Linkage

An interesting discussion among some libertarians.
"... and will pardon Paul Claudel / Pardon him for writing well."
The Economist on climate change.

Cyprus

If I were in Cyprus, why would I put my money in the bank? I can't take it out again (except at 300 EUR/day), I can't send it abroad, and they might decide to nick some of it. So, I think there will be a bank run, slowed only by the limits on withdrawal.

Linkage

An excellent review of 3 books on happiness.

Linkage

An outsider talks about academia.
Tyler Cowen defends economists' cosmopolitanism. 

Knot bothered about causality

The report Knot Yet, on the increasing age of marriage in America, has gathered plenty of media attention.
It's a really important topic, but I can't help be worried that in 2013, we still accept social science that makes no attempt to distinguish causality from correlation. The report rightly contains comments like: "... we cannot rule out the possibility that some of these associations are simply due to the type of young adults who marry in their twenties." Indeed they cannot. But media reports don't bother to mention this, instead throwing around headlines like "Late Marriage and its Consequences", or phoney statements like "Upper-class women reap a large wage premium from delaying marriage", where all we can say is "Upper-class women who delay marriage have higher wages" - or, exactly equivalently, "Upper-class women who have higher wages delay marriage".
Is proper social science really so hard to do on this topic?

Disability benefits in the US.

The rise of disability benefits in the US. Includes a cool graphic.
It seems that just as in the UK, disability has become hidden unemployment. And just as here there are incentives for governments to push this: states pay for unemployment but the federal government pays for disability. In the US there's another group - lawyers:

Live coverage from a genocide trial

https://twitter.com/xeni/guate-genocide-trial

Juan: In the rain there was no way to protect ourselves. If we could we covered ourselves with leaves.

MP: Did you see people die? Juan: Some people who were not able to hide from the bombs died.

His final statement:

No one asks us to tell our story. This is everything I suffered, in the flesh. No one can obligate me to come to tell the story, no one else knows what I lived. Sorry, I didn't finish explaining something. After the massacres, my father died May 25, 1983, they bombed the place and he died.

What they wanted to do was to disappear us but thanks to God the mountains protected us, mother nature saved us. My father died and stayed in the mountains. As indigenous people we have rituals  days to celebrate our dead, but on that day I can’t go to my father because he is in the mountains. I’m not at peace like before, my father does not appear. They were killed and I can’t see them any more. This pain, this sadness, I never forget it. I felt it in the flesh. There is no peace. We lost everything, our land, our animals, our clothes, but no one has replaced it. The government did it, the government is here but don’t do anything. On the contrary, they look down on us. Excuse my expression. The pain will only end when I die.

[He breaks down and Edgar Perez pauses to give him a moment.]

I hate it when that happens

"Oi bruv I've just got claret all over me 'and as well. Cos I dunno... I just got claret all over it."

-- Heard on the Colchester-London train

Linkage

A sidelight on the democratic peace thesis: Richard Nixon sabotaged peace talks with Vietnam; LBJ considered it treasonable.
I study group behaviour by looking at how individuals see groups. This Wired story talks about a different level of analysis: emergent behaviour from simple rules.
A long list of cliches that I hadn't realised were cliches, but now know I must avoid.
(Both the last via BoingBoing.)
The USA's oubliette. "In 2009, President Obama ordered that the prison be closed by the end of his first year in office. But the effort to wind it down collapsed as Congress, concerned about their own reelection possibilities some former detainees who were linked to terrorist activities, has imposed an increasingly steep set of obstacles to any additional transfers." This is why we don't let politicians decide who stays in prison.
PLOSOne about us. Political scientists, read and consider. And more about how it works.
Lastly: the meaning of Wivenhoe.

And now for something completely different

If you have kids, my friend has an app for you!

Download the new Bubele mobile app to discover what's near you for your kids and babies: Places for you and them to eat, shop, play, have fun, and spend time.

 

If you have an iPhone or iPad search “Bubele” in the UK app store or follow the link below:

https://itunes.apple.com/gb/app/bubele/id605048686?mt=8

 

If you don't have kids, have some kids! Then download Bubele.

Linkage

Of course, the right kind of immigrants are utterly welcome. This line made me laugh: "In flaming torches behind the happy couple, will you marry me was written, without the usual question mark."

Linkage

How bank execs trouser QE cash, explained by Alphaville.
Yannis Varoufakis sounds a bit like UKIP, but then qualifies it a bit.
And YV on what's actually happening in Greece. Gosh, why can't those whinging Southerners just learn to pay their debts?
Another little immigration story.
Anglo-EU translation guide.
A cute information argument about why your friends never call you.

A negative view of the political economy of the internet

So the story about the knowledge economy is that more and more capital is human capital, which is stored in workers' heads. This has benign political effects: human capital, unlike fixed capital or land, is quite mobile, and intrinsically difficult to expropriate. Therefore, greedy rulers (including tyrannous majorities) cannot tax it to extinction. Rulers then focus on more useful activities, like providing public goods to grow the economy. And perhaps democratization becomes easier because the threat of expropriation by the poor is less.

This logic only seems stronger in the internet era of tiny firms of self-motivated geniuses. And as the internet enables not just hierarchy-free production, but also lightspeed self-organization to produce public goods or influence politics, a utopian future seems to beckon.

Well, maybe.

Here's an alternative thought. What is Google, conceptually? Of course it's very innovative and has lots of smart people. But how does Google make its money, really?

i) a huuuge server farm;
ii) some fairly well-understood algorithms to serve search results and ads, which run on the huuuge server farm;
and
iii) a guy to answer the phones at the huuuge server farm.

Everything else in Google is basically taking money out of that one big money spout. No doubt some of what they do may change the world and keep Google innovating, but the money comes from the spout. Now, to me that sounds completely expropriable. Essentially there is just a big source of rents from network externalities, et cetera, and it is waiting to be fought over. And, guess what, an increasing number of governments have started to levy big "fines" on Google for its "violations" of various vitally important rules.

More generally:

• A lot of the human capital in the internet is embodied in code. 
• There is no reason to think that innovation in code goes on forever. There may just be one best way to do a bubble sort or build a search engine.
• Embodied code is as expropriable as land or machinery.
• The globalized internet economy generates many winner-take-all markets.

These points suggest that in the end, the new economy may look more like North-east Brazil than Northern California.

Immigration policy - how it actually works.

Here's an email from a collaborator and very smart guy. The sort of person we should be encouraging to come to Britain, if we would like to have world class universities. His experience was not exactly encouraging.

Particularly egregious bits are highlighted.

The thing is, I am not pro immigration. I think Britain should have lower immigration (not zero). I'm basically quite communitarian. But what inevitably happens, in the political system we have, is gesture politics where you make some headline number commitment. Then you have to fulfil the commitment. Doing it right would be hard. So instead you do what is easy: you target the most law-abiding, highly visible people because they are the easiest to bully. And then... well, now read on.

Hi David,
Thanks for the support!  Yes, I was detained for a pretty long time, and sent back to [first world country Z], but it was largely due to my own stupidity. Although people still seem a bit horrified when I tell the story, so I must inadvertently tell it in a way that understates my stupidity, so keep that potential bias in mind. Here's the full(ish) story. It's pretty long, sorry.
My initial plan was to go to [country X in Africa] for research, and come back about a week before my visa expired and apply for an extension when I got home (which is what you're supposed to do). As is typical, there were some small issues in hiring a staff in X, which caused delays and so I ended up staying longer than I had initially anticipated. In the end I tried coming back into the country 4 days after my visa expired. I was in X, and didn't have time to really research the visa situation, and thought it's not a big deal, I have a Zian passport, I'm allowed to enter for 6 months with a Zian passport without a visa. I really didn't think much of it, I've entered the country without a visa many, many times before I moved over. So, that was very naive of me.
When I got to immigration I was pretty up front and honest about the situation; I didn't think it was going to be a problem. I told the immigration officer that I was gone on research for a month, I lived in the UK, I was putting finishing touches on my dissertation, and would be visiting for 2 months (I have a conference in Z in May). She asked questions about how much cash I had on me, why my visa was expired, and said I couldn't enter to do school work without a student visa. So, alright, I said, I didn't actually have school work left to do, my dissertation is all but complete, I'm really just visiting for a few months while I tie up some loose ends. She thought that it shouldn't take 2 months to do this, and didn't believe that my dissertation was complete since I was gone on research. I tried to explain that the work I was doing was not for my dissertation. She said oh, so you have a job? I said, no, but I expect to get one, and the work I'm doing now will help my career when I get a job. She did not understand my motivation for doing work that I was getting neither course credit nor money for, and basically called me a liar (said it was "highly implausible") and so they sent me to this room/cell thing in the bowels of Heathrow.

I waited there for a few hours, a new immigration officer came and interviewed me, wrote everything down, I told her the same story, I was here for a few months to tie up loose ends with my living situation, and submit my dissertation, and I was leaving the country in May at the latest. She told me there was no way I was going to enter the country, I was clearly doing school work without a student visa (which is kind of true) and they were going to send me to Nairobi because that was where I came from.
I started making calls using my credit card to let people know what was going on: my girlfriend, parents, etc. I had made several purchases on my way back, in Kigali, Bujumbura, Nairobi, and now London. So of course, while trying to make calls, my card got security blocked. My other card had already been blocked for a few days, I hadn't worried about it because the backup worked, but now the backup was down. So this was pretty bad because now I was being sent to Nairobi which isn't the safest place in the world, and I had absolutely no access to cash, not even enough to get a cab to the Zian embassy when I got to Nairobi. This next bit is the worst part I think: I desperately explained the situation to the immigration officer, literally telling her that people regularly die wandering the streets of Nairobi at night, and she said "not my problem, is it?". That was cold. My stomach sank with the lack of empathy. I was basically begging to go back to Z instead of Nairobi. I was pretty scared to go to Nairobi without any money or access to any money.
There was this guy in the cell with me (there were 7 of us) who clearly sensed my fear/desperation. He was a Libyan guy who seemed to know the immigration laws very well. He was there declaring amnesty, and had been detained for almost 48hrs. He overheard the conversation, and mentioned that his understanding was that the law said that I could go to my home country if there was a flight before the next flight back to my destination port, and I paid my way myself. ... So, I called my parents, and got my dads credit card info, bought the last ticket of the day into Z, all on the secretary's cell, and so they let me come to Z....
 
So, anyway, that's it. I ended up being detained just under 12 hours. I think the worst thing from their end is that they didn't actually ever tell me what my options were under the law. I apparently had the legal right to go back to Z, and despite my desperation and begging to not go to Nairobi, it took some random stranger to tell me that I had the legal right to be sent to my home country. I think it was pretty unreasonable of the officer to just assume that I wouldn't be able to figure out a way to get a flight home. I don't think that was particularly fair treatment.
All in all, not a great travel experience. 2/10 (max) - would not recommend and would not do again.

Linkage

Fight! Fight! Jonathan Portes describes Krugman versus the European Commission.
Dani Rodrik, always worth reading, attacks political economy. I am pretty sympathetic, but will register a quibble. The -- commonly made -- argument that "endogenizing politicians' behaviour leaves analysts with no policy recommendations to make" has some force, but can be overplayed. The material and electoral interests that politicians face are real, and even quite idealistic politicians will be helped by being made aware of them.

An urgent appeal

We interrupt our normal programming to bring you this vital message.

https://www.change.org/en-GB/petitions/skype-bring-back-the-original-skype-bear-emoticon

Please, for all our sakes, sign up now.

Leominster 1872

http://www.visionofbritain.org.uk/descriptions/entry_page.jsp?text_id=740110

LEOMINSTER popularly LEMSTER, a town, a parish, a sub-district, and a district in Herefordshire. The town stands in a fertile valley, on the river Lug, at the influx of two of its tributaries, and at the commencement of the Leominster canal, adjacent to the Shrewsbury and Hereford railway, at the junction of the Leominster and Kington railway, 13 miles N of Hereford. ...
The monastery was afterwards rebuilt as a college or priory; became a cell to Shaston and Reading abbeys; was notable for the preaching of the crusade in it, in 1187, by Baldwin and Giraldus;....

The town hall was built in 1856, at a cost of £3,000; is in the Italian style, 156 feet long and 48 feet wide; has, over the centre, a lofty cupola and clock-turret; and contains a council-chamber, 45 feet long and 30 feet wide.... The butter-cross stood on the site of the new market-house; was built in 1633, by John Abel, "the king's carpenter;" was a curious and beautiful example of Tudor timber-work, with 12 carved oak pillars, arches, shields, and varions carved devices; was taken down in 1855, to give effect to the town hall, and to afford space for the new market-house; and has been re-erected on a large open space, called the Grange.

The churchyard contains some interesting ancient monuments, and one to Mrs. Siddons and Mr. Kemble. ...

There are chapels for Baptists, Quakers, Moravians, Wesleyans, Primitive Methodists, Plymouth Brethren, and Unitarians. ...

Marriages in 1863, 90; births, 442, of which 37 were illegitimate; deaths, 309, of which 89 were at ages under 5 years, ....

The schools were 18 public day schools, with 1,171 scholars; 20 private day schools, with 384 s.; and 18 Sunday schools, with 1,043 s.

Linkage

I made an analogy between online education and film. Alex Tabarrok uses the analogy with recorded music. Andrew Gelman and Bryan Caplan jump in.
Pictures of Syria, before and after. "[T]he greatest that in any form of government can possibly happen to the people in general is scarce sensible, in respect of the miseries and horrible calamities that accompany a civil war..."

Meanwhile, in China:

And as she sees me turn around, she forces me into a conversation about her relationship to my great-aunt. Do you know? Your great-aunt was my class-mate, we got along greatly. When you two were class-mates, I wasn’t even born! That’s what I think, but on the surface, I can only bite the bullet, and at the risk of my ears breeding a silkworm, I have to let her finish....

Leigh Caldwell

Leigh Caldwell is coming by next Friday to look at the lab and say hi. He is a pricing adviser with an interest in behavioral economics and a blog here.

Is the search for exogeneity pointless in complex systems?

This idea came up in a response to a reviewer.

One of my hypotheses is that a psychological trait, honesty, may affect certain social or economic outcomes. The reviewer raised the legitimate point that other unobserved personality traits, correlated with honesty, could be the real causal factor. This is undeniable. We don’t know enough about human personality to control for everything that can affect a person’s social relationships.

The normal economist’s response would be to seek a source of random variation that affected honesty but nothing else: for example, an exogenous instrumental variable; or a natural experiment; or a real experiment. For example, if you want to see if economic growth makes war less likely in poor countries, but you are worried about reverse causality or unobserved confounds, then you may argue that weather is random, affectseconomic growth and does not affect war except via economic growth.

For psychological variables, though, this just seems impossible. Even if you could run an experimental treatment to change someone’s level of honesty (maybe an extra hour of Sunday school?), how could you guarantee that this would not change other aspects of their personality too? In fact, that would be extremely unlikely. A person’s character is a complex and interconnected whole. There seems no way to rule out unobserved heterogeneity – short of major neurosurgery, perhaps.

So it seems that if we want to investigate human psychology, we are stuck with finding the major dimensions of personality variation (such as the “Big Five”) via various forms of dimensionality reduction, and then controlling for them.

It seems as if this argument should also apply to other areas of science which study complex systems not subject to precise manipulation – say, ecology or climate science. What can we do about that?

Linkage

Orgtheory.net on combinatoric social science.
Health care price gouging in America (via interfluidity.com).
Andrew Gelman on academic versus political talk.
All published estimates are biased upwards.

Thomas Mann also knew about Jena's weather

... und schlechtes Wetter war über Jena, seit Wochen, seit Wochen, das war richtig, ein miserables und hassenswertes Wetter, das man in allen Nerven spürte, wüst, finster und kalt...
-- Schwere Stunde

Guaranteed entertainment

New paper from Christian Grose, Neil Malhotra and Robert van Houweling:

"It employed a within-subjects design in which the subjects of the experiment, U.S. senators, received one letter from a constituent taking a position in favor of immigration reform; and a second letter from a different constituent opposing immigration reform. By comparing how senators responded to these two letters we can identify the frequency with which they tailor their messages to constituents with differing views on this issue, as well as the form their targeted explanations take...."

How fast do institutional changes take effect?

Today I saw a presentation of a field experiment evaluating different ways to deliver aid. One was the standard method which had been used until that point. The other two “treatments” were new. The evaluation was over the course of a year. (There were lots of pictures of smiling villagers... lab guys don't have those.)

How long do we have to wait before new institutions settle down and we can evaluate them “in equilibrium” – meaning, not any rigorous game-theoretic concept, but just that people have somehow got used to them, and that all the changes have worked through the system? In this case I felt that a year was too little. Aid recipients are unlikely to be naïve about the fact that new institutions are being tried and evaluated, and they may therefore behave in a special way in the first season of a change.

I worry in general that social scientific evaluation is too short-termist, and that the tools of statistical analysis can encourage this. For major institutional changes, there is a good case that the smallest possible “independent” unit of observation is a generation. Until people have grown up under a new system, we are not sure that its full effects have been worked out.

In this context, advanced statistical analysis can actually be a step backward. For example, consider this paper which estimates the effect of democracy on GDP – a traditional hobby for political scientists. Now as everyone in the field knows, just looking at democracies versus dictatorships and comparing averages will not be informative, because these countries differ in many many other ways. So instead the paper looks at the few years before and after a change from dictatorship to democracy, and estimates the switchover effect from that. But this is crazy, because such massive changes to social institutions are not remotely likely to have all their effects within a few years. After all, many political decisions have ramifications that span decades – think of the choice to create the NHS, or Lloyd George's introduction of old age pensions, or Nixon's visit to China. Evaluating political institutions after seven years is like evaluating a new fitness regime after a week.

I can think of several cases where my previous beliefs were probably based on too short a run of evidence. For example, I assumed that privatization of e.g. water utilities was a good thing, because the privatized utilities performed better than public counterparts elsewhere. But a lot is going to depend on the first generation of entrepreneurs who take over, and these may not be the same as the second or third generation of entrepreneurs who inherit the system. In the 1950s, nationalization must have seemed as obvious as privatization did in the 1990s. I am not saying that privatization was a mistake – I still support it – but I am less confident of the evidence base.

My colleagues seem to be making a similar mistake about the effect of the Research Assessment Exercise (now the Research Excellence Framework) for UK academia. Everyone I know who was around in the 80s, when this came in, says that it swiftly forced a lot of unproductive, “dead wood” academics to either shape up or leave the system. So they are basically positive about it. (Well, Essex political scientists would be, wouldn't they?)

The question is whether it is still having the same effect now. When a new institution is imposed, there are two kinds of adjustment: people adjust to the institution; and the institution is adjusted to the people. After all, nobody wants to live under permanent revolution, so initially harsh conditions are gradually softened, informal routines grow up that may subvert the official rules, et cetera.

In this context it is pretty alarming to consider the Conservatives' and then New Labour's regime of targets for the NHS (known by some as “targets and terror”). Again, I have heard people in the industry talk about the salutary initial effects of having managers asking “why isn't this bed being used”? But now look where targets and terror have got us.

If this argument is right, we will often be unable to evaluate institutional changes rigorously until long after the fact – even if we are doing randomized controlled trials, which is often impossible. So, how can we decide what changes to make in the here and now? Two things might help.

First, a historical perspective won't tell us what will happen, but will at least give us a sense of what can happen. Without history we are doomed to parochialism. As Churchill said, "Study history, study history. In history lies all the secrets of statecraft."

Second, a sense of principle might often be a good guide. Actually, another Churchill quote is relevant: "In life the only wise course is to follow the course of duty and not of interest. Every man knows what his duty is. But it is not given to many to know their true interest." To apply this to academia: we may not know, now or ever, the true efficiency effects of such-and-such a government evaluation framework, or of the practice in an increasing number of European universities of – no joke – paying bonuses for top journal publications. But every researcher should feel that the search for truth is sacred, that it requires rigorous and demanding standards of honesty in the muddy waters of empirical analysis, and, therefore, that attempts to import monetary incentives, or impose pressure to publish, should be met with great suspicion.

A couple from bookslut:
A bit of an awkward read, this, about the Potato Famine. Not our finest hour.
"... and will pardon Paul Claudel / Pardon him for writing well."

Linkage

"... and will pardon Paul Claudel / Pardon him for writing well."

Linkage

"... and will pardon Paul Claudel / Pardon him for writing well."