Bryan Caplan and David Henderson

August 2006

A Monthly Archive (67 entries)

Lifespan and Heritability

Economic Methods
Arnold Kling
This gets my vote for most important research finding of the year (my emphasis): “How tall your parents are compared to the average height explains 80 to 90 percent of how tall you are compared to the average person,” Dr.... MORE

Health Care and Cost-Effectiveness

Economics of Health Care
Arnold Kling
The New York Times reports on a recent paper by Harvard's David Cutler and two co-authors. The study calculated, however, that Americans of all ages spent an average of $19,900 on medical care for each extra year of life expectancy... MORE

When Hell Froze Over

Economic History
Bryan Caplan
Not long after Abbie Hoffman praised "revolution for the hell of it," David Friedman memorably retorted "revolution is the hell of it." While reading literary historian Gleb Struve's edifying Russian Literature under Lenin and Stalin, I came across an eloquent... MORE

Adjusting Income for Age

Income Distribution
Arnold Kling
Anne Kim, Adam Solomon, and Jim Kessler write, Progressive economists typically peg median household income at about $45,000. But that includes households headed by 22-year olds (who are on their way up) and 76-year olds (who live on fixed incomes... MORE

Sticky-Priced, Illiquid Asset

Finance: stocks, options, etc.
Arnold Kling
Chip Case and Bob Shiller write, New home sales in July are 22% below July 2005. The decrease is 43% for the Northeast over that same period, and the inventory of unsold new homes is up 22%. Existing home sales... MORE

The Tick Petition

Public Goods
Bryan Caplan
Years ago I signed an online petition urging Fox to release The Tick (the animated series) on DVD. Today I've got the DVD in my hand. Spoon! Who says economists won't help produce public goods? To be honest, I doubt... MORE

Hair Length and the Demand for Haircuts, II

Microeconomics
Bryan Caplan
Several readers basically share my solution to the haircutting puzzle. Namely: Hair length per se is irrelevant to the demand for haircuts. What matters is the acceptable range of hair length - roughly speaking, the difference between the shortest acceptable... MORE

Growing into Freedom

Growth: Consequences
Bryan Caplan
Heard of the Magdalene Asylums? Long story short: They were quasi-prisons in Ireland for "wayward" girls and women, run by nuns. To sustain themselves economically, the inmates ran Magdalene Laundries. Check out the movie The Magdalene Sisters; and if you... MORE

Hair Length and the Demand for Haircuts

Microeconomics
Bryan Caplan
Puzzle: When is demand for haircuts higher? When short hair is in fashion, or long hair? Or is the relationship more complex? I'll post my preferred answer tomorrow.... MORE

A Taste of Economic Ridicule

Regulation and Subsidies
Bryan Caplan
Don Boudreaux is continuing Bastiat's noble tradition of teaching economics with ridicule: As my friend George Leef points out in an e-mail to me, if government can lower firms' costs by paying workers' health-insurance premiums, why stop there? Why not... MORE

Fundraising vs. Selling

Business Economics
Arnold Kling
Bryan makes a good point that denying someone a risky investment opportunity probably will not protect that individual, given all of the alternatives out there. When I wrote, I think we need fewer fund-raising start-ups and more start-ups where the... MORE

A Fool and His Money

Behavioral Economics and Rationality
Bryan Caplan
Arnold comes down on the side of paternalistic regulations on investment: To me, an entrepreneur who looks for investors is like somebody who can't swim who finds himself in the middle of a lake. It's dangerous to go near the... MORE

Government-funded Health Care

Economics of Health Care
Arnold Kling
Maggie Mahar writes, it turns out that taxpayers bankroll 51 percent of the nation's $2 trillion health care bill: this includes paying for private insurance for public employees (accounting for 6 percent of total health care spending), Medicare (17 percent... MORE

Funding Start-ups

Business Economics
Arnold Kling
Bruce Boston asks, what are the economic arguments in favor of the two class system of accredited investors and non-accredited investors? And are these economic arguments stronger than the counter-arguments that can be made on this same topic? I'd also... MORE

Outsourcing and Wages

Labor Mobility, Immigration, Outsourcing
Arnold Kling
A news story reports Princeton professors Gene Grossman and Esteban Rossi-Hansberg argued that wages for the least-skilled blue collar jobs had been rising since 1997 as outsourcing boosted productivity. The intuition of their argument can be found in this paper.... MORE

The Libertarian Case for Divided Government

Books: Reviews and Suggested Readings
Bryan Caplan
My former student Stephen Slivinski, now director of budget studies at Cato, has just published his first book, Buck Wild: How Republicans Broke the Bank and Became the Party of Big Government. There's lots of neat stuff in this book,... MORE

Your Next Job?

Business Economics
Arnold Kling
The San Francisco Chronicle reports, Ray Ruiz of Sacramento will perform one of the dirtier jobs of parenthood: For $50 an hour plus travel costs, Ruiz will bring a chair, lights, chemicals and combs to your house to pick the... MORE

Risk and Pensions

Social Security
Arnold Kling
Jane Galt takes on Malcolm Gladwell: he attributes pension problems to higher productivity, which allows manufacturers to make more stuff with fewer people, and thereby increases their dependency ratio. This is daft. Increasing productivity also increases profits, allowing companies to... MORE

School Reform

Economics of Education
Arnold Kling
Expanding an idea I first tossed out on this blog, I write, A simple way to separate the teacher from the exam is to exchange grading responsibilities. For example, have the teacher of "algebra 2" make up and grade the... MORE

Used Furniture

Business Economics
Arnold Kling
Tyler Cowen finds advice on what to buy used. We just helped my daughter move to an apartment in Boston. She asked, "How did people sell their used furniture before Craigslist?" My wife and I decided that part of the... MORE

Homage to Catalonia, II

Income Distribution
Bryan Caplan
I've long been suspicious of international comparisons that weight all nations equally. When someone says "Former British colonies do better than former French colonies," my reaction is "Yes, but India did badly for decades, and it's probably got more people... MORE

Homage to Catalonia

Economics and Culture
Bryan Caplan
As far as I'm concerned, all the jokes about economists "lacking the personality to be accountants" fall flat. The truth is, we're the life of the world's intellectual party. In evidence, I present this hysterical set of pics from the... MORE

Yanquico

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Immigration skeptics like Victor Davis Hanson, author of Mexifornia, warn that Mexican culture is supplanting our own. My knee-jerk reaction is to say "Mildly. What's the big deal?" But a fine essay by Douglas Massey has shown me the error... MORE

Surveillance and Terrorism

Terrorism
Arnold Kling
Richard Posner writes, warrantless searches are permissible as long as they are reasonable. The potential abuses of warrantless surveillance can be minimized, without judicial intervention, by rules limiting the use of intercepted communications to national security, requiring that the names... MORE

Mueller on Iraq

Politics and Economics
Bryan Caplan
John Mueller's been very busy since I last looked. Here's one of the most interesting things I've seen about Iraq in months: The public gave substantial support to the military ventures in Korea, Vietnam, and Iraq as the troops were... MORE

Capitalism, Democracy, and Polygamy

Political Economy
Bryan Caplan
There's a memorable passage in John Mueller's Capitalism, Democracy, and Ralph's Pretty Good Grocery where he argues that minorities can stop majority oppression by (a) coming out of the closet, and (b) banding together to complain: For generations (actually, for... MORE

Sampling Bias on a Plane

Behavioral Economics and Rationality
Bryan Caplan
Walking the halls of Comic-Con and GenCon, I repeatedly heard voices gush: "Snakes on a Plane is going to make a TON of money. Everyone I know is going to see it!!!" The numbers are in: SoaP's domestic gross for... MORE

Questions About Blogging

Economic Education
Arnold Kling
"Jane Galt" asks her readers 1) Why do you read blogs? 2) Why do you read economics blogs, specifically? 3) What are your favourite economics blogs? 4) Even more specifically, why do you read this blog? 5) What are your... MORE

A scam Elliot Spitzer Won't Touch

Finance: stocks, options, etc.
Arnold Kling
The New York Times reports on the New York City pension fund. Ms. Stark said that she was sure of the pension funds’ health because the city was contributing responsibly to them every year, and because she was confident that... MORE

Murray Edelman and the Myth of the Rational Voter

Political Economy
Arnold Kling
Critical Review has come out with an issue for which I have been waiting eagerly, because it has a symposium on Murray Edelman, a political scientist. My father knew Edelman and was a big fan of his 1964 book The... MORE

The Experience Machine

Behavioral Economics and Rationality
Bryan Caplan
I forgot to mention the greatest experience-producing durable good of all: the Digital Video Recorder. You could argue (mistakenly, I think) that you'll soon take a nice t.v. for granted. But the whole point of a DVR is to expand... MORE

Preference-for-Ignorance Watch

Economics of Health Care
Arnold Kling
The New York Times reports, in this small, aging industrial city in northeast Ohio, doctors are much more likely than those anywhere else in the country to steer patients toward angioplasty ...Whether the preference for angioplasty is good for the... MORE

Durable Experience

Behavioral Economics and Rationality
Bryan Caplan
From the WSJ, via Mankiw: "Money itself doesn't make you happy," [Harvard psychology professor Daniel] Gilbert says. "What can make you happy is what you do with it. There's a lot of data that suggests experiences are better than durable... MORE

Preferring Ignorance

Economics of Education
Arnold Kling
My latest essay says, Imagine what might happen if one were to run a controlled experiment, pooling a group of students and randomly assigning them to different schools. Would the "good" suburban school really do better than the "failing" urban... MORE

The Market For Scientific Superstars

Economics of Education
Arnold Kling
Austan Goolsbee writes, Landing the best scientists in the world can start a place on the way to economic superstardom. The catch is, there are not many superstars and they mainly want to be near one another. The study covered... MORE

Good Dictators

Institutional Economics
Arnold Kling
This paper by Edward L. Glaeser, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer is a couple of years old, but it speaks to issues that come up here frequently. we find that, in a variety of specifications, initial levels... MORE

Au Contraire

Behavioral Economics and Rationality
Bryan Caplan
Tyler Cowen has been preaching against various intellectual vices. My chairman Don Boudreaux thoughtfully adds the Contrarian Vice to the list: Being contrarian is admirable because it keeps the mind open and exploring; it's of a piece with one of... MORE

The Quotable Kling

Economics of Education
Bryan Caplan
Arnold quiped: "[H]igher education is the only product where the consumer tries to get as little out of it as possible." If I wind up writing a book on education, that quote will be very prominently displayed! I can't think... MORE

College Customers vs. Suppliers

Economics of Education
Arnold Kling
Following a link from Alex Tabarrok, I see that Angry Professor writes, The marginal departments, the ones with the lowest possible academic standards, are pulling in vast numbers of warm bodies and the tuition dollars associated with them. I recall... MORE

Caught In My Own Trap?

Politics and Economics
Bryan Caplan
Arnold wonders if I've forgotten the Idea Trap I've talked so much about in the past: He has this theory of "idea traps," in which bad ideas lead to bad outcomes which lead to populists with more bad ideas, etc.... MORE

My Student Gets a Letter in the Washington Post

Income Distribution
Bryan Caplan
My former student Daniel Lurker (and the youngest graduate in the history of GMU!) got his letter published in the Washington Post. You may even detect trace elements of my lectures: To read Brigid Schulte's recent "Class Questions" article about... MORE

Trading or Sharing?

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Richard Rodriguez writes, The contribution of illegal lives is never counted—never—as praise or admiration or courage or virtue of any kind. It is as though America, having benefited from illegal labor, pretends that the transaction was one of middle-class benevolence.... MORE

Bryan's Thought Experiment

Political Economy
Arnold Kling
Someone claiming to be Bryan writes, After fifty years of libertarian dominance in academia, we'd be in the same situation. Lots of our least-favorite policies would be drastically scaled back. But we'd seem out of touch for demanding abolition, and... MORE

How Much Influence Do Professors Have?

Politics and Economics
Bryan Caplan
Winterspeak chides me for exaggerating the negative externalities of academic leftism: While I acknowledge that left-wingers are overrepresent[ed] in academia, I think this is an efficient market outcome and I think that Bryan's claims of the harm from leftist policies... MORE

What, Me Worry? Part II

Behavioral Economics and Rationality
Bryan Caplan
Ubiquitous news reports of airport chaos had even me wondering if I was going to miss my plane. I could have driven back from Indy with friends, but I decided to take my chances at the airport. Total time to... MORE

Doing Good While Doing Well: Breaking Norms at GenCon

Cost-benefit Analysis
Bryan Caplan
GenCon was fantastic. The highlight: Fab Rojas ran a sublime session of Pandemonium!, the tabloid journalism role-playing game. We laughed so hard we cried, and our characters got the front-page story: "Dave Chapelle Rescued from Time-Travelling Witches." You didn't have... MORE

Libertarianism and Terrorism

Books: Reviews and Suggested Readings
Arnold Kling
Science-fiction author Neal Stephenson, in an interview 18 months ago, said Speaking as an observer who has many friends with libertarian instincts, I would point out that terrorism is a much more formidable opponent of political liberty than government. Government... MORE

What, Me Worry?

Behavioral Economics and Rationality
Bryan Caplan
I'm skeptical about all predictions of disaster. I'm predictably skeptical about doom-and-gloom predictions used to rationalize big expansions of government power: global warming, overpopulation, avian flu, resource depletion, terrorism, nuclear proliferation, "Mexifornia," etc. But I've also long raised my eyebrow... MORE

Improvements for the Poor

Income Distribution
Arnold Kling
Nicholas Eberstadt writes Perhaps not surprisingly, adults without a high school diploma had significantly higher age-standardized death rates than the general population: In 2002, the differential was over 50 percent among both men and women. Despite the relative magnitude of... MORE

Long Tail Podcast

Business Economics
Arnold Kling
Chris Anderson's Long Tail thesis is that small, niche markets are, in the aggregate, very large on the Internet. Russ Roberts has a "podcast" (audio file) where Anderson explains his thesis. I recommend becoming familiar with Anderson's thinking. He draws... MORE

Immigration Metaphors

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Anthony de Jasay takes an "on the one hand, on the other hand" approach to immigration. One strand of libertarian doctrine holds that it is precisely private property that should serve as the sole control mechanism of immigration. Immigrants should... MORE

Theory of the Hooligan Firm

Economics and Culture
Bryan Caplan
There's a lot of grist for the social science mill in the soccer hooligan drama Green Street Hooligans. Starring Elijah Wood, in a performance good enough to make you forget Frodo for the duration, it tells the story of an... MORE

My Favorite Economic Indicator

Macroeconomics
Arnold Kling
Apparently, the echo chamber of left-wing macro pundits has pronounced a recession to be imminent. For example, Nouriel Roubini writes, Given the recent flow of dismal economic indicators, I now believe that the odds of a U.S. recession by year... MORE

Medicare and Health Costs

Economics of Health Care
Arnold Kling
MIT's Amy Finkelstein argues that (a) much of the increased use of technology in American medicine (what I term "premium medicine" in Crisis of Abundance) has been induced by Medicare, which reduced out-of-pocket costs and thereby increased the demand for... MORE

Energy and Environmental Cost-Shifting

Energy, Environment, Resources
Arnold Kling
Dan Lewis writes, Even if we [in Europe] succeed in making big cuts in carbon emissions, these would not include the pollution created by imports. This is the accounting flaw at the heart of the Kyoto treaty. Globalization means energy-intensive... MORE

Of Markets and Ideas

Economic Philosophy
Arnold Kling
I would like to make a couple of points about Bryan's post. (A) Bryan says, Leftist professors promote leftist policies, leftist policies are largely contrary to libertarianism, and are therefore socially harmful. ...The broader lesson is that libertarian reformers -... MORE

When he launched his first blog, Jeff Miron was explicit about his motivation: In this blog I provide a libertarian perspective on economic and social policy. By libertarian, I mean consequential libertarian, not philosophical libertarian. Thus, my arguments are based... MORE

CoA Live

Economics of Health Care
Arnold Kling
On August 29th at noon, join me at Cato for lunch and a discussion of Crisis of Abundance. Sebastian Mallaby a Washington Post columnist, and Jason Furman, a Democratic wonk, are scheduled to be on the panel.... MORE

Global Warming and Models

Energy, Environment, Resources
Arnold Kling
Richard S. Lindzen writes, Even if we attribute all warming over the past century to man made greenhouse gases (which we have no basis for doing), the observed warming is only about 1/3-1/6 of what models project. His point is... MORE

Moral Consequences of Economic Growth

Growth: Consequences
Arnold Kling
I have not read Benjamin Friedman's book, but Megan McArdle has. When earnings are growing, Friedman says, people are more tolerant of minorities, more welcoming to immigrants, more solicitous of their fellow citizens, more supportive of democratic institutions, and just... MORE

The homeless are different from you and me, and it's not because they have less money. It's because they are extraordinarily low in what personality psychologists call conscientiousness. That's my theory, anyway. A quite watchable documentary on Showtime (and that's... MORE

Market Failure in HIgher Education?

Economics of Education
Arnold Kling
Libertarian Jeff Miron asks, In what sense is Democratic predominance a problem? And what "market failure" is responsible? Perhaps the truth is that many conservatives do not really believe in competition; instead they want conservative ideas imposed because these ideas... MORE

Paying for Parking

Behavioral Economics and Rationality
Bryan Caplan
I know less about Los Angeles, the city I grew up in, than any other place I've ever lived. Throughout my childhood, my dad's mantra was, "Goddammit, we're not going to downtown L.A.!" I always assumed drive time was the... MORE

Strictly Preferred to the AEA Meetings

Game Theory
Bryan Caplan
One week from today, I'll be at the world's most important conference on advanced game theory and experimental economics: GenCon. My dream is to make it the Schelling point around which creative social scientists gather. Who's with me?... MORE

Trade Deficit? What Trade Deficit?

International Trade
Bryan Caplan
According to standard government statistics, the U.S. has accumulated a massive debt to the rest of the world during the last three decades - over 5 trillion dollars. No statistical tricks, however clever, are going to erase that debt. Or... MORE

Old-time Macro Religion

Macroeconomics
Arnold Kling
Greg Mankiw talks about analysis by Ray Fair which says that Bush Administration economic policy kept the recession that he inherited from being much worse. Fair assesses the impact of monetary and fiscal policy during the recovery from the recent... MORE

If You Can't Wait to Buy My Book...

Books: Reviews and Suggested Readings
Bryan Caplan
...buy a book where I wrote one of the chapters. It's Ayn Rand's Atlas Shrugged: A Philosophical and Literary Companion, edited by Edward W. Younkins.... MORE

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