Bryan Caplan and David Henderson

September 2006

A Monthly Archive (74 entries)

The Fundamentalist Stereotype: A Vindication

Economics and Culture
Bryan Caplan
Yesterday my colleague Larry Iannaccone, the world's leading expert on the Economics of Religion, gave a provocative lecture on Christian fundamentalism. His thesis: Almost all the stereotypes about this group are false. Now I'm one of those people who believes... MORE

From Far Left to Libertarian

Politics and Economics
Arnold Kling
My latest essay says, I travelled the route from Far Left to libertarian. I think that quite a few libertarians have travelled that route, and yet I cannot think of anyone who has gone the other direction. This leads me... MORE

Global Competitiveness?

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
The World Economic Forum writes (in its executive summary), Switzerland takes the leading position as the world’s most competitive economy in 2006–2007, overtaking Finland and Sweden, and replacing the United States, which dropped to sixth position. Switzerland’s top ranking reflects... MORE

The Virtual Handshake

Public Goods
Bryan Caplan
I've been sick for almost three weeks now, and it's not fun. I make an effort not to infect the people around me, but unfortunately conventional etiquette gets in the way. You're supposed to shake people's hands, right? My proposed... MORE

A Quote that Should Have Been in My Book

Behavioral Economics and Rationality
Bryan Caplan
Niclas Berggren of Sweden's Ratio Institute emailed me a quote that would have been fantastic for my book: When there are rational grounds for an opinion, people are content to set them forth and wait for them to operate. In... MORE

Benefits of Immigration

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Michael Kremer and Stanley Watt write Since high-skilled natives with a higher opportunity cost of time are more likely to purchase domestic services from immigrants, native high-skilled workers will spend more time working in the labor market. To the extent... MORE

Do We Spend Too Little on Health Care?

Economics of Health Care
Arnold Kling
From an article in The New York Times. In 1950, the country spent less than $100 a year — or $500 in today’s dollars — on the average person’s medical care, compared with almost $6,000 now, notes David M. Cutler...... MORE

Growth and Development of Growth and Development

Growth: Causal Factors
Arnold Kling
E. Han Kim, Adair Morse, and Luigi Zingales write, Micro and macro have a relatively prominent presence during the 1970s and the 1980s (18% and 17%, respectively), but both experience a sharp decline in the 1990s (only 9% for each).... MORE

On Neuroeconomics and Paternalism

Behavioral Economics and Rationality
Arnold Kling
Will Wilkinson writes, At best, neuroeconomics shows that peoples' representation of their best interest shifts from one decision context to the next as the brain shifts its resources from one brain region to another. Neither neuroscience nor economics speaks to... MORE

Governance Indicators

Cross-country Comparisons
Arnold Kling
The World Bank has assembled indicators of the quality of governance in 213 countries. The researchers are making the underlying data available to researchers, so I can imagine many regressions being run to try to see which indicators best correlate... MORE

Pessimistic Bias: Economists Suffer Too

Growth: Consequences
Bryan Caplan
I've been carping on the public's pessimistic bias for quite a while. Now Robert Fogel persuasively argues that even economists suffer from it: At the close of World War II, there were wide-ranging debates about the future of economic developments.... MORE

Enron

Business Economics
Arnold Kling
'Jane Galt" writes If Mr Delong emails me, I will be quite happy to put him in touch with reputable and knowlegeable people, not paid to do so, who believe that Skilling and Lay, at the very least, may be... MORE

Health Care Misinformation

Economics of Health Care
Arnold Kling
Your tax dollars helped to fund something called the Citizens Health Care Working Group, which produced this report. Americans clearly want a system that guarantees health care for everyone. The most important considerations expressed focused on people having access to... MORE

Policing Economic Illiteracy

Economics and Culture
Bryan Caplan
Jane Galt is going Dirty Harry on economic illiteracy on t.v. It's good to have another honest cop on the streets.... MORE

Policy Beliefs and Policy Preferences: The Case of Guns

Behavioral Economics and Rationality
Bryan Caplan
Donald Wittman says that it doesn't matter if people have systematically biased beliefs about policy. Why not? Because even if you fixed their misconceptions, their policy preferences would remain unchanged. In an earlier post, I showed that he's wrong for... MORE

Free Education Valued at Cost

Economics of Education
Bryan Caplan
Mankiw notes that Yale is offering some free education over the web, and wonders whether this is "the beginning of a big change in the industrial organization of higher education?" I say: No Way. Lots of people want an Ivy... MORE

Paul Krugman Hearts Medicare

Economics of Health Care
Arnold Kling
According to Mark Thoma, Krugman writes, Medicare, which is a universal health insurance program for older Americans, spends less than 2 cents of every dollar on administrative costs, leaving 98 cents to pay for medical care. By contrast, private insurance... MORE

The Euphoria-Disillusion Cycle

Behavioral Economics and Rationality
Bryan Caplan
Here's another neat passage from Miller, White, and Heywood's Values and Political Change in Postcommunist Europe: We might expect that public opinion would celebrate the end of dictatorship and the transfer of power to the people. But the normal trajectory... MORE

The Birth Order Illusion

Labor Market
Bryan Caplan
Once one of my wife's law professors polled her class on birth order. "How many of you are first-borns?" Two-thirds of the students raised their hands. Clear evidence that first-borns are achievers, right? Hardly. An alternative hypothesis is that law... MORE

The Internet Boom, Location, and Income Distribution

Income Distribution
Arnold Kling
Hal Varian reports on research by Jamie Galbraith and Travis Hale. According to Mr. Galbraith and Mr. Hale, much of the increase in income inequality in the late 1990’s resulted from large income changes in just a handful of locations... MORE

The Saddest Sentence I've Read Today

Labor Mobility, Immigration, Outsourcing
Arnold Kling
was written by Rich Lowry. The key is stepped-up interior enforcement to cut off the jobs magnet that draws so many illegals here. My guess is that the adverse economic consequences of shutting down this market could be larger than... MORE

Outstanding Lecture

Growth: Consequences
Arnold Kling
Hans Rosling is amazing. There are many lessons in this talk about how well-being around the world has changed over the past forty years. But what struck me was the quality of the presentation. My impression is that the number... MORE

Another COA Review

Economics of Health Care
Arnold Kling
Sally Pipes writes, For a fresh analysis of health care, people ought to look to economist Arnold Kling’s new book, Crisis of Abundance. Although it offers no easy villain-versus-hero narrative or solution to the challenges of funding health care, it... MORE

I'm a critic of Austrian economics. I've published general critiques (see here, here, and here), and questioned their positions on economic calculation and the impossibility of socialism (see here and here). Today I just submitted a new piece to the... MORE

A Black Gamer Speaks

Economics and Culture
Bryan Caplan
Over at the Hero System discussion boards, there's been a long-running thread asking whether "people of color play role-playing games?" One vignette from a black gamer really struck me, and it's full of grist for the social science mill: IMHO,... MORE

A Bad Day

Regulation and Subsidies
Arnold Kling
Even if the California's lawsuit against auto manufacturers for the damages caused by global warming is, as Steve Verdon says, "a cheap political stunt," it is still shocking. The idea that this could win votes tells you something. And then,... MORE

Think Before You Sign

Politics and Economics
Bryan Caplan
Alex Tabarrok berates economists who signed a petition in favor of raising the minimum wage. He's willing to forgive them for disagreeing about the magnitude of the disemployment effect, but not for failing to check facts from the almanac: Nevertheless,... MORE

The Sun and Global Warming

Energy, Environment, Resources
Arnold Kling
N. Scafetta and B.J. West write, We find good correspondence between global temperature and solar induced temperature curves during the pre-industrial period such as the cooling periods occurring during the Maunder Minimum (1645–1715) and the Dalton Minimum (1795–1825). The sun... MORE

Real Social Security

Social Security
Arnold Kling
Jeremy Siegel writes, The reasons why retirees cannot turn their savings into consumption is because wealth can only be transformed into goods and services if they are sold to those willing to defer their consumption. In a modern economy, wealth... MORE

Lawyers in Government

Political Economy
Arnold Kling
'Cactus' of Angry Bear writes, Why is it OK to have an attorney making decisions about nuclear power, or how to combat mad cow disease or scrapie, or whatever else, regardless of the attorney’s level of ignorance on the subject... MORE

Peak Load Pricing at the Movies

Microeconomics
Bryan Caplan
Whenever I'm stuck in a line, I grumble about the need for peak load pricing. Raise the price during popular times, cut the price during off-times, and watch the world's blood pressure fall. At the same time, however, I understand... MORE

Fiscal Titanic

Fiscal Policy
Arnold Kling
According to the General Accounting Office, the category “all other spending” includes much of what many think of as “government”—“discretionary” spending on such activities as national defense, homeland security, veterans health benefits, our national parks, highways and mass transit, foreign... MORE

They Called Me Mad: "The Economics of Szasz" Gets Published

Behavioral Economics and Rationality
Bryan Caplan
People thought I was crazy to to write - let alone try to publish - "The Economics of Szasz." This analysis of the economics of mental illness has got to be the least-publishable article I ever wrote. And now it's... MORE

The COA Club

Economics of Health Care
Arnold Kling
Harvard Medical School Professor Jerry Avorn writes, In a program financed by the Commonwealth of Pennsylvania, called the Independent Drug Information Service, we scan the medical literature for the best evidence on how to treat a given medical problem (like... MORE

For Open Borders

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Sebastian Mallaby writes, In Let Their People Come, a new book published by the Center for Global Development, Lant Pritchett reports that if rich countries permitted extra immigration equivalent to 3 percent of their labor force, the citizens of poor... MORE

College Education Oversold?

Economics of Education
Arnold Kling
George C. Leef writes, we waste resources on a more extensive higher education system than is necessary. We employ more professors, administrators, and support personnel than would be the case if individuals were not subsidized and prodded to attend college.... MORE

Belief in Communism

Cross-country Comparisons
Bryan Caplan
I've discovered a gem of a book on public opinion in the former Soviet bloc: Values and Political Change in Postcommunist Europe by William Miller, Stephen White, and Paul Heywood. In the mid-late '90's, they surveyed people in Russia, Ukraine,... MORE

Businesses as Storehouses of Knowledge

Business Economics
Arnold Kling
It turns out that my post on Test Scores and Economic Performance was preceded by Stuart Buck's meditation on the knowledge contained in businesses. For any type of business that you can imagine, the overwhelming majority of the information necessary... MORE

Why the IMF and World Bank?

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
Mary Anastasia O'Grady writes, In a world of floating exchange rates and open capital markets, the IMF's raison d'être no longer exists. Its "clients" are rapidly repaying their outstanding loans. Macroeconomic accountability has improved world-wide, not because the fund mandates... MORE

Classic Catallarchy

Microeconomics
Bryan Caplan
In blogging as in most things, I prefer the timeless to the transient. I read history books, not newspapers. And if a blog entry won't be interesting in a month or a year, I'd rather not write it. In this... MORE

GMU Economists for Tolstoy

Books: Reviews and Suggested Readings
Bryan Caplan
Don Boudreaux loves Tolstoy too. If only GDP were proportional to literary talent, the Russians would be the richest people on earth.... MORE

I Bargained with a Dentist

Economics of Health Care
Bryan Caplan
Today I successfully bargained down my dentist. In the end, I got 20% off the price of a service I really didn't want in the first place. (Why was I there in the first place? The service I didn't want... MORE

Teaching Statistics

Economic Education
Arnold Kling
Does anyone out there know any AP Statistics teachers? They might be interested in using an interactive web site that I am working on. If so, tell them to get in touch with me. I have only a few slots... MORE

Demographics of the Oligarchs

Cross-country Comparisons
Bryan Caplan
You've heard about the Russian "oligarchs," right? They're the richest men in Russia. The insinuation is almost invariably that they owe their riches not to entrepreneurial ability, but to political connections. It's not "what you know," but "who you know,"... MORE

Test Scores and Economic Performance

Economics of Education
Arnold Kling
Gary Becker writes, One of the challenging paradoxes during the past several decades is that American teenagers have consistently performed below average on international tests in math and sciences, and not especially well on reading tests, yet the American economy... MORE

Proposals for Liberalization

Regulation and Subsidies
Arnold Kling
In the course of putting together a critique of a critique of the 2005 Economic Report of the President, Daniel B. Klein and Michael J. Clark surveyed 11 economists at George Mason University and came up with a top ten... MORE

Silent Signals

Information Goods, Intellectual Property
Bryan Caplan
I didn't know logicians had a name for it, but they do: it's called the Argument from Silence. The argument from silence (also called argumentum a silentio in Latin) is that the silence of a speaker or writer about X... MORE

Elephants Clashing

Politics and Economics
Arnold Kling
Ryan Sager writes, Why, as activists and students and journalists gathered for CPAC, was there a distinct sense that something was amiss? Because the marriage at the heart of the conservative movement was falling apart. ...Will social conservatives continue to... MORE

Harvard's Decision on Early Decision

Economics of Education
Arnold Kling
Greg Mankiw comments on Harvard's decision to end early decision in the admissions process. The early admission process has been becoming increasingly strategic on the part of both schools and students, and this game playing does not seem to serve... MORE

Consumption Mobility and Inequality

Income Distribution
Arnold Kling
Jonathan D. Fisher and David S. Johnson write, we show that there has been a large increase in income inequality but no concurrent increase in consumption inequality in the 1990s. Conversely, income mobility and consumption mobility are similar during this... MORE

Unstrategic Alliances

Politics and Economics
Bryan Caplan
Laugh if you must, but I've always enjoyed the Journal of Libertarian Studies. Last week, I came across another great read in a recent issue: John Payne's "Rothbard's Time on the Left." It's a fascinating account of Rothbard's "strategic alliance"... MORE

CoA Review

Economics of Health Care
Arnold Kling
Arnold Relman, who is no friend of market-oriented health care policy, nonetheless gives a kind review to Crisis of Abundance in the New England Journal of Medicine. The review is behind a subscriber wall, but excerpts can be found here... MORE

Saving for Retirement

Finance: stocks, options, etc.
Arnold Kling
John Karl Scholz, Ananth Seshardi, and Surachai Khiatrakun write, We find that over 80 percent of HRS households [a sample of households aged 51-62 in 1992] have accumulated more wealth than their optimal targets. These targets indicate the amounts of... MORE

Cities and Educated Elites

Economics and Culture
Arnold Kling
Richard Florida writes, Today, a demographic realignment that may prove just as significant is under way: the mass relocation of highly skilled, highly educated, and highly paid Americans to a relatively small number of metropolitan regions, and a corresponding exodus... MORE

Spotted in a Fairfax Parking Lot

Growth: Consequences
Bryan Caplan
A caricature of hypocrisy: Overweight, middle-aged man in a Che Guevara t-shirt, talking on a cell-phone in his illegally-parked BMW.... MORE

Learning from Experience

Economic Education
Arnold Kling
Tyler Cowen invites me to add to a list of experiences that he recommends for a young economics major. His list is a good one. One thing that I would add is that you spend several months living in a... MORE

Government's Role in Health Care

Economics of Health Care
Arnold Kling
In my opinion, Greg Mankiw did not quite nail the problem with this article by David Wessel, who writes, The theory: Give consumers more information, let them choose the best provider and the resulting competition will help to squeeze out... MORE

The Other Reason Big Business Supports Federal Regulation

Regulation and Subsidies
Bryan Caplan
Contrary to popular belief, Big Business often supports federal regulation. Economists' standard explanation: Regulation either directly restricts competition, or indirectly imposes a greater burden on smaller businesses. But there is another important reason why Big Business supports federal regulation that... MORE

Business Regulation and Economic Development

Cross-country Comparisons
Arnold Kling
A World Bank Study is filled with information on the cost of doing business in various countries. For example, they rank countries using an overall index. New Zealand has the most business-friendly regulation in the world, as measured by the... MORE

Site Traffic Ranking

Econlog Administrative Issues
Arnold Kling
Tyler points to this post giving traffic rankings for economics blogs. Econlog was not included because our traffic logs are not public. Our unique visitors, apart from robots (such as search engines combing the Web), averaged 4762 per day for... MORE

The Joy of the Switch

Microeconomics
Bryan Caplan
My website has had non-stop problems for the last month. Now, at last, it's fully operational. I've lamented my evil web hosting company - name withheld to protect the guilty - for years. I've often dreamed of taking my business... MORE

Growth and Development

Growth: Causal Factors
Arnold Kling
Lant Pritchett writes, While the contribution of the new growth models to the internal logic of the economics discipline has been lasting, the bloom came off the rose of the explicit use of new growth models for policy purposes in... MORE

Labor Market Dynamics

Labor Market
Arnold Kling
In the latest Journal of Economic Perspectives, Steven J. Davis, R. Jason Faberman, and John Haltiwanger write, More than ten percent of U.S. workers separate from their employers each quarter. Some move directly to a new job with a different... MORE

Determinants of Mortality

Economics of Health Care
Arnold Kling
In the latest issue of the Journal of Economic Perspectives, David Cutler, Angus Deaton, and Adriana Lleras-Muney write, The argument for the role of public health in reduced mortality is made most prominently by Samuel Preston (1975, 1980, 1996). If... MORE

Envy and Status

Income Distribution
Arnold Kling
'Jane Galt' writes, when it comes to hyper-obsession with invisibly fine status distinctions, no banker could hold a candle to the average academic Read the whole thing, and also re-read Economic Man vs. Status Man. Incidentally, in Learning Economics, I... MORE

The Escalation of Well-Being

Income Distribution
Arnold Kling
Don Boudreaux pulls some facts out of a Bureau of Labor Statistics report. It's surprising (and important to note) that in 1901 only 19 percent of U.S. families owned a home; by 1972-1973, this figure had risen to 58.8; indeed,... MORE

The Marginal Myth

Microeconomics
Bryan Caplan
One of economists' favorite things to say is: "Economics only makes predictions at the margin. We can't tell you how much people will buy, only that they'll buy less when the price goes up." Sometimes this is true. But there... MORE

An Evolutionary Model of Depression

Behavioral Economics and Rationality
Bryan Caplan
Depressed people - what is their problem? Edward Hagen of Humboldt University has a fascinating answer: Getting depressed is a good way to get the people around you to give you more for less. Feel underappreciated? Then mope around non-stop,... MORE

New Interview with Milton Friedman

Tax Reform
Arnold Kling
Russ Roberts is the interviewer. To listen, go here. To read a transcript, go here. I was struck by the following: But it's always been true that business is not a friend of a free market... the real problem here... MORE

Tax Reform

Tax Reform
Arnold Kling
Sebastian Mallaby writes, The same argument holds for tax incentives to buy health insurance. Just over a quarter of this subsidy is swallowed by households in the $100,000-plus bracket; far from promoting the wider dissemination of health insurance, it may... MORE

Envy, Happiness, and Social Policy

Behavioral Economics and Rationality
Arnold Kling
Brad DeLong serves, I'm enough of a touchy-feey sociology-lover to believe that a good chunk of the utility the rich derive from their conspicuous consumption is transferred to them from the poor: the happiness America's working poor and middle class... MORE

Freeze - Statistics Police!

Economic Methods
Bryan Caplan
Heard of the study that finds that beautiful women have more girls and intelligent men have more boys? Andrew Gelman finds that at least the first finding is suspect on multiple levels. You get a statistically significant effect if you... MORE

Beyond Irrational: The Hinckley Effect

Behavioral Economics and Rationality
Bryan Caplan
The most intriguing part of Steve Slivinski's Buck Wild is his section on the "Hinckley Effect." I've known about failed assassin John Hinckley since 4th grade. But it's only now that I've learned about the policy effects of his gambit... MORE

The video from the live event where a panel discussed my book is here. I am reasonably happy with my initial talk. Jason Furman talks about the large benefits of health care. I think my best answer on that is... MORE

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