Help me test a (very silly) hypothesis by answering a few questions

boss

I’ve held a silly hypothesis in my head ever since I was a grad student, but never had the time/resources to test it. I just recently came across a publication which drastically reduced the costs to testing the idea. It will almost certainly result in a “jokey” paper, but a fun one nonetheless.

But I could use your help. I have constructed an online survey displaying photos of people, and I need respondents to tell me whether these people are smiling, frowning or have neutral expressions. There are over 170 questions, but they are randomized, so even if you only manage to answer a few (and then close the window), it still would help a lot!

I can’t tell you what the idea is just yet, because it might spoil how you answer the questions. More information to follow, once enough people have answered the survey.

Click through here to enter the survey.

The road out of hell

In the FT yesterday, Branko Milanovic suggested that we might be able to increase global migration by reducing the citizenship rights of migrants. This is not a new idea – Lant Pritchett brought it up ten years ago and it is widely practiced by many Gulf states.

Over at Crooked Timber, Chris Bertram made it clear he really doesn’t like this idea, comparing Milanovic’s suggestion to “recreating apartheid” (I suspect the word apartheid will eventually be subject to its own form of Godwin’s law):

Milanovic wants us explicitly to abandon the liberal and democratic principles of legitimacy that those who are subject to the laws of a society should (in time in the case of migrants) get to have the right to make those laws. In doing so, he goes far beyond similar proposals (for example from Martin Ruhs that have been explicitly temporary in nature and have largely focused on labour-market rights. Milanovic’s lack of commitment to the norms of liberal democracy also comes across in the fact that he holds up illegitimate and tyrannical states, such as the Gulf kleptocracies, as models for his proposed policy.

Part of what’s going on here is the economist’s perspective on policy, which just focuses on net improvements in well-being or utility, with income serving as a proxy, and which doesn’t, therefore, see human beings as possessed of basic rights which it is impermissible to violate. Rather, all and any rights can be sacrificed on the altar of income improvement, just in case someone is poor and desperate enough to make a deal (who are we, paternalistically, to stop them?). The road to hell is paved with Pareto improvements.

Let’s be absolutely clear: we are already in hell and we are trying to find a path out of it. International migration restrictions – as they stand – already enforce a global system of apartheid. Most of global inequality in income (and likely in health and happiness) is driven mainly by where  you are born. By preventing someone mired in poverty overseas from moving to a place where they can make a better life for themselves – even temporarily – we are implicitly denying that person the same rights that we enjoy every day (rights that most have us have inherited, not earned). These are also arguments that Pritchett made before.

Human beings have a proximity problem: inequalities in outcomes or rights which are proximate to us (on the right side of an arbitrary national boundary) are weighted much higher that massive, gaping inequalities which are harder to observe because the people bearing the brunt of that inequality happen to live overseas.

We would all agree that a migration system which allows for restricted freedom is a worse solution than a system which allows for the same amount of migration with no restrictions on freedom. But the latter system does not exist, nor has anyone managed to propagate a convincing way to get there. I don’t know if a Milanovic/Pritchett system would work, but I can think of two main reasons why we might not want to consider it:

  1. There is a lower cost path towards a system which does not limit freedom that we can implement sooner.
  2. Adopting a system based on limited citizenship now will somehow make it harder to move to a free system later on.

If Bertram really wants to make a convincing case against the Milanovics of the world, he needs to start by showing us a better road out of hell.

The ultimate Monopoly strategy and the British housing shortage

monopoly

Over at imgur, someone has discovered a Monopoly strategy that will not only let you win, but will also make the other players hate you:

A little-known rule of Monopoly is that the game has exactly 32 houses and 12 hotels. Once you run out of houses, no more can be purchased until they re-enter the supply by being sold or upgraded to hotels. If there are more players who want to build houses than there are houses available, they are auctioned off to the highest bidder, one at a time. The core of this strategy is to buy up as many houses as possible before anyone realizes what you’re doing, and DO NOT UPGRADE TO HOTELS to prevent people from improving their own properties.

Basically, you need to create several monopolies very quick and just focus on buying up all the available houses the game provides. Once there are no more houses, your friends can’t advance and so you’ll win, slowly and painfully.

Everyone suffers in this scenario, except for the lucky person who rushed their way onto the housing ladder. But note that the reason this strategy works and the first-mover will eat up all the resulting rent is because Monopoly has a purely arbitrary rule on the supply of housing. This is not a million miles away from the unnecessary planning restrictions which make it harder to build or upgrade in the UK and thus make land and housing far more expensive than they need to be.

Hate tip to kottke.org

The most trolling, self-aware Nigerian e-mail scam ever

I spotted this on Joe Wein’s extensive 419 scam repository. Spamming, in the name of Nigeria’s reputation:

Dear Sir/Madam,

Compliments of the day.

We hope this email would find you in the best of health and spirits.

You are reading an e-mail from JUDICIARY OF ENGLAND AND WALES, UK. On a daily basis, the Judicial Office coordinates and transmits requests for investigative and humanitarian assistance. The preponderance of economic and financial crimes like Advance Fee Fraud, Money Laundering and Terrorist activities all over the world, etc has had severe negative consequences all over the world, including decreased Foreign Direct Investments and tainting of world’s national image.

The menace of these crimes and the recognition of the magnitude and gravity of the situation led to the signing of Memorandum of Understanding on Friday 21st March, 2014 between British Government, United States Government, United Nations, Australian Government, Canada Government and Nigeria Government at the United Nations Headquarters located at New York City, USA. It was agreed that to retain the good image of Nigeria and the rest of Africa countries, all the scam victims who lost his/her hard earn money to these faceless thieves will be compensated with just US$250,000.00 (Two hundred and fifty thousands United Stated Dollars only) to avoid sanctioning Nigeria and some Africa Countries.

To that effect, we are sending you this e-mail because your contact details were given to us as one of the victims. You will receive your compensation payment through ATM SMART CARD which is the simplest way to transfer huge amount of money to avoid transfer charges or any further delay.

The delivery of your ATM SMART CARD to your provided address via CHRONOPOST COURIER will cost you US$100 only. We have signed a contract with CHRONOPOST COURIER Company for the delivery of all the ATM SMART CARD which should expired June 30th, 2014.

I WANT YOU TO READ BELOW CAREFULLY, THE NOTICE BELOW STAND AS CAUTION BEFORE IT IS TOO LATE.

MR. CHARLES WILLIAM ROME presented an Authorization Letter for change of your data that you are dead one month ago. After the investigations however,it was revealed that there are some dubius Banks and Government Officials in Nigeria and the rest of Africa countries who are collaborating with some Foreigners to make these changes illegally without the knowledge of the Bona-fide Benefactors and one traced to your own change is this MR. CHARLES WILLIAM ROME of United States of America, who said you are dead, He have also forwarded his Name and Address below as the new Address that will receive this money.

Name: MR. CHARLES WILLIAM ROME
Address: 139 Chelmsford DR Aurora, Ohio 44202, United States

But we wanted to confirm if actually this is true and hence decided to write to your email address which from now and there is no response from you, We will then know that you are dead indeed and the Compensation payment of US$250,000.00 will be transfer to him.

IF PROVED OTHERWISE BY YOU THAT YOU ARE NOT DEAD, PLEASE, FILL THE Claimant Form below and SEND IT TO HON. MINISTER OF FINANCE, NIGERIA (ATTENTION DR. NGOZI OKONJO-IWEALA) IMMEDIATELY. SHE IS THE PROCESSING AND PAYING OFFICER.

CLAIMANT FORM:-
1.YOUR FULL NAME
2. GENDER:
3. HOUSE OR OFFICE ADDRESS (P. O. Box not accepted)
4. YOUR PHONE NUMBER(S)
5. COUNTRY:

NAME: ATTN: DR. NGOZI OKONJO-IWEALA
E-mail: fedministryoffinance_department@yahoo.fr

Immediately you send the above required information to DR. NGOZI OKONJO-IWEALA, she will proceed with the Processing/Releasing of your ATM SMART CARD to you within 2-3 working days based on our agreement.

PLEASE NOTE: YOU WILL BE REQUIRED TO PAY US$100 ONLY TO CHRONOPOST COURIER WHICH IS THE COST OF THE DELIVERY OF YOUR ATM SMART CARD TO YOUR PROVIDED ADDRESS. (YOU SHOULD NOT PAY ANY OTHER MONEY FOR ANY REASON(S) WHATSOEVER).

IMPORTANT: UNDER PENALTY OF LAW, THE INFORMATION YOU SUBMITTED TO DR. NGOZI OKONJO-IWEALA CORRECTLY IDENTIFY YOU AS THE RECIPIENT OF THIS PAYMENT; NO OTHER LIVING PERSON OR ENTITY IS ENTITLED TO ANY PART OF THIS PAYMENT; IT IS A VIOLATION OF LAW FOR ANY PERSON TO INTENTIONALLY OR KNOWINGLY FILLING FOR DOUBLE CLAIMING OR AID ANOTHER PERSON IN CLAIMING THE SAME FUND, BY MEANS OF FRAUD OR DECEIT. BE WARNED

We await your urgent reply.

Yours faithfully,

The Lord John Thomas of Cwmgiedd,
Lord Chief Justice of England and Wales

A randomista for hire is a dangerous thing

Our research shows that the treated (caged) group was 30% more likely to return home than the non-caged group.

Our research shows that the treated (caged) group was 30% more likely to return home than the control (non-caged) group.

The Behavioural Insights Team is a research unit made up of randomistas who prefer to rely on behavioural economics and psychology to develop and test `nudges’ to achieve certain policy goals. They originally grew out of the Cabinet Office, but eventually went private (the CO has retained a stake in the BIT).

I was always excited by the mere existence of the Behavioural Insights Team – this was the first clear example of government investing in rigorous randomisation to test some of its policies.

That said, while the BIT likely comprises a group of people who want to make the world a better place, they are beholden to their clients. One of these clients is the Home Office, which is currently paying the BIT to find ways to convince illegal migrants to voluntarily leave the UK. From the BIT’s update report:

Increasing voluntary departures of illegal migrants

BIT has been working with the Home Office to consider new measures to help illegal migrants to voluntarily return home, focusing initially on engagement at reporting centres. Reporting centres are seen as an important but underutilised opportunity to prompt illegal migrants to consider whether leaving the UK voluntarily would be a preferable option in their circumstances.

Starting in December 2014, BIT undertook a short piece of ethnographic research at reporting centres across London, reviewing current procedures and interaction points to gain an understanding of the reporting centre experience from the perspective of a member of the reporting population and the reporting agent.

Informed by this, BIT developed several options for Home Office consideration to employ behaviourally informed trials in reporting centres that could encourage higher numbers of voluntary departures from the UK.

At this stage, the precise scope of a trial is still being finalised, with the aim to combine a number of behavioural elements to create a distinct reporting centre experience that encourages members of the reporting population to consider voluntary departure as an alternative to their current situation.

Note that many people who end up in reporting centres are asylum seekers, not just illegal `economic’ migrants. The BIT has another project in the pipeline aimed at targeting business who hire illegal migrants, with a similar end goal of convincing the migrants to voluntarily go home. The Home Office got a lot of push back from trying this before, in the not-too-subtle form of a van driving around telling migrants to go home:

tory-van-620_2628143b

So now the UK government has turned to more insidious methods, aided by a team of randomistas. It’s useful reminder that rigorous, evidence-based policy can be used for stupid, short-sighted policy as well.

 

*Disclaimer: I once applied to work at the BIT, but dropped out midway through the selection process to work on a project in Oxford.

How I Learned to Stop Worrying and Love the Bomb

bomb

Orbital Mechanics has created an incredibly creepy, yet riveting video showing every single nuclear detonation from 1945 onward.

 

You would be excused if your first reaction is “holy shit, we’re absolutely bonkers.” That was my first reaction.

My second thought was: “we were lucky that, aside from the obvious first two bombs, we were relatively lucky in that nothing ever went wrong.” But I was wrong to think that – nuclear testing led to long lasting, negative effects on the cognition of people who were exposed to the radiation while in utero. Sandra Black and co. have a really interesting paper examining the effect on Norwegians (apparently due to atmospheric conditions, a large hunk of radiation form nuclear testing landed in Norway):

Research increasingly shows that differences in endowments at birth need not be genetic but instead are influenced by environmental factors while the fetus is in the womb. In addition, these differences may persist well beyond childhood. In this paper, we study one such environmental factor – exposure to radiation –that affects individuals across the socio-economic spectrum. We use variation in radioactive exposure throughout Norway in the 1950s and early 60s, resulting from the abundance of nuclear weapon testing during that time period, to examine the effect of nuclear exposure in utero on outcomes such as IQ scores, education, earnings, and adult height. Importantly, we are able to examine the effects of exposure each month in utero to determine the periods when exposure is most harmful. We find that exposure to low-dose nuclear radiation, specifically during months 3 and 4 in utero, leads to a decline in IQ scores of men aged 18. Moreover, radiation exposure leads to declines in education attainment, high school completion, and earnings among men and women. We are also able to examine whether these effects persist across a second generation – we find that the children of persons affected in utero also have lower cognitive scores, suggesting a persistent effect of the shock to endowments. Given the lack of awareness about nuclear testing in Norway at this time, our estimates are likely to be unaffected by avoidance behavior or stress effects. These results are robust to the choice of specification and the inclusion of sibling fixed effects.

Hat tip to Kottke.

 

The IMF, inequality and the trickle-down of empirical research

"It took so many assumptions to put you together!"

“It took so many assumptions to put you together!”

By Nicolas Van de Sijpe

recent IMF staff discussion note has received a lot of attention for claiming that a smaller income share of the poor lowers economic growth (see also here and here). This piece in the FT is fairly typical, arguing that the paper “establishes a direct link between how income is distributed and national growth.”

It quotes Nicolas Mombrial, head of Oxfam International’s office in Washington DC, saying that (my emphasis): “the IMF proves that making the rich richer does not work for growth, while focusing on the poor and the middle class does” and that “the IMF has shown that `trickle down’ economics is dead; you cannot rely on the spoils of the extremely wealthy to benefit the rest of us.”

The aim of this blog post is to clarify that the results in Table 1 of  the paper, which are based on system GMM estimation, rely on assumptions that are not spelled out explicitly and whose validity is therefore very difficult to assess. In not reporting this and other relevant information, the paper’s application of system GMM falls short of current best practices. As a result, without this additional information, I would be wary to update my prior on the effect of inequality on growth based on the new results reported in this paper.

The paper attempts to establish the causal effect of various income quintiles (the share of income accruing to the bottom 20%, the next 20% etc.) on economic growth. It finds that a country will grow faster if the share of income held by the bottom three quintiles increases. In contrast, a higher income share for the richest 20% reduces growth. As you can imagine, establishing such a causal effect is difficult: growth might affect how income is distributed, and numerous other variables (openness to trade, institutions, policy choices…) might affect both growth and the distribution of income. Clearly, this implies that any association found between the income distribution and growth might reflect things other than just the causal effect of the former on the latter.

To try to get around this problem, the authors use a system GMM estimator. This estimator consists of (i) differenced equations where the changes in the variables are instrumented by their lagged levels and (ii) equations in levels where the levels of variables are instrumented by their lagged differences (Bond, 2002, is an excellent introduction). Roughly speaking, the hope is that these lagged levels and differences isolate bits of variation in income share quintiles that are not affected by growth or any of the omitted variables. These bits of variation can then be used to identify the causal effect of the income distribution on growth. The problem with the IMF paper is that it does not tell you exactly which lagged levels and differences it uses as instruments, making it hard for readers to assess how plausible it is that the paper has identified a causal effects.

Continue reading

Guns don’t kill people

commando

Think of all the cultural reasons I am wielding this rocket launcher.

Another shooting happens. This time in Charleston. I grew up about two hours away and often visited the town with my parents. It’s a lovely place, although like most places in South Carolina it has a difficult, disturbing past.

There are two opposing views which typically surface after  a mass shooting. The first is that gun violence is driven by gun ownership, and that effective gun control will reduce the number of people killed by firearms every year.  A simple mathematical way of describing this relationship would be to say that gun violence is a function of the number of guns in a country:

V = F(G)

The opposing view is that there are all sorts of other things that determine gun violence. Proponents look to countries with high levels of gun ownership but low levels of violence, such as Canada. Holders of this view assert a relationship that looks like this:

V = F(S)

Where S is “other stuff” which influences gun violence. This is somewhat consistent with the  “guns don’t kill people, people kill people” argument, which includes the unstated third statement: “and there are lots of things that determine whether people want to kill each other.”

Setting aside any preoccupations with the Second Amendment, the gun control debate can be characterized as a fight over whether V = F(G) or V = F(S). But this is a mischaracterization which gives more legitimacy to those opposed to gun control. In reality, gun violence is a function of both the number of guns in circulation and all the “other stuff,” and that, by construction, fewer guns makes it more difficult to commit gun violence, so that.

V = F(G,S) and V = 0 if G = 0 or S=0

That is: it doesn’t matter if Canada can have its cake and eat it. If there is some special ingredient to having guns without the violence (S = 0), we don’t know what it is, and won’t know any time soon. But that doesn’t mean that reducing G will not reduce violence. Whether it is a cost-effective way to reduce violence is another question, but unless someone identifies what goes into S, the best bet is for the US to focus on G.

LaTeX Wars Episode V: The Word Users Strike Back

Of course I edit all my documents using the original Nintendo Power Glove

Of course I edit all my documents using the original Nintendo Power Glove

Throughout the mid-90s, my father used a DOS-based typesetting program called PC-Write to produce his books and journal articles. In stark contrast to more-popular word processing programs, PC-Write relied on a what-you-get-is-what-you-mean approach to typesetting: dad would indicate his formatting preferences as he wrote, but he would be forced to print out a page in order to see his formatting options being applied. By contrast, I grew up working with Microsoft Word and so with each passing year I found my father’s system to be increasingly archaic. Eventually, after a substantial amount of healthy mockery from his son, he migrated over to Word and hasn’t looked back since.

However, by the time I arrived in grad school an increasing number of other (economics) students were using LaTeX, a typesetting language that was much closer in design to the old-fashioned PC-Write than to the what-you-see-is-what-you-get format of Word. Although I suspected that LaTeX was another manifestation of the academic economist’s tendency to choose overly-complex methods and technical mastery over user-friendliness, I eventually became a convert. Somehow, I found my preferences begun to mirror Dad’s original love of PC-Write.

If you ever feel like experiencing a wonderfully-arbitrary argument, ask a group of economists if they prefer LaTeX or Word. Within the profession there is a pretty serious division between those who prefer the look and workflow of the former  and those who prefer the accessibility of the latter. While there are some of us who are comfortable working in both formats, each camp has its stalwarts who find members of the other camp to be bizarrely inefficient.

The two sides appeared to be in a stable stalemate until recently, when a new study comparing the efficiency and error rates among LaTeX and Word users appeared in PLOS One. The headline result: Word users work faster AND make less errors than LaTeX users.

journal.pone.0115069.g004

Ooof – I hear the sound of a thousand co-authors crying out with righteous indignation. The Word camp was quick to seize upon this study as clear evidence that LaTeX users were probably deluding themselves and that now would be a good time for everyone to get off of their high horse. The authors of report  even went as far to suggest that LaTeX users were wasting public resources and that journals should consider not accepting manuscripts written up using LaTex:

Given these numbers it remains an open question to determine the amount of taxpayer money that is spent worldwide for researchers to use LaTeX over a more efficient document preparation system, which would free up their time to advance their respective field. Some publishers may save a significant amount of money by requesting or allowing LaTeX submissions because a well-formed LaTeX document complying with a well-designed class file (template) is much easier to bring into their publication workflow. However, this is at the expense of the researchers’ labor time and effort. We therefore suggest that leading scientific journals should consider accepting submissions in LaTeX only if this is justified by the level of mathematics presented in the paper.

Pretty damning, eh? Not so fast! There are several reasons we should doubt the headline result.

For one, rather than randomly assigning participants to Word or LaTex, the researchers decided to allow participants to self-select into their respective groups. On one hand, this makes the result even more damning: even basic Word users outperformed expert LaTeX users. The authors themselves admit that preference for the two typesetting programs varied wildly across disciplines (e.g. computer scientists love LaTeX and health researchers prefer Word). It’s perfectly possible that the types of people that select into more math-based disciplines are inherently less efficient at performing the sort of formatting tasks set by the researchers. Indeed, the researchers found that LaTeX users actually outperformed Word users when it came to more complex operations such as formatting equations.

Furthermore, the researchers only evaluated these typesetting programs along two basic dimensions: formatting speed and error-rates, ignoring other advantages that LaTeX might have over Word. As an empirical researcher, I find it enormously easier to link LaTeX documents to automated data output from programs like Stata, making it simple to update results in a document without having to copy and paste all the time. Word can also do this, but it has always been far clunkier.

So, in short, the jury is still out. Feel free to return to your respective camps and let the war continue.

Protected by randomness

tdh2

From fusion.net:

The Random Darknet Shopper, an automated online shopping bot with a budget of $100 a week in Bitcoin, is programmed to do a very specific task: go to one particular marketplace on the Deep Web and make one random purchase a week with the provided allowance. The purchases have all been compiled for an art show in Zurich, Switzerland titled The Darknet: From Memes to Onionland, which runs through January 11.
The concept would be all gravy if not for one thing: the programmers came home one day to find a shipment of 10 ecstasy pills, followed by an apparently very legit falsified Hungarian passport– developments which have left some observers of the bot’s blog a little uneasy.

The title of the piece (Robots are starting to break the law and nobody knows what to do about it) elicits worries of AIs gone amok, but the basic conundrum of this piece and others about the Random Darknet Shopper is more complex: if I design an AI which takes a random, blind action in a space which is largely – but not uniformly – illicit, am I legally culpable?

Take this thought experiment: imagine going around your office with a ten dollar bill, offering to buy whatever your colleagues would be willing to sell to you at that price, but under the condition that you do not see the item until the transaction has taken place. If one of your colleagues slipped you some cocaine, who would be at fault? What if you chose to repeat the experiment in an area of town infamous for drug-deals, are you suddenly more culpable?

When I was young, I used to order what they called “Grab Bag” comic packs, where I would pay a set amount of money for an unknown, random assortment of comic books. If someone had slipped a pornographic comic into my grab bag, it’s hard to see how I would be at fault. But where I choose to make my blind transactions seems to augment how we perceive culpability.

Several years ago I wrote a piece about how randomness can complicate our standard notions of guilt. The intersection of randomness, culpability and the law sounds like an area that – if someone hasn’t written about it a lot already – is ripe for further work.