Governments run some things better than the private sector: SHOCK!

Who Should Own and Control Urban Water Systems? Historical Evidence from England and Wales
by Brian Beach, Werner Troesken, Nicola Tynan – #22553 (DAE HE PE)


Nearly 40% of England’s privately built waterworks were municipalised
in the late 19th century. We examine how this affected public health
by pairing annual mortality data for over 600 registration districts,
spanning 1869 to 1910, with detailed waterworks information.
Identification is aided by both institutional hurdles and
idiosyncratic delays in the municipalisation process.
Municipalisation lowered deaths from typhoid fever, a waterborne
disease, by nearly 20% but deaths from non-waterborne causes were
unaffected. Results are also robust to the adoption of several
strategies that control for the possibility of mean reversion and
other potential confounds.

Posted in Economics and public policy | 1 Comment

Weavers goes open source

Readers of this blog will be familiar with Family by Family, the service which matches families up with other families in coached, mentoring relationships to help families through tough times and lower the risk of them falling into crisis with all the implications that has for the wellbeing of the kids and for government budgets if governments are forced to remove children from their parents. There’s another similar program The Australian Centre for Social Innovation (TACSI) developed a year or so after Family by Family called ‘Weavers’.

Observing the low levels of wellbeing and high levels of stress and consequent ill mental and physical health, we built Weavers as a means of connecting carers who were on their own – often first time carers – with experienced carers or Weavers to provide peer support. ‘Weavers’ help carers navigate the service maze, stay connected and involve others, work through emotional challenges and keep things together emotionally – a big challenge if you put yourself in carers’ positions. The program was designed and trialled with carers in South Australia and has won an Australian International Design Award.

We’ve persevered with it even though it’s languished a little compared with Family by Family unsure of what kind of business model it should have. Should we seek government funding to deliver the service in return for the benefits it delivers to governments’ bottom lines (particularly by delaying the move from home into institutional care) or could we sell it to those who provide services in relation to ageing.

Anyway, what we’ve done is to ‘open source’ it. So if you go to the Weavers’ website, you’ll be able to sign up and access all our hard work – for free! Is there a catch? Well no, but a better question is ‘how do we make a return on it?’ since TACSI isn’t in receipt of funding from anyone – whether government or philanthropy – except for services rendered. The answer is that we’re giving away what we know (to the extent it can be codified) as a benevolent act, but also like Red Hat and any number of other vendors of open source software, we distribute a codified product for free and then charge for providing services like consulting and further development of the codified knowledge to organisations that use it. Continue reading

Posted in Uncategorized | 3 Comments

IMF Researchers on Inequality on Social Capital

Image result for inequality and trust

Growing Apart, Losing Trust? The Impact of Inequality on Social Capital

There is a widespread perception that trust and social capital have declined in United States as well as other advanced economies, while income inequality has tended to increase. While previous research has noted that measured trust declines as individuals become less similar to one another, this paper examines whether the downward trend in social capital is responding to the increasing gaps in income. The analysis uses data from the American National Election Survey (ANES) for the United States, and the European Social Survey (ESS) for Europe. Our analysis for the United States exploits variation across states and over time (1980-2010), while our analysis of the ESS utilizes variation across European countries and over time (2002-2012). The results provide robust evidence that overall inequality lowers an individual’s sense of trust in others in the United States as well as in other advanced economies. These effects mainly stem from residual inequality, which may be more closely associated with the notion of fairness, as well as inequality in the bottom of the distribution. Since trust has been linked to economic growth and development in the existing literature, these findings suggest an important, indirect way through which inequality affects macro-economic performance. 

Image result for inequality and trust

HT: Prakash Loungani

Posted in Economics and public policy, Philosophy, Political theory, Social, Social Policy | Leave a comment

Extrinsic incentives in schools

Unintended Consequences of Rewards for Student Attendance: Results from a Field Experiment in Indian Classrooms
by Sujata Visaria, Rajeev Dehejia, Melody M. Chao, Anirban Mukhopadhyay – #22528 (CH DEV ED)

In an experiment in non-formal schools in Indian slums, a reward
scheme for attending a target number of school days increased average
attendance when the scheme was in place, but had heterogeneous
effects after it was removed. Among students with high baseline
attendance, the incentive had no effect on attendance after it was
discontinued, and test scores were unaffected. Among students with
low baseline attendance, the incentive lowered post-incentive
attendance, and test scores decreased. For these students, the
incentive was also associated with lower interest in school material
and lower optimism and confidence about their ability. This suggests
incentives might have unintended long-term consequences for the very
students they are designed to help the most.

Posted in Economics and public policy, Education | 2 Comments

People from the wrong side of the tracks disadvantaged in job market: SHOCK!

Family Descent as a Signal of Managerial Quality: Evidence from Mutual Funds
by Oleg Chuprinin, Denis Sosyura – #22517 (LS)

We study the relation between mutual fund managers’ family backgrounds and their professional performance. Using hand-collected data from individual Census records on the wealth and income of managers’ parents, we find that managers from poor families deliver higher alphas than managers from rich families. This result is robust to alternative measures of fund performance, such as benchmark-adjusted return and value extracted from capital markets. We argue that managers born poor face higher entry barriers into asset management, and only the most skilled succeed. Consistent with this view, managers born rich are more likely to be promoted, while those born poor are promoted only if they outperform. Overall, we establish the first link between family descent of investment professionals and their ability to create value.

Posted in Cultural Critique, Economics and public policy, Education, Ethics, Inequality, Information | 2 Comments

Long-term orientation, national culture and educational performance

Available here. by David Figlio, Paola Giuliano, Umut Ozek, Paola Sapienza – #22541 (CH ED LS POL)

We use remarkable population-level administrative education and birth
records from Florida to study the role of Long-Term Orientation on
the educational attainment of immigrant students living in the US.
Controlling for the quality of schools and individual
characteristics, students from countries with long term oriented
attitudes perform better than students from cultures that do not
emphasize the importance of delayed gratification. These students
perform better in third grade reading and math tests, have larger
test score gains over time, have fewer absences and disciplinary
incidents, are less likely to repeat grades, and are more likely to
graduate from high school in four years. Also, they are more likely
to enroll in advanced high school courses, especially in scientific
subjects. Parents from long term oriented cultures are more likely
to secure better educational opportunities for their children. A
larger fraction of immigrants speaking the same language in the
school amplifies the effect of Long-Term Orientation on educational
performance. We validate these results using a sample of immigrant
students living in 37 different countries.

Posted in Economics and public policy, Education | Leave a comment

In praise of blogging: Hoist from 2009 archives

I’m pleased to see Jason Potts tweeting “Blogs are still a thing. This one I just came across is the thingest. It’s like @slatestarcodex, but for econ & tech”. As a result of tweeting back my 2009 post on Blogging the crisis, I re-read it. Sometimes I’m surprised at how badly I’ve written, sometimes how well. This time I was pleased. So I though it’d re-post it – below the fold. All I can say is that if our institutions weren’t asleep at the wheel, we’d have wrapped up most peer reviewed journals into some open system of blog posts which were reviewed and revised in real-time online.

Continue reading

Posted in Economics and public policy, Innovation, Web and Government 2.0 | 4 Comments