To weight or not to weight?

Last week, we discussed weighted least squares in my methods class. As a method for dealing with heteroskedastic errors, it has a lot of opponents, notably Angrist and Pischke of Mostly Harmless Econometrics fame. The form of heteroskedasticy, or rather the lack of information about the form, can make weighting a useless proposition. If we’re wrong about the form, which we most likely are, it only introduces further bias.

With regards to population weighting, however, Angrist and Pischke are more clear that we absolutely should weight samples to reflect populations. I’m chest-deep in edits right now, trying to get out my paper on match quality and reading to children, and struggling again with the weighting issue. My advisor, seminar participants at the Census Bureau, and Angrist and Pischke say weight for population. If not, the results aren’t meaningful, or so the story goes.

My gut and a friendly editor say “isn’t it enough to learn about this population itself? Why try to extrapolate to the whole population?” Especially when the sample population was picked to identify particular characteristics, I wonder how or whether weighting is a useful exercise. Or rather, how not weighting is somehow less meaningful.

Any suggestions on how to resolve this internal debate?

More on Education and TFA

A week or so ago, Matthew diCarlo of the Shanker Institute posted on the Shanker Blog a post exploring the link between teacher performance and the much-lauded, much-criticized, and thus, controversial, program Teach for America. TFA, as it is known, puts high-achieving, service-oriented college grads into classrooms in high-need areas all over the country for a period of two years. It’s an extremely competitive program. My senior year of college, I watched several close friends navigate the process and succeed, while another close friend did not get a spot. Ironically, the one who entered the education system as an emergency teacher taught for several more years than the TFAers.

Matt diCarlo provides a quick and dirty review of the literature that rests on this:

Yet, at least by the standard of test-based productivity, TFA teachers really don’t do better, on average, than their peers, and when there are demonstrated differences, they are often relatively small and concentrated in math (the latter, by the way, might suggest the role of unobserved differences in content knowledge). Now, again, there is some variation in the findings, and the number and scope of these analyses are limited – we’re nowhere near some kind of research consensus on these comparisons of test-based productivity, to say nothing of other sorts of student outcomes.

The assertion, and indeed the post, is filled with caveats, conditions, and couching, which serves to tell me that Matt is likely a reasonable person and certainly an economist. It also underscores how difficult it is to analyze teacher performance with standardized tests, something which Dana Goldstein explores a bit today.

Both Matt diCarlo and a linked post at Modeled Behavior suggest that “talent” at least as measured by the private sector, isn’t a good indication of teacher effectiveness. While that’s interesting, I’m curious what is?

What makes a good teacher? At any level? I’m curious because–among other reasons–I  think I’m a pretty good teacher. I would imagine that most of us like to think we’re good at our jobs. If the skills that make me a good (or average, or mediocre, or bad) teacher aren’t the same ones that would help me in other markets, what are they? And perhaps more importantly, why are we asking the people in the private sector, which hasn’t enumerated the qualities of a good teacher and doesn’t reward them, what entails good teaching? And shouldn’t we figure this out before we go about firing “bad” teachers as a means trying to improve student outcomes?

h/t @ModeledBehavior

Breastfeeding Follow-up

After Saturday’s post about breastfeeding, Katina sent me a link to a recent blog post on the history of marketing formula and some recent legal changes, which I believe are for South Africa, concerning how formula can be marketed. It’s a bit long, but it is an interesting read. In particular, Sarah Emily’s post echoes the story I was told on Saturday:

This isn’t to suggest that women should have their choices about how they feed their babies curtailed – or that it’s only advertising which causes women to choose to use baby formula. Far from it. The problem, though, is that, particularly in poor nations, advertising or other promotional methods encourage breastfeeding mothers to switch to baby formula when it’s unlikely that they’ll be able to afford to buy more formula, and where they may dilute formula with too much water to make it go further. This water may not be clean, and it’s difficult to keep bottles and teats sterile without electricity or plumbing.

So, not only is the nutritional value of the formula decreased through dilution, but the risk of water-borne diseases is elevated.

During the question and answer session following my talk on Saturday, many women expressed concern at the very low average durations of breastfeeding in my sample, about 3 and a half months. Some people wanted to say this was so different than the norm in the rest of the world, but Sarah Emily suggests it’s not:

The cause for these new regulations and other measures introduced internationally to encourage mothers to breastfeed for the first six months of life, is a concern that rates of breastfeeding remain low in comparison to what they were during the early twentieth century. For all the good that the Code and other laws have done, it remains the exception, rather than the rule, for women to breastfeed for such an extended period of time.

She also has a great old advertisement. My only caveat to add would be that while supporting breastfeeding as a healthy choice for mothers and babies is important, it’s also critical that we not demonize women who simply cannot breastfeed. Supplying those women with formula and reducing the stigma there is important, just as it is important to create more accepting spaces for mothers to breastfeed their children.

How to look rich by not breastfeeding

Almost every time that I’ve presented one of my dissertation papers, someone comes up to me to tell me about some experience they have had that is relevant to my paper. Often, they’re not happy. My paper on parental relationship quality and reading to children tends to really rile up single mothers, all of whom want to tell me how they managed to be good parents despite having unhappy marriages. Mostly, I reiterate how these are average and then just smile and thank them for their input.

Occasionally, though, someone tells me something inspiring, or sad, that really touches me. A student came to tell me about her own experiences with a violent relationship after I presented some of my research, and many others have told me stories about parenting.

Today, I presented the second chapter of my dissertation at the Central Pennsylvania Consortium’s annual Women, Gender, and Sexuality conference. That’s a mouthful, no? My second paper explores the extent to which promises of financial support given to single mothers by the fathers of their children have an influence on financially-constrained investments in children as the child gets older.

As we all finished, a woman who works at the College came up to tell me her story of growing up in Jamaica. She told me how formula was marketed to upper class mothers and so became a sign of wealth. And conversely, breastfeeding became a sign of poverty. Many mothers with few resources, she said, wanted to appear as though they were giving their children formula–the marketed as healthier option as well as the option that signaled ability to pay. Consequently, these mothers would use their limited resources to buy formula, but then would water it down in order to have more opportunities to show they were feeding their children with formula.

It broke my heart to hear it, but it also showcases a rather important problem that economists have. When we rely on survey data and on averages, all of these women would say that they used formula, but likely the nutritional outcomes for their children would be much different. So, not only is there a reporting problem whereby poor mothers might understate for how long and whether they breastfed, but the quality of the alternative has much more variability in nutritional value.

Outside of the measuring problem, I don’t think we’re all that good at identifying these types of what we would call irrational behavior. Without having interviewed women in depth or been there to witness this behavior, we likely would not include it in our analysis, leading to biased estimates.

The value of financial history

Last week, when Eric Hanushek was at Gettysburg College for the Finance Symposium, we got into a post-symposium debate over a couple of glasses of wine concerning the usefulness of historians. In a place like Gettysburg, where most everyone is a historian of some stripe, this is a relevant argument. Gettysburg hosts the Civil War Institute and several scholars who study just that. Civil War buffs travel from all over the country–and perhaps even the world (are there non-American Civil War buffs?) to visit the battlefield and the town. They walk over Cemetery Ridge and Seminary Ridge and talk about Pickett’s Charge* and strategy and the people who died and go on ghost tours. Students and scholars read books and reimagine history, too. Hanushek argued that history is unlikely to change much because we already know all the facts and thus studying it, or at least writing several new books and papers on topics that had been exhausted, was perhaps not the best use of intelligent peoples’ time.

Last summer, I attended the Canadian Network of Economic Historians conference. It’s a great group of scholars who I’m sure would profoundly disagree with Eric’s argument, and they were particularly excited when I told them about my plans. “Gettysburg is going to have three economic historians!?” someone asked me. Actually, no. One retired, one is on leave–the one whom I’m replacing–and me, well, I don’t really consider myself an economic historian.

Despite that lack of self-identified association, I was ready to tell Eric he was wrong. I do have a few papers in economic history, using financial transaction and shareholding data from 18th century England. It’s really cool. Which is exactly what I told Eric. Perhaps I’m not going to entirely rewrite the History (with a capital H) of the establishment of the English stock market and modern portfolio theory, but I probably can make little changes to our understanding of how financial markets worked, how investors made decisions, and what effect that might have on commerce, trading, and the like.

In one of these papers, a coauthor and I show that despite relatively established secondary markets for trading shares of companies, individuals did not tend to buy in more than one company. Wealth constraints and the value of being able to vote likely trumped the relative ease with which one could stroll down to Garroway’s in Exchange Alley and pick up a few extra shares. In another, we show how women (who likely couldn’t stroll down to Exchange Alley for propriety reason) used the market.

Like I said, I’m not changing the history of the world, but it’s kind of cool to know that investors weren’t diversifying over these kinds of assets as we might expect modern investors to do. (Which, incidentally, they don’t always do, either).

I’ve been discussing some of these ideas with a few colleagues and all of a sudden, the ideas are flowing. Over lunch today, we mapped out at least half a dozen papers that could come out of these data. So now, my problem is this: how do I go on the market as a labor economist with a slew of papers that fall better under financial macro and economic history? I usually say that being a labor economist means I can do whatever I want, so there it is, I guess.

*Notes:

  1. The Battle of Gettysburg was July 1-3, 1863.
  2. You now know pretty much everything that I do about the Battle of Gettysburg.

RCTs and placebo effects

A few weeks ago, a paper was posted on the CSAE 2012 Conference website that seemed to fly in the face of much of the current research that is happening in development economics. The advent of RCTs (randomized control trials) brought about a significant change in the way we do policy analysis, but also in the costs of it. This paper suggested that RCTs were capturing placebo effects. Just like when people believe they are taking curative medicines, they feel better, so do those benefiting from RCTs experience placebo effects from knowing they are part of an experiment.

The answer, according to the researchers, is to conduct a double-blind experiment, where neither the researchers nor the participants whether they were part of the treatment or control.

The paper garnered a lot of attention early on. I noticed many colleagues and others had the immediate and short reaction of “wow” and “yikes”, and I wasn’t the only one. Berk Ozler, at the Development Impact Blog, has a good review of the paper up with a great, punny title. Among other problems:

First, it turns out that the modern seeds are treated with a purple powder in the market in Morogoro (to prevent cheating and protect the seed from insect damage during storage), so the experimenters sprayed the traditional seeds with the same purple powder. As you can immediately tell, this is less than ideal. First, as this is a not a new product, farmers in the blind RCT are likely to infer that the seeds they were given are modern seeds. Given that beliefs are a major part of the story the authors seem to want to tell, this is not a minor detail. Second, if the purple powder really does protect the seeds from insect damage, the difference between the MS and TS is now reduced.

Berk’s analysis is well worth a read. Kim Yi Dionne also addresses placebo effects, though a different paper.

Update: the original post said that this paper was forthcoming in Social Science and Medicine. This is not the case. Sorry for the confusion and thanks to Marc Bellemare for catching it.

Update #2: The Economist has a nice review of this paper up as well on the Free Exchange blog. It doesn’t touch most of the analysis issues, but it does explain well why double-blind experiments might not be useful in Economics. h/t @cdsamii

Public Education Finance

Last week, my department hosted two prominent economists who do research on public education finance to speak to students, faculty, and local teachers regarding how we’re going to finance public schools and improves US student outcomes in the coming decades. By international standards, school performance in the US lags behind other countries in math and science, in particular, which is largely heralded as expected to bring about the eventual demise of out economic and geopolitical advantage.

This is certainly not my area of expertise, so I’m speaking a bit off the cuff here, but I thought I’d summarize a bit.

Andrew Reschovsky, who is a professor in the policy school at the University of Wisconsin-Madison, asserts that we’re not paying teachers enough. His argument wasn’t entirely clear to students, it seemed, but his ultimate prescription is to bring more money to the problem.

Eric Hanushek, of the Hoover Institute at Stanford, presented an argument that many of my students found much more compelling. Firing the bottom 5-6% of teachers from each school and replacing them with an average teacher, he says, would raise math and reading scores dramatically. And, if we could only get to Canada’s level, it would add trillions to our GDP.

One teacher rightly asked, where do you expect to get these teachers, particularly when you’re cutting their salaries left and right? Hanushek replied that there are a lot of unemployed teachers, but mostly ignored the distributional problem. There are a lot of unemployed teachers in Michigan, where salaries are high and applicants far outnumber openings. There are lots of openings in places like Arizona, where salaries are low. It’s as much a problem of getting people to move to Arizona as it is replacing those teachers that get fired.

Neither side got too much into the question of how we measure student outcomes (for more on this, see Dana Goldstein, who is also moderating an event on the same at the New America Foundation tomorrow evening at NYC). Though Hanushek was fairly convinced that some measure of value-added by teacher seemed to be in order through rigorous testing, by his own admission, principals and colleagues all seem to know who the bad teachers are. In that sense, amending the system to allow teachers to evaluate each other might lead to more efficient outcomes than administering tests that hamper the ability of teachers to teach, and could be racist or biased in different cultural situations. We know testing is problematic, and yet, right now, it seems to be all we have.

As a teaching moment, I wanted to highlight how two people, coming from rather different sides of the aisle, could use the exact same information to come up with very different policy prescriptions. I’ve heard some students remark lately that econometrics seems like a science without answers. But I think the better description is that there are many answers, and we’re tasked with finding the best ones. I also had a long discussion with a colleague and my students about how teacher quality over the past fifty years has likely changed dramatically as more opportunities for women opened up in different fields.

I find it all really fascinating.

I was really hoping to outsource this post by linking to my students’ blogs, but none of them wrote about it (though many  have some interesting thoughts about Moneyball). Even for extra credit. Guess it’s going to be a required assignment next year. I will update here if I notice any posts about it in the next week.

A weak (or at least relatively weaker) recovery for women

As the job numbers for 2012 keep coming out, economists and pundits are heralding a recovery. Employment is increasing, the unemployment rate is falling, and monthly revisions to those numbers give even greater cause for optimism.

Economist Betsey Stevenson was quick to note about last month’s numbers that job leavers were overtaking layoffs. Even regular people (who don’t watch these numbers like a hawk and compete to be the first to tweet them) are becoming more optimistic. It takes guts to leave a job you don’t like; it’s a lot easier to do if you think there is another one down the line.

But just like the recession hit groups unevenly, so too is the recovery having differential effects. Notably, women aren’t going back to work as quickly as men. The Pew Research Center came out with a report today on minority groups. The whole thing is worth a read, but notably:

Men experienced greater setbacks in the recession, losing twice as many jobs as women from the fourth quarter of 2007 to the fourth quarter of 2009. In the recovery, however, men have gained four times as many jobs as women. The weakness of the recovery for women is underscored by the fact that they represent the only group among those examined in this report for whom employment growth lagged behind population growth from 2009 to 2011.

So, naturally, the question becomes why? Are women slower to return to work because there are fewer jobs available to them? Are they choosing to stay unemployed to remain at home with their families? Are they more picky about what jobs they should take having achieved some modicum of success before the recession?

I think it would be interesting to compare numbers for women in general and numbers for men with only a high school education–the group which is generally cited as having fared worst in the recession.

Update: Casey Mulligan of UChicago goes into the marriage aspect of the recession part of this phenomenon a bit more deeply over on the NYT Economix blog.

And then they all went home and did their homework

This blog is about economics, and I intend to keep it that way, but I wanted to express my joy for a minute at my students getting involved. Last night, Rick Santorum, former PA Senator and GOP candidate for the presidential nomination, chose to spend the evening in my little town of Gettysburg. He set up shop in the historic Gettysburg Hotel on the square (which is only kind of historic because the hotel, built in 1767, was totally rebuilt a few decades after the war and actually burned down in 1983).

I was promised bra burning and protestors, and though I had no desire to stand in line for hours (6:45 for a proposed 8pm start would have gotten you in for the actually 9:30 speech), I was curious to see who and what turned up. Sadly, there was no bra-burning, but there were several posters with bras attached.

Otherwise, the group was surprisingly diverse. I watched several Gettysburg College students file in, mingled with older locals and families from around the area. I’m told about 750 people actually made it into the ballroom. Outside, people from Occupy Harrisburg turned out. Ron Paul supporters (this is Gettysburg people, he did go to school here) were in full chant mode. The group of older women with burning bras and signs declaring “we fought this war 50 years ago” and “Women Beware” were among my favorites.

Most heartwarming, though, was the throng of students. On the protesting side, the Gettysburg Allies group came with rainbow flags and purple shirts and a circular piece of Styrofoam with the word Bayer on it. A group of female students changed “Keep your rosaries off my ovaries” and others joined in the OWS chanting. Inside, several students got in and told me today about how exciting it was. Regardless of what they thought of him, it was exciting for them to be there with the people and the cameras and the rush.

I was told, before I came here, that Gettysburg College students were pretty apathetic. It was great to see them excited and involved and participating. And seeing that their participation was part of something larger. It’s so important. Even I was really excited. I tweeted about it constantly, and it’s not like it was a big, significant event with people getting arrested or police brutality. It was mostly a bunch of students and locals, showing that they care, one way or the other.

And then they all went home and did their homework.

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In which I review Matt Yglesias’ The Rent is Too Damn High

I caved last week and downloaded a Kindle App for my iPhone. It kind of killed me. I really love books–the bound, paper kind. I’ve been fighting the Kindle/iPad/tablet/Nook/e-reader thing for years now, and imagined I could still hold out for several more years. At least one publisher probably figured out that the best way to get me (and other holdouts like me) to convert was to offer certain desirable pieces solely on e-readers. I may be one of the few they got with this book, but surely there are others coming this way.

Matt Yglesias was a fellow at Think Progress and now writes a blog about economics for Slate. He’s thoughtful, smart, and perhaps even more important, concise. I’d followed him on twitter and through his various blog posts for awhile. When he released this e-book–too long for a magazine piece (still my favorite form of journalism) and too short to really be a book, book–called The Rent is Too Damn High, I felt like I had to read it.

I read the book (ebook, Kindle, whatever it is) in about an hour an a half when I arrived at a friend’s condo on Friday evening. I spent the entire next day talking about it and subsequently lent it to my ski buddy, who also devoured it in an evening. The skiing was terrible, might as well talk about economics, right?

Matt’s argument is fairly simple and straightforward. He argues that much of our housing and societal woes could be addressed–partly, certainly not entirely–by relaxing restrictions on building height and density and reducing implicit and explicit subsidies for single-family homes in the far-flung suburbs.

It’s a very convincing argument. Letting more people live in desirable places means more efficient transportation and other public services, reducing long average commute times, increasing the number of people walking and taking public transportation, increasing availability and variety of service providers, and more. Most importantly, perhaps, increasing density would reduce upward pressure on housing prices, which pushes people out of their homes, reduces variety and profitability of businesses, and likely contributed in some ways to the housing bubble.

At the center of the story is a profound disconnect in the way we think about houses. Hoping that a house will appreciate in value and constitute a sound investment is rather silly. Houses are made of wood and concrete and stone and steel, physical materials that will only degrade with time. The land a house sits on is an investment, and can appreciate based on the values of proximate amenities. But when housing prices increase rapidly, as they did prior to crashing a few years ago, they lose predictive power of the true value of the land and incorporate speculation. That’s how we get a bubble.

What I love about Matt Yglesias is that he is skilled at taking rather complicated topics in economics and making them perfectly accessible. He has a deep understanding of economic theory and relates those ideas in a clear, concise, and readable way. This book is no exception. It’s easy to read and clearly well thought-out.

My only real complaint is that I wanted more. Though there were places I wasn’t sure where he was going, it quickly came back to the point. The repeated discussion of elevators as technology was a bit amusing, but nothing more than a slight distraction. What I would have liked is to have seen additional discussion on the policy problems that additional density would create. No policy, regardless of how enticing it sounds, can change a rather significant trend in demographics without significant adjustment. This doesn’t mean that the costs aren’t worth it, but they are worth enumerating and discussing.

Water, for instance. While it’s cheaper per capita to get water to people who live in denser areas, it also means that pipes need to be replaced more often, and at least one person writing a book tells me NYC’s sewer system is in dire need of repairs. Direct re-use plants, increased sanitation, etc, are all things that belong in this discussion. Higher density housing also necessitates a stronger commitment to building more schools and park and hospitals. The ease of spreading diseases, access to sunlight, etc, etc.

There’s more, surely. In sum, though, read it. It’s quick, straightforward, and you might just learn something.