No loo, No I do

A few weeks ago, a coauthor sent me a job market paper from an environmental economics student at Yale. Though in a very different department than me, we have similar interests and she thought I would find the paper interesting. Not only did I find it interesting, I found myself wishing it had been my job market paper. Apparently, so did a lot of people. The paper has been blowing up my twitter feed and was featured on the World Bank’s Development Impact Blog.

The paper evaluates the effects of a media campaign in Haryana, India designed to encourage women to make latrine presence a requirement for marriage. The project is particularly interesting because it allows for reasonable evaluation of a campaign targeting social norms without the the randomized control component so in vogue in economics right now. In addition, it provides real evidence as to the causal effect of skewed sex ratios. While we have speculated and reported on the effects of sex ratios, many of which I’ve discussed here, there is little statistical evidence. Now, we have some. It’s pretty great.

In summary, the paper shows that men of marrying age are more likely to build latrines when they live in areas with a more skewed sex ratio. Thus, a woman’s bargaining power in demanding a good that has an outsized benefit for her (privacy, sanitation, health) increases when she becomes relatively ‘scarce’ on the marriage market. While this doesn’t discount the other, more undesirable possible effects of a skewed sex ratio (bridenapping, increased violence against women, etc), it is certainly evidence that women are leveraging their bargaining power to improve their outcomes.

In addition, the means to test a social norms marketing campaign are huge. My own work on such campaigns directed at reducing gender-based violence showed the near impossibility of successfully and credibly evaluating their impact. The use of a sex ratio as a (somewhat?) exogenous measure of potential impact is novel, exciting, and I’m sure will be in use by many papers to come. There’s the obvious question of whether it’s plausibly exogenous, but perhaps we’ll save that conversation for another day.

The paper has two parts, one presents a theoretical model to explain the mechanism and the other presents empirical evidence from the program itself to show how a skewed sex ratio has increased women’s bargaining power, at least on this one dimension in Haryana, India. I have some nitpicky comments, like the theory section needs to be more thoroughly explained, or there are square brackets where there should be curly ones, but overall, I think it’s a great paper. It’s kind of wonkish, but you can download the paper here, if you’re interested. Good luck in Chicago, Yaniv!

Violence and Venezuela

I spent much of the last few weeks of the semester trying to convince my Latin American economics students that Venezuela is unabashedly the craziest place on earth. I may have made this claim about several places I’ve lived, but new evidence shows that I may actually be correct about Venezuela.

In Al Jazeera this week, former Fulbright scholar and current Stanford PhD student, Dorothy Kronick, discusses the prevalence of violence in Venezuela and how Chavez amazingly escapes the blame for it. Comparisons of Venezuela’s level of violence have been made to Iraq during the height of the war, Ciudad Juarez, and other dangerous places, but Dorothy points out that unlike Iraq or Ciudad Juarez, there is no war going on in Venezuela. Petty crime often ends in murder, gang-related deaths are all too common, and I’ll add that violence against women, at least in my anecdotal knowledge, is rather high.

Despite the relative impunity with which these criminals act and the astounding levels of violence that permeate society, President Chavez does not seem to suffer electorally. In fact, Dorothy shows that the areas showing the highest growth in rates of crime have lost very few Chavez and chavista votes.

“People don’t seem to blame the government for the security problem,” Gerardo Gonzalez, an analyst with one of Venezuela’s top polling firms and a Central University of Venezuela graduate, told me in an interview. “In fact, it seems to us that violence might even help Chavez: the more people talk about violence, which they don’t attribute to him, the less they’re talking about unemployment, which they do attribute to him.”

So, there’s only so much you can complain about, but I still find it most amazing that Venezuelans don’t attribute la inseguridad (violence or insecurity, loosely) to Chavez. I never knew a pre-Chavez Venezuela, but it can’t have always been like this.

Over on Caracas Chronicles, my former editor gives his take on the same article: it can’t go on forever.

Stay awhile

I got a first-hand look at the economy of Europe this past week with a trip to Ireland. The pessimism was rather unsurprising all around, but I got my first exposure to it before I’d even entered the country. I told the the customs officer that I was a professor and he replied “And what do you usually profess?” It took me a minute to realize what he was asking, but I replied “economics”. Without looking up at me, he handed me my passport and said, “Stay awhile. You’ll learn a lot.”

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Left at either end

Rising sex ratios in Asia and other parts of the world have been getting a lot of attention lately. Or at lest, I see them a lot. The idea that men at all socioeconomic levels are being left behind in the marriage market as women become more scarce is one that promises to have effects on everything from gender-based violence to construction inefficiencies as time goes on.

While perhaps a smaller problem, it’s clear that there are women losing out in Asia, too, when it comes to the marriage market, though not for the same reason. As much as economist might love the concept of ceteris paribus, changes in the sex ratio aren’t the only changes sweeping the world. In cities in particular, as women become more highly educated than men and begin to close the wage gap, a culture of “marrying up” means those highly educated, paycheck-earning women are having a hard time finding wives.

I have no idea how many women this might actually be affecting, but I do think it poses interesting questions of social and economic mobility. Like, is the entire distribution of women shifting towards more education and higher incomes? Or is there only movement at the top? And if there’s only movement at the top, then does that mean men are reaching “lower” into the pool, to less and less educated women? Or are the education and income differentials relatively constant?

Gendered Realty

Via someone on twitter this morning, I came to this infographic on how men and women are doing compared to each other in terms of home sales and prices. If that’s a confusing statement, or rather a vague statement, I intended it that way. That’s the way the infographic sets itself up. What it really means to present is how male and female real estate agents are faring, compared to each other, using home price sales and quantity of listings as their metric for success.

I like infographics, but I found this one to be unnecessarily confusing. If you scroll down to the bottom of the page, it gives you, in barely readable text, a good, solid way to read the infographic and accompanying list. But without that, I think it’s really unclear whether we’re talking about buyers (no) or sellers (no) or real estate agents (yes) and it doesn’t really give me much reason to care. Statistics are misleading enough without such beating around the bush.

What’s the matter with Kansas?, redux

I saw mutterings that a repeal of domestic violence laws might actually take place in Kansas a few weeks ago, but I had a hard time believing that it might actually come to pass. It did, and now the mainstream news is covering it. I’m not a lawyer, but I have to believe this violates equal protection clause of the Constitution. It’s unbelievable to me that anyone would use the economy to justify picking and choosing which crimes to prosecute. Beyond that, though, I’m astounded that even if you are able to justify your actions so callously–as those in charge in Topeka are doing–you cannot see that it’s incredibly short-sighted to repeal domestic violence laws. You create such perverse incentives–increase in battering, reduction in reporting, decrease in intervention by police, family members, neighbors. Haven’t we established that domestic violence is extremely costly? To individuals, to society, to workplaces, to the insurance system, to children. Endangering women and children is not the way to make a point.

On the state of economics

I haven’t yet written much about the Nobel Prize this week. There was little discussion of it within my department, likely due to a dearth of macroeconomists and a few days off for “reading days”. I will try to write something more in depth about it, perhaps over the weekend, but I found this piece, by John Kay, rather insightful for several reasons, two of which I’ll highlight here.

The first has to do with teaching. Students often struggle with the concept of a model. It’s something that is so profoundly simple, and even simplistic, that they struggle to see the use of it. I really like Kay’s description of the necessity of simplifying assumptions

All science uses unrealistic simplifying assumptions.  Physicists describe motion on frictionless plains, gravity in a world without air resistance.  Not because anyone believes that the world is frictionless and airless, but because it is too difficult to study everything at once.  A simplifying model eliminates confounding factors and focuses on a particular issue of interest.  To put such models to practical use, you must be willing to bring back the excluded factors.  You will probably find that this modification will be important for some problems, and not others – air resistance makes a big difference to a falling feather but not to a falling cannonball.

At lunch today with my chair, we discussed the decline in female economics majors. Our department, unlike many economics departments, has quite a few female faculty members. I didn’t have a single female economics professor at Duke, though I did in my time abroad. In fact, the female economics faculty with whom I did interact at Duke left a not-fantastic impression. At least anecdotally, I can say that high female-to-male faculty ratios didn’t push me down my current path, or low ones didn’t discourage me, either. Rather, Kay suggests there is something about the nature of our model-making that is profoundly asocial and disconnected, and thus, perhaps, male.

The knowledge that every problem has an answer, even and perhaps especially if that answer may be difficult to find, meets a deeply felt human need.  For that reason, many people become obsessive about artificial worlds, such as computer games, in which they can see the connection between actions and outcomes. Many economists who pursue these approaches are similarly asocial.  It is probably no accident that economics is by far the most male of the social sciences.

The whole piece is incredibly well done and provides a clear, straightforward critique of economics today; it is a bit dense. It addresses much of the debate behind current arguments for and against deficit spending, which, sadly, are likely not well understood by those pushing for either side. I highly recommend reading it.

Paying for Beauty Pays

Awhile back, I ordered Daniel Hamermesh’s new book, which is a basically a more readable compilation of some of his academic papers on beauty, called Beauty Pays: Why Attractive People are More Successful. I’ve yet to read it due to the piles of books all over my office and apartment right now, but I will say that I find the subject fascinating.

An article in today’s New York Times addresses one facet of the beauty premium by presenting research that shows that makeup affects our perception of women, particularly traits such as trustworthiness. The study is conducted by psychologists, but it’s no surprise that they asked Hamermesh to weigh in:

Daniel Hamermesh, an economics professor at the University of Texas at Austin, said the conclusion that makeup makes women look more likable — or more socially cooperative — made sense to him because “we conflate looks and a willingness to take care of yourself with a willingness to take care of people.”

It’s a very economist-y response, which is likely why I find it appealing.

Diffuse Costs, Concentrated Benefits

In a principles of economics class, I have to spend a lot of time explaining why the government puts into place policies that create inefficiencies in markets, or policies that don’t seem to make much sense. In a situation where you’re already faced with disseminating large amounts of information, I tend to emphasize one factor above all, the principle of concentrated benefits and diffuse costs. When we examine very simplistic market-changing tools like a price floor or a quota, we can clearly identify the winners–generally a really small group of people that benefits greatly–and the losers–generally a large group of people that loses out, but usually just a small amount. So even if the losses of the larger group outweigh the benefits to the smaller group, it’s hard to get the losers to rally around a cause to change things because what they’re losing is not quite worth the time to push for a change. Those who are winning have a strong incentive to make sure the policy stays in place to ensure their continued winning.

The press around the Occupy Wall Street protests is beginning to take form with a small twist on this outcome. Instead of just losing out a little bit, those who are losing out are losing out a lot. And though those who are winning still have a vested interest in maintaining the power structure, but even that is coming unraveled a bit. Warren Buffet’s offering to pay more taxes and in today’s Washington Post, Ezra Klein says there are a lot of people bitter at the fact that “You did everything you were told to do, and it didn’t work out.”

Maybe we’ve gotten far enough along the inequality path that the diffuse costs are big enough for individuals that they’re asking for change. That they don’t know what kind of change yet is definitely something that needs to be worked out, but perhaps not all that surprising. We had to know this wouldn’t last forever.