Deeper into the spin zone

This observation is hardly a blindingly new insight, but it struck me that the video above is a kind of landmark. Google was the company that was information focused, engineering focused – and pretty good at user experience (UX) and all that stuff even if not up to Apple’s standard. As someone who’s just swithed from Nexus to iPhone and regretted it, I’d say it’s overtaken Apple at UX.

Anyway I wanted a quick lock on what the new Nexus has to offer. And arrived at this video. Fifty seconds. Fifty seconds of almost complete bullshit, albeit glossy bullshit and bullshit I might enjoy if I was on the other side of the Gruen Transfer and wasn’t trying to find stuff out.

Education Research and Administrative Data

Education Research and Administrative Data by David N. Figlio, Krzysztof Karbownik, Kjell G. Salvanes

Thanks to extraordinary and exponential improvements in data storage and computing capacities, it is now possible to collect, manage, and analyze data in magnitudes and in manners that would have been inconceivable just a short time ago. As the world has developed this remarkable capacity to store and analyze data, so have the world’s governments developed large-scale, comprehensive data files on tax programs, workforce information, benefit programs, health, and education. While these data are collected for purely administrative purposes, they represent remarkable new opportunities for expanding our knowledge. This chapter describes some of the benefits and challenges associated with the use of administrative data in education research. We also offer specific case studies of data that have been developed in both the Nordic countries and the United States, and offer an (incomplete) inventory of data sets used by social scientists to study education questions on every inhabited continent on earth.



[T]he great thing in all education is to make our nervous system our ally instead of our enemy. . .  A ‘character,’ as J.S. Mill says, “is a completely fashioned will”.

William James, The Laws of Habit

“Taste” is a word and an idea that comes from another time. But I think it’s loss is a big deal. First there’s some good news about its demise. The idea of taste was freighted with class superiority. Good taste is typically taken to be associated with the upper and upper-middle classes. There’s also the idea of taste as setting some bounds on public discussion – which doesn’t have much going for it. So in some ways we’re good to be rid of it. But the upside of taste – the thing we’ve lost – is the idea of a desire that’s not a simple ‘preference’ but somehow an enlightened preference – and one that’s typically acquired. It’s an ability to see a little beyond simple appearances, to allow experience to speak of something deeper than appearances. An object in bad taste typically appeals to the untutored. Before megalomania overcame her, before she became a mega-star, Edna Everage’s schtick involved satirising bad taste by referring to the art-work she liked to have around. Ducks flying across the wall, a picture of Chinese girl with a beautiful green face. She would demonstrate her sense of taste by advising her audience “You can always tell an original. The eyes follow you all around the room”.


A Google n-graph of the use of the expression “good taste” at its height in 1930 and leading up to 1960 as you can see.

And here’s the thing. The death of taste as a cultural resource is killing us. Fast food tastes yummy. It’s scientifically optimised to allow you to mainline unmediated yumminess. When I was a kid and first encountered Kentucky Fried Chicken and then saw McDonalds restaurants I remember thinking that McDonalds would never beat Kentucky because Kentucky was so, so yummy – so rich as all that salt, sugar and oil and those secret herbs and spices made the chicken taste unbelievably good. My fish and chip shop just wasn’t close. Anyway, I was wrong. McDonalds, slightly less in-your-face yummy to my juvenile palate seems to have won that battle. Perhaps Maccas were optimising for my adult palate. Today I find the oiliness of KFC off-putting but I do wolf down a very occasional Maccas hamburger when travelling. I enjoy the utter accessibility of Macca’s scientifically optimised yumminess. It’s not hard to see how I could crave them – well I do crave them actually – but only very rarely.  Continue reading

Being stuck in traffic: worse than you think

Superstitions, Street Traffic, and Subjective Well-Being
by Michael L. Anderson, Fangwen Lu, Yiran Zhang, Jun Yang, Ping Qin – #21551 (DEV EEE PE)

Congestion plays a central role in urban and transportation economics. Existing estimates of congestion costs rely on stated or revealed preferences studies. We explore a complementary measure of congestion costs based on self-reported happiness. Exploiting quasi-random variation in daily congestion in Beijing that arises because of superstitions about the number four, we estimate a strong effect of daily congestion on self-reported happiness. When benchmarking this effect against the relationship between income and self-reported happiness we compute implied congestion costs that are several times larger than conventional estimates. Several factors, including the value of reliability and externalities on non-travelers, can reconcile our alternative estimates with the

existing literature.

Opening our doors to more refugees

Henry Ergas offers let’s say a bracing perspective on our increased refugee intake which is to say that we should profile refugees to try to screen out those with odious views – many of whom will be Muslims. It’s quite compelling. Then again doing so opens a Pandora’s box of concerns. I’d feel it was a more compelling issue if we were proposing a much higher intake – as Germany is.

What do others think? If you’re locked out by the Oz’s paywall, for a limited time, I’ve made Henry’s article available on this link.



Competition – important but no silver bullet

It’s hardly a surprise, but somehow we put too much faith in competition, and not enough in all the other things like building capability not to mention a bunch of other things – not covered in the study below – like getting market architecture right, improving information flows. Anyway, here’s a straw in the wind.

Business Practices in Small Firms in Developing Countries by David McKenzie, Christopher Woodruff – #21505


Management has a large effect on the productivity of large firms. But does management matter in micro and small firms, where the majority of the labor force in developing countries works? We develop 26 questions that measure business practices in marketing, stock-keeping, record-keeping, and financial planning. These questions have been administered in surveys in Bangladesh, Chile, Ghana, Kenya, Mexico, Nigeria and Sri Lanka. We show that variation in business practices explains as much of the variation in outcomes – sales, profits and labor productivity and TFP – in microenterprises as in larger enterprises. Panel data from three countries indicate that better business practices predict higher survival rates and faster sales growth. The effect of business practices is robust to including numerous measures of the owner’s human capital. We find that owners with higher human capital, children of entrepreneurs, and firms with employees employ better business practices. Competition has less robust effects.

Theorising in science: theorising in economics

Robert Waldman has a fantastic critique of Paul Romer’s recent missives on economic science. He’s commenting ultimately on why Lucas’s work isn’t such a breakthrough. In it he highlights something of immense importance. It’s hard to think of many developments in economic theory in recent decades to which his observations do not apply. His point is that ‘advances’ in theory tend to be advances in conventions of professional practice, rather than new insights into the world.

General Relativity explained an anomaly … the precession of the perihelion of Mercury… predict[ed]… how much gravity caused light to curve… has yielded a huge number of predictions which fit the data exactly… was easily modified to correspond to an expanding universe…. Physicists are quite sure general relativity is not the truth (because it is inconsistent with quantum mechanics and therefore a lot of data). But it is a very empirically successful theory.

In contrast, the Dixit-Stiglitz example did not attempt to explain anomalies. … The aim was to make models with imperfect competition tractable… an example…. They made a modelling choice… neither would guess that people might actually have Dixit-Stiglitz preferences…. It meant there was a standard way to handle imperfect competition…. [But] there are no general results…. Together the assumptions of imperfect competition and Nash equilibrium imply almost nothing….[Dixit-Stiglitz] made it possible to have the illusion that economic theorists understood imperfect competition, but this was discovery by assuming we have a can opener. The example was fruitful because, once a lot of people decided to explore the same special case, they could discuss its interesting behavior…. Theory can grow if people agree on core assumptions. This is progress if the assumptions are useful approximations. Once a field of economic theory has developed, its core assumptions are no longer vulnerable to data. I do not think the the development of a new branch of theory is necessarily scientific progress. Continue reading

The Impact of R&D Subsidy on Innovation

The Impact of R&D Subsidy on Innovation: a Study of New Zealand Firms by Adam B. Jaffe, Trinh Le – #21479 (PR)


This paper examines the impact of government assistance through R&D grants on innovation output for firms in New Zealand. Using a large database that links administrative and tax data with survey data, we are able to control for large number of firm characteristics and thus minimise selection bias. We find that receipt of an R&D grant significantly increases the probability that a firm in the manufacturing and service sectors applies for a patent during 2005–2009, but no positive impact is found on the probability of applying for a trademark. Using only firms that participated in the Business Operation Survey, we find that receiving a grant almost doubles the probability that a firm introduces new goods and services to the world while its effects on process innovation and any product innovation are relatively much weaker. Moreover, there is little evidence that grant receipt has differential effects between small to medium (<50 employees) and larger firms. These findings are broadly in line with recent international evidence from Japan, Canada and Italy which found positive impacts of public R&D subsidy on patenting activity and the introduction of new products.