President Obama Appoints Betsey Stevenson to the CEA

Some big news: the White House has recently announced that the newest member of the Council of Economic Advisers will be my favorite economist, and a long-time friend of this blog, Betsey Stevenson.  She'll be joining Harvard's Jim Stock and the newly announced CEA Chairman, Jason Furman on the three-member council,  which serves as the President's main source of advice on economic policy. 

When I say that I'm thrilled about this news, I'm speaking not just as a dismal scientist, but also as Betsey's co-author, colleague, co-parent and domestic partner.  The CEA has a special role as a bridge between ivory tower academic economists and the levers of public policy.  They're our best hope for ensuring that the sharpest insights of economists can elbow past the political machinations that dominate D.C., and the list of past CEA members reads like a who's who of the economics profession.  And there's never been a more important time to be working as a labor economist than during a period of mass unemployment.

Honestly, I'm about as proud as an economist is allowed to be.

Crowdsourcing Economics

An interesting approach to economics, from UC Berkeley economists William FuchsBrett Green, and David Levine: crowdfunding.

But first, some background, because this is fascinating stuff. The typical household in rural Africa is "off the grid." With no electricity, such households spend a significant fraction of their income on kerosene for lamps. Yet for about $20, they can buy a solar light, which provides a superior source of light and charges their cell phones. (Yes, cell phone use is common, even in rural households with no electricity; they simply walk to the nearest town and pay to charge their phones.)  Given that the light pays for itself in about 6 weeks and lasts for about 3 years, purchasing one seems like a no-brainer. Yet few households have done so.  These intrepid economists are trying to figure out why, and want to see whether the barriers to adoption can be overcome in a profitable way. In order to do so, they are running controlled experiments in rural Ugandan villages using various combinations of incentives and financing arrangements.

Explaining Love

Following my #lovedata challenge this morning, the first few attempts at explaining love around the world are already trickling in.

But first, the finding that blew my mind. Commenter Renars pointed out that the very data I had plotted---the proportion of people feeling love in a country on a typical day, versus a measure of GDP per capita (a measure of average income)--form a heart-shaped cloud. Really. Take a closer look at it. This may be the most amazing chart I've ever drawn.

Crunching the Numbers on Love

I've spent the last few days crunching data from the largest-ever international survey of love.  Specifically, in 2006 and 2007, the Gallup World Poll went to 136 countries around the world and asked people, "Did you experience love for a lot of the day yesterday?" Betsey Stevenson and I report our initial analysis of the data in our latest column.  A snippet:

The good news: Ours is a loving world. On a typical day, about 70 percent of people worldwide reported a love-filled day. In the U.S., 81 percent felt love... Across the world as a whole, the widowed and divorced are the least likely to experience love. Married folks feel more of it than singles. People who live together out of wedlock report getting even more love than married spouses... If you’re young and not feeling all that loved this Valentine’s Day, don’t despair: You’re not alone. Young adults are among the least likely to experience love. It gets better with age, ultimately peaking in the mid-30s or mid-40s in most countries before fading again into the twilight years.

Economists Making Their End-of-the-World Confessions

Today is the last day on the Mayan calendar, which, according to some, means the world is going to end.  This seems about as likely to occur as any economic forecast.  And so in preparation, economists on Twitter have been making their end-of-the-world confessions, using the hashtag #EndOfTheWorldEconfessions.

Here are some of the highlights:

Research from My Favorite Economic Gabfest

I’ve just gotten back home after a terrific few days at the Brookings Panel on Economic Activity.  It’s my favorite gabfest of the year, featuring economic analysis that is both serious research, and also connected to ongoing policy debates.  (OK, I’m biased--I’m an editor, and organize the conference along with Berkeley’s David Romer.)  And while I think some of you may enjoy slogging your way through the latest papers, others may prefer your summaries simpler and lighter. So I went ahead and recorded a few short videos summarizing the papers. I hope you enjoy!

Is Income Inequality Rising, and Are a Lot of Feathers Heavy?

New data on income inequality in the United States were just released.  And they provide a useful teaching moment. The graph below, which comes from the Census Bureau, shows the evolution of the Gini coefficient since 1967.  It’s pretty clear that this measure of inequality has been rising pretty much through this whole period.

p>But here’s how the Census Bureau chose to describe these data:

Based on the Gini index, income inequality increased by 1.6 percent between 2010 and 2011; this represents the first time the Gini index has shown an annual increase since 1993, the earliest year available for comparable measures of income inequality.

Say what?

The Economics Revolution Will Be Televised

There’s a revolution underway in economics. It’s not due to the financial crisis, but rather something more mundane: Data, and computing power. At least that’s the claim that Betsey Stevenson and I make in our latest Bloomberg View column:

“Consider the stream of data you will create today. Your metro card will record what time you caught the train. Your Web browser will note how you go about your job, and how much you procrastinate. A mid-afternoon purchase at Starbucks will reveal your penchant for lattes and the occasional cookie. Your flow of e-mail traffic will trace out your professional and personal networks.

At the same time, computing power has made it extremely easy and cheap to analyze all the data you produce. An economist with a laptop can, in a matter of seconds, do the kind of number crunching it used to take a roomful of Ph.D.’s weeks to achieve. Just a few decades ago, economists used punch cards to program data analysis for their empirical studies.”

Two weeks ago, Harvard’s Raj Chetty gave a spectacular talk at the National Bureau of Economic Research, about what he called “The Transformative Potential of Administrative Data.” He documented that today’s cutting-edge research is based on crunching newly-available data from the vast databases which underlay our schools, welfare state and tax systems.  I’m just as optimistic that new data coming online from the private sector will prove to be just as useful.

The Secret Consensus Among Economists

If you follow the economic policy debate in the popular press, you would be excused for missing one of our best-kept secrets: There’s remarkable agreement among economists on most policy questions.  Unfortunately, this consensus remains obscured by the two laws of punditry: First, for any issue, there’s always at least one idiot willing to claim the spotlight to argue for it; and second, that idiot may sound more respectable if he calls himself an economist. 

How then can the quiet consensus compete with these squawking heads?  A wonderful innovation run by Brian Barry and Anil Kashyap at the University of Chicago’s Booth School Initial on Global Markets provides one answer: Data.  Their “Economic Experts Panel” involves 40 of the leading economists across the US who have agreed to respond on the economic policy question du jour.  The panel involves a geographically and ideologically diverse array of leading economists working across different fields.  The main thing that unites them is that they are outstanding economists who care about public policy.  The most striking result is just how often even this very diverse group of economists agree, even when there’s stark disagreement in Washington. 

That observation is the starting point for my latest column with Betsey Stevenson

How Economics Explains The Rising Support for Gay Marriage

President Obama’s personal evolution toward accepting same-sex marriage has certainly made plenty of headlines.  But perhaps the bigger—and untold story—is the evolution of marriage itself, and how the generational shift in how we experience marriage underpins rising toward support for same-sex marriage.  At least that’s the idea that Betsey Stevenson and I explore in our latest column:

For our grandparents’ generation, marriage was about separate roles, separate spheres and specialization. Gary Becker, an economist at the University of Chicago, won the Nobel Prize partly for describing the family as an economic institution -- a bit like a small firm that employs people with different skills to produce both income and a well-run household.