Monday, March 28, 2011

Supporting the arts

It seems almost universal that no matter what the culture, we love to celebrate the successes of artists, performers and sportsmen. We have been to several school performances this school year and there is no doubt that there is a lot of talent – yet when is their talent good enough that we should encourage and cultivate it? There is also no doubt that talent by itself is not enough for commercial or even limited artistic success. Do we sow the seeds of desire in these young men and women to strike out into the artistic world when we clap and shout 'Bravo!' or 'Author, author!'? And if so, are we responsible for helping them find their way whatever that may be – or should we tamp down our enthusiasm and clap politely and whisper 'Don't quit your day job'.

For while the returns to college may be an expensive gamble, so is the returns to artistic and sporting endeavors. Just how much should we as parents encourage any kind of artistic or sporting career or be responsible for their chosen paths?

Sunday, March 27, 2011

Reading Posner on the financial crisis

The books are The Crisis of Capitalist Democracy, which preceded A Failure of Capitalism: The Crisis of '08 and the Descent into Depression. Here is Robert Solow's reading of the latter. Both books have a feel of being written in a hurry and as such sounds disjointed in its narrative. The first book is essentially an impression formed as the crisis evolved and is light on prescription and heavier on description though not quite as moving as other books on the crisis. I detected a shift from the earlier book in terms of causes of the financial crisis. The first book concludes as most onlookers did at the time that excessive leverage was one of the prime causes of the crisis. While not blaming leverage per se, Posner discusses this as well as other factors that may have brought about the crisis. In the latter book, he argues that the causes of the crisis stem from low interest rates which caused a bubble to form, as well as lax supervision in the belief that markets would be self-regulating since the ideology of efficient markets had taken hold.

At least, this is my reading of it and I am surprised that Solow did not touch on this aspect at all. (See also a review from the NYT which has a similar interpretation as this.) Coming from Posner who is a well known conservative and from the bedrock of free markets of the University of Chicago, I found this to be quite a turn around and in parts of the latter book he admits this freely. All the other 'causes' such as greed, CEO pay, excessive leverage, creation of new derivatives can be explained rationally from these two factors. (See also here.) In this sense, the second book is better than the first and what is also refreshing is his admission that he really does not see anything from current or pending legislative reforms that would avoid another crisis. While he admits there are many good ideas out there such as counter-cyclical leverage requirements, he is not optimistic that these will come to pass.

In all, the second book is better than the first though it could have been a better book had it been more tightly edited. In some passages, he sounds as though he is rambling and going off on a tangent.

Saturday, March 26, 2011

What people do where

This is something that strikes me whenever I'm on vacation and having discovered On the Map, I can look anything up:
1. Kitty Hawk: 28% Retail, 13% Health and 12% Food and Accomodations (2,524 jobs in 2009) and almost 50 percent of the jobs do not require a college degree (although about 25% of the jobs do no list education requirement)
2. Nags Head: 21% Health, 16% Food and Accomodations, 14% Retail (3,106 jobs in 2009) and like Kitty Hawk, almost 50% don't require a college degree - with the same degree of missingness in the data.
3. Kill Devil Hills: 17% Health, 16% Retail, 15% Food and Accomodations (3,076 jobs in 2009) and like above, most jobs do not require a college degree.

On The Map also allows to do an inflow-outflow analysis of Nags Head and Kitty Hawk. Drawing a polygon from Kitty Hawk (around the Wright Memorial Bridge) down beyond Hatteras shows that the number of people living in and working in this area have stayed steady at around 50% between 2007-2009. This says to me that the people aren't being priced out of the neighborhood just yet.


Spent most of this week at the Outer Banks. Those who live there call themselves (some of them anyway), Outer Bankers. (There are some who think it is all right to be bankers.) We rented a house in Nags Head found via VRBO. The house was between Highway 158 and 12 and fortunately, since it was early in the season, it was still relatively quiet. The only real disturbance in the morning was the construction nearby on Jeanette's Pier.

I found it remarkable that despite being less than half a mile on the ocean on one side and the sound on the other, it was very easy to forget that we were by the sea. Nags Head and most of the strip from Kitty Hawk is laid out in a grid with commercial strip malls on either side on 158. On Highway 12, there are houses, restaurants and motels/hotels on either side, making it convenient since we were close by to several restaurants (within 5 minutes walk) as well as a convenience store and a 7-11.

All the homes have balconies, some more than one - like outstretched arms embracing the sea, as if saying, "Take me home." It will not be surprising to me to read that life on earth began from the sea.

I also found it contradictory that when on vacation I like isolation and yet be close to all the trappings of suburbia at the same time. It would have been nice if it were possible but the scale of development of the Outer Banks precludes that. We drove as far north as Corolla, where houses like this were the norm. The northern part of the Outer Banks from Kitty Hawk feels more affluent as evidenced by the size of the homes and the lack of public beach access. Our last night was spent at the Hilton Garden Inn in Kitty Hawk - oceanfront - we could hear the waves from the room. The bed was too soft for me and the space was a letdown after a house but it was otherwise a comfortable stay.

The weather was cool but for the most part good and the food at FatBoyz, Owens and Outer Banks Brewing were delicious. I'm not planning on going back - it was one of the places on my list that I can now cross off. It's too bad we did not have the inclination to drive down to Cape Hatteras.

Friday, March 18, 2011

Scenario building

Via MR Clive Crook and some are wondering the following:

From the start of this calamity I have wanted to know, “What is the worst that can happen at these nuclear sites? Suppose everything that could go wrong does go wrong: what then?” I still don’t know the answer. In what I have read so far–dozens of articles–nobody who knows what he is talking about has spelt this out carefully.

I felt that this was the case during the subprime meltdown as well. The only scenario that was offered from a high level Treasury official was "God help us all". Interestingly, the only direct assistance toward the nuclear meltdown the supposed advanced industrial nations such as the United States and France have offered is to airlift its citizens out of the country.

Monday, March 14, 2011

Administrative versus survey data

Low response rates to surveys (with technologies such as Caller ID, etc.) have made the jobs of government agencies such as Census and BLS much harder. The alternative to surveys are administrative data such as wage and unemployment insurance records. However, these records are usually administered at the state level - making it difficult to coordinate. One example of successful coordination has been the LEHD. While the micro-data is not available for public access in the way that the American Community Survey and the CPS is, the aggregate data is available via On The Map.

Even though it is a useful data set for exploring issues such as worker flows, it cannot answer basic questions such as what is the unemployment rate? In order to answer such a question, data linking would have to be made to social security records to identify workers and non-workers (via wages received). Even here, it is unable to distinguish between those who are unemployed versus those who are not in the labor force.

Another useful source of linkage would be from workers to the 4-and 2-year colleges, technical and vocational schools, and graduate and high schools. This education data could provide a wealth of information on the returns to education as well as give a more accurate picture of which colleges have graduates who go on to have higher earnings. One modest project that has been underway for some time is the Texas Schools Project.

While extremely useful, privacy concerns will prevent an expansion and convergence of such two systems.

Is college the new high school?

According to, the following are the most popular jobs for BA holders:

Elementary School Teacher $32,678 - $49,637
High School Teacher $37,553 - $51,654
Retail Store Manager $39,012 - $58,845
Graphic Artist / Designer $32,533 - $46,762
Administrative Assistant $29,622 - $42,212
Executive Assistant $35,234 - $53,442
General / Operations Manager $48,293 - $84,060

Individuals Reporting: 6,208

Except for the teaching educations and the general manager position, it is hard to imagine why a high schools cannot teach the skills required for the other jobs.

Sunday, March 13, 2011

Comparing recessions: Hirings

The above chart shows hiring levels from JOLTS data for the past two recessions. Except for the transportation and leisure industries, hiring levels appear to be fairly similar. Here are the same charts again with each recession appearing separately.

The hiring rates show a similar pattern, including the possibility that hiring rates in construction have recovered.

Again, the charts for the separate recessions appear below:

Is college really worth it

The current recession has generated a slew of articles questioning whether with the rising costs of a college education and grade inflation, is it really worth it to go to college (and get that degree)? Here are some top links that I came across just googling "what's a college degree worth":

1. NYT asks whether those who go and don't finish are better off not going at all: A small but influential group of economists and educators is pushing another pathway: for some students, no college at all. It’s time, they say, to develop credible alternatives for students unlikely to be successful pursuing a higher degree, or who may not be ready to do so. (See also David Leonhardt's rebuttal and a counter by Floyd Norris.) A similar vein at the New Yorker.

2. The WSJ asks what's it really worth? The arguments are about specific numbers and the convetional wisdom has been that it has been around $1 million in life time earnings. Current thinking is that it's probably around half of that in present value terms. Coupled with the college costs of $30,000 a year, the returns are looking rather slim.

3. A nice list of links are also at College Stats.

If we assume that the returns to college follow some kind of distribution and compared it to the distribution of just having a high school degree, is a college degree vastly superior (in terms of dominance of the distribution). Expected returns (means) are definitely higher (see the Leonhard post above) - but is the mean of college graduates so far to the right of the distribution that they are guaranteed to make more than high school graduates.

Below are smoothed plots showing the actual weighted earnings of high school graduates versus bachelor degree holders (ages 25-54) from the 2010 Current Population Survey (March Supplement):

Update: The mean of HS graduates is low relative to Bachelor degree holders mainly because there are many more HS graduates than there are Bachelor degree holders. The peaks of the earnings distribution however, seem to be indicate that the median earnings are not that much different - but they are: $34,000 versus $53,000.

Thursday, March 10, 2011

Where the jobs are

Census has been touting its web site On the Map for some time now and so I decided to take a look based on some blog posts by Sirinya Tritipeskul, particularly this one that looks at jobs along a proposed subway route in Century City, Los Angeles. What was impressive was the ability to map job density all the way along the proposed route.

I was more interested in other aspects of the data - for instance, can it answer the following questions:
1. What has happened to employment in the brewery industry in Milwaukee in the past 3 years (the data is only from 2007-2009)?
2. What would happen to commuting patterns if Montgomery County's largest employer moved to Prince George's County?

Sadly, the data does not allow for such fine grain analysis. Industries only go down to major groups. What would be awesome would be to be able to click on the major industries and drill down to maybe the top 5 of the smaller industries the are part of the major group. Then clicking on the finer category of industries would give the names of the top 3 employers in that geographic region.

The use of maps to present the data is interesting only because it would not have been the first thing I would have thought of as a way to deliver the data.

Tuesday, March 1, 2011

Incentive effects of prizes on children

This is in K2's primary school. The classroom that collects the most boxtops gets a prize. Along the course of the year, the teachers realized that kids were starting to steal box tops from one classroom and claim them for their own classroom. Zip lock bags used to be taped to the door of their classrooms so that parents can just drop them off whenever was convenient. Now, the box tops are kept by the teachers and submitted by the kids.