Archive for the ‘economics’ Category
The New York Times posted a big feature yesterday on a couple of new papers by Harvard economists Raj Chetty, Nathaniel Hendren, and Lawrence Katz. The papers, like much of Chetty’s other work, use deidentified individual-level tax data to get at factors affecting income over time. In this case, they are interested in getting at neighborhood effects—in one paper, county-level effects on intergenerational income change, and in the other, the effects of the Moving to Opportunity experiment, which in the 1990s provided housing vouchers through a lottery system, on the same.
The big findings are that moving to a better neighborhood improves children’s income as adults, with the effects being cumulative. The experimental MTO data shows that each additional year of residence in the new neighborhood contributes linearly to an increase in adult income. However, the effects of a move zero out around age 13, after which they may be negative. The quasi-experimental data on non-MTO moves, which cleverly compares different-age siblings to get at length of exposure to the new neighborhood, points to substantial variation in mobility across counties for children at various income levels. The NYT visualization of this latter data, which is personalized by your location, is really terrific.
It’s some impressive work. But sociologists, of course, have been studying neighborhood effects for a long time. And while there is a lot of interest in the study, there is also a not-totally-unjustified sense of annoyance:
Big News: Economists discover a thing sociologists have been studying in detail for about a century. https://t.co/AxVkIfqsyw
— Mervyn Horgan (@simmelian) May 4, 2015
I’m fascinated both by the studies, sociologists’ reaction to them, and how the research is picked up and interpreted by the media. I tried to put all those things into one post, but it was getting way too long. So I’m going to break my reactions into a couple of chunks. Today, I’ll highlight some of the excellent existing work by sociologists in this area. Tomorrow, I’ll comment on why Chetty and Hendren’s work is getting so much more attention than related work in sociology. And later this week I’ll address how this kind of research gets covered in the media and is likely to be translated into policy conversations.
So for starters, some pointers to the sociology literature.
Yesterday, I described a paper written by Kirby Schroeder and my self on infection networks. Yesterday’s post addresses the professional lessons I learned. Today, I want to talk about the impact of the paper on current work. For a long time, the paper, literally, got zero citations in peer reviewed journals. Then, the citations increased around 2010, with people in economics, health, and biology discussing the paper.
Economics: The main commentary among economists is that this is a model of interaction, which can then be used to assess the impact of policy. For example, a paper in the American Law and Economics Review notes that the paper models risky behavior but does not model the law. Other economists are attracted to our prediction about infection knowledge and epidemic plateaus (once the disease becomes common knowledge, people shift behavior and transmission stalls).
Health: The Archives of Sexual Behavior has an article that discusses our article in the context of trying to expand models of disease transmission. For example, we critique the health belief model for ignoring interaction. We criticize sexual scripting theory for ignoring risk and strategic action.
Biology: Perhaps the most interesting impact of the paper is the impact on mathematical biology. In The Journal of Theoretical Biology, a team of mathematicians use the model to address group formation. In a model derived from our Risky Sex Game model, they show that the population, under certain conditions, will separate into specific groups based on HIV status.
Bottom line: People sure hated the paper when I wrote it, but its children are a joy to behold.
When people look at PhD programs, they usually base their judgment on the fame of its scholars or the placement of graduates. Fair enough, but any seasoned social scientist will tell you that is a very imperfect way to judge an institution. Why? Performance is often related to resources. In other words, you should expect the wealthiest universities to hire away the best scholars and provide the best environment for training.
Thus, we have a null model for judging PhD program (nothing correlates with success) and a reasonable baseline model (success correlates with money). According to the baseline, PhD program ranks should roughly follow measures of financial resources, like endowments. Thus, the top Ivy League schools should all have elite (top 5) programs in any field in which they choose to compete, anything less is severe under performance. Similarly, for a research school with a modest endowment to have a top program (say Rutgers in philosophy) is wild over performance.
According to this wiki on university endowments, the top ten wealthiest institutions are Harvard, Texas (whole system), Yale, Stanford, MIT, Texas A&M (whole system), Northwestern, Michigan, and Penn. This matches roughly with what you’d expect, except that Texas and Texas A&M are top flight engineering and medicine but much weaker in arts and sciences (compared to their endowment rank). This is why I remain impressed with my colleagues at Indiana sociology. Our system wide endowment is ranked #46 but our soc programs hovers in that 10-15 range. We’re pulling our weight.
The NY Times Opinion Pages has a forum on whether economists have too much influence. Personally, I actually think economists have a great deal to contribute. But when reading Diane Coyle’s contribution, she personified the extreme caricature of economists as disconnected. For example, Coyle wrote:
No government has a chief anthropologist or a corps of philosophers employed in its departments. The president has no Council of Sociological Advisers.
We actually do have a corps of sociologists in government who do an extremely important job – the US Census Bureau! And there actually is a high level committee where sociologists shape this extremely government agency. It’s called the Census Scientific Advisory Committee! And it actually has a bunch of sociologists on it such as NYU’s Guillermina Jasso, Michigan’s Barbara Anderson and Penn’s Irma Elo. Within the ranks of the US Census Bureau, there are actually lots of sociologists who work on policy reports and survey design, including some graduates of my own program. The Congressional Budget Office also employs a lot of social science graduates to do important work.
While Coyle may be right about philosophy, she is still wrong about anthropology. It is true that states do not have cabinet level anthropologists, many do actually employ anthropologists to study, manage, and interact with indigenous populations, which is an enormously important job. In Latin America, anthropologists are crucially important for Indian affairs. I don’t know where Coyle got her ideas when she implied that economics is the only social science discipline with a function in government , but I’m working with real data – not pie in the sky!
So last week, for me, was the first week of classes. But the week before that, I was in Austin to use the LBJ archives.
The LBJ archives are awesome. Of the 15 or so archives I’ve visited over the last 10+ years, they had hands-down the most helpful archivist I’ve ever met. (Allen Fisher, if you’re taking notes.) I was also amused that they’re a little competitive with the other presidential archives. I received a meaningful look when they learned that no one at JFK explained the details of the archives’ shared cross-referencing system to me. (“You’d be surprised how often that happens.”)
Anyway, the best find of the trip was the papers of Donald Turner, who was the first economist to run the Antitrust Division (1965-68). There were letters to all sorts of major players in law & economics, like Robert Bork. A letter of recommendation for Oliver Williamson, who very early in his career was Turner’s special economic assistant. A “P.S” on a letter from the Dean of Yale’s Law School: “Is Steve Breyer [then 27] as able as I think he is?”
But the most fun was the totally human part. The year before Turner became antitrust chief, he went on sabbatical at Stanford, where, as academics do, he rented the house of another faculty member who was also on leave — a young Bill Baxter, who would become Reagan’s antitrust chief some 15 years later. Turner kept a copy of his outgoing letters from that year, and they sound awfully familiar. Academics of the past — they’re just like us!
They complain about grading!
I’m not sure if these were left over from the fall semester at Harvard, or if Turner had to teach while he was on leave, but the 140 blue books staring him down in December caused a fair bit of grief. That one’s easy to relate to.
They complain about how their articles are going!
In 1965, Turner published a major article on conglomerate mergers, which caused him all sorts of anguish. The letters are full of agonizing over how hard he’s working on it, frustration with how long it’s taking, and the inevitable requests for deadline extensions. To top it off, there was a final kerfuffle over the copyediting. He sure must have been glad to see the back side of that one.
They take advantage of the bar!
Turner and Baxter, the two future antitrust chiefs, didn’t know each other well at the time that Turner rented Baxter’s house. In fact, it appears that they had never met in person. One of the funniest bits is the post-sabbatical correspondence tidying up the loose ends. Turner drank some of Baxter’s booze, and offered to reimburse him for it. Baxter had noted what they left on a card, but then misplaced the card. So he roughed it out: “[My] recollection is that you left about the same amount of gin and wine that we had left; but that about two fifths of bourbon, two fifths of scotch, and one fifth of cognac have not been replaced.” He called it $25, and Turner paid up. It’s always important to pay for your liquor.
Blogging is like exercise. It feels great as long as you stay in the habit. But once you stray, for whatever reason, boy is it hard to get back in the saddle.
Not only have I been a bad blogger, I’ve been cheating on you with another blog. But I swear it was just a one-time thing. Dan Hirschman and I wrote a piece on “The Influence of Economists on Public Policy” for the Oxford University Press economics blog.
Although we wrote it last week, it ended up being pretty timely given the chatter over Justin Wolfer’s recent Upshot piece about how economists came to dominate the conversation. If you’re interested in this sort of thing, Philip Cohen’s piece over at Contexts does an excellent job at contextualizing the Wolfers article, particularly with regard to ways sociologists might have somewhat more voice than the NYT chart gives them credit for.
Anyway, I have a growing list of things to blog about, not all of them involving economists, I promise, but an incredibly busy schedule at the moment — thank you, graduate admissions season. But I’m not planning on checking out just yet. This post is just me reminding myself that blogging isn’t really all that hard. More to come soon.
I swear I was already thinking about this before Fabio posted last night about the politics of academia. Noah Smith (of the blog Noahpinion and more recently Bloomberg) wrote an interesting piece yesterday titled “Economics Stars Swing Left.”
In it, Smith notes that, contra Fabio’s statement below, economics is pretty left-leaning these days. Among economists there was widespread, though not universal, approval for government stimulus after the recession; inequality has been the cause célèbre ever since Piketty (and, really, before; see Dan Hirschman’s excellent paper on how economics rediscovered income inequality). Development economics, with its focus on interventions that help the poor, has been a hot field for well over a decade. Tyler Cowen calls Piketty, Krugman, Stiglitz, Sachs, and Sen the five most influential economists today — hardly a bunch of free-marketeers.
This runs counter to the way many sociologists think about economics. Some sociologists (#notallsociologists) think that economics is dominated by members of the Chicago School who believe that actors are always rational, free markets always work, and if we just privatized everything the world would be a better place. That’s simply not the case.
But I would like to offer an amendment to Smith’s assertion about economics being totally left-leaning these days. I agree in a way. But what this misses is that the “left” that economists tend to be is a very particular kind of left.
In fact, this is a core argument of the book I’m writing — that as economics became more influential in U.S. policy, it changed what it means to be “left.” It’s also a prominent theme in Stephanie Mudge’s forthcoming book, which follows the development of market-friendly “third way” parties in Europe.
So what’s different about the kind of left that economists tend to be? As always, there are exceptions here — I’m painting with a broad brush. But to make some generalizations:
- It’s a kind of left that does believe in the power of markets, while acknowledging that markets frequently fail or at least work imperfectly.
- It is a technocratic sort of left, that sees market failure as a problem to be solved, and government as a way to solve that problem.
- It tends to prioritize political goals that make sense through the lens of economics: promoting growth, increasing efficiency, increasing income; these days, reducing inequality.
- It has a harder time engaging with goals that can’t really be understood using economics: individual autonomy, civic engagement, political empowerment.
- It’s a bit skeptical of the value of democratic politics. In fact, it kind of thinks that the world would be better if people would just shut up already and do what the experts are telling them. (This last part goes for many sociologists, too.)
- It tends to undervalue what can’t be measured: a sacred piece of land, the value of dignity in one’s work, the inherent worth of increasing knowledge. Or perhaps a better term than “undervalue” is “view as impractical to consider.”
In other words, it’s a type of “left” that looks very familiar in American politics today.
The central political position in economics, then, may be seriously concerned with inequality. It may care deeply about poverty and about development. And it may be solidly in favor of government intervention to solve these problems.
But even so, it is only one type of left. And while there are big chunks of it I agree with, I think we lose when this is the only left that is legitimate.