Stumbling and Mumbling

• Some new happiness research

  Here are three new papers on happiness research.
  First, German research finds that there’s a strong day of the week effect upon happiness. People are much less happy on Sundays than other days; they side with Billie Holiday rather than Fats Domino.
  You might think this [...]
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  Posted: November 24, 2009, 9:04am EST
  by chris dillow

• Was fiscal policy too tight in the boom?

  In a letter to the FT, Martin Weale writes:
  Fiscal policy should be run on the principle of saving up for the next crisis and our government should have saved the revenues associated with the financial boom and a buoyant housing market.
  Is this true? I ask for [...]
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  Posted: November 23, 2009, 9:54am EST
  by chris dillow

• Immigration: two new papers

  Via the NBER come two new papers on the effect on immigration.
  First, Giovanni Peri shows (pdf), from looking across US states, that migrants are good for the economy:
  We present three main findings, two of which are quite new in this literature. First, we confirm [...]
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  Posted: November 20, 2009, 8:04am EST
  by chris dillow

• Labour's anti-Keynesianism

  Is the government spending too little? I know it sounds a silly question, but it’s the one raised by today’s public finance numbers.
  My table shows what I mean. I’ve taken it from page 3 of today’s press release (pdf) and table 2.8 of the Budget 2009 [...]
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  Posted: November 19, 2009, 9:17am EST
  by chris dillow

• Scroogenomics: a review

  Joel Waldfogel’s Scroogenomics provides the academic justification for the campaign to cancel Christmas. The gist of his argument will be familiar to anyone who knows his now-notorious paper, The Deadweight Loss of Christmas (pdf). Quite simply, we are worse at buying for other people than we [...]
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  Posted: November 18, 2009, 9:03am EST
  by chris dillow

• Bayes theorem: an application to Afghanistan

  I said yesterday that MPs should know their Bayes’ theorem. To see its usefulness, let’s apply it to the question: do the deaths of British troops show that the mission in Afghanistan is failing?
  Bayes’ theorem lets us answer this if we know just two numbers (well, actually [...]
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  Posted: November 16, 2009, 9:01am EST
  by chris dillow

• What should MPs know?

  The FT asks: what should MPs know? Its list of questions contains a glaring omission. I would ask: describe Bayes theorem, and discuss some common deviations from it.
  The reason for asking this is simple. It is a cliché that MPs, and especially ministers, must exercise [...]
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  Posted: November 15, 2009, 7:13am EST
  by chris dillow

• Tories & smackheads

  The Tory Party is less popular than heroin. That - if anything - is the  lesson from the Glasgow North East by-election result.
  The Tories got 1075 votes. The best estimate (table 3 of this pdf) is that there are over 13,000 “problem drug users” in the [...]
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  Posted: November 13, 2009, 11:34am EST
  by chris dillow

• Wage inequality falls

  Wage inequality is falling. This is one message from yesterday’s Annual Survey of Hours and Earnings.
  My table shows some measures of this. It shows the ratio of the 90th percentile of gross hourly wages for full-time workers to the 10th percentile. (That is, the wages of someone earning [...]
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  Posted: November 13, 2009, 8:14am EST
  by chris dillow

• Capital & full employment

  Duncan has endorsed Keynes’ old proposal to maintain cheap and easy money, and so achieve “an increase in the volume of capital until it ceases to be scarce”.
  I’m not sure this will work. We’ve tried something like it twice, and on both occasions it proved unsustainable. [...]
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  Posted: November 12, 2009, 9:24am EST
  by chris dillow

• A feminine economy?

  Our economy is becoming increasingly feminized. That’s one message of today’s labour market figures.
  These show that, over the last 12 months, male employment has fallen by a net 447,000 whilst female employment has dropped just 43,000 net. Thanks to this, there are now almost as many female employees [...]
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  Posted: November 11, 2009, 7:40am EST
  by chris dillow

• What media influence?

  How much influence does the media really have on our behaviour? This question is bedevilled by the problem of interpreting causality: do people vote Tory because the read the Daily Mail, or do they read the Daily Mail because they vote Tory?
  This new paper (pdf) by Baris Yoruk [...]
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  Posted: November 10, 2009, 9:24am EST
  by chris dillow

• Children & happiness

  Having children makes you miserable. That’s the message of this paper by Luca Stanca, which draws upon data from 94 countries:
  Having children is negatively related to subjective well-being. Conditioning on individual characteristics shows that the effect of parenthood on well-being is positive and significant only for widowers, older [...]
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  Posted: November 09, 2009, 9:34am EST
  by chris dillow

• Against a transactions tax

  Gordon Brown’s proposal for some sort of transactions tax seems to have been rejected by Tim Geithner, which means the idea is, in effect, dead: such a tax is only remotely feasible if applied globally. This is good. There are (at least) three arguments against such a [...]
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  Posted: November 08, 2009, 7:54am EST
  by chris dillow

• Immigration & localities

  The house next to mine is up for rent. But I have no say over who the tenant should be. Is this right?
  I’m prompted to ask by Martin Wolf’s argument for immigration controls.
  He points out that immigrants add to congestion. But if next door is rented out [...]
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  Posted: November 06, 2009, 9:20am EST
  by chris dillow

• Jedward & social choice

  Is it just me, or do several X Factor contestants look like Arsenal players: Danyl and Eduardo; Joe and Cesc, Jedward and Nicklas Bendtner’s bollocks?
  Which is a preface to saying that Jedward raise an important point about social choice theory - namely, that the public‘s “choice” can depend upon [...]
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  Posted: November 05, 2009, 9:40am EST
  by chris dillow

• Johnson, Burke & MPs' pay

  It’s insufficiently appreciated that Alan Johnson’s sacking of David Nutt has direct bearing on the question of MPs’ pay.
  What I mean is that there are two views of what an MP should do. On the one hand, there‘s the Burkean view, that MPs should exercise independent judgement:
  Your [...]
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  Posted: November 04, 2009, 8:20am EST
  by chris dillow

• Tories & the pound

  Are the Tories planning on a huge fall in the pound? This is one question raise by Giles Wilkes’ paper, Slash and Grow, in which he argues that it’s unlikely that capital spending and/or net exports will grow sufficiently to keep GDP growing well in the face of [...]
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  Posted: November 03, 2009, 8:57am EST
  by chris dillow

• Competition vs safety

  Alistair Darling says he wants a “safer, more competitive banking system.” But isn’t there a trade-off between these two goals?
  I mean, competition generates instability, because firms that lose crash out of business. Schumpeter’s “perennial gale of creative destruction” will blow some companies away.
  We saw this in [...]
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  Posted: November 02, 2009, 9:37am EST
  by chris dillow

• Drug laws, cognitive biases & democracy

  Everyone seems to agree that the Home Secretary’s sacking of David Nutt as chairman of the Advisory Council on the Misuse of Drugs shows that policy is based upon prejudice rather than evidence, and that the function of experts is not [...]
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  Posted: October 31, 2009, 8:18am EDT
  by chris dillow

• Democracy & the left

  Insofar as I’ve given him any thought at all, I’ve long considered Slavoj Zizek to be a mere blusterer*. However, I fear Norm is too quick to dismiss this claim of his:
  Although democracy, in the formal sense, is precious, it is not in itself a measure of [...]
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  Posted: October 30, 2009, 9:07am EDT
  by chris dillow

• Stereotypes, schools & inequality

  Could teachers’ racial stereotyping be a cause of black Caribbean boys’ under-achievement at school? That’s the question raised by a new paper by Simon Burgess and Ellen Greaves.
  They compared two measures of children’s ability at age 11: their results on Key Stage 2 tests - which are externally [...]
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  Posted: October 29, 2009, 10:43am EDT
  by chris dillow

• Privilege, poverty & adaptation

  Laurie’s post on white male resentment - the tendency for some white men to complain that they are under-privileged and marginalized when in fact they are not - raises an important question: what is the relationship between stated grievances and actual, genuine hardship?
  This paper by Daniel Neff [...]
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  Posted: October 28, 2009, 9:57am EDT
  by chris dillow

• Don't believe your eyes

  Two different comments on different subjects reveal a common error in thinking about social affairs. First, in response to my claim that much of the gender pay gap is due to women having children, Toto says: “you didn't consult any childless women before writing this, did you?” You’re damn [...]
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  Posted: October 27, 2009, 8:29am EDT
  by chris dillow

• Marriage, sexuality & wages

  In an earlier post, I asked whether the well-known marriage wage premium was due to causality or correlation. Some new Canadian research (pdf) sheds light upon this.
  It estimates that, among heterosexual men working over 30 hours a week, married ones earn almost 20% more than singletons; this [...]
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  Posted: October 26, 2009, 11:09am EDT
  by chris dillow

• "Does reason matter?"

  Matthew Parris comes up with an entry for Oliver Kamm's and John Rentoul’s series, “questions to which the answer is no”:
  Does reason, does philosophy matter?
  Of course they don’t. In politics - and especially on matters of freedom, there are powerful mechanisms selecting against reason:
  1. [...]
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  Posted: October 24, 2009, 6:53am EDT
  by chris dillow

• The power of peers

  It’s becoming increasingly clear that people’s behaviour is shaped by peer effects; for good or ill, we imitate those around us. A new paper sheds more light on this.
  The authors took the common room of the economics department at Queensland University of Technology. Some days, [...]
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  Posted: October 23, 2009, 8:45am EDT
  by chris dillow

• Does (party) politics matter?

  Several people seem to have missed the point about my last post. The point of comparing BNP membership to Cage and Aviary Birds’ circulation was to show that the BNP is a minuscule presence in society. Insofar as it has political presence, this is only because (party?) politics is itself [...]
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  Posted: October 22, 2009, 9:21am EDT
  by chris dillow

• The BNP in context

  Can we put the BNP into context? According to the Guardian, it has 11,811 members. This is less than the circulation of Cage & Aviary Birds magazine, and less than Huddersfield Town’s average attendance this season. It’s barely half the membership of the Bakers, Food & Allied [...]
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  Posted: October 21, 2009, 4:46am EDT
  by chris dillow

• When speculation fails

  Tim Worstall’s defence of oil speculators is an immaculate exposition of neoclassical thinking. It is also deeply questionable.  He says:
  This is the point about speculators. If they're correct, if there really is a shortage looming (of anything) then they bring that price signifying shortage forward: thus making shortage [...]
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  Posted: October 20, 2009, 9:04am EDT
  by chris dillow

• Progress & data in economics

  If you want a nice exemplar of some issues in the history of economic methodology, you could do worse than contrast two recent papers - one by David Meenagh and colleagues, one by Rhys ap Gwilym - to chapter 12 of Keynes’ General Theory; all address the [...]
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  Posted: October 19, 2009, 9:55am EDT
  by chris dillow

• Marriage & prejudice

  The right’s prejudice in favour of marriage can sometimes lead it to some very sloppy thinking. Two recent pieces suggest this.
  First, the Spectator’s leader cites ONS research showing that married men are more likely to find work that single ones, and infers that “perhaps it’s time to chivvy [...]
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  Posted: October 17, 2009, 6:52am EDT
  by chris dillow

• Marriage and inequality

  I’ve never seen the point of marriage. For me, women are like horses - nice to look at, interesting to ride, but too much trouble to keep. Nevertheless, I’m intrigued by this new paper on the economics of marriage by Gilles Saint-Paul.
  He begins from the premise [...]
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  Posted: October 16, 2009, 11:00am EDT
  by chris dillow

• Trafigura, Marx and technology

  Does the Trafigura/Carter-Ruck case vindicate Marx?
  What I mean is that Marx argued that technical change was a powerful force behind social change, so technology influenced power relations between people:
  Social relations are closely bound up with productive forces. In acquiring new productive forces men change their [...]
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  Posted: October 15, 2009, 9:07am EDT
  by chris dillow

• Unemployment tops 5.6 million

  The BBC reports that unemployment has risen at its slowest rate since July 2008. What it doesn’t do is point out why.
  One reason is that economic inactivity has increased. People who would otherwise show up in the unemployment numbers have simply dropped out of the workforce.
  The number [...]
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  Posted: October 14, 2009, 8:23am EDT
  by chris dillow

• Boris Johnson kills children

  Boris Johnson is threatening to kill some children and worsen the educational outcomes of many more.
  The reason for this is straightforward. He intends to remove the western extension zone of the congestion charge, and delay phase three of the low emission zone, which would charge polluting vans [...]
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  Posted: October 13, 2009, 9:14am EDT
  by chris dillow

• Selling the Tote: some sums

  Does it make sense for the government to sell off the Tote?
  The first question is: how much could it get for it? Let’s take Ladbrokes as the obvious comparator. It has a market capitalization of £868m, having made pre-tax profits of £257m in the last financial year. [...]
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  Posted: October 12, 2009, 9:38am EDT
  by chris dillow

• Evidence vs effectiveness

  The row between Norm and Conor about liberal intervention has descended into mere semantics. For me, though, it raises an interesting question: could it be that there’s sometimes a trade-off between the evidence for a policy and the effectiveness of it, so that evidence-based policy-making [...]
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  Posted: October 09, 2009, 9:01am EDT
  by chris dillow

• Our dumbed-down deficit debate

  The debate about government borrowing shows how backward our political class and media are.
  It's being conducted within the wrong framework. It’s about what the parties will or will not do, when in fact it should be about the range of policies they are considering.
  To see what I mean, [...]
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  Posted: October 08, 2009, 7:46am EDT
  by chris dillow

• Government borrowing & capitalism

  One curious fact about this recession is that corporate profits have held up quite well. Today’s figures (pdf) show that, in Q2, non-oil, non-financial firms’ net return on capital was 10.8%. Though down from the peak of 13.7% recorded as long ago as Q4 2006, this is comparable to [...]
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  Posted: October 07, 2009, 8:05am EDT
  by chris dillow

• Osborne vs the markets

  George Osborne says:
  The world is watching Britain at the moment. It is casting doubt on our country’s creditworthiness. It is questioning our resolve to deal with our debts. And when that starts to happen, then long term interest rates rise.
  Meanwhile on planet earth the opposite is happening. [...]
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  Posted: October 06, 2009, 12:00pm EDT
  by chris dillow

• Looks, politicians & rational voters

  Good-looking politicians are more likely to get elected than munters. This recent paper (pdf) by Andrew Leigh and Amy King found that, in the 2004 Australian House of Representatives elections, candidates who scored one standard deviation higher for looks won 1.5-2 percentage points more of the vote. This isn’t [...]
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  Posted: October 05, 2009, 9:52am EDT
  by chris dillow

• The BBC & household debt

  The financial crisis suggests there’s a strong argument for the BBC remaining state-owned and not carrying adverts.
  Yes, this claim looks bald. But the reasoning’s simple.
  Let’s start from the assumption (which might be questionable) that high levels of personal debt were a contributory factor to the recession, and/or that [...]
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  Posted: October 02, 2009, 9:01am EDT
  by chris dillow

• Asset sales & deficit fetishism

  The Times reports that the government is planning to sell off assets to reduce the deficit. There’s certainly stuff available to sell: the latest national assets register estimated that the government had £294.8bn of fixed assets in 2007. Such sales are, though, a bad way of reducing borrowing.
  [...]
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  Posted: October 01, 2009, 12:53pm EDT
  by chris dillow

• Polanski: some cognitive biases

  Why are the great and the good of the arts world - including Martin Scorsese, Whoopi Goldberg and Salman Rushdie - calling for the release of Roman Polanski? I suspect there are some inferential errors at work. Here are five possibilities:
  1. The halo effect. It’s common to [...]
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  Posted: September 30, 2009, 11:08am EDT
  by chris dillow

• Public borrowing, private lending

  According to a recent poll, half of the public believe there is no need to cut spending to reduce public debt. Today’s figures from the Bank of England suggest they might be right. They show that individuals borrowed money in August (pdf), suggesting that July’s repayment was a [...]
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  Posted: September 29, 2009, 9:03am EDT
  by chris dillow

• Come Dine With Me: the economics

  It’s insufficiently appreciated that Come Dine with Me raises some profound issues in economics. Here are three:
  1. The importance of norms of fairness. The format of CDWM is simple. There are four people. Each hosts a dinner party for the other three. The guests score their host out of [...]
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  Posted: September 28, 2009, 9:35am EDT
  by chris dillow

• Brown's cunning deficit plan

  It’s reported that Gordon Brown wants to introduce a law committing future governments to reduce borrowing*. This is both very stupid and very cunning.
  As macroeconomic policy, it scales the peaks of imbecility. To see why, imagine the following (which shouldn’t be difficult, as it’s what’s happened in the [...]
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  Posted: September 27, 2009, 6:07am EDT
  by chris dillow

• Investment, growth & animal spirits

  Duncan says we should be concerned by today’s news of a collapse in capital spending because “investment is the driver of long term growth.”
  This sounds sensible. But it raises a problem, shown by my chart. It plots the share of business investment in GDP, measured in [...]
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  Posted: September 25, 2009, 9:03am EDT
  by chris dillow

• Brown-Obama & the legitimacy paradox

  The papers report that Brown's requests to meet Barack Obama one-to-one have been rebuffed. What they don't answer is the question: what was the policy issue that Brown believed could be solved only by facetime, rather than by the sort of emails and phone calls that occur all [...]
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  Posted: September 24, 2009, 1:36pm EDT
  by chris dillow

• The Mansion tax: politics vs economics

  If you want an example of how good politics makes bad (or at least indifferent) economics, the LibDems "Mansion tax" is it.
  I was prepared to defend this, on the grounds that it's a minor move to improve the allocative efficiency of the housing market*.
  The idea here [...]
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  Posted: September 23, 2009, 1:11pm EDT
  by chris dillow

• Actions, beliefs and tacit knowledge

  For me, Norm’s criticism of Terry Eagleton’s discussion of propositions and performances just highlights why the debate between atheists and the religious is a dialogue of the deaf.
  Terry says: “It is a typically positivist kind of mistake to begin with the propositional.”
  To this, Norm replies:
  Let's [...]
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  Posted: September 23, 2009, 11:30am EDT
  by chris dillow

• Do governments affect spending?

  Peter Mandelson claims that we have a choice between Labour’s “progressive reform” and the Tories “ideologically-driven retrenchment and deep cuts”. Which raises the question: what impact do different governments really have upon public spending?
  The answer might be: less than you think. A new paper by Allen [...]
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  Posted: September 22, 2009, 9:23am EDT
  by chris dillow

• Infectious happiness

  Happiness is infectious - we catch it from others. That’s the finding of this new paper. The authors find that people in Chinese villages are more likely to be happy if their fellow villagers are. Significantly, this is not simply because the things that cause their neighbours to be [...]
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  Posted: September 21, 2009, 9:59am EDT
  by chris dillow

• GDP, welfare & defunct economists

  Tim picks apart many of the weird claims made by Will Hutton here. What irritates me, though, is that Will is attacking the strawest of men:
  As a nation, we carry on measuring the growth of goods and services that are sold in the marketplace – the gross [...]
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  Posted: September 20, 2009, 6:18am EDT
  by chris dillow

• Not Brixton, Barking

  150 years ago, John Stuart Mill described national currencies as a “barbarism.” Brixton seems to want to bring this barbarism nearer home, as this week it launched its own currency.
  This seems a bad idea. The mere existence of an exchange rate brings with it costs. [...]
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  Posted: September 18, 2009, 9:20am EDT
  by chris dillow

• Welfare reform & the fallacy of composition

  The Centre for Social Justice claims that its proposals for welfare reform would get 600,000 households into work. This is an example of the fallacy of composition.
  The gist of its story is simple. It proposes to increase the return to working relative to not doing so by [...]
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  Posted: September 17, 2009, 9:08am EDT
  by chris dillow

• Happiness vs preferences

  Richard Layard argues for old-fashioned Benthamite utilitarianism:
  I should aim to produce the most happiness I can in the world and, above all, the least misery. And my rulers should do the same.
  One issue this raises - which Layard doesn’t discuss in his article and barely addresses in [...]
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  Posted: September 16, 2009, 10:20am EDT
  by chris dillow

• How celebrity advertising works

  Why should firms use celebrities to advertise their products? A new paper uses MRI scans to cast light upon this.
  The researcher got a group of Dutch women to look photos of pairs of shoes alongside pictures of various female celebrities, or non-celebrities of equal attractiveness.
  They found [...]
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  Posted: September 15, 2009, 9:50am EDT
  by chris dillow

• Against bank privatization

  The FT reports that the Tories are planning a “Tell Sid”-style privatization of bank shares. This is a bad idea, for four reasons.
  1. It forecloses the possibility of some intelligent banking reforms. Should big banks be split so that they are no longer too [...]
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  Posted: September 14, 2009, 8:52am EDT
  by chris dillow

• How the crisis kills

  The financial crisis will kill between 28,000 and 50,000 babies in sub-Saharan Africa this year, according to this paper.
  The reasoning here is straightforward. For people on subsistence incomes, a fall in GDP can be fatal. The paper's authors, Jed Friedman and Norbert Schady, estimate that a one percentage [...]
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  Posted: September 11, 2009, 8:47am EDT
  by chris dillow

• Noise traders & noise voters

  68% of the Great British Public support a Tobin tax. This is a paradox - because the argument for a Tobin tax is also an argument for not giving a stuff about what the public want.
  The case for such a tax is that traders trade too much, which [...]
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  Posted: September 10, 2009, 9:41am EDT
  by chris dillow

• Open borders: the mainstream view

  Philippe Legrain, author of Immigrants: Your Country Needs Them, is on the wireless tonight advocating scrapping immigration controls. What puzzles me, though, is the BBC’s description of this position as iconoclastic.
  In truth, Philippe’s position is mainstream. What’s odd and extreme is the argument for immigration controls. [...]
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  Posted: September 09, 2009, 9:52am EDT
  by chris dillow

• Recessions and beliefs

  Michael Skapinker writes:
  The division of work into “socially useful” and “socially useless” was a particular preoccupation of the post-Woodstock generation.
  But it certainly wasn’t one of the preoccupations of the post-post-Woodstock generation. I’m a member of that later cohort. I’ve spent almost 24 million minutes on this [...]
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  Posted: September 08, 2009, 6:37am EDT
  by chris dillow

• The BNP & our sick democracy

  The question of whether the BNP should appear on Question Time raises a worrying question for the health of our democracy.
  Matthew Syed thinks the BNP should appear,  on the Millian grounds that:
  The more oxygen they are given to publicise their views, the more the British people will [...]
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  Posted: September 07, 2009, 9:57am EDT
  by chris dillow

• Property rights & liberalism

  I’m surprised by Tim’s and Peter’s take on property rights.
  My first surprise is that, in denying that people have some kind of natural right to the fruits of their labour they are throwing out the libertarian baby with the Marxist bathwater. This is because (some) libertarians’ [...]
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  Posted: September 06, 2009, 9:48am EDT
  by chris dillow

• X Factor politics

  Here’s a contrast that tells us much about our political system. On Friday, Samuel Brittan wrote of politicians “boasting that they have never heard of [Rawlsianism].” Today, Alice Thomson writes:
  The X Factor has become the show that every politician must watch…Both parties are convinced that shows such [...]
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  Posted: September 05, 2009, 8:15am EDT
  by chris dillow

• Norms, agency & competition

  James Kwak cites David Romer’s paper (pdf) showing that American football teams kick too often on the fourth down. This, he says, is evidence that coaches protect their own reputation - by doing the conventional thing - even though it reduces their team’s chance of winning.
  It’s [...]
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  Posted: September 04, 2009, 9:06am EDT
  by chris dillow

• Finance & human capital

  How much would the global economy lose if the financial sector were to shrink?* This question raises a problem about the role of human capital.
  Take the question: why are (some) bankers so well paid? One possibility is that they are highly skilled; they have lots of [...]
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  Posted: September 03, 2009, 9:30am EDT
  by chris dillow

• Gender in context

  Gender differences in decision-making can be very sensitive to context, according to this new paper (pdf).
  The researchers got groups of Swedish students to play simple dictator games, where they were given some money and then asked whether they wanted to give some of it away.
  When the [...]
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  Posted: September 02, 2009, 8:30am EDT
  by chris dillow

• Economists, stories & mechanisms

  Anthony Evans has written a fine paper (pdf) proposing how economists might make themselves more useful. There’s much to like about this - not least his stress upon the need for economists to be imaginative and his claim that it is “simply anti-intellectual” to believe in economic forecasts. [...]
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  Posted: September 01, 2009, 10:59am EDT
  by chris dillow

• Mandelson, P2P & public reason

  Tom Watson says the “Sunday Times published a thoughtful contribution to the filesharing debate from Peter Mandelson.” He’s wrong on two counts. First, the piece appeared in Saturday’s Times. Second, it is not “thoughtful.”
  I have three problems with it. First is this:
  Taking something for nothing, without [...]
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  Posted: August 31, 2009, 9:00am EDT
  by chris dillow

• What property right?

  Many of those who have criticised my post on music downloading seem to be asserting what has to be proven - that there should be large-scale intellectual property rights. But what is the origin of this right?
  It’s doesn’t lie in nature. Property rights, as David Hume said, [...]
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  Posted: August 30, 2009, 7:59am EDT
  by chris dillow

• Cabbies & record companies

  If I give a friend a lift in my car, should BP refuse to sell me petrol to punish me for depriving cab companies of revenue?
  No-one is proposing this. So why is the government proposing that ISPs cut off services to people who swap music files?
  [...]
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  Posted: August 26, 2009, 11:38am EDT
  by chris dillow

• Keynes & irrationality

  You can’t open a newspaper these days without seeing some article about how people behave irrationally. What much of this writing misses, however, is that - for many practical purposes - it’s just impossible to behave rationally. The distinction between actually-existing irrational people and the desiccated calculating machine [...]
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  Posted: August 25, 2009, 8:41am EDT
  by chris dillow

• Religion is good for you

  Religion is good for your health. That’s the finding of this new paper (pdf) by Angus Deaton. He says:
  On average, over all countries, and over countries sorted into income groups, religious people do better on a number of health and health-related indicators. These protective effects appear to be [...]
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  Posted: August 24, 2009, 10:13am EDT
  by chris dillow

• Democracy, character and preferences

  My call for workers to exercise greater control over bosses has been criticised by Liam Murray and Kardinal Birkutski on the grounds that workers are often unable to judge the quality of bosses.
  This raises a point which was perhaps better grasped by Tocqueville and Montesquieu than [...]
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  Posted: August 20, 2009, 9:29am EDT
  by chris dillow

• Against a High Pay Commission

  Compass wants the government to set up a High Pay Commission to limit top incomes. This is a bad idea. It’s an example of what Boffy, in another context, rightly calls the Left’s “debilitating reliance on statism.”
  The thing is, high salaries lie along a spectrum. At one [...]
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  Posted: August 18, 2009, 9:29am EDT
  by chris dillow

• Hannan: a partial defence

  Daniel Hannan is copping some stick for his criticism of the NHS. But there’s one thing he said which seems defensible. It’s this:
  If the Americans came to me and said, ‘Would you recommend us taking up a system just like the British NHS?’, I think I [...]
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  Posted: August 15, 2009, 6:57am EDT
  by chris dillow

• Health spending & life expectancy

  Does it matter how much a country spends on healthcare? My chart, taken from OECD data for 2005, raises this question. It plots total health spending (public and private) as a share of GDP against life expectancy, for 32 OECD nations.
  What leaps out here is that the US [...]
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  Posted: August 14, 2009, 9:09am EDT
  by chris dillow

• When China rules the world: a review

  Martin Jacques argues that as China gets rich, it will not become westernized, but it will become a hegemonic power, using its economic might for political, military and cultural purposes.  This, he says, will lead to a “different kind of world”, in which economic and political progress are no [...]
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  Posted: August 13, 2009, 9:09am EDT
  by chris dillow

• Yes, the market is efficient

  In the FT, Robert Skidelsky takes yet another fact-free pop at the efficient market hypothesis.
  The facts, however, tell a different story. Figures from Trustnet show that, over the last five years, only a minority of unit trusts in the UK all companies sector (91 of 254) [...]
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  Posted: August 06, 2009, 8:47am EDT
  by chris dillow

• Ownership, control & workers

  Lord Myners has proposed, to some acclaim, that longer-term shareholders should have more voting rights. I’m not sure.
  First, fund managers have no especial expertise in running companies - partly because any outsider is always at a huge disadvantage in knowing what is really going on inside [...]
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  Posted: August 05, 2009, 8:25am EDT
  by chris dillow

• The state & inequality

  To what extent can state intervention reduce inequality? The lesson of the New Labour government is that it can’t much; since 1997 inequality has either barely changed, or risen a little depending upon whether you take ONS or IFS data.
  However, a new paper by [...]
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  Posted: August 04, 2009, 9:04am EDT
  by chris dillow

• Gender & decision-making

  What’s the difference between men and women? It’s this question that underpins Harriet Harman’s claim that a mixed-gender team makes “better decisions”. After all, if the only difference between the genders is that women have funny plumbing, it’s not obvious why a political leader’s gender should matter.[...]
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  Posted: August 03, 2009, 9:53am EDT
  by chris dillow

• Markets and/or socialism?

  John Rentoul highlights a curious claim by Neal Lawson:
  The relationship between markets and socialism is not complimentary but contradictory.
  Depending on your conception of democracy, this is both true and false.
  It’s true if you regard democracy as Neal does - as a way in which we [...]
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  Posted: August 02, 2009, 11:35am EDT
  by chris dillow

• Tory confusion on tax credits

  The Tory right is, yet again, showing its ignorance of the income distribution and tax system. The Speccie’s leader says:
  Mr Cameron has been criticised for telling Mr Marr that he would remove tax credits for households which earn more than £50,000 a year. This…would hit 130,000 families immediately [...]
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  Posted: August 02, 2009, 6:25am EDT
  by chris dillow

• Forecasts vs mechanisms in economics

  This discussion between Edmund Conway and Andrew Lilico on the Today programme on the alleged crisis in economics seems to me to rest upon a misunderstanding of what economics is.
  Conway says the crisis has been “an earthquake for economic thought” and Lilico says we need “new theories.“  [...]
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  Posted: July 31, 2009, 9:40am EDT
  by chris dillow

• Social mobility in the long run

  In this new paper (pdf), Gregory Clark of A Farewell to Alms fame makes a gobsmacking claim:
  Pre–modern England, all the way from 1250 to at least 1860, was a society without persistent social classes. It was a world of complete social mobility, with no permanent over-class [...]
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  Posted: July 30, 2009, 9:34am EDT
  by chris dillow

• Invariant inequality

  The Office for National Statistics today published its latest figures (pdf) on income inequality. These show that, in 2007-08, the richest 10% received 28% of all post-tax income - that is, incomes including benefits after direct and indirect taxes - whilst the poorest 10% got just 2%. That means [...]
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  Posted: July 29, 2009, 9:01am EDT
  by chris dillow

• Cognitive biases & state intervention

  Leigh Caldwell says that, thanks in part to people’s cognitive biases, markets can fail and so “Government regulation …may be a way of improving how the market works rather than replacing it.” His use of the word “may” is well judged. The fact that decision-making is subject to cognitive [...]
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  Posted: July 28, 2009, 9:41am EDT
  by chris dillow

• Relative poverty for the hard of thinking

  Not all Tories are as thick as farmyard animals. But if I were in the habit of drawing inferences from anecdotal evidence, I'd probably think they were. Take Dizzy‘s complaint about the Child Poverty Bill, which aims to outlaw child poverty:
  Can someone tell me how you can outlaw [...]
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  Posted: July 27, 2009, 9:21am EDT
  by chris dillow

• Grammar schools, mobility & cognitive bias

  Why do so many people think grammar schools are a way of improving social mobility? It’s not because the social research says they are. I suspect instead that plain error is involved.
  One such error is the availability heuristic, mixed with survivorship bias. The handful of working [...]
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  Posted: July 26, 2009, 7:10am EDT
  by chris dillow

• Markets in public services

  The latest row between Neal Lawson and Tim Worstall suggests to me that Bryan and Danny might be right - abstract ideas can be distracting delusions.
  Neal writes:
  Markets, the mechanism of choice, are designed to allocate the spoils to the winner. That's OK with supermarkets and [...]
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  Posted: July 24, 2009, 8:44am EDT
  by chris dillow

• Grammar schools & social mobility

  The Milburn report has caused the usual suspects to complain that the abolition of grammar schools is a big reason for lower social mobility. The evidence for this is, however, almost entirely anecdotal. It has almost no basis in hard research.
  Granted, some researchers have found evidence that [...]
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  Posted: July 23, 2009, 6:09am EDT
  by chris dillow

• Milburn on social mobility

  There’s something that puzzles me about Milburn’s report on social mobility. A major claim in it is this:
  There is likely to be a need for many more professionals in future. Some studies suggest that up to nine new jobs in ten created over the next decade will be [...]
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  Posted: July 22, 2009, 9:02am EDT
  by chris dillow

• Being on the left

  Open Left is asking people what it means to be on the left today. I’m struck by how much, as a Leftie, I’m unhappy with many answers.
  For one thing, there seems to be an odd optimism about human nature. Jessica Asato says: “I believe that human [...]
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  Posted: July 22, 2009, 3:56am EDT
  by chris dillow

• The price elasticity of marriage

  Tory proposals to give tax breaks to married couples might cause a surprisingly large increase in the number of people getting married. That’s the implication of this new paper (pdf), which concludes that “even small changes in the cost of marriage can have significant effects.”
  The authors established [...]
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  Posted: July 21, 2009, 10:01am EDT
  by chris dillow

• Public schools & charities: a paradox?

  Should public schools have charitable status? There’s a paradox here - the people who should favour such status actually oppose it, whilst those who should oppose it actually support it.
  To see what I mean, bear in mind that the case for charitable status is not that private schools save [...]
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  Posted: July 20, 2009, 10:15am EDT
  by chris dillow

• Macroeconomics & the black box

  The Economist’s article on the state of economics is rather good. But there’s one good point it makes which needs developing, namely its criticism of modern macroeconomics for having “too little interest in the inner workings of the financial system.”
  This failure, though, is part of a wider and [...]
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  Posted: July 19, 2009, 6:48am EDT
  by chris dillow