Economics & Marginalia: September 24, 2021

Hi all,

In a nice change from opening the links with the obit of one of my favourite musicians or actors, this week I get to celebrate an 87 year old genius doing something amazing: Wole Soyinka (author of two of my favourite autobiographies ever, one for each end of his extraordinary life) has finally written another novel, just the 50 years after the last one. Chronicles from the Land of the Happiest People on Earth is a blockbuster even bigger than Go Set a Watchman—Prof actually planned this one to be released, for one. It’s bittersweet for me, personally, though: I’m going to get it the day its released (Tuesday, since you ask), and then no doubt spend six months looking wistfully at it while the little tornado of sleep deprivation and attention-demanding who celebrated his first birthday recently keeps me from it. On the other hand, Wole can write beautifully, but I don’t think he’ll make me yelp with excitement when he manages to use a magnetic fishing rod to retrieve a wooden goldfish, so there’s that.

1. If you’re reading these links, you’ll know two things about me: I get giddily excited about good economics and I am cricket tragic. Usually the cricket chat is confined to the introductory paragraph of the links (often in combination with a grumble about the weather and the English batting, two things that Brits seem to enjoy despite being objectively terrible). But today, I put a cricket article in the main text, and not ironically. Cricket matches usually begin with a coin toss contested by the two team captains, the winner of which will be allowed to choose whether to bat or bowl first. This might sound innocuous, but thanks to the outsize role of atmospheric condition and the precise nature of the specific pitch being bowled on to how easy or difficult batting is, it confers a large advantage to the winning team. Cricket fans are constantly complaining about the toss, but Gaurav Sood and Derek Willis have a solution, one drawn from economics no less: an auction for the right to bat first. The auction induces teams to make an incentive-compatible bid on the right to bat first: absent information about the other team’s preferences, the optimal strategy will be to bid just fewer runs than you think the right to bat first will be worth—and with that bid, the advantage usually conferred by the toss is whittled away to nearly nothing. If Milgrom and Wilson had done this they’d have won the Nobel a lot sooner, no doubt.
2. And because this is a good week, I can follow up a cricket-economics tie-in with a Columbo-economics tie-in, as Markus Goldstein has just one more question (and more often than not, it’s the one that really matters). But unlike for Lieutenant Columbo (which, my wife informs me, will be the name of our cat, unless it’s a British shorthair, in which case it will be named Rumpole), the extra questions in a household survey can come at serious cost: as surveys go on, less and less information is imparted, an effect that is larger for information about women and young people, who are, additionally more likely to be reported later in the survey in any case. Optimising survey design is not trivial, especially given how much of the information we use in policymaking comes from small surveys rather than administrative or nationally collected data.
3. And also from Development Impact, a really cool lab experiment by David Mckenzie and Catia Batista investigates a question that has always puzzled me: given the massive returns to migration, why is there so little of it? Two results that particularly interest me: first, risk is the most important factor reducing the desire to migrate; and second, the rationality of choice (specifically, what economists often assume, the independence of irrelevant alternatives) starts to break down when incomplete information and risk are introduced to the decision problem. This second result is really interesting to me: it chimes with what I’ve observed about decision-making in other domains, and it would be very cool to test it more generally.
4. Charles Kenny has a new paper looking at the economic effect of aging populations around the world, arguing that soon large-scale migration will be a necessity for most advanced economies, with a great blog series accompanying it (first one here). I’m a bit less optimistic about the final policy set than Charles is, but this is genuinely fascinating, thought-provoking work. Planet Money are also on the ageing trip, looking at China (transcript), but they don’t get quite as far as suggesting that migration from outside will be the answer.
5. I have already sent this one to colleagues: when Andrew Gelman tells you what he thinks a data visualisation should look like, listen.
6. I know some people laughed at Matt and I for starting a podcast which routinely clocks in at an hour (the next episode, after a long summer break, coming soon, and it’s a *lot* of fun), but we have nothing on Rob Wiblin and the 80,000 hours podcast. This interview with Mushtaq Khan on institutional economics has a running time just a tiny bit shorter than the Godfather Part II, and I will freely admit to not having finished it yet. But I’ll recommend it partly because what I have listened to is excellent and partly because Mushtaq taught me, and his course – in 2002/3 – is still seared in my mind, and still influential to how I think about economics, politics and development. Listen.
7. Finally, at the end of a long day of childcare and work, my capacity to absorb TV is some way short of the Godfather Part II. Instead, we’ve been watching the Great British Bake Off – not so much because I care about the cakes but because I enjoy speculating about the personal lives of the contestants and what they’d be like off camera. The Ringer get into the spirit by celebrating the best and most endearing of them over the years, and correctly names Selasi as the coolest contestant ever—an impression confirmed when it emerged he became (and remains) close friends with the superficially completely different Val (I’ve read that interview probably 5 times and it’s still the most wholesome thing imaginable). Anyway, we’ve got it on catch up and I’m off to speculate over which contestant has bodies buried in the garden over a glass of wine…

Have a great weekend, everyone!

R