Saturday, June 01, 2013


House price dynamics with dispersed information 

Giovanni Favara & Zheng (Michael) Song
Journal of Economic Theory, forthcoming

Abstract: We use a user-cost model to study how dispersed information affects the equilibrium house price. In the model, agents are disparately informed about local economic conditions, consume housing services, and speculate on price changes. Optimists, who expect high house price growth, buy in anticipation of capital gains; pessimists, who expect capital losses, prefer to rent. Because of short-selling constraints on housing, pessimistic expectations are not incorporated in the price of owned houses and the equilibrium price is higher and more volatile relative to the benchmark case of common information. We present evidence supporting the modelʼs predictions in a panel of US cities.

Friday, May 31, 2013

Fight the Power!

I have a great colleague (just got tenure), Dr. Bahar Leventoğlu.

 It turns out she has been fighting a landmark court case in Turkey, for the legal right to keep and use her own name (her "maiden" name in patriarchal language) after getting married.

And she won! GoodONya, ma'am!

 (Some background and other details on the case here)

Thursday, May 30, 2013

Russ Roberts!

Tomorrow, at long last, Russ and I get to do that voodoo that we do, and record another EconTalk. The subject is a little different from what we have done in the past: Sports rules and equipment.

The claim is that there are three moving parts:  Equipment, formal rules, and informal rules.

If you try to change one thing, such as allowing an equipment change, you get a bunch of unintended and possibly bad consequences.

So, should fighting be allowed?  Well, in some sports ( chess, golf--unless you are Sergio Garcia--, tennis) fights are almost unknown.  In some sports (basketball, soccer, football), a fight means you are ejected.  But in some sports, particularly baseball and hockey, fighting is an important check on other kinds of violence.  In particular, I found this quote from Gordie Howe, one of the best hockey players ever: "If you get rid of fighting, you are going to get more of the dirty play. Let them fight, and get rid of all of the stickwork."   The point is, the threat of retaliation in the form of humiliation, rather than eye-for-an-eye physical damage, makes the game safer.

Of course, the "fighting" can be stylized.  Here is a baseball brawl from a game in South Korea.

This kind of fighting is of course well known in the animal world, in dominance displays:

On the other hand, it is possible for a baseball fight to be an actual fight.  Most famously, Ray Knight v. Eric Davis.  (Full disclosure:  I really, really hated Ray Knight, and thought Eric Davis was not treated fairly here.  The whole thing was that jerk Knight's fault.  Go Reds, Dutch Boy).

At the University of Chicago, it's no longer "sink or swim"

From 1954 til now, you had to be able to swim to graduate from the University of Chicago.

I am not making this up.

At Cornell, Dartmouth, Columbia, MIT and Notre Dame you still do.

Here's what UC alum Hassan Ali had to say about his experience:

"Entering college is intimidating enough, let alone getting half-naked in front of your peers and trying to prove your physical acumen,"

And here's what the great Christopher Zorn had to say about Mr. Ali's quote:

"For those of us who didn't attend U of C, that was known as the "good part" of college".

Proving that Public Choice is everywhere, the article did find someone in favor of this ridiculous policy:

Fred DeBruyn, aquatics director and assistant physical education director at Cornell, said the swim tests served a valuable purpose: preventing drowning.

Not to mention helping to fund Mr. DeBruyn!

Pow Wow Chow

They want the "Redskins" to lose their name, but Elizabeth Warren, who is not even Native American, can write (actually, plagiarize) a book called "Pow Wow Chow" and that's okay?

Some background, in an email from WH:

Elizabeth Warren, the queen of the notional proposition, wrote a book entitled Pow Wow Chow. 

It was much later pointed out that the book was plagiarized. Basically no one ever read the book and those that did read it at its face value [recipe book]. 

However, when Warren was running for the senate she made a big deal of being of native American ancestry. The claim of native American ancestry lead people to investigate the claim. The investigation spider webbed into all kinds of nooks and crannies once it was determined her claim was dubious and that she had parleyed her claim into obtaining crony type benefits over her career. 

The aggregate investigation by reporters and plain old regular folks lead to the uncovering of Pow Wow Chow as plagiarized. The plagiarizing is old news. But the Amazon book reviews are little known. Huh? Given the above, the book Pow Wow Chow is sold on Amazon. Over the years only a handful of reviews existed. Once the whole native American ancestry deal was exposed and the book having been plagiarized, people started visiting the book's site on Amazon and writing additional comments. Some of the "new" comments [note the proliferation in 2012] are absolutely hysterical! 

 I'm not so sure about the "plagiarism" thing.  After all, these are recipes.  Maybe she should have made a little more effort to change things up, but recipes are rarely original.

The title "Pow Wow Chow," on the other hand:  Wow! She can only get away with that because she's a real Native American.  Oh...wait.

New Codes....LOTS of New Codes

Instead of better policies, it is the nature of bureaucracies to seek ever more complex classification schemes and record-keeping protocols.

No surprise that that is where our medical "care" is going.

My question:  what if a turtle on buring water skis hits a lamppost?  Don't we need a way to distinguish those?

Wednesday, May 29, 2013

Third Party Scape-goating

Displacing Blame over the Ingroup's Harming of a Disadvantaged Group can Fuel Moral Outrage at a Third-Party Scapegoat 

 Zachary Rothschild et al. 
Journal of Experimental Social Psychology, forthcoming 

Abstract: Integrating research on intergroup emotions and scapegoating, we propose that moral outrage toward an outgroup perceived to be unjustly harming another outgroup can represent a motivated displacement of blame that reduces collective guilt over ingroup harm-doing. We tested this hypothesis by manipulating the purported cause of working-class Americans' suffering (ingroup cause vs. unknown cause vs. outgroup cause) and whether a potential scapegoat target (i.e., illegal immigrants) was portrayed as a viable or nonviable alternative source of this harm. Supporting hypotheses, participants primed with ingroup culpability for working-class harm (versus other sources) reported increased moral outrage and support for retributive action toward immigrants when immigrants were portrayed as a viable source of that harm, but reported increased collective guilt and support for reparative action when immigrants were portrayed as a nonviable source of that harm. Effects on retributive and reparative action were differentially mediated by moral outrage and collective guilt, respectively. 

Nod to Kevin Lewis

What Happens when you try to give away money?

Prof. Newmark provides a nice set of examples and varieties of rent-seeking.  Well linked, sir.

The video version of my own effort:

Tuesday, May 28, 2013

Markets in ....ick.

Markets in everything, f'real.  Taken from a car window by an aware reader.

How do know...collect it?

How to Close Gitmo

A solution:  How to close Gitmo

Nod to Angry Alex

Utterly Wrong-Headed

Morals and Markets  

Armin Falk & Nora Szech 
 Science, 10 May 2013, Pages 707-711

Abstract: The possibility that market interaction may erode moral values is a long-standing, but controversial, hypothesis in the social sciences, ethics, and philosophy. To date, empirical evidence on decay of moral values through market interaction has been scarce. We present controlled experimental evidence on how market interaction changes how human subjects value harm and damage done to third parties. In the experiment, subjects decide between either saving the life of a mouse or receiving money. We compare individual decisions to those made in a bilateral and a multilateral market. In both markets, the willingness to kill the mouse is substantially higher than in individual decisions. Furthermore, in the multilateral market, prices for life deteriorate tremendously. In contrast, for morally neutral consumption choices, differences between institutions are small.

Even by the low and folksy standards of "Science," this is pretty lame.  Calling it a "market" simply means that responsibility is more widely shared.  Surely any collective body with large numbers would see the same result.  It's just the banality of evil problem, rediscovered and given the ideological twist that "Science" loves to give.  

Monday, May 27, 2013

Monday's Child is Full of Links

1.  If you want your wallet / purse returned, stock it with sweet baby pix...

2.  The only way to not to play.

3.  Carbon-free sugar?  That's nice.  Wait...what?

4.  "We were trying to give away huge suitcases of free money, but we ran out."  The Administration is trying to blame "cost overruns," when the problem is that Obamacare is incoherent and unsustainable.  The "risk pools" cannot possibly pay for all the people with pre-existing conditions, which is precisely why they didn't have insurance in the first place.  But when insurance companies couldn't insure them, the regime blamed greed.  Now that the government can't insure them either, the regime is trying to blame unexpected cost overruns.  Nice.

5.  Interesting.  Our leftist brethren are upset about the requirement that folks must have an ID to vote.  But they don't seem to have thought enough about the problem of ACA requiring that everyone has a bank account.  For the "unbankable," this is quite a hardship!

6.  Another reason to admire Elon Musk, of Tesla.

7.  We are captives of the federal prison-industrial complex. "A labor union representing 12,000 federal officers who issue immigration documents will join forces...with the union representing deportation agents to publicly oppose a bill overhauling the immigration system that is making its way through the Senate, arguing that the legislation would weaken public safety." 

8.  "An oversight by Congress two decades ago led to the inclusion of models in the H-1B class."  I don't see why this is a problem.  Women who are physically freakish enough to be models should ALL be given green cards, immediately.

9.  Four people (including the LMM) sent me this Dilbert cartoon about clueless PhDs.  I'm sure it's a good thing.

10.  The Whimsy-conomy in energy...

11.  The EXTRA-ordinary business of life...

12.  Interesting.  Even the French think that French movies suck.  Or so it seems.

13.  You won't find THIS on  Hard to tell if it's simply satire, or satirically true.

14.  Earnest young man with guitar case far more likely to score the digits from young ladies.  Which may explain this, as a response from other men.

15.  Council members abstain from vote on abstention...

16.  Young Obamawalker...nevah underestimate the POWAH...of the demand side!

From my favorite "Headline Meme":

1.  "Pregnant woman dies, gives birth, comes back to life"

2.  "Lake seniors drew penises on cars, disciplined." (UPDATE:  this was the original headline.  Someone thought better of it...)

3.  Police:  "Thong Cape Scooter Man" Not Breaking Law

Sunday, May 26, 2013

Movies of Summer

The LMM and I see a lot of movies.  Thought that we would make highly idiosyncratic judgments of eight movies we have seen that are still in theaters.

42:  M:  Very good.  Solid baseball movie, good acting, actually allows Branch Rickey to be greedy, the real reason he wanted to break the color line.  All that was necessary for desegregation was for people to be optimally self-interested, instead of bent on hurting others.  LMM:  Very good, story works on several levels, relationship between JR and wife was plausible and involving.

Great Gatsby:  M:  Appalling.  As bad a movie as I have ever seen.  LMM:  Bad, but how bad can it be with Leo de Cap?  Would leave M in a minute if LdC invited her to a party, or anything else.

Iron Man 3:  M:  Very good.  Very very good, in fact.  LMM:  Ditto, very good.

Life of PI:  M:  Very good.  Visually stunning.  Story is bizarre, of course, but you have to pay attention.  LMM:  Okay, but not great.  Hard to follow.

Mud:  M:  Very good.  Quirky unexpected violence in an almost "Sling Blade" vein.  LMM:  Ditto, very good.  UPDATE:  LMM gives it more of a "meh."

Oblivion:  M:  Very good.  The premise is complex, but the way it is filmed works.  LMM:  Appalling.  Very confusing, terrible.  Would leave M in a minute, however, if Tom Cruise called on the communicator.

Sapphires:  M:  Very good.  Not sure if the "great white man saves black folks" genre really needs another entry, but this one is well done.  And the connection with Viet Nam, and having the "black folks" be Australian was all very interesting.  The scene with black aboriginals sitting around a fire in the outback watching news of MLK's murder was arresting.  And the songs and the ladies are cute.  LMM:  Ditto, very good, good performances.

Star Trek:  Into Darkness.  M:  Very good .  Several parts are too long, and the implausibilities (Kirk needs to talk to Scotty, but he fired Scotty.  So Kirk calls Scotty on his cell phone device....from another star system....without any delays in communication.  And etc.)  LMM:  Would leave M in a minute if Chris Pine called her on HIS cell phone device.

Only the Lonely

Social Isolation in America: An Artifact 

Anthony Paik & Kenneth Sanchagrin 
American Sociological Review, forthcoming 

Abstract: This article examines whether existing estimates of network size and social isolation, drawn from egocentric name generators across several representative samples, suffer from systematic biases linked to interviewers. Using several analytic approaches, we find that estimates of network size found in the 2004 and 2010 General Social Surveys (GSS), as well as other representative samples, were affected by significant interviewer effects. Across these surveys, we find a negative correlation between interviewer effects and mean network size. In the 2004 GSS, levels of social connectivity are strongly linked to interviewer-level variation and reflect the fact that some interviewers obtained highly improbable levels of social isolation. In the 2010 GSS, we observe larger interviewer effects in two versions of the questionnaire in which training and fatigue effects among interviewers were more likely. Results support the argument that many estimates of social connectivity are biased by interviewer effects. Some interviewers’ failure to elicit network data makes inferences, such as the argument that networks have become smaller, an artifact. Overall, this study highlights the importance of interviewer effects for network data collection and raises questions about other survey items with similar issues

Social isolation, loneliness, and all-cause mortality in older men and women 
Andrew Steptoe et al. 
Proceedings of the National Academy of Sciences, 9 April 2013, Pages 5797-5801 

Abstract: Both social isolation and loneliness are associated with increased mortality, but it is uncertain whether their effects are independent or whether loneliness represents the emotional pathway through which social isolation impairs health. We therefore assessed the extent to which the association between social isolation and mortality is mediated by loneliness. We assessed social isolation in terms of contact with family and friends and participation in civic organizations in 6,500 men and women aged 52 and older who took part in the English Longitudinal Study of Ageing in 2004–2005. A standard questionnaire measure of loneliness was administered also. We monitored all-cause mortality up to March 2012 (mean follow-up 7.25 y) and analyzed results using Cox proportional hazards regression. We found that mortality was higher among more socially isolated and more lonely participants. However, after adjusting statistically for demographic factors and baseline health, social isolation remained significantly associated with mortality (hazard ratio 1.26, 95% confidence interval, 1.08–1.48 for the top quintile of isolation), but loneliness did not (hazard ratio 0.92, 95% confidence interval, 0.78–1.09). The association of social isolation with mortality was unchanged when loneliness was included in the model. Both social isolation and loneliness were associated with increased mortality. However, the effect of loneliness was not independent of demographic characteristics or health problems and did not contribute to the risk associated with social isolation. Although both isolation and loneliness impair quality of life and well-being, efforts to reduce isolation are likely to be more relevant to mortality.