Saturday, November 29, 2008

And you thought American wedding costs were burdensome

We analyze funeral arrangements following the deaths of 3,751 people who died between January 2003 and December 2005 in the Africa Centre Demographic Surveillance Area. We find that, on average, households spend the equivalent of a year's income for an adult's funeral, measured at median per capita African (Black) income.
--Anne Case, Anu Garrib, Alicia Menendez, and Analia Olgiati, "Paying the Piper: The High Cost of Funerals in South Africa," on one last extravaganza

The salutary effect of blue laws

In this paper we identify a policy-driven change in the opportunity cost of religious participation based on state laws that prohibit retail activity on Sunday, known as “blue laws.” Many states have repealed these laws in recent years, raising the opportunity cost of religious participation... We then use a variety of datasets to show that when a state repeals its blue laws religious attendance falls, and that church donations and spending fall as well... We find that repealing blue laws leads to an increase in drinking and drug use, and that this increase is found only among the initially religious individuals who were affected by the blue laws. The effect is economically significant; for example, the gap in heavy drinking between religious and non religious individuals falls by about half after the laws are repealed.
--Jonathan Gruber and Daniel Hungerman, "The Church vs the Mall: What Happens When Religion Faces Increased Secular Competition?," Quarterly Journal of Economics

An argument for being a salaried drone

The big rewards [to entrepreneurship] come only to those whose companies go public or are acquired on favorable terms, forcing entrepreneurs to bear a substantial burden of idiosyncratic risk. We study this burden in the case of high-tech companies funded by venture capital. Over the past 20 years, the typical venture-backed entrepreneur earned an average of $4.4 million from companies that succeeded in attracting venture funding. Entrepreneurs with a coefficient of relative risk aversion of two and with less than $0.7 million would be better off in a salaried position than in a startup, despite the prospect of an average personal payoff of $4.4 million and the possibility of payoffs over $1 billion. We conclude that startups attract entrepreneurs with lower risk aversion, higher initial assets, preferences for entrepreneurship over employment, and optimistic beliefs about the payoffs from their products.
--Robert Hall and Susan E. Woodward, "The Burden of the Nondiversifiable Risk of Entrepreneurship," NBER Working Paper 14219

Friday, November 28, 2008

What a smarter doctor gets you

This paper compares nearly 30,000 patients who were randomly assigned to clinical teams from one of two academic institutions. One institution is among the top medical schools in the country, while the other institution is ranked lower in the quality distribution... Those treated by physicians from the higher-ranked institution have 10-25% shorter and less expensive stays than patients assigned to the lower-ranked institution. Health outcomes are not related to the physician team assignment, and the estimates are precise. Procedure differences across the teams are consistent with the ability of physicians in the lower-ranked institution to substitute time and diagnostic tests for the faster judgments of physicians from the top-ranked institution.
--Joseph J. Doyle, Jr., Steven M. Ewer, Todd H. Wagner, "Returns to Physician Human Capital: Analyzing Patients Randomized to Physician Teams," NBER Working Paper 14174

Black Friday indeed

In Long Island early Friday, the malaise turned deadly. A 34-year-old Wal-Mart employee was killed, the police said, after being knocked down and trampled by a wave of shoppers who broke down the doors of the store at the Green Acres Mall in Valley Stream, N.Y. Several other shoppers were hurt, including a 28-year-old pregnant woman who was taken to the hospital, police said, after the stampede occurred just after 5 a.m.
--Michael M. Grynbaum, NYT, on sacrifices to the altar of consumerism

At 4:55 a.m., just five minutes before the doors were set to open, a crowd of 2,000 anxious shoppers started pushing, shoving and piling against the locked sliding glass doors of the Wal-Mart in Valley Stream, N.Y., Nassau County police said. The shoppers broke the doors off their hinges and surged in, toppling a 34-year-old temporary employee who had been waiting with other workers in the store’s entryway.

People did not stop to help the employee as he lay on the ground, and they pushed against other Wal-Mart workers who were trying to aid the man. The crowd kept running into the store even after the police arrived, jostling and pushing officers who were trying to perform CPR, the police said.
--Jack Healy and Angela Macropolous, NYT

How life changes with a Nobel Prize

“You get invited to places that you never expected to be invited to,” he said. “People want to be associated with it,” including some who have reached out to him after years without contact. One woman from his high school days in Skokie, Ill., told him, “You know, several of my friends had crushes on you.”

“I wrote her back,” Dr. Chalfie said, “to say, ‘Why are telling me this now? Back then, it would have been a very useful piece of information.’”
--Clyde Haberman, NYT, on Martin Chalfie's new life as a chemistry Nobel laureate

Obama as surname

I'm so glad Obama is finally a good guy. I really had a hard time for a while there with Osama.
--Susie Obama, of Japanese descent, on a fringe benefit of Barack's victory

Tuesday, November 25, 2008

The Bible on credit default swaps?

Do not be a man who strikes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.
--Proverbs 22:26-27

He who puts up security for another will surely suffer, but whoever refuses to strike hands in pledge is safe.
--Proverbs 11:15

A man lacking in judgment strikes hands in pledge and puts up security for his neighbor.
--Proverbs 17:18

Take the garment of one who puts up security for a stranger; hold it in pledge if he does it for a wayward woman.
--Proverbs 20:16 on the wisdom of demanding collateral when lending to AIG

Housing prices: Where the carnage is (and isn't)

Phoenix -39%
Las Vegas -39%
Miami -36%
San Diego -36%
San Francisco -34%
Los Angeles -33%
Detroit -29%
Tampa -28%
Washington -25%
Minneapolis -19%
Chicago -12%
Boston -12%
Cleveland -12%
New York -11%
Seattle -10%
Atlanta -10%
Portland -9%
Denver -7%
Dallas -4%
Charlotte -4%

--September 2008 seasonally adjusted Case-Shiller index housing prices relative to peak

Friday, November 21, 2008

What actually convinces economists?

This paper argues that formal empirical work which, to use Sargent's (1987, p. 7) phrase, tries to "take models seriously econometrically" has had almost no influence on serious thinking about substantive as opposed to methodological questions. Instead, the only empirical research that has influenced thinking about substantive questions has been based on methodological principles directly opposed to those that have become fashionable in recent years. Successful empirical research has been characterized by attempts to gauge the strength of associations rather than to estimate structural parameters, verbal characterizations of how causal relations might operate rather than explicit mathematical models, and the skillful use of carefully chosen natural experiments rather than sophisticated statistical technique to achieve identification.

These views may seem extreme. But I invite the reader to try and identify a single instance in which a "deep structural parameter" has been estimated in a way that has affected the profession's beliefs about the nature of preferences or production technologies or to identify a meaningful hypothesis about economic behavior that has fallen into disrepute because of a formal statistical test.
--Larry Summers, "The Scientific Illusion in Empirical Macroeconomics," Scandinavian Journal of Economics (1991), laying the smack down

What is a protected disability?

Disabled travellers -- including the morbidly obese -- must be given an extra free seat on domestic flights as of Jan. 10 after the Supreme Court of Canada refused Thursday to hear an appeal by the country's biggest airlines.
--Tamara Gignac, Calgary Herald, on special considerations for the morbidly obese

Thursday, November 20, 2008

More on resurrecting Neanderthals

Didn't I read as recently as ten years ago that "Jurassic Park" scenarios were more or less impossible? I don't expect Neanderthal man to reappear soon, but assuming the world stays (relatively) peaceful and wealthy, what is the chance of seeing one or more such beings within the next two hundred years? Yes I know all about the law, eventual demographics, and the fear of planet-wide interspecies war, but at $10 million and over one hundred countries in the world, is not private philanthropy robust?

As one commentator asks, if we humans killed them off in the first place, does that mean we have any obligation to revive them now?
--Tyler Cowen, Marginal Revolution, on the impossible becoming the inevitable

Wednesday, November 19, 2008

Mammoth/Neanderthal Park

Scientists are talking for the first time about the old idea of resurrecting extinct species as if this long time staple of science fiction were a realistic possibility, saying that a living mammoth could perhaps be regenerated for as little as $10 million...

The same would be technically possible with Neanderthals, whose full genome is expected to be recovered shortly, but ethically more challenging.
--Nicholas Wade, NYT, on a brave old world

Sunday, November 16, 2008

An unexpected inheritance

Foreigners who can document Korean ancestry can qualify for the South Korean national health insurance.

Sally Im, a Korean-American from Honolulu, recently traveled to Wooridul for back surgery. After her husband paid two months’ worth of premiums — about $90 — on their arrival, a portion of Ms. Im’s medical bill was covered by the South Korean government. The couple ended up spending $3,200, rather than the $30,000 that her operation would have cost in the United States, Wooridul said.
--Choe Sang-Hun, NYT, on a little-known backstop available to ethnic Koreans

Saturday, November 15, 2008

Awkward situations

Sometimes it’s easy to know what to do. Should you say hello to your son’s kindergarten teacher, for instance, when you see her on the street? Others times, it’s a little harder: What if you bumped into Miss Judy at a bar? Now, what if it’s a topless bar — and junior’s teacher is dancing there?

Deciding whether to speak to your Wall Street acquaintances about their misfortunes is like that, too.
--Philip Galanes, NYT, on what to say to friends whose firms are imploding

Thursday, November 13, 2008

The shrinkage of the Bond villain

Why is [James Bond] in Bolivia? In pursuit of a global villain, whose name is not Goldfinger, Scaramanga, Drax or Le Chiffre, but ... Dominic Greene (Mathieu Amalric). What is Dominic's demented scheme to control the globe? As a start, the fiend desires to corner the water supply of ... Bolivia. Ohooo! Nooo!
--Roger Ebert on the lameness of Quantum of Solace's villain

An alternative revenue source

The Federal Government owns more than half of Oregon, Utah, Nevada, Idaho and Alaska and it owns nearly half of California, Arizona, New Mexico and Wyoming. See the map for more. It is time for a sale. Selling even some western land could raise hundreds of billions of dollars - perhaps trillions of dollars - for the Federal government at a time when the funds are badly needed and no one want to raise taxes. At the same time, a sale of western land would improve the efficiency of land allocation.
--Alex Tabarrok, Marginal Revolution, on how to pay for the bailout and more

Friday, November 7, 2008

The price of a name

The University of Chicago Graduate School of Business announced Thursday that it had received from an alumnus a $300 million gift, which it described as the largest ever to any business school in the world. ...

The business school is being renamed the University of Chicago Booth School of Business.
--Catrin Einhorn, NYT, on how much it costs to slap your name on Chicago's business school

Our price tag is $1 billion.
--A Stanford GSB professor I talked to yesterday

Monday, November 3, 2008

Things we know just because

Objectives To determine whether parachutes are effective in preventing major trauma related to gravitational challenge.

Design Systematic review of randomised controlled trials.

Data sources: Medline, Web of Science, Embase, and the Cochrane Library databases; appropriate internet sites and citation lists.

Study selection: Studies showing the effects of using a parachute during free fall.

Main outcome measure Death or major trauma, defined as an injury severity score > 15.

Results We were unable to identify any randomised controlled trials of parachute intervention.

Conclusions As with many interventions intended to prevent ill health, the effectiveness of parachutes has not been subjected to rigorous evaluation by using randomised controlled trials. Advocates of evidence based medicine have criticised the adoption of interventions evaluated by using only observational data. We think that everyone might benefit if the most radical protagonists of evidence based medicine organised and participated in a double blind, randomised, placebo controlled, crossover trial of the parachute.
--Gordon Smith and Jill Pell, British Medical Journal, on things we know without exogenous variation of the explanatory variable

Hold and die

In a videotaped interview with the U.S. Naval Institute for its Americans at War program, [retired Marine Col. John] Ripley said he and about 600 South Vietnamese were ordered to "hold and die" against 20,000 North Vietnamese soldiers with about 200 tanks.

"I'll never forget that order, 'hold and die'," Ripley said. ... "When you know you're not going to make it, a wonderful thing happens: You stop being cluttered by the feeling that you're going to save your butt."
--Associated Press on gaining life by losing it

The world is a tough place. You’re never going to get out of it alive.
--Charlton Heston

Saturday, November 1, 2008

Always getting the leftovers

And you can imagine what the black brothers and sisters in the barbershops and beauty salons say: "Right when the thing is about to go under, they hand it over to the black man."
--Cornel West on why the presidency might be a booby prize