Many of my classes consist of a large writing component. I’ve designed the courses so that most students write the best paper that they’ll ever write in their life. Recently, I had reason to believe that a student was using AI or a paid service to write their paper. I couldn’t find conclusive evidence that they didn’t write it, but it ended up not mattering much in the end.
Continue readingProductivity
Must-Have Practical Gifts
My wife and I have different preferences for the kind of gifts that we like to receive. She likes earrings, flowers, massages, and electronics. I like hand tools, power tools, and any other item that makes domestic life more efficient. I can really appreciate a nice new pair of dockers or a button-down.
If you have a dad, husband, or anyone else in your life who appreciates practical gifts, then this list is for you. Below are four gift ideas that are sure to make the practical person in your life very happy – even if they may not be what you would want to receive. I’ve personally vetted all of the below items, so I can attest to the satisfaction that they are sure to provide that hard-to-shop-for person.
Is your life in disarray? Are your cords and chargers in disarray? Then look no further. Nothing compares to the knowledge that the nest of cords behind your wall unit is no more. Use Velcro to bind and truncate your computer cords and your kitchen appliance cords. Do you have a drawer or box full of tangled extras? Velcro is nice because you can cut it to your custom length and reuse it with minimal loss of life. You can also use it in electrical applications or in the cabin of your vehicle. Do you have a phone charger beside your bed that keeps falling on the ground? Just Velcro it to the nightstand lamp and it will stay exactly where you want it. AND, because it’s reusable, you can easily remove it and keep the cords in your luggage nice and compact.
2) Minute Soil
Growing stuff is hard. But flowers, greenery, or even vegetables are nice. Yes, I’m basically recommending that you give someone dirt. But it’s awesome dirt. There’s this stuff called coconut coir. It’s coconut fiber that’s been compressed into a small disc or brick that’s ideal for shipping and delivery. Just add water and you’ve got some fancy dirt just waiting for an application. Coconut coir is all plant-based material, drains well, and it’s easy to store. You may not think of dirt as something that has a shelf life, but regular potting soil can definitely grow some unsavory things if you let it sit for long enough. Coconut coir is the solution to all of your spur of the moment small-scale horticultural endeavors.
3) Qwix Mix
Shipping items to our homes has been a game changer for shopping. But home delivery is not sensible for low priced heavy items like some liquids. My family was frequently running out of windshield wiper fluid and we’d end up stopping at a grocery store and overpaying. But no more! Qwix Mix is a windshield wiper fluid concentrate. Just an ounce in addition to a gallon of water saves us unplanned trips, high prices, and the storage cost of purchasing gallons of fluid ahead of time. I can’t vouch for the de-icing formulation, but the southern climate formula does exactly what it’s supposed to do.
Since the Covid recession, many of us have taken up our hand at cutting hair at home. For a while, we were borrowing a neighbor’s clippers. They were loud and had a short cord. But I’ve since purchased Ufree clippers and they are so much more convenient. They’re quiet, cordless, charge with a USB cord, and have a battery level display. But the battery lasts so long that you don’t even need to think about it. This kit comes with a beard trimmer, several guards, and a cape (throw the cape away, it’s bad). The clippers are metal and have some heft to them. Several colors are available – they come in black, silver, and gold finishes. But how can one not choose the gold ones?
That’s my list of great gifts for practical people. IDK your gift limit, but if you buy all 4 of these gifts you’ll spend about $100. That might leave room left over for stocking stuffers and chocolate.
(We’re not paid for any of these recommendations. But using our links is always helpful.)
Cheers to Sumproduct!
I teach macroeconomics, finance, and other things.
Often, I use Excel to complete repetitive calculations for my students. The version that I show them is different from the version that I use. They see a lot more mathematical steps displayed in different cells, usually with a label describing what it is. But when I create an answer calculator or work on my own, I usually try to be as concise as possible, squeezing what I can into a single cell or many fewer cells. That’s what brings me to to the sumproduct excel function that I recently learned. It’s super useful I’ll illustrate it with two examples.
Example 1) NGDP
One way to calculate NGDP is to sum all of the expenditures on the different products during a time period. The expenditures on a good is simply the price of the good times the quantity that was purchased during the time period. The below image illustrates an example with the values on the left, and the equations that I used on the right. That’s the student version. There is an equation for each good which calculates the total expenditure on the individual goods. Then, there is a final equation which sums the spending to get total expenditures, or NGDP.
Willingness to be Paid Treatments
This is the second of two blog posts on my paper “Willingness to be Paid: Who Trains for Tech Jobs”. Follow this link to download the paper from Labour Economics (free until November 27, 2022).
Last week I focused on the main results from the paper:
- Women did not reject a short-term computer programming job at a higher rate than men.
- For the incentivized portions of the experiment, women had the same reservation wage to program. Women also seemed equally confident in their ability after a belief elicitation.
- The main gender-related outcomes were, surprisingly, null results. I ran the experiment three times with slightly different subject pools.
- However, I did find that women might be less likely to pursue programming outside of the experiment based on their self-reported survey answers. Women are more likely to say they are “not confident” and more likely to say that they expect harassment in a tech career.
- In all three experiments, the attribute that best predicted whether someone would program is if they say they enjoy programming. This subjective attitude appears more important even than having taken classes previously.
- Along with “enjoy programming” or “like math”, subjects who have a high opportunity cost of time were less willing to return to the experiment to do programming at a given wage level.
I wrote this paper partly written to understand why more people are not attracted to the tech sector where wages are high. This recent tweet indicates that, although perhaps more young people are training for tech than ever before, the market price for labor is still quite high.
The neat thing about controlled experiments is that you can randomly assign treatment conditions to subjects. This post is about what happened after adding either extra information or providing encouragement to some subjects.
Informed by reading the policy literature, I assumed that a lack of confidence was a barrier to pursuing tech. A large study done by Google in 2013 suggested that women who major in computer science were influenced by encouragement.
I provided an encouraging message to two treatment groups. The long version of this encouraging message was:
If you have never done computer programming before, don’t worry. Other students with no experience have been able to complete the training and pass the quiz.
Not only did this not have a significant positive effect on willingness to program, but there is some indication that it made subjects less confident and less willing to program. For example, in the “High Stakes” experiment, the reservation wage for subjects who had seen the encouraging message was $13 more than for the control subjects.
My experiment does not prove that encouragement never matters, of course. Most people think that a certain type of encouragement nudges behavior. My results could serve as a cautionary tale for policy makers who would like to scale up encouragement. John List’s latest book The Voltage Effect discusses the difficulty of delivering effective interventions at scale.
The other randomly assigned intervention was extra information, called INFO. Subjects in the INFO treatment saw a sample programming quiz question. Instead of just knowing that they would be doing “computer programming,” they saw some chunks of R code with an explanation. In theory, someone who is not familiar with computer programming could be reassured by this excerpt. My results show that INFO did not affect behavior. Today, most people know what programming is already. About half of subjects said that they had already taken a class that taught programming. Perhaps, if there are opportunities for educating young adults, it would be in career paths rather than just the technical basics.
Since the differences between treatments turned out to be negligible, I pooled all of my data (686 subjects total) for certain types of analysis. In the graph below, I group every subject as either someone who accepted the programming follow-up job or as someone who refused to return to program at any wage. Recall that the highest wage level I offered was considerably higher on a per-hour basis than what I expect their outside earning option to be.
I’ll discuss the three features in this graph in what appear to be the order of importance for predicting whether someone wants to program. There was an enormous difference in the percent of people who were willing to return for an easy tedious task that I call Counting. By inviting all of these subjects to return to count at the same hourly rate as the programming job, I got a rough measure of their opportunity cost of time. Someone with a high opportunity cost of time is less likely to take me up on the programming job. This might seem very predictable, but this is a large part of the reason why more Americans are not going into tech.
Considering the first batch of 310 subjects, I have a very clean comparison between the programming reservation wage and the reservation wage for counting. People who do not enjoy programming require a higher payment to program than they do to return for the counting job. Self-reported enjoyment is a very significant factor. The orange bar in the graph shows that the majority of people who accepted the programming job say that they enjoy programming.
Lastly, the blue bar shows the percent of female subjects in each group. The gender split is nearly the same. As I show several ways in the paper, there is a surprising lack of a gender gap for incentivized decisions.
I hope that my experiment will inspire more work in this area. Experiments are neat because this is something that someone could try to replicate with a different group of subjects or with a change to the design. Interesting gaps could open up between subject types under new circumstances.
The topic of skill problems in the US represents something reasonably new for labor market and public policy discussions. It is difficult to think of a labor market issue where academic research or even research using standard academic techniques has played such a small role, where parties with a material interest in the outcomes have so dominated the discussion, where the quality of evidence and discussion has been so poor, and where the stakes are potentially so large.
Cappelli, PH, 2015. Skill gaps, skill shortages, and skill mismatches: evidence and arguments for the United States. ILR Rev. 68 (2), 251–290.
Highlights from EA Global DC
I was in DC last weekend for the Effective Altruism Global conference. I met a lot of smart people who are going to have a huge impact on the world, and some who already are. I’ll share a few of my favorite highlights here, with the disclaimer that most quotes won’t be exact:
The mistake every do-gooder makes is coming to a country and thinking ‘I’m just here to help people, I’m not a political actor.’ Guess what? You are. What you do changes the balance of power, often toward the center
Chris Blattman
I’m funding the Yale spit test? The world doesn’t make sense [Yale, NIH, et c should be on it]… its like, if I won an academy award or NBA MVP, how screwed up would the world be?
Tyler Cowen, referring to Fast Grants
You should all be political independents, both parties are terrible. You should be voluntary social conservatives, behave like Mormons…. we need a marginal revolution toward the better parts of the Mormon / social conservative package
Tyler Cowen
Tyler later specified that the main things he meant by this were to marry young and not drink, though I don’t think he realized how common the latter already is:
As he often does, Tyler recommend that people travel more:
If I meet someone who’s been to 40 countries I tell them they should travel more, and to weirder places
Tyler Cowen
But when someone asked “How much travel is too much”, he came up with this limiting principle:
How much travel is too much travel? 10% after your significant other gets mad at you
Tyler Cowen
I asked Matt Yglesias how much of his policy influence comes just from writing things online, and how much from personal connections and being in DC. He said something like:
Personal connections matter a lot given how real people change their minds, but there’s also less of a dichotomy than you’d think. For instance, a WaPo column of mine was getting passed around the White House, but I wrote it because someone in the WH suggested the topic. Politicians often communicate with each other via the media, though I wish they wouldn’t. Just talk to each other, you work in the same building!
Matt Yglesias
His take on the changing media environment:
My tweets are more influential than my columns & substack, because they are read so much more & I’m followed by many journalists. Overall though now is a great time for specialists, obsessives and weirdos. Construction Physics is a great blog now but if he’d written it in 2003 people would just be like, WTF. On the other hand my [generalist] college blog did well in 2003 but if a college student wrote the same kind of things today people would say, who cares?
Matt Yglesias
Journalists are suspicious haters, that’s our function in society
Can’t remember if this was Matt Yglesias or Kelsey Piper
Tyler and Matt were both telling people that you can accomplish your goals more effectively by being more “normie” in some ways. This can be a bit of a sacrifice, but:
If you can give a kidney, you can learn to tie a tie, give a firm handshake, and look people in the eye
Matt Yglesias
I’m some combination of smart enough and arrogant enough that its normally rare for me to meet someone and think “oh, you’re smarter than I am”. But at EAG it was common; not just because of the ridiculous numbers of top-university degrees and real-world accomplishments, but the breadth and depth of the conversations, everything from mental math to number theory, AI to finance, to a surprisingly convincing pitch for the relevance of metaphysics for political theory.
It wasn’t a step up for everyone though; I talked to someone at a top hedge fund who said the people he worked with were “are the smartest, most dedicated people I’ve been around…. smarter than EAs, more able to execute than mathematicians at [top PhD program he was at]”. They work 12 hour days, actually working the whole time (no long lunch break, small talk with colleagues, reading social media on their computers)… but all in a ruthless, selfish, impressively successful quest to outsmart the market and make more money.
Overall it was a great time and helped me narrow down my plans for what to do with my time and brainpower post-tenure. If you’re interested there are more conferences ahead.
Doobies over Butts: More Americans Now Smoke Marijuana Than Cigarettes
Gallup has polled Americans for many decades about their smoking habits. About 40-45% of adults smoked cigarettes from about 1945-1975, but the percentage has dropped steadily since then. A 2022 poll showed a new low of 11% being smokers. Roughly three in 10 nonsmokers say they used to smoke.
On the other hand, marijuana usage has climbed steadily since Gallup first asked about it in 1969. Some 16% of Americans say they currently smoke marijuana, while a total of 48% say they have tried it at some point in their lifetime:
Younger adults (18-34) are much more likely to be current users, but the 55+ crowd tried it nearly as much (44%) as the younger cohorts:
Among all adults, opinion is about evenly split on whether marijuana has a positive or negative effect on society and on people who use it. However, opinion is skewed very positive among those who have actually tried it, and negative among those who have not:
(I can’t resist inserting a consistent anecdotal observation by reliable people I know or know of, that habitual smoking of MJ tends to be highly correlated with passivity / lack of initiative, especially among young men. When one young man I know of told his counselor, “Nothing happens [when I smoke weed]”, the response was, “That’s the problem, nothing happens [because with weed you just chill and don’t do the stuff you need to do].” Of course, correlation says nothing about the direction of causation here).
The big gorilla of substance usage is still alcohol. About 45% of Americans have had an alcoholic drink within the past week, while another 23% say they use it occasionally. Alcohol use has remained relatively constant over the years. The average percentage of Americans who have said they are drinkers since 1939 is 63%, which is close to Gallup’s most recent reading of 67%.
Series 65 for Economists
Financial discussions often give the disclaimer “this is not investment advice” for legal reasons. I would always see this and wonder, is anyone ever willing to say “this *is* investment advice”?
The answer is, yes, licensed investment advisers do when speaking to their clients. How do people become licensed investment advisers? They start by taking the Series 65 exam.
I decided to take the Series 65 because I thought it would be a good learning opportunity, that it could be fun to tell people “this is investment advice”, and because it also provides the fast track to becoming an accredited investor. I’d like to have the option to invest in startups or hedge funds, but the SEC doesn’t let people do that unless they are rich (consistently over $300k/yr HH income, or $1mil in assets) or a licensed financial professional. I didn’t want to wait years to pass the income or asset tests, and so decided to pass the literal test instead.
I hoped that as a PhD economist who sometimes reads about finance for fun, I could pass the Series 65 without studying. This turned out not to be true, but it also wasn’t wildly wrong. You need to get at least 72% of questions correct to pass; taking a practice test cold I got 62%. I decided to first take the slightly easier Security Industry Essentials exam as a warmup. For both exams, I passed after spending ~ 2 weeks reading through the ~500 page study guides from the Securities Institute of America in my spare time.
For someone with an economics background, the exams will feature a few true econ questions you’ll know cold, a lot of “common sense” finance questions you probably know, some more specific finance questions you probably don’t know, and some specific questions about laws and regulations for investment advisers you almost certainly don’t know. This means you can speed through some parts of the study guide, but will need to slow way down in others. I found myself learning a roughly equal mix of things I’m happy to know for their own sake, things that would only be helpful to the extent I actually work as an investment adviser, and things that seem completely pointless.
Overall this seems like a decent way to spend a bit of time and money. Economists love to complain about people asking us for financial advice, and we tend to either reply “I don’t know, that’s not what economics is about” or give uninformed answers. But it doesn’t take that much time to educate yourself enough to be able to give people good, informed answers, so I think we should do so, especially when the alternatives people turn to tend to either be uninformed (friends or internet randos) or biased (advisers who get paid for steering them to high-fee investments).
That said, if your goal is actually to make money as an adviser or as an accredited investor, the Series 65 exam is only the first hoop to jump through. You still need to get licensed, which means either starting an investment advisory firm or joining one. I haven’t tried to do this yet despite passing the Series 65 in June, as I’ve been busy with my main job. I’d be interested to hear from anyone who has done this, especially anyone who got a part-time or consulting role just to get licensed to make accredited investments. How hard was it, how long did it take, what did you think of the actual work?
Some Countries Use Too Much Fertilizer, and Some Use Too Little
In a world where China and India continue to build huge, CO2-belching coal power plants, and a world where global supply chains can no longer be taken for granted, you might think that a small, crowded country like the Netherlands would prioritize home-grown food production over concerns about greenhouse gas emissions from a relatively small volume of cow manure. But this is Europe, the land of eco-utopianism, and so you would be wrong.
Cow poop does emit nitrous oxide (a greenhouse gas) and ammonia (which can potentially pollute local water if uncontained). In a burst of green virtue, the Netherlands has, “unveiled a world-leading target to halve emissions of the gasses, as well as other nitrogen compounds that come from fertilizers, by 2030, to tackle their environmental and climate impacts.” This target is expected to result in a 30% reduction in livestock numbers and the closure of many farms. Dutch farmers are not amused, and have vented their ire by dumping hay bales on highways and smearing manure outside the home of the agricultural minister. Protests over green policies hobbling local farmers have spread to Germany and Canada.
All this raised in my mind the question, could we really get along with using much less nitrogen-based fertilizers? I found a great article by Hannah Ritchie on OurWorldinData.org, “Can we reduce fertilizer use without sacrificing food production?”, which provides lush tables and graphs on the subject.
First, it’s estimated that artificial nitrogen fertilizers (where hydrogen, mainly derived from natural gas, is reacted with atmospheric nitrogen at high pressure over catalysts to make ammonia and derivatives) allow the world’s population to be about twice as high is it would be otherwise. Put another way, take away nitrogen fertilizers, and half of us die. So any campaign to massively scale back on fertilizer usage would result in mass starvation. You first…
That said, Ritchie’s article pointed out that some countries such as China seem to be (inefficiently) using much more fertilizer than they need to get similar results, some countries (e.g. America) seem to be about in balance, and some areas (e.g. sub-Saharan Africa) would benefit from using more fertilizer. So globally we could probably use a bit less fertilizer if the profligate countries used (a lot) less, while the deprived countries used a little more.
I’ll conclude with two charts from Ritchie’s article. The first chart shows, for instance, that Brazil uses twice as much fertilizer per hectare or per acre as the U.S, and China uses three times as much, while Ghana uses about a tenth as much.
The second chart shows estimated nitrogen use efficiency (NUE). An NUE of 40%, for instance, shows that 40% of the nitrogen in the fertilizer is converted to nitrogen in the form of crops, while the other 60% of the nitrogen becomes pollutants. In China and India, only about a third of the applied nitrogen is fully utilized, compared to two thirds in places like the U.S. and France. ( Some countries have a very high NUE – greater than 100%. This means they are undersupplying nitrogen, but continue to try to grow more and more crops. Instead of utilizing readily available nutrients, crops have to take nitrogen from the soil. Over time this depletes soils of their nutrients which will be bad for crop production in the long-run).
Aging Populations = Inevitable Slow GDP Growth?
Last month Eric Basmajian published “Why Demographics Matter More Than Anything (For The Long Term)” on the financial site Seeking Alpha. He predicts that that the developed world plus China face a future of low economic growth (regardless of policy machinations) due simply to demographics. His key points:
Demographics are the most important factor for long-term analysis.
The young and old age cohorts negatively impact economic growth.
The prime-age population (25-64) drives the bulk of economic activity.
The world’s major economies are suffering from lower population growth and an older population.
Over the long run, the world’s major economies will have worse economic growth, which will negatively impact pro-cyclical asset prices (like stocks).
I will paste in some of his supporting charts. First, the labor force is more or less proportional to the 25-64 age cohort (U.S. data shown) :
…and GDP growth trends with labor force growth:
Also, on the consumption side, that is highest with the 25-54 age group:
And so,
Younger people are a drag on economic growth and older people are a drag on economic growth… The prime-age population is the segment that drives economic activity, so if the share of population that is 25-54 is shrinking, which it is, then you’re going to have more people that are a negative force than a positive force:
Once the working-age population growth flips negative, an economy is doomed…. Working age population growth in Japan flipped negative in the 1990s, and they moved to negative interest rates, QE, and they have never been able to stop. The economy is too weak.
After 2009, the working-age population in Europe flipped negative, and they moved to negative rates and QE, and they haven’t been able to stop. Even now, as the US is raising rates, Europe is struggling to catch up and has already abandoned most of its tightening plans.
In 2015, China’s working-age population flipped negative, and they’ve had problems ever since. They devalued their currency in 2015 and tried one more time to inflate a property bubble, but it didn’t work, and now they’re having to manage the deflation of an asset bubble that the population cannot support.
The US is in better shape than everyone else, but we’re not looking at robust growth levels in this prime-age population.
In conclusion, “ The real growth rate in most developed nations is collapsing because of those two factors, worsening demographics, and increased debt burdens. In the US, as a result of the demographic trends I just outlined plus a rising debt burden, real GDP per capita can barely sustain 1% increases over the long run compared to 2.5% in the 60s, 70s, and 80s.”
That is pretty much where Basmajian leaves it. No actionable advice (besides subscribing to his financial newsletter). What isn’t addressed is whether productivity (production per worker) can somehow be accelerated. Also, one of his charts (which I did not copy here) showed a big trend down in 25-64 age fraction in the US population in the 1950’s-1960’s (as hangover from the Depression?), and yet these were decades of strong GDP growth. So these demographic trends are not the whole story, but his analysis is sobering.
Secret Fun Tech People
If you are trying to pick a career, it would help to know what the daily experience is like in various professions.
A friend of mine recently quit her old job and did a coding bootcamp. She worked hard, went through interviews and is now working in tech. She was correct in expecting that coding is more interesting and provides more opportunity than her old job.
She is not at a FAANG or grinding at a startup. She got hired in a remote position that requires an understanding of code. She’s starting at the bottom of the hierarchy in her 30’s, as someone with no experience.
Now that she has started work in the industry, she reported to me that, “I don’t think I could have predicted that the people would be this much fun.”
She is genuinely enjoying tech culture. She texts me obscure tech jokes now as if it’s an SNL skit that I would enjoy. (e.g. https://www.youtube.com/watch?v=kHW58D-_O64 somewhat obscure YouTube channel) Her previous job was boring, and she never told me a positive thing about it. She is happy, not just with her financial return on investment but with her community.
If you read much about tech policy, you have heard about harassment in the workplace, especially for women. This is indeed an important issue. I’m not presenting my anecdote to imply that everything is fine everywhere. If people are trying to make important life decisions, then this is worth discussing.
One factor that might make people not want to learn to code is that they are afraid the work would be isolating and boring. It can be, but there is also a community aspect that can be positive.
I polled my Twitter friends and got this result (small, biased sample, albeit, and I suspect it’s mostly men who answered):
No one disputed that tech folk can be fun, although some people wanted to qualify the statement by saying that different companies have different cultures.
John Vandevier (@JohnVandivier) sent me a blog he wrote about a study on tech culture. “Analyzing ‘Resetting Tech Culture’ by Accenture and Girls Who Code” The study shows that the world is complex. Lots of women are happy in tech. At the same time there are people who face harassment. There is good news and bad news. Offenders should stop offending. There are also good opportunities out there for people who train for tech.
When I shared the story about my friend’s good news, it was mostly ignored on Twitter. Good news does not drive engagement. Happy people are not interesting and so no one hears about them. Tech is not the right choice for everyone, and some people have been mistreated at tech companies, but on the margin a few more people should probably go for it.
Here’s something to balance out my rosy report about all the laughing and LOLing among coders. Last year I had a miserable long day of coding. I wrote up a diary entry about how much I hated that day. I’m not trying to get sympathy for myself. I wanted to capture a modern experience that is shared by many.
Coding can be hard and frustrating and lonely. The jokes are funny because the pain is real.
Economist Writing Every Day 