so it is another question as to who and what started the Celtic Tiger. The main question for Ahern is how his three administrations managed this historic opportunity.
By 1997 when Ahern first became Taoiseach, the Irish economy had already become one of the most vibrant in the history of the world and it continued apace during the first Ahern administration. The main worry from the 1997 to 2002 period was continued inflation partly fueled by interest rates that were too low, public sector pay agreements and an aggressive finance minister (Charlie McCreevy) who famously summed up his approach to fiscal policy with the phrase "if I have it I'll spend it". While the government did begin to amass a pension reserve fund and kept debt and deficits within Maastricht parameters, the failure to more agressively hedge the economy against potential future shocks surely will go down in history as a missed opportunity. Those who argue that economists only talk after the collapse should look at Philip Lane's output from around this time period. Not only was Philip writing theoretical work on what happens countries that get suddenly rich and the dangers therein, he was also pointing to very practical solutions for a country like Ireland such as building up a strong non-politicised pension fund and also amassing a rainy day fund e.g. this paper from 1998 is about as clear a policy recommendation as it possible for an economist to make.
Having said that, had Ahern resigned in 2002 (which wasn't on the cards) I think he would not have too much to worry about in terms of an economic legacy. Despite the inflationary pressures building up, most analysts believe that the economic growth experienced in Ireland during the first Ahern administration was still "real" in the sense of being driven by improvements in core economic activity. However, the second administration from 2002 to 2007 will be scrutinised for many years for a definitive account of how one of the world's most successful economies was left so completely vulnerable to a financial sector shock and then so completely wiped out by it. Ahern was leader, of course, through this period and he replaced his long-serving finance minister Charlie McCreevy with the current Taoiseach in 2004, meaning that Cowen began as finance minister as glaring financial vulnerabilities were becoming apparent. It is clear that something very dramatic took place in the Irish financial system during this period. The curve showing the amount Irish banks were borrowing from external institutions was practically vertical from 2004 to 2008 with much of this money ploughed into increasingly unviable property developments (see graph below from Honohan 2009), exposing the banking system to a potentially crippling reliance on the performance of domestic property loans. Morgan Kelly's VOX piece summarises what was happening at the time and it really does look shocking. Honohan's 2009 paper Resolving Ireland's banking crisis is more diplomatic in tone but equally hair-raising.
Most official commentators at the time were warning that the Irish economy had become too reliant on property taxes and some commentators were pointing out the reckless nature of some of the lending. In my view (and happy to take contrary views) nobody clearly and emphatically stated that the Irish banking system was so fragile due to the nature of its lending activities that it risked total collapse until Morgan Kelly's prophetic contributions from 2006 onwards. Kelly's original contributions led to one of Ahern's low points where he muttered that he didn't know how people with Kelly's view didn't commit suicide. Ascertaining who was at fault for the very sorry state the banks found themselves in by the time Ahern's third government took power in 2007 will fill many volumes nationally and internationally perhaps for centuries to come. By the time the full extent of the calamity began to be fully publicly acknowledged in late 2008, Ahern was out of the picture with his finance minister now assuming leadership. A sympathetic historian might remark that more prudent banking policies following Ahern's departure (such as immediately nationalising Anglo and offering debt-equity swaps to subordinated bondholders in the other banks) would have contained the damage caused by policies during his reign. Also, they might note that much of the damage could have been contained during Ahern's second and third administrations had a strong regulator noticed that the Irish banks were going crazy. But whatever your view on that, the culture of property, politics, banking and investment that Ahern was the figurehead for will unlikely come to be viewed positively and it is hard to see any assessment of the 2002 to 2008 period as it being anything other than a national financial failure of sizeable proportions. What is less clear is how the overall financial and economic performance during the Ahern years of 1997 to 2008 will be viewed. Critics will point, among other things, to the flaws in social partnerships agreements a failure to reform key public service and the failure to get to grips with educational inequalities that was masked by an artificially inflated public sector. If there is an attempt at rehabilitation, the continued strong performance of FDI into Ireland and exports, and the generally positive business environment maintained throughout the Ahern period might rescue some of his economic legacy.
In terms of the social record, while I have written a couple of papers showing that improvements in Irish subjective well-being and life satisfaction had largely stalled in the mid-1990s, I am with Ronan Lyons on the view that there are too many people exaggerating the failure to make social and health gains through the Celtic Tiger era. Life Expectancy gains among older people began to increase in 1986 and accelerated through the Celtic Tiger period with proportionate gains occurring during the Ahern years and Ronan lists a long record of other improvements in living standards that occurred during the period. Again, the extent to which any of this was due to Ahern's leadership is debatable and I doubt any econometrician would ever find an "Ahern effect" if they had enough time to mine health data-sets. But it is worth being cautious about a general public reaction against Ahern turning into a wider sense of despair about the real developments in human welfare attained in Ireland over the last 20 years. When we balance those against the ruined financial position that a lot of people have been left in as a consequence of the collapse of the property bubble and the fiscal and employment position in Ireland that threatens to leave behind a decade of stagnation, we will get someway toward evaluating the social legacy of the Ireland that Ahern was at the helm of.
Thursday, December 30, 2010
Links 30-12-10
A big hello to all the gym-owners and health book publishers in the world who will make a lot of money in the next week from a number of common behavioural biases. Seeing people around this time is like observing behavioural economic forces in their pure state. For me, each time around this year a mystical vision of my potential self descends on me and keeps me rapt for a few days. Sometimes it has led to me making decisions that were very positive but for the most part the allure wears out after a week. If anyone knows any good papers on New Year's resolutions bounce them on or post them. For now, here are some random links.
1. Economics Teaching Sessions at AEA Meeting in Denver (via Greg Mankiw)
2. Stumbling and Mumbling has some interesting thoughts on tail-risk and Northern Ireland's current trouble with water. Dublin has been hit with water shortages also due, it seems, to burst pipes leading to massive leaks of water. The preparedness of Ireland and the UK for the type of extreme (by standards this side of the world) weather conditions experienced in the last month is a very interesting case-study in cost-benefit analysis and behavioural economics.
3. The Guardian letter-writing page starts attacking the "nudge agenda".
4. New website of the Cornell Center for Behavioural Economics in Child Nutrition.
5. From Behavioural Economics to the Bedside - about a JAMA edition on physician reasoning in case you were wondering.
6. Hepburn et al - Behavioural Economics, Hyperbolic Discounting and Environmental Policy - from a recent special issue of Environmental and Resource Economics
7. Kirman and Teschi - The Role of Empathy in Economics
1. Economics Teaching Sessions at AEA Meeting in Denver (via Greg Mankiw)
2. Stumbling and Mumbling has some interesting thoughts on tail-risk and Northern Ireland's current trouble with water. Dublin has been hit with water shortages also due, it seems, to burst pipes leading to massive leaks of water. The preparedness of Ireland and the UK for the type of extreme (by standards this side of the world) weather conditions experienced in the last month is a very interesting case-study in cost-benefit analysis and behavioural economics.
3. The Guardian letter-writing page starts attacking the "nudge agenda".
4. New website of the Cornell Center for Behavioural Economics in Child Nutrition.
5. From Behavioural Economics to the Bedside - about a JAMA edition on physician reasoning in case you were wondering.
6. Hepburn et al - Behavioural Economics, Hyperbolic Discounting and Environmental Policy - from a recent special issue of Environmental and Resource Economics
7. Kirman and Teschi - The Role of Empathy in Economics
Empathy is a longstanding issue in economics, especially for welfare economics, but one which has faded from the scene in recent years. However, with the rise of neuroeconomics, there is now a renewed interest in this subject. Some economists have even gone so far as to suggest that neuroscientific experiments reveal heterogeneous empathy levels across individuals. If this were the case, this would be in line with economists' usual assumption of stable and given preferences and would greatly facilitate the study of prosocial behaviour with which empathy is often associated. After reviewing some neuroscientific psychological and neuroeconomic evidence on empathy, we will, however, criticize the notion of a given empathy distribution in the population by referring to recent experiments on a public goods game that suggest that, on the contrary, the degree of empathy that individuals exhibit is very much dependent on context and social interaction
Behavioural Economics and Labour Market Policy
Notes on Behavioral Economics and Labor Market Policy
Labor, Jobs and the Economy, Unemployment, U.S. Economy
Linda Babcock, James M. Walton Professor of Economics, Carnegie Mellon University
William J. Congdon, Research Director, Economic Studies
Lawrence F. Katz, Elisabeth Allison Professor of Economics, Harvard University
Sendhil Mullainathan, Professor of Economics, Harvard University; Nonresident Senior Fellow, Brookings Institution
The Brookings Institution
I am currently reading this paper with a view to thinking about the applicability to the Irish and UK labour market. Their suggestions for policy reform are below. Any policy people who read this blog and are interested in unemployment should read this paper. Would be great to start thinking concretely about applications in the Irish case.
Labor, Jobs and the Economy, Unemployment, U.S. Economy
Linda Babcock, James M. Walton Professor of Economics, Carnegie Mellon University
William J. Congdon, Research Director, Economic Studies
Lawrence F. Katz, Elisabeth Allison Professor of Economics, Harvard University
Sendhil Mullainathan, Professor of Economics, Harvard University; Nonresident Senior Fellow, Brookings Institution
The Brookings Institution
I am currently reading this paper with a view to thinking about the applicability to the Irish and UK labour market. Their suggestions for policy reform are below. Any policy people who read this blog and are interested in unemployment should read this paper. Would be great to start thinking concretely about applications in the Irish case.
Recommendations for policy reform
Unemployment compensation. Should include wage-loss insurance in some form. In addition to the insurance benefits it provides, wage-loss insurance offers a way of assisting individuals with the psychological adjustment to changing labor market conditions and addresses likely biases in wage expectations that impede work incentives.
Employment services and job search assistance. Should be expanded to provide more accessible and meaningful information about labor market conditions and occupational projections. These programs should help address procrastination in job search and provide guidance to unemployed and low-wage individuals in a way that both reflects and takes advantage of the way people process information.
Job training. Should simplify program take-up, navigation, and completion, and provide user-friendly information on the quality of training providers. These programs should structure choices to reflect the limited abilities of individuals to manage complexity and exert self-control.
Affective Forecasting and Optimal Environmental Behaviour
A recent paper in the Journal of Economic Psychology finds positive associations between pro-environmental behaviour and well-being, suggesting that pro-environmental consumption may be less than individually optimal due to decision-making biases. In other words, we would feel better if we helped preserve the environment more but due to a failure to appreciate the benefits of doing so engendered by affective misforecasting, we do less than would be even individually optimal, never mind societally optimal. There are now quite a few papers demonstrating potentially superior intra-person allocations in terms of quality of life, including work by Alois Stutzer and colleagues showing decreased quality of life induced by channel surfing , and happier lives among people who volunteer. David Comerford, who is currently a visiting scholar at Duke, worked on this issue here and has presented results showing that at least part of the decision utility from car-use is due to affective misforecasting. In general, this is an interesting and challenging literature that has obvious policy and philosophical relevance.
Blog Development
Anyone with suggestions for things to add or delete from the blog, please let me know. This year was the worst I have ever put down in terms of time so I have neglected the blog somewhat and am going to put aside a little time over the next week to make some improvements. Aesthetically, I am sorry folks but I don't have any sense of this at all so the look isn't going to change but I would like to freshen up the links and maybe get some suggestions on useful things to post. Thanks to Enda who has already emailed on some dead links etc., that I will tidy up. Suggestions for improvements big or small most welcome.
Addendum:
(i) Have taken off dead twitter links and inactive blogs from the links
(ii) Have added some blogs e.g. Nudge had switched to a new site
(iii) Have added a search widget
(iv) Have added a page-counter
(v) Reset Upcoming Conference Deadlines
(vi) Removed Followers Tab - not really adding much
Addendum:
(i) Have taken off dead twitter links and inactive blogs from the links
(ii) Have added some blogs e.g. Nudge had switched to a new site
(iii) Have added a search widget
(iv) Have added a page-counter
(v) Reset Upcoming Conference Deadlines
(vi) Removed Followers Tab - not really adding much
Tuesday, December 28, 2010
Graph of the year? Mother's education and breastfeeding
Its that time when people reflect on the year gone by, lists of pivotal events, dead celebs etc. There are also lots of suggestions for "graph of the year" going round. It's pretty arbitrary of course since it depends on what people find interesting. Graphs are great but they have the potential to mislead since, by their nature, they are simple but evocative.
Anyway, here is one I find very striking. It graphs the rate of breastfeeding initiation (i.e. whether the child is breastfed at all) by their mother's education level using the Growing Up in Ireland data. It is one of the most pronounced socio-economic gradients I have come across. A child whose mother is a graduate has about a 77% chance of being breastfed. At the other end of the scale it is a staggering 17%. If, instead of looking at "ever" you look at a duration of "6 weeks+" the story is much the same.
Note that the average (i.e. the % ever breastfed, using sampling weights) is about 45% which is way lower than pretty much anywhere else I have looked at. The US and UK data are in the low 70's. Many countries are higher. Why there is such a low average and such a steep socio-economic gradient in Ireland I don't know. But given the benefits to mother and child it should be a matter for concern - and action.
Anyway, here is one I find very striking. It graphs the rate of breastfeeding initiation (i.e. whether the child is breastfed at all) by their mother's education level using the Growing Up in Ireland data. It is one of the most pronounced socio-economic gradients I have come across. A child whose mother is a graduate has about a 77% chance of being breastfed. At the other end of the scale it is a staggering 17%. If, instead of looking at "ever" you look at a duration of "6 weeks+" the story is much the same.Note that the average (i.e. the % ever breastfed, using sampling weights) is about 45% which is way lower than pretty much anywhere else I have looked at. The US and UK data are in the low 70's. Many countries are higher. Why there is such a low average and such a steep socio-economic gradient in Ireland I don't know. But given the benefits to mother and child it should be a matter for concern - and action.
Monday, December 27, 2010
How many Facebook friends do you have?
Pleased that you have 400 close friends on Facebook? Sad that you only have 51? Well according to evolutionary anthropologist Robin Dunbar we can only have about 150 meaningful relationships at most: our brains aren't big enough for more. The number was derived by comparing the size of groups that species live in with the size of the brain and then extrapolating to humans. Interestingly enough, some recent neuroscience points to a correlation between the size of the amygdala and people's gregariousness. The amygdala's importance for emotion and fear in humans is well known but it turns out that the bigger it is the more outgoing you are. It's a correlation only of course.
Sunday, December 26, 2010
Grand Challenges in Economics
(ht Stephen Kinsella) - the NSF issued a call this year for white papers on the grand challenges in the social and behavioural sciences. The AEA have posted the Economics submissions on this page. Would be very interested in discussing some of these submissions with readers of the blog interested, particularly the behavioural and measurement papers.
Acemoglu, Daron Challenges for social sciences: institutions and economic development
Alesina, Alberto Why certain countries have developed and others have not?
Altonji, Joseph Multiple Skills, Multiple Types of Education, and the Labor Market: A Research Agenda
Autor, David and Lawrence Katz Grand challenges in the study of employment and technological change
Baily, Martin Neil Some Foundational and Transformative Grand Challenges in Economics
Berry, Steven A Proposal for Future SBE/NSF Funded Research: Refocusing Microeconomic Policy Research
Bloom, Nick Key Outstanding Questions in Social Sciences
Blume, Lawrence Robustness and Fragility of Markets: Research at the Interface of Economics and Computer Science
Boskin, Michael Ideas about possible NSF grand challenges in economics over the next twenty years
Brown, Charles, Dan Brown, Dalton Conley, Vicki Freedman, Kate McGonagle, Fabian Pfeffer, Narayan Sastry, Robert Schoeni, and Frank Stafford Future Research in the Social, Behavioral, and Economic Sciences with the Panel Study of Income Dynamics
Card, David, Raj Chetty, Martin Feldstein, and Emmanuel Saez Expanding Access to Administrative Data for Research in the United States
Cramton, Peter Market Design: Harnessing Market Methods to Improve Resource Allocation
Cutler, David Why Don’t People and Institutions Do What They Know They Should?
Diamond, Peter Three Important Themes: Taxation of Capital Income, Behavioral Economics in Equilbrium Analyses, and Systemic Risk
Duflo, Esther A Research Agenda for Development Economics
Eaton, Jonathan and Samuel Kortum The Contribution of Data to Advances in Research in International Trade: An Agenda for the Next Decade
Fischer, Stanley Questions about the Future of the International Economy
Fudenberg, Drew Predictive Game Theory
Gintis, Herbert Long-range Research Priorities in Economics, Finance, and the Behavioral Sciences
Goulder, Lawrence Integrating Economic and Political Considerations in the Analysis of Global Environmental Policies
Greenstein, Shane, Josh Lerner, and Scott Stern The Economics of Digitization: An Agenda for NSF
Gruber, Jon What is the Right Amount of Choice?
Haltiwanger, John Making Drill Down Analysis of the Economy a Reality
Hansen, Lars Peter, Markus Brunnermeier, Anil Kashyap, Arvind
Krishnamurthy, Andrew W. Lo Modeling and Measuring Systemic Risk
Hanson, Gordon Future Directions for Research on Immigration
Hanushek, Eric Developing a Skills-based Agenda for "New Human Capital" Research
Hart, Oliver Making the Case for Contract Theory
Heckman, James A Research Agenda For Understanding the Dynamics of Skill Formation
Hubbard, Glenn Some Compelling Broad-Gauged Research Agendas in Economics
Imbens, Guido Challenges in Econometrics
Jackson, Matthew Research Opportunities in Social and Economic Networks
Jorgenson, Dale A New Architecture for the U.S. National Accounts
Kapteyn, Arie Measurement and Experimentation in the Social Sciences
Kroszner, Randall Implications of the Financial Crisis
Levine, David Virtual Model Validation for Economics
Lo, Andrew A Complete Theory of Human Behavior
Moffitt, Robert A New Household Panel in the U.S.
Nordhaus, William Some Foundational and Transformative Grand Challenges for the Social and Behavioral Sciences: The Problem of Global Public Goods
Poterba, James Research Opportunities in Economics: Suggestions for the Coming Decade
Reis, Ricardo Three outstanding challenges for economic research
Rodrik, Dani A Research Agenda in Economic Diagnostics
Rogoff, Kenneth Three Challenges Facing Modern Macroeconomics
Roth, Al Market Design: Understanding markets well enough to fix them when they’re broken
Samuelson, Larry Future Research in the Social, Behavioral and Economic Sciences
Stavins, Robert Some Research Priorities in Environmental Economics
Van Reenen, John The productivity grand challenge: Why do organizations differ so much?
Varian, Hal Clinical Trials in Economics
Weir, David Grand Challenges for the Scientific Study of Aging
Acemoglu, Daron Challenges for social sciences: institutions and economic development
Alesina, Alberto Why certain countries have developed and others have not?
Altonji, Joseph Multiple Skills, Multiple Types of Education, and the Labor Market: A Research Agenda
Autor, David and Lawrence Katz Grand challenges in the study of employment and technological change
Baily, Martin Neil Some Foundational and Transformative Grand Challenges in Economics
Berry, Steven A Proposal for Future SBE/NSF Funded Research: Refocusing Microeconomic Policy Research
Bloom, Nick Key Outstanding Questions in Social Sciences
Blume, Lawrence Robustness and Fragility of Markets: Research at the Interface of Economics and Computer Science
Boskin, Michael Ideas about possible NSF grand challenges in economics over the next twenty years
Brown, Charles, Dan Brown, Dalton Conley, Vicki Freedman, Kate McGonagle, Fabian Pfeffer, Narayan Sastry, Robert Schoeni, and Frank Stafford Future Research in the Social, Behavioral, and Economic Sciences with the Panel Study of Income Dynamics
Card, David, Raj Chetty, Martin Feldstein, and Emmanuel Saez Expanding Access to Administrative Data for Research in the United States
Cramton, Peter Market Design: Harnessing Market Methods to Improve Resource Allocation
Cutler, David Why Don’t People and Institutions Do What They Know They Should?
Diamond, Peter Three Important Themes: Taxation of Capital Income, Behavioral Economics in Equilbrium Analyses, and Systemic Risk
Duflo, Esther A Research Agenda for Development Economics
Eaton, Jonathan and Samuel Kortum The Contribution of Data to Advances in Research in International Trade: An Agenda for the Next Decade
Fischer, Stanley Questions about the Future of the International Economy
Fudenberg, Drew Predictive Game Theory
Gintis, Herbert Long-range Research Priorities in Economics, Finance, and the Behavioral Sciences
Goulder, Lawrence Integrating Economic and Political Considerations in the Analysis of Global Environmental Policies
Greenstein, Shane, Josh Lerner, and Scott Stern The Economics of Digitization: An Agenda for NSF
Gruber, Jon What is the Right Amount of Choice?
Haltiwanger, John Making Drill Down Analysis of the Economy a Reality
Hansen, Lars Peter, Markus Brunnermeier, Anil Kashyap, Arvind
Krishnamurthy, Andrew W. Lo Modeling and Measuring Systemic Risk
Hanson, Gordon Future Directions for Research on Immigration
Hanushek, Eric Developing a Skills-based Agenda for "New Human Capital" Research
Hart, Oliver Making the Case for Contract Theory
Heckman, James A Research Agenda For Understanding the Dynamics of Skill Formation
Hubbard, Glenn Some Compelling Broad-Gauged Research Agendas in Economics
Imbens, Guido Challenges in Econometrics
Jackson, Matthew Research Opportunities in Social and Economic Networks
Jorgenson, Dale A New Architecture for the U.S. National Accounts
Kapteyn, Arie Measurement and Experimentation in the Social Sciences
Kroszner, Randall Implications of the Financial Crisis
Levine, David Virtual Model Validation for Economics
Lo, Andrew A Complete Theory of Human Behavior
Moffitt, Robert A New Household Panel in the U.S.
Nordhaus, William Some Foundational and Transformative Grand Challenges for the Social and Behavioral Sciences: The Problem of Global Public Goods
Poterba, James Research Opportunities in Economics: Suggestions for the Coming Decade
Reis, Ricardo Three outstanding challenges for economic research
Rodrik, Dani A Research Agenda in Economic Diagnostics
Rogoff, Kenneth Three Challenges Facing Modern Macroeconomics
Roth, Al Market Design: Understanding markets well enough to fix them when they’re broken
Samuelson, Larry Future Research in the Social, Behavioral and Economic Sciences
Stavins, Robert Some Research Priorities in Environmental Economics
Van Reenen, John The productivity grand challenge: Why do organizations differ so much?
Varian, Hal Clinical Trials in Economics
Weir, David Grand Challenges for the Scientific Study of Aging
Friday, December 24, 2010
Labor vs. labour economics
Further to Martin's post below, here is a comparison of labor economics with labour economics. It seems both are in decline. The blue line is labor. What caused the two series to almost converge in the early 1970s and then drift apart I wonder? I guess there will be a new discipline of culturometrics. Is that a word? It is now.
Behavio(u)ral Economics: What's in a Name?
"What's in a name? That which we call a rose
By any other name would smell as sweet."
The above quotation from Shakespeare's Romeo and Juliet is considered by some to indicate Juliet's concern that a name is an artificial and meaningless convention; it is what the name respresents that really matters. Readers of this blog are probably familiar with the distinction between the spelling of behavioural economics in Europe, and behavioral economics in the United States. Previously I wondered whether this distinction really mattered; and now, to some extent, I know.
The source of my knowledge is http://www.culturomics.org/, a website which sifts through the hundreds of billions of words digitised as part of Google Books' effort to create a universal online library. Culturomics was reviewed this week in The Economist:
Anyone can now go to www.culturomics.org, type in a word or expression in one of seven languages (English, French, German, Spanish, Hebrew, Russian, Chinese) and see for himself. Jean-Baptiste Michel, a postdoctoral researcher at Harvard University and the lead author of a related study just published in Science (Quantitative Analysis of Culture Using Millions of Digitized Books)... (says) that twiddling with this new virtual widget is "addictive".Putting the phrases "behavioural economics", "economic psychology" and "behavioral economics" into Culturomics produces the chart shown below (click on the image to see a bigger version). It can be seen that behavioral (the green line) has always been more popular than behavioural (the blue line). This provides some reason to believe that the American spelling of the discipline's name is quite important. Furthermore, this exercise underscores the importance of choosing key-phrases (or key-words) carefully, as discussed on this blog before here. Finally, it can also be seen that the phrase behavioral economics has overtaken economic psychology in popularity since the year 1998.
Addendum: Of course, it is also worth pointing out that some scholars view the phrase economic psychology to mean the psychological study of issues in the economic domain; and the phrase behavio(u)ral economics to mean the incorporation of psychological insight into economic theory. This is worth considering when interpreting the chart above.
Thursday, December 23, 2010
Wednesday, December 22, 2010
Life expectancy and socio-economic status
A useful Irish Times article documents CSO data on how life expectancy varies with socio-economic status and other variables: "Life expectancy is longest among those with the highest social class and the highest level of education. Male professional workers have a life expectancy of 81.4 years, for example, 6.1 years higher than their unskilled counterparts...For women, professional workers have the highest life expectancy, at 86 years, while unskilled workers have the lowest, 81 years."
Apres Match - IMF/EU Bailout
Minister Lenihan and Fintan O'Toole from the Irish Times debate the recent bailout. Three and a half minutes in, a member of the audience reminds us of the terrible consequences of what would happen if Fianna Fail were to be decimated. Tyler Cowen was looking for an electoral strategy for Fianna Fail. According to this satirical account, they intend to password-protect access to the bank account where the bailout funds are stored (ok, some poetic license), and then make handing the password over conditional on securing an overall parliament majority.
Links 23-12-10
The snow continues to fall. James Joyce - The Dead - comes to mind.
1. Top Scientific Breakthroughs of 2010 (vie MR blog)
2. Via Philip Lane, the recent IMF Conference Call on Ireland. The terms of the IMF agreement look reasonable to my non-macroeconomic eye. The deal with the EU looks like it simply compounds every flaw in the system that allowed crazy non-Irish banks to lend money to crazy Irish banks for the purposes of property speculation, and bundles up the losses into a bill for the Irish taxpayer. This is definitely one for every person with an interest in the future of the country to quietly reflect upon once the Christmas celebrations are over and there is some quiet time before the New Year. Karl Whelan's B+F article is not a bad place to start. In a recent post, Karl waxes unusually aggressively about the nature of this agreement.
3. NBER paper claiming that workplace smoking bans cause fires but that policies that increase the price of smoking decrease fires.
4. NBER paper on the economic value of teacher quality by Hanushek - Kevin may have already covered this. Teachers that I know rarely enthusiastically endorse education economics as a useful contribution, as a lot of the literature overturns some sacred cows such as class sizes. However, there is now much credible evidence showing that good teachers produce a sizeable economic and social externality. We should have a much bigger discussion in Ireland as to how to reward and enable good teachers, including figuring out how the good ones themselves want to be rewarded and treated. Good, energetic, intrinsically motivated teachers are definitely on my list of things to be grateful and thankful for this Christmas.
5. NBER Working Paper on Financial Literacy and Retirement Plans
The Role of Financial Literacy in Determining Retirement Plans
Robert Clark, Melinda Sandler Morrill, Steven G. Allen
Workers nearing retirement face many important, and often irreversible, choices. We collected detailed demographic and financial literacy data on over 1,500 workers nearing retirement at three large companies to assess how individuals are planning for retirement. Many respondents display limited knowledge and understanding of public and company-provided retirement benefits. Controlling for basic demographics and wealth, we find that misconceptions about eligibility ages and plan generosity influence workers’ expected age of retirement. Although retirement-related decisions will affect workers’ wellbeing for the remainder of their lifetimes, many do not possess enough basic financial knowledge to confidently make optimal choices.
6. Edgar Morgenroth links to John Bruton's piece on the recent IMF-EU deal. Edgar is a German-born economist who has lived in Ireland for several years so is in a better position than most to evaluate the deal without national blinkers. To a lot of the outside press, Ireland got a bailout and many of the journalists themselves had bailed out of the city even before the announcement. However, very little about this feels like a bailout. Irish economists have not been sentimental patriots during this mess and the most common criticism levied at them has been unpatriotically talking down the country. When people like Edgar, Karl Whelan, Kevin O'Rourke etc., all start saying that we are getting a really bad deal, it is well worth listening to them.
"The time had come for him to set out on his journey westward. Yes, the newspapers were right: snow was general all over Ireland. It was falling on every part of the dark central plain, on the treeless hills, falling softly upon the Bog of Allen and, farther westward, softly falling into the dark mutinous Shannon waves. It was falling, too, upon every part of the lonely churchyard on the hill where Michael Furey lay buried. It lay thickly drifted on the crooked crosses and headstones, on the spears of the little gate, on the barren thorns. His soul swooned slowly as he heard the snow falling faintly through the universe and faintly falling, like the descent of their last end, upon all the living and the dead."
1. Top Scientific Breakthroughs of 2010 (vie MR blog)
2. Via Philip Lane, the recent IMF Conference Call on Ireland. The terms of the IMF agreement look reasonable to my non-macroeconomic eye. The deal with the EU looks like it simply compounds every flaw in the system that allowed crazy non-Irish banks to lend money to crazy Irish banks for the purposes of property speculation, and bundles up the losses into a bill for the Irish taxpayer. This is definitely one for every person with an interest in the future of the country to quietly reflect upon once the Christmas celebrations are over and there is some quiet time before the New Year. Karl Whelan's B+F article is not a bad place to start. In a recent post, Karl waxes unusually aggressively about the nature of this agreement.
If, as it appears, the Europeans (rather than the IMF) were pushing for faster fiscal adjustment, more intense conditionality, no defaults on senior bonds and a high borrowing rate, rather than have no hand to play at all, the Irish side could still have adopted the Dirty Harry strategy: Go ahead punk, make my day.
3. NBER paper claiming that workplace smoking bans cause fires but that policies that increase the price of smoking decrease fires.
4. NBER paper on the economic value of teacher quality by Hanushek - Kevin may have already covered this. Teachers that I know rarely enthusiastically endorse education economics as a useful contribution, as a lot of the literature overturns some sacred cows such as class sizes. However, there is now much credible evidence showing that good teachers produce a sizeable economic and social externality. We should have a much bigger discussion in Ireland as to how to reward and enable good teachers, including figuring out how the good ones themselves want to be rewarded and treated. Good, energetic, intrinsically motivated teachers are definitely on my list of things to be grateful and thankful for this Christmas.
5. NBER Working Paper on Financial Literacy and Retirement Plans
The Role of Financial Literacy in Determining Retirement Plans
Robert Clark, Melinda Sandler Morrill, Steven G. Allen
Workers nearing retirement face many important, and often irreversible, choices. We collected detailed demographic and financial literacy data on over 1,500 workers nearing retirement at three large companies to assess how individuals are planning for retirement. Many respondents display limited knowledge and understanding of public and company-provided retirement benefits. Controlling for basic demographics and wealth, we find that misconceptions about eligibility ages and plan generosity influence workers’ expected age of retirement. Although retirement-related decisions will affect workers’ wellbeing for the remainder of their lifetimes, many do not possess enough basic financial knowledge to confidently make optimal choices.
6. Edgar Morgenroth links to John Bruton's piece on the recent IMF-EU deal. Edgar is a German-born economist who has lived in Ireland for several years so is in a better position than most to evaluate the deal without national blinkers. To a lot of the outside press, Ireland got a bailout and many of the journalists themselves had bailed out of the city even before the announcement. However, very little about this feels like a bailout. Irish economists have not been sentimental patriots during this mess and the most common criticism levied at them has been unpatriotically talking down the country. When people like Edgar, Karl Whelan, Kevin O'Rourke etc., all start saying that we are getting a really bad deal, it is well worth listening to them.
Tuesday, December 21, 2010
IRCHSS and IRCSET PhD Funding Deadlines
Its not too much of an exaggeration to say that for those considering PhD study in Ireland in social science or in areas such as neuroscience that these will be the only show in town for the next few years. Details of the deadlines are now available on the IRCHSS and IRCSET webpages. These are competitive but good scholarships that pay fees, a stipend of 16k and, in the case of IRCSET, money toward lab expenses etc.,
Links 21-12-2010
I haven't psychologically come to terms yet with the fact that we are approaching Christmas, so will continue with regular blog service for a few days. Very interesting time to be in Ireland. One of the most talked-about economic plunges in history and the most dramatic winter since at least before I was born, which means the country has largely ground to a halt again for a few days. If nothing else, the phrase "the luck of the Irish" means something a lot different than it used to mean. Though, considering the turbulent nature of Irish history, I'm not entirely sure how that phrase gained positive connotations.
1. Stanford's edu page on youtube has some really nice lectures. There are a number of lectures by Zimbardo. His lecture on evil and heroism is delivered in his usual absorbing style. Its really great to watch these lectures - most of the material is familiar to me but still absorbing. The phrase "Heroism is the antidote to evil" sounds trite but the depth of the argument is very profound, building on 40 years of research.
2. Killingsworth, M. A., & Gilbert, D. T. (2010). A wandering mind is an unhappy mind. Science, 330, 932.
3. Einstein for the Masses on the Yale channel. Funny and engaging lecture on relativity. Nice model for how to treat alumni.
4. Via Economix, "austerity" is the most searched-for word this year on the Webster online dictionary.
5. Nicholas Barberis's talk on Yale's channel on behavioural finance and the financial crisis is a nice overview of the cognitive and social psychology of financial crises. Nice set of notes here on applications of prospect theory in finance.
6. Richard Tol on ranking business schools in Ireland.
7. Via Philip Lane, the Central Bank has a new data series on the foreign claims on domestic Irish banks. Hopefully, this will stop the habit in some papers of including the foreign claims on international IFSC banks in calculations of Irish external debt. Things are bad enough!
8. Tyler Cowen on twitter asks "On what grounds can Fianna Fail possibly campaign for reelection? Marketing challenge". Ken McKenzie and I solved this recently. "Fianna Fail: The Government You Deserve".
1. Stanford's edu page on youtube has some really nice lectures. There are a number of lectures by Zimbardo. His lecture on evil and heroism is delivered in his usual absorbing style. Its really great to watch these lectures - most of the material is familiar to me but still absorbing. The phrase "Heroism is the antidote to evil" sounds trite but the depth of the argument is very profound, building on 40 years of research.
2. Killingsworth, M. A., & Gilbert, D. T. (2010). A wandering mind is an unhappy mind. Science, 330, 932.
3. Einstein for the Masses on the Yale channel. Funny and engaging lecture on relativity. Nice model for how to treat alumni.
4. Via Economix, "austerity" is the most searched-for word this year on the Webster online dictionary.
5. Nicholas Barberis's talk on Yale's channel on behavioural finance and the financial crisis is a nice overview of the cognitive and social psychology of financial crises. Nice set of notes here on applications of prospect theory in finance.
6. Richard Tol on ranking business schools in Ireland.
7. Via Philip Lane, the Central Bank has a new data series on the foreign claims on domestic Irish banks. Hopefully, this will stop the habit in some papers of including the foreign claims on international IFSC banks in calculations of Irish external debt. Things are bad enough!
8. Tyler Cowen on twitter asks "On what grounds can Fianna Fail possibly campaign for reelection? Marketing challenge". Ken McKenzie and I solved this recently. "Fianna Fail: The Government You Deserve".
Genes, economics and happiness
We all know some people are born stupid but what I didn't know was that some people are born to be happy dudes while others are inherently miserable. To be precise, heritability of happiness is approximately 33%, and much higher for men then women.
This is documented in a study by De Neve, Christakis, Fowler and Frey which is even able to pinpoint specific genes associated with happiness. This suggests that if you want your kids to be happy campers that you should be very careful who you mate with, especially if you are a woman. Unless its too late. There's a cheery thought.
This is documented in a study by De Neve, Christakis, Fowler and Frey which is even able to pinpoint specific genes associated with happiness. This suggests that if you want your kids to be happy campers that you should be very careful who you mate with, especially if you are a woman. Unless its too late. There's a cheery thought.
Monday, December 20, 2010
Biases, Scams and Regulation: Shiller Lecture
I posted before on the fact that Robert Shiller's undergraduate finance lectures at Yale are available to view on the web. I posted already on the behavioural finance lecture (lecture 7), which is obviously worth watching for most of the people who read this blog. Lecture 8 extends the study of heuristics and biases to examine their implications for fraud and regulation, and in general the implications for people's behaviour in financial markets. He covers various deviations from rationality such as wishful thinking, attention anomalies, anchoring, representativeness, gambling and quasi-magical thinking. These lead to market temptations including: overselling, hiding information and loyalty to friends with respect to channelling of investment opportunities of varying quality. The job of regulatory authorities is partly to prevent asset prices from being unduly influenced by the exploitation of these psychological biases and the temptation to capitalise on them, using mechanisms such as forced disclosure, ease of access to information, regular filing rules, accreditation, insider-trading rules, surveillance, accounting standards and deposit protection.
Republic of Telly: Should we Tax Confirmation Money?
Republic of Telly ask the really hardhitting questions:
Brainiest Blog
Gerard O'Neill uses a new google feature and finds out that this blog is considerably brainier than irisheconomy.ie and some other blogs, or something like that
Sunday, December 19, 2010
Do they (i.e. economists) know its Christmas?
Its the season of goodwill. People are looking forward to a bit of a break over Christmas after a fairly depressing year and with a pretty uncertain outlook for the New Year. Time then to revisit Joel Waldfogel's piece on the Deadweight Loss of Christmas.
For those not familiar with it, the basic idea is the following. When you buy something for yourself, say a €20 book, it must be worth at least that much to you. But if you buy a €20 book for someone else there is no guarantee they value it that highly (after all, why else have they not bought it already). Hence Christmas presents generate a deadweight loss. Using survey data on Yale undergraduates he estimates that Christmas gifts waste between 10% and about 33% of the value of gifts.
A compelling argument clearly, although there are obvious exceptions: this argument should not put you off sending me expensive presents. And you can avoid any deadweight loss by just sending me cash.
For those not familiar with it, the basic idea is the following. When you buy something for yourself, say a €20 book, it must be worth at least that much to you. But if you buy a €20 book for someone else there is no guarantee they value it that highly (after all, why else have they not bought it already). Hence Christmas presents generate a deadweight loss. Using survey data on Yale undergraduates he estimates that Christmas gifts waste between 10% and about 33% of the value of gifts.
A compelling argument clearly, although there are obvious exceptions: this argument should not put you off sending me expensive presents. And you can avoid any deadweight loss by just sending me cash.
Friday, December 17, 2010
Mandatory Minimum Sentencing, Drug Purity and Overdose Rates
This is the title of an article in the current edition of the Economic and Social Review by Ronald Davies (UCD). Link here. Abstract below.
Abstract: As of 1987, the US’s Anti-Drug Abuse Act (ADAA) has imposed mandatory minimum sentences for drug traffickers based on the quantity of the drug involved irrespective of purity. Using the STRIDE dataset and a differences-in-differences approach, I find that this led to increases in cocaine and heroin purity of 52 per cent and 27 per cent respectively. It also affected the distribution of purity around its mean. Using data on emergency room visits, I show that changes in the distribution of purity had significant impacts on such visits. These results provide insights useful when considering Ireland’s drug policies which include the use of mandatory minimum sentences.
Irish Economy: Grounds for Optimism?
John McHale has a good post on irisheconomy about the relatively good news coming from Irish gnp/gdp figures.
Thursday, December 16, 2010
Tesco Metrics: Every Little Bit of Data Helps
Liam linked to an article in the Guardian earlier this week, which was all about Nudge. One comment in the article was that "while shopping, working, or even deciding on who to share their lives with, individuals are less thoughtful and less calculating than modern-day economists... typically assume." This blog-post zones in on shopping, in particular the data-analysis of consumer purchasing behaviour at Tesco. The Guardian article linked above also suggests that "any critic who points out that that's hardly news to the women...(and) the men at Tesco... is spot on." Indeed, Tesco have been conducting interesting micro-level analysis on individual behaviour for many years now.
An informative article on this topic was written by Jenny Davies in the Sunday Times last year. According to Davies, Tesco gets its data from its loyalty clubcard scheme; this was launched 15 years ago with much fanfare - the advert below may jog memories for some readers. Davies also informs us that around this time last year, Tesco was tracking "the shopping habits of 16 million families across Britain, delivering an extraordinary insight into their lives — not only for itself but for companies such as Coca-Cola, Nestlé and Unilever, which buy the rights to the data." Readers in the Republic of Ireland might also remember that the Tesco Clubcard was launched there on the 13th. Oct 1997. To date almost 800,000 members have joined in the Republic.
Jenny Davies also tells us that: "Each bill detailing every item in a customer’s shopping basket is logged in a data centre in London Docklands and decoded by Dunnhumby, the marketing firm that is in charge of the scheme. It has to process 100 baskets a second — six million transactions a day. This helps Tesco to decide which products should go on to the shelves at what times, and in early trials it increased sales by as much as 12% in some of the supermarkets." According to the Guardian (in this article), the power of the clubcard was demonstrated in 2009, "when Tesco harnessed the card's database to halt the exodus of shoppers to cheaper retailers because (of) the recession, by doubling the points available to shoppers."
In a blog-post on Tesco data from two years ago, Tony Hirst desribes the early analysis conducted by Dunnhumby, and how this has changed over the last 15 years. A couple of months ago, Dunnhumby (and its recently departed co-founders) were profiled in the Guardian. The article says:
However, perhaps the last word should go to UCD social psychologist Ken McKenzie, writing on his A Head in Business Blog: "I don’t have a loyalty card, and every time I’m in Boots, Tesco or Dunnes, and they ask if I have one, I feel a slight sense that I should justify why I don’t, as it it’s odd to not have one. And according to rational actor theory in Economics, it is odd to not have a loyalty card and avail of discounts. However, there’s a small but growing body of work in the overlapping area between Psychology and Economics that might explain why (some) people might behave like me."
An informative article on this topic was written by Jenny Davies in the Sunday Times last year. According to Davies, Tesco gets its data from its loyalty clubcard scheme; this was launched 15 years ago with much fanfare - the advert below may jog memories for some readers. Davies also informs us that around this time last year, Tesco was tracking "the shopping habits of 16 million families across Britain, delivering an extraordinary insight into their lives — not only for itself but for companies such as Coca-Cola, Nestlé and Unilever, which buy the rights to the data." Readers in the Republic of Ireland might also remember that the Tesco Clubcard was launched there on the 13th. Oct 1997. To date almost 800,000 members have joined in the Republic.
Jenny Davies also tells us that: "Each bill detailing every item in a customer’s shopping basket is logged in a data centre in London Docklands and decoded by Dunnhumby, the marketing firm that is in charge of the scheme. It has to process 100 baskets a second — six million transactions a day. This helps Tesco to decide which products should go on to the shelves at what times, and in early trials it increased sales by as much as 12% in some of the supermarkets." According to the Guardian (in this article), the power of the clubcard was demonstrated in 2009, "when Tesco harnessed the card's database to halt the exodus of shoppers to cheaper retailers because (of) the recession, by doubling the points available to shoppers."
In a blog-post on Tesco data from two years ago, Tony Hirst desribes the early analysis conducted by Dunnhumby, and how this has changed over the last 15 years. A couple of months ago, Dunnhumby (and its recently departed co-founders) were profiled in the Guardian. The article says:
According to company lore, there was a 30-second silence after Humby presented the initial trial's results to the Tesco board, until the then chairman, Lord MacLaurin, declared: "What scares me is that you know more about my customers after three months than I know after 30 years."One question that readers might have is: what's in it for club-card holders? According to Tony Hirst, a good place to get an answer to this question is the book: Scoring Points: How Tesco Continues to Win Customer Loyalty. Hirst describes the "Clubcard customer contract: more data means better segmentation, means more targeted/personalised services, means better profiling. In short, the more you shop with us, the more benefit you will accrue." According to the Marketing Week magazine, "from the day of its launch in February 1995 the Tesco Clubcard was immediately embraced by customers attracted to the 1% discount off their shopping bills. But its long term success has not been built on discounts alone, rather on the personalisation of the shopping experience."
However, perhaps the last word should go to UCD social psychologist Ken McKenzie, writing on his A Head in Business Blog: "I don’t have a loyalty card, and every time I’m in Boots, Tesco or Dunnes, and they ask if I have one, I feel a slight sense that I should justify why I don’t, as it it’s odd to not have one. And according to rational actor theory in Economics, it is odd to not have a loyalty card and avail of discounts. However, there’s a small but growing body of work in the overlapping area between Psychology and Economics that might explain why (some) people might behave like me."
Wednesday, December 15, 2010
Harmon on Policy Decisions
Colm Harmon has an article in the Times last week on changing the way policy decision are made in Ireland.
Colm references the Travel Tax reduction in the budget. Basically, Minister Lenihan played the part of Solomon and instead of leaving the 10 euro flight tax as it was or abolishing it totally, he has reduced it to 3 euro for the next year when it will be reviewed. There is definitely a progression here over the usual way of doing policy, one that seems calculated to call the bluff of Ryanair in particular. Of course, as an experimental design, it is going to be a tricky one to look at. Macroeconomic conditions are changing rapidly and this is a once-off change. Worth talking through for the econometrically minded of the group.
And Budget 2011 did make some bright moves – the changes in the transit taxes for air travel is framed like an experiment – change designed to have impact, reversible if it fails, embedded if it works. We need to get into the same thought-space on microeconomic policy on all domains.
Colm references the Travel Tax reduction in the budget. Basically, Minister Lenihan played the part of Solomon and instead of leaving the 10 euro flight tax as it was or abolishing it totally, he has reduced it to 3 euro for the next year when it will be reviewed. There is definitely a progression here over the usual way of doing policy, one that seems calculated to call the bluff of Ryanair in particular. Of course, as an experimental design, it is going to be a tricky one to look at. Macroeconomic conditions are changing rapidly and this is a once-off change. Worth talking through for the econometrically minded of the group.
Smart boy wanted: longevity and intelligence
Economists are interested in the returns to cognitive ability. One fairly basic return is longevity: smarter people live longer. But why? An obvious explanation is that they make better choices, avoiding the Darwin Awards for example. A more specific hypothesis is that they cope better with adversity and hence live longer. Some experimental evidence is detailed here. Don't worry: it uses bees.
New IZA Working Papers
Some recent working papers. The last reminded me of an article publised in the Times last week. FG wants appointments freeze. There have already been some "interesting" ones unfortunately. Update: Coalition to install 300 people on State boards before election
Pedro Carneiro, Katrine V. Loken, Kjell G. Salvanes:
A Flying Start? Long Term Consequences of Maternal Time Investments in Children During Their First Year of Life
Abstract:
We study the impact on children of increasing the time that the mother spends with her child in the first year by exploiting a reform that increased paid and unpaid maternity leave in Norway. The reform increased maternal leave on average by 4 months and family income was unaffected. The increased time with the child led to a 2.7 percentage points decline in high school dropout. For mothers with low education we find a 5.2 percentage points decline. The effect is also especially large for children of mothers who, prior to the reform, would take very low levels of unpaid leave.
http://ftp.iza.org/dp5362.pdf
Olivier Bargain, Herwig Immervoll, Heikki Viitamäki:
No Claim, No Pain: Measuring the Non-Take-up of Social Assistance Using Register Data
(forthcoming in: Journal of Economic Inequality)
Abstract:
The main objectives of social assistance benefits, including poverty alleviation and labor-market or social reintegration, can be seriously compromised if support is difficult to access. While recent studies point to high non-take-up rates, existing evidence does not make full use of the information recorded by benefit agencies. Most studies have to rely on interview-based data, with misreporting and measurement errors affecting the variables needed to establish both benefit receipt and benefit entitlement. In this paper, we exploit a unique combination of Finnish administrative data and eligibility simulations based on the tax-benefit calculator of the Finnish authorities, carefully investigating the measurement issues that remain. We find rates of non-take-up that are both substantial and robust: 40% to 50% of those eligible do not claim. Using repeated cross-section estimations for years 1996-2003, we identify a set of stable determinants of claiming behavior and suggest that changes in behavior could drive the observed downward trend in take-up rates during the post-recession period. We discuss the poverty implications of our results.
http://ftp.iza.org/dp5355.pdf
Pedro S. Martins:
Cronyism
Abstract:
Politicians can use the public sector to give jobs to cronies, at the expense of the efficiency of those organisations and general welfare. Motivated by a simple model of cronyism that predicts spikes in appointments to state-owned firms near elections, we regress 1980-2008 monthly hirings across all state-owned Portuguese firms on the country’s political cycle. In most specifications, we also consider private-sector firms as a control group. Consistent with the model, we find that public-sector appointments increase significantly over the months just before a new government takes office. Hirings also increase considerably just after elections but only if the new government is of a different political colour than its predecessor. These results also hold when conducting the analysis separately at different industries and most job levels, including less skilled positions. We find our evidence to be consistent with cronyism and politically-induced misallocation of public resources.
http://ftp.iza.org/dp5349.pdf
Pedro Carneiro, Katrine V. Loken, Kjell G. Salvanes:
A Flying Start? Long Term Consequences of Maternal Time Investments in Children During Their First Year of Life
Abstract:
We study the impact on children of increasing the time that the mother spends with her child in the first year by exploiting a reform that increased paid and unpaid maternity leave in Norway. The reform increased maternal leave on average by 4 months and family income was unaffected. The increased time with the child led to a 2.7 percentage points decline in high school dropout. For mothers with low education we find a 5.2 percentage points decline. The effect is also especially large for children of mothers who, prior to the reform, would take very low levels of unpaid leave.
http://ftp.iza.org/dp5362.pdf
Olivier Bargain, Herwig Immervoll, Heikki Viitamäki:
No Claim, No Pain: Measuring the Non-Take-up of Social Assistance Using Register Data
(forthcoming in: Journal of Economic Inequality)
Abstract:
The main objectives of social assistance benefits, including poverty alleviation and labor-market or social reintegration, can be seriously compromised if support is difficult to access. While recent studies point to high non-take-up rates, existing evidence does not make full use of the information recorded by benefit agencies. Most studies have to rely on interview-based data, with misreporting and measurement errors affecting the variables needed to establish both benefit receipt and benefit entitlement. In this paper, we exploit a unique combination of Finnish administrative data and eligibility simulations based on the tax-benefit calculator of the Finnish authorities, carefully investigating the measurement issues that remain. We find rates of non-take-up that are both substantial and robust: 40% to 50% of those eligible do not claim. Using repeated cross-section estimations for years 1996-2003, we identify a set of stable determinants of claiming behavior and suggest that changes in behavior could drive the observed downward trend in take-up rates during the post-recession period. We discuss the poverty implications of our results.
http://ftp.iza.org/dp5355.pdf
Pedro S. Martins:
Cronyism
Abstract:
Politicians can use the public sector to give jobs to cronies, at the expense of the efficiency of those organisations and general welfare. Motivated by a simple model of cronyism that predicts spikes in appointments to state-owned firms near elections, we regress 1980-2008 monthly hirings across all state-owned Portuguese firms on the country’s political cycle. In most specifications, we also consider private-sector firms as a control group. Consistent with the model, we find that public-sector appointments increase significantly over the months just before a new government takes office. Hirings also increase considerably just after elections but only if the new government is of a different political colour than its predecessor. These results also hold when conducting the analysis separately at different industries and most job levels, including less skilled positions. We find our evidence to be consistent with cronyism and politically-induced misallocation of public resources.
http://ftp.iza.org/dp5349.pdf
For better or for worse, but how about a recession?
Pretty much everyone is feeling the pain of the recession, unless you specialize in bankruptcy I suppose. How could it get worse? Well if you marriage ended due to the recession that would be a real bummer. So whats the story Rory? Well it looks like years 6-10 of your marriage is when you need to watch out, after the first flush of marital bliss and before she's just resigned to you.
For Better or for Worse, But How About a Recession?
J Arkes, Y-C Shen
In light of the current economic crisis, we estimate hazard models of divorce to determine how state and national unemployment rates affect the likelihood of divorce. With 89,340 observations over the 1978-2006 period for 7633 couples from the 1979 NLSY, we find mixed evidence on whether increases in the unemployment rate lead to overall increases in the likelihood of divorce, which would suggest countercyclical divorce probabilities. However, further analysis reveals that the weak evidence is due to the weak economy increasing the risk of divorce only for couples in years 6 to 10 of marriage. For couples in years 1 to 5 and couples married longer than 10 years, there is no evidence of a pattern between the strength of the economy and divorce probabilities. The estimates are generally stronger in magnitude when using national instead of state unemployment rates.
For Better or for Worse, But How About a Recession?
J Arkes, Y-C Shen
In light of the current economic crisis, we estimate hazard models of divorce to determine how state and national unemployment rates affect the likelihood of divorce. With 89,340 observations over the 1978-2006 period for 7633 couples from the 1979 NLSY, we find mixed evidence on whether increases in the unemployment rate lead to overall increases in the likelihood of divorce, which would suggest countercyclical divorce probabilities. However, further analysis reveals that the weak evidence is due to the weak economy increasing the risk of divorce only for couples in years 6 to 10 of marriage. For couples in years 1 to 5 and couples married longer than 10 years, there is no evidence of a pattern between the strength of the economy and divorce probabilities. The estimates are generally stronger in magnitude when using national instead of state unemployment rates.
Tuesday, December 14, 2010
Pompeii Skeletons and Ancient Health Conditions
Am stuck in the office working on something so cannot get to the BBC documentary about Pompeii but the article is really interesting. The well-preserved skeletons found hiding in a basement to escape the volcano include several middle-aged and elderly people and people taller, on average, than the residents of modern Naples, according to the BBC report. There are obvious limitations in looking at skeletal remains to recover ancient health conditions and social structures but what a really interesting enterprise to attempt.
New York Times Article on Randomisation Designs for Housing Policy
An interesting article in the NYT covers a debate about the use of an RCT design to test the efficacy of homelessness prevention programme called HOMEBASE. Opponents of the design argue that it wasn't need given that the programme was already demonstrating efficacy and also that it is unethical to treat people like lab rats in this fashion. Proponents argue that the money is currently being spent without awareness of whether it is really having an effect and that, therefore, the use of the RCT design will be a powerful guide as to whether the programme should be continued and/or scaled up.
Irish Hip-Hop Goes Viral
Its interesting, if occasionally depressing, to be living in Ireland at present. Some quite strange things happening. The viral explosion this week of a comedy Irish hip-hop song is the latest one. Think of a cross between 50 Cent and Father Ted. Again, strong language so not for the sensitive. It has the feeling of something various social scientists will be analysing for symbolic information as to a post-crash psychological crisis mentality in Ireland. A couple of US media suggested today that the "horse outside" might be symbolic of the austerity mindset in Ireland (they were joking I think!).
Addendum: A full national debate including senior Irish politician Willie O'Dea on the merits of the video.
Addendum: A full national debate including senior Irish politician Willie O'Dea on the merits of the video.
Monday, December 13, 2010
The height of intelligence
The positive correlation between height and intelligence has been documented many times. It is attributed generally to deficits in early life nutrition. According to some this explains much of the height/earnings premium. So is there any evidence on this correlation for Ireland? Using the Growing Up in Ireland data I graph the students mathematics score against their height (adjusting for sex, SES and birthweight) along
with a 95% confidence interval.
So yes there is a slight upward gradient but it flattens out above about 1.25 metres, possibly even dipping at the very top of the range, the raw correlation is .114. But on the whole it looks fairly flat and shorter people who want to be mathematicians should not be discouraged.
with a 95% confidence interval.So yes there is a slight upward gradient but it flattens out above about 1.25 metres, possibly even dipping at the very top of the range, the raw correlation is .114. But on the whole it looks fairly flat and shorter people who want to be mathematicians should not be discouraged.
Sunday, December 12, 2010
The bitter sweet smell of success
THE EFFECTS OF OLFACTORY STIMULI ON SCHOLASTIC PERFORMANCE
Burhan Akpinar
The research described in this paper was carried out to determine the effects of olfactory stimuli (provided by natural essence oils of lemon) on achievement in English of fourth grade pupils in a school in Turkey. Pupils were randomly assigned to an experimental group (n:29) or a control group (n:29). Both groups were taught English lessons twice a week for a period of four weeks as part of the normal curriculum. In the experimental group, lessons were provided in an aromatic atmosphere. In the control group, lessons were provided in a normal classroom environment. Following treatment, the experimental group outperformed the control group on an achievement test in English. A month after the termination of treatment, the performance of both groups on the achievement test had deteriorated, but the experimental group still outperformed the control group.
Irish Journal of Education , vol 36, 2005
Friday, December 10, 2010
HRB Student Scholarships
Students interested in spending next summer in the Geary Institute or other research groups should think about this excellent scheme. as one potential route.
HRB Grants and Fellowships
Summer Student Scholarships
Training / Career Development
Opening Date:
8 December 2010
Closing Date:
26 January 2011
Details:
HRB Summer Student Scholarships 2011
The Health Research Board invites applications for summer scholarships from undergraduate students in health-related disciplines to support their participation in research during Summer 2011. The purpose of the student scholarships is to encourage an interest in research and to give the student an opportunity to become familiar with research techniques.
WHO should apply?
Undergraduate students who are not in the final year of their degree course who are studying in a health-related discipline at a university in Ireland.
In line with the HRB strategy the project must fall within one of the following research areas: clinical research, health services research, population health sciences research or applied biomedical research. Applications that focus solely or predominantly on basic biomedical research are not eligible.
WHAT is the value of the award?
The amount paid will be €250 per week for a maximum of eight weeks.
WHEN is the DEADLINE for applications?
Wednesday 26 January at 12.00 noon.
HOW can one apply?
Applications must be made online using the HRB eGrants system. Please note that for the purposes of the Summer Student Scholarship Scheme, when registering with eGrants, the Student is considered to be the Principal Investigator.
Further information is available in the Guidelines for Applicants document below.
Contact:
Patricia Cranley
HRB Grants and Fellowships
Summer Student Scholarships
Training / Career Development
Opening Date:
8 December 2010
Closing Date:
26 January 2011
Details:
HRB Summer Student Scholarships 2011
The Health Research Board invites applications for summer scholarships from undergraduate students in health-related disciplines to support their participation in research during Summer 2011. The purpose of the student scholarships is to encourage an interest in research and to give the student an opportunity to become familiar with research techniques.
WHO should apply?
Undergraduate students who are not in the final year of their degree course who are studying in a health-related discipline at a university in Ireland.
In line with the HRB strategy the project must fall within one of the following research areas: clinical research, health services research, population health sciences research or applied biomedical research. Applications that focus solely or predominantly on basic biomedical research are not eligible.
WHAT is the value of the award?
The amount paid will be €250 per week for a maximum of eight weeks.
WHEN is the DEADLINE for applications?
Wednesday 26 January at 12.00 noon.
HOW can one apply?
Applications must be made online using the HRB eGrants system. Please note that for the purposes of the Summer Student Scholarship Scheme, when registering with eGrants, the Student is considered to be the Principal Investigator.
Further information is available in the Guidelines for Applicants document below.
Contact:
Patricia Cranley
Weekend Links
(i) NBER working paper from Dora Costa on scarring versus selection among Civil War POWs.
(ii) Shick and Steckel - Height as a proxy for cognitive and non-cognitive ability. Effectively suggests suggest taller people are richer and richer largely because they are brighter.
(iii) Poor fitness contagion from randomly assigned friends. NBER Working Paper.
(iv) IZA Working Paper - Subjective Well-Being, Income, Economic Development and Growth by Daniel W. Sacks, Betsey Stevenson, Justin Wolfers
(v) Guardian article from last month on the role the Behavioural Insights Team in the Cabinet Office will have in promoting health behaviour
(vi) A more recent Guardian article argues that Cameron is hijacking and corrupting a great set of ideas
(vii) Truth on the Market Symposium on Behavioural Economics, Law and Regulation. This is great. Essential reading if you are interested in the legal and regulatory aspects of behavioural economics.
(viii) "Spend More Today: Using Behavioural Economics to Improve Retirement Decisions" - Paper Linked Here - From Blake and Boardman at Cass Business School.
(ii) Shick and Steckel - Height as a proxy for cognitive and non-cognitive ability. Effectively suggests suggest taller people are richer and richer largely because they are brighter.
(iii) Poor fitness contagion from randomly assigned friends. NBER Working Paper.
(iv) IZA Working Paper - Subjective Well-Being, Income, Economic Development and Growth by Daniel W. Sacks, Betsey Stevenson, Justin Wolfers
(v) Guardian article from last month on the role the Behavioural Insights Team in the Cabinet Office will have in promoting health behaviour
(vi) A more recent Guardian article argues that Cameron is hijacking and corrupting a great set of ideas
(vii) Truth on the Market Symposium on Behavioural Economics, Law and Regulation. This is great. Essential reading if you are interested in the legal and regulatory aspects of behavioural economics.
(viii) "Spend More Today: Using Behavioural Economics to Improve Retirement Decisions" - Paper Linked Here - From Blake and Boardman at Cass Business School.
Vox Pop on Knowledge of Current Economic Affairs
Stephen Kinsella points to a vox-pop asking people on Grafton street about their knowledge of current affairs. There is a mixed performance, with people seeming to have particular difficulty with the ECB and with the definition of a billion. Usual caveats about anecdotes apply and we don't know what selection mechanism led to answers making it into the video. Also, I don't think anybody on the video should feel bad as few people can really be confident how they would perform if someone stuck a camera in their face and asked questions on the spot. However, there is a serious issue about how well-informed people are (or need to be) about economics and economic institutions.
The Celtic F***ing Tiger
Via Colm McCarthy on irisheconomy, who bears a reasonable resemblence to the person in the clip, this angry summary of the Celtic Tiger has gone viral. Language is very strong so don't click on the link if you are a timid soul. A lot of f words - the bad f words - worse than feck.
The Psychology of Facebook
Of the 20 most popular websites in the world, 13 relate to corporations that have European headquarters in Ireland: Ebay, Google, Yahoo and Facebook. The last three of these corporations have been the source of much commentary on this blog. Facebook (FB) has 1.5 millions users in Ireland and it is competing strongly with Google for web-user time-allocation. The chart below (from comScore/Citi) shows FB's increasing share of web-user time-allocation since 2006. FB has an explicit interest in internet economics and it has been mentioned many times before on this blog: from ambient awareness to the App Economy, FB search data to Mulley Com's study of FB eye-tracking, the choice architecture of FB, the FB Global Happinness Index, and of course, the debate on whether FB-use hurts students' grades.
Earlier this week in the Irish Times, Eoin Burke Kennedy wrote an interesting article about the psychology of FB. "Extroverted people tend to have more friends on Facebook but reveal less about themselves while introverts disclose more personal details but to a smaller group." Extraversion is one of the Big 5 personality traits: often discussed on this blog in the context of non-cognitive ability. Here and here, for example. The Big 5 personality traits have also been discussed on this blog before - in relation to social networking and web-users' choice of email address. Readers who find these topics interesting may want to read about the developing field of cyberpsychology - this subject encompasses all the psychological phenomena that are associated with or affected by emerging technology.
The content of the Irish Times article (mentioned above) is based on work by Dublin Business School psychologist Dr Ciarán McMahon. "McMahon has conducted an extensive review of the psychological literature on Facebook to better understand what makes it tick". McMahon runs a blog, PsychBook Research, which links to one of his recent presentations: "Facebook and psychology: What we know so far". While the Geary Blog has often mentioned the career opportunities for economists in corporations such as Google, Yahoo, and Microsoft; and opportunities for applied economists in private sector firms such as Netflix, SeatGeek, Yapta, Inon and Nielsen; opportunities for psychologists seem likely in Facebook, and in other Web 2.0 commerce.
Earlier this week in the Irish Times, Eoin Burke Kennedy wrote an interesting article about the psychology of FB. "Extroverted people tend to have more friends on Facebook but reveal less about themselves while introverts disclose more personal details but to a smaller group." Extraversion is one of the Big 5 personality traits: often discussed on this blog in the context of non-cognitive ability. Here and here, for example. The Big 5 personality traits have also been discussed on this blog before - in relation to social networking and web-users' choice of email address. Readers who find these topics interesting may want to read about the developing field of cyberpsychology - this subject encompasses all the psychological phenomena that are associated with or affected by emerging technology.
The content of the Irish Times article (mentioned above) is based on work by Dublin Business School psychologist Dr Ciarán McMahon. "McMahon has conducted an extensive review of the psychological literature on Facebook to better understand what makes it tick". McMahon runs a blog, PsychBook Research, which links to one of his recent presentations: "Facebook and psychology: What we know so far". While the Geary Blog has often mentioned the career opportunities for economists in corporations such as Google, Yahoo, and Microsoft; and opportunities for applied economists in private sector firms such as Netflix, SeatGeek, Yapta, Inon and Nielsen; opportunities for psychologists seem likely in Facebook, and in other Web 2.0 commerce.
Wednesday, December 08, 2010
The news from PISA
The latest results from the Program for International Student Assessment (PISA) are out and Ireland does not do too well. Sean Flynn has a fairly trenchant take on it. While I don't necessarily agree with everything he says, he makes some good points. The bottom line seems to be that we have slipped down the international league table significantly using the scores. PISA measures attainment of 15 year olds, usually in reading, science and mathematics. There have been several waves of data so far.
When the issue of "school league tables" comes up, many in the education sector are quick to oppose them on the basis that they don't provide a balanced comparison, not comparing like with like etc. Well if you believe that, you can't then use these "international league tables" to rank countries with different education systems, different cultures, different curricula and so on as you are certainly not comparing like with like either.
What I am unclear about is whether PISA only tells us where we are relative to others. That is, say attainment in Ireland has not changed in absolute terms but other countries have simply got better than us, then will we still move down the table? My guess is Yes but in reality its probably a bit of both going on: that is attainment may have fallen in Ireland and we may have been leapfroged by others also. My recollection is that PISA scores are normed to have an overall mean of 500 so it can't tell you about absolute changes but I may be wrong.
When the issue of "school league tables" comes up, many in the education sector are quick to oppose them on the basis that they don't provide a balanced comparison, not comparing like with like etc. Well if you believe that, you can't then use these "international league tables" to rank countries with different education systems, different cultures, different curricula and so on as you are certainly not comparing like with like either.
What I am unclear about is whether PISA only tells us where we are relative to others. That is, say attainment in Ireland has not changed in absolute terms but other countries have simply got better than us, then will we still move down the table? My guess is Yes but in reality its probably a bit of both going on: that is attainment may have fallen in Ireland and we may have been leapfroged by others also. My recollection is that PISA scores are normed to have an overall mean of 500 so it can't tell you about absolute changes but I may be wrong.
Tuesday, December 07, 2010
First Cut is the Deepest
Following Gift Grub's line, it seems an appropriate song for the day that's in it! But let's have the Cat Steven's version!
Education and the budget
Lots could be, and doubtless will be, said about the budget. But it is worth looking at some of the changes regarding education. The increase in higher level fees is 500Euro and only for the first child in the family (no increase for the second kid). So the government has gone out of its way to protect the relatively well off who dominate university. Meanwhile the Educational Disadvantage Budget has been slashed by 60% and student grants are to be cut by 4%.
Well at least you know what the government's priority is: protect the middle class.
Well at least you know what the government's priority is: protect the middle class.
Irish Budget
The Irish budget is available on this link. 6 billion of tax increases and spending cuts. This is very much across the board including cuts in almost all social welfare categories (state pensions excluded), tax hikes across the income brackets and cuts in spending in capital programmes, health, education etc., Some interesting aspects include the introduction of a property tax at a low level and the reduction in child benefit on a universal basis. As expected, the temporary crisis "levies" have now been rolled into a permanent universal contribution. Other than that, the bulk of the action happens in the reduction of the capital allocation and in current health spending.
Gift Grub Renegotiate Bailout
Gift Grub arrange for some of Ireland's noteworthies to renegotiate the agreement. Highlights include the waiting music on the IMF line - "first cut is the deepest" - and Gift Roy Keane's negotiating stance that we should take much bigger cuts and "get over it".
New evidence on class size effects
Class size effects: evidence using a new estimation technique
Kevin Denny, Veruska OppedisanoThis paper estimates the marginal effect of class size on educational attainment of high school students. We control for the potential endogeneity of class size in two ways using a conventional instrumental variable approach, based on changes in cohort size, and an alternative method where identification is based on restriction on higher moments. The data is drawn from the Program for International Student Assessment (PISA) collected in 2003 for the United States and the United Kingdom. Using either method or the two in conjunction leads to the conclusion that increases in class size lead to improvements in student’s mathematics scores. Only the results for the United Kingdom are statistically significant.
Monday, December 06, 2010
Westminister Forum Projects
Westminster Forum Projects (WFP) operates a "group of influential, impartial and cross-party forums: the Westminster Education Forum; the Westminster eForum; the Westminster Energy, Environment & Transport Forum; the Westminster Food & Nutrition Forum; the Westminster Health Forum; the Westminster Legal Policy Forum and the Westminster Media Forum."
"All the Westminster Forum Projects... enjoy substantial support and involvement from key stakeholders within Parliament, government, regulatory bodies, industry, consumer organisations and other interested groups. The forums organise senior level seminars on public policy in these sectors. None of the forums has a policy agenda of its own, other than simply to raise the quality of debate on public policy developments and so create opportunities for informed discussion."
The Westminster Education Forum aims to "provide the premier environment for policy makers in Parliament, Whitehall and government agencies to engage with key stakeholders. These include education professionals, parents and learners, industry representatives and their advisors, interest groups, local authorities, the voluntary sector and academia, along with members of the reporting press."
"All the Westminster Forum Projects... enjoy substantial support and involvement from key stakeholders within Parliament, government, regulatory bodies, industry, consumer organisations and other interested groups. The forums organise senior level seminars on public policy in these sectors. None of the forums has a policy agenda of its own, other than simply to raise the quality of debate on public policy developments and so create opportunities for informed discussion."
The Westminster Education Forum aims to "provide the premier environment for policy makers in Parliament, Whitehall and government agencies to engage with key stakeholders. These include education professionals, parents and learners, industry representatives and their advisors, interest groups, local authorities, the voluntary sector and academia, along with members of the reporting press."
Sunday, December 05, 2010
Two New Papers On Malthus
As if we needed any reminding of it in this climate, economics is often known as the “dismal science”. Malthus is largely to blame for this unfortunate term, thanks to his pessimistic theories on the nature of population growth and mortality. In a simple Malthusian world, an increase in wages increases population. This only results in an increase in mortality rates, ultimately returning society to its original equilibrium with no permanent increase in welfare.
Two recent papers by UCD economists re-examine this issue. Cormac Ó’Gráda and Morgan Kelly (Living Standards and Mortality since the Middle Ages) find that all strata of English society, including the nobility, were affected by food shortages before the Black Death. The relationship between food prices and mortality disappears in the mid 17th century (although not in London), but then reappears in the early 18th century. Interestingly (given Malthus’ objections to the Poor Laws), the authors suggest that social welfare had a part to play in this. This paper is also discussed on the Economic Logic blog.
Research in this area has tended to focus on England; however we know that the UK was exceptional for several reasons. Alan Fernihough (Malthusian Dynamics in a Diverging Europe: Northern Italy 1650-1881) examines the evidence for Italy. He finds support for the existence of Malthusian checks into the late 1800s. Both papers are relevant for the debate on the stages of economic growth (e.g. Galor and Weil, Population, technology, and growth: From Malthusian stagnation to the demographic transition and beyond).
Two recent papers by UCD economists re-examine this issue. Cormac Ó’Gráda and Morgan Kelly (Living Standards and Mortality since the Middle Ages) find that all strata of English society, including the nobility, were affected by food shortages before the Black Death. The relationship between food prices and mortality disappears in the mid 17th century (although not in London), but then reappears in the early 18th century. Interestingly (given Malthus’ objections to the Poor Laws), the authors suggest that social welfare had a part to play in this. This paper is also discussed on the Economic Logic blog.
Research in this area has tended to focus on England; however we know that the UK was exceptional for several reasons. Alan Fernihough (Malthusian Dynamics in a Diverging Europe: Northern Italy 1650-1881) examines the evidence for Italy. He finds support for the existence of Malthusian checks into the late 1800s. Both papers are relevant for the debate on the stages of economic growth (e.g. Galor and Weil, Population, technology, and growth: From Malthusian stagnation to the demographic transition and beyond).
Friday, December 03, 2010
Weather and the macroeconomy
Given the lousy weather and the lousy macroeconomy prevailing in Ireland it is natural to wonder do adverse weather shocks have an impact on economic activity? One's intuition is that bad weather is bad for the economy though clearly there will be silver linings to the cloud for some, manufacturers and purveyors of galoshes for example. For a non-technical discussion of why weather does matter see Niemara (2005).
In an historical analysis Solomou & Wu (2002) "considers the influence of weather shocks at a disaggregated level of analysis, modelling the effects of weather shocks on British agriculture, construction and energy demand over the period 1870–1913. The impact of weather shocks will vary from sector to sector as the conditions favouring one activity may be adverse to another. The sectoral effects are aggregated to give us an estimate of the macroeconomic effects of weather on business cycle fluctuations"
In an historical analysis Solomou & Wu (2002) "considers the influence of weather shocks at a disaggregated level of analysis, modelling the effects of weather shocks on British agriculture, construction and energy demand over the period 1870–1913. The impact of weather shocks will vary from sector to sector as the conditions favouring one activity may be adverse to another. The sectoral effects are aggregated to give us an estimate of the macroeconomic effects of weather on business cycle fluctuations"
Thursday, December 02, 2010
Fry and Laurie - Are You Happy?
Nice clip from the BBC vaults - "You do a job that half of mankind would kill to be able to do and you can have sex with the other half as often as you like. I just want to know if this makes you happy!!??"
Wednesday, December 01, 2010
Growing Up in Ireland Report Published
From TCD's website - While the macro situation is getting understandable attention at present, Ireland is still a country that spends a lot of money on public services. The task of making sure that our public resources and infrastructures are set up to help this generation of children lead fulfilling lives should get more attention in the policy debate.
Key findings from the report include:
* 86% of nine-month-olds lived in two-parent families with 14% living in lone-parent families.
* Traditional family types are still the norm. Over 70% of the mothers of nine-month-olds were married and a further 15% were cohabiting with a partner.
* 27% of mothers and 24% of fathers were not born in Ireland.
* Nearly one in five mothers (18%) had smoked at some stage during the pregnancy and a similar proportion (20%) had drunk alcohol at some stage. Mothers with the lower levels of education were more likely to smoke, but less likely to drink alcohol, during pregnancy than mothers with the highest education.
* Just over half of all infants (57%) were breastfed at some point, with just over 49% being breastfed on leaving hospital. Irish-born mothers were less likely to have breastfed (48%) than mothers born elsewhere (83%). Rates of breastfeeding also increased in line with better education of the mother.
* One in ten mothers had ‘no intention of ever getting pregnant’ at the time they conceived the Study Infant.
* The vast majority of mothers reported their infant’s health to be good at birth (97%) and at nine months (99%).
* 38% of nine-month-olds were in some form of non-parental childcare. Grandparents were the most frequent provider of childcare (12%), followed by crèche/daycare centres (11%).
* Infants in non-parental childcare spent an average of 25 hours per week in childcare and this cost an average of €5.14 per hour. The most important consideration when choosing childcare was the quality of the care provided. However, a substantial proportion (17%) recorded that their choice had been determined by costs, either completely or to a large degree.
* A total of 57% of mothers of infants are currently working outside the home
* Mothers in higher income groups as well as those with higher education were more likely than others to report that they had missed out on home or family activities because of their work. In contrast mothers from the lowest income group were most likely to record having turned down work activities or opportunities because of their family life
Key findings from the report include:
* 86% of nine-month-olds lived in two-parent families with 14% living in lone-parent families.
* Traditional family types are still the norm. Over 70% of the mothers of nine-month-olds were married and a further 15% were cohabiting with a partner.
* 27% of mothers and 24% of fathers were not born in Ireland.
* Nearly one in five mothers (18%) had smoked at some stage during the pregnancy and a similar proportion (20%) had drunk alcohol at some stage. Mothers with the lower levels of education were more likely to smoke, but less likely to drink alcohol, during pregnancy than mothers with the highest education.
* Just over half of all infants (57%) were breastfed at some point, with just over 49% being breastfed on leaving hospital. Irish-born mothers were less likely to have breastfed (48%) than mothers born elsewhere (83%). Rates of breastfeeding also increased in line with better education of the mother.
* One in ten mothers had ‘no intention of ever getting pregnant’ at the time they conceived the Study Infant.
* The vast majority of mothers reported their infant’s health to be good at birth (97%) and at nine months (99%).
* 38% of nine-month-olds were in some form of non-parental childcare. Grandparents were the most frequent provider of childcare (12%), followed by crèche/daycare centres (11%).
* Infants in non-parental childcare spent an average of 25 hours per week in childcare and this cost an average of €5.14 per hour. The most important consideration when choosing childcare was the quality of the care provided. However, a substantial proportion (17%) recorded that their choice had been determined by costs, either completely or to a large degree.
* A total of 57% of mothers of infants are currently working outside the home
* Mothers in higher income groups as well as those with higher education were more likely than others to report that they had missed out on home or family activities because of their work. In contrast mothers from the lowest income group were most likely to record having turned down work activities or opportunities because of their family life
Economics Research at Microsoft
I've blogged before about economics research at Google and Yahoo. Another major technology company with a research area devoted to economics is Microsoft. Within this stream of research, topics of particular interest include game theory, research on the family, financial services for low-SES groups, household well-being, socio-economic mobility, social networking and trust/reputation. Microsoft staffers associated with economic research are shown here.
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