[Tirta Susilo is a PhD student in psychology, and a co-author of mine on a recent study, published in (appropriately enough) the Journal of Economic Psychology. Tirta has written a guest-post on some fascinating new research about skin colour and politics.]
Earlier this year Andrew Leigh and I observed that [...]
Australia’s latest unemployment numbers seem now to suggest a levelling off of unemployment at or a bit below 6 percent, at least for the next few months. The unemployment rate in November dropped to 5.7%, with full time jobs rising by 31,000. Full time jobs are still down about 150,000 [...]
It may sound like a case of “the pot calling the kettle black”. Asciano is worried about the behaviour of QR after it is privatised by the Queensland government. The story is here. However, Asciano have a good point. When privatising large utility companies – like QR, which owns [...]
Earlier this year, the Henry tax review (aka AFTS) commissioned me to write a paper on the tax treatment of education. They’ve now posted it on their website. Here’s the executive summary (click on the title for the full paper).
The IMF have recently pointed to four main risks to the global recovery; dangers in the exit from the fiscal stimulus and rising public debt, further financial problems, further reversals of capital flows, and the lack of a global growth engine. The first problem seems to me to be the [...]
At my intergenerational mobility conference last week, I asked all attendees:
What percentile in the income distribution does your household now occupy? (1=lowest,50=middle, 100=highest) What percentile in the income distribution did your household occupy when you were aged 14?In a nice coincidence, the intergenerational earnings correlation is 0.29, which [...]
In October, Noel Pearson wrote a Quarterly Essay on Indigenous education titled “Radical Hope: Education and Equality in Australia”. In the December issue, I have a letter published in response. Full text over the fold.
Letter in response to Noel Pearson’s Quarterly Essay (“Radical Hope: Education and Equality in [...]
I spoke yesterday in a plenary session at The Australian Sociological Association’s annual conference at ANU. The session was on ‘Economics and Sociology’, and I shared the stage with RSSS Director David Marsh and TASA President Michael Gilding (who I know because of the fascinating work he has done [...]
… both sounding like one and government policy. Usual scenario: (1) RBA changes interest rates, (2) banks immediate react but don’t do the same thing — almost always passing on less or, apparently, taking more — (3) Treasurer says consumers should use their feet and switch banks; (4) consumers work [...]
Chikako Yamauchi and I have a new paper out this week on the impacts of child care. Abstract below (click on the title for the full paper).
Which Children Benefit From Non-Parental Care?
Andrew Leigh & Chikako Yamauchi
Although the impact of non-parental care on children has been [...]
John Durie discuses the issue of collusion and potential changes to the Trade Practices Act here. One line in particular caught my attention:
Clearly, a straight merger decision and cartel pricing flow together, but they are fundamentally different issues.
Actually, no. From a historic (United States) perspective, the economic view of [...]
Suppose you believed the world was getting warmer due to humanity’s greenhouse gas emissions and you worried about it but you can’t get yourself to believe that the 200-odd countries in the world are ever going to agree to drastically reduce their emissions via some joint scheme, partially because it [...]
OK, I had to admit I am getting confused. Up until yesterday, I thought that the Liberals had decided that they were not going to have an ETS or any form of carbon tax because, for many of them, they were unconvinced of the need to do anything with regard [...]
A loyal reader of the CoRE Economics Blog asked me why I only commented on the first bit of the Richmond amendment to Australia’s merger laws.
Time to make amends!
The second bit is complete economic lunacy. It would add a new merger test that says:
A corporation that has a substantial share [...]
The majority of Australians support action on climate change. Yesterday, a faction of the Liberal party — a slim majority — asserted that it did not agree with that opinion and will likely today move to block action on climate change. Whether this is temporary or a permanent party position [...]
Coincidences raise interesting issues. I received an e-mail pointing out that the Senate is inquiring into the ‘Richmond amendment’ to the Trade Practices Act. The link is here. This amendment will change the word ’substantially’ to ‘materially’ in the merger test. The current test makes a merger illegal if [...]
Google has been having an interesting dialogue with Eric Clemons of U. Penn on the pages of the Chicago Tribune. The first article is here. And this is the follow up.
Google may face some antitrust hurdles. For example, in Australia, Google is fighting an antitrust battle with the [...]
My AFR op-ed today (competing with the ascendancy of a certain ex-monk), is on the impact of US school reforms on student achievement. Full text over the fold.
Mixed Results for School Tests, Australian Financial Review, 1 December 2009
Some of George Bush’s best verbal slips came when speaking [...]
If the conservative faction of the Liberal Party prevails in the leadership vote on Tuesday by installing its own candidate, Tony Abbott, or a compromised candidate, Joe Hockey, then what should the liberal wing of the Liberal Party do about that?
They could remain and fight to take back control of the [...]
Homer’s Iliad is the epic story of the infinite anger of the great Greek warrior Achilles. The story begins with Achilles remaining in his camp and refusing to fight the Trojans, despite the imminent collapse of Greek forces. After ten years of besieging the city of Troy, the tide of [...]
Well, not completely wrong (he is right that in principle taxes and caps achieve similar economic outcomes if implemented) but let me explain. In the FT today, Tim Harford argues that at Copenhagen negotiators should be focused on getting agreement on a tax rate on emissions to levied at [...]
It is hard to remember, although we should, that just over two years ago, Australia had held out for the better part of a decade being one of only two countries not to sign to Kyoto protocol. That was after the negotiators bent over backwards to cut a deal in [...]
Those early risers would have noticed that this website was hacked this morning. They had managed to replace two key Wordpress files with their own code. It took myself and Kwang a good four hours to identify the problem and you can see we are back in business now.
It isn’t [...]
Some things seem to need no explanation, but are not obvious at all on reflection and, if you wonder about them, suggest something of interest about the economic system. Consider the question of why the informal economy is so small, leading to the question of how much more productive the [...]
If you attempted to upgrade from XP to Windows 7 recently, you probably went through Upgrade Hell along with me and many others. In the process I learnt a couple of things about Microsoft. Firstly, Microsoft doesn’t understand how to sell software as downloads. If like me, you tried [...]
If there is one thing I value in political leaders above all else is that they stand their ground on fundamental values when it is crunch time. There are very few political leaders who I have seen this quality in. Yesterday, we saw Malcolm Turnbull rise to that status. After [...]
Here is the text of my opinion piece in The Age today.
The events of the GFC have snookered the Rudd Government. The RBA is now raising interest rates to suppress resurgent inflation, but most the Government’s $95 billion stimulus package is still in the pipeline and cannot easily be reversed. [...]
There are two extreme views going around regarding where US inflation is headed. Those who subscribe to the view that the US is in for a long period of insufficient demand see the risk as being a Japanese style decade long deflation. On the other side are those who see [...]
I updated the piece that I posted last week relating to the value of the RMB and the US trade deficit - the new piece appears in todays AFR, and follows below. There’s a nice piece in The Economist magazine with similar themes – if you’re a subscriber you should be [...]
I was asked to contribute a few words to a feature in The Age about how Australia has fared two years into the Rudd government. My bit dealt with the economy.
One thing is for sure, if there ever were a time when one can’t distinguish the soundness of economic management [...]
Here is a basic economic principle: don’t sell an asset unless you have verified that someone actually places a higher value (at least financially) on it than you do. This is a principle that the Queensland government has apparently forgotten and is articulated nicely in a letter published today [...]
The Henry tax review has posted an interesting paper on its website.
Behavioural economics and complex decision making: implications for the Australian tax and transfer system by Andrew Reeson and Simon Dunstall, CSIRO
This paper summarises the relevant literature (from behavioural economics and psychology) on how individuals make simple [...]
I wrote an op-ed a few months ago about David Galenson’s work on creative life cycles in art, poetry, novel-writing, movie-making and architecture. Now he’s turned his hand to pop music. Abstract below.
Innovators: Songwriters (gated link, sorry)
David Galenson
Irving Berlin and Cole Porter were two [...]
With Obama in China this week many have been calling again for the need for greater Yuan flexibility to address the problem of global imbalances – big US trade deficits and big Chinese trade surpluses in particular. The problem is that a flexible RMB will not solve the US trade [...]
John Quiggin has an op ed in the AFR today (not yet online) asking the Coalition to think of the Great Barrier Reef and to pass the CPRS. He points out (correctly) that the Great Barrier Reef is in grave danger from climate change. So what may save it is [...]
My Wryside Economics segment on Life Matters this morning was about the effects of gender and money on happiness, essentially riffing off two important papers that Betsey Stevenson and Justin Wolfers presented at my happiness conference last week (the research is on their websites). The audio from my [...]
My AFR oped today is on prison reform. You can’t put acknowledgements in an opinion piece, but the piece owes a substantial debt to Justin Wolfers, who first suggested the idea of smarter prison contracts about 7 years ago, when we were strolling the streets of San Francisco together. I’m [...]
Ariel Kalil is a Professor of Public Policy at the Harris School, University of Chicago. She is a developmental psychologist by training, and her work links developmental psychology with economics, e.g., the effect of parental job loss on child development. I had a conversation with [...]
At lunchtime today I heard a part of Prime Minister Rudd’s public apology to people who were abused whilst wards of the state. The so-called “forgotten Australians”. Previously, Mr Rudd apologised to the “stolen generation”, again for their mistreatment by the state.
There is something that these apologies say about Mr [...]
Last week, Rupert Murdoch gave an interview with Sky News where he repeated his claim that aggregators like Google and Microsoft were ’stealing’ his content and that putting up a paywall will limit that. This resulted in an blogosphere frenzy as to his craziness. After all, if Google and [...]
I have a new paper out, looking at the impact of stamp duty on the housing market. Methodologically, the question turns out to be slightly tricky – because stamp duty is a mechanical function of house prices, a regression of turnover or prices on average stamp duty in a neighbourhood [...]
On Wednesday I wrote that people who advocate a Tobin tax are revealing that their understanding of risk is at the level of static risk management rather than higher level of dynamic risk management. Let me use an example to explain what I mean.
Australian banks make more loans than [...]
I still have a few spare spaces for my intergenerational mobility conference at ANU on Monday 30 November. The conference will now be opened by Terry Moran, the Secretary of the Department of Prime Minister and Cabinet. So if it’s good enough for Australia’s most senior public servant…
Also, each paper [...]
My happiness workshop yesterday certainly raised my life satisfaction – and hopefully that of the attendees as well. If you missed it, the papers of Betsey Stevenson and Justin Wolfers are available on their websites. Paul Frijters’ paper should soon be on his site. ABC Fora [...]
I teach the Futures & Options (financial engineering) course at the Melbourne Business School. The students find it pretty hard going (despite my world class teaching). By way of motivation I tell them that you can always tell whether a person has taken a financial engineering course because they think of risk management [...]
Following on from my chapter by chapter reviews of Superfreakonomics (here is One and here is Five), I have now read Chapter 2 — the Kindle version of course (as the Australian Government now advocates). Chapter 2 is describes why terrorists should take out life insurance. I [...]
Suppose that you had a reform that potentially would lead to consumer benefits of around half a billion per year that might stand to harm some 10,000 Australians with 10 percent of that total. So that interest group gets $5,000 each while costing the rest of us $450m. Seems like [...]
I have just read Chapter 5 of Superfreakonomics, alongside the New Yorker review by Elizabeth Colbert. The focus is on climate change science – the science is uncertain and imprecise (nothing new there), but the claim is that climate change fears are overdone and technological solutions will fix the [...]
Oh dear, when this review popped up in my reader today for an iPhone App, Urinals: The Game, I just couldn’t resist and it was free too boot.
It is basically Flight Control but in a men’s toilet. You have to ensure that your patrons go to the right [...]
Just posted slides from some recent presentations. One on the newspapers and the Internet and another my talk from the recent PerCapita conference. The Back to the Future stuff in the latter presentation was far neater in Pages than pdf with animations, flames and everything.
You have to love the silliness that surrounds supermarkets in Australia. The current silliness relates to food price rises. According to Frank Zumbo the supermarket “duopoly” is responsible for Australia’s food price inflation rate being higher than the Britain over a ten year period (even though the Australian rate [...]
I’m presently advertising for a full-time research assistant, on a 12 month (renewable) contract. The skill-set I’m seeking is a convex combination of energy, economics nous, Stata knowledge, and high-level English proficiency (can you find more than 3 errors in this post?). I’m also hoping to find someone who is [...]
Gordon Brown has suggested that a tax on financial transactions be introduced, a proposal that France and Germany are keen on. For those interested in this idea there is a nice summary of the issues in a book titled “The Tobin Tax: Coping with Financial Volatility” edited by Ul Haq, Kaul [...]
Andrew Norton points to this Herald Sun article about a man who was sued by his mistress of 20 years and she won a payout of $100,000 when their relationship ended. Andrew doesn’t like it.
This encourages adultery and gold-diggers, at significant emotional and financial risk to the first [...]
The most common form of commercialisation of iPhone apps is self-developers, writing apps and putting them on the iTunes App Store. Recently, we have seen some unbundling of the production chain with developers purchasing app ideas from anyone who comes up with ideas and also who offer to develop [...]
The other day, I was chatting with MIT’s Jerry Hausman (who is a fairly regular visitor to Australia). He is a keen observer of our telco and NBN developments as a disinterested US observer (that is, he isn’t consulting for anyone here in that sector). He suggested that he [...]
This week, Australia Radio National ran a Background Briefing on internet piracy. Going beyond just arguing whether “downloading” is good or bad, this podcast discusses changes in copyright law over the centuries, why these tensions came about, and puts copyright infringement in a broader context. I like it that they [...]
I usually avoid offering financial advice, but I was struck by an article on p5 of The Australian today. The RBA yesterday raised the cash rate to 3.5%, and most lenders have already passed on the 0.25% increase. So most newspapers have hard luck stories about the difficulties that borrowers [...]
On very short notice, I’m running a half-day workshop at ANU on ‘The Economics of Happiness’ next Wednesday, 11 November. The program features three stars of the international happiness literature – Paul Frijters, Betsey Stevenson and Justin Wolfers. The flyer is available here, and the program is as follows:
My AFR oped today is on behavioural economics and ‘nudging’. Full text below.
Give reform a bit of a nudge, Australian Financial Review, 3 November 2009
It turns out that lemmings don’t actually follow one another off the edge of a cliff. Thanks to some investigative journalists, we now [...]
With some notable exceptions, the Australian public debate over refugees has so far been conducted largely in an evidence-free zone. So I’ve asked my colleague Tim Hatton to send me through his recent writings on the topic. Tim has written two papers for high-ranking economics journals on the [...]
That is the question asked in The Australian today [HT: Sinclair Davidson]. The case concerns an economic policy paper by Dr Clive Spash who has worked for the CSIRO’s sustainable ecosystems division since 2006.
The paper, by the CSIRO’s Clive Spash, argues the Carbon Pollution Reduction Scheme is an [...]
Ken Henry gave a speech to UNSW alumni last Thursday, 28 October, in which he recounted two conversations which brought home to him the severity of the crisis that followed the collapse of Lehman Brothers. The AFR article on Friday contained the following quote. “Should I go down to the [...]
Today is All Saints day, the day for to celebrate saints who don’t have their own special day. So last night was the celebration to scare away the evil spirits in anticipation of their arrival.
Which brings me to the question: how many children came knocked at your door [...]
So much attention has been focussed on Chapter 5 of Superfreakonomics which dealt with climate change policy that there has been little discussion of other chapters. I have now read Chapter 1 which explored how prostitution was related to Santa Claus and was the second issue — “Patriotic Prostitutes” — [...]
I don’t like the killing of wild animals. Even fishing now seems to me like unnecessarily cruel plunder of the natural world, whereas years ago I was keen on line fishing and spearfishing. I don’t like the killing of whales and dolphins. I don’t like the shooting of wild bears in [...]
It is not often that you get to see the data being collected by the Australian Bureau of Statistics first hand. However, this year our family was selected (randomly) to be part of a survey (conducted monthly) on various house things. It is still going on but the first part [...]
What is it with books and competition? In Australia, we have seen continual moves to keep foreign editions out of the country with parallel importing laws. In this case, it is nominally to protect Australian authors but in reality it protects Australian publishers of foreign best-sellers and harms bookstores and, [...]
The front page of the Age newspaper today had “onward, upward for the aussie” as the lead in to Saul Eslake’s piece about the value of the AUD. I have written before about our bank’s poor forecasts when compared with a random walk – in fact I came [...]
It’s fashionable to disparage the US for having a legal drinking age of 21. But there’s pretty solid evidence to suggest that Australia could save lives by following suit. From a new research paper:
Long Term Effects of Minimum Legal Drinking Age Laws on Adult Alcohol Use and Driving Fatalities [...]
Last night my computer suffered a bad crash while attempting a software upgrade. Fortunately everything was backed up, so things are back to normal again. I thought I’d write a short note to answer a question I’m often asked: “how do you back up your files?”. My approach is based [...]
Some new education-related links:
David Brooks on the willingness of the Obama-Duncan team to push radical school reform Elena Silva on re-organising teachers’ work to make schools more effective (use of teams, integrating on-the-job training, removing needless admin tasks).And a link that is neither ed-related or new, but [...]
So I waited a little while to install Windows 7 on my MacBook until the VMWare Fusion 3.0 came out. That happened yesterday and I did a clean install (as I previously had XP). In half an hour I was done with Google Pack installed and just Office to go. [...]
A few years ago, I put together a list of tips for budding opinion piece writers. My friend Dalton Conley (an NYU sociologist who thinks like an economist) has just emailed me his own set of suggestions, which are much better than mine. Since they weren’t already [...]
The Walkley Magazine has published an article by myself and Andrew Leigh on media slant. It is reproduced over the fold.
True blue view from the red centre
Joshua Gans and Andrew Leigh
The Walkley Magazine, Issue 58, 14th October 2009, p.50
It is a hardy perennial of public debate. Politicians or their [...]
When your city spreads out, so does your paunch – at least according to new work from the NBER stable. Their IV strategy seems credible, suggesting that the relationship is probably causal.
Effects of Urban Sprawl on Obesity (unstable ungated, stable gated)
Zhenxiang Zhao and Robert Kaestner
[...]
I added to my blog on time in the sharemarket for the following piece that was published in the Weekend Australian Financial Review on 17-18 October…
As we all now know, financial markets are irrational and inefficient, but probably less understood is the fact that financial markets are also very superstitious. [...]
In the US, some industries have antitrust exemption – including baseball and insurance. The latter is under scrutiny to see if its exemption should be removed. This is a complex argument – exemption allows information sharing about risks that may otherwise be illegal. The insurance companies are also State regulated [...]
Claims of predatory pricing by Qantas when Rex started servicing some new routes in Queensland are made here. Now we have heard such claims before both when Compass and when Virgin began their airline services. Such claims are notoriously hard to prove under the Trade Practices Act. And as [...]
Steve Thomas was one of the four who won a free ticket to attend Per Capita’s annual Policy Exchange conference. Here’s his views on the event:
I enjoyed Policy Exchange because of how it provided an opportunity to present and discuss some of the narratives that are [...]
Phil Dobbie pulled my testimony from the Senate Select Committee on the NBN and you can hear it here (around 2/3 of the way through). Of course, to pull in the crowds the headline he uses is “NBN should be free, says economist” which of course is not what [...]
In a post a few weeks back, I raised the question of what additional production factor one would have to include into the current production function framework in order to have a plausible story about the recent crisis.
That post included a set of conditions any candidate would have to [...]
Chapter 5 of Superfreakonomics must be the most discussed pre-release book chapter ever. And I have participated in debates before but nothing as seemingly intense as this. My Sunday morning thoughts on the whole matter were picked up by Brad DeLong (who classed me as a defender of Levitt [...]
Taking a soft line on asylum seekers would seem to be the third rail of Australian politics. Prime Minister Rudd is so worried about appearing weak on the matter that he has resorted to the Orwellian double-speak of “having a hardline and humane approach to dealing with asylum seekers”. But [...]
Nothing seems to generate as much controversy as immigration. My post the other day in support of Chris Berg’s call for freeing up immigration laws is a good example. But what is interesting to me is how it seems to cut across usual right-wing and left-wing divides.
The right-wing case [...]
My AFR op-ed today is on education and the economic “downturn” (formerly known as the Australian recession). Full text over the fold, along with all the usual hyperlinks.
Much thanks (but no responsibility) to Andrew Norton, who helped me understand the university financing issues, although he doesn’t agree with all my [...]
It is clear that a gap has opened between the RBA’s view of Australia’s economic prospects and that of the Federal Government and its Treasury Department. The Reserve Bank Board is winding back its “emergency” monetary policy, but the Treasury sees no need for winding back the emergency fiscal policy [...]
and his name is Joel Waldfogel. Who is Scrooge? He is someone who hates Christmas and thinks that Christmas activities are a waste. Joel Waldfogel in his new book, Scroogenomics (will the onomics trend know no end?) tell us in a series of essays why you shouldn’t buy presents [...]
Apparently because I am an Australian author. Shouldn’t publication laws also apply to electronic versions? Productivity Commission, are you going to do anything about it?
[Update: that said, an incredible amount of Parentonomics is available on Google books. You'll need something other than a kindle to view' [...]
Over the last few days, a storm has arisen over Steve Levitt and Stephen Dubner’s Superfreakonomics. The book hasn’t been released but the chapter on climate change has generated a ton of discussion. That chapter was posted (I suspect not with publisher’s approval) on the net and I [...]
In the news today, PM Kevin Rudd admits smacking his kids. The headline sounds different from the text though.
Weighing in to the debate, Mr Rudd said: “And the rule that’s been applied in our family ever since they were tots is that if they’re doing something dangerous they’ll get [...]
It is not everyday that I read the morning paper and find that the person I am most agreeing with is Chris Berg but this Sunday was such a day. Berg writes today on immigration and points out that the current Government is not too different from the previous [...]
I’ve been a little busy so haven’t had time to comment on the Government’s ramping up of its residential mortgage-backed securities intervention of last week. Chris Joye has done an excellent job of laying out the pros and cons of that intervention. The pro being that it is a [...]
I’m a few weeks late in blogging about Paul Romer’s novel proposal for ‘Charter Cities’. As he describes them:
Charter cities offer a truly global win-win solution. These cities address global poverty by giving people the chance to escape from precarious and harmful subsistence agriculture or dangerous urban slums. [...]
With the Dow going through 10,000 yesterday I am reminded of a fact that I once saw Warren Buffett discuss regarding the US sharemarket. For the 34 years from 1964 to 1998 the return on the US sharemarket was about 6 percent. However, for the first 17 years of this [...]
For the past couple of days I have had the pleasure of trying out Google Wave. It is a preview version so it suffers from the fact that I can only interact with people in my contracts who also received an invite (7 at present). But from what I have [...]
Last week, I offered up two free tickets to the PolicyExchange conference for the people who could come up with the most interesting new policy ideas. Joshua Gans kindly added his two free tickets, so we had four to give away. From the dozen or so entries, congratulations to [...]
Andrew Leigh, Sam Wylie, Joshua Gans, Mark Crosby, Kwanghui Lim, Stephen King, Paul Frijters
