You might be an economist if you ....

... you adamently refuse to sell your children ....


... because you think they might be worth more later.

Some interesting trade-offs in breeding decisions

Lowly females choose mediocre mates BBC:

"The main reason, we think, could be that the two individuals just accept each other faster - they just go for it.

"The really amazing thing is that the females are able to recognise what 'category' they are in. We'd like to investigate further to find out how they do this."

Joseph Tobias ... said the findings were interesting.

"While [this] doesn't overturn evolutionary thinking, it does reveal some interesting trade-offs in breeding decisions," he said.

"It also raises the intriguing possibility that the environment in which individuals are reared strongly influences their mating preferences as adults."

The study by Marie-Jeanne Holveck and Katharina Riebel is published here.

Isn't this confirmation of assortative mating? Why chase someone you are unlikely to attract?

New workers co-op formed

Strippers take off over:

When dancers at San Francisco's Lusty Lady turned the exotic club into an egalitarian co-op, they found it tough to reconcile their lofty ideals with the aesthetic realities of the sex trade.

One of the first things the dancers did was to toss out rules about maintaining the same body type as the day they were hired, and ones regarding height-weight proportion. A list of acceptable hair colors was scrapped, along with a policy regulating the quantity and location of tattoos.

Now, larger dancers and those who might not be stereotypically "pretty" are welcome on the Lusty stage, but this emphasis on inclusion has brought difficulties for the 60 or so dancer-owners.
...
But the theater's mission statement, which seeks to break down hierarchy, made the creation and enforcement of managerial policies difficult.

"It's hard, because we'd elect people to enforce our performance standards, but we hadn't yet decided on what those are," said former dancer Lili Marlene, who was involved in the transition. "Hygiene rules are easier."

Dancers learned how to take disciplinary action against each other via new policies such as peer-based performance reviews. Each week performers evaluate their onstage colleagues, considering general appearances, customer interaction, and levels of eye contact.

The first years of self-governance were the most difficult.

"On a good day, it's like Peter Pan," said Lili Marlene. "On a bad day, it was like Lord of the Flies. We can do whatever we want, and there's nobody to tell us what to do."

My favorite sentence of the day

Tyler Cowen on the hypothesis that there was no market for hot Russian women during Soviet days:

Admittedly much more research needs to be done on this question.

Before?



After the fall?



Anne Applebaum started the debate in Slate

To put it bluntly, in the Soviet Union there was no market for female beauty.

Matt Yglesias reacts

Most likely, the change Applebaum is trying to explain is just something that hasn't actually changed. Instead, part of the Cold War dynamic was that most of the Russians a Westerner might see or interact with were government officials, who tended to be middle aged men rather than attractive young women.

Cowen says,

Countries don't develop networks of beautiful women overnight. Furthermore, once you get past the point of malnutrition, beauty is not related to per capita income in any simple way.

Free Exchange says,

I agree that improved access to the means of aesthetic enhancement will generally lead to enhanced aesthetics, but I'd like to think I'd notice a towering Siberian goddess with or without spike-heeled boots and a layer of L'Oreal.

Locally, the Sharjah municipality is doing what it can to level the playing field. Read it here in the Khaleej Times - ‘Breast-enhancing creams’ racket busted. Yes, you read it right. "Busted."

That would be my favorite headline for some time.

The Economy Makes Us Fat

That headline is the one Newsweek uses, and it's the subtitle of a new book. But actually that's not accurate. Unless we're being force fed, overeatting is a choice. The question is, why are we overeatting? From the article:

Is a fatter population an inevitable consequence of an advanced economy? Health economist Eric Finkelstein, co-author of the new book "The Fattening of America" (John Wiley), thinks so. Thanks to economic advances, he argues, we spend more time on our butts—at the computer, in front of the TV, in the car—than our parents and grandparents did, and we spend less time in the kitchen making healthful meals or outdoors burning calories. And everywhere we go we're tempted by a growing array of cheap, high-calorie, fat- and sugar-laden treats. The result: nearly two-thirds of American adults now qualify as overweight or obese. [A similar proportion of the poor Americans are also obese.]

From the interview it's clear Finkelstein and I agree individuals are responsible for their own obesity, not the economy:

Worse choices?
Not from an economist's perspective. We're fatter, but that does not mean that we are worse off. We could do without the low-cost food or the new technology, but most Americans would prefer not to. The reason is that the costs of being thin, in terms of what they would have to forgo, have just gotten so high that people are saying "I'd rather be fat" than make the increasingly difficult sacrifices necessary to be thin.

What about the costs to our health of carrying around a lot of extra weight?
Our research suggests that, even with this knowledge, many people will still choose to be overweight. We found that overweight individuals are aware that their excess weight makes them more likely to get diabetes, cancer, and heart disease.
...
Employers could adapt some of those ideas to combating obesity in the workplace.
Employers should use the types of strategies that are profit-maximizing. After all, that is what most [companies] are in business to do. I would subsidize healthy food in the cafeteria, maybe even have a fitness center. It's a nice perk and a great way to attract young, healthy workers.

But you don't think implementing weight-loss programs makes sense economically?
In order to be a cost-saving program, employees would have to lose enough weight, keep it off long enough and stay with the company long enough so that the reduction in health-related costs would be borne by the company. In reality, people change jobs every five years on average, so these programs are unlikely to pay off for most firms.

People do want to lose weight and that's why they're willing to pay for diet advice, or pills or procedures. Some economists are even hoping to make money with the economics diet.

And here is a Freakonomics post on the economics of obesity.

Eidonomics

There has been a fair bit of work in economics looking at the effect of Christmas on western economies created by the unevenness in purchasing. (I went looking a good summary, and - why should I be surprized? - finally found one by Tyler Cowen at Marginal Revolution.) The Hajj has similar features. One difference of course is with the Hajj all pilgrims are flying to and from the same place at the same time. During the Christmas holidays many people travel, but they're all going to grandma's (for example) -- not literally all the same place.

There are several stories in today's papers related to the strain Eid al-Adha, the Festival of Sacrifice in Islam, is putting on markets.

Spiralling prices of livestock likely to dampen Eid festivities
Sheep price hike hits middle class
Gas cylinder prices shoot up by almost 25%
Travellers scramble for air tickets
Residents forced to book eggs

Some things you just can not make up

Undercover Economist

John Nye and Charles Moul, two economists at Washington University in St Louis, have now checked some basic macroeconomic statistics using Benford’s Law. They find that OECD statistics fit the law quite well, suggesting that GDP data should follow Benford. But African GDP data do not fit. It is not possible to say whether the anomaly is due to fraud or underfunded statistical offices. But it is a reminder that some data should come with a health warning.

Another thing I learned from this post: Hal Varian is Google's chief economist.

Sweet!

As the increasing demand for ethanol drives up sugar prices a major tomato producer is checking out sweeter tomatoes.

The Wall Street Journal ($) reports:

With prices for corn syrup and other ketchup ingredients going up faster than Heinz can raise its own prices, the Pittsburgh-based condiment king is overhauling its breeding operations to help compensate. Heinz is developing sweeter tomatoes that could cut down on its need for corn syrup, as well as varieties that resist disease, stay fresh longer and produce a thicker consistency. "The new seed work is all about creating the perfect tomato," says Mr. Ozminkowski, the company's manager of agriculture research.

The ethanol industry's consumption of corn is just one factor driving up its price. Rising global demand for meat is also boosting prices, since corn is a key ingredient of animal feed.
...
Heinz faces risks any time it changes the tomatoes in its ketchup, which could affect the balance of flavors customers are used to. ... Heinz officials say their ketchup undergoes rigorous testing before being introduced to the marketplace and that consumers won't be able to detect any difference as the company gradually uses sweeter tomatoes and less corn syrup in its ketchup.

Another example of insourcing.

What I'm reading

1. Globalization of labor. Is labor getting a smaller share of income and yet a larger income? Yes says the IMF.

2. Driving alone, in traffic. Putnam redux.

3. The Constant Economist. Rachel Friedberg, economist, takes a busman's holiday.

4. The Obesity Conjecture, by David Friedman, "an academic economist who teaches at a law school and has never taken a course for credit in either field." Excerpt:

Over time, although the hardwired elements of behavior do not change--evolution is slow--the cultural elements do. Instead of demonstrating how wealthy and generous you are by urging your guests to have a second and third helping of dinner, you do it by providing them smaller amounts of particularly tasty, sophisticated, or expensive dishes.

Let's talk about...

... a little less conversation.

At a crowded restaurant why is talk cheap? David Friedman wants to know.

I've wondered the same thing.

A little less conversation
Come on baby I'm tired of talking
Grab your coat and let's start walking
Come on, come on Come on, come on Come on, come on
Don't procrastinate, don't articulate

Economists refuse to stay within the lines: The causes of autism

Not long ago there was a car commercial showing a kindergarten classroom with the teacher saying "stay within the lines" as the children filled in their coloring sheets and staying within the lines. Except who was expressing his creativity and imagination. That was the truly productive one.

Economists - as much as they are accused of making accountants look alive by comparison - tend not to stay within the lines. Economics is an imperial social science and its practioners think they can apply its tools just about anywhere.

The latest example is found on the front page of Friday's Wall Street Journal ($ req.):

Prof. Waldman's willingness to hazard an opinion on a delicate matter of science reflects the growing ambition of economists -- and also their growing hubris, in the view of critics. Academic economists are increasingly venturing beyond their traditional stomping ground, a wanderlust that has produced some powerful results but also has raised concerns about whether they're sometimes going too far.

Ami Klin, director of the autism program at the Yale Child Study Center, says Prof. Waldman needlessly wounded families by advertising an unpublished paper that lacks support from clinical studies of actual children. "Whenever there is a fad in autism, what people unfortunately fail to see is how parents suffer," says Dr. Klin. "The moment you start to use economics to study the cause of autism, I think you've crossed a boundary."

Prof. Waldman, who thinks television restriction may have helped rescue his own son from autism, says many noneconomists don't understand the methods he used. His paper recommends that parents keep young children away from television until more rigorous studies can be done. "I've gotten a lot of nasty emails," he says. "But if people aren't following up on this, it's a crime."

Such debates are likely to grow as economists delve into issues in education, politics, history and even epidemiology. Prof. Waldman's use of precipitation illustrates one of the tools that has emboldened them: the instrumental variable, a statistical method that, by introducing some random or natural influence, helps economists sort out questions of cause and effect. Using the technique, they can create "natural experiments" that seek to approximate the rigor of randomized trials -- the traditional gold standard of medical research.
...
But as enthusiasm for the approach has grown, so too have questions. One concern: When economists use one variable as a proxy for another -- rainfall patterns instead of TV viewing, for example -- it's not always clear what the results actually measure. Also, the experiments on their own offer little insight into why one thing affects another.

"There's a saying that ignorance is bliss," says James Heckman, an economics professor at the University of Chicago who won a Nobel Prize in 2000 for his work on statistical methods. "I think that characterizes a lot of the enthusiasm for these instruments." Says MIT economist Jerry Hausman, "If your instruments aren't perfect, you could go seriously wrong."
...
In principle, the best way to figure out whether television triggers autism would be to do what medical researchers do: randomly select a group of susceptible babies at birth to refrain from television, then compare their autism rate to a similar control group that watched normal amounts of TV. If the abstaining group proved less likely to develop autism, that would point to TV as a culprit.

Economists usually have neither the money nor the access to children needed to perform that kind of experiment. More broadly, randomized trials seldom lend themselves to studying economic questions, particularly the more traditional ones. It would be unfair to randomly subject some people to a higher tax rate just to see how it affects their spending.

Instead, economists look for instruments -- natural forces or government policies that do the random selection for them.
...
Prof. Waldman and his colleagues had such studies in mind when they approached autism and TV. By putting together weather data and government time-use studies, they found that children tended to spend more time in front of the television when it rained or snowed. Precipitation became the group's instrumental variable, because it randomly selected some children to watch more TV than others.

Waldman et al. available here (pdf).

Thanks to Steven Levitt for the pointer. Levitt wonders:

As an aside, isn’t it strange that we live in a world where I’m puzzled as to why the WSJ won’t give away their product for free? In general, it doesn’t seem like a good idea to give your product away if you are a company, but given that most newspapers do, why doesn’t the WSJ?

Attack Assignments in Terror Organizations and The Productivity of Suicide Bombers :: NBER

More evidence that economists think about everything. Or, as Craig says at Newmark's Door, more evidence that "economics no boundaries."

More able suicide bomber are assigned to the most important targets. This according to empirical work by economists Efraim Benmelech and Claude Berrebi.

Upsized nation :: NYT

Quote:

A recent study by the economists Alberto Alesina of Harvard and Enrico Spolaore of Tufts demonstrates that the bigger the nation, the harder it becomes for the government to meet the needs of its dispersed population. Regions that don’t feel well served by the government’s distribution of goods and services then have an incentive to take independent action, the economists note.
...
If the scale of a country renders it unmanageable, there are two possible responses. One is a breakup of the nation; the other is a radical decentralization of power. More than half of the world’s 200 nations formed as breakaways after 1946. These days, many nations — including Brazil, Britain, Canada, China, France, Italy and Spain, just to name a few — are devolving power to regions in various ways.
...
California’s governor has also put his finger on a little discussed flaw in America’s constitutional formula. The United States is almost certainly too big to be a meaningful democracy. What does “participatory democracy” mean in a continent? Sooner or later, a profound, probably regional, decentralization of the federal system may be all but inevitable.

Perhaps I'm missing something, but where's the flaw in America's constitutional formula? It's constitutional formula has taken this far largely because it is decentralized -- states rights. It's not a flaw, it's a feature.