Crooked Timber

Surfing over to Charles Dodgson’s site yesterday, I happened upon Elizabeth Warren’s lecture on the squeeze on the American middle class since the 1970s. Then you could bring up a family on one income; now you can’t. Then non-discretionary spending made up a smaller proportion of household spending; now, it dominates. Result: if a parent loses their job or gets sick, bankruptcy looms. I didn’t expect to sit watching a YouTube video for whole hour but I was riveted by the story Warren tells with the consumption statistics.

I was kind of reluctant to blog this too. After all, there are others at CT who do sociology or economics or family policy and I don’t do those things. And I’m not an American resident either. Still, it struck me as pretty compelling. I wonder how similar the change has been in the other OECD countries?

Just ten days or so ago Henry wrote that Chuck Tilly had won the SSRC’s Hirschman Prize, and linked to a classic paper of his. Tilly died this morning. He had been battling cancer for several years.

Tilly was a comparative and historical sociologist, an analyst of social movements, a social theorist, a political sociologist, a methodological innovator—none of these labels quite capture the scope of his work. I think of him as someone who was interested in the general problem of understanding social change, and he attacked it with tremendous, unflagging energy. Here is one of his own self-descriptions:

Among Tilly’s negative distinctions he prizes 1) never having held office in a professional association, 2) never having chaired a university department or served as a dean, 3) never having been an associate professor, 4) rejection every single time he has been screened as a prospective juror. He had also hoped never to publish a book with a subtitle, but subtitles somehow slipped into two of his co-authored books.

I saw him speak on several occasions and met him a few times, too. I particularly remember him giving the Mel Tumin lecture at Princeton, and a great chat I had with him in his office at Columbia. He was a small, wiry man who always seemed to be smiling and, like a true Weberian charismatic figure, he seemed able to transmit some of his own brio to you as he talked.

Via Dan Nexon, Charles Tilly has won the SSRC’s 2008 Albert O. Hirschman prize. I’ve blogged occasionally before about his wonderful little essay Warmaking and Statemaking as Organized Crime; now I find that it’s finally available on the WWW in a decent scan (as a working paper, but I think it is pretty well identical to the final version apart from page numbers etc). It’s a piece I can’t recommend highly enough – short, brutal and brilliant (and quite accessible to curious non-academics, I would think).

Also of interest from the SSRC is this roundtable on MLK, Obama and William Kristol.

Obviously, I’m not Crooked Timber’s resident expert on the sociology of online communities, so here’s hoping that Kieran or Eszter will be along in a moment to reassure me, but, as a keen Flickr user, I’m perturbed by their decision to start allowing video. Flickr (owned by the troubled Yahoo, of course) probably has two (overlapping) kinds of user: the person who wants a repository for their snaps to show to friends and family and the person who is into photography on at least a hobbyist level who wants to interact with similar others. It also has thriving groups of various kinds based on shared interests or locality: for example my local group has 1000+ nominal members, dozens of active members, and a fairly thriving offline complement of activities (monthly meets where much beer is consumed, photowalks etc.).

All of this is threatened by the addition of video. As the photographic element is diluted and the YouTubers arrive, some photographers will find it less congenial and will choose to go elsewhere; as they go, the pool will become more dilute, leading others to take the same decision. In other words, I predict the kind of cascade effect the Mark Granovetter and others have written about. Of course, I could be wrong, and maybe the Flickr community is more robust and adaptable than I’m allowing for. SmugMug and Pbase don’t (yet) have local groups of photographers who hang out together, critique one another’s pictures and so on. But this seems a rash decision for Yahoo to make. Does it have to do so with the Microsoft bid? Maybe.

Via Sally Satel, here’s a bit from a Freakonomics discussion. Stephen Dubner asked a bunch of people, “How much progress have psychology and psychiatry really made in the last century?” One of the respondents, Dan Ariely (a Professor of Management at MIT) cites some work about organ donation (emphasis added):

One of my favorite graphs in all of social science is the following plot from an inspiring paper by Eric Johnson and Daniel Goldstein. This graph shows the percentage of people, across different European countries, who are willing to donate their organs after they pass away. When people see this plot and try to speculate about the cause for the differences between the countries that donate a lot (in blue) and the countries that donate little (in orange) they usually come up with “big” reasons such as religion, culture, etc. But you will notice that pairs of similar countries have very different levels of organ donations.

For example, take the following pairs of countries: Denmark and Sweden; the Netherlands and Belgium; Austria and Germany; and (depending on your individual perspective) France and the U.K. These are countries that we usually think of as rather similar in terms of culture, religion, etc., yet their levels of organ donations are very different.

So, what could explain these differences? It turns out that it is the design of the form at the D.M.V. In countries where the form is set as “opt-in” (check this box if you want to participate in the organ donation program) people do not check the box and as a consequence they do not become a part of the program. In countries where the form is set as “opt-out” (check this box if you don’t want to participate in the organ donation program) people also do not check the box and are automatically enrolled in the program. In both cases large proportions of people simply adopt the default option.

You might think that people do this because they don’t care — that the decision about donating their organs is so trivial that they can’t be bothered to lift up the pencil and check the box. But in fact the opposite is true. … The organ donation issue is just one example of the influence of rather “small” changes in the environment (opt-in vs. opt-out) on our decisions.

Johnson and Goldstein’s work on the role of default options in decision-making is good, but the figure above (especially with its y-axis labeled “Effective Consent Percentage”) is misleading as presented by Ariely. First he says, correctly, that the data show “the percentage of people, across different European countries, who are willing to donate their organs after they pass away.” But then he says, wrongly, that “similar countries have very different levels of organ donations.” The graph shows the number of people who say they are willing in principle to be donors, and the large difference that the default option to this question makes. The casual reader might think—as Ariely himself seems to—that the actual rate of organ procurement in those presumed-consent countries is vastly higher than that in informed-consent countries. But this is not the case at all. The figure shows is how many people sign up given the defaults (opt-in vs opt-out), and not the rate of actual organ donors procured.

Here is a figure showing the organ procurement rate for various presumed- and informed-consent countries from the early 1990s to 2002 or so. Each green circle is the procurement rate for a particular country-year. (I want to focus on average differences between countries so I don’t show the time series itself. Click here for a figure showing the time trends.)

You can see that there are differences in the procurement rate between presumed- and informed-consent countries, and the highest-performing presumed-consent countries on average (Spain, Austria) score higher than the highest-performing informed consent countries. But the differences are not that big, and they are probably due mostly other features of the procurement system in the presumed consent countries. There is certainly not the huge disparity you might believe exists from a quick look at the post on the Freakonomics blog . (Incidentally, all of the countries shown here had their legal regime set as presumed- or informed-consent before the period covered by the data, so the often large within-country variability can’t be explained by the opt-in or opt-out defaults. Italy’s procurement rate, for instance, grew rapidly in the 1990s with no change in the law.)

In fact, as I’ve discussed recently in this post and argue in this paper, it is not at all clear that consent laws per se have any strong effect on the procurement rate (as distinct from their effect on people’s attitudes). Even if most people support organ donation, there are still large logistical hurdles to be overcome at the point of procurement. It is investment in the procurement infrastructure that really makes the difference to rates of organ donation, even if default options to opt-in or opt-out have large effects on people’s professed willingness to participate in the system.

Update: John Graves at the IQSS Blog makes the same error. As always, it is striking how easy it is for a mistake like this to propagate.

I didn’t know Brian Donovan until I saw this video he posted on YouTube after which I feel like I know him a tiny bit. He’s an alum of the Northwestern Sociology Department and he’d been involved with the excellent Culture Workshop that I attend whenever I can. That’s how I heard about his tenure and this fun way in which he’s decided to let people know about it. Congrats, Brian!

Buried within the U.S. Treasury Department’s just-released blueprint for a new financial regulatory structure is a proposal for a new approach to regulation. The report calls the regulatory status quo an “institutionally based functional system,” and as a long-term goal seeks to replace this with “objectives-based regulation.” In fact, OBR is celebrated in the document as the optimal regulatory structure. Strong words indeed. I’ll resist the temptation to dismiss this as recycling “management-by-objectives” for the public sector. Instead, it is useful to regard OBR as one of a new set of approaches to economic regulation, all of which stem from criticism of “old-fashioned” command-and-control regulation. These new approaches include “principles-based” regulation and “performance-based” regulation.

Whatever their faddish qualities, the problem they respond to is real. When regulation is done by promulgating detailed rules (that explain what the regulated shall and shall not do, and how), and then enforcing compliance with those rules, two problems arise. First, the regulated activity or industry typically evolves faster than the governing rules, and so the latter become increasingly irrelevant. In fact, escaping the grasp of static regulations becomes a big incentive to innovate. Regulators trying to keep up will usually add more rules, spelled out in excruciatingly greater detail, until the ungainly corpus of rules looks like, like, well, … the IRS code. Second, compliance increasingly becomes formal compliance with the strict letter of the law, even when such compliance violates the spirit of the law. It encourages a “check list” mentality that focuses solely on the literal meaning of the rules. OBR, and the other alternatives, try to avoid such difficulties by recasting regulation so that it focuses on a desired outcome or objective, and then grants a measure of flexibility to the regulator to steer towards that goal in whatever way seems best. Flexible regulations make sense if the behavior, market or industry that is to be regulated is dynamic, innovative, or highly variable.

Is OBR truly optimal? Who knows? Evidently the Australians have some experience with it, and the British know something about its close cousin “principles-based” regulation. But OBR certainly isn’t a failsafe measure, for the flexibility that makes OBR adaptable can also be used to render it ineffective or even toothless. The discretion that it necessarily entails means that both the regulators and the regulations matter. Thus, people who fear regulatory capture get even more worried about the possibility that the captured regulators possess lots of authority that they can legally exercise under the rubric of broad rules.

John Gruber twittered the following:

Suggestion for Gallup: how many Americans both (a) are offended by sermons of Obama’s Christian pastor and (b) think Obama is a Muslim?

Which led me to check out this Pew Center Report:

The recent controversy surrounding sermons by Obama’s former pastor, Rev. Wright, and Obama’s March 18 speech on race and politics have attracted more public attention than other recent campaign events, according to Pew’s weekly News Interest Index. Nearly eight-in-ten (79%) say they heard at least something about Wright’s sermons (51% a lot, 28% a little) and about half (49%) have seen video of the sermons. … There is little evidence that the recent news about Obama’s affiliation with the United Church of Christ has dispelled the impression that he is Muslim. While voters who heard “a lot” about Reverend Wright’s controversial sermons are more likely than those who have not to correctly identify Obama as a Christian, they are not substantially less likely to still believe that he is Muslim. Nearly one-in-ten (9%) of those who heard a lot about Wright still believe that Obama is Muslim.

In the greatest sea battle of World War I, British Admiral David Beatty watched with uncomprehending dismay as his battlecruisers got blown out of the water, and famously remarked that: “… there seems to be something wrong with our bloody ships today.” Ninety years after Jutland, there seems to be something wrong with our bloody financial system. A big reputable investment bank like Bear, Stearns wasn’t supposed to get into such trouble that it had to be bailed out by the Federal Reserve before it blew up. One of the legacies of the last systemic American financial crisis, in the 1930s, was a regulatory system intended to ensure greater transparency for investors, some measure of confidence for bank depositors, and prudential requirements for financial institutions. Recent events suggest that this system is no longer adequate to the task. The savings-and-loan crisis of the 1980s could have slowed down the push to deregulate, but in the 1990s the Asian Financial Crisis provided a moment for self-congratulatory triumphalism about the superiority of Anglo-Saxon finance and the perils of crony capitalism. With rigorous accounting standards, regulatory oversight, and a quantitatively-based credit culture that kept lenders honest, surely the U.S. wouldn’t be vulnerable to the real estate bubbles that plagued Indonesian, Thai and South Korean banks. Or so we fervently hoped. Thus, financial deregulation and innovation proceeded apace. Today’s sub-prime mortgage crisis wasn’t supposed to happen, and now investors are haunted by the fear that financial portfolios are filled with near-worthless paper. And the baleful effects of the credit crunch are now felt widely by both individuals and firms.
Continue reading “Riddles Wrapped in Mysteries Inside Enigmas”

I bought some Girl Scout Cookies on a street corner yesterday. The box says: “The Girl Scout Cookie Program promotes financial skills such as goal setting, decision-making, customer-service and money management.” Okay, I buy it. I mean, literally, I have bought numerous boxes this season (and the last, and the one before that, etc.).*

But there was an interesting part of the experience this time that I thought was worthy of a note. Two girls were selling the cookies (with two women who were presumably their mothers behind them), but a little boy was next to them handling the money. The boy was clearly younger, probably the little brother of one of the girls. I think it’s great that he’s learning math and dealing with money. He should learn about things of that sort. But wait, wasn’t the purpose of this program to help girls learn such skills?

The incident reminded me of an anecdote in Babcock and Leschever’s book Women Don’t Ask:

Once, when their daughter was three, Linda stopped in a drugstore for something and the child saw a stuffed animal she wanted. “Do you have enough money to buy that for me, Mommy?” she asked. “Do girls have money, or is it just boys that have money?” Linda was horrified. Their family habits had unwittingly communicated to their daughter that men control money, not women. She and her husband now make sure that their daughter sees Linda paying for things frequently; they also bought their daughter a piggy bank so that she can have money of her own.

Again, I’m all for little boys learning about money and arithmetic, but the purpose of this program is that girls learn related skills. Given all the situations in everyday life where men are the default for handling money, it would seem important to emphasize girls’ exposure to it in the context of a Girls Scouts program.

To be sure, the girls were quite active in the selling process (attracting folks to the table, offering samples) so it is not as though they were passive observers. But if anything, this suggests that they were not shy to interact with the customers and thus could have been given the responsibility of handling the money. I only recognized these dynamics after I left the table. If I’d been paying more attention, I would have just handed one of the girls the money. Next time.

[*] No worries, I don’t eat most of these cookies myself, I give them to the students in my lab. I also try to make some healthier snacks available as well, but these cookies tend to be pretty popular.

Tyler Cowen responds to the discussion on open publishing.

I don’t envision the free access system as the status quo but free. Papers would be ranked directly in terms of status and popularity rather than ranked through the journals they are published in. Ultimately there wouldn’t be journals and this would make a big difference as journals are the current carrier of selective incentives and status rewards. It would be easy to refuse to referee, since you wouldn’t fear being shut out of publication of that journal; I suspect refereeing might die. And if status were attached to the individual paper rather than the journal, who would bother to become an editor? It would be a very different world and in some ways more like (academic) blogging than its proponents may wish to think. In other words, the partial monopolization of for-fee journals makes it possible to produce status returns to motivate both editors and referees. Returning to the free setting, refereeing will survive insofar as writing detailed referee comments on other people’s work helps with your own research; it is interesting to ponder in which fields this might hold.

The interesting bit for me here is Tyler’s suggestion about the implicit incentives for reviewing; that people referee papers for fear of not being able to get published in the journal in question. My personal take on it (as is the take of a number of other people, if this discussion is anything to go by), is a little different. I review not so much because I feel that if I don’t review a paper for journal x that the editors of that journal will look unkindly on me in future, but because of a broad sense that I send papers out that others ought to review, and hence there’s a diffuse obligation on me to review other people’s papers in turn. In other words, I think that the motivating factor is general reciprocity rather than specific reciprocity. Not only that: when I have been on search committees where we are considering people who have been in the field for a few years, I usually check their resumes to see whether they have been reviewers for a few journals. This isn’t so much to figure out what the editors think of them (very often, editors are happy with whoever they can get as a reviewer), as because it seems to me to be the best publicly available proxy for whether the candidate is the kind of person who is likely to take on their share of the unofficial responsibilities that any school or department has.

This isn’t to say that Tyler may not be right when he suggests that an open publication world might not support the kinds of detailed and thoughtful review that we hope for, and sometimes get, in the current system. But I suspect (perhaps wrongly) that the mechanism that would undermine reviewing would primarily be a sociological one rather than an economic one. That is, it would have more to do with the disappearance of the social role of reviewer, and the set of perceived general responsibilities that go with it, than with the opportunities for specific quid-for-quo interactions between reviewer and editor that the current review system lends it to.

Scott had a delightful column over at IHE last week, demonstrating to tyroes like Matt Seligman and Ezra Klein how you really show off your bookish erudition to the world (by affecting, of course not to be at all interested in what the world thinks of your erudition; see further Chris on the cultural politics of ironic gnomes) .
Continue reading “Aspirational taste”