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Posted by Tyler Cowen

From Twitter I see this statistic:

Ratio of mean health care spending in richest quintile to mean health care spending in poorest quintile

For the United States, as reported, that ratio is 0.884 for ages 25-64, and for 65 and up the ratio has two varying estimates, from 0.87 to 0.9.

If I am understanding the numbers and presentation correctly, that indicates more health care spending on the poorest quintile than the wealthiest quintile (for below 25 however the ratio is 1.3, namely more spending on the wealthy).

I believe this comes as a surprise to many people, though it is arguably intuitive, since poor people become sick more often, and furthermore sick people are more likely to lose income.

I tracked down the source paper by Eric French and Elaine Kelly (pdf), and it does seem to be true, noting that the numbers exclude long-term care for the elderly.  By the way, that piece is full of fascinating, under-reported medical expenditure statistics, for other countries too.

A number of points suggest themselves:

1. You still might feel we are neglecting the health care of the poor, but I am not sure the majority of the American public would react that way, upon hearing these numbers.  Usually the poor get less of things, as measured by expenditures, even if they might “need” it more.  Health care is an exception to what is otherwise a pretty general rule.  I believe it should be such an exception, but to what degree?  I see a lot of pretty aggressive intuitions out there, mostly without serious justification or without any presentation of what the stopping point should be.

2. Those numbers don’t prove anything, least of all normatively.  Still, they do point my attention in the direction of wondering — yet again — if public health programs are not better than spending more on health care coverage of the poor.  Let’s stop or at least limit poor people from getting sick so many more times.

3. That poor people get sick more times, how much of this is a) poor environment including higher stress and exposure to crime, b) genes, c) inability to afford proper preventive care, d) bad decision-making, including diet, lifestyle, and exercise, and e) sickness causing poverty, and f) other factors.  I know of plenty of individual papers on these topics, but would it go over well to write an “apportionment” paper doling out the relative responsibilities?

4. How much should our decisions on the best health care policy depend on the answer to #3?  How many people are even willing to talk about this right now?

5. Why does the ratio flip so significantly toward the wealthy for younger people?  Can we use that fact to make any general inferences about the apportionment outlined in #3?  On the surface, it seems to suggest a significant possible role for d) and e), since those might affect children less.

6. What else?

The original pointer was from a retweet by Garett Jones, the tweet from Houston Euler, the Great Firewall is making direct links to them very costly right now.

The post Do Americans spend more money on the health care of the poor than the rich? appeared first on Marginal REVOLUTION.

Sunday assorted links

Jun. 25th, 2017 04:56 pm
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Posted by Tyler Cowen

1. In one study, young children learn how to deceive in ten days.

2. “A new kind of elevator uses linear motors, similar to those in maglev trains and HyperLoop, to whiz its cabins through shafts, and will be able to move people up, down, left, or right.” Link here.

3. New Chinese movie stars Stephon Marbury as Stephon Marbury (NYT).  And this: “There is indeed a statue of Marbury in Beijing. “People say it doesn’t look like me,” Marbury said. “But I know it does, because I know the face I made when they made the statue.””

4. Boris Becker is now bankrupt (no Beijing statue).

5. Employees committed to family are more motivated and productive (WSJ).

6. Flying ability helps determine egg shape.

The post Sunday assorted links appeared first on Marginal REVOLUTION.

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Posted by Alex Tabarrok

I never imagined that Canadian finance ministers would one day worry about a shortage of marijuana. Welcome to 2017.

Bloomberg: The biggest challenge for Justin Trudeau’s forthcoming legal recreational marijuana market is a shortage of pot, the finance minister of Canada’s most-populous province says.

…Finance ministers were told demand is “quite high” for marijuana already in Canada, he said. “So we want to make certain that, when we do proceed, there is sufficient supply to accommodate the activity because what we’re trying to do is curb the illicit use and organized crime that now exists around it.”

The finance ministers’ worry, however, is misplaced. Canada’s system is not as open to entry as Colorado’s, so even with new licenses being approved rapidly, demand will increase faster than supply once legalization happens and prices will increase. That much is true. But much of the new demand will come from people who were deterred from buying illegally. As far as these buyers are concerned, the total price–including the price of possibly being caught–will have fallen, even as the money price rises. Many people who were buying illegally will also prefer to buy legally, even at the higher price. In other words, even if the price of legal pot is higher than the current illegal price, the demand for illegal pot will fall putting pressure on the criminal element.

As usual, the finance ministers forgot to think at the margin.

Hat tip: Daniel Lippman.

The post Canada’s “Shortage” of Marijuana appeared first on Marginal REVOLUTION.

China supercomputer fact of the day

Jun. 25th, 2017 07:18 am
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Posted by Tyler Cowen

A new ranking shows that for the second year running, the world’s fastest supercomputer is TaihuLight, housed at the National Supercomputing Center in Wuxi, China. Capable of performing 93 quadrillion calculations per second, it’s almost three times faster than the second-place Tianhe-2. And in third spot this year is a newly upgraded device, called Piz Dain, at the Swiss National Supercomputing Centre, which recently had its performance boosted by the addition of Nvidia GPUs.

Sadly for America, the upgraded Piz Dain pushes the Department of Energy’s Titan supercomputer, which is housed at Oak Ridge National Laboratory, into fourth spot. Able to make 17.6 quadrillion number crunches per second, Titan is just a fifth as fast as TaihuLight. In its defense, the U.S. still claims five of the top 10 spots, and it is home to 169 of the supercomputers that make up the fastest 500. China, meanwhile, can only claim 160.

Here is the full article.

The post China supercomputer fact of the day appeared first on Marginal REVOLUTION.

What I’ve been reading

Jun. 25th, 2017 05:03 am
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Posted by Tyler Cowen

1. Sarah Binder and Mark Spindel, The Myth of Independence: How Congress Governs the Federal Reserve.  I’ve only been reading the title of this one, as it came in the door just before I left for China.  But I like it already, and even if this book were nothing more than its title it still would be better than much of what is written on monetary policy.

2. Frédéric Dard, The Executioner Weeps.  French noir, full of cheap tricks, suspenseful, fun.

3. Robert Bickers, Out of China: How the Chinese Ended the Era of Western Domination.  A very good book, substantive, readable, and full of information not readily available elsewhere.  Yet the title is misleading, as most of the book, including the best parts, covers the first half of the twentieth century and in particular the Western presence and control in China (not quite domination).  Later on, the author says plenty about the Cultural Revolution, but doesn’t seem to want to actually condemn it.

4. Fyodor Dostoyevsky, Crime and Punishment, Oliver Ready translation.  I hadn’t read this one since high school, so thought it was worth another try.  I can’t say I find Raskolnikov to be a convincing criminal, or a convincing character at all.  Maybe this story is better read as man’s struggle for freedom, and his inability to obtain it, due to the social processing of all his actions, rather than as a novel of crime per se.  I liked it, I didn’t love it.  If it were published today, it would not receive rave reviews.

5. Slavoy Žižek, The Ticklish Subject: The Absent Centre of Political Ontology.  While he is overrated by his trendy partisans, he is underrated by almost everyone else.  Might this be his best book?  Early Žižek is the best Žižek.  We have not escaped from the spectre of the Cartesian self, and what might a truly emancipatory political project have to look like?  2017 is not the worst time to be reading this book.  Here is one probably not very helpful review.  Usually the best five pages in a Žižek book are very very good, but in this case it is thirty or more.

And I very much enjoyed this sentence and the few pages of exposition that followed: “The notion that best illustrates the necessity of a ‘false’ (‘unilateral’, ‘abstract’) choice in the course of a dialectical process is that of ‘stubborn attachment’: this thoroughly ambiguous notion is operative throughout Hegel’s Phenomenology.”

The post What I’ve been reading appeared first on Marginal REVOLUTION.

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Posted by Tyler Cowen

To see the problem, consider Brian’s situation. He’s a single adult, age 45, earning $35,000 a year. BCRA (section 102(b)(2)) expects Brian to contribute a little more than 8.3% of that income to purchase a health insurance policy. That’s about $2,911. The federal government would chip in the amount needed to let Brian buy a “median benchmark” policy in his region. That policy won’t be lavish: on average it will pay for 58% of covered expenses, but it might well let Brian avoid bankruptcy if he gets extremely sick. It will also get Brian low, pre-negotiated rates for a lot of medical treatment instead of being subject to astronomical “Chargemaster” prices that hospitals often charge the uninsured. So, if that Bronze policy costs $4,500, Brian would pay $2,911 and the federal government would pay $1,089.

Suppose Brian succeeds at work and gets a $5,000 raise; or suppose Brian gets a part time job to help supplement his income and earns $5,000 more. Now, because his income is $40,000, section 102(b)(2) of BCRA expects Brian to contribute 11.3% of his income to healthcare. Since that’s $4,558, Brian in fact pays for the whole $4,500 policy; the federal government pays nothing. So, although Brian’s raise is $5,000, he pays an extra $1,589 in premiums. His effective marginal tax is almost 32% just from the BCRA alone. When one combines his loss of a subsidy with increased income taxes of $1,488 and an increased payroll tax of $382.50 (double that if Brian’s new job is deemed self-employment), Brian’s gets to keep at most $1,541 of his new $5,000. His effective marginal tax rate is at least 69%. It’s probably even higher if Brian faces state income tax or suffers a phase out of other government income-based benefits.

That is from Seth Chandler.  Ross Douthat has a good bottom-line take on the bill.

The post Marginal tax rates under the Senate health care bill appeared first on Marginal REVOLUTION.

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Posted by danariely

Here’s my Q&A column from the WSJ this week  and if you have any questions for me, you can tweet them to @danariely with the hashtag #askariely, post a comment on my Ask Ariely Facebook page, or email them to AskAriely@wsj.com.

___________________________________________________

Dear Dan,

I’m seeing many more surveillance cameras in shopping malls, restaurants, roads and even my workplace. I doubt that anyone is watching all these acres of footage, so why should anyone care about being recorded? Won’t the cameras’ ubiquity undermine their effectiveness?

—Bruce 

Don’t be so sure. Even if no one is watching the cameras’ video in real time, authorities can still use it after a crime has occurred to figure out who did what to whom. So please don’t start behaving badly just because you’re seeing so many cameras around.

Moreover, from a psychological perspective, surveillance cameras also provide a good mechanism for reminding us about morality. One of the most powerful motivators of honest behavior is our own moral self-evaluations (known to experts as “self-concept maintenance”). When we have other people (or cameras) around, they remind us about the people we want to be, which spurs us to behave more nobly.

An early demonstration of this principle came from research in 1976 by Edward Diener and Mark Wallbom, published in the Journal of Research in Personality, who showed that mirrors reduced academic dishonesty in students by making them more self-aware. In their experiments, students who took an exam in a room decked out in mirrors were less likely to keep writing after the bell rang than those who took their tests in a normal classroom. Similarly, surveillance cameras—particularly if they’re clearly observable—should increase self-awareness and, with it, better behavior.

___________________________________________________

Dear Dan,

My closest friend since childhood recently betrayed me, after decades of trusting friendship. She has apologized sincerely, but all the confidence I had in her is still tainted. Is it rational (or helpful) to forgive people who have hurt us?

—Jamie 

While it isn’t clear whether your friendship can fully recover from this incident, you clearly would be better off if you could forgive your friend. Research has shown that our health improves when we free up mental space from grudges and hate.

In a study published in 2003 in the Journal of Behavioral Medicine, Kathleen A. Lawler and colleagues interviewed 108 college students about a time when a parent or friend had deeply hurt them and measured their blood pressure at several points during the conversation. Subjects who forgave their betrayers had lower levels of blood pressure than those who hadn’t been as lenient. Even more important, college students who had more forgiving personalities overall turned over to have lower blood-pressure levels and heart rates.

Of course, forgiveness isn’t easy, but if you can pull it off, it brings real benefits.

___________________________________________________

Dear Dan,

I go out to dinner with my husband once a week, and every time, we promise to order something healthy—but when we see the menu, we get tempted and order something less virtuous but tasty. Any advice on how to show more resolve?

—Aimee 

You are describing a classical case of temptation. Before you get to the restaurant, you’ve settled on a certain idea of how you want to behave—then you get tempted, and afterward, you regret your indulgences. So how can you override temptation? Just order for each other. When we order for our significant other, we aren’t tempted by taste and can instead think about their health—which is also what our spouse would want a few hours later.

See the original article in the Wall Street Journal.


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Posted by Tyler Cowen

In the past few months, China has announced two new crackdowns on research misconduct — one of which could lead to executions for scientists who doctor their data.

Scientists have been sounding alarms for years about the integrity of research in China. One recent survey estimated that 40 percent of biomedical papers by Chinese scholars were tainted by misconduct. Funding bodies there have in the past announced efforts to crack down on fraud, including clawing back money from scientists who cheat on their grants.

This month, in the wake of a fake peer review scandal that claimed 107 papers by Chinese scholars, the country’s Ministry of Science and Technology proclaimed a “no tolerance” policy for research misconduct — although it’s not clear what that might look like. According to the Financial Times, the ministry said the mass retractions “seriously harmed the international reputation of our country’s scientific research and the dignity of Chinese scientists at large.”

But a prior court decision in the country threatened the equivalent of the nuclear option. In April courts approved a new policy calling for stiff prison sentences for researchers who fabricate data in studies that lead to drug approvals. If the misconduct ends up harming people, then the punishment on the table even includes the death penalty. The move, as Nature explained, groups clinical trial data fraud with counterfeiting so that “if the approved drug causes health problems, it can result in a 10-year prison term or the death penalty, in the case of severe or fatal consequences.”

Here is the story, via the excellent Mark Thorson.

The post What is the proper penalty for scientific fraud the culture that is China what would Gary Becker say? appeared first on Marginal REVOLUTION.

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Posted by Tyler Cowen

That is a new paper by Jonathan Berk and Jules H. van Binsbergen, here is the abstract:

We study a market for a skill that is in short supply and high demand, where the presence of charlatans (professionals who sell a service that they do not deliver on) is an equilibrium outcome. We use this model to evaluate the belief that reducing the number of charlatans through regulation increases consumer surplus. We show that this belief is false: both information disclosure as well as setting standards reduces consumer surplus. Although both standards and disclosure drive charlatans out of the market, consumers are worse off because of the resulting reduction in competition amongst producers. Producers, on the other hand, strictly benefit from the regulation, implying that the regulation we observe in these markets likely derives from producer interests. The model provides insights into the parameters that drive the cross-sectional variation in charlatans across professions. Professions with weak trade groups, skills in larger supply, shorter training periods and less informative signals regarding the professional’s skill, are more likely to feature charlatans. We conclude that the number of charlatans in equilibrium is positively related to the value added of that profession to consumers.

How does financial advising fit into this schema?  Economic consulting?  Blogging?

For the pointer I thank the excellent Kevin Lewis.

The post Regulation of Charlatans in High-Skill Professions appeared first on Marginal REVOLUTION.

*Regulation and Economic Growth*

Jun. 23rd, 2017 05:50 pm
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Posted by Tyler Cowen

The author is James Broughel and the subtitle is Applying Economic Theory to Public Policy.  I am biased, as James was my doctoral student and this is an adaptation of his thesis, but I think this is a great work and also well-written and fun to read.  It’s the single best piece written on how to think about how regulation impacts economic growth — in particular once-and-for-all effects vs. growth rate changes — and that is one of the most neglected economic policy questions today.

The post *Regulation and Economic Growth* appeared first on Marginal REVOLUTION.

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"We have seen advances in every aspect of our lives -- except our humanity," says Luma Mufleh, a Jordanian immigrant and Muslim of Syrian descent who founded the first accredited school for refugees in the United States. Mufleh shares stories of hope and resilience, explaining how she's helping young people from war-torn countries navigate the difficult process of building new homes. Get inspired to make a personal difference in the lives of refugees with this powerful talk.

The Senate health care bill

Jun. 23rd, 2017 03:02 pm
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Posted by Tyler Cowen

Here is a good summary and analysis from Megan McArdle, here is one key part:

But while there are a few things to like in this bill, overall, it’s a mess.  All of the problems created by Obamacare’s architecture remain, and some of the problems will get worse, because lower subsidies, higher deductibles and no mandate penalty probably means that a lot of people will exit the exchanges.  Those people are likely to be the folks we most need to stabilize those exchanges: healthy youngsters who don’t use much health care.  Which means that the exchanges will be at further risk from the death spirals we’ve already seen in some states.

I agree the bill is a bad idea.  That said, I do hope you keep in perspective some of the more, um, lurid critiques running around, including from health care economists (the Great Firewall won’t let me link to Twitter, and right now VPN is down).  You can read them as sociology, however, with a rather chilling effect.

The post The Senate health care bill appeared first on Marginal REVOLUTION.

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Posted by Tyler Cowen

The orcas will wait all day for a fisher to accumulate a catch of halibut, and then deftly rob them blind. They will relentlessly stalk individual fishing boats, sometimes forcing them back into port.

Most chilling of all, this is new: After decades of relatively peaceful coexistence with cod and halibut fishers off the coast of Alaska, the region’s orcas appear to be turning on them in greater numbers.

“We’ve been chased out of the Bering Sea,” said Paul Clampitt, Washington State-based co-owner of the F/V Augustine.

Like many boats, the Augustine has tried electronic noisemakers to ward off the animals, but the orcas simply got used to them.

“It became a dinner bell,” said Clampitt.

John McHenry, owner of the F/V Seymour, described orca pods near Alaska’s Aleutian Islands as being like a “motorcycle gang.”

“You’d see two of them show up, and that’s the end of the trip. Pretty soon all 40 of them would be around you,” he said.

A report this week in the Alaska Dispatch News outlined instances of aggressive orcas harassing boats relentlessly — even refusing to leave after a desperate skipper cut the engine and drifted silently for 18 hours.

These are not Coasean orcas, or are they?  And sperm whales are now in on the act:

Fishing lines are also being pillaged by sperm whales, the large square-headed whale best known as the white whale in Moby Dick.

“Since 1997, reports of depredation have increased dramatically,” noted a report by the Southeast Alaska Sperm Whale Avoidance Project.

A remarkable 2006 video by the Avoidance Project captured one of the 50,000 kg whales delicately shaking fish loose from a line. After a particularly heavy assault by sperm whales, fishers are known to pull up lines in which up to 90 per cent of the catch has disappeared or been mangled.

Here is the full story, with video, and further points of interest.  For the pointer I thank the excellent Mark Thorson.

The post The orca wars escalate, with special reference to the economics of fisheries appeared first on Marginal REVOLUTION.

The commerce that is Chinese

Jun. 23rd, 2017 04:51 am
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Posted by Tyler Cowen

As organized, multiplayer video game competitions — also known as esports, or electronic sports — continue to gain recognition in China, entertainment giant Tencent Holdings Ltd. has accelerated its esports expansion with the unveiling of a new five-year plan.

The plan, which involves setting up esports leagues, tournaments and associations, nurturing players and constructing esports-themed industrial parks, was published by Tencent E-Sports, a subsidiary established in early December.

Tencent is the world’s largest mobile gaming company by revenue, according to research firm Newzoo. With the new plan, it aims to create a 100-billion-yuan esports industry in China within five years, the company announced on Friday at a press conference.

The plan was based on Tencent’s expectations that China is set to become the world’s largest esports market. Tencent predicted there will be 220 million esports players in China and 335 million globally by the end of this year.

Here is the story.  And:

The number of Chinese “red tourists” who visit Russia to retrace a shared communist history has been soaring in recent years, contributing to the wave of Chinese visitors to Russia that has grown with the help of closer bilateral relations between the countries, according to industry insiders on Tuesday.

“There definitely is growing interest among Chinese tourists for Russia, especially the older generations, who are nostalgic about the history of Russia,” Zeng Qingan, general manager of Beijing Global Travel Ltd, told the Global Times.

Zeng said that since his company started tour groups to Russia nine years ago, the number of participants has increased fast, especially after the company redesigned its tour routes in 2014 to cover historical Soviet Union era sites, including the Red Square and Victory Square in Moscow, the Lenin Memorial Museum in Ulyanovsk and Moscow State University. The travel firm called it the “Red Tourism” package.

Link here.  The revolution not only will be televised, but they will make an e-sports version of it, marketed on WeChat.

The post The commerce that is Chinese appeared first on Marginal REVOLUTION.

Grading Modi

Jun. 22nd, 2017 07:18 pm
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Posted by Alex Tabarrok

There have been a number of articles recently reviewing economic reform under India’s Prime Minister Narendra Modi. The best is this excellent report from the Economist:

FEW countries would see a tax requiring some businesses to file over 1,000 returns a year as an improvement. But India might. A nationwide Goods and Services Tax (GST) is set to come into force on July 1st. It will replace such a tangle of national and local levies and duties that even the prospect of 37 annual filings (three a month plus an annual return) for each of India’s 29 states in which a business operates is a relief by comparison.

By replacing domestic tariffs, the new tax should rid India of checkposts at internal borders, where lorries carrying goods typically languish for hours. Less red tape, however, comes with complications. Most countries with a value-added tax settle on a single rate for many goods and services. India has opted for six, ranging from zero to 28%. Officialdom decrees, for example, that shampoo, wallpaper and fizzy water are luxuries to be taxed at 28%; eyeliner, curry paste and plain water will attract an 18% levy. Restaurants will pay 12%, unless they are small (5%) or air-conditioned (18%).

Hopes that liberalising reforms would breathe new life into India’s economy have permeated the air since Narendra Modi swept to power as prime minister in May 2014. But the GST is perhaps the most obvious example of an opportunity wasted. Economists think a simple GST, which would have ensured businesses focus on goods and services that consumers want rather than those favoured by the tax code, might have added two percentage points to GDP growth. The complicated version will probably yield less than half that and only after a painful transition.

Read the whole thing.

The post Grading Modi appeared first on Marginal REVOLUTION.

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Posted by Tyler Cowen

There is a restaurant in New Jersey called Tina Louise.

It’s serves “a taste of Asia.” We were thinking tropical island fare. According to the website, it is temporarily closed due to a fire. But if you someday find yourself in Carlstadt, New Jersey…

Link here, the restaurant’s home page is here, menu here (pdf, yum), here are the Yelp reviews.

I thank an anonymous MR reader for the pointer.

The post Temporarily postponed markets in everything, Gilligan’s Island edition appeared first on Marginal REVOLUTION.

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