1. Does this strike you to be distinctive research? It is pretty freaky!  UCLA is a special place with special minds working on PG-13 research questions.  I will stick to my research on climate change adaptation.  This work discussed below by Meg Sullivan is a little too much for me.


    Contact with dads drops when women ovulate


    Evidence of evolutionary protection against inbreeding in women?

    Meg Sullivan, msullivan@support.ucla.edu
               
    Through an innovative use of cell phone records, researchers at UCLA, the University of Miami and Cal State, Fullerton, have found that women appear to avoid contact with their fathers during ovulation. 

    “Women call their dads less frequently on these high-fertility days and they hang up with them sooner if their dads initiate a call,” said Martie Haselton, a UCLA associate professor of communication in whose lab the research was conducted. 

    Because they did not have access to the content of the calls, the researchers are not able to say for sure why ovulating women appear to avoid father-daughter talks. They say the behavior may be motivated by an unconscious motive to avoid male control at a time when the women are most fertile. But a more primal impulse may be at work: an evolutionary adaptation to avoid inbreeding.  

    Whatever the case, the researchers know that the findings are consistent with past research on the behavior of other animals when they are at their most fertile.  

    “Evolutionary biologists have found that females in other species avoid social interactions with male kin during periods of high fertility,” said the study’s lead author Debra Lieberman, a University of Miami assistant professor of psychology. “The behavior has long been explained as a means of avoiding inbreeding and the negative consequences associated with it. But until we conducted our study, nobody knew whether a similar pattern occurred in women.”  

    The findings appear in the latest issue of “Psychological Science,” a prominent peer-reviewed scholarly journal.

    The study builds on a mounting body of evidence of subtle and significant ways in which women’s behavior is unconsciously affected by the approach and achievement of ovulation — a physical change that in humans has no outward manifestation of its own. Research has found that women tend to dress more attractively, to alter the pitch of their voices ways that are perceived as more attractive by men, and to contemplate more frequently the possibility of straying from their mates during high as opposed to low fertility periods of their menstrual cycle. Research has also shown that women are more attracted during high-fertility periods to men whose physique and behavior are consistent with virility, especially if they’re not already mated to men with these characteristics.  

    For the latest study, the researchers examined the cell phone records of 48 women between the ages of 18 and 22 — or near the height of a woman’s reproductive years. Over the course of one cell phone billing period, the researchers noted the date and duration of calls with two different people: the subjects’ fathers and their mothers. They then identified the span of days comprising each woman’s high and low fertility days within that billing period. 

    Women were about half as likely to call their fathers during the high fertility days of their cycle as they were to call them during low fertility days. Women’s fertility had no impact, however, on the likelihood of their fathers calling them. Women also talked to their fathers for less time at high fertility, regardless of who initiated the call, talking only an average of 1.7 minutes per day at high fertility compared to 3.4 minutes per day at low fertility.     

    The researchers concede that the high-fertile women might simply be avoiding their fathers because fathers might be keeping too close an eye on potential male suitors. But their data cast some doubt on this possibility. It is more likely, they conclude, that like females in other species, women have built-in psychological mechanisms that help protect against the risk of producing less healthy children, which tends to occur when close genetic relatives mate. 

    “In humans, women are only fertile for a short window of time within their menstrual cycle,” Lieberman said. “Sexual decisions during this time are critical as they could lead to pregnancy and the long-term commitment of raising a child. For this reason, it makes sense that women would reduce their interactions with male genetic relatives, who are undesirable mates.” 

    The reluctance to engage in conversations with fathers could not be attributed to an impulse to avoid all parental control during ovulation. In fact, the researchers found that women actually increased their phone calls to their mothers during this period of their cycle, and that this pattern was strongest for women who felt emotionally closer to their moms. At high fertility, women proved to be four times as likely to call their mothers as they were to phone their fathers, a difference that did not exist during the low fertility days. In addition, women spent an average of 4.7 minutes per day on the phone with their mothers during high fertility days, compared to 4.2 minutes per day during low-fertility.

    One possible explanation is that women call their moms for relationship advice, said Elizabeth Pillsworth, who also contributed to the study. 

    “They might be using mothers as sounding boards for possible mating decisions they’re contemplating at this time of their cycle,” said Pillsworth, an assistant professor of evolutionary anthropology at California State University, Fullerton. “Moms have a lot more experience than they do. Particularly for those women who are close to their mothers, we can imagine them saying, ‘Hey Mom, I just met this cute guy, what do you think?’” 

    Either way, the findings show that women are unconsciously driven during their most fertile periods to behavior that increases the odds of reproducing as well as potentially doing so with a genetically appropriate mate, said Haselton. 

    “We think of ourselves as being emancipated from the biological forces that drive animal behavior,” she said. “But this suggests that our every day decisions are often still tied to ancient factors that for millennia have affected survival and reproduction.”   
  2. In the new Chronicle of Higher Education,  Michael Ruse takes a look at a large number of new climate books including Climatopolis.

    First he talks about everyone else's new books;


    "Secular apocalyptic thinking continues; indeed, it thrives. The cold war may be over, but the world is not right. America is caught in a seemingly endless foreign conflict; we are in an economic downturn of a kind not seen since the 1930s; and above all hangs—or perhaps more accurately, chokes—the threat of global warming. This last topic has triggered a tsunami of books, almost all of which are linked by an apocalyptic theology of foreboding and warning. The Flooded Earth: Our Future in a World Without Ice Caps; The Climate Fix: What Scientists and Politicians Won't Tell You About Global Warming; The Rising Sea; The Coming Famine: The Global Food Crisis and What We Can Do to Avoid It; Coming Climate Crisis? Consider the Past, Beware the Big Fix; Storms of My Grandchildren: The Truth About the Coming Climate Catastrophe and Our Last Chance to Save Humanity."

    "The proposed solutions aren't cause for eager anticipation either. Even if all does not collapse, get ready for some strenuously healthy living. There is a lot of bicycling in our future. And homegrown vegetables. Not much meat, I'm afraid. And you should forget about the restaurant experience; it's far too energy consuming. We will work less so as to have more time to fix food at home. How about raw spinach covered in cottage cheese and topped with applesauce? With that kind of diet, I'm not surprised about the thousands of gallons of untreated human waste. The pong inside our yurts will be overwhelming."

    Then he talks about me;

    "Amillennialists don't get much representation in the climate-change debate, although one might put Climatopolis: How Our Cities Will Thrive in the Hotter Future, by Matthew E. Kahn, into this category. While everyone else is moaning about what's going wrong, Kahn is the St. Augustine of this business. Things have gone wrong; things will go wrong. Calm down. Or maybe he's the Alfred E. Neuman of climate change: "What? Me worry?" Never fear! We will adapt! Miami may go out with the tide, but Detroit will be a lot more pleasant in the winter. I leave to the judgment of others the prospect of a future America where half the population lives in North Dakota and the other half lives on houseboats."

    If Mr. Ruse was fair --- he would have devoted 2 sentences to explain why I'm optimistic.  I do like his pithy quote but he could have discussed the power of innovation and self interest.   Like Mr. Ruse, I am well aware of the large number of books out there forecasting our end.  I do not believe this and my book presents a coherent and funny analysis of the microeconomics of how a large number of us will "escape".   We will rebuild our cities but our future cities may not be in Miami.







    • Derek Jeter is in the midst of some tough negotiations.  Will he accept a real pay cut?  The market says that he better but his sense of fairness and his past compensation are nudging him to be a pinch unrealistic here.     Now, $19 million a year averages out to $117,000 per game. Not a bad wage or $29,000 or so per at bat.   At $29,000 per lecture, how many lectures would my friends in academia be willing to give a year?  I'd supply 10 and call it a year.  

    "If they did agree on those numbers, it would actually represent a small, but symbolic, annual increase over Jeter’s last contract, which, at the behest of George Steinbrenner, was designed to average a sliver below $19 million a year.


    A deal that paid $19 million a year would also allow Jeter to rationalize that he was not taking a pay cut, a point that was emphasized on Friday by one National League executive who has been watching the Jeter situation with interest. That executive said that established stars like Jeter typically found it difficult to take any kind of reduction of pay, even when they have already made enormous amounts of money.

    Still, it is not clear that the Yankees will ultimately agree to a compromise that pays Jeter $19 million a year, regardless of the negative fallout a protracted standoff might produce."

    The Yankees should offer their Captain deferred compensation. Offer him $1 billion dollars in the year 2400 and let's get back to more important things. What is the net present discounted value of 1 billion dollars 390 years from now?
  3. Robert B. Daugherty's life offers a classic example of an economist's optimism that ideas can substitute for natural capital.   "The breakthrough for Mr. Daugherty came in 1953, when he bought the rights to manufacture a new irrigation system, the brainchild of a Nebraska farmer, Frank Zybach. The new system came to be called center-pivot irrigation. It involved a long pipe on wheels that rotated around a point at the center of a field, spraying water as it went. "

    "Robert B. Daugherty, a Nebraska businessman who helped transform the rural landscape into a patchwork of circular fields by popularizing a means of irrigation that used a pipe on wheels pivoting around a central point, died on Wednesday at his home in Omaha. He was 88."


    "Today, about 42 percent of irrigated farmland in the United States uses center pivot machinery or similar mechanized systems, said Terry J. McClain, chief financial officer of Valmont. In some Great Plains states, the system is used to water three-quarters or more of the farmland that uses irrigation.

    Its prevalence can perhaps be best recognized from the air, where travelers on cross-country flights can see the landscape converted into a polka dot pattern of irrigated circles inside square fields.
    “On those areas where you need to irrigate to raise crops, it’s just dominant,” said Derrel L. Martin, a professor of irrigation and water resources engineering at the University of Nebraska, Lincoln.
    Before the center pivot, farmers would typically irrigate their fields by allowing water to run downhill in furrows.

    Dr. Martin said the center-pivot system allowed for a much more efficient use of water. It also requires less labor and can be used on uneven or hilly terrain where traditional methods of irrigation may not be an option. It is now used around the world and is credited with expanding the acreage of irrigated land and increasing farm productivity."

    When I fly across country, I had wondered about all of these circles I see on the ground and now I get it.  I thought it was all about attracting UFOs to land there rather than another spot.

    While Mr. Daugherty did not invent the key idea --- he did foresee how it could be widely adopted and he must have made money in its adoption.  

    Water is a scarce resource and climate change is likely to make it more scarce in certain geographical areas --- this case study highlights how innovation and diffusion takes place to help us to make the best of the circumstance we face.  Human capital played a key role here and investment in education and basic R&D will only help us to be ready.  In this sense, capitalism helps us to adapt to climate change because it helps us to have the $ to finance basic research and great centers of research and discovery.  What poor nations have great universities?
  4. I will be speaking about Climatopolis at the Claremont McKenna College Marian Miner Cook Athenaeum on Thursday December 2nd.  As a warm up, I gave a lecture to my UCLA undergrads about the economics of climate change adaptation.  They pushed me on the broad issue of international migration.  Especially in the developing world, it will help us to adapt to climate change if people can move from a Bangladesh to Southern China.  Ted Miguel and co-authors have argued that in Africa that climate change will increase deaths from Civil War.  I presume that the causal story here will be that heat waves and natural disasters will displace people from where they currently live and in the name of adaptation they will encroach on other people's land and this will trigger violence and a cage match.

    In my "win-win" vision of migration, there will be "environmental refugees" eager to move away from their flooded current home BUT there will be destinations such as southern China who welcome the immigrants.  Why? Not due to charity but due to gains to trade.  Educated, high income people need the time and help of low skilled people to supply basic services such as cooking and cleaning and home maintenance.  There are gains to trade and generations of immigrants have started their rise "up the ladder" based on these first steps. As India and China develop, there may be more opportunities for the people of Bangladesh than the pessimists think there will be.  This is obviously an empirical prediction and as time passes it will be proved to be true or false.
  5. The Wall Street Journal has provided Joel Kotkin with the space to sketch the tradeoffs of living in megacities (such as NYC or Tel-Aviv) vs. living in smaller cities such as Raleigh.  His thesis boils down to "Smaller, more nimble urban regions promise a better life than the congested megalopolis."  Is this correct? Will Don Trump and Derek Jeter read his column and move to Nashville?   These immediate counter-examples highlight that we need to be a pinch nuanced here.

    To his credit, Kotkin later reveals that he is talking about the middle class and the urban poor.  If this is really his focus, then why did the Wall Street Journal publish it?  (that was a joke).  Consider this quote from his piece;


    "Consider Mumbai, with a population just under 20 million. Over the past 40 years, the proportion of its citizens living in slums has grown from one in six to more than half. Mumbai's brutal traffic stems from a population density of more than 64,000 per square mile, fourth-highest of any city in the world, according to the website Demographia."

    Now, to a non-economist the first sentence appears to suggest that quality of life is growing worse in Mumbai for the urban squatter poor.  The slums are growing more dense.  But, if we take revealed preference seriously then the people who are moving into such slums must  prefer it to the even poorer rural areas.  So, the incumbent urban poor are made worse of as the urban slums grow (rents rise, density increases, urban wages fall) but the new migrants must prefer their new destination or they would not have made the costly move to the city.  So, overall --- does Mumbai offer the urban poor a good "quality of life" or not?


    Returning to the United States, Kotkin makes a very reasonable point about the fate of the middle class in the U.S Superstar cities;

    "The largest American cities—notably New York, Los Angeles and Chicago—also show the most rapid decline in middle-class jobs and neighborhoods, with a growing bifurcation between the affluent and poor. In these megacities, high property prices tend to drive out employers and middle-income residents. By contrast, efficient cities are where most middle- and working-class Americans, and their counterparts around the world, will find the best places to achieve their aspirations."

    Now, he is ignoring the fact that NYC, LA and Chicago all have suburbs where the price of land heads to zero. You can live in a very large, very cheap home in LA as you go east towards Riverside.  As employment has suburbanized, commute times do not go to infinity as people suburbanize. More and more people have suburban home to suburban jobs commutes.

    If few middle class people can afford to live in Manhattan, or near Santa Monica in LA or in Lincoln Park in Chicago; what problem arises? I wish I had a fancy Mercedes but I can't afford one.  I'm not going to lead a revolution because I know that Don Trump has 22 of them.

    He is correct that for some middle class people that there may be better cities for them to live in that NYC, LA or Chicago but so what?  It is up to them to make this choice.  The key is that they have choice.  In nations around the world, we need different cities to pursue their own competitive edge in terms of amenities, job opportunities and culture.   Today, Detroit has a growing Arab-American population.  As this group grows in terms of education, numbers and income, Detroit will become a stronger city because of this. Young Arab immigrants to the United States know that if they move to Detroit that they will have access to religious events and sympathetic social networks to start their life in our nation.

    This type of specialization across cities is fantastic. Individuals differ with respect to their conception of what is "the good life" and the menu of cities that the U.S offers (coastal and big and superstar, inland and medium sized) offers different choices for different people.  Just like when you go to a restaurant with a diverse menu, in the U.S you face a menu with 300 different choices. Neither Kotkin or I know what's right for you, but you do!

    Cities differ on at least the following 6 dimensions.

    A. labor market opportunities (industries that the city specializes in)
    B. geographical amenities (close to a coast, climate amenities such as LA)
    C. marriage market opportunities (ethnic types in cities and their counts)
    D. learning and culture opportunities (presence of leading universities such as a Harvard)
    E. consumer cities  (large counts of people similar to you so that restaurants and shops you like are open there)
    F.  Endogenous attributes such as local pollution and crime ----  (read my Green Cities book!)

    Different households will place different weights on these 6 factors.  Real estate prices will differ across cities as a function of these 6 atributes

    He never defines what is an "efficient city". I presume that he means low commute times.  But, does this mean that day traders who work in their underwear in their basement are the most efficient people?  He also glosses over the fate of the urban poor.  Big cities such as NYC have been generous to their urban poor and to balance the budget taxes do need to rise.  In the "efficient cities" that Kotkin celebrates such as

    "The winners included business-friendly Texas cities and other Southern locales like Raleigh-Durham, now the nation's fastest-growing metro area with over one million people. You can add rising heartland cities like Columbus, Indianapolis, Des Moines, Omaha, Sioux Falls, Oklahoma City and Fargo."

    How do they treat their poor?  There is a welfare magnets effect here. Cities such as San Francisco end up with more poor people and more taxes because they are "nice" to the poor.  Non-liberal cities are rewarded for being not nice in terms of redistribution.  While Kotkin would call that "efficient", there are other words for that such as "cheap" and "nasty".  Economists know that redistribution should take place at the Federal level (to minimize the local magnet effect) but the Republican Congress is unlikely to enact this.

    So, my question for the WSJ is; "why did you accept Mr. Kotkin's piece?"  Can LA, Chicago and NYC really learn from the Omaha experience?    Should your company move to Omaha?  Yes, if you land intensive and don't need to learn from other nearby firms.  But, there are many companies seeking to network and to learn and to have access to superstar talent for whom NYC continues to be the right place to be.

    In this age of firm fragmentation, firms can have it both ways but splitting their firm such that the deal makers are in the center city of the Superstar cities and the "back office" is somewhere else where it is cheaper.  The firm has the right incentives to consider the tradeoffs that will maximize its profits.

    Why have I written this long blog piece?  Because, Dr. Kotkin has taken the slot of an urban economist here. The WSJ should believe in competition for scarce resources and allocate it to those who can make the best of it.
  6. Norfolk, Virginia  is facing more flooding risk these days.  Whether climate change is the cause of this problem remains an open question. But, FEMA is spending over $20,000 per home to raise them to protect them from the next flood.


    "We are the front lines of climate change,” said Jim Schultz, a science and technology writer who lives on Richmond Crescent near Ms. Peck. “No one who has a house here is a skeptic.”

    Politics aside, the city of Norfolk is tackling the sea-rise problem head on. In August, the Public Works Department briefed the City Council on the seriousness of the situation, and Mayor Paul D. Fraim has acknowledged that if the sea continues rising, the city might actually have to create “retreat” zones.
    Kristen Lentz, the acting director of public works, prefers to think of these contingency plans as new zoning opportunities.

    “If we plan land use in a way that understands certain areas are prone to flooding,” Ms. Lentz said, “we can put parks in those areas. It would make the areas adjacent to the coast available to more people. It could be a win-win for the environment and community at large and makes smart use of our coastline.”
    Ms. Lentz believes that if Norfolk can manage the flooding well, it will have a first-mover advantage and be able to market its expertise to other communities as they face similar problems."

    This is a smart article and it highlights the adaptive responses that I claimed in my new book Climatopolis that coastal areas would engage in when faced with a real threat.

    Now, for the land owners who own the land that people "retreat from" they would lose out.  What does society owe them?  If they have flood insurance , then these contracts should be honored but I'm not convinced that general tax payer $ should be used by FEMA to defend private homes. If people want to make these investments for themselves then they are welcome to do so.  If Federal tax payer $ will be used to defend the coasts, then this actually will have a moral hazard effect (and a cross-subsidy effect) of encouraging more people to live in dangerous zones and when the inevitable shocks do occur -- there will be more loss of life. Note that government intervention , not capitalism, causes this problem.
  7. I wrote Climatopolis because I wanted to nudge forward the discussion of how diverse urban households and firms will adapt to climate change.   Unfortunately for me, there are so many other pressing issues right now (war, Bernanke's QE2, airport nude body scans, Michael Vick, the Royal Wedding, the Miami Heat's losing streak, the fake Taliban leader, Bristol Palin's dance moves, etc) that the world has refused to engage with my book's core ideas about the microeconomics of adaptation.  On top of this, I face the political challenge that my book has received weird reviews from non-economists who didn't think through the book's core logic and it has also been attacked by angry liberal activists such as Joe Romm who have taken out their frustration over our collective inability to reduce our greenhouse gas emissions on those who dare to discuss what our future path will be in the face of climate change.  In the case of Dr. Romm, he admits that he hasn't read the book but that did not slow down his onslaught.  As I have said many times, mitigation and adaptation go "hand in hand" but we are not going to mitigate. I wish we will but we won't.  Taking this reality as given, what happens next?  Doom or adaptation?

    While my Amazon ranking has made me sorry for myself, a number of prominent economists have sent me nice notes about my book. Today, I see The Economist Magazine's report on climate change adaptation.  You will see that this article says some smart stuff about my book.  I like that!

    The lead story in This week's Economist sounds a lot like the main themes of my book.  I like that!

    To quote the first article:

    "The fight to limit global warming to easily tolerated levels is thus over. Analysts who have long worked on adaptation to climate change—finding ways to live with scarcer water, higher peak temperatures, higher sea levels and weather patterns at odds with those under which today’s settled patterns of farming developed—are starting to see their day in the uncomfortably hot sun. That such measures cannot protect everyone from all harm that climate change may bring does not mean that they should be ignored. On the contrary, they are sorely needed.

    Public harms

    Many of these adaptations are the sorts of thing—moving house, improving water supply, sowing different seeds—that people will do for themselves, given a chance. This is one reason why adaptation has not been the subject of public debate in the same way as reductions in greenhouse-gas emissions from industry and deforestation have. But even if a lot of adaptation will end up being done privately, it is also a suitable issue for public policy.

    For a start, some forms of adaptation—flood barriers, for instance—are clearly public goods, best supplied through collective action. Adaptation will require redistribution, too. Some people and communities are too poor to adapt on their own; and if emissions caused by the consumption of the rich imposes adaptation costs on the poor, justice demands recompense.
    Furthermore, policymakers’ neat division of the topic of climate change into mitigation, impact and adaptation is too simplistic. Some means of adaptation can also act as mitigation; a farming technique which helps soil store moisture better may well help it store carbon too."

    My book argues that capitalism will help us to adapt to climate change.  The "Climate Hawks" need to engage on the adaptation issue.  I'm waiting and willing to work with you.
  8. In my new Journal of Urban Economics paper , I use data for California's cities and argue that the answer is "yes".   Within the San Francisco metro area, have you noticed the boom in development in Emeryville?  An unintended consequence of next door Berkeley's and Oakland's restrictive land use policies is to nudge growth to more builder friendly Emeryville.

    For those who follow my work, I hope you see the common theme of the role of political ideology in affecting economic outcomes.

    This theme appears;

    paper #1   ,  paper #2   and paper #3

    Is blocking new development good or bad for the environment?  The answer hinges on the "deflection effect". If an urban city such as Oakland blocks growth, where does the growth go? If it leapfrogs to the exurban fringe then overall sustainability can fall due to the carbon footprint growth at the fringe.  If the growth deflects to a Las Vegas if a City of San Francisco blocks growth then the extent of the sustainability impact depends on what is the relative footprint of Las Vegas relative to San Francisco. For the answer to that question, read this.
  9. David Leonhardt has increased his carbon footprint to study Consumption in China.  If David had asked me to co-write this long article with him, I would have suggested that we focus on a couple of families and look at their actual consumption patterns. I know some very successful academic economists in Beijing.  By U.S standards, they live a middle class life as they live in a small apartment that is modestly furnished in a high rise tower that shares a little bit of green space with several other towers.  They own a small car that they drive infrequently.

    These successful academics save their salaries for several reasons.  They are unsure of what retirement pension they will receive.  They are unsure of what health benefits they will have access to.  Anticipating a long life, and that they may have to care for their parents, they are saving for their future. If the Chinese state used its capital account surplus to offer a FDR New Deal of Social Security and LBJ Medicare and Medicaid then I bet you would see Chinese households save less and consume more goodies and plasma TVs today.  

    In David L's piece, he talks about high home prices in the superstar cities and this certainly encourages savings today but this raises the question of why "2nd tier" cities are not booming? In the United States, cities such as Phoenix and Las Vegas exploded in growth because of their cheap housing! People cashed out their small San Francisco home and bought something real nice in these growing, cheap land cities.  Why isn't the same thing happening in China? Is government policy acting to "force" urbanites to live in the eastern coastal cities? Why aren't free market forces encouraging decentralization and the push of jobs and people to cheaper land cities?

    If the equivalent of a Las Vegas could grow in China, then households would have more $ after housing to spend on consumption stuff and the U.S might have a new export market?
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