Tuesday, August 22, 2017

Salary vs job satisfaction

What profession would you choose if you could start again?

This graph plots salaries against job satisfaction in US using Payscale most recent data:

Avoid bottom right corner: Graphic Design, Sports Management and Fine arts.
Go for Psychiatric Nursing or Pediatric Nursing

Monday, May 29, 2017

World's sky-night lights

Really amazing map comparing the NASA night-sky world map from 2012 against 2016. You can zoom in!

Blue means more lights, purple fewer lights.

Thursday, April 27, 2017

Olympic corruption

Are the Olympic games awarded cities (and countries) more corrupt than they used to? The news about corruption in the Olympic Committee and FIFA were all around in 2016. Both have been and still are investigated by the CIA and Swiss authorities. Here I wanted to analysed if that corruption scandals could be correlated to those games being awarded to more corrupt countries. Polity IV and Freedom house have been measuring corruption perceptions and Civil liberties for many years. In general, both corruption perceptions and Civil liberties have been improving since WWII. So, first, I therefore standarised their data by year (countries in the 60s were much more corrupt and Civil liberties scored much lower than today). Secondly, I compared the awarded countries with the rest of the world to see if these days corruption perceptions and Civil liberties do correlate more (or less) than before.

The first graph is the Polity IV corruption measure for each country awarded with the Olympics and the FIFA World Cup  (standarised by year)

The second graph is the Freedom House Civil liberties corruption measure for each country awarded with the Olympics and the FIFA World Cup  (standarised by year):

The analysis shows that the awarded countries of both events are less democratic and more corrupt these days than before (by moving avg. measure). 

The  FIFA World Cup have ranked specially low (record lows historically) in both measures in the last two decade. Russia and Qatar were the awarded countries.  

Monday, June 27, 2016

Spring weather nomad in North-america

How to get the best temperature in North-america all year round? Just follow this map.


Wednesday, April 27, 2016

Regulation and Distrust

This month I found this very interesting paper by Aghion, Algan, Cahuc and Shleifer (AACS) published in 2008.

For long time, it’s been argued that regulation hampers economic performance; what these authors say, however, goes one step further, they argue that regulation hinders social capital, i.e. trust in others.

The authors developed a model where there are two equilibria: a good one with a large share of civic individuals and no regulation, and a bad one, where a large share of uncivic individuals supports heavy regulation.
As the authors put it “when people expect to live in a civic community, they expect low levels of regulation and corruption, and so invest in social capital. Their beliefs are justified, and investment leads to civicness, low regulation, and high levels of entrepreneurial activity. When in contrast people expect to live in an uncivic community, they expect high levels of regulation and corruption, and do not invest in social capital. Their beliefs again are justified, as lack of investment leads to uncivicness, high regulation, high corruption, and low levels of entrepreneurial activity”.

The consequences of distrut are tremendous, “distrust generates demand for regulation even when people realize that the government is corrupt and ineffective; they prefer state control to unbridled activity by uncivic entrepreneurs. The most fundamental implication of the model”

In short: 

Distrust -> demand for regulation -> regulation -> corruption & unfairness -> distrust

The causality is both ways from distrust to regulation and from regulation to distrust.

This model reminds me of Alesina (2004) (or here) where “If a society believes that individual effort determines income, and that all have a right to enjoy the fruits of their effort, it will chose low redistribution and low taxes. In equilibrium, effort will be high and the role of luck will be limited, in which case market outcomes will be relatively fair and social beliefs will be self-fulfilled. If instead a society believes that luck, birth, connections and/or corruption determine wealth, it will tax a lot, thus distorting allocations and making these beliefs self-sustained as well”.

AACS also states that liberalization in a low trust environment such as the one seen in the 1990s in the ex-soviet bloc, triggers a rise in corruption at a given level of regulation, leading people to demand a re-regulation.
A liberalization shock in a regulated economy doesn’t improve people’s trust, quite the opposite, it increases corruption and as a result a demand for re-regulation.

The origin of distrust and regulation systems are set in history and deep-rooted in countries’ cultures. Hence, a change in regulation will not see a change in trust or corruption. This is the opposite to what Alesina said in his paper and in a sense this new view is a much more deterministic model.

The cross-country data used for distrust comes from World Survey database whilst the data for regulations comes from La Porta (2002), Djankov et al. (2002), Botero et al. (2004) and and Aghion, Algan, Cahuc (2008).

Tuesday, March 1, 2016

Economics looks more like physics than a social science

This week I saw two graphs that summarize quite well how economics have changed in recent times. The first one seen in Bloomberg View, but originally from this paper, is about the trend in economic academic journals to publish more and more empirical and data intensive papers instead of theoretical ones. The trend has been observed since the 80’s but today is much more evident. The twist here is that in the last decade or so, empirical papers using own data instead of borrowed data (i.e. data from IMF or World Bank…) are now a majority. Field experiment plus own data empirical papers represent 42% of the total. Only 20 years ago they were barely 11%.

That shows the major change economics has been through, from a theoretical field to an empirical one. Economics has become a social science based on experiments and data with the likes of biology and natural sciences.

Obviously, a field that uses data and experiments requires a good amount of statistics and mathematics. The use of those in economics has increased dramatically and as a consequence it is a prerequisite for any economic student-to-be. The second chart points in that direction, it shows the results of the GRE quantitative test by field of study. GRE is a standardized test that is an admissions requirement for most graduate schools. For those who doesn’t know a graduate school is a school that awards advanced academic degrees (i.e. master's and doctoral degrees).

   Source: Julie Posselt Twitter account

The GRE scores distribution of economics students is closer to those of physics than to any of the other social science subfields.

Monday, February 22, 2016

Economic failures

I read recently a critique of the economics field, by Timothy Garton Ash, based on the supposed failure of the field to achieve the basic principles of science. The author stresses the need, in economics, of more humble and modest assertions giving the uncertainty of the field.

I went to Wikipedia to find the definition of science and it says “Science is a systematic enterprise that creates, builds and organizes knowledge in the form of testable explanations and predictions about the universe.”

And goes on saying:

“Popper proposed replacing verifiability with falsifiability as the landmark of scientific theories, and replacing induction with falsification as the empirical method. Popper further claimed that there is actually only one universal method, not specific to science: the negative method of criticism, trial and error. It covers all products of the human mind, including science, mathematics, philosophy, and art. […] A scientific theory is empirical, and is always open to falsification if new evidence is presented. That is, no theory is ever considered strictly certain as science accepts the concept of fallibilism.”

This is probably one of the main deficiencies of the economic science, the lack of replicability. Not that it can’t be done, but that there is no incentive whatsoever to the economic researcher for doing so. That causes a big black hole, without new evidence there is no falsification.

So, when Andrew C. Chang and Phillip Li decided to start digging on replicability and falsifiability in economics, this is what happened: