Public Dental Services

The Dental Treatment Services Scheme has shown substantial growth in 2009. A staggering 399,262 (34%) more treatments were provided year to date in 2009 than was targeted. At the end of December 2009, the cumulative number of treatments 'above the line' (i.e., routine services, extractions, fillings) was 1.4 million (35% growth) and the number 'below the line' (i.e., specialties like root and gum treatments) was 144,000 (26% growth).

Amazing how resilient dentistry seems to be to the recession.

Of course one must consider that since the beginning of 2009 a lot more people were granted medical cards, due to the dire economic circumstances of the country. This is what the HSE suggested. But the actual increase in the number of people with medical cards over the year was 55,000; which was 4% above target. So by safely assuming these projections are meaningful and represent normal levels of demand in the system, the increase in supply should be attributed to the demand from new card holders; this is the HSE suggestion.

My rough calculations of this appealing hypothesis suggests some bizarre results: every new medical card recipient got about 8 fillings or extractions AND about 3 root canal treatments! Crazy right, but there's more to consider.. these new recipients were mostly the newly unemployed so as PSRI payers they previously had a very generous dental package (now cut) which included two free check-ups and cleanings per year and sizable reductions for most treatments.

To me, unless i'm missing something, the increase is now down to two possibilities: either the quality of existing medical card holders' teeth declined significantly or dentists started to be more sensitive to the dental "needs" of their medical card-holding clients. The former doesn't seem plausible (a 30% decline in dental health in one year!?) yet there is considerable reason to suspect the latter, given the possible fall-off in dentist services from purely private patients (note: general domestic demand for goods and services in Ireland contracted by about 10% in 2009) .

The phenomenon of 'supplier induced demand' (SID) has been empirically validated in many instances and across health professions; it is well documented in the health economics literature. It can also be controlled and managed and, at times like this, it's probably worth considering.

The raw figures are available from the most recent 2009 HSE Healthstats Report.

Warriors Against Rational Choice: Eating Money

Behavioural Economics talks a lot about money burning, but this BBC story is the first instance of irrational money-eating that I have come across and has led me to resurrect the WARC medal. Take a bow the man who, frustrated that Ryanair flight staff wouldn't pay him his 10,000 euro scratchcard winnings immediately, then ate the ticket for reasons known only to his limbic system. Given he cannot claim the winnings without the ticket, the money will now be donated to charity. We salute you sir!

Selfish Economists

Just had a class with a group of economics students that I have been teaching. I have struggled all year to find examples of deviations from utility maximisation that really generate discussion. I have been using things like money ultimatum games but largely the students behave as many papers suggest economics students behave, namely that they offer low amounts in the ultimatum game and are far more likely, in my experience, to accept lower offers than when I give talks to psychology or lay audiences. Similarly, public goods games with prisoner dilemma structures that involve money have been generating mostly non-cooperation patterns.

However, when I framed the public goods problem as a grades example, whereby students could contribute to a common pool that improved the class grade or keep points to improve their own grade at the expense of the pool then far more people refused to deviate from the cooperative solution. In general, the idea of deviating from the money game generated no real discussion and it was difficult to use it as a launching pad to talk about indignation, neuroeconomics etc., However, the grades example did the trick nicely and generated far more discussion about why you shouldn't deviate from cooperating in such a game and why people who do so are violating a norm. This is, of course, anecdote but it has got me thinking about whether much of what we say about economics students being selfish comes from not looking closely enough at the social norms that operate among economics students. Economics students may not perceive deviating from money games as selfish as they are simply games with financial payoffs and dont involve their co-players being hurt in any meaningful way. However, when dealing with co-operation games where one has to violate a social sanction against hurting others to behave selfishly then economists may behave like anyone else.

Another thought is that I was simultaneously a psychology undergraduate and an economics undergraduate at one stage. When I think back to the small environment of my psychology class where I knew each of my classmates intimately from repeated interactions working on projects and so on, and compare that to my economics environment where I sat in a lecture theatre with 200 people I didn't know, it strikes me that this is not atypical of psychology and economics classes. Some of my economics students today complained that I was calling their behaviour selfish whereas they simply were acting in an environment where they did not know all the other people in the room. The psychology class that I taught last year mostly all knew one another and perhaps it is not so surprising that they cooperate more. I don't think this would explain all the differences between economics and psychology students but it should be born in mind.

All anecdote and happy to talk to people about testing this if anyone wants to collaborate.

Golden Balls

Thanks to one of my students (Gary) for sending this on. This is the most unsettling example of a prisoner's dilemma type game being played out that I have ever seen.

Conversations with History Kahneman

I hadn't seen this before but this is a fascinating interview with Daniel Kahneman from 2007 in the Berkelely Conversations with History series.

link here 

A Few More Links

1. Do happy people have fewer heart attacks?

2. Obama advisor Austan Goolsbee on the importance of "the first job after graduation": NYT 2006

3. This week's U.S. jobs measure: payroll tax exemption, and tax breaks for capital expenditure

4. CIRGE: the Center for Innovation and Research in Graduate Education

5. Panel Conditioning and Attrition in the AP-Yahoo! News Election Panel Study

6. Tomorrow's edition of The Economist runs with the following lead-story: "The Data Deluge - and How To Handle It"

7. Job Opportunities at Yahoo!: the tech giant recently advertised for Ph.D. graduates in Microeconomics

links 25-02-10

1. Alex Tabarrok raises the stakes on finding a true behavioural economics anthem. Having run an econometrics bandname competition here for the last four years (this year's winner to be announced soon), I am wary of escalating another session. They tend to break out here and spread like chickenpox in a creche.

2. Wolfers and Stephenson raise interesting questions on gender differences in graduation ages on Freakonomics blog.

3. Nudge blog evaluates the progression of behavioural economics using autocomplete. They lament that behavioural economics is still a "Hibernian outpost in the great economics Roman Empire". They don't quite mean that behavioural economics is best suited for the Irish, but I like the idea of having a Hibernian outpost over here in Hibernia.

4. Neuroeconomics makes it on to IrishEconomy blog. John O'Doherty and colleagues work on inequality aversion is discussed by Kevin O'Rourke.

Links 24-02-10

1. The Flaming Lips get a honourable place in the behavioral economics songs hall of fame for "yeah yeah yeah song" which reminds us that it is "a very dangerous thing to do exactly what you want because you cannot know yourself..."

2. TCD's Professor Phillip Lane wins an award for best paper in the Journal of International Economics in the last two years.

3. I have posted on some IZA papers, particularly relevant to people here. In general, there are a number of February papers that people should look at. I have a real sense that there is a missing link somewhere in how IZA/NBER papers are discussed on the web and in departments. Almost seems like there should be a TV programme devoted to debating them. VOX is coming close to such an ideal.

4. A reminder for anyone who is working in microeconometrics of households. The Dutch LISS data is amazing.

5. Gerard O'Neill on the prospects for Irish graduates. We need more people like Gerard.

6. Geary's Orla Doyle has a guest post on the Preparing for Life Intervention on Ferdinand's blog.

IZA Paper: Survey Design and Labour Statistics

Do Labor Statistics Depend on How and to Whom the Questions Are Asked? Results from a Survey Experiment in Tanzania
by Elena Bardasi, Kathleen Beegle, Andrew Dillon, Pieter Serneels
(January 2010)

Abstract:
Labor market statistics are critical for assessing and understanding economic development. In practice, widespread variation exists in how labor statistics are measured in household surveys in low-income countries. Little is known whether these differences have an effect on the labor statistics they produce. This paper analyzes these effects by implementing a survey experiment in Tanzania that varied two key dimensions: the level of detail of the questions and the type of respondent. Significant differences are observed across survey designs with respect to different labor statistics. Labor force participation rates, for example, vary by as much as 10 percentage points across the four survey assignments. Using a short labor module without screening questions on employment generates lower female labor force participation and lower rates of wage employment for both men and women. Response by proxy rather than self-report yields lower male labor force participation, lower female working hours, and lower employment in agriculture for men. The differences between proxy and self reporting seem to come from information imperfections within the household, especially with the distance in age between respondent and subject playing an important role, while gender and educational differences seem less important.
Text: See Discussion Paper No. 4733   

IZA Paper: Early Life Conditions and Later Cognitive Decline

The Role of Early-Life Conditions in the Cognitive Decline due to Adverse Events Later in Life
by Gerard J. van den Berg, Dorly J. H. Deeg, Maarten Lindeboom, France Portrait
(February 2010)

Abstract:
Cognitive functioning of elderly individuals may be affected by events such as the loss of a (grand)child or partner or the onset of a serious chronic condition, and by negative economic shocks such as job loss or the reduction of pension benefits. It is conceivable that the impact of such events is stronger if conditions early in life were adverse. In this paper we address this using a Dutch longitudinal database that follows elderly individuals for more than 15 years and contains information on demographics, socio-economic conditions, life events, health, and cognitive functioning. We exploit exogenous variation in early-life conditions as generated by the business cycle. We also examine to what extent the cumulative effect of consecutive shocks later in life exceeds the sum of the separate effects, and whether economic and health shocks later in life reinforce each other in their effect on cognitive functioning.
Text: See Discussion Paper No. 4780   

McKinsey: A Marketers Guide to Behavioural Economics

Interesting Article (requires registration)

link here

Some Irish Demographic History

Anyone with an interest in Irish demographic history will like this one:

Sourced from the ESRI Family Figures (2010) report. Well worth a read!

I'm interested in singlehood and couple formation in Ireland, and more specifically, the economic and social factors that mediate it. Ireland has some fairly unique historical rates and patterns in this area - nineteenth century (post-famine) was predominantly characterised by remarkably low marriage rates but with very high fertility rates (observed by Joe Lee: Modernisation of Irish Society; 1848-1918). I'm not familiar with any analysis of this.

Here we see the variability in marriage (inc. common law marriages) rates for the 20th century which shows the increase in family formation through the early and mid twentieth century, up to 1980. Now, it seems marriage rates (people aged 25-35) or singlehood rates are returning to the rates of the Victorian era.

I'd be interested to hear you thoughts on this. I'm working on a theory..

Get Better

Some Blog Links

1. A new report from the European Centre for the Development of Vocational Training: "The skill matching challenge: Analysing skill mismatch and policy implications". HT: Michael Egan. [The report is largely based on the contributions of Nigel O’Leary and Peter Sloane (Welmerc, School of Business and Economics, Swansea University), Seamus McGuinness and Philip O’Connell (ESRI – Economic and Social Research Institute, Dublin) and Kostas Mavromaras (NILS – National Institute of Labour Studies, Flinders University, Adelaide, Australia).]

"With global competition increasing, demographic change unfolding and rapid technological change intensifying, skill mismatch has come to the forefront of Europe’s policy debate (European Commission, 2008). Skill mismatch refers not only to skill shortages or gaps, but also to qualifications, knowledge and skills exceeding job requirements."

2. The U-S unemployment rate fell from 10 to 9.7 percent in January, but a Gallup poll out yesterday found that nearly one out of every five members of the country's workforce is underemployed. That's about 30 million Americans who are without jobs or unable to find full-time work.

3. NYT: "Economists fear that the nascent recovery will leave more people behind than in past recessions. Roughly 2.7 million jobless Americans will lose their unemployment check before the end of April... unless Congress approves the Obama administration’s proposal to extend the payments"

4. The Economist: God help the jobless

5. How business meetings are done at Google

6. Another Web 2.0 data-based (ad)-venture: Trendrr

Your Country, Your Call

Your Country, Your Call is a competition to ignite imaginations and inspire thinking.

The goal is to pick two truly transformational proposals so big that, when implemented, could secure prosperity and jobs for Ireland. Proposals that could help change the way we do things, allow businesses to grow, employment to be created and prosperity to flourish.

There will be two competition winners and each will receive a prize of €100,000. A development fund of up to €500,000 is committed for the implementation of each of the winning proposals.

The closing date is April 30th 2010 and more information is available here: http://www.yourcountryyourcall.com/

Family Formation in Ireland

An important new report from ESRI examining family patterns and trends in Ireland from 1986 to 2006. I will post in more detail at a later date on this but for now would advise people to read this. (HT Peter C)

link here 

Call for Papers: Warsaw International Economic Meeting

CALL FOR PAPERS

Warsaw International Economic Meeting

2-4 July, 2010

Organized by Faculty of Economic Sciences, University of Warsaw and National Bank of Poland

Partner institution:

Centre for Economic Analysis

All economists, academics and non-academics alike, are invited to submit their unpublished analytical work or new research in all areas of economics. The main objective of this meeting is to stimulate cooperation of researchers from all over the world.

Young economists, such as graduate students or post-docs are encouraged to apply.

Location: Faculty of Economic Sciences, University of Warsaw, Długa 44/50, 00-241 Warsaw, Poland.

Procedures: Conference language is English. Both individual authors and chairs of organized sessions should register and submit abstracts at www.wiem2010.pl. Submissions of organized sessions will receive priority in the allotment of time slots.

Finances: No conference fee is charged but participants are expected to cover other associated costs. If additional funds become available, the reimbursement of costs of travel and accommodation for presenters of organized sessions will receive priority.

Prize: As in previous years, the Best Paper Prize for Young Economists is established. Up to three presentations will receive the Prize or additional rewards; the budget is at least 1000 Euro.

Important dates:

Submission deadline for extended abstracts: 30 April

Authors are notified: 14 May

Final papers due: 5 June

Conference is scheduled for: 2-4 July, 2010

For updates, please visit www.wiem2010.pl

Contact: Max Kwiek, mkwiek@soton.ac.uk 

More love advice from Dr Kev

I have been working on laterality, specifically handedness, for some time. But there is a lot more to laterality than handedness and lateralisation in the brain is an important topic in neuroscience. The following paper caught my eye as being potentially useful to my young, or even not so young, colleagues.
What McKay et al show is that self-esteem is lateralized.So imagine subjects hearing particular words in each ear (i.e. one ear at a time). It turns out that words heard via the right ear (which are processed in the left-hemisphere) generate a higher feeling of self-esteem than those heard via the left-ear. So if you are going to whisper sweet nothings to your partner, or your desired partner, then you know what to do. I think you will be pleased with the results.
Alternatively, if you want to castigate your PhD student for their general fecklessness, use the left-ear if possible. As far as I can recall, the sense of smell is also lateralized 'though this may be harder to take advantage of in practice.

McKay, R., Arciuli, J., Atkinson, A., Bennett, E., & Pheils, E. (2010). Lateralisation of self-esteem: An investigation using a dichotically presented auditory adaptation of the Implicit Association Test. Cortex, 46 (3), 367-373
http://dx.doi.org/10.1016/j.cortex.2009.05.004

Links 22-02-10

Some of the links clear up some things from last year that did not feature

1. Behavioural Economics and Climate Change . Paper from 2008 that will be of interest

2. John Sugden's review of Nudge

3. Jonathan Baron on risk attitudes and the taste for luxury Some interesting thoughts on how to profile people for retirement advice

4. Sharon Tennyson on analysing the role for the financial protection agency

PROMIS - Improving the use of Patient Reported Outcomes

Thanks to Professor Arthur Stone for pointing to this exciting initiative in improving the science behind patient-reported outcomes in the US.

This initiative -the Patient-Reported Outcomes Measurement Information System (PROMIS) - aims to revolutionize the way patient-reported outcome tools are selected and employed in clinical research and practice evaluation. It will also establish a national resource for accurate and efficient measurement of patient-reported symptoms and other health outcomes in clinical practice.

 The website for the project is here

Intolerance and education in Ireland

Intolerance is a terrible thing. In fact I have no time for people who are intolerant. String 'em up, I say. So I thought it would be interesting to see what are (some) of the characteristics of people who are intolerant. The instrument I use is a question in the European Social Survey which asks whether the respondent thinks "gays & lesbians should be free to live their life as they wish". Its a 5 category answer and I define a dummy which is 1 for the top 2 categories ("agree strongly" or "agree"), 0 otherwise. About 75% are tolerant by this criterion, using the Irish data. So we are a pretty tolerant bunch, according to ourselves anyway.
Below I have a simple model. The coefficients are marginal effects. So what the results show is that each additional year of education is associated with about a 7% higher probability of being tolerant (remember 7% relative to 75%). If you are reading this you are probably fairly educated so this will conform with your prior view (i.e. your prejudice): educated people are nice people. Older people are less tolerant towards gays. Well what do you expect? Likewise people who describe themselves as religious. Women are the good guys, being much more (20%) tolerant than men.
What is curious is that parental education has the opposite effect to one's own education, the more educated your father was the less tolerant you are towards gays. Parental education is a big, perhaps the biggest, determinant, of one's socio-economic status. Its an interesting paradox: answers please on a post-card...

---------------------------------------------
tolerant towards gays
---------------------------------------------
years education 0.0681***
(4.94)

age -0.00532*
(2.22)

woman 0.210**
(2.96)

very religious -0.311***
(4.12)

father's education -0.0823**
(2.61)

----------------------------
N 1631
----------------------------
Absolute t statistics in parentheses
* p<0.05,>

Genetic markers as instrumental variables

This looks pretty interesting, a nice combination of econometrics, genetics & epidemiology

Genetic Markers as Instrumental Variables:An Application to Child Fat Mass and Academic Achievement
Stephanie von Hinke Kessler Scholder, George Davey Smith, Debbie A. Lawlor,Carol Propper,Frank Windmeijer

The use of genetic markers as instrumental variables (IV) is receiving increasing attention from economists. This paper examines the conditions that need to be met for genetic variants to be used as instruments. We combine the IV literature with that from genetic epidemiology, with an application to child adiposity (fat mass, determined by a dual-energy X-ray absorptiometry (DXA) scan) and academic performance. OLS results indicate that leaner children perform slightly better in school tests compared to their more adipose counterparts, but the IV findings show no evidence that fat mass affects academic outcomes.

Wine Case

The extent to which people enjoy wines that are more expensive regardless of intrinsic qualities is brought to bear in dramatic circumstances in court today. Essentially a group of people were fined/imprisoned having been convicted of a massive scam involving selling less prestigious wine for higher prices through falsely labelling them as a more expensive brand. Amazingly, given the scale of the scam, there were no consumer complaints at all, according to one of the lawyers interviewed by the BBC - bbc link

There are a number of behavioural and neuroeconomic studies on one reason why they got away with this for so long, namely that our brain tags more expensive wines as being tastier. See, for example, Drazen Prelec's MIT video , which references some famous studies.

Best Practice Guidelines for PhD Programmes

The Irish Universities Quality Board in Ireland issued this document  last year. It spells out best practice guidelines for PhD programmes. It is worth looking at. From my purely on-the-ground perspective as someone involved in supervising students, the committee structure is certainly an improvement on the standard one-to-one structure, particularly where a student wants a primary supervisor with particular topic expertise but also wants a supervisor who can advise on other technical aspects. For example, a committee structure makes it possible for a student with a clear behavioural economics thesis to have a co-supervisor specialising in GIS and other examples like that. Similarly, the emphasis on encouraging PhD students to present work, attempt to publish and so on is all useful.

Having said that, I am still left with a feeling that what ultimately determines PhD success is a combination of the intelligence of the candidate, their intrinsic motivation, the extent to which their supervisor is working on a good area, the social norms existing in the research group and department and other things that are just hard to define in terms of these guidelines. Perhaps an emphasis on adherence to guidelines and monitoring of them may be harmless in terms of helping those who are having a bad experience with their supervisors and spotting "rogue" departments, without hindering groups who simply have found their own formula for gelling their research group together and producing good researchers.

Yet I do wonder sometimes what we might be communicating to students by getting them to regularly write down whether they have met a series of milestones such as transferrable skills training and so on. There is some risk that the message will be that following the instructions is what doing a PhD is about. Similarly, the idea that transferrable skills, such as communicating to policymakers, can be taught in a linear fashion is something that needs to be looked at. Particularly for social scientists, developing a policy orientation is as much a matter of deep level personal development as it is a skill. Some of the training can aid this (e.g. I certainly encourage people to take a presentation class) but at some stage the residual term that lies outside these production functions needs to kick in, with elements such as belief, intrinsic motivation, creativity and so on being given the seriousness they merit. These things are harder to measure and harder to develop "guidelines" for but should not be ignored when thinking about policy in this areas.

Michael Daly - Congratulations

Congratulations to Michael Daly who just overcame his PhD viva in TCD. His supervisor is the well-known health psychologist Mac MacLachlan. Arthur Stone, whose work is familiar to hopefully all regular readers here, was the external examiner. Michael's thesis encapsulated five papers, including one forthcoming in Health Psychology and a number of others that are under review or revision for top psychology journals. He has also published a number of other papers including work dating back as far as his undergraduate thesis. During his time on the PhD register in Trinity, he worked on a number of projects with me and others in Geary, including a recent paper on time preferences, and he worked as a Fulbright Scholar in Roy Baumeister's lab in Florida State University. He is currently working on a number of exciting collaborative projects in the area of well-being and self-control, including work on inflammation. He has presented his work at several conferences and has been a regular fixture for the last two years at events and internal sessions in Geary. He is certainly one of the most talented people I have ever worked with at any level and I wish him a lot of future success.

Walking Tour Dublin

A lot of our research projects here concern health and education, and many of us have a strong interest in how education, health and social conditions evolved in Ireland in the 20th century and patterned the current distribution of welfare in the county. Pat Liddy recently gave us a tour of parts of inner-city Dublin, taking in Stephen's Green then back along to the quays past Wood Quay and up to Henrietta street. The session lasted about 3-4 hours followed by some cups of tea afterwards. It was a really informative and interesting session and I have asked Pat to do it again.

We will do this on Sunday March 21st at 2pm, this time beginning on Westland Row and walking around areas such as Pearse Street, Sheriff Street, then into the Docklands, around O'Connell Street and so on. Please email me if you would like to go.

Links 15-02-09

1. Designing questions to minimise bias is a concern here. My favourite ever example of a leading question from the Youtube Vaults. "So Debbie McGee, you are very pleasing on the eye. What first attracted you to the millionaire Paul Daniels?".

2. A group of 20 economists petition Gordon Brown.

3. Economix blog has a typically lucid piece on the growing emphasis on attracting students who can pay hard cash

4. Ferdinand sounds a warning note on current policy with respect to university hiring and promotions

5. A UK Central Office for Information report  on behavioural change and communication (thanks Marie)

A Family Affair: Intergenerational Social Mobility

Another interesting OECD report examines social mobility. Some of the conclusions:

Across European OECD countries, there is a substantial wage premium associated with growing up in a better-educated family, and a corresponding penalty with growing up in a less-educated family. The premium and penalty are particularly large in southern European countries, as well as in the United Kingdom. The penalty is also high in Luxembourg and Ireland. In these countries the wage premium is more than 20%, while the penalty is some 16% or more (relative to wages earned by individuals raised in a family with average education).

Education policies play a key role in explaining observed differences in intergenerational social mobility across countries. For example, higher enrolment in early childhood education is associated with a lower influence of parental background on students’ achievement in secondary education. By contrast, school practices that group students into different curricula at early ages come with less social mobility in educational achievement. Moreover, increasing the social mix within schools appears to boost performance of disadvantaged students without any apparent negative effects on overall performance.

Redistributive and income support policies seem to be associated with greater intergenerational social mobility.

Weekend Links: 14-02-10

1. Tim Harford on research about the selfishness of economists

2. VOX article on 11 lessons we can learn from Iceland's collapse

3. Rational Irrationality show us what a bubble looks like

4. Yale interview with Betsy Stephenson on the economics of happiness

5. Bayesian Heresy recommends Jared Diamond's new work on Natural Experiments in history. Will be taking up that recommendation.

6. Karl Whelan points to important new research by the Central Bank using SILC data to model mortgage indebtedness at the household level

7. From the Youtube vaults . Someone had the idea of overlaying Arvo Part's Magnificat on top of archive footage of daily life in Philadelphia and surrounding areas in the 1950s. The result is stunning and worth a few minutes if you want to do some deep thinking about society and the economy.

Book Club on Identity and Economics: Reminder

Just a reminder on the book club folks. Please email me if you are coming along.


The next book club will take place on the recently released book "Identity Economics: How Our Identity Shapes our Work Wages and WellBeing " authored by George Akerlof and Rachel Kranton and published by Princeton University Press. The venue is Duke Bar at 7.30pm on February 16th. As usual, please email if you are coming along. It is not necessary to read the book in advance, but we don't forbid that. This is a really important book and I look forward to debating it. Aspects of it will also feature in my teaching this year and I am happy to have a session in Geary during the day at some point also if people don't like the later hour.