Arrived in my pile

Tuesday assorted links

How to fix restrictions on building

http://feedproxy.google.com/~r/marginalrevolution/feed/~3/cXtV7KfHEcQ/how-to-fix-restrictions-on-building.html

http://marginalrevolution.com/?p=67377

Stephen Smith, a well-known urban blogger, writes in the comments to Interfluidity:

Finally, I think you’re not giving us enough credit for thinking through the political challenges to urban land use deregulation. I’m well aware of the entrenched interests opposing it, and the most promising solution I’ve seen is to shift the level of governance upwards. Washington and Oregon have much stronger state-level planning laws than California, and permit about twice as much housing as a result, with much lower urban housing prices. Ontario also has strong provincial planning, and Toronto has a torrential housing stock growth rate and very low housing prices compared to similar US cities. And in Japan, the central government has a huge hand in land use regulation and localities are relatively powerless, and Japan is literally the market urbanist promised land, which a mind-blowing housing stock growth rate in Tokyo, to the point where their private railroads are profitable and one is able to undertake an incredible capital expansion project, practically without subsidies.

The pointer is from Reihan.  And here is a story from my own northern Virginia: “The century-old congregation decided to sell its building, parking lot and grounds to the Arlington Partnership for Affordable Housing, which will tear down the stone structure and replace it with 173 affordable apartments.”  Bravo.

The Top Ten MR Posts of 2015

http://feedproxy.google.com/~r/marginalrevolution/feed/~3/UaFd_r1z-uY/top-mr-posts-of-2015.html

http://marginalrevolution.com/?p=67315

Here are the top ten MR posts from 2015, mostly as measured by page views. The number one viewed post was:

  1. Apple Should Buy a University. People really like to talk about Apple and this post was picked up all over the web, most notably at Reddit where it received over 2500 comments.

Next most highly viewed were my post(s) on the California water shortage.

2. The Economics of California’s Water Shortage followed closely 4) by The Misallocation of Water.

3. Our guest blogger Ramez Naam earned the number 3 spot with his excellent post on Crispr, Genetically Engineering Humans Isn’t So Scary.

5. My post explaining why Martin Shkreli was able to jack up the price of Daraprim and how this argued in favor of drug reciprocity was timely and got attention: Daraprim Generic Drug Regulation and Pharmaceutical Price-Jacking

6. What was Gary Becker’s Biggest Mistake? generated lots of views and discussion.

7. Tyler’s post Bully for Ben Carson provided plenty of fodder for argument.

8. The Effect of Police Body Cameras–they work and should be mandatory.

9. Do workers benefit when laws require that employers provide them with benefits? I discussed the economics in The Happy Meal Fallacy.

10. Finally, Tyler discussed What Economic Theories are Especially Misunderstood.

Posts on immigration tend to get the most comments. The Case for Getting Rid of Borders generated over 700 comments here and over 1700 comments and 57 thousand likes at The Atlantic where the longer article appeared.

Other highly viewed posts included two questions, Is it Worse if foreigners kill us? from Tyler and Should we Care if the Human Race Goes Extinct? from myself.

The Ferguson Kleptocracy and Tyler’s posts, Greece and Syriza lost the public relations battle and a Simple Primer for Understanding China’s downturn (see also Tyler’s excellent video on this topic) were also highly viewed.

I would also point to Tyler’s best of lists as worthy of review including Best Fiction of 2015, Best Non-Fiction of 2015 and Best Movies of 2015. You can also see Tyler’s book recommendations from previous years here.

What caught my attention in 2015

http://feedproxy.google.com/~r/marginalrevolution/feed/~3/bUDAaLkgptY/what-caught-my-attention-in-2015.html

http://marginalrevolution.com/?p=67361

This was the year when it became clear that much of Eastern Europe probably won’t end up as free societies.  It’s not just semi-fascism in Hungary.  Poland and Slovakia, arguably the two most successful economies and societies in Eastern Europe, took big steps backward toward illiberal governance.  How can one be optimistic about the Balkans?  I imagine a future where African and North African refugees are bottled up there, and Balkan politics becomes slowly worse.  As for Ukraine, a mix of Russia and an “own goal” has made the place ungovernable.  Where is the bright spot in this part of the world?

Nothing good happened in China’s economy, although more fingers have been inserted into more dikes.  I am not hopeful on the cyclical side, though longer term I remain optimistic, due to their investments in human capital and the growing importance of scale.

I have grown accustomed to the idea that Asian mega-cities represent the future of the world — have you?

Syria won’t recover.

This was the year of the rise of Ted Cruz.

It was an awful year for movies, decent but unpredictable for books.  The idea that Facebook and social media rob the rest of our culture of its centrality, or its ability to find traction, is the default status quo.  Not even that idea has gained much traction.  Cable TV started to receive its financial comeuppance.  Yet on the aesthetic side, television is at an all-time peak, with lots of experimentation and independent content provision, all for the better.  I suspect this is one reason why movies are worse, namely brain drain, but I am hoping for longer-run elasticities of adjustment into the broader talent pool.

Against all odds, Homeland was excellent in its fifth season.

I became even more afraid to move my cursor around a web page, and in terms of content, more MSM sites became worse than better.  Banning photos would solve twenty percent of this problem.

Stephen Curry and Magnus Carlsen were the two (public) individuals I thought about the most and followed the most closely.  Each has a unique talent which no one had come close to before.  For Curry it is three point shooting at great range and with little warning; for Carlsen it is a deep understanding of the endgame as the true tactical phase of chess, and how to use the middlegame as prep to get there.  It wasn’t long ago Curry’s weapons were “trick” shots, perhaps suitable for the Harlem Globetrotters; similarly, players such as Aronian thought Carlsen’s “grind ’em down” style could not succeed at a top five level.  Everyone was wrong.

But here’s what I am wondering.  Standard theory claims that with a thicker market, the #2 talents, or for that matter the #5s, will move ever closer to the #1s.  That is not what we are seeing in basketball or chess.  So what feature of the problem is the standard model missing?  And how general is this phenomenon of a truly special #1 who breaks some of the old rules?  Does Mark Zuckerberg count too?

I realized Western China is the best part of the world to visit right now.  The food trends where I live were Filipino and Yemeni, which I found welcome.  Virginia now has a Uighur restaurant in Crystal City, and the aging San Antonio Spurs continue to defy all expectations.  Kobe Bryant, who “ranks among the league’s top 5 percent of shot-takers and its bottom 5 percent of shot-makers,” has redefined the retirement announcement, among other things.

Top curling teams say they won’t use high-tech brooms.  Just wait.

AnandCarlsen

What happens if you expand higher education?

http://feedproxy.google.com/~r/marginalrevolution/feed/~3/yNSG2bsOYqI/what-if-you-expand-higher-education.html

http://marginalrevolution.com/?p=67385

This is based on Italian data from the 1960s:

However, I also find that those induced to enroll earned no more than students in earlier cohorts who were denied access to university. I reconcile these surprising results by showing that the education expansion reduced returns to skill and lowered university learning through congestion and peer effects. I also demonstrate that apparently inframarginal students were significantly affected: the most able of them abandoned STEM majors rather than accept lower returns and lower human capital.

Uh-oh.  The good news, however, is that the children of these individuals seem to have ended up in higher-paying jobs.

That is from Nicola Bianchi (pdf), he is now at Northwestern.  For the pointer I thank Robin Gaster.

Monday assorted links

http://feedproxy.google.com/~r/marginalrevolution/feed/~3/Ko81SdwXkws/monday-assorted-links-38.html

http://marginalrevolution.com/?p=67375

1. “…the only guilded butler in North America…”  “In Canada, graduating butlers fresh from school can expect annual wages in the $50,000 to $60,000 range, climbing to $75,000 within five years. After 10 years, according to Mr. MacPherson, butlers can look forward to six-figure salaries.”  Finally: ““If you think you love people, but you’re not sure you love people, it’s not the profession for you.””

2. WTF?

3. A good review of Carol.  And Valentina’s in Austin is an A+, get the brisket taco, smoked corn, and beans.

4. What makes an academic paper useful for health care policy?

5. Sidney Mintz has passed awayEllsworth Kelly and Meadowlark Lemon, too.  The latter two are NYT links.

6. Seymour Hersh’s speculative piece on Syria, Turkey, Russia, etc.  Not a pretty picture.

How much does assortative mating matter for income inequality?

http://feedproxy.google.com/~r/marginalrevolution/feed/~3/vxwSryaaopo/how-much-does-assortative-mating-matter-for-income-inequality.html

http://marginalrevolution.com/?p=67388

The astute Kurt Mitman noted that Greenwood, et.al. issued a later corrective (pdf) to their earlier 2014 AER piece (ungated here), and therefore their estimates in that piece (which I very recently cited) contain no real information.  I apologize for having cited the piece, as I was not aware of the later correction.

It would be incorrect to conclude, however, that assortative mating has no connection to income inequality.  Some of the other evidence for that connection is cited in my piece, but more specifically Greenwood et. al. have since revised their own revision (pdf), and produced a more integrated model.  A gated version of this piece was just published in American Economic Journal: Macroeconomics this last week.

In the integrated model, the focus is on family and labor supply decisions more generally.  For instance, let’s say a couple keeps its income up by not divorcing: is that “no divorce” or rather “assortative mating” which is contributing to income inequality?  After all, high income, high education, well-paired couples do divorce a lot less, so that may be a semantic distinction from a causal point of view.  The authors suggest that their integrated family model explains about a third of the rise in income inequality from 1960-2005 (see for instance p.46, with a summary of their overall approach and results starting on p.47), and assortative mating is very much a part of their bigger-picture story.

Do Tinder and related services increase assortative mating?

http://feedproxy.google.com/~r/marginalrevolution/feed/~3/UZwD-YwO-Qw/does-tinder-raise-or-lower-assortative-mating.html

http://marginalrevolution.com/?p=67371

Under one model, Tinder teaches you the joys of tussling with those from “the other side of the tracks,” and pulls you away from marrying a fellow Ph.d. — “once you’ve tried Mack, you’ll never go back.”

My intuition differs.  You use Tinder in bars, venues, and neighborhoods you have chosen.  So you end up tussling with, or mating with, or just chatting with, the more attractive members of your own preferred socioeconomic group.  If your group wasn’t on average so sexy to begin with, well at least at the top end it just got a big upgrade in terms of your actual access to attractiveness.  So on net the high socioeconomic groups become sexier, at least for those “at the top” with the most choice.

(I am assuming by the way that male photos can to some extent signal status, income, and education, and not just looks; furthermore the male follow-up can demonstrate this readily.  And many “connection” services post this information in one form or another as part of the profile.  If need be, in general equilibrium bars can adjust their exclusiveness levels to match better to a world-with-Tinder, so that bar patrons are not lured into socioeconomically mistaken “honey pot” marriages.)

Most of all, Tinder gets you out more.  You sample more people, even if you don’t end up meeting them through the Tinder app itself.  Going to a bar or public space is a better way to spend time than before, and that draws others out too.  That’s right, “thick market externalities.”  The resulting extra meetings  tend to favor assortative mating, just compare such plenitude to a corner solution where you meet only one potential spouse your entire life, namely the proverbial girl next door.

Put it this way: George Clooney or a Silicon Valley billionaire can do better — especially better, compared to others — choosing from 500 people than from five.  He (she) has a very good chance of getting his (her) absolute top favorite pick, or close to it.  The local milkman also does better from a larger sample size, if only because of match and compatibility issues, but can’t expect to move up so much and of course the pool as a whole can’t “move up” at all.  (If you wish, break this down into a positive-sum compatibility component and a competitive zero-sum component; unlike Clooney the milkman may not gain on the latter.)

Finally, Tinder may make it easier for married people to find casual sex, again if they have the right qualifications.  Therefore those marrieds may, earlier on, decide to choose a spouse on the grounds of IQ and education, again boosting assortative mating in terms of those features.

In sum, I expect Tinder to boost assortative mating, at least at the top end of the distribution in terms of IQ and education.

And please note, I suspect this increase in assortative mating is a good thing.  The abilities of top achievers have a disproportionate impact on the quality of our lives, due to innovation being a public good.

In any case, file under speculative.

match

Addendum: An interesting twist on the model is to assume that men have some willingness to marry down in terms of education, in return for beauty or other forms of household production, but women do not.  An increase in the total sampling of potential partners therefore boosts the marriage prospects of very beautiful women, at the expense of less beautiful women of a given level of educational attainment.  In percentage terms, very beautiful women of decent but not extraordinary educational achievement gain the most.  Men who are indifferent to such forms of female beauty end up with the smartest children.

Second addendum: Yesterday brought an ongoing twitter exchange on these issues, you might start with tweets by @ninjaeconomics and @modestproposal.