Seminar: Jon Lanning

Jon Lanning (Albion College) will be the final presenter in the Department of Economics seminar series this semester. He will present "Testing Standard Theories of Economic Discrimination: Productivity, Prejudice, and Lost Profits During Baseball's Integration," on Friday, December 7th at 3:30 pm in room 230 Wimberly Hall. I hope you can join us for what promises to be a stimulating discussion. The presentation will be appropriate for upper level econ majors, so feel free to invite them.

Bonding

I was just interviewed for a piece on WSLU/WPR concering this article in the Journal Sentinal.

According to the Legislative Fiscal Bureau, the state had $8.28 billion in general-obligation, transportation and environmental debt in mid-2006; the same debts totaled $4.41 billion in 1996.

The 87% increase was three times the U.S. inflation rate over that period.

Figures show that debt rose the most - by $1.8 billion- under Thompson between 1996 and 2001, when he resigned to become a cabinet secretary for President Bush. Debt increased by more than $1.5 billion in Doyle's first three years.

Todd Berry, president of the Wisconsin Taxpayers Alliance, said the growing debt is another risky budget decision governors and legislators have made to benefit themselves politically.

Also rising is annual debt-service payments on those bonds: Principal and interest payments on general-obligation bonds will exceed $700 million for the first time this year; and payments on transportation bonds will cost an additional $174 million.

That $874 million is cash that can't be used for other important programs. By comparison, that amount is close to what it cost to run the state's prison system last year.

There are two real issues. The first is that the increase in bonding burdens future generations, which is alright if they are the ones who benefit. The second issue concerns the state's bond rating. As it falls debt service costs rise, crowding out other budget items.

The article could have been improved by publishing the debt as a percentage of the state economy, as it has grown by 50% over the last 9 years. That makes the outstanding debt about 2.9% of Gross State Product in 1997 and about 3.6% in 2006. Not exactly an enormous increase.

Death by Powerpoint

Everyone is guilty of misusing powerpoint. Don't put your classmates to sleep during your next presentation, learn how to use it effectively.

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Prof. Brooks to Speak at Macalester College: Come up and dinner's on me!

Professor Taggert Brooks, University of Wisconsin La Crosse will present
his paper “In Da Club: An Econometric Analysis of Strip Club Patrons” on Friday, November 16th at noon in Carnegie Hall, room C-304 at Macalester College in lovely St. Paul, MN.

This talk is also scheduled for presentation at the Allied Social Sciences
meetings (January 2008 in New Orleans) in a panel on the Economics of Paid Sex Markets, presided over by Alan Krueger (Princeton University), and along with other presenters including Steve Levitt (University of Chicago) and discussants including the up-and-coming hotshot, Emily Oster (University of Chicago).

ABSTRACT
Conservative estimates from the National Health and Social Life Survey
(NHSLS) suggest 17 million Americans went to a club that featured nude
or semi-nude dancers in 1991. Their attendance comprises nearly 67
million visits, 10 million more than the attendance at major league
baseball games that year. A recent report by the Free Speech Coalition
(2005), and recent testimony in front of the Ohio Legislature by an
industry advocate, Angelina Spencer, put the total revenues earned by
strip clubs at 15 billion dollars a year (Smyth, 2005; Thompson, et al.,
2003). The industry arrived at this point following a doubling of the
number of strip clubs between 1987 and 1992 according to Hanna (2005).
Yet there has been no academic work covering this industry by economists.

In this paper I estimate a hurdle model using the NHSLS which is the
first and only national probability based sample which asks people about
their sexual behavior including if they have attended a strip club and
the frequency of attendance. Using the hurdle model I test two popular
theories which purport to explain the rapid increase in the number of
clubs. I find that for those who reported changing their
behavior in response to AIDS/HIV they were much more likely to go to a
strip club and more frequent visitors than those who did not change
their behavior.

On the second explanation I fail to find support for the belief that
attendance at strip clubs was motivated by the desire to escape the
uncertain rules of a gender integrated work place. The rise
of societal sensitivities to sexual harassment in the workplace does not
appear to explain patron attendance at a strip club.

Gender

Dr. Giddings has recently posted on her bailiwick, gender issues (here and here) . Though its not exactly my area of study, I'm always interested in research on gender differences. I'm incredibly lucky to have a colleague like Lisa who will thoughtfully discuss these issues and not react the way Harvard's faculty did to Larry Summer's musings on gender. So with that preface I'll share some controversial recent research. The first piece, by Cawley and Liu , use time use data to identify the source of maternal employment's impact on increasing childhood obesity.

Recent research has found that maternal employment is associated with an increased risk of childhood obesity. This paper explores mechanisms for that correlation. We estimate models of instrumental variables using a unique dataset, the American Time Use Survey, that measure the effect of maternal employment on the mother’s allocation of time to activities related to child diet and physical activity. We find that employed women spend significantly less time cooking, eating with their children, and playing with their children, and are more likely to purchase prepared foods. We find suggestive evidence that these decreases in time are only partly offset by husbands and partners. These findings offer plausible mechanisms for the association of maternal employment with childhood obesity.

The second, by Noam Kirson, concerns how female labor force participation shortens the life of their male spouses.

This paper finds a strong positive correlation between female labor force participation and negative health outcomes for middle-aged men and women, and suggests that this correlation is mediated by household-level stress. At the cross-country aggregate level, I show that labor force participation of women is associated with increased mortality rates among both men and women. At the individual level, I find that married men whose spouses work are more likely to die within 10 years, to have high blood pressure and to self-report worse health outcomes. The findings do not appear to be the result of reverse causality. The mortality effects, both aggregate and individual, are especially large for deaths from ischemic heart disease, while weak to moderate for cancer. These findings match well with the medical evidence on the link between stress and health.

Of course this isn't the only mechanism by which women can shorten men's lives. They also "make" us do stupid, crazy things. Don't forget male life expectancy is much shorter than women's due largely to the increased likelihood of death from accident. We are the risk takers, and I mean that in the physical sense. From The Economist:

Chasing females can take years off life

IN THE cause of equal rights, feminists have had much to complain about. But one striking piece of inequality has been conveniently overlooked: lifespan. In this area, women have the upper hand. All round the world, they live longer than men. Why they should do so is not immediately obvious. But the same is true in many other species. From lions to antelope and from sea lions to deer, males, for some reason, simply can't go the distance.

One theory is that males must compete for female attention. That means evolution is busy selecting for antlers, aggression and alloy wheels in males, at the expense of longevity. Females are not subject to such pressures. If this theory is correct, the effect will be especially noticeable in those species where males compete for the attention of lots of females. Conversely, it will be reduced or absent where they do not.

The best thing I have read on the evolutionary psychology/biology of gender differences is this speech by Roy F. Baumeister (here). Read and discuss, preferably with the opposite sex and preferably in a room without sharp objects.

Consumed

National Public Radio has been providing different views about our consumer society under the title" Consumed Is our consumer society sustainable?" On its web site npr states the objectives of the series as: "...Is our consumer society sustainable? Marketplace and American Public Media take on that question in this special series. We follow consumerism from its origins to its dominance in the world's economy and, arguably, its culture. And we examine how, and if, it might be adapted to reduce its destructive consequences while keeping store shelves stocked."

Audio reports, web stories and blogs are dealing with the effects consumption is having on individuals, families, regions, nations, environments. It tells stories like how a Chinese woman gained a net worth of $10 billion with our garbage or how a country, Bhutan, which was closed off from the rest of the world changed since they opened their doors seven years ago.

A Pearl Harbor without War

The following article "A Pearl Harbor without War" presents journalist Gabor Steingart's view of the implications for the USA of China's prediction "the dollar is likely to lose its status as the world's leading currency." Gabor Steingart is the Washington correspondent of the German news magazine Der Spiegel. Summarizing his article he suggests it is high time for the USA and her government to improve the international trading position especially via China. The latter is approaching the end of her patience to accept further declines in the value of her US treasury bond holdings.

The Gap Minder

Check out this great Google application, The Gap Minder.

The lecture posted on that Website (about 20 minutes) is well worth the watch.

The application itself is quite interesting and fun to explore. It is highly interactive and allows you to look at data over time and across countries. For eample, you can explore "Income per capita in international dollars", "Carbon dioxide emissions", "Contraceptive use among adult women", "Economic growth", "Internet users" and the "Military budget" just for example.

Have fun!

Economic Lessons from Music and Movies

Many economic principles and ideas appear in modern music and movies. Here you can find a list of movies and their principles and here you can find a weblog dedicated to discussing the economics in music lyrics.

The website for educators discussing the use of these methods is here.

Competitive Frims

There is a nice java applet demonstrating the supply of competitive firms here.

Taxes

Its important to be able to discern truth from fiction or at least filter out the ideology. David Leonhardt helps in his column on taxes.

The top earners pay a bigger share of the government tab than in the past because their incomes have risen so sharply — even more sharply than their tax bills. (Mr. Fleischer was able to claim the opposite by looking only at income taxes.)

The affluent, in short, are paying less in taxes on every dollar they earn but earning many more dollars.

And despite what some politicians say, not even conservative economists believe tax cuts are self financing. There is no such thing as a free lunch. As James Surowiecki points out:

How much of an impact tax rates have—and how high taxes have to get before they have an impact—is a subject of much debate in economics, but it’s inarguable that they do matter. What supply-siders have done is start with that reasonable idea and extrapolate it to unreasonable lengths.

It’s the comparison between actual tax revenue in 2007 and what tax revenue would have been in 2007 had there been no tax cuts in 2001. And studies that make these types of comparisons—including one by Bush’s own Treasury Department that looked at the tax cuts’ impact on economic growth—find that government revenues would be greater had taxes not been cut.

I use to call myself a supply sider, but stopped years ago when the tax cut nuts laid claim to the name.

Women: Darned if They Do, Darned if They Don't

Lisa Belkin added another article in what seems to be a never-ending series about women in the workforce yesterday in her article The Feminine Critique published in the New York Times.

The article explores the existing academic literature on why more women aren't in leadership positions despite moving into the labor force in large numbers over the last three decades. Studies show that "the view of an ideal leader varied from place to place — in some regions the ideal leader was a team builder, in others the most valued skill was problem-solving. But whatever was most valued, women were seen as lacking it."

"Respondents in the United States and England, for instance, listed 'inspiring others' as a most important leadership quality, and then rated women as less adept at this than men. In Nordic countries, women were seen as perfectly inspirational, but it was 'delegating' that was of higher value there, and women were not seen as good delegators."

Hum. . .

Here's some more:

"Joan Williams runs the Center for WorkLife Law, part of the University of California Hastings College of the Law in San Francisco. She wrote the book 'Unbending Gender' and she, too, has found that women are held to a different standard at work.

They are expected to be nurturing, but seen as ineffective if they are too feminine, she said in a speech last week at Cornell. They are expected to be strong, but tend to be labeled as strident or abrasive when acting as leaders. 'Women have to choose between being liked but not respected, or respected but not liked,' she said."

Double hum. . .

Lastly she reports on studies that show that women simply don't ask for as much money, or are as skilled at wage bargaining as men, as explanations for wage or salary differences.

I wonder, if women acted more like men, and asked for more money, would they actually get it? Or would they be perceived as too masculine?