The New York Post is a Leading Academic Source for Ideas and Quotes

As I try to finish the final draft of my new book, I found these letters, from angry New Yorkers who were frustrated by heavy rains knocking out the NYC subways in 2007, to be quite useful. The NY Post captures the voice of "real" New Yorkers. Somehow, the letters in the NY Times don't carry a similar punch. The Times publishes too many letters written by "important" people getting huffy that they were misquoted or forgotten and not quoted in some previous important piece. In contrast, the Post's readers just want to yell. I respect their honesty.

I promise to send each of these letter writers a copy of my 2010 treatise!

What is my new book about? Well, what do I know? Cities, climate change and our future. Brad Delong and I will both publish new books for Basic Books in fall 2010. I look forward to lowering their average!


DOES THE 'M' IN MTA STAND FOR 'MORONIC'?
Last Updated: 5:00 AM, August 12, 2007

Posted: 5:00 AM, August 12, 2007

THE ISSUE: Wednesday's storm and the ensuing MTA challenges.

The entire MTA organization is incompetent, from root to branch. Thanks to them, we have a subway that is a disgrace to the greatest city in the world ("Twister," Aug. 9).

I just spent another nightmare day of non-existent trains, inadequate information given by people who would simply evaporate if they cared any less, sweltering carriages on the C and E lines and incomprehensible announcements spoken over a speaker system that would have been an embarrassment 50 years ago, let alone in 2007.

Throwing more money at an organization this feckless would be like shoveling it into a furnace.

William Lawson
Queens

****

As we spend countless hours and dollars to make ourselves more secure against the threat of terrorism, it seems that such minor infrastructure problems are more likely to gravely affect the lives of everyday New Yorkers.

When will our elected leaders see that if rain can virtually cripple a great metropolis like New York, these mass-transit and utility problems have moved beyond the realm of minor problems into major ones?

We expect New York to be great, yet our increasing number of infrastructure failures is slowly making us resemble a regrettable backwater unworthy of the nickname the Empire State.

Kathy B. Huang
Manhattan

****

I ask The Post to please slam the MTA for what it did on Wednesday. It was a disgrace.

I was stuck in a subway tunnel on the B line for almost two hours. I thought people were going to faint.

This system is terrible and is not how New York City's subways should be run. The service is like something you'd expect to see in some Third World country.

Tom Roberts
Manhattan

****

With the storm the other day, Katrina, Rita and the tsunami along the Indian Ocean, Al Gore is looking like he's 100 percent correct about global warming.

If we continue to ignore global warming, storms will get worse and worse.

Edward Drossman
Manhattan

****

Rumor is that Gore was observed running through the streets of Bay Ridge, Brooklyn, shouting, "I warned all of you this would happen."

Robert McKenna
Staten Island

****

Maybe we do not have the luxury to waste money on all the parades that ensure every group is culturally appreciated.

I, for one, would like to know that every time it rains, I do not have to wonder if the trains are running or if the whole transit system is down.

David Rivnak
Amityville

****

Why are we paying and, more to the point, trusting the MTA to expand the transit system when it can't operate what it has?

As it contemplated new subway lines and cathedral-like stations, one of the seasoned executives, expert study groups or high-priced consultants might have realized that New York is subject to the occasional summer thunderstorm.

Why can't we spend some money on fixing the storm drains?

Just because the MTA has problems getting work done, it shouldn't mean the rest of us can't get to work.

Michael Duff
Queens

****

As any resident of Queens who uses the E, F, R or V knows, the subway system cannot handle severe thunderstorms without the tracks flooding and shutting down train service.

This has been an ongoing problem for many years.

The Bloomberg administration needs to conduct an immediate investigation as to the reason for the MTA's failure to correct this situation.

Any delay on the mayor's part to launch this investigation will only cause further hardship to all New Yorkers.

It is only a matter of time before someone dies from a system shutdown.

Robert Subjenski
Manhattan

****

Earth to the MTA: It rains here sometimes.

Doesn't "A" in MTA stand for "authority"? When no downtown trains were running, the only announcement at the Port Authority was about the E train.

Orange vests were nowhere. Cops were handling their jobs, but only by telling everyone one route, the M20, which came once an hour, packed, while 10 empty ones passed by "out of service" was running.

J. Andrew Smith
Bloomfield, N.J.

My Father Wins a NYU Teaching Award

I haven't won any teaching awards and I don't expect to win any soon. I do know a guy who wins these things and he is proud of it and I'm proud of him. But, he could publish more!

Master Clinician: Martin L. Kahn, MD, the Joel E. and Joan L. Smilow Professor of Cardiology since 2002, was honored for his patient-centered work in cardiology. Dr. Kahn has dedicated his career to the training of physicians, the search for new knowledge and the care of the sick. The high standards he sets for himself as a clinician and teacher are a reflection of his belief that he represents not only himself and the Medical Center, but the entire medical profession.

See See page 5 of this document for a photo and the full bio of the true Dr. Kahn.

Evan Smith Reinvents Texas News Coverage

Evan Smith, an old friend from Hamilton '87, is featured in a photo in the NY Times Business page today . He looks tough in the picture. What has he done? Started a hedge fund? Gone to a tea party? No and No. He has created a new way to deliver the news separate from print sales and circulation.

The economics here is interesting. Step #1: Find a sugar daddy. Regardless of the sugar daddy's motives, the first step is to find an endowment of roughly $5 million bucks. That guarantees an annual flow of $250,000 a year and this is a non-profit so no taxes. With that credible committment of cash, then pursue some advertising and some premium subscriptions. Let's suppose that this yields $200,000 a year. Evan's only cost is for the webpage and to pay the writers and their expenses.

Here is the final product . It looks serious!

Now, all non-profits seek a sugar daddy and the potential "daddies" know this. While Mike Bloomberg has been a benevolent leader of New York City (using his billions to wisely guide his subjects such as my parents), we face an interesting issue with the rise of the public goods providers.

Do you remember Ronald Coase and his lighthouse? Sometimes public goods are provide by private citizens as they pursue their own agendas.

For years liberals railed that conservative foundations such as Heritage and AEI were funded by rich conservatives. So, this new venture is a repeat of an old theme.

Recall Hotelling's long narrow beach, will multi millionares of all political types chip in their millions to create newspapers that span the full spectrum of views? If yes, then internet surfers will have freedom of choice and can write a thanks tweet to these nice rich people.

But, if certain ideologies do not have a rich backer or face free rider issues such that no one rich member of the them wants to provide the "lighthouse", what happens next? In the ideological competition, their views will not be heard.

Should PBS seek to fill that gap?

Good Luck in the Big City

There are some selfless people in the Big City. Here is a very
nice story about good luck in a big city. A cynic would say that the cardiologist anticipated that she would get a nice write up in People Magazine but I don't believe this.

The "Treatment Effect" of Doctors

Are doctors good for you? When are they good for you? As they learn how to do their craft, could their treatment improve and become more cost-effective? Here is David Leonhardt's piece on health care and doctor's value added

For applied micro scholars, we can map this into the treatment effects literature's basic notation and focus on essential heterogeneity and the incentives and objectives of doctors.

First, some notation. Define Y = health of the patient (its units are noodles).

Patients differ on both observable characteristics (age, race, sex) and unobserved characteristics (diet habits, patience). Call the first set D1, and the second set D2

The doctor must choose to give treatment T1 or T2. They differ with respect to their cost, complications and ex-ante expected impact on Y.

Here is the linear health production function if treatment T1 is given:

Y1 = b1*D1 + b2*D2 + b3*T1 + b4*D1*T1 + b5*D2*T1 + U

here is the linear health production if Treatment T2 is given:


Y2 = b1*D1 + b2*D2 + b3*T2 + b4*D1*T2 + b5*D2*T2 + U


The statistical inference problem is to estimate b1, b2, b3, b4, b5. The doctors don't know the true health production function.

With these b1-b5 parameters, we would fully understand the benefits of a given treatment for diverse patients. The problem is that the assignment to treatment status is not randomly and we do not observe D2. How does this missing data issue affect the inferences that Doctors make based on "evidence based measurement"?

So, the relative benefit (measured in health) of treatment 1 is:


b4*D1*(T1-T2) + b5*D2*(T1-T2)


With a large enough data sample (and assuming that b5 = 0), an empiricist will know b4 (giving 65 year old blacks a blood pressure medicine versus giving the same medicine to a 47 white man etc) but how does the doctor know b5?

Intuitively, b5 represents how a patient person who is willing to comply with the regimen will respond to the treatment. My intuition tells me that modern medicine has more trouble being "effective" when b5 does not equal zero. b5 represents a random effect that the same treatment can have a different effect on different patients because the patients differ in ways that the patient is aware of but the doctor cannot know.

If D1 and D2 are uncorrelated, then one can recover b1 and b3 and b4 using OLS and this will help the evidence based guys offer better advice.

Now , here is the interesting part. Think of Bones on Star Trek. Suppose with his country doctor intuition he sees a subset of the D2 vector (the unobserved attributes of the patient). He may choose to violate the "treatment manual" that Leonhardt would have used. Bones is not crazy; he has more information than the manual --- so the manual only has information in D1 (there is a 46 year old black woman with hypertension and she should be assigned treatment x).

Bones has more information D1 and part of the D2 vector about the patient. He has an ethical duty to make a "better" recommendation but will be sued for violating protocal?

So, what is interesting here is the 2 way asymmetry of information. The doctor knows more than the Manual but the doctor knows less than the patient. The doctor is forced to take a gamble and is aware that he will be sued if the bad state of the world unfolds and he makes a choice far from the Manual would have suggested he do.

When there is a distribution on b5 and if patients know their type but the doctor does not know their type, then doctors will make more mistakes in assigning "optimal" treatment. Will The doctor who Mr. Leonhardt profiles be able to solve this problem?

In my speed read of the piece, there was no mention of liability. If doctors are risk averse and fear being sued then they will follow the leader and follow the cookbook in terms of what are "best practices". This should minimize the probability that they are sued but if b5 does not equal zero then the heterogeneous population of patients actually need different treatments that are tailored to them.

So, the liability lawyer would want to observe my (D1,D2) but only sees my (D1).

the "right" treatment hinges on (D1,D2) observables and unobservables; an intuitive doctor might be able to get an imprecise handle on D2 and assign the "heckman" correct treatment while the lawyer would say; "the book says if you have D1, you get treatment X1" but this assumes an independence of D1 and D2 and in the real world this won't always be true.

The lawyers and the empiricists have to be honest about the role that unobservables play here in producing health.

Ken Caldeira's Congressional Testimony on Geoengineering

Ken Caldeira's opening remarks from his 11/5/09 testimony are reported here. Below, I provide some quotes from his remarks but first allow me to editorialize.

Wikipedia tells us that "Ken Caldeira is an atmospheric scientist who works at the Carnegie Institution for Science's Department of Global Ecology. He researches ocean acidification, climate effects of trees, intentional climate modification, and interactions in the global carbon/climate system."

Now, I still wonder whether he is an expert on geoengineering. Is this a field in which you can get a Ph.D? I know how you become labor economist. In an analogous fashion, how do you train to be a geoengineer?

I looked up Dr. Caldeira's technical publications on geoengineering. To be honest, according to google scholar, he has only published two papers on the subject and their respective citation counts are real low.

Here is one of the papers . According to Google Scholar it has been
cited 52 times since 2000. That is not very impressive and his other paper is here:

Transient climate–carbon simulations of planetary geoengineering
HD Matthews, K Caldeira - Proceedings of the National Academy of Sciences, 2007 - National Acad Sciences
Cited by 39 - Related articles - BL Direct - All 15 versions

So, I find it interesting that a serious scientist with less than 100 citations on geoengineering is "one of the world's leading experts" on the subject. This doesn't appear to be a real research field right now. I skimmed the first paper listed about and he modifies a computer simulation to predict what role geoengineering could play. That is okay but doesn't sound that serious.

With these caveats, he does say some quite smart things below; These are quotes from his 11/5/09 testimony to congress.


Quote #1:
"Climate change poses a real risk to Americans. The surest way to reduce this risk is to reduce emissions of greenhouse gases."

Quote #2: "However, other options may also be available which could in some circumstances cost‐effectively
contribute to risk reduction. These options can be divided into two categories with very different characteristics: Solar Radiation Management (SRM) approaches seek to reduce the amount of climate change by reflecting some of the sun’s warming rays back to space."

Quote #3: " Carbon Dioxide Removal (CDR) approaches seek to reduce the amount of climate change and ocean acidification by removing the greenhouse gas carbon dioxide from the atmosphere.

"While there is some expectation that Solar Radiation Management approaches can diminish most of the climate change in most of the world most of the time, it is possible that there could be bad effects that would render this offsetting undesirable. These bad effects could be environmental, or they could be
socio‐political. With regard to environmental negatives, it is possible there could be adverse shifts in rainfall, or damage to the ozone layer, or unintended impacts on natural ecosystems. These unintended consequences should be a major focus of a Solar Radiation Management research program. Furthermore, we must bear in mind that Solar Radiation Management proposals do not solve problems associated with ocean
acidification (but they do not significantly affect ocean acidification)."


KEY JUSTIFICATION QUOTE FOR GEOENGINEERING RESEARCH

"What if we were to find out that parts of Greenland were sliding into the sea, and that sea‐level might
rise 10 feet by mid‐century? (Such rapid sea level rises apparently happened in the geologic past, even
without the kind of rapid shock we are now applying to our climate system.) What if rainfall patterns
shifted in a way that caused massive famines? What if our agricultural heartland turned into a perpetual
dustbowl? And what if research told us that an appropriate placement of tiny particles in the
stratosphere could reverse all or some of these effects?
Ken Caldeira Testimony before the House 5 Nov 2009
kcaldeira@carnegie.stanford.edu Comm. on Science & Technology page 8
That was a lot of “what if’s”, but nevertheless there is potential that direct intervention in the climate
system could someday save lives and reduce human suffering. Moreover, direct intervention in the
climate system might someday save lives and reduce suffering of American citizens. I do not know what
the probabilities of such outcomes are, but I believe that if we take the risks associated with climate
change seriously, we must investigate our options carefully and without prejudice.
We do not want our seat belts to be tested for the first time when we are in an automobile accident. If
the seat belts are not going to work, it would be good to know that now. If there is something really
wrong with thoughtfully intervening in the climate system, we should try to find that out now, so that if
a crisis occurs, policy makers are not put in the decision of having to decide whether to let people die or
try to save their lives by deploying, at full scale, an untested system.
We need the research now to establish whether such approaches can do more good than harm."

It is hard to disagree with this. The policy issue here is marginal analysis. If we have a fixed budget for addressing climate change; do we focus on mitigation measures, adaptation measures or geoengineering measures?

Is Brooklyn a "Green City"? New Cement Production in Red Hook

Cement Factories are part of the "old economy". Do they have any place in a "consumer city" such as Brooklyn?

"But Red Hook, a western Brooklyn peninsula known for its rough-hewn docks and their denizens, has been cultivating a gentler, more genteel image for years now, becoming a magnet for artists looking for cheap space, homesteaders longing for views of the Statue of Liberty and foodies craving organic vegetables grown in the neighborhood.

So the plant, which is nearing completion, has spurred protests in this split-personality neighborhood. The clouds of dust stirred up could be quite literal: What mostly worries opponents are the airborne particles they say the plant will scatter to the yellow-and-blue Ikea next door, heavily used baseball fields across the street, and a 2.75-acre farm nearby on a former playground."

Cement is heavy to ship so you want production close to final place of use. Cement is needed in Brooklyn and in NYC, so where should the Cement be produced? The problem is that producing cement is a dirty production process. If you are Coase, where do you site the noxious facility? Would you put it in the middle of Central Park?

A point in my research has been that the reduction in transportation costs of shipping final goods has allowed dirty production to move away from big cities and this separation of production and consumption has reduced the urban population's exposure to manufacturing production. Globalization critics would say; "Matt keep going"; The nasty production has moved to China not merely to Alabama. That is going too far.

Keep in mind that dirty factories do not walk away from old cities. They shut and a new lower emitting factory is built somewhere else. The nation's regulatory rules will determine how clean the new factory will be but new capital is cleaner than old pre-1970s vintage capital. For recent work on globalization's consequences for the pollution content of production see this paper and this paper by Arik Levinson.

But, in the case of cement and other costly to ship (per $ of value of output) products, they will continue to be produced near final consumers --- in order to minimize transportation costs --- so , as Manhattan's boroughs become yuppie --- where should the nasty production activity take place? Where is the path of least resistance? Does this community "like" pollution? No, they are probably a renter; poor; low voice community who faces transaction costs to organize to oppose the entry of such a production facility. NIMBY politics causes this search . The issue is a property rights issue. Do communities have the right to not face such noxious facilities? Does the cement plant need to make a transfer to the community it enters and how large should that transfer be to compensate the "victims" for the quality of life damage its production causes.

One final point -- an economist would say that there is no negative externality here in the following case; if the land where the Cement Plant is about to open has been zoned "nasty industrial" then property next to it should sell for a price discount to reflect the pollution damage that is likely to be caused by their neighbor. If I can buy a cheap house because the house is next to a dump, I can't complain that I live next to a dump. I picked it and I was compensated for living there. So, my question here is "what is the new news?" Is the cement factory nastier than was expected? In this case, the neighbors have not been fully compensated for the damage they are now feeling. Alternatively, the neighbors want a free lunch of low land purchase price and no pollution.

The Good Life: A Harvard Case Study

Tournaments feature a skewed payoff distribution. Tiger Woods wins much more cash than the runner up. This creates strong incentives to devote effort. Academic economics can be viewed as such a tournament. Our superstars do the profession a service by opening up their homes and showing what a good life they really have. This signals to the rest of us (especially young people) what the best of the next generation may be able to achieve with some hard work and perhaps a little luck.

Cost Overuns and the Denver Rail System

I am not surprised that the Denver rail's FasTracks is vastly over budget. I am often "railed" against the rising total cost of such public works projects. Voters do have a right to know the final cost of a project before they vote on it. Unfortunately, this type of thing does not help in generating "trust in government". In the middle of this NY Times article , there is a quote from Arthur Nelson who optimistically says that all else equal that if a home is closer to rail transit that its probability of going into foreclosure is lower. So, he is positing that new urbanist homes are less risky investments. Is this true?

Arthur, have you read my 2007 Real Estate Economics paper on community gentrification near new rail transit lines? The largest home price gains are near new "Walk and Ride" stations. Think of Davis Square on the Boston Red Line.

My question for Dr. Nelson is what is his control group? To tease out a causal effect of proximity , he needs to answer what would these homes' foreclosure rates have been if they had not been close to rail transit. Is he simply looking at homes equi-distant to the city center that are not near rail transit (so looking at a common radius around a city's center)?

When we make causal claims to the media, I'd ask us to be clear about what is the comparison group. How do we know that what we are telling the reporters is "true" versus is wishful thinking?

Nelson has made an interesting claim that merits further research.

Will LeBron James Move to the Knicks? A Test of Whether the Internet Substitutes for Big Cities

An open question in urban economics is whether information technology is a complement or substitute for living in a big city? Does the Internet and the fax machine increase or decrease the demand for living in New York City or Los Angeles? In a well known paper, Glaeser and Gaspar 1998 argue that it increases the demand for big city living.

So if Lebron James is a $ maximizer, will he move to New York City?

The NY Times says no. A famous agent says that 20 years ago it would have been a wise move to go from small Cleveland to big NYC. But now with the Internet 24 hour news feeds his fame will not be magnified in NYC. In fact, he will just be one of 100s of celebrities. If he has relative preferences and prefers to be the King of a Small Pond then Cleveland may offer him the same nominal salary, lower home prices and more fame!

The King should not forget Moretti's paper on real wage inequality that the high home prices in NYC will eat into his real pay. Cleveland's very low home prices offer some real consumption benefits.

A final point: the King's income = price per unit of skill*quantity of skill.

Unlike a software writer, a NBA player's skill is not augmented by being in a big city. There are no learning effects a la Jane Jacobs or Marshall. This article's point is that the Internet is creating a law of one price per unit of skill. In the past before the Internet, Skilled players earned more from Advertising and fame when the played in major cities because of the PR and fame amplication effect. But, the Internet can generate equal buzz regardless of where you play.

The King should talk to us urban economists! LeBron; call me.

The big question here is whether the King is a special case or whether this example foreshadows that the Big City premium will soon fade because of the Internet. In this case, the only reason to pay the big city real estate price premium is "Consumer City".

Take Your Son to Work Day

My wife has a full time job. Apparently, we have a son. This sometimes has consequences for my routine.



Last year, I was invited to speak to a crowd of roughly 250 people at the UCLA Opportunity Green Conference. Grist's Russ Walker was kind enough to share the stage with my son and I. My son looks a little stiff here but he has strong views on the environment and wants you to recycle more.

I have not been invited back to this year's Opportunity Green 2009 Conference . So, some combinaation of my son and I must have stunk.

Some Thoughts on the Superfreakonomics Carbon Controversy

I just took the superfreakonomics global warming quiz and as usual scored a B+. Steve says that carbon mitigation will cost us a $1 trillion dollars a year. He is well aware that there is a confidence interval around that number but let's think about that number.

There are 7 billion people on the planet. I believe in equal pay for equal work so let's share that equally so 1000/7 = $142 per person per year. President Obama has reminded us that a postage stamp costs .42 dollars. Suppose each person in the world gave up one of these precious stamps each day = 365*.42 = $153. So , a few lucky people could even keep their stamp rather than giving it to Al Gore.

Point #1: My first point is a shout out to my liberal/green friends --- while the aggregate price tag looks nasty --- this is a big planet --- when we place costs in per-capita terms --- this doesn't look serious relative to bigger bills like paying for health care reform.

Point #2: Where did this $1 trillion dollar number come from? Does Steve believe in Computable General Equilibrium models where not a single parameter in the model is estimated using micro data and modern applied econometrics techniques? I doubt it.

We must be honest about what we know and what we don't know in the case of mitigating greenhouse gas emissions. As folks know, I have talked about this knowledge gap before in the context of figuring out the true costs of California's AB 32 regulation.

The CBO has come out with its report on its predictions concerning the costs of the June 2009 ACES Waxman/Markey Bill. They did not look large to me but I also do not fully understand how they did their analysis.

Economists are not doing a great job here providing a sophisticated analysis or explanation of how in the heck we generate these numbers that the naive public takes as "the truth".


Point #3: Geoengineering options should certainly be explored but the likely lulling effect it will cause ---that voters will rebel against carbon mitigation because they will anticipate that ex-post geo-engineering will save us --- should not be discounted.

Ex-Post insurance does create ex-ante risk taking --- every Chicago economist will agree on this point!

I have now read Ken Caldeira's 2007 PNAS paper and he recognizes the challenge of the "lull". Here is a direct quote from the Master.

"It is equally critical that
efforts to mitigate greenhouse gas emissions do not become
hampered or slowed by the specter of false certainty in our ability
to geoengineer the climate change problem away."

http://dge.stanford.edu/labs/caldeiralab/Caldeira_research/pdf/Matthews_Caldeira_PNAS2007smaller.pdf

How Do You Generate Demand for a Home Priced at Over $10 Million?

Real estate agents have to earn their 3%. They have to live with Levitt's and Syverson's view of them and in the midst of this ongoing economic trouble, it takes some work to sell a $10+ million dollar house. To generate some buzz about these shacks, the real estate agents are opening up the homes to the proletariat and letting people use the pool, the bathrooms and look for nearby celebrities. Anything to generate a potential offer. In the good old days, you had to prove that you had the $ in the bank to actually purchase the house before they'd let you in to run around it. Whose nearby home would I like to see? Perhaps Arnold S's Brentwood place, Dusten Hoffman's Santa Monica shack would be of interest. I'd like to see what books Brittney Spears has in her library. There would be more trust in our society if there was more contact between the rich and people like me. This real estate broker's attempt could offer some social benefits in the long run!

The City/Suburban Carbon Footprint Differential and the Implicit Subsidies in the Tax Code: How Do OP-ED Readers Respond to Economic Logic?

Ed Glaeser makes some excellent points about the suburban subsidy implicit in our tax code: "Yet the tax code encourages Americans to live in big, energy-guzzling homes, instead of thrifty apartments, and Congress seems intent on further unbalancing the federal budget to egg on home buyers."

As many of you know, I wrote one of the first empirical papers on the city/suburbs energy consumption differential back in 2000! Here is a free copy. I did not explore how government incentives affect the city/suburb locational choice.

How have the readers of his Boston Globe Op-Ed received this wisdom? Let's hear from the comment gallery. The comments are very funny. You have to admit that there is a certain wisdom (or at least humor) in crowds. Take the best hate from 2 billion connected Internet users and you will have some great stuff.


shumirules wrote:
If you live in a home smaller then Al Gore then dont worry about your carbon frontprint.
11/4/2009 10:14 PM EST Recommend (10) Report abuse Permalink

JeffreyHooooop wrote:
Yes, carbon emissions could be reduced by reducing home size. But, they could also be reduced by castrating all breeding aged males, or legislating a legal limit on the number of times one can visit their grandmother in a year. All carbon reductions come at some cost, and while you may be happy living in a little apartment in Boston, there are parts of this country where apartments don't even exist.

The tax credit is available for the purchase of an apartment (or house boat...). The fact of the matter is, that when most people are able to purchase a place to live in, they want a place that is pleasant to live in, not someplace like the apartment they lived in in their poverty.

In the end, any consumption inducing policy has a negative carbon footprint, but, there are other things that matter other than carbon emissions.
11/4/2009 10:51 PM EST Recommend (8) Report abuse Permalink

yokosuka wrote:
Can't these green types just leave us alone?
11/5/2009 3:58 AM EST Recommend (7) Report abuse Permalink

biotechlawnerd wrote:
The global warming hoax is the greatest boon for politicians. It gives them the ability to severely regulate or tax any and every aspect of our existence.
No one can drive.
No one can eat meat.
No one can eat produce that wasn't locally grown.
No one can live in a single family home.
No one can have more than one child.

11/5/2009 5:27 AM EST Recommend (6) Report abuse Permalink

MiketheForester wrote:
For those "warmers" who worry about carbon footprints, what about the huge carbon footprint caused by the tsunami of illegal aliens? In the 1980's Reagan and Kennedy gave amnesty to 3 million lawbreakers and promised this would solve the problem. But now we have 12-15 million illegals that have greatly depressed wages, stolen jobs, and caused huge amounts of pollution. If the Democrats give amnesty to these lawbreakers, it really means 50 million more as they bring in their next of kin, etc. Then this will spur another tidal wave of illegal aliens. If nothing is done, US population will grow to at least 1 billion by the year 2100.

So next time one of these "warmers" start crying about CO2 ask them their position on illegal aliens. More than likely they will say "well I don't want to be xenophobic".
I'll call them for what they really are: hypocrites!
11/5/2009 5:39 AM EST Recommend (4) Report abuse Permalink

billyb2 wrote:
Since when did electrical appliances and lights start emitting greenhouse gases? The only place where the use of electricity would have any affect on the enviroment is at the source of production i.e. your local Edison plant. Even there with all the enviromental safeguards already in place in place there is negligible impact. This is just more hokum on top of hokum.
11/5/2009 6:00 AM EST Recommend (5) Report abuse Permalink

WJ wrote:
Mr. Glasser, where is your appartment located? Oh, you live in a house!
11/5/2009 6:20 AM EST Recommend (4) Report abuse Permalink

RJG33 wrote:
Mr. Glaeser: how large is YOUR abode? It would have been instructive if you showed all of us planet-wrecker who seek "to live in big, energy-guzzling homes, instead of thrifty apartments"... that you wlak the walk, not jsut tlak the talk. Methinks, much like those who bleat for increased state spending and taxes but refuse to say if they pay @ the optional higher rate, you are great at telling others what they should do but do not exercise the courage of your- stated- convictions. Do YOU live in a tiny, tidy studio apartment? Put up or shut, Ed- talk is cheap!

Global warming- er, um, excuse me, "climate change"- hysteria is SO 2004! I second shumirules assertion:
"If you live in a home smaller then Al Gore then dont worry about your carbon frontprint."
11/5/2009 6:42 AM EST Recommend (8) Report abuse Permalink

sweetlandoliberty wrote:
Well, finally an article showing the ridiculous hysteria about "global warming".

First time home buyers need that tax break in this lousy economy, and the "green loons" want to take that away from them?

We all seemed to have gone to sleep last November, and woke up to the realization that, indeed, the loons had won. Thank goodness most Americans have finally awakened from that drunken stooper, except the "greenies".
11/5/2009 6:53 AM EST Recommend (5) Report abuse Permalink

sizmo55 wrote:
The writer lives in the city, and believes in the superiority of city life, of higher population density. I don't buy it. I wouldn't live in a city if you paid me. Cites are meant to be visited and worked in, not lived in.

He wants to reduce the mortgage interest deduction for EVERYONE, whether they take advantage of the tax credit or not. Either he lives in an apartment or, being a Harvard professor, he can afford the reduction. I don't like deductions either, but get rid of them ALL and go to a flat rate. How's that Mr.Glaeser?
11/5/2009 7:40 AM EST Recommend (4) Report abuse Permalink

deltachild wrote:
Another Harvard loonie wanting to create the perfect life for everyone. Mr. Glasser, how about trying to sell your crap to Hamas, Hezbollah, Iran, Syria etc and I promise that when they come on-board I'll join. Wow
11/5/2009 8:42 AM EST Recommend (2) Report abuse Permalink

Douglas4517 wrote:
"Edward L. Glaeser, a professor of economics at Harvard University, is director of the Rappaport Institute for Greater Boston"

Once again, the elitists wish to impose upon the masses, the One True Way. Not a way that the Ruling Class will have to live, mind you, just the way the peasantry should accept as their ordained lot in life.

I am sick and tired of these idiots.

11/5/2009 8:42 AM EST Recommend (1) Report abuse Permalink

ludviko wrote:
Ah, the fanatics of the secular religion strike again. Agree with the first poster - as long as your home is smaller than Gore's, you're OK.
11/5/2009 8:54 AM EST Recommend Report abuse Permalink

Celticpole wrote:
According to the Residential Energy Consumption Survey, per person energy use in owner-occupied housing is 39 percent higher than in rental units. Energy use, per household member, is 49 percent higher in single-family detached houses than in apartments in buildings with more than five units.
Well that sounds pretty accurate. Once the absentee landlord doesn't repair the heating system; the city suts off the water for non-payment; and residents are reduced to by their wits the carbon footprint is indeed reduced so that some of us can use more in a cap and trade kind of way. If the residents die from exposure that's even better as they will be subtracting themselves from the causal side of the equation.
Come to NYC, Newark NJ, KCMO, or Denver to see life's laboratory in action.
Carpe Diem and two sticks.
11/5/2009 8:59 AM EST Recommend Report abuse Permalink

realitybiter wrote:
I appreciate that the fantastically more intelligent academics have an enormous mental advantage over the rest of us.......but, puleeeeeez.

I will give a rip about my carbon footprint when private jets are made illegal. I will give a rip about my carbon footprint when academics stop traveling around the world, spewing 20 lbs of carbon per gallon burned of jet fuel, all in the name of attending this conference or that....it is a long list.....you get the idea. "Some pigs are more equal than others"

I know my graduate degree in engineering is far less worthy than a phd in sociology or some other social "science" study, but my little pea brain says you folks are unwilling to eat your own cooking. Until you are, please reduce your carbon footprint by not blowing so much hot gas, through hare-brained notions like these.

My sister is an academic, tenured professor, dept chair...married no kids. I have done the math. She and her husband burn up more jet fuel and create a carbon footprint 2 times larger than me, my wife, my 3 kids, two dogs, three cars( we don't drive much...20k mi total), and mini mcmansion. All based on the fact that we live in a suburb, close to our school, house ran office, close to stores...and rarely fly. Them planes create a massive amount of carbon when you are traveling 100,000 miles a year... Do the math.

And just what do academics produce? Couldn't it be argued that their mere existence should be questioned since they create carbon and produce next to nothing? Just saying...you step on that slope and gets slippery in a hurry.
11/5/2009 9:03 AM EST Recommend (2) Report abuse Permalink

Huhh wrote:
Overly simplistic. And having lived in city apartments and the suburbs ... well I'll take the place where I own more that cubic air space and I can actually fit my family.
11/5/2009 9:37 AM EST Recommend Report abuse Permalink

PSRyan wrote:
Ahhhh, the beautiful concrete sterilized utopia of Cold War era Moscow apartment buildings. Squat, square concrete cubicles, about 150 sq ft of living space, low carbon footprint. How could I have been so foolish to want more?

Can I get the bread lines too?

MiketheForester brushes a key issue, but doesn't quite nail it in that the influx of immigration has moved these people from an agrarian, and therefore much lower carbon footprint lifestyle, to a more modern suburban lifestyle. Instead of living in a small home, likely built out of materials available nearby, built practically on top of the fields upon which they work; they now live in a city, often driving older, less efficient cars (both in emissions and gas mileage) longer distances to work in more industrialized fields using higher amounts of commercial fertilizers.

So how is it then that both policies can be supported if by supporting unlimited immigration we actually place more harm upon the environment? Shouldn't the policies be mutually exclusive?

I've said it before, and I'll say it again. All the greenies want is a FULL return to an all agrarian lifestyle for everyone (well, except themselves). Being flippant I bet zombies are a greenies best friend as they consume the most evil being on the planet - humans.

I fully support recycling, wind, solar, and nuclear power. Interestingly, all of these things are actually opposed by, you guessed it, environmentalists. They infringe on natural beauty, threaten habitats of the desert toad, or migratory birds and therefore must be stopped (according to them).

So put on your reedskin loincloth, get your hoe (no oxen - that's cruel) and start farming (no hunting - just farming- you're not allowed meat either) - anything else doesn't meet the environmentalist agenda.
11/5/2009 9:56 AM EST Recommend (1) Report abuse Permalink

Hammer02 wrote:
My goodness ... the globe throwing stones at the moonbats in their big houses out in the burbs ... i am shocked?
11/5/2009 10:07 AM EST Recommend Report abuse Permalink

RJG33 wrote:
Worth noting:
A Google search did turn up an Edward L. Glaeser living on Ripley Lane in... Weston. Wonder if that is a tiny, cramped studio apartment?

An Arbitrage Opportunity?

If you can find people who believe that the world will end in 2012 , then in late 2011 they should be willing to trade you all of their worldly stuff for a small December 2011 payment. It will be interesting to see if eBay's auction volume activity significantly increases then as this subset liquidates their inventories. I vaguely recall from graduate school that disagreements over future probabilities over states of the world provide a justification for homogenous agents to trade with each other!

Are You Funnier than the Late Night Comics? The Case of Climate Change's Impacts

Last weekend, I tried (for the 3rd time) to submit a caption for the New Yorker's Cartoon . My quote was; "I am happy to inform you that your head will not roll".



Get it? During this time of recession and job loss -- this was my attempt at "job preservation" humor. Well, I guess I am not funny --- so recognizing this fact -- I turn to you dear reader. I am looking for better jokes about climate change that this set.

"Yesterday, a group of scientists warned that because of global warming, sea levels will rise so much that parts of New Jersey will be under water. The bad news? Parts of New Jersey won't be under water." --Conan O'Brien

"Scientists say because of global warming they expect the world's oceans to rise four and a half feet. The scientists say this can mean only one thing: Gary Coleman is going to drown." --Conan O'Brien

"Experts say this global warming is serious, and they are predicting now that by the year 2050, we will be out of party ice." --David Letterman

If you are as funny as Larry Summers (and I believe in the 1 factor model of ability (I am kidding)), then please email me your best stuff. I will cite your joke in my new book.

Carbon Pricing Will Help Warren Buffett Get Rich From Investing in Railroads

Warren Buffett's Berkshire Hathaway Inc (BRKa.N) (BRKb.N) will pay $26 billion to buy out railroad Burlington Northern Santa Fe Corp (BNI.N) in what the billionaire investor called a bet on the U.S. economy. Did you know that freight trains have a fuel economy of 400 MPG? That's better than a freight truck. You don't have to be Jimmy Hoffa to anticipate that Mr. Buffett's bet on shipping logistics will be more likely to payoff in a carbon constrained world where carbon is priced. Here is the story. Now for cities such as Detroit and Cleveland that have ample railroad network capability --- will there be beneficial spillover effects? Are you getting ready to buy Detroit Real estate to get rich along with Warren Buffett? I talk about these points much more in Climatopolis just wait until it appears as a Basic Books publication some time next year.

UPDATE: Here is a source for the fuel economy of freight trains. I am impressed with the stated fuel economy of trucks but it sounds too high to me.

I must admit that Andrew Leonard's Salon post is very funny. This is why Warren B is a Billionare. He is hedged!He doesn't flip a 2 sided coin. He flips a 1 sided coin! He will make money using his new railroad shipping coal while coal is still King and if and when there is carbon pricing he will redeploy his railroad to ship goods that used to be shipped by planes and trucks.

My New Favorite Journal: Reviews in History

Forget the AER, JPE or QJE, if you are looking to read a journal filled with action packed punches and kicks take a look at the Review of History. Now that I've published in it, I wanted to see what other people publish there and it is wild stuff. I never knew that historians talk nasty to each other.

Want proof? Start Here and then click here . If you think that is funny, then try out this . If you need more, try out this review of the review.

another

another

Geoengineering's Debutante Ball

I hope the smart blogger start talking about the "Lulling hypothesis". Child proof safety caps on medicine lull people into not hiding medicine from kids and kids break into the pills. Diabetic medicines for fighting high blood sugar lull diabetics into thinking they can eat lots of sweets. Will geoengineering have the same effect? Do expectations of future technology fixes diminish our desire to "go low carbon" today? I think the answer is yes and this is why geoengineering is running into the hate.

If people could promise to not be lulled by the promise of the geo-engineers would Al Gore give it his blessing?

Prof Ken Caldeira has become the "guru" of geoengineering. I have now read Ken Caldeira's 2007 PNAS paper and he recognizes the challenge of the "lull". Here is a direct quote from the Master.

"It is equally critical that efforts to mitigate greenhouse gas emissions do not become hampered or slowed by the specter of false certainty in our ability
to geoengineer the climate change problem away."

http://dge.stanford.edu/labs/caldeiralab/Caldeira_research/pdf/Matthews_Caldeira_PNAS2007smaller.pdf



Let's here from my new friend Henry.


Dear Professor Kahn,


On November 5, the House Committee on Science and Technology is scheduled to hold the first congressional hearing devoted to geoengineering, a strategy to change features of the Earth’s environment to offset the warming effects of greenhouse gases. The AEI Geoengineering Project has been active for over a year, and Lee Lane, codirector of the project with Samuel Thernstrom, will be one of the witnesses testifying on Capitol Hill. Lane recently coauthored an extensive analysis of geoengineering options for the Copenhagen Consensus that has been cited in the New York Times, in the Financial Times, and on Time.com. A growing number of climate scientists and economists are supporting research into geoengineering, and the idea is gaining popular notice as well. In their new book SuperFreakonomics, University of Chicago economist Steven Levitt and his coauthor Stephen Dubner discuss geoengineering’s potential.



“An Analysis of Climate Engineering as a Response to Climate Change,” by Lee Lane and J. Eric Bickel

Copenhagen Consensus Center Working Paper

Full Text: www.aei.org/article/100863

http://www.aei.org/docLib/AP-Climate-Engineering-Bickel-Lane-v.3.0.pdf


I JUST DOWNLOADED the BICKEL PAPER BUT HAVE NOT READ IT.

“Could We Engineer a Cooler Planet?” by Samuel Thernstrom

Article in the Washington Post

Full Text: www.aei.org/article/100625

"A geoengineering system would of course be controversial, but the policy question we face today is simple: Should the federal government conduct research on geoengineering? The scientific and engineering challenges involved in geoengineering the global climate for decades, and the potential consequences of success or failure, are extraordinary; all the more reason to begin a research program commensurate with the scale and significance of the task."

I CERTAINLY SUPPORT DOING THIS RESEARCH AND HAD NAIVELY ASSUMED THAT THE NSF WAS AWARDING GRANTS FOR THIS.





“Governing Geoengineering”

AEI event with Lee Lane, Scott Barrett, Bryan D. Caplan, and Thomas C. Schelling

More Information: www.aei.org/event/100074



Best,



Henry



Henry Olsen

Vice President and Director, National Research Initiative

American Enterprise Institute

1150 17th St., N.W.

Washington, D.C. 20036

Another New York City to Los Angeles Convert

Julian Casablancas, the lead singer of the Strokes, and I do have something in common. Twenty years ago, I had hair like him but not any more. With the rock music scene in Los Angeles, he moved from NYC to LA for a while and really likes it .

"He likes the sunshine. He is smitten. “It’s fun; I won’t lie,” he said on a recent visit back east. “L.A.’s kind of, like, seven really cool towns. It’s so laid-back. If you go in the right spot, you can walk around, and you don’t need a car. It’s a lot easier to eat healthy. And the weather!”

The dude may not be a poet but he does speak the truth. How many people in LA are NYC exports? How many people in NYC are LA exports?

UPDATE: Here is an interesting article highlighting the "Lulling effect". Modern pilots now feel too safe as they fly and this is why they are going to their facebook page and emailing their friends. As Jim Morrison of the Doors taught us, "keep your eyes on the road and your hands upon the wheel, the future's uncertain and the end is always near."

Lulling is a powerful idea that pops up over and over in many contexts.

A Case Study for Elinor Ostrom's 2009 Nobel Speech?

Here is a French tragedy of the commons. In a happy utopia, people could share the bicycles through renting them, using them and returning them and this "green transit mode" would reduce vehicle use. But, this has not played out. 80% of the bikes have been stolen or injured.

"Residents here can rent a sturdy bicycle from hundreds of public stations and pedal to their destinations, an inexpensive, healthy and low-carbon alternative to hopping in a car or bus.

But this latest French utopia has met a prosaic reality: Many of the specially designed bikes, which cost $3,500 each, are showing up on black markets in Eastern Europe and northern Africa. Many others are being spirited away for urban joy rides, then ditched by roadsides, their wheels bent and tires stripped."

One solution would be for renters to post a larger deposit which would be returned to them when they return the bike back in mint condition. But, this would price out the poor and lower middle class.

Can social sanction and repeated interaction substitute for rule of law in this case?

Stanford University's Carbon Footprint: Is Golf Causing Climate Change?

Tiger Woods needs to use some of his billions offsetting his carbon emissions. Trained for a little while at Stanford, he must have enjoyed playing on this miniature golf course. I know that Stanford has invested a fair bit of money to be a green campus but suppose all of the golf course were transformed into faculty housing? The carbon footprint from driving to Stanford would vanish and the water now being thrown away on all of that green grass would not be needed. Given that the land would be expensive --- so close to campus --- senior faculty would live in smaller homes than in they lived in sprawl housing nearby , this would reduce their residential electricity consumption. With access to the University pool, they wouldn't need their own pool (which raises electricity consumption by 30% --- see Costa and Kahn (2010)). I'm a fan of density. Are you?

The Future of Research Economics

Tyler Cowen notes some relevant trends here . I talk to people and they say that applied micro has suffered over the last 15 years as top Americans have gone to Wall Street rather than the professor route. When I was a graduate student 20 years ago, my entering class was 50% American. Now I believe that at Chicago it is 15%. So what? I'm go back and forth on the causes and consequences of the globalization of research economics. I look at the MIT faculty. It is a highly international group and they are certainly churning out great research except when the World Cup is played and then the place turns into the United Nations.

A deeper question might ask; "Why are Americans not entering academic economics?" Is it simply the "pull" of Wall Street big money? Unfortunately, I am slightly worried that economics has hit diminishing returns. There is a huge intellectual payoff from starting to know basic economics and statistics but are there increasing returns here?

I think of Watson and Crick and the Double Helix with many research teams all simultaneously trying to crack the same research question. They were working in a "stationary" environment. I don't believe that DNA changes over time.

Economics is harder. The agents we are studying form expectations of the future, are highly heterogeneous, their choices are often strategic and some claim that they even make mistakes. These agents have private information concerning their past history and this past set of choices and outcomes affects their decisions today (non-separable) On top of this, the economies we study are not stationary as they are bombarded with shocks (climate change, financial news, new products) that change the equilibrium we observe. If we could study a stationary process where people play the same games and situations over and over, I'm highly optimistic that we could use revealed preference methods to tease out interesting facts about people, firms and governments and then use our "structural findings" to inform policy debates.

I do have the sense that modern applied micro is too spread out. Our collective research covers a vast number of topics. I would find it satisfying to be in a field where there is one core question and everyone is trying to make progress on that question. In contrast, we have sprawled. Perhaps I know too little about other fields and they are equally sprawled.

Well, I just received a revise and resubmit email so please let me end this blog
to get back to the research frontier. Lucas please call me!

UPDATE: I see that people are reading this blog entry so I want to offer a quick
follow up.

I am proud to be a Ph.D. applied economist. If I was 22 again, I think I would make the same career choice. This is certainly a very good life. But in 2009, are the next 30 years brighter for academic economics or academic biology meets computer science or neuroscience? If in the year 2039, economics is in the midst of a "golden age" --- this would be a very happy surprise to me when I am a 73 year old man.

I want to be wrong here because it would be quite exciting to be part of a field whose cumulative insights are accelerating. What can economics do to maximize the likelihood that this remains an exciting time for our field?

A couple of "micro" ideas

1. Google could create a centralized data clearinghouse so that all data sets would be archived there after publication. No more ISSR. Journals such as the AER that require such archiving could forward on the data sets to Google.

2. The National Academy of Sciences could strongly lobby the government of the U.S and others around the world to reconsider what types of data are collected and to reconfigure panel data sets.

3. The U.S tax authorities should offer special tax deals for data companies to share proprietary data with academic nerds. I pay a lot of money for micro data sets from companies that sell real estate data or vehicle registration data. There is no reason for why I need to face such monopoly pricing when the true marginal cost of data delivery equals zero. This is slowing down science.

#1- #3 would improve data quality and guarantee replicability. It would lower the barrier to entry -- we know that the number of papers written would rise but would average quality rise? Given that we only care about the max of the set --- so what? but someone would have to review all of these papers.

I just stumbled across this recent speech by Alan Krueger. He appears to agree with me.

I am not smart enough to answer the riddle of the future of macro. We started with the 1 sector growth model with representative agents and common production technology. We now agree with the 2000 Nobel Laureate concerning the fundamental role that heterogeneity plays along many many dimensions in our modern economy. Once we allow the "heterogeneity genie" out of the bottle, how do we generalize from the field experiments we run? How do we do empirical work when we are accumulating high numbers of unobserved state variables that the agents are aware of and responding to but that the econometrician does not observe?

What are Economists Good For?

Well, we know we can't screw in a lightbulb but that can be outsourced. Auction theorists know that they have made a difference in the real world. Want proof? Click here . Preston McAfee serves up a very interesting recent intellectual history.

What else are we good for?

On improving the design of health care policy, here is an example from MIT's jon gruber.

On designing well functioning carbon mitigation legislation, I can point you to Dr. Stavins' input .

We are trying to be as socially useful as dentists. But the patient takes the advice that the dentist offers. There is no strategic game played between the patient and the dentist. The dentist leads (she looks in your mouth) and you do what she tells you to do. I am going to dental school.

My First History Publication

Here is proof that I can publish in a history journal. The Costa/Kahn book was reviewed in a history journal and we were invited to reply. I wish that the Journal of Economic Literature would allow me to respond to Ed Mills' review of my Green Cities book.


Books: Awaiting the Heavenly Country: The Civil War and America's Culture of Death
Mark S. Schantz
Ithaca NY: Cornell University Press, 2008
ISBN-13: 978-0801437618 ; 245 pp.; £20.95.00


Heroes and Cowards: The Social Face of War
Dora L. Costa and Matthew E. Kahn
Princeton, NJ: Princeton University Press, 2008
ISBN-13: 978-0691137049 ; 336 pp.; £19.95

Reviewer: Brian Holden Reid
King's College London

Citation: Brian Holden Reid review of Awaiting the Heavenly Country: The Civil War and America's Culture of Death, by Mark S. Schantz and Heroes and Cowards: The Social Face of War by Dora L. Costa and Matthew E. Kahn (review no. 811)
URL: http://www.history.ac.uk/reviews/paper/reidb.html
Date accessed: Thursday, 29-Oct-2009 15:56:16 GMT


Author's response (Dora L. Costa and Matthew E. Kahn)

We appreciate the opportunity to respond to Brian H. Reid’s thoughtful review of Heroes and Cowards: The Social Face of War. Given book review publication lags, we have eagerly awaited the first set of reviews written by historians to appear. We have wondered how a book that is set in the Civil War but is not about the Civil War would strike historians.

Our book differs from the hundreds of Civil War books published every year in two ways. One is methodological. The second is that our book has implications beyond those four years of bloody combat and its immediate aftermath. We examine four main questions that are basic to social science research. First, when are men willing to sacrifice for the common good? We answer this by looking at why men deserted during the Civil War and find that men in more homogeneous companies, companies that were more similar in occupation, ethnicity, and age, were more loyal. Our second question is what are the benefits to men of friendship and of community? Loyalty to comrades raised men’s chances of dying during the Civil War. We find that the stronger the ties between men (and ties were stronger when men had more in common – whether because they were related or because they were of the same ethnicity), the more likely men were to survive the hell holes that were Civil War POW camps. Our third question is how do communities deal with betrayal? We found that during the Civil War men who had betrayed their communities by deserting moved away, driven out by shame and ostracism. We conclude that community codes of conduct are reinforced not just by loyalty but also by punishments. Our work shows that more diverse communities are less cohesive. Their members are less willing to sacrifice and derive fewer benefits from being part of the community. Our fourth and final question is whether there are any benefits to living and working in a diverse community. When we look at the lives of black soldiers after the Civil War, the tensions between the short-run costs of diversity and its long-run benefits become apparent. Men did not like to serve with those who were different from them, so much so that they were more likely to desert, but in the long run the ex-slaves who joined the Union Army learned the most from being in units with men who were different from themselves.

Our book is about the costs and benefits of diversity in any organization, not just in Civil War companies. The same factors play out in terrorist organizations, in United States cities, on college campuses, and in towns in developing countries. Men may measure similarity in different ways across time and space. The distance between us may now be more likely to be education rather than ethnicity, but the basic lesson remains the same. A community of similar people is likely to be cohesive and its members are likely to sacrifice time, effort, and even their lives for each other. But in a diverse community members can learn from one another.

Much of history is written as if each case were unique. While each case does have unique features, we approach history as allowing us to uncover basic facts about human behaviour.

Our work is a quantitative history. Unlike many historians, we avoid using diaries and letters as our primary sources of evidence. Not only is ‘talk is cheap,’ but it is also the talk of the literate. Many black soldiers’ stories cannot be told if one does not ‘crunch the data’. Second, sophisticated men may ‘spin’ their diaries with an eye to history as they re-write events to play up bravery and downplay cowardice. We therefore focus solely on outcomes we can observe in our data. Who deserts? Who survives? Who migrates where after the war? Who deserts? Who survives? Who migrates where after the war? These are well defined, costly choices that are easily amenable to statistical analysis.

We are not arguing that statistical analyses do not come without their drawbacks. (These are not, however, the drawbacks pointed out by Brian Reid. For example, when we say that ‘A good soldier was older’ we are not drawing any inferences beyond unit loyalty. The physical demands of the job are a completely different matter.) We acknowledge that one of the limitations of our study is that we have very little to say about the importance of leadership. We do find that having one of your own officers (and most of these officers were non-commissioned officers) with you in a POW camp, improved your survival probability. We can say that for black soldiers having an abolitionist officer decreased desertion rates but that the effect was relatively small. We agree that we could have done more with the non-commissioned officers for the white troops. The empirical challenge that a researcher faces in measuring the effects of ‘good leadership’ is to identify before combat begins who are the ‘good leaders’ and who are the ‘bad leaders’.

Finally, we want to emphasize that we do not just ‘exploit the 41,000 computerized soldiers’ records in the National Archives.’ Dora Costa has spent almost 20 years working on the digitalization and analysis of these records. The Nobel Laureate, Robert Fogel, has spent more years on this project. The final product is a unique data base that provides the life histories of men before the war, during the war, and after the war. A unique feature of our study is our ability to recreate each soldier’s peer network. We can do this because of the way the sample was drawn. The Union Army was built from companies of roughly 100 men. Our sample is based on randomly sampling companies and then conducting a 100 per cent census of all men in a randomly selected company. Without jargon, this means that for any soldier in our sample we also know information about all the other soldiers in his war company. These men lived together 24 hours a day and were forced to interact with each other continuously.

Our book does not reveal the full power of the Union Army data base. The data base has been used in studies of health and of retirement. Work is underway to continue to expand the data base to examine specific subpopulations. The data base is currently available at http://www.cpe.uchicago.edu . We encourage other researchers to use this unique resource.

October 2009

New York State Confronts The Energy Suppy/Natural Capital Protection Tradeoff

People in New York City want clean water to drink and access to cheap natural gas. This article highlights the tradeoff. To protect the water supply from pollution at the drill site, the energy company has been pushed not to drill in upper New York State. Given that the company believes that a huge amount of natural gas is located there, they are frustrated. Would a Torts lawyer have come up with a contract to encourage the energy company to devote careful effort to minimize the liability concerns? Is zero drilling "optimal"?

The "big issue" here is how much risk (to the water supply in this case) are we willing to take on in return for some benefits? If the water supply can really be poisoned by the energy company's pollution, then I certainly support this decision but is that true? There is really no way to craft a moderate position here?

Of course, I want my mom (in New York City) to have clean water and there are 20 million people like her in the region. But, what is the cost of banning this drilling?

Ed Glaeser's Tribute to John Meyer

In this Economix Piece , Ed remembers a great economist. It is striking that a great man's life can be boiled down to roughly 2000 words. You live for 25,000 days (if you are lucky). At 10 days a word, this piece is a powerful reminder of John Meyer's key contributions to economics.

Today, transportation economics is a vibrant field. With the rise of GIS techniques and some efforts to model the political economy of where infrastructure is built; the causes and consequences of transportation investment is an ongoing research effort. Meyer gets a lot of the credit for this.

A "Natural Experiment" on Local Human Capital Spillovers at Columbia University?

According to this article , Columbia University plans to move some Nobel Laureate faculty from their current Medical School location to a new location. Will this raise or lower productivity of the Medical School as a whole? Presuming that the Nobel Laureates offer positive local spillover effects (is this always true?), the losers will be their current neighbors. The article quotes a colleague of theirs who implies that it would be a bad thing to move them. Now, I don't know if their destination is randomly assigned but this design bears some similarity to Josh Zivin and Pierre's work on Superstar Scientists. Now they use death as a measure of breaking the network. I guess I am assuming that migration away from the "Mother Ship" is equivalent to death.

If the productivity spillover effect is so high, why are the Deans moving the laureates? Do the Deans not know the true parameters of the model? If they are risk averse why are they rocking the ship? While I'm cracking jokes, a Dean is supposed to be a benevolent planner who internalizes externalities. If these guys can't achieve an efficient allocation of resources within the firm, then maybe Oliver Williamson needs to be called in for some Nobel to Nobel consulting.

What Do Other Academics Do All Day?

We roughly know what economists do all day (teach?, blog?) but what about everybody else? In this interview, UCLA's Richard Ambrose sketches his background and explains why he studies water systems.

Now that I know the modern research university, I still think I would have entered academic economics. A good friend once told me that I would have been a homeless person had I not become an economist. Now, that's comparative advantage!

Merely out of self interest, the other fields require that you do 1 or 2 Post-Docs. Some very talented scientists are not guaranteed academic jobs. While the Scientists are given expensive lab equipment, their salaries tend to be low. In terms of intellectual substance, it certainly would be exciting to come up with a cure for cancer or baldness but I do not have that type of mind. I know that I couldn't have cracked such problems. I do see the links between random ideas. So, I'm a permutation guy. I read a lot of stuff and then I see how stuff that looks independent and unrelated actually fits together and out comes a new paper based on this "Resses Peanut Butter Cup".

The Future of Macro?

James Hamilton has written a great pithy piece on the possible causes of the recent deep recession. As a retired macroeconomist (I dropped out in 1988), I wonder how modern macro guys will figure out how to disentangle the possible explanations that he poses. What calibration exercise will count as a "test"? How will model builders nest the various possible explanations? We seem to have more theories than data points so as "scientists" what happens next?

I do find the "fundamentals" versus "sunspots and panic" explanations to be pretty stark but how do we disentangle these? I must admit that when Hank Paulson and Ben Bernanke were talking "doom and gloom" to justify the TARP (circa November 2008?) they spooked me out. I can't say that I panicked (I didn't change my portfolio at all) but I did assume that they had better information than me about the real state of the relevant state variables. So, my point is that the game theorists must enter macro. What was Bernanke "maximizing"? What game did he think he was playing with Congress and the taxpapers? How did his announcements shift expectations?