Best of #econtwitter - Week of March 5, 2023: paper summaries
Welcome readers old and new to this week’s edition of Best of Econtwitter. Please submit suggestions — very much including your own work! — over email or on Twitter @just_economics.
Late edition this week (sorry!) but a LOT of good stuff…
Idiosyncratic favorites
Does happiness increase with income or level off beyond some threshold? An adversarial collaboration of Killingsworth & Kahneman on the relationship between income and well-being, just out at PNAS: pnas.org/doi/10.1073/pn…
^key figure:
Important study reconciling research on co-linearity of ↑money~↑happiness
If you are a generally unhappy person, money has diminishing returns for happiness (flattening effect)
If you are a generally happy person, ↑money will continue to ↑happiness
pnas.org/doi/10.1073/pn…
^(some pushback eg here, here?)
3/7 Distribution of self-employment (SE) and Earnings
1⃣SE high among lowest and highest earners
2⃣SE highest among lowest earners in developing countries (inverted for developed)
🚨DP ALERT🚨
Do raises in potential benefit duration (PBD) cause higher aggregate unemployment? Economic theory: unclear🫤 For Poland we find: Yes✅
Unemployment increases, driven by directly affected. Inflows play a major role
with @RobinJessen+3
iza.org/publications/d…
1/X 👇
South Dakota implemented 24/7 sobriety program—alcohol abstinence orders with frequent alcohol testing (2x daily breathalyzers, monitoring bracelets) + swift, certain, and moderate sanctions for noncompliance (1 to 2 nights in jail)—reducing death rates by 50% over 5 year period
High-Frequency Transmission of Monetary Policy (MP):
1️⃣MP Shocks transmit at Short! & Long lags
2️⃣Larger Effects for Sales(but lagged) than Consumption
3️⃣More Sticky Employment(Frictions?) 👇shorturl.at/buwIR
@R2Rsquared @NunoGalo @ECB_Research @BIS_org @CebraOrg @AMLEDS1
^“short and variable lags”
^“17% to 29% of voters make up their mind during the two months before the election”
What is the probability that that price offers were rejected by consumers? The graph below shows a discontinuous jump in rejected price offers at each dollar threshold.
Who's most hurt by contractionary monetary policy? In the latest JEP, @AlisdairMcKay and @ChristianKWolf look at the heterogeneity of consumption reactions to expansionary MP - here is what their results imply for MP tightening (assuming symmetry) 👇 1/7
pubs.aeaweb.org/doi/pdfplus/10…
💡 Interest rates affect households very differently, but overall consumption reactions are pretty evenly distributed. This figure (see linked paper) presents numbers from a back-of-the-envelope calculation for an interest rate decrease.
But ⚠️: state dependence matters! 7/7
We find that Amazon’s US toy prices increased significantly following the Toys R Us bankruptcy. For the most popular products, prices rose by 5.3%. The sales-weighted average price increase is 4.7% - almost half of Amazon’s reported price advantage pre-exit. 3/n
🥳 Conditionally accepted at Econometrica: Algorithmic Mechanism Design with Investment. (w Mohammad Akbarpour,@skominers, Kevin Li, and Paul Milgrom.)
VCG mechanisms aren't always feasible—many real-world allocation problems are NP-hard, so we can't compute optimal allocations.
Navel gazing
Is Economics self-correcting? We have a new discussion paper, joint with N Fiala & @flneubauer. Quick answer is: No, rather not. We reviewed all replications published as comments in the AER. Plus, we surveyed the authors. A short thread 1/. bit.ly/3y0wMYp #EconTwitter
It’s also not surprising but still striking to see how little agreement there is between original authors and replicators – reflecting the sense that there’s no convincing definition or understanding in economics of what is an un/successful replication 8/.
Separately:
"We find that median article quality is lower in the QJE if authors have ties to Harvard and/or MIT than if authors are from other top-10 universities, but higher in the JPE if authors have ties to Chicago." (ht @NicolaiFoss) docs.iza.org/dp15965.pdf
Separately:
Applied econometrics as a signaling game - researchers are more likely to razzle-dazzle the reader/referee by mentioning that they compute the "Kleibergen-Paap" F statistic when their first stage is weak.
Paper summaries
New working paper with @ArpitaPatnaik6, Gwyn Pauley, and @realMattWiswall ! This paper asks: does exposure to same-gender speakers increase women's take-up of econ major DUE to same-gender channels or does ANY speaker increase take-up? nber.org/papers/w30983 [1/N]
Women have traditionally participated in intellectual property creation at depressed rates relative to men, but book authorship has become an exception. In 1970, women published a third as many books as men. By 2020, women authored the majority of new books.
Just 3 years of data make a significant difference in trend estimates.
Here is the change in the linear trend on economic profits from 1981-2014 achieved by varying the sample start year.
Over 30% of the trend disappears from 1985!
^“t-hacking”
Our new paper looking at alcohol, drug and suicide mortality during the first 2 years of the pandemic in the USA and the UK nations has just been published in @RSPH_PUHE
Lots of attention on these deaths early in the pandemic, so what actually happened?
doi.org/10.1016/j.puhe…
Since everyone is talking about the dangerous effects of smartphones (cc @Noahpinion), I'll share this finding from my 2017 paper.
Kids started going to the hospital more after the iPhone was released.
Likely cause: parents were distracted by their phones.
“Engels' Pause” – the fact that real wages did not rise much in the early phases of the Industrial Revolution – is sometimes cited as evidence that rapid technical progress can hurt labor. Is this relevant in the modern context? 1/
^and also:
Are past periods of persistent prosperity (e.g., Greece, Rome, Song China, etc.) inconsistent with Malthusian economics as historians often claim (sometimes in scathing critiques of work done by economists)? Turns out they are not. 1/
The steady rise in CPS nonresponse since 2010 is from households refusing the survey. Robert Bernhardt, @D_Munro_Econ, and I offer a correction method to adjust labor market indicators for selection: erinwolcott-econ.github.io/BernhardtMunro…
Nick Bloom @I_Am_NickBloom
Recent inflation and consumer spending numbers have remained strong. Why?
One idea that people seem to dismiss somewhat: Excess savings
“It’s been two years since Biden’s stimulus, everybody already spent it”
A short 🧵 on why that is the wrong way of thinking about it... 1/N
The Wall Street Journal @WSJ
Ten years after its inception, our paper on the performance of school assignment mechanisms is published in @JPolEcon. We use a unique combination of register and survey data from Amsterdam to compare allocations under Deferred Acceptance (DA) and adaptive Boston.[1/9]
I really am a health economist. 💖All three projects of my dissertation found a lovely home 🏡The last one on the “negative effects of long parental leave” is now out @JHealthEcon doi.org/10.1016/j.jhea… (1/4)
🚨 New working paper! 🚨
Curious about the effects of generative AI systems like ChatGPT on production and labor markets? Then you'll be interested in our new paper (with @whitneywzhang)!
Link to paper and thread below ⬇️
economics.mit.edu/sites/default/…
More paper summaries
An algorithm decided you should see this tweet! Our new paper shows a big problem with algorithmic curation: it hides content by people not like you (different races for example).
You say: sure, that’s because users themselves are prejudiced.
We say: it's something more!
🧵
NBER @nberpubs
New research: most previous work showing that YouTube, TikTok etc. recommend increasingly extreme content is junk 😐
These "audits" simulated users clicking randomly. But that vastly overestimates rabbit hole effects, because most users aren't extreme.
arxiv.org/abs/2302.11225
Jacob Orchard @profwieland Valerie Ramey paper on fiscal stimulus shifted my priors:
• MPCs are overstated; 0.3 rather than 0.5
• Micro-MPCs incompatible with aggregate consumption shifts
• Stimulus is lessened by GE effects, ie higher vehicle prices
conference.nber.org/conf_papers/f1…
🧵on a crucial & 🤯 study. Immigrants represent 16% of US inventors but account for 36% of patents. 23% is a direct contribution as authors. 13% indirect by making *native* inventors more productive. Let’s break the direct & indirect effect down:
Our paper on party cues/persuasive communication is out today at @NatureHumBehav.
We asked: is US partisans’ receptivity to persuasive communication diminished by countervailing cues from their party leader?
We found no evidence of this.
nature.com/articles/s4156…
New paper on effect of digital payment on economic growth w/ Tamanna Singh Dubey
India witnessed impressive growth in digital payments after the launch of a nationwide payment interface (UPI) in 2016.
Districts w/ high digital payment: higher income, higher business growth
BIS working paper introducing a new dataset on emerging market sovereign bonds; tracking the currency of denomination and the residence of investors
"Overcoming original sin: insights from a new dataset"
bis.org/publ/work1075.…
