That is the point

I am in Colorado for what is an admittedly enviably long break from teaching classes. I have been spending time in various cities and this week had the pleasure of spending a day in the mountains with my dear friend from high school and her family.

B’s mom, M, and I were chatting a bit before we headed to breakfast (at the Butterhorn Bakery in Frisco. Love!) and she mentioned Yoram Bauman’s piece in the New York Times two weeks ago on his experiments to uncover the nature of economists’ stinginess. M was curious to hear my opinion on the matter, and so I thought I might share here what I shared with her.

At the heart of the paper is an experiment in which college students are asked whether they want to donate a nominal amount, $3, to one of two charities at the time of their class registration. One is a left-leaning group, WashPIRG, and the other a non-profit with the aim to reduce tuition rates, Affordable Tuition Now (ATN). The take-home message is that economics majors were less likely to contribute to either group and thus are “free-riding.” In addition, those who took economics classes but didn’t become majors were less likely to contribute than those who never took an economics class.

In his NYT piece, and in his paper, Bauman dismisses the type and name of the charities he employs in the experiment as rather meaningless to the outcome. “You may question whether these groups actually serve the common good, but that’s mostly beside the point.” It is my belief that the types and aims of charities are driving a lot the effect he sees, or at least have the potential to drive the effect.

For purely anecdotal purposes, I’ll tell you that I was an economics major, and I’m a little bit cheap, (have been my whole life), but that I also give to charity. Despite five years of impoverished grad student living, I still gave and will continue to give to charities I trust and admire. Now that I have a job and am feeling as though I’ve recuperated much of the year’s moving and dissertation writing losses, I’m also looking to expand that giving. Whether I give more to the charities I know or include new ones is to be determined, but you can bet that it will be a careful decision.

And I think that is where the problem comes in with Bauman’s experiment, carefulness. Research, thought, time, and emotional value all come into play when choosing charities to support. So do politics, often. And while I can’t say for sure that economics students are more careful about those decisions, if Bauman can’t account for that either, I don’t think he has a paper. Snap decisions about giving are likely very different than careful decisions about giving. And just because an economics class makes you less likely to give your money to an unknown organization with an unknown track record (or perhaps a known one that works for something that goes against some part of your belief system), I don’t think that makes us more stingy, it makes us more careful.

From an econometric standpoint, if the students who are more (or even less!) careful are the ones who are choosing not to donate–at least in that moment–then the effect you are attributing to stinginess is in fact not there. It’s what economists call an unobservable. The unobservable effect may be driving the difference in donations.

Even if economics students are not more careful, if there is any unobservable quality that is correlated with unwillingness to contribute, the effect is biased.

It’s also my experience that economics majors are more conservative–politically–than their arts and sciences counterparts. I have a hard time believing that right-leaning students would be inclined to donate to WashPIRG anyway, especially when they have likely spent a good deal of their college career dodging their canvassers in the street. (Maybe that’s just COPIRG.)

Overall, I disagree with the interpretation as much as the method. That taking an economics class leads to “loss of innocence” and thus not contributing is overly dramatic, patriarchal, and just plain silly. Aren’t we supposed to be educators? Since when is it my job to protect the innocence of college students? And why should we conflate giving with innocence?

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.