This is Spinal Compression?

It's New Year's Eve and one's thoughts turn inevitably to ageing and all that goes with it. goes with it. According to physical anthropologists, one thing than goes with it is shrinking: one's height reduces after some point in the 20's due to compression of the spine. But I am not convinced that I am any shorter that in my heydey. So using the good old NCDS I plot height at 42 against height at 23 (controlling for sex). It's pretty much on the 45 degree line, the median change is precisely 0 in fact. I rest my case. Now I just need to rest.

Chandler P.J., R.D. Bock (1991) Age changes in adult stature: trend estimation from mixed longitudinal data Annals of Human biology 18(5) 443-440

Himes J.H., W.H. Mueller (1977) Aging and secular change in adult stature in rural Columbia American Journal of Physical Anthropology 46, 275-280

A Message to You

Its amazing that this reggae/ska intertemporal choice anthem has remained off the blog for so long. My time preferences lecture may involve some singing this term.

Harvard Business Review: Breakthrough Ideas for 2010

Fascinating article (link here - requires subscription though a free pdf version seems to be available if you google the title). HBR's ten breakthrough ideas include Romer on Charter Cities, Mullainathan on spotting bubbles, Amabile and Kramer on worker motivation and Dixon on simple technologies to revolutionise healthcare. It is hard to look at our situation in Ireland and Europe and not have some optimism that we are so far from the frontier of human potential that breakthroughs in healthcare, the nature of work, innovation policies and related areas in 2010 could usher in an area of real progress in human welfare. There is no doubt that our debate in Ireland will be intense this year as the government strategy of promoting economic progress through funding university based inter-sectoral research clusters rolls out in the backdrop of looming problems with public finance. Much of the breakthrough ideas in the HBR article are simple ideas for operation at the ground level. Hopefully, the 2010 debate in Ireland will see a greater appreciation of the role that such innovation plays in promoting human welfare.

Some Ideas From Academia to Policy for 2010

Throughout the last year, our research group here has given a number of talks to political parties, government agencies and voluntary groups. These have been conducted in formal settings such as the third crisis conference, as well as a substantial number of internal sessions conducted in Geary and outside, including briefings to the Commission on Taxation, IBEC, Gallup learn@lunch and a number of other forums. We are certainly not restricted to Ireland and have given a number of European policy briefings, but simple geography does make it easier to organise informal sessions at short notice with Irish policy-makers and we do consider it part of our remit to feed in as much as possible from the literature to real-world policy in Ireland. For many of us here, part of 2010 will be to attack the question of the relevance of social science to policy with fresh energy and ideas. Colm Harmon has written on a number of occasions (e.g. here ) about the potential for policy to absorb ideas from academia and the type of structures that might promote this. One method that Colm himself has always promoted is the simple model of the academic as sounding-board. Our research culture here will continue to promote this. Most of us see it as part of our job to be available freely to answer questions to anyone on why our research areas matter.

There is, of course, also the backdrop of the main thrust of government policy in university funding, the belief that funding activity within universities will lead to externalities outside the university system. Like most of my colleagues, I continue my research agenda on top of a full teaching load and I'm not sure I accept the idea that I need to demonstrate value beyond the intrinsic value of teaching and researching the ideas in and of themselves. Having said that, part of the excitement of behavioural economics and related areas lies in the potential application of the ideas, and research groups such as ours are as well placed as any to explore the application of ideas. It is also the case that I have rarely given a talk to a policy or business group without hearing some ideas that I could not have accessed from the academic literature.

Some of the ideas that many of us here will be discussing and researching on throughout the next year are listed below. This is an illustrative overview and I do not claim to have special knowledge of my colleagues interests, all of whom are free to post here. As always, we are happy to talk to any groups who are interested in the implications of these literatures for their own areas. A number of established academics here such as Colm Harmon and Kevin Denny are active in some of these areas but also many of our PhD students are working very hard on a number of these topics and some of our best sessions have involved the interaction between experienced policy-makers and enthusiastic, knowledgeable students. The ideas below give a snapshot of areas at the cutting edge of modern economics and are areas that we have sufficient expertise here to coordinate their interaction with policy. The US literature, in particular, has provided an enormous menu of new policy options that we are only beginning to discuss in countries like Ireland. Off-the-shelf US solutions are clearly not a panacea, but having a world leader to observe is a clear advantage.

1. The influence of behavioural economics on financial regulation, innovation, health policy, environmental policy, consumer protection and other areas. This is currently one of the dominant streams of thought in public policy, driven to a large part by Richard Thaler and Cass Sunstein. We strongly encourage any policy group working on these areas to get in touch if they would like to discuss ideas from this field with us. We have already had a number of interesting sessions with policy groups from revenue, financial regulation, transport and related fields.

2. The issues associated with an aging society. For example, the Mannheim-led SHARE study is in the field for a second round in Ireland and will be completed in 2010 by researchers at Geary.

3. Psychological Consequences of Recession. The implications of the literature on well-being economics for public policy is a regular feature of discussion on this blog and an area where there are a number of potential policy applications.

4. The Economics of Early Childhood Intervention. See, for example, a recent paper by colleagues on this topic. Professor James Smith's Ulysses lecture captures inspiringly the vast economic consequences of protecting childhood physical and mental health. It is hard to watch this lecture carefully without feeling ground shifting underneath one's feet even if the core message may seem well-known to anyone with common sense.

5. Trust. The inspiring work of Ernst Fehr and others on the nature and function of trust should be given high consideration in 2010 as the nations of the world try to rebuild financial and social institutions that have been run ragged over the last few years.

6. The importance of measurement for policy. We have been absorbed here in discussions around issues such as comparability of survey questions across countries, the use of bio-markers in economic data-sets, accurate measures of preferences and so on. Once again, the relevance of this for policy is a question worth exploring.

7. The determinants and consequences of health inequalities. Awareness of the economic and social contexts of health inequalities has picked up markedly in recent years yet much of the debate rests on a very simplified causal model of the effect of income on health. Research areas such as reducing inequalities in chronic illness management will get a lot of attention here throughout the year.

8. Youth unemployment. In October, David Blanchflower gave us a chilling snapshot  of what lies ahead without concerted effort on this core issue. This should be one of the main areas of study and debate in 2010.

9. The importance of causal inference for policy design and evaluation. This is a very large area to condense into a sentence but one major thrust in modern economics is an increased emphasis on development of policies that have in-built designs to subject them to causal tests of effectiveness.

10. The communication of risk in areas such as emerging technologies, food scares and so on. The FoodrisC programme, coordinated by Professor Patrick Wall will begin in February 2010. This five year FP7 programme will bring together leading academic and policy groups from across Europe to explore key issues in risk perception and risk communication, particularly in food contexts. We are participating in this network here and have been working on a major Irish study for the last three years. The food literature is clearly established in policy, but the experience of our banking crisis suggests a gaping hole in the ability of policy-makers to explain financial risks to citizens.

Book Clubs

Starting in mid-January, the following is a partial list of some of the books I want to cover in the next few months if people are interested in sparing a few hours off-campus. Recent sessions included Theory of Justice, Animal Spirits, The Politics, Theory of Moral Sentiments and Nudge. Michael Collins in TCD got me into the habit of doing these and they have been a fantastic source of intellectual inspiration over the last few years. Sessions have ranged from two people to 20, but it is really immaterial how many people actually attend. It is also irrelevant whether everyone has read the book being discussed. It is important that one person has read it carefully to moderate things (feel free to volunteer but am more than happy to cover the ones listed below).

1. Robert Nozick is practically a household name due to Anarchy, State and Utopia and I would like to cover this, given that Theory of Justice was covered previously. However, a book that has substantial relevance to our discussions and research here is the 1993 work "The Nature of Rationality". The wiki description is here Among other things, the work contains novel solutions to the Prisoner's Dilemma, discussions of how principles can reduce discounting and enable life-time utility maximisation, ideas on the adapability of incorporating sunk costs and a substantial number of other ideas.

2. Hayek "The Road to Serfdom". A shame we have not yet covered this. Various versions available through the links on the wiki page. I will get a copy of the definitive version. Readers digest version here

3. Jon Elster's books have been a revelation to me over the years. Brilliantly lucid discussions of core issues at the intersection of economics, philosophy and psychology. His work on emotions and self-restraint are particularly interesting to behavioural economics. His classic work Ulysses and The Sirens is one of the most cited books in behavioural economics and completely gripping.

4. Robert Putnam. "Bowling Alone". Again, already a classic work that placed the concept of Social Capital on the agenda of many national and international policy agencies. My copy currently rests somewhere in the North of Ireland, as I gave it to a football manager a few years back after giving a talk on sport and social capital to the Ulster GAA association, in between talks by the President of the GAA and the DUP Minister for Sport. The book has received a lot of attention in Ireland over the years and it still has a strong life in current debates.

Are economists human?

A nice review by Deaton of Nudge and related matters

http://www.princeton.edu/~deaton/downloads/Are_Economists_Human.pdf

Happy Holidays

I will start blogging again before the New Year.  Try not to discount the future too heavily during the holidays. I will leave you with a blog favourite from Merle Haggard

Galama and Kapteyn: Grossman's Missing Threshold

Grossman’s Missing Health Threshold 

Author info | Abstract | Publisher info | Download info | Related research | Statistics

Author Info

Titus J. Galama (RAND Corporation)
Arie Kapteyn (RAND Corporation)

Abstract

We present a generalized solution to Grossman’s model of health capital (1972), relaxing the widely used assumption that individuals can adjust their health stock instantaneously to an “optimal” level without adjustment costs. The Grossman model then predicts the existence of a health threshold above which individuals do not demand medical care. Our generalized solution addresses a significant criticism: the model’s prediction that health and medical care are positively related is consistently rejected by the data. We suggest structural and reduced form equations to test our generalized solution and contrast the predictions of the model with the empirical literature.

Behavioural Economics Lectures

One major task for break will be to find a quiet place somewhere in the country to sit down and work on my behavioural economics lectures, and to begin the process of writing them into a book. Suggestions for somewhere to go and any suggestions for the contents of the lectures welcome. I have added lectures on consumption, investment and growth.

link here (sorry, bit of a building site at present)

Geary Working Paper: Morgan Kelly on Credit Bubble

Morgan Kelly has been among the most forceful critics of government banking policy in Ireland in the last few years. His latest work on this is available as a working paper.

link here

Geary Working Paper: Van Soest and Kapteyn on Mode and Context Effects

Mode and Context Effects in Measuring Household Assets 

Author info | Abstract | Publisher info | Download info | Related research | Statistics

Author Info

Arthur van Soest (Netspar, Tilburg University, RAND)
Arie Kapteyn (RAND)

Abstract

Differences in answers in Internet and traditional surveys can be due to selection, mode, or context effects. We exploit unique experimental data to analyze mode and context effects controlling for arbitrary selection. The Health and Retirement Study (HRS) surveys a random sample of the US 50+ population, with CAPI or CATI core interviews once every two years. In 2003 and 2005, random samples were drawn from HRS respondents in 2002 and 2004 willing and able to participate in an Internet interview. Comparing core and Internet survey answers of the same people, we analyze mode and context effects, controlling for selection. We focus on household assets, for which mode effects in Internet surveys have rarely been studied. We find some large differences between the first Internet survey and the other three surveys which we interpret as a context and question wording effect rather than a pure mode effect.

Consequences of Recession in Ireland?

The debate into the Irish recession has naturally focused on the banking system and the fiscal adjustment. Ireland ran a large bubble in property for at least five years that added to revenue, inflating both the public sector coffers and the banking systems balance sheets. When the financial crisis hit, the vulnerability of this situation became rapidly apparent and we have witnessed an astonishing increase in unemployment as well as collapse of our banking system and a need for rapid fiscal adjustment that has, among other things, reduced take-home pay of public servants.

One real shame about our current situation is the lack of data to monitor how it is actually affecting people. The current micro-data infrastructure of Household Budget Survey, SILC, SLAN, SHARE, QNHS and others is simply ill-equipped to examine events that occur at this level of frequency. Thus, we simply do not know how households are smoothing consumption through this time period. For example, we know that many people have taken drastic reductions in their housing wealth but do not know how this actually affects their day-to-day lives with respect to availability of credit. Nor do we have any real sense of the extent to which certain groups are facing hard liquidity constraints in ways that may lead to real consequences for health and life outcomes. Anecdotally, we are hearing reports of paid doctors visits declining as the recession bites but have no sense of whether people's health is being placed in jeopardy. Similarly, preliminary data suggests an increase in suicide rates, but we are unable to examine the mechanisms through which the economy impacts on psychological distress. Savings have increased sharply as has consumption has declined but the academic community has no way of providing any micro-founded explanation of why this is happening.

We have been collecting monthly panel data here to track things like risk perception but the research is still too early stage to provide sufficient sample sizes for sub-groups to answer the questions above. My personal new year's resolution is to get this to a state where we can start engaging properly with policy in Ireland. High-frequency (i.e. monthly) data delivered quickly to academic researchers in a manner comparable to other countries is the only solution to the massive knowledge hole that exists in Ireland at present. We need to speed up the delivery of data so that papers can be written that are scientifically robust and timely enough to actually enter into the debate.

Independent Article on Graduate Unemployment

useful piece by Katherine Donnelly and John Walshe

link here 

Non-cognitive skills

Papers on non-cognitive skills are increasingly common in economics & they are also appearing in political science. Often they lack much by way of theory. This paper looks like a useful overview.

Noncognitive skills in economics: models, measurement, and empirical evidence
H Theil, S L Thomsen

There is an increasing economic literature considering personality. This paper provides an overview on the role of these skills regarding three main aspects of economic analysis: measurement, theoretical modeling, and empirical estimates. Based on the relevant literature from different disciplines, the common psychometric measures used to assess personality are discussed. A recently proposed theoretical framework of human capital production takes personality explicitly into account. It is reviewed to clarify the understanding of crucial features of skill development. Based on these foundations, the main results of the empirical literature regarding noncognitive skills are classified along the research questions and summarized.
http://d.repec.org/n?u=RePEc:zbw:zewdip:09076&r=cbe

Colm Harmon on Higher Education

Nice talk by Colm to the graduating class at UCD. focus on higher education and economic recovery.

link here

Comments

Hi All
The blog gets an enormous amount of spam - literally 20 or so pieces of nonsense everyday advertising fake watches, drugs and other stuff that is totally random (though I apologise if the people contributing comments in Russian and Chinese are actually genuine commenters). Thus, I have to use the comment moderation feature. I try to check in twice a day and upload people's comments. I hope the delay between posting and getting the comment up doesn't discourage people from commenting if they wish to. If there is a more efficient solution please let me know.

Liam

Christmas Spirit

Ive searched hard for a suitable christmas song on youtube. this one does it for me.

NBER Paper on Environmental Behaviour

Discontinuous Behavioral Responses to Recycling Laws and Plastic Water Bottle Deposits 

W. Kip Viscusi, Joel Huber, Jason Bell, Caroline Cecot NBER Working Paper No. 15585* Issued in December 2009 This article examines the effects of recycling and deposit laws on consumer recycling of plastic water bottles using a nationally representative sample of 2,550 bottled water users. Economic theory predicts individual behavior that gravitates toward extremes—either diligent recycling or no recycling at all. This pattern is borne out in actual recycling behavior. Both water bottle deposits and recycling laws foster recycling behavior through a discontinuous effect that converts reluctant recyclers into diligent recyclers. More stringent recycling laws have a greater effect on recycling rates. The efficacy of these interventions is greatest for those who would not already recycle and especially for those in lower income groups or who do not consider themselves to be environmentalists.

IZA Paper on Health Spending and Longevity

On The Rise of Health Spending and Longevity
by Raquel Fonseca, Pierre-Carl Michaud, Titus Galama, Arie Kapteyn
(December 2009)

Abstract:
We use a calibrated stochastic life-cycle model of endogenous health spending, asset accumulation and retirement to investigate the causes behind the increase in health spending and life expectancy over the period 1965-2005. We estimate that technological change along with the increase in the generosity of health insurance may explain independently 53% of the rise in health spending (insurance 29% and technology 24%) while income less than 10%. By simultaneously occurring over this period, these changes may have lead to a "synergy" or interaction effect which helps explain an additional 37% increase in health spending. We estimate that technological change, taking the form of increased productivity at an annual rate of 1.8%, explains 59% of the rise in life expectancy at age 50 over this period while insurance and income explain less than 10%.
Text: See Discussion Paper No. 4622   

IZA Paper on Financial Distress and Mortgage Debt

Mortgage Indebtedness and Household Financial Distress
by Dimitris Georgarakos, Adriana Lojschova, Melanie E. Ward-Warmedinger
(December 2009)

Abstract:
Using comparable survey data from twelve European countries we investigate households' attitudes towards mortgage indebtedness. We find that a given debt burden creates much higher distress in Southern countries, France and Belgium, where fewer households have a mortgage outstanding relative to countries where a sizeable part of the population uses mortgage debt, like the UK, the Netherlands, and Denmark. This is the case after taking into account ppp-adjusted income levels, a rich set of socioeconomic characteristics, housing traits, country-specific constant terms, and household unobserved heterogeneity. We attribute part of this asymmetry to cross-country differences in the expansion of credit markets, which facilitate differential access to liquidity. Household's reported distress is also affected by excess indebtedness relative to the debt load of reference households, and crucially so in countries with less expanded mortgage markets. Thus it appears that households evaluate their own debt burden partly in comparison with the debt position of their peer group and in a way consistent with social stigma considerations which lessen in significance as markets expand. Households' assessment of a debt burden therefore tends to diminish in more expanded credit markets and this process can be reinforced by reference to other households in a growing pool of debt holders.
Text: See Discussion Paper No. 4631   

Some Events in Development

The main seminar series will go ahead as normal in the new year. Some events in development from the group behind this blog include those listed below. Preliminary so suggestions more than welcome. This year was packed and created many ideas that will have lasting impact on our work. We are devoting a lot of time to thinking about how to keep the formats interesting and to keep learning from these events as well as working out interactions with many different kinds of audience.

one day session on behavioural economics and business (march)

half day session on unemployment (march)

session on irish universities (april)

third economics and psychology event (november)

third health symposium (november)

more regular book-clubs (suggestions welcome)

Gallup Behavioural Economics Event

Spoke at this event in Brussels on Tuesday. Clearly a strong interest in ideas from behavioural economics among European policymakers.

link here

How Does Under-Employment in the QNHS Contribute to an Overall Measure of Labour Market Distress?

Following on from the previous post (based on the CSO's Quarterly National Household Survey), another question arises: what is the extent of underemployment in the Quarterly National Household Survey (QNHS)? And... what does this mean for an overall measure of labour market distress?

We know that there were 1,922,400 people in employment in the third quarter of 2009; which represents an annual decrease of 184,700 (or 8.8%). However, 15,300 of those in employment are 'part-time under-employed'; almost three times as many compared to summer 2007. This can be seen in the chart from the previous post. (Technical details about the measurement of 'part-time under-employment' are provided in the comments section).

Also, besides under-employment, the 'part-time' component of employment has increased by about 16,000 individuals; comparing Q3-2009 to the summer of 2007. It is possible that some of these individuals may not be classified as 'under-employed' because they have given up looking for additional hours of work. What does all of this mean for the headline statistic that the (non-seasonally adjusted) unemployment rate climbed to 12.7% in the third quarter of 2009?

Firstly, taking account of the 15,300 individuals who are 'part-time under-employed' means that we get an overall measure of labour market distress (i.e. unemployed plus 'part-time under-employed'). The rate of labour market distress (by this measure) was 13.4% (non-seasonally adjusted) in the third quarter of 2009. (Broader measures of labour market distress were discussed on the blog before - here - in the context of U.S. unemployment. And also on the Economix Blog: here).

Finally, if we take account of individuals who are 'marginally attached to the labour force' (see previous post on declines in the labour force), the rate of labour market distress was 14.3% (non-seasonally adjusted) in the third quarter of 2009. This figure (which requires seasonal adjustment) is closer to taking account of individuals forced onto shorter working weeks; and those who have given up looking for work (this could include the long-term unemployed who are not job-seeking).

How Important are Recent Declines in the Labour Force for Understanding Unemployment?

The RTE website reports that the unemployment rate climbed to 12.4% in the third quarter of 2009. This is in keeping with recent indications from the Live Register. The report on the RTE website is based on the CSO's Quarterly National Household Survey (QNHS) - available here. The Irish Times reports (here) that the rise in Q3-2009 represents the smallest quarter-on-quarter increase in unemployment since the first quarter of 2008. Similar observations have been made in relation to previous rounds of the Live Register. The Irish Times notes however, that "commentators warned against reading too much into signs of a stabilisation in the unemployment rate, with Davy’s Rossa White pointing out that a decline in the labour force rather than an improvement in the employment trend, was the primary factor behind the slowing down in the rate of increase."

So what are the most recent annual decreases in unemployment and the labour force? There were 1,922,400 people in employment in the third quarter of 2009; which represents an annual decrease of 184,700 (or 8.8%). There were 2,202,300 persons in the labour force in the third quarter of 2009; representing an annual decrease of 64,300 (or 2.8%). The labour force decrease compares with an annual labour force growth of 0.6% (or 13,500) in the third quarter of 2008. So compared with this time last year, there is certainly much more downward movement the labour force. This can be seen in the chart below, taken from today's QHNS publication. (The chart can be clicked on to see a larger resolution).


According to the CSO, "the decline in the size of the labour market is largely attributable to a decline in participation of 53,600, as represented by the fall in the participation rate from 64.2% in Q3-2008 to 62.5% in Q3-2009." The participation rate (as defined by the CSO) is 'the number of persons in the labour force expressed as a percentage of the total population aged 15 or over'. In addition to changes in participation, the labour force is also affected by changes in the number of persons of working age in the State (the demographic effect). Also from the CSO: "Up to the start of 2008 this demographic (was)... primarily driven by net inward migration. With the decline in inward migration the demographic effect has declined through 2008 and became negative in Q2-2009. In Q3-2009 this negative demographic effect contributed 10,600 to the overall annual decline in the labour market."

In summary, what we can see in the table above is the importance of following trends in the data-rows which show "in labour force" and "total persons aged 15 or over". Furthermore, if one compares the first 5 columns in the above table (with the final two columns), a number of points are apparent:

(i) A marked slow-down in unemployment
(ii) An increase in labour force size comparing Q1-2009 to Q2-09 and Q3-09 (however, there is still a notable decrease in Q3-09 when compared to Q4-2008)
(iii) A fall off in persons of working age i.e. "total persons aged 15 or over"

Finally, is there anything to the claim that a recent decline in the labour force (rather than an improvement in the employment trend) is the primary factor behind the recent slowing in the rate of unemployment-increase? Looking at the figures from a year-on-year perspective (Q3-08 vs. Q3-09), we can see that the labour force has shrunk, and much more so than the fall-off in persons of working age. This suggests that labour force decline is limiting the increase in the unemployment rate more than emigration, at least for now. However, it must be remembered that in September of this year, the CSO announced there was a return to net outward migration for Ireland (-7,800 in the year to April 2009) for the first time since 1995. Of the 65,100 people who emigrated in the year to April 2009, Irish nationals totalled 18,400. This figure is roughly one tenth of the reduction in the number of employed individuals during the Q3-08 to Q3-09 period (184,700).

But is labour force decline the primary factor behind the recent slowing in the rate of unemployment-increase? The reduction in the size of the labour force during the Q3-08 to Q3-09 period (64,300) is roughly one third the size of the reduction in the number of employed individuals (184,700); and more than three times the outflow of Irish nationals in the year to April '09 (18,400). There is no doubt that the recent decline in the labour force (64,300) is a contributory factor in the recent slowing of unemployment-increase; however, it is not the primary factor. The primary factor seems to be that the country is simply losing jobs at a slower rate than in previous quarters. Despite this, it is important to remember that we are still enduring increments to an unemployment rate that is absolutely large.

New Economics Foundation Piece on Behavioural Economics

useful overview

link here

Health Symposium

My sincerest thanks to all speakers and attendees today, and to Phillipa Barrington and Emma Barron for making sure everything went smoothly. The presentations by Syvlana Cote, Mark McGovern, Alan Fernihough, Peter Carney, Sarah Gibney, Eibhlin Hudson, Michael Daly, Leah Quinlivan, Lorna Sweeney and Kevin Malone were all excellent. The final session was particularly impressive and represents over a decade of research by Professor Malone and his research team.

I will post details of some of the talks on this blog over the next week or so. If you attended today and would like further information then feel free to email either me or any of the speakers.

Between the regular series, the crisis event, the economics/psychology session, the education session, today's health event and other once off events, this has been a remarkable few months of intellectual energy and activity. I count myself very lucky to be part of this. I hope people will stick with this in the New Year and keep up the momentum.

Budget Video Available

For those who didn't get a chance to see the budget, it is available below

Paul Samuelson RIP

The death of Paul Samuelson has been announced. It is difficult to describe the influence of Samuelson who made so many profound contributions in so many areas of economics. To use a phrase applied to Richard Feynman, he was "no ordinary genius".

OmmWriter

Thanks to Gerard O'Neill for the tip on Ommwriter, a cross between a meditation package and a wordprocesser. I have been using it for the last couple of hours and it is a nice experience (only available to Mac Users unfortunately!).

link here 

December 14th: Health Research Symposium

December 14^th, UCD Geary Institute

10.45 – 11.00: Opening Remarks

Colm Harmon, “Health Research”.

11.00 – 1pm: Health Economics and Health Policy

Sylvana Cote: "Short and Long Term Risk for Infections by Group Child Care Attendance: An 8-year Population-based Study"
Mark McGovern: “Angela’s Ashes to the Celtic Tiger: Early Conditions and Health in Ireland”

Alan Fernihough: “The Health of the Irish in the UK: Assimilation and Selection”

Peter Carney: "Moral Hazard, Health Insurance and Health"

1pm to 2pm Lunch

2pm -3.30pm: Well-Being, Health and Public Policy

Sarah Gibney and Michael Egan: "Overview of Irish SHARE Study"

Eibhlin Hudson: "Child Well-Being and Obesity"

Michael Daly: "Self-Regulation, Health and Well-Being"

3.30pm – 5pm: Suicide in Ireland: Learning from Loss Through Science, Art and Humanities

(Professor Kevin Malone, Lorna Sweeney, Leah Quinlivan, Seamus McGuinness)

U.S. Cities Make Their Data Free

"A big pile of city crime reports is not all that useful. But what if you could combine that data with information on bars, sidewalks and subway stations to find the safest route home after a night out? In Washington, a Web site called Stumble Safely makes that possible...

A Web site called CleanScores tracks restaurant inspection scores in various cities and explains each violation...

San Francisco recently unveiled DataSF, a Web clearinghouse of raw government data that the public can download. The data sets include seismic hazard zones, street sweeping schedules and campaign finance filings. New York City’s Data Mine includes directories of sidewalk cafes, property values, horseback riding trails and historic houses."

There's more about how some U.S. cities are making their data freely available in this NYT article. HT: Michael Terbush.

Finding Balloons

This has run for the last few days. Fascinating project funded by US defence department. Offered a cash prize to find 10 weather balloons hidden in undisclosed locations in the US. Took an MIT team 9 hours to do it using a simple incentive package they devised (described by Tyler Cowen here )

Endowment Effects

On Wednesday morning I had the pleasure of joining Aoibhín, my two-year-old niece, for breakfast. As I sat down beside her she asked for some toast. I duly buttered a slice and placed it on the side-plate between us, only for her mother to point out that Aoibhín would eat, at most, half that slice.

I did the sensible thing and cut the slice in half, giving one half to the child and one half to myself. Though she had heard her mother, Aoibhín protested that I had taken some of her food. She was displaying an endowment effect, based on an attachment period of a couple of seconds.

Harbaugh et al (2001) ask Are Adults Better Behaved than Children? Age, Experience, and the Endowment Effect. They

find that large increases in age do not reduce the endowment effect, supporting the hypothesis that people have reference-dependent preferences which are not changed by repeated experience getting and giving up goods.

Incidentally, Aoibhín's mother is a public sector worker.

Changes to the Jobseeker’s Allowance and Supplementary Welfare Allowance Schemes

As indicated on the official Budget website here.

Activation Measures:

There are a number of changes to the Jobseeker’s Allowance and Supplementary Welfare Allowance schemes as set out below:

* New maximum personal rates of Jobseeker’s Allowance and basic Supplementary Welfare Allowance will be introduced for new applicants aged 20 to 24 inclusive. The new rate will be €100 per week for new applicants aged 20 to 21 and €150 per week for new applicants aged 22 to 24. The Qualified Adult rate applicable to Jobseeker’s Allowance/basic Supplementary Welfare Allowance applicants aged 20 and 21 will also be €100 per week and for those applicants aged 22, 23 and 24 will be €130.10 per week. These rate reductions will not apply to claimants with dependant children.

* The personal rate of Jobseeker’s Allowance and basic Supplementary Welfare Allowance will be reduced to €150 per week where job offers or activation measures have been refused. Further details of this measure will be published in the Social Welfare Bill, 2010.

New Activation Fund

The Enterprise, Trade and Employment section of the Summary of Budget Measures indicates the following:

"Within the overall allocation for Enterprise, Trade & Employment, resources will be directed towards Support Measures for the Food Industry and a range of activation measures including 10/20 week FÁS Training Courses or work placements to provide additional training and upskilling places for the unemployed; and an Activation Fund which will involve an open call for activation proposals targeted at the construction and low skilled sectors."

More details are available from a press release on the website of the Department of Enterprise, Trade and Employment. €1.2 billion will be provided in 2010 to support job retention and tackle unemployment through a range of activation and training measures, employment programmes and the Employment Subsidy Scheme (previously discussed here).

An additional €90 million will be committed in 2010 to increase the number of training and activation places for the unemployed by 16,300 - to a total of 146,300, bringing the number of activation places across Government to over 180,000. A detailed announcement on the nature of places to be made available in 2010 will be made at a later date.

In addition, there will be an additional 500 Community Employment Scheme places in 2010. €20 million of the additional funding will fund the call (mentioned above) for proposals targeting the low skilled and those suffering from unemployment in declining sectors including construction.

The British Pre-Budget Report: What Does It Mean for Education and Youth Unemployment?

The BBC provide a synopsis of how the British Budget will affect youth unemployment and the education sector across the pond. Here.

* Another half a million primary school children in England will get free school lunches. This will affect families with a household income below £16,190 and will be staged, half in September next year and the rest a year later - ultimately benefiting about 500,000 children at a cost of £140m a year. (More on the meals initiatives in the comments section).

* The government will offer £8m of financial support for up to 10,000 undergraduates from low-income backgrounds to take up short-term internships. The existing guarantee of a place in education or training for every 16 and 17-year-old would be available again in September 2010. From next month no-one under the age of 24 need be out of work for more than six months before being guaranteed work or training - rather than the current 12 months.

Revised Eligibility for the Work Placement Programme

The Work Placement Programme (discussed previously here) has undergone a number of revisions. For unemployed participants the following criteria have been amended:

• Recipients of most social welfare payments, including Job Seekers’ Allowance and Job Seekers’ Benefit, will now be eligible to apply. Unemployed graduates who are not receiving a social welfare payment will also now be eligible to apply.
• 2009 graduates are now also eligible to apply.
• The period, for which participants have to be in receipt of a social welfare payment in order to be eligible, has been reduced from 6 months to 3 months.

The key changes relating to the eligibility criteria of firms providing placements are:

• The Programme will be open to all sectors of the economy including, the private, public, and now the community and voluntary sectors. The Department of Finance will issue a Circular in the coming weeks on the operation of the programme in the public sector.
• The requirement for a firm to have at least 10 employees has been removed.
• Previously firms could only participate if they did not have redundancies in the previous 6 months. This constraint has been reduced to 3 months. However, the level of redundancies in the last three months were less than 5% of the workforce, these firms will be eligible to participate.

The duration of the work placement has been increased to a maximum of 9 months. The revised criteria came into effect from 1st December 2009. For eligibility guidelines and details on how to become a Participant on the Programme, follow this web link: http://www.fas.ie/en/Job+Seeker/WPP/default.htm
For eligibility guidelines and details on how to become a Provider on the Programme, follow this web link: http://www.fas.ie/en/Employer/WPP/default.htm

Do The Right Thing

No not the Spike Lee film, or even an appeal to Brian Lenihan. An interesting new NBER working paper on the effects of morality on cooperation:

"Do the Right Thing:" The Effects of Moral Suasion on Cooperation
by Ernesto Dal Bo, Pedro Dal Bo

Abstract:

The use of moral appeals to affect the behavior of others is pervasive (from the pulpit to ethics classes) but little is known about the effects of moral suasion on behavior. In a series of experiments we study whether moral suasion affects behavior in voluntary contribution games and mechanisms by which behavior is altered. We find that observing a message with a moral standard according to the golden rule or, alternatively, utilitarian philosophy, results in a significant but transitory increase in contributions above the levels observed for subjects that did not receive a message or received a message that advised them to contribute without a moral rationale. When players have the option of punishing each other after the contribution stage the effect of the moral messages on contributions becomes persistent: punishments and moral messages interact to sustain cooperation. We investigate the mechanism through which moral suasion operates and find it to involve both expectation- and preference-shifting effects. These results suggest that the use of moral appeals can be an effective way of promoting cooperation.

Weather,wellbeing & risk

The lousy weather in Ireland is a source of perennial gloom. A connection between well-being and weather seems unsurprising. What I didn't know was that lack of sunshine also seems to predict risk taking behaviour.

http://www.deakin.edu.au/news/2009/150909happiness.php

Unemployed, Depressed and Spreading Loneliness

People who have recently become unemployed are four times more likely to claim to have depression than the general population, a new survey suggests. The survey is the Pfizer Health Index; this year the study also examined the impact of the recession on people’s lives, with particular focus on those who recently became unemployed.

"The Pfizer Health Index is a Behaviour and Attitudes National Barometer Survey, which samples 1,040 adults aged 16 and over. Pfizer said a "booster" of 122 recently unemployed people was added to the research this year." See more here. More information is also available here. The 2008 report (related to the Pfizer Health Index) is available here.

Finally, the link between unemployment and depression is worth considering in light of new research which indicates that loneliness spreads in social networks: "Loneliness can be contagious, new study finds". The research, a new study in the Journal of Personality and Social Psychology, was led by John Cacioppo, a neuroscientist and psychologist at the University of Chicago. The data comes from a longitudinal study, conducted by the University of Chicago, the University of California-San Diego and Harvard, which interviewed more than 5,000 people over the course of 10 years, tracking their friendship histories and their reports of loneliness.

"In the study, researchers found that lonely individuals tend to move to the fringes of social networks (and, no, we’re not talking about Facebook or Twitter here), where they have fewer and fewer friends.

But before they move to the periphery, they “infect” or “transmit” their feelings of loneliness to their remaining friends. With fewer close relationships, these friends then become lonely and eventually move to the fringes of the social network, again passing their loneliness on to others. Thus, the cycle continues."

The study also found that "loneliness spreads much more easily among women than among men, citing the idea that women may be more likely to express and share emotions, as well as the observation that there may be greater stigma associated with loneliness among men." This may be the source of some solace: the latest Live Register (LR) figures show that almost twice as many men are claiming unemployment benefit (or allowance), compared to women. If two-thirds of LR claimants (i.e. the males) are less likely to spread their feelings of loneliness (compared to the other third), then this is the potential source of solace. However, there is still the possibility that loneliness could be spreading; and more importantly; LR claimants are more likely to be depressed.

The Employment Outlook in Ireland

In today's Business World, it is reported that "Irish employers remain gloomy about the prospects for hiring staff in early 2010 with 17pc expecting to cut payroll numbers in the first three months of the New Year... Employers also report their sixth consecutive quarter of negative hiring activity." This is according to a survey from Manpower.

The Manpower Employment Outlook Survey examines anticipated hiring activities across 35 countries and territories. The current survey in this country measures the intentions of 620 Irish employers to increase or decrease their workforce over the next three months. The report is available here.

Online Learning and Superstar Teachers - Cowen

fascinating post over at marginal revolution on the potential for the emergence of a model of superstar lecturers teaching thousands of students online.

link here

One Step Closer to Perfect Information

"MySpace and Facebook have both signed deals with Google to allow publicly available status updates to be indexed in real-time by the search giant...Up till now Google had only signed a similar deal with Twitter and was missing agreements with Facebook and MySpace...This means that when somebody searches for a particular topic on Google they will receive real-time updates from a variety of social media sites, as well as the usual list of search results." Full story here.

Nudge Reminder

I was going to start the message with "just a little nudge..." but was overcome with tension as I typed. Instead I will just remind people that bookclub is tomorrow night. If you would like to come then email me.

Why economists and women are not nice

Everybody thinks economists are wicked people who would cheerfully send children up chimneys, cut the minimum wage and [horror of horrors] make well-off people pay for their own investments in higher education. Now we have the evidence to prove it.

Why are economics students more selfish than the rest?

1. Elaina Rose (with Yoram Bauman)

A substantial body of research suggests that economists are less generous than other professionals and that economics students are less generous than other students. We address this question using administrative data on donations to social programs by students at the University of Washington. Our data set allows us to track student donations and economics training over time in order to distinguish selection effects from indoctrination effects. We find that economics majors are less likely to donate than other students and that there is an indoctrination effect for non-majors but not for majors. Women majors and non-majors are less likely to contribute than comparable men.
http://d.repec.org/n?u=RePEc:udb:wpaper:uwec-2009-20&r=cbe

Downfall - Peer Review Edition

For those of you following the many uses of the now famous rant scene from the brilliant film Downfall, this journal article review version may be of interest. Cathartic!

link here (Strong language in places)

Ireland after NAMA Blog

a new irish blog led by geographers. some very good posts so far with excellent data and graphics.

link here 

Economist: The Best Books of the Year

The Economists list is linked here 

Below is my next read, following the reviews. 3 others in the Economics and Business category also look good.

How Markets Fail: The Logic of Economic Calamities. By John Cassidy. Farrar, Straus and Giroux; 416 pages; $28. Allen Lane; £25
A sharp look at the roots of the financial crisis that turns into an excellent history of economic thought, by a British writer at the New Yorker.

Randomised Trials and Development

Easterly outlines a new conference book on the topic and gives a good feel for the debate

link here 

Yes Minister

The BBC programme Yes Minister (Yes Prime Minister) is described here

It is my favourite television programme, and like many others who are fans, I can happily watch or listen to episodes time and again and still appreciate their structure and genius. They are both extremely well-written and funny and, as John Considine has pointed out in a paper , an invaluable tool for explaining constructs in public economics.  For those not familiar, below are some examples that are relevant to things we have discussed here and things happening currently more generally. There are dozens other examples.

In this clip, Sir Humphrey explains why sports subsidies should not take precedence over arts subsidies.

Here, he stonewalls a public inquiry into wasteful spending.

Here, Humphrey and the Minister try to allay fears of a dioxin contamination occurring in a new plant.

In this one , Sir Desmond (city financier) explains how "the chaps" think about financial regulation, including some fairly innocent things such as the case of one of the chaps who authorised himself an unsecured loan from his own company to make an investment that went wrong ("horse falling at the first and all that").

8th European Conference on Health Economics; July 2010

The 2010 conference will be hosted by the Finnish Society for Health Economics in Helsinki.

Deadline 15 December 2009.

Main themes of ECHE 2010
01. Economics of ageing
02. Economics of information technology in health care
03. Economics of prevention and health promotion
04. Economics of social care
05. Health care financing and provision
06. Implementing health economics
07. Macro economics, health and health care
08. Migration, health and labour markets
09. New developments in the theory and methodology of health economics
10. Performance measurement in health care systems
11. Pharmaceutical markets
12. Valuing health
13. Economic evaluation

School "league tables"

Ferdinand Von Prondzynski generously invited me to contribute a piece to his University Blog and I write about the arguments for not keeping parents in the dark about their children's school as they are at present in Ireland, a policy that is surprisingly popular amongst educationalists here 'though not with parents (as if their opinion mattered).

http://universitydiary.wordpress.com/2009/12/01/better-by-leagues/

Reminder: New ERA Conference (Plus Change of Venue)

This is a reminder about the half-day New ERA conference to be held on Thursday (December 3rd). The venue for Thursday's conference has been changed to the Stillorgan Park Hotel. If you get the 46A, the Stillorgan Park Hotel is just a few more stops after UCD. A map is available here.

The study examines the performance of the New ERA programme across 3 domains: increased access from disadvantaged school, retention rates and overall exam performance. Susan Dynarski, (Professor of Education and Public Policy, University of Michigan, USA) will deliver the keynote address. The full programme is below.

10.30: Registration

11.00: Welcome

Dr. Philip Nolan, Registrar, UCD Ann O'Brien, Director of access, NUI Maynooth

11.20: Keynote Address:

Professor Susan Dynarski, Professor of Education and Public Policy, University of Michigan, USA

12.00: Evaluating the impact of the UCD New ERA Widening Participation Initiative Dr. Kevin Denny and Dr. Orla Doyle, UCD

12.45: Questions and Answers

Close: Anna Kelly, Director of Access and Life Long Learning, UCD

13.00: Lunch

Academic Research: is it of any value to the taxpayer?

This is the title of a debate to be held later this evening in TCD. Might be of interest to those following recent developments in the debate about public investment into R&D in Ireland. Details below.

The debate will be led by Professor Poul Holm (TCD), Dr Declan Jordan (UCC) and Professor Luke O'Neill (TCD)

Time: 6.00 p.m - 7.30 p.m.

Date: Tuesday 1 December 2009.

Venue: Robert Emmet Theatre, Arts Building, Trinity College Dublin