Bryan Caplan and David Henderson

July 2007

A Monthly Archive (89 entries)

Opera versus the NFL

Economics and Culture
Bryan Caplan
According to Russ Roberts:Annual [opera] admissions are now estimated at 20 million, roughly the same attendance as NFL football games (22 million, including playoffs, in 2006–07).I'm incredulous. How can a hobby enjoyed by me and a few octogenarians be competitive... MORE

The Selfish Reason to Have More Kids: The Book?

Books: Reviews and Suggested Readings
Bryan Caplan
True story: While I was on vacation, I got a phone call from Good Morning, America, asking me to talk about my book, The Selfish Reason to Have More Kids. The main problem, I told them, is that a few... MORE

Aging Rockers vs. the Long Tail

Economics and Culture
Arnold Kling
Marie Connolly and Alan B. Krueger write, Concert revenues became markedly more skewed in the 1980s and 1990s. In 1982, the top 1 percent of artists took in 26 percent of concert revenue; by 2003 that figure reached 56 percent.... MORE

Cheers for a Two-Tier Society

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Giovanni Peri writes, U.S.-born workers are climbing the educational ladder, acquiring interactive/analytic skills and progressively leaving the manual jobs that would put them in competition with immigrants. If the trend continues as expected, the day is not far off when... MORE

High School Curriculum

Economic Education
Arnold Kling
This is easy for Greg Mankiw to say. I have long thought that a year of economics should be standard in high school, much as American history is now. I even have a good textbook to recommend. I think that... MORE

Reliability of Survey Data

Economic Methods
Arnold Kling
Tom Slee writes, what I get from the Netflix prize is that there are probably significant limits to recommender systems. Even the smartest don't do a whole lot better than the simple approaches, and a lot of work is required... MORE

Discover Your Inner Literalist

Books: Reviews and Suggested Readings
Bryan Caplan
Perhaps the most amazing thing about Robin Hanson is his determined literalism. He listens to your exact words, and evaluates your specific statements as true or false. If you want to reach truth, it really helps to have someone like... MORE

Who to Trust?

Economic Methods
Bryan Caplan
Arnold writes:With one exception, I think there is nothing that the public can look for in terms of a signal about economists. The best thing is to force economists to explain their arguments clearly in layman's terms, and then to... MORE

Conventional Reflections

Economics and Culture
Bryan Caplan
My Comic-Con epiphany: Economics doesn't really have superstars. Even if Adam Smith himself showed up at the American Economic Association meetings, he wouldn't have thousands of economists fall on their knees in awe. But that's basically what happened at Comic-Con... MORE

A Book is Just a Very Long Text Message

Economics of Education
Arnold Kling
What do you think of this? Launched in England less than a year ago, ICUE software lets users read novels on their cell phone without the irritation of constantly scrolling through blocks of text displayed on the small screen. Instead,... MORE

Which Economists to Trust?

Political Economy
Arnold Kling
In a new econtalk podcast, David Henderson and Russ Roberts discuss the issue of how a layman should deal with economic expertise. They mention the problem that the press will seek out "balance" when in fact one side is represented... MORE

Taxes and Economics

Tax Reform
Arnold Kling
Alan Blinder gives a pretty good lesson. just remember one simple principle: If we tax Activity A at 15 percent and Activity B at 38 percent, a free-market economy will give us more A and less B. Some of this... MORE

Singularity Watch

Game Theory
Arnold Kling
MSNBC reports The results are in from the great "Man vs. Machine" computer poker showdown in Vancouver, with the humans coming out on top by a narrow margin. ...The Polaris team as well as Laak and Eslami are all looking... MORE

Free Market or Artificial Market?

Energy, Environment, Resources
Arnold Kling
Evidently, there is a company offering a solution to CO2. It is called Planktos. Our primary focus is to restore damaged habitats in the ocean and on land. Through iron-stimulated plankton blooms in the oceans and afforestation projects in Europe,... MORE

Do Sports Franchises Make Money?

Business Economics
Arnold Kling
Austan Goolsbee writes, Take the Sonics. The team may have lost $60 million while Mr. Schultz owned it. But he bought it for $200 million in 2001 and sold it for $350 million five years later. So he ended up... MORE

Toward Better Debate

Politics and Economics
Arnold Kling
I suggest political debate would be more enlightening if we asked proponents to focus on their assumptions. When you say that your policy proposal would be an improvement, what are the key assumptions behind that statement? For example, suppose that... MORE

Primary Care Doctors vs. Specialists

Economics of Health Care
Arnold Kling
The Wall Street Journal reports primary-care doctors, including internists, family physicians, and pediatricians, are in short supply across the country. Their numbers dropped 6% relative to the general population from 2001 to 2005, according to the Center for Studying Health... MORE

Fabulous Wisdom

Behavioral Economics and Rationality
Bryan Caplan
An omen? Hours before I head down to Comic-Con, I stumbled across a brilliant exchange in Fables: March of the Wooden Soldiers. Background: In this Eisner Award-winning series, legendary figures ("Fables") have been exiled from their native lands to the... MORE

Medical Paradigm

Economics of Health Care
Arnold Kling
From an article by Ron Bailey. Olshansky argues that the old paradigm of directly targeting diseases is about to run out of steam. Even if all cancer, all heart disease and all diabetes were eliminated, it would add only 3... MORE

Andy Stern on Health Care

Economics of Health Care
Arnold Kling
A reader points me to this interview with Andy Stern, head of the Service Employees union. He says that employer-provided health insurance is an anachronism. Coming from a union guy, that's refreshing. It would be even more refreshing coming from... MORE

The Reading Class

Business Economics
Arnold Kling
In The New York Times, Harriett Rubin writes, It took Dee Hock, father of the credit card and founder of Visa, a thousand books to find The One. Mr. Hock walked away from business life in 1984 and looked back... MORE

Doctors and Waiting Times

Economics of Health Care
Arnold Kling
Tyler Cowen asks, in market equilibrium, should we expect two- or three month-long waits to see a doctor? The alternative is for the doctor to charge more for a visit, thereby shortening the queue. My guess is that this has... MORE

The Angst of Economics?

Books: Reviews and Suggested Readings
Bryan Caplan
The New York Magazine profiles Tyler's new book. My favorite part:Cowen’s book does run up against another kind of scarcity. There are not enough economic tricks that distill neatly into interesting advice. When he discusses the techniques for motivating your... MORE

Battlestar Libertopia

Economic Philosophy
Bryan Caplan
Last week I had a few days on my own, so I decided to try Season 1 of Battlestar Galactica. I'm probably the last geek on earth to take the plunge, and I wasn't disappointed. My verdict: It's a great... MORE

Who Are the High Earners?

Income Distribution
Arnold Kling
Steve Kaplan and Joshua Rauh write, Overall, we estimate that the groups we study represent 15% to 26.5% of the individuals who comprise the AGI categories at and above the top 0.1%. Among the groups we study, non-financial public company... MORE

Scott McCloud is often called "the smartest man in comics," but how does he measure up in economics? In his Reinventing Comics, McCloud re-invents the wheel of path-dependence to explain the dominance of superheroes in the American comics industry. McCloud's... MORE

Hal Varian on Googlenomics

Business Economics
Arnold Kling
the Wall Street Journal does an interview. WSJ: Is Google an example of a “winner take all” market, where “network effects” make it more valuable as it gets more users? Varian: I don’t think [search] is a winner take all... MORE

Movie Review

Books: Reviews and Suggested Readings
Arnold Kling
I review "Call of the Entrepreneur." I can imagine "The Call of the Entrepreneur" being shown to people in other countries. It has already been viewed by a large preview audience in Africa. I would like to see it translated... MORE

Tolstoy, Hayek, and David Brooks

Institutional Economics
Arnold Kling
Tolstoy had a very different theory of history. Tolstoy believed great leaders are puffed-up popinjays. They think their public decisions shape history, but really it is the everyday experiences of millions of people which organically and chaotically shape the... MORE

Amateur Bank Lending

Finance: stocks, options, etc.
Arnold Kling
The Wall Street Journal reports, About $100 million in new person-to-person loans will be issued this year, and that will increase to as much as $1 billion in new loans in 2010, according to a recent study by Online Banking... MORE

Mea Culpa: How I Succumbed to Anti-Foreign Bias

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
A high fraction of immigrants are young, low-skilled, Hispanic males. Given these demographics, I long assumed that immigrants would have relatively high crime rates. While I kept this problem in perspective, I took it for granted that increased crime was... MORE

I'll Defend IQ

Growth: Causal Factors
Arnold Kling
Against Tyler Cowen's attack. I've spent much time in one rural Mexican village, San Agustin Oapan, and spent much time chatting with the people there... I'm also sure they if you gave them an IQ test, they would do miserably.... MORE

Mugabenomics

Price Controls
Arnold Kling
The Guardian reports President Robert Mugabe's order that all shop prices be cut by at least half, and sometimes several times more, has forced stores to open to hordes of customers waving thick blocks of near worthless money given new... MORE

Solar Dreams

Energy, Environment, Resources
Arnold Kling
The U.S. Department of Energy reports, Acciona Energy announced on June 7th that Nevada Solar One, a 64-megawatt solar thermal power plant near Boulder City, Nevada, is now online. The new facility is the largest of its type to be... MORE

The Context and the Leader

Political Economy
Arnold Kling
I assess the Bush Presidency Claims that ordinary workers fared poorly under President Bush are suspect. Data on the "distribution of income" are often abused by people making the claim that only the rich are getting ahead. Even the abusers,... MORE

Positive Freedom, Negative Freedom, and Wealth

Political Economy
Arnold Kling
Julian Sanchez writes Is the freedom and individualism Lindsey sees the freedom from interference we find in Kansas or the plenitude and diversity of options we find in Manhattan? Or more generally, which of Isaiah Berlin’s “two concepts of liberty”... MORE

My Kind of Democrat

Behavioral Economics and Rationality
Bryan Caplan
From the NYT:Representative George Miller, the California Democrat who is chairman of the Committee on Education and Labor, said, “Trade may not be the reason, or the number one reason, they’re losing their jobs, but they [the American people] think... MORE

David A. Hyman and Charles Silver advocate Results-Based Compensation Agreements between patients and doctors. Another common complaint about RCBAs is that they would encourage providers to "cherry pick" by treating patients with good success odds and excluding patients who, being... MORE

Painful Budget Cuts in Maryland

Fiscal Policy
Arnold Kling
An Editorial in the Washington Post tells the story. Gov. Martin O'Malley (D) has begun chipping away at the problem, starting with the outlays. Predictably, he is under attack -- from liberals and unions who say the cuts are pitiless... MORE

Garett the Gracious

Behavioral Economics and Rationality
Bryan Caplan
I've known Mormons all my life. I was in a Mormon Cub Scout troop because my best friend was Mormon. One of my best friends in grad school was a Mormon, too. But in 35 years, I'd never (knowingly) met... MORE

Scheve and Slaughter have gotten a lot of attention for their Foreign Affairs piece on "A New Deal for Globalization." They argue that we can squelch popular support for protectionism by making the tax code more progressive:The best way to... MORE

With Rebuttal from Dan Klein?

Economic Methods
Bryan Caplan
Alex's ridicule of the New York Times piece on economists who "oppose the hegemony of free-market economics" is spot-on. Basic fact-checking would have exposed the silliness of this story, which was decisively refuted by Dan Klein and Charlotta Stern a... MORE

Economic Advisers Stoop to the Net

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Greg Mankiw writes, 1. Alan's views are a challenge to the economic mainstream. 2. Alan did not present his new views in a refereed academic publication but instead in Foreign Affairs, a publication aimed at the broad policy community, and... MORE

The Default Path for Taxes

Tax Reform
Arnold Kling
Greg Mankiw points to a letter from the Congressional Budget Office which says that with no change in tax law we will be able to finance higher health care spending by the government. Greg writes, For the median married taxpayer... MORE

The Rational Liberal Minister

Behavioral Economics and Rationality
Bryan Caplan
I had a stimulating, well-reasoned interview with noted liberal activist and ordained minister Barry Lynn, host of "Culture Shocks." I continue to be surprised by the bipartisan reaction to my book - has Bush inadvertently opened liberal eyes to the... MORE

I Bet An Austrian

Politics and Economics
Bryan Caplan
Austrians have strong philosophical objections to the application of probability theory to most of the real world, but that didn't stop Walter Block from publicly offering to bet at 200:1 odds that Ron Paul will be elected president:Can't happen? Give... MORE

Malevolent Aspirations

Tax Reform
Bryan Caplan
As the Tick might say, this modest proposal from Reihan Salam is "just plain... plain wrong! And no-one should do it, ever!"[T]here is a way to sharply reduce immigration. It just so happens that most of us, on the right... MORE

Is Jeffrey Friedman Ignorant?

Economic Philosophy
Arnold Kling
He would say so. Back in November, He wrote, The economist’s approach reduces human error to the merely so-called “errors” of people who actually know that they are wrong, but prefer to be wrong—either because (1) they have some sinister... MORE

Freakonomics: The T.V. Series

Economics and Culture
Bryan Caplan
Jane Galt doesn't think you could have a good t.v. show about journalists at the Economist:But even if you rely heavily on political or human-interest plotlines, there is no way to make a whole show about journalists work on television.... MORE

Do Voters' Biases Bias Policy?

Behavioral Economics and Rationality
Bryan Caplan
Daniel Casse's review of my book in today's Wall Street Journal raises an important objection:As an analysis of how far voters are out of step with settled economic thinking, Mr. Caplan's argument seems irrefutable. Yet as a work of political... MORE

Armstrong Answers

Energy, Environment, Resources
Bryan Caplan
I emailed Scott Armstrong my questions about his climate change bet, and he graciously responded:The bet is about the size of the forecast errors, not about direction. There are better ways of designing a competition. I had to go for... MORE

A Creative Conspiracy Theory

Behavioral Economics and Rationality
Bryan Caplan
If gas prices go up because of business conspiracies, why do they ever come down? In his Daily Kos review of my book, Dean Nut proposes a staggeringly original explanation - and as far as I can tell, he's serious:If... MORE

Daily Kos Falls Into My Trap

Behavioral Economics and Rationality
Bryan Caplan
In yesterday's Daily Kos, Dean Nut criticizes my book as filtered through the Economist's review. It turns out that alleged economic illiteracy is just selfish voting:The Americans who most believe that "the economy is seriously damaged by sending jobs overseas"... MORE

Exit and Voice

Business Economics
Arnold Kling
James Surowiecki contrasts the governance of pirate ships with that of corporations. Leeson’s analysis of pirate governance focusses mainly on the way in which this system deterred self-dealing. But the pirate system was also based on an important insight: leaders... MORE

The Inequality Issue

Income Distribution
Arnold Kling
From my latest essay: The distribution of rewards in America today is still relatively merit-based. However, the extent of economic and social mobility is difficult to assess. One optimistic indicator of mobility is that wealth differences across siblings remain fairly... MORE

Opposition to Single-Payer Health Care

Economics of Health Care
Arnold Kling
According to the Washington Post, it comes from Jonathan Gruber. Instead, Gruber argued for a more incremental approach, like the one in Massachusetts he helped write. Its central elements would be providing subsidies to people who are unable to pay... MORE

Climate Bet Details

Energy, Environment, Resources
Bryan Caplan
Armstrong has just offered Al Gore a $US20,000 ($23,000) bet that the Intergovernmental Panel on Climate Change temperature forecasts are wrong.This passage intrigued me. What counts as "being wrong"? Here's what I learned at the bet's official website:Scott Armstrong of... MORE

Climate Betting

Energy, Environment, Resources
Arnold Kling
Michael Duffy writes, Professor Scott Armstrong is at the Wharton School at the University of Pennsylvania. Dr Kesten Green is with the Business and Economic Forecasting Unit at Monash University. They're experts in forecasting techniques... Armstrong and Green looked at... MORE

Hydrocarbon Pessimism: Get Your Story Straight

Energy, Environment, Resources
Bryan Caplan
A sharp post by David Friedman:One argument is that we are running out of hydrocarbons and should therefore reduce our use of hydrocarbons, reduce energy consumption and switch to alternative energy sources. The other argument is that we are, by... MORE

Polygamy Meets Economy

Microeconomics
Bryan Caplan
Even if you think my earlier posts on HBO's Big Love were gratuitous, you can't deny the economic relevance of one of the latest story lines:Bill hears about a new investment opportunity. A slot machine manufacturer wants investors, and doesn't... MORE

I Heart Econ

Economic Methods
Bryan Caplan
Guest blogging at Free Exchange, I answer the charge that Econ is a cult, and end with a hymn of praise:[T]here's nowhere where the grass is greener than in the economics profession. It's far from perfect, but economics is an... MORE

On the Health Care Front

Economics of Health Care
Arnold Kling
Reihan Salam writes, Mind you, we want poor people to be less cost-conscious when it comes to consuming healthcare, so in one obvious sense this is a strength of the French alternative. But then there's everyone else. The post is... MORE

A Business Idea for Education

Economics of Education
Arnold Kling
On this post, a commenter writes, I was thinking of providing my children with exceptional tutors from various disciplines in addition to their regular curriculum. Aristocrats would frequently engage proven scholars to teach their children. Good private schools today attempt... MORE

From Di Tella and MacCulloch:A finding that people who perceive corruption to be widespread also want more government regulation would be difficult to explain if regulations were simply facilitating rent extraction by bureaucrats.Is it really so "difficult" to believe that... MORE

Here's the beginning of the abstract from Di Tella and MacCulloch's "Why Doesn't Capitalism Flow to Poor Countries?" (non-gated version here):We find anecdotal evidence suggesting that governments in poor countries have a more left wing rhetoric than those in OECD... MORE

A Video for Ec 10

Economic Education
Arnold Kling
This fall in Harvard's introductory class, I think Greg Mankiw should have his students watch The Call of the Entrepreneur. One of the segments is a clear explanation given by a Wall Street lawyer of the value added by financial... MORE

Teachers and Stardom

Economics of Education
Arnold Kling
A reader sends in this question: CBS Sunday Morning knocked multi-million dollar baseball salaries this morning and lamented that teachers are much more poorly paid. Then I wondered, why do teachers not market themselves? How come there are no teaching... MORE

OPEC and Global Warming

Energy, Environment, Resources
Bryan Caplan
True or false? "OPEC has done more to reduce global warming than all the world's environmental protection agencies put together." Discuss.... MORE

Conceived in Tribalism

Economic History
Bryan Caplan
Here's a puzzling reaction to my doubts about the wonders of American independence:The chief goal of libertarianism is not low taxes or any specific public policy outcome but rather liberty.Actually, the libertarian view is that liberty consists in specific public... MORE

The Demographic Transition

Economics and Culture
Arnold Kling
Bryan writes, The puzzle of declining family size in the face of rising wealth remains. Since I'm currently steeped in Gregory Clark, let me throw in my two cents. From Clark, we learn that in England: 1. Prior to the... MORE

Opposition to Immigration: Get Your Story Straight

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Some opponents of immigration think it benefits the poor at the expense of the rich by increasing support for the welfare state. Other opponents of immigration think it benefits the rich at the expense of the poor by reducing the... MORE

Who Wants More Kids?, Part II

Economics and Culture
Bryan Caplan
The GSS asks: "What do you think is the ideal number of children for a family to have?" So who wants more - men or women? Survey says: Women want .05 children more. That's a lot smaller difference than my... MORE

The Wonder That Is Dog

Microeconomics
Bryan Caplan
Richard Dawkins and I have something else in common: We're amazed by dogs:If mutation, rather than selection, really limited evolutionary change, this should be true for artificial no less than natural selection. Domestic breeding relies upon exactly the same pool... MORE

Where Numbers Come From

Economic Methods
Bryan Caplan
Brad DeLong explains the birth of an early pro-NAFTA number:Here's where I state that the "200,000 net jobs projected from NAFTA" number was mine: we took an estimate of overall economic efficiency gains from tariff reductions and an employment elasticity... MORE

The IQ Revolution?

Economic History
Arnold Kling
Gregory Clark writes, Millenia of living in stable societies, under tight Malthusian pressures that rewarded effort, accumulation, and fertility limitation, encouraged the development of cultural forms--in terms of work inputs, time preference, and family formation--which facilitated modern economic growth. This... MORE

Who Wants More Kids?

Economics and Culture
Bryan Caplan
It may well be the biggest puzzle in evolutionary psychology: Why do humans have fewer kids when they get richer, when their extra resources allow them to support more? Robin blogs a new explanation from Ted Bergstrom:Because of a genetic... MORE

Beyond the Pale

Economics and Culture
Bryan Caplan
Mankiw writes:Kinsley and Libby share two, significant characteristics: They are both very smart, and they both care deeply about public policy. I am willing to bet that if they ever sat down over a cup of coffee, they would like... MORE

Taxes, Independence, and Canada

Economic History
Bryan Caplan
In response to yesterday's doubts about the benefits of American independence, many commenters emphasized the importance of taxes - and pointed me to the Declaration of Independence. But this doesn't really answer my question: Did the Revolution actually lead to... MORE

What is a High-Trust Society?

Institutional Economics
Arnold Kling
I give my answer. If you can trust the processes of government, then that is a good thing. Good trust in government is based on processes that provide for accountability, checks and balances, equal protection, and punishment of official corruption.... MORE

The Consequences of Pessimistic Bias

Behavioral Economics and Rationality
Bryan Caplan
For three out of the four biases I discuss in my book, it's easy to see the connection between economic biases and inefficient policies. Anti-market bias leads to under-use of markets. Anti-foreign bias leads to excessive protection, immigration restrictions, etc.... MORE

Independence Day: Any Reason to Celebrate?

Economic History
Bryan Caplan
Can anyone tell me why American independence was worth fighting for? Most libertarians interpret the Revolutionary War as a libertarian crusade. But when you ask about specific libertarian policy changes that came about because of the Revolution, it's hard to... MORE

Most policies are popular. But I'm almost sure that Virginia's draconian new traffic fines are a counter-example. This part clinched it for me:Although the amount of the tax can add up quickly, the law forbids judges from reducing or suspending... MORE

Patri Friedman on Lott's Cats

Books: Reviews and Suggested Readings
Bryan Caplan
Patri Friedman says that John Lott got his facts on hypoallergenic cats wrong... among other things. Anyone want to take sides?... MORE

Tyler on Tyson's

Energy, Environment, Resources
Bryan Caplan
Some pretty reasonable remarks by Tyler about the future of Tyson's Corner provoked a remarkably angry set of comments. When I first moved to Virginia ten years ago, I lived across the street from Tyson's II, and Tyler lived in... MORE

How My Graphic Novel Got Me on C-SPAN

Books: Reviews and Suggested Readings
Bryan Caplan
True order of events: 1. I put my graphic novel on my webpage. 2. Tyler blogged it. 3. Tim Kane read Tyler's blog and emailed me about our shared interests in economics and comics. Plus he turned out to be... MORE

The Waste of Recycling

Energy, Environment, Resources
Bryan Caplan
"Recycling is the philosophy that everything is worth saving except your time" - I still don't know who coined the quip, but I repeat it every chance I get. If that's not enough for you, though, here's Mike Munger on... MORE

Ballots Are Better than Bullets

Political Economy
Arnold Kling
Louis Menand writes, If all policy decisions were straightforward economic calculations, it might be simpler and better for everyone if only people who had a grasp of economics participated in the political process. But many policy decisions don’t have an... MORE

Austan Goolsbee on Health Care

Economics of Health Care
Arnold Kling
He writes If you set up a market-based health system, allowing insurance companies to pick and choose who and what they will cover, you give them overwhelming incentives to dump, deny, avoid and neglect the sick people. But the data... MORE

What's Wrong with REVENGE?

Economic Philosophy
Bryan Caplan
Dialogue from a hundred interchangeable Law and Order episodes:"You didn't want justice. You wanted revenge!" "The law says 'Thou shalt not kill,' not 'Thou shalt not kill nice people!'"Each time, I'm thinking: "Maybe justice required revenge? Ever think of that?"... MORE

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