Saturday, January 13, 2018

Giving military equipment to the police is a good thing

Surprising to me:

Sparked by high-profile confrontations between police and citizens in Ferguson, Missouri, and elsewhere, many commentators have criticized the excessive militarization of law enforcement. We investigate whether surplus military-grade equipment acquired by local police departments from the Pentagon has an effect on crime rates. We use temporal variations in US military expenditure and between-counties variation in the odds of receiving a positive amount of military aid to identify the causal effect of militarized policing on crime. We find that (i) military aid reduces street-level crime; (ii) the program is cost-effective; and (iii) there is evidence in favor of a deterrence mechanism.
--Vincenzo Bove and Evelina Gavrilova, "Police Officer on the Frontline or a Soldier? The Effect of Police Militarization on Crime," American Economic Journal: Economic Policy

We provide the first local level empirical analysis of the causal effects of providing military equipment to local police. Employing a novel combination of publicly available county-year panel data matched to hand-collected data on citizen complaints, we investigate the effects of acquiring tactical weapons, optics, and vehicles on citizen complaints, assaults on police officers, and offender deaths. For causal identification, we exploit exogenous variation in equipment availability and cost-shifting institutional aspects of the 1033 Program. Our results indicate that these items have generally positive effects: reduced citizen complaints, reduced assaults on officers, increased drug crime arrests, and no increases in offender deaths.
--Matthew Harris, Jinseong Park, Donald Bruce, and Matthew Murray, "Peacekeeping Force: Effects of Providing Tactical Equipment to Local Law Enforcement," American Economic Journal: Economic Policy

Tuesday, January 9, 2018

How the classic endowment effect paper was published

One of the most powerful findings of behavioral economics is “loss aversion,” the psychological tendency to feel losses more acutely than gains. As Adam Smith (1759) put it, “Pain … is, in almost all cases, a more pungent sensation than the opposite and correspondent pleasure” (1981, III, ii, 176–77). Although Daniel Kahneman and Amos Tversky (1979) and I (1980) had earlier written about this phenomenon, its empirical validity was still very much in question when Kahneman, Jack Knetsch, and I submitted an experimental paper on the subject to the [Journal of Political Economy], later published in 1990.

In the experiment we randomly assigned half the subjects to receive some object (often a coffee mug), with the other half getting nothing. We then conducted a market for the mugs in which both buyers and sellers stated their reservation prices. Since transaction costs were negligible and the objects were randomly assigned, the Coase theorem predicts that roughly half the mugs will change hands so that subjects who value mugs the most end up owning them. Our hypothesis was that fewer than half the mugs would trade because owners would regard a trade as a loss. This hypothesis was strongly supported. In a typical experiment, the expected number of trades was 11 but the empirical average was only 3.4. As predicted by loss aversion, median reservation prices for selling the mug were roughly twice the median prices for buying the mug.

The editor handling this paper was George Stigler. He sent us back a rejection letter based on a highly critical referee report from someone Stigler described as a “heavyweight in the field.” The referee said that income effects could explain our results since those who received the mugs had received a windfall relative to those who did not. After taking a few days to calm myself down (a good self-control strategy) I wrote back on behalf of my coauthors (who were both away traveling) explaining why the referee’s comments could not be taken seriously, either theoretically or empirically. First, the marginal propensity to spend windfalls on university insignia coffee mugs must be minuscule. Second, one experiment explicitly tested and rejected this explanation. Stigler wrote back in his usual witty style saying that JPE stands for Journal of Perspicacity and Equity, and he offered to send both my letter and the original referee report to another referee to adjudicate. That referee said that if forced to choose between our view and that of the original referee, he would side with us, which is how the paper came to be accepted.*

*The self-control paper [Thaler and Shefrin (1981)] also involved quite a bit of back and forth with the editor Sam Peltzman, who somewhat reluctantly agreed to accept it rather than continue to exchange letters. Both papers were published as the last paper in the issue, which I took as a signal that they were considered the paper the editors were most ashamed to publish. It is gratifying that both papers were ranked highly on the list of most-cited papers compiled by the editors for this issue. Perhaps people read the JPE from back to front.
--Richard Thaler, Journal of Political Economy, on the slings and arrows of publishing seminal papers

Sunday, January 7, 2018

White supremacists are into Asian women

The white supremacists on the far right have “yellow fever” — an Asian woman fetish. It’s a confusing mix.

Andrew Anglin, the founder of the neo-Nazi website The Daily Stormer, once posted a video of himself with a Filipina he called “my jailbait girlfriend,” the young couple flirting as they sauntered through a megamall in the Philippines. Richard Spencer, a white nationalist, has dated a series of Asian-American women, according to one of his ex-girlfriends. (Mr. Spencer insists that it was before he embraced white nationalism.)

The right-wing agitator Mike Cernovich, the writer John Derbyshire and an alt-right figure named Kyle Chapman (so notorious for swinging a lead-filled stick at Trump opponents at a protest in Berkeley, Calif., that he is now a meme) are all married to women of Asian descent. As a commenter wrote on an alt-right forum, “exclusively” dating Asian women is practically a “white-nationalist rite of passage.” ...

Maybe it makes sense that the alt-right is so confused: On a neo-Nazi news site, a user asked advice on whether he could be a white nationalist if he slept with East Asian women, and he received dozens of spirited responses from both sides.
--Audrea Lim, NYT, on Asians as whites from the right

The New York Times Bits blog reports:
Google on Wednesday released statistics on the makeup of its work force, providing numbers that offer a stark glance at how Silicon Valley remains a white man’s world.
But wait — just a few paragraphs down, the post notes that non-Hispanic whites are 61 percent of the Google work force, slightly below the national average. (That average, according to 2006-10 numbers, is 67 percent.) Google is thus less white than the typical American company. White men are probably slightly overrepresented; assuming that the 30 percent number it gives for women Google employees worldwide carries over to the U.S. (the article gives no separate number for U.S. women Google employees), white men are 42 percent of the Google work force, and 35 percent of the U.S. work force — not a vast disparity. Indeed, if the goal is “reflecting the demographics of the country” as to race —
Google’s disclosures come amid an escalating debate over the lack of diversity in the tech industry. Although tech is a key driver of the economy and makes products that many Americans use everyday, it does not come close to reflecting the demographics of the country — in terms of sex, age or race.
— Google can only accomplish that by firing well over three-quarters of its Asian employees, and replacing them with blacks and Hispanics (and a few whites, to bring white numbers up from 61 percent to 67 percent). ...

This is part of a phenomenon I have long observed, under the label of “how the Asians became white.” It’s not just that Asians are being treated like whites for purposes of race preferences, with some institutions deliberately setting lower standards (or creating a “plus factor,” which is the same thing) for black and Hispanic applicants than for Asian and white applicants — instead, people sometimes actually call Asians white (mostly unconsciously, I suspect).
--Eugene Volokh, Washington Post, on Asians as whites from the left

Monday, January 1, 2018

The challenge ahead for small cities

Once upon a time, it was obvious what towns and small cities did: they served as central places serving a mainly rural population engaged in agriculture and other natural resource-based activities. The rural population was dispersed because arable land and other resources were dispersed, and so you had lots of small cities dotting the landscape.

Over time, however, agriculture has become ever less important as a share of the economy, and the rural population has correspondingly declined as a determinant of urban location. Nonetheless, many small cities survived and grew by becoming industrial centers, generally specialized in some cluster of industries held together by the Marshallian trinity of information exchange, specialized suppliers, and a pool of labor with specialized skills.

What determined which industries a small city developed? In some cases particular features of the location and nearby resources were important, but often it was more or less random chance at first, then a sequence in which one industry created conditions that favored another. ...

Obviously, this was a chancy process. Some localized industries created fertile ground for new industries to replace them; others presumably became dead ends. And while a big, diversified city can afford a lot of dead ends, a smaller city can’t. Some small cities got lucky repeatedly, and grew big. Others didn’t; and when a city starts out fairly small and specialized, over a long period there will be a substantial chance that it will lose enough coin flips that it effectively loses any reason to exist.

I’m not saying that there weren’t patterns of success and failure. Small cities were and are more likely to fail if they have miserable winters, more likely to come up with new tricks if they’re college towns and/or destinations for immigrants. Still, if you back up enough, it makes sense to think of urban destinies as a random process of wins and losses in which small cities face a relatively high likelihood of experiencing gambler’s ruin.

Again, it was not always thus: once upon a time dispersed agriculture ensured that small cities serving rural hinterlands would survive. But for generations we have lived in an economy in which smaller cities have nothing going for them except historical luck, which eventually tends to run out. ...

In the modern economy, which has cut loose from the land, any particular small city exists only because of historical contingency that sooner or later loses its relevance.
--Paul Krugman, NYT, on having the short stack at the table. But see a rebuttal here.