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Women Who Want Equal Pay Should Think About Becoming Pharmacists

We’ve written before about Claudia Goldin and Larry Katz‘s research on the persistent gender wage gap in the U.S.  Now Goldin and Katz are back with a new working paper (abstract; PDF) on “the most egalitarian of all U.S. professions today”:

Pharmacy has become a female-majority profession that is highly remunerated with a small gender earnings gap and low earnings dispersion relative to other occupations. We sketch a labor market framework based on the theory of equalizing differences to integrate and interpret our empirical findings on earnings, hours of work, and the part-time work wage penalty for pharmacists. Using extensive surveys of pharmacists for 2000, 2004, and 2009 as well as samples from the American Community Surveys and the Current Population Surveys, we explore the gender earnings gap, the penalty to part-time work, labor force persistence, and the demographics of pharmacists relative to other college graduates. We address why the substantial entrance of women into the profession was associated with an increase in their earnings relative to male pharmacists. We conclude that the changing nature of pharmacy employment with the growth of large national pharmacy chains and hospitals and the related decline of independent pharmacies played key roles in the creation of a more family-friendly, female-friendly pharmacy profession. The position of pharmacist is probably the most egalitarian of all U.S. professions today.


The Candy Auction

As I do each year, I auctioned off candy (this year Reese’s peanut butter cups) to my class.  None were bought at a price above $0.50, all 23 were sold at that price. As usual, a nice illustration of downward-sloping demand curves.  I had kept one piece at the start, extolling its taste while eating half of it (and thus presumably causing an increase in demand).  The other half fell off my lectern, and I stepped in it after returning to the front of the room.  The first half piece of candy was really tasty, and I was dying for another one.  

What to do?


The Miracle at Medinah

The Ryder Cup was about as exciting as golf can get. Down 10-6 going into the last day, the European team eked out a 14.5-13.5 victory.

The headline in USA Today reads “Europe Rallies for Miraculous Ryder Cup Win.” The Ryder Cup website calls it the “Miracle at Medinah.”

So how miraculous was the outcome from a statistical perspective?

Europe needed to win eight of twelve matches for a victory.  (If the teams tied, Europe got to keep the trophy, so it is considered a European win.)  Let’s assume that each of the pairings was an even match.  Then the likelihood that Europe wins after being down 10-6 after two days is given by the binomial distribution: what is the likelihood of at least 8 heads coming up if you flip a fair coin 12 times.

The answer is about 19 percent.

Not exactly the stuff of miracles, but fun nonetheless.


How Shale Gas Can Benefit Us and the Environment

It took less than an hour for Apple to sell out the initial supply of its new iPhone 5. It’s thinner, lighter, faster, brighter, taller than its predecessors, and yet it costs the same. That’s called progress.

Elsewhere, progress is met by protest rather than praise.

A suite of technologies has brought vast supplies of previously unrecoverable shale gas within reach of humans, dramatically expanding natural gas reserves in the U.S. and around the world. Horizontal drilling and hydraulic fracturing have produced a fuel that can at once promote a cooler planet and an expanded economy, essentially eliminating the tradeoff between climate change mitigation and the pursuit of other public projects and, perhaps, economic growth. But unlike the iPhone, the productivity gain embodied in shale gas technologies doesn’t attract a cult following and its benefits get obscured. 


Calling All Bosses for a New Freakonomics Radio Segment

We are working on a short Freakonomics Radio piece about “the value of bosses,” derived from a new working paper of that name (abstract; PDF) by Edward Lazear, Kathryn Shaw, and Christopher Stanton. The paper finds a good boss is indeed considerably more valuable than a mediocre or bad boss, at least in terms of productivity.

What do you think? We’d like to include in the radio piece some real bosses (i.e., not just the anonymized kind that show up in economics papers) so if you’re a boss (in retail or service or I.T. or manufacturing or whatever), let us hear from you via radio@freakonomics.com. How much do you think bosses matter? What makes a good boss good (and a bad one bad)? Who’s the best (or worse) boss you ever had? And, most important, how are good bosses made?


Winners of The Knockoff Economy Photo Contest

We are excited to the announce the winner of The Knockoff Economy contest for best photo of a knockoff. In fact, we are excited to announce that we have two winners (we had a lot of great entries, but these two jumped out). And, since they kind of go together in an odd way, we decided to award them both the prize. Winners receive a signed copy of The Knockoff Economy plus a copy of the new album Just Tell Me That You Want Me, featuring covers (i.e., legal knockoffs) of Fleetwood Mac songs by artists like Karen Elson, Lykke Li, and The New Pornographers.

Our congratulations to Donna Ivanisevic for the Louis Vuitton condom (originally created and sold, ever so briefly, for World AIDS Day) and to Terry Stedman (disclosure: a former student of Kal’s) for the Louis Vuitton Virgin Mary:


A Remarkable New Chapter to a Remarkable Story

Last week I blogged about a grass-roots effort to get a baseball player named Adam Greenberg an at-bat in the majors. Greenberg did make the majors once, back in 2005, but was hit in the head by the very first pitch he faced, never to return.

I wrote a chapter about Greenberg (called “Once-Hit Wonder”) in the forthcoming book Jewish Jocks . I hope the book goes to a second printing, because his story already needs an update. Next week, Greenberg is scheduled to get another chance to hit in the majors. The Miami Marlins — the team Greenberg that faced in his 2005 at-bat, when he was with the Cubs — has signed him to a one-day contract. He is set to play for the Marlins on Tuesday, when they face the Mets and pitcher R.A. Dickey (a knuckleballer!). ESPN has good coverage.

Who knows, maybe Greenberg will hit a rocket in his first at-bat and win his way back into the big leagues. 

 


Makers and Takers

Can’t resist chiming in on Mitt’s “47%” comment, as I was asked to do so by USNews and World Report:

I’m a freeloader/slurper from the public trough. But I’m also producing something—educated citizens and workers, and useful research—that taxpayers’ decisions in political markets have determined to be socially valuable.

Read the rest here.


The Cost of a Happier Chicken: Who Pays?

Animal rights activists often oppose animal welfare reforms on the grounds that they make animal production more efficient. Rutgers professor Gary Francione argues this case convincingly, insisting that some “[w]elfare reforms make animal exploitation more profitable by eliminating practices that are economically vulnerable.” He adds, “For the most part, those changes would happen anyway and in the absence of animal welfare campaigns precisely because they do rectify inefficiencies in the production process.”  The point is compelling and controversial: welfare reforms–which so many consumers support–can make it easier for industrial agriculture to turn animals into food.

Improbably enough, industrial producers of animal products agree. As a justification for what concerned consumers perceive to be inhumane practices, factory farmers routinely insist that if they treated their animals poorly, production would decline. Thus, they conclude that consumers need not worry: the animals are doing just fine. Scott Dewald, Vice-President of the Oklahoma Cattlemen’s Association, explains, “Our producers take care of their animals, and we know that an animal that isn’t treated well doesn’t produce.”  Sherrie Niekamp, head of animal welfare for the National Pork Board, echoes this sentiment when she acknowledges that “Animal welfare is . . . a market driven issue.”


Contraception as a Prisoner's Dilemma

A reader named Dennis Schenkel in Martin, Tenn., writes in with an interesting commentary about an article that intersects with a lot of things we’ve written about:

First, I know I’m partisan. I’m a Catholic priest. I’m a moralist. I’m biased. That having been said, I just read an article [from 2010] … describing how better contraceptives have successfully split the previous (before 1960) “mating market” into two markets consisting of the “sex market” and the “marriage market,” the author goes on to describe how this sets up a classic “prisoner’s dilemma” for women and gives men a huge advantage in both markets. The article appears in First Things, which is a religion/philosophy/culture/arts journal inhabited mostly by orthodox Catholic and Protestant Christians. But the article’s author does his best to speak exclusively in the language of the social sciences, without moralizing.

 


What Is the Relationship Between Income Inequality and Revolution?

A pair of interesting-looking papers, particularly interesting when paired, about income inequality and its relationship (or not?) to revolutions. From “Russian Inequality on the Eve of Revolution,” by Steven Nafziger and Peter H. Lindert:

Just how unequal were the incomes of different classes of Russians on
the eve of Revolution, relative to other countries, to Russia’s earlier history, and to Russia’s income distribution today? Careful weighing of an eclectic data set provides provisional answers.    We provide detailed income estimates for economic and social classes in each of the 50 provinces of European Russia.  In 1904, on the eve of military defeat and the 1905 Revolution, Russian income inequality was middling by the standards of that era, and less severe than inequality has become today in such countries as China, the United States, and Russia itself.  We also note how the interplay of some distinctive fiscal and relative-price features of Imperial Russia might have shaped the now-revealed level of inequality.


A Conservative Wishtory of the United States

My friend Jack Hitt has a funny piece in The New Yorker listing misstatements about American history by conservative politicians, beginning with these doozies: 

1500s: The American Revolutionary War begins: “The reason we fought the revolution in the sixteenth century was to get away from that kind of onerous crown.”—Rick Perry

1607: First welfare state collapses: “Jamestown colony, when it was first founded as a socialist venture, dang near failed with everybody dead and dying in the snow.”—Dick Armey

1619-1808: Africans set sail for America in search of freedom: “Other than Native Americans, who were here, all of us have the same story.”—Michele Bachmann

1775: Paul Revere “warned the British that they weren’t going to be taking away our arms, by ringing those bells and making sure as he was riding his horse through town to send those warning shots and bells that we were going to be secure and we were going to be free.”—Sarah Palin

1775: New Hampshire starts the American Revolution: “What I love about New Hampshire… You’re the state where the shot was heard around the world.”—Michele Bachmann

[Ed. note: One of these claims seems much closer to being true: see page 1336-38 of Property in Land].

Freakonomics Nation: can we produce an analogous list of historical misstatements by liberal pols? We’ll give out some Freakonomics swag to a clear winner or two. 


When a Typo Improves an E-Mail

We received a pretty standard e-mail recently that included the following sentence:

“We will be using experimental economic sand psychology to explore the motivations behind …”

Wow, I thought — that sounds interesting: experimental economic sand psychology. I wonder how that works. Is each subject given a pile of sand and asked to create a sand castle that represents their view of capitalism? Or maybe do different subjects bid on different lots of sand in an auction/game theory setting?

And then I read it again. Oh. It was supposed to read “experimental economics and psychology,” not “economic sand psychology.”

Never mind. Into the trash bin.


Bring Your Questions for FiveThirtyEight Blogger Nate Silver, Author of The Signal and the Noise

Nate Silver first gained prominence for his rigorous analysis of baseball statistics. He became even more prominent for his rigorous analysis of elections, primarily via his FiveThirtyEight blog. (He has also turned up on this blog a few times.)

Now Silver has written his first book, The Signal and the Noise: Why So Many Predictions Fail — But Some Don’t. I have only read chunks so far but can already recommend it. (I would like to think his research included listening to our radio hour “The Folly of Prediction,” but I have no idea.)

A section of Signal about weather prediction was recently excerpted in the Times Magazine. Relatedly, his chapter called “A Climate of Healthy Skepticism” has already been attacked by the climate scientist Michael Mann. Given the stakes, emotions, and general unpredictability that surround climate change, I am guessing Silver will collect a few more such darts. (Yeah, we’ve been there.)


Boycotts and Jerks

A reader named Ert Dredge writes in with the following set of trenchant observations and questions:

Hiya, Dubner ‘n Levitt.

I was just listening to podcast #84 “Legacy of a Jerk,” and it brought to mind a long-standing cocktail party question of mine:  Is it reasonable to boycott what someone does for a living, if you think they’re good at it, because they’re privately a jerk?

Is it reasonable to never watch Braveheart again because of Mel Gibson‘s anti-Semitism or other issues?
…or never watch another Roman Polanski film?
…or to have not listened to Cat Stevens during the whole Salman Rushdie fatwa issue (misunderstanding?)

And, if so, does that mean that boycotting my local shoe repair guy’s business because he doesn’t clean up after his dog is reasonable.


The Cost of Environmental Regulations

The environment has taken a back seat to the economy this election season. But timely new research looks at the intersection of politics, economics and the environment: the actual cost of environmental regulations.  

A new working paper (abstract; PDF) by Michael Greenstone, John List, and Chad Syverson analyzes the economic cost of air-quality regulations. From the abstract:

The economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago. Using detailed production data from nearly 1.2 million plant observations drawn from the 1972-1993 Annual Survey of Manufactures, we estimate the effects of air quality regulations on manufacturing plants’ total factor productivity (TFP) levels. We find that among surviving polluting plants, stricter air quality regulations are associated with a roughly 2.6 percent decline in TFP. The regulations governing ozone have particularly large negative effects on productivity, though effects are also evident among particulates and sulfur dioxide emitters.


The Risk of Reading This Blog

From a reader named William Haisley:

I’m a weekly columnist for the Daily Collegian, the Penn State newspaper, where I currently attend law school. Today my column about why I don’t vote — an idea I was exposed to and ran with after reading your “Why Vote” article — ran and I have been dealing with the fallout ever since. I think I’ve been insulted more often today than the rest of my 24 years combined.

In some sense, my column is just an amalgamation of your article and various Overcoming Bias articles — which, again, I was introduced to on your blog and can’t thank you enough for — I’ve read over the years, though I guess I could say that about my entire belief system at this point.

Anyways, you should have a warning label at the end of your articles that tells people the potential dangers of publicly stating some of your more controversial findings (though I really didn’t think this was that controversial, but I’ve been proven wrong). You really need the cultural tread to take people somewhere they didn’t know they were going.


The Authors of The Knockoff Economy Answer Your Questions

We want to thank everyone for their questions — it’s great to see people responding to, critiquing and, in some cases, tweaking, the ideas we set out in The Knockoff Economy. We are fascinated by the complex relationship between copying and creativity — and we’re thankful that many of you are as well.  So, to the Q&A . . .

Q. The issue that concerns my industry most is internet sales of prescription skin products such as retin-A and hydroquinone. Some might be counterfeit, but many are probably diverted products. The manufacturer sells them to a physician, the unscrupulous physician sells them on the internet at a deep discount, the patient may be hurt by expired or dangerous medications or may not use them correctly even if they are real. This hurts legitimate physicians by drawing business away from them, but also hurts a manufacturer’s reputation. (Apparently, people who have qualms about buying Viagra online don’t think twice before buying skin medications from those same sources.)

Do you plan to do any research in this area? Will you be looking at diversion in addition to counterfeits?


Peter Cramton: Medicare Auction Gadfly

My friend and co-author Peter Cramton continues his two-year crusade to improve the workings of “Medicare’s Bizarre Auction Program.”  You can watch his YouTube testimony before the United States House Committee on Small Business here.

(See also his Oral Testimony, Transcript of Hearing, Video of Entire Hearing.)

Peter’s supplemental comments are particularly devastating in rebutting two claims of Lawrence Wilson, Centers for Medicare and Medicaid Services (CMS) Director of the Chronic Care Group:

CMS [claim]: “CMS worked closely with stakeholders to design and implement the program.”

Mr. Wilson. “CMS worked closely with stakeholders to design and implement the program in a way that is fair for suppliers and sensitive to the needs of beneficiaries.”


Beware the Weasel Word "Statistical" in Statistical Significance!

As Justin Wolfers pointed out in his post on income inequality last week, the Census Bureau was talking statistical nonsense. I blame the whole idea of statistical significance. For its weasel adjective “statistical” concedes that the significance might not be the kind about which you care. Here, I’ll explain what statistical significance is, and how its use is harmful to society.

To evaluate the statistical significance of an effect, you calculate the so-called p value; if the p value is small enough, the effect is declared statistically significant. For an example to illustrate the calculations, imagine that your two children Alice and Bob play 30 rounds of the card game “War,” and that the results are 20-10 in favor of Bob. Was he cheating?

To calculate the p value, you need an assumption, called the null (or no-effect) hypothesis: here, that the game results are due to chance (i.e. no cheating). The p value is the probability of getting results at least as extreme as the actual results of 20-10. Here, the probability of Bob’s winning at least 20 games is 0.049. (Try it out at Daniel Sloper’s “Cumulative Binomial Probability Calculator.”)


Sex and Chocolate: Complements or Substitutes?

The attached picture is a display at the local CVS in Ann Arbor, Mich. My thought was that this shelf display is a great example of complements: Enjoy a chocolate bar together, and who knows what nice things might follow?  My son thought that it depicted  substitutes — no luck in love, so drown your sorrows by eating chocolate.  I don’t know who is correct, but the example illustrates well the fact the complementarity/substitutability can depend on the specific situation being examined.


Freelance Economist for Rent

From the mail:

Hi there,

I am a recent graduate of an economics Ph.D. program. I had what I thought was a successful trip through the adventure that is the economics job market and chose the risky but exciting option of working for a small start-up. Unfortunately, it turns out that it was more risky than exciting and the company doesn’t have work for me after all. So, I will be going back on the job market next year, but in the meantime I have extra time on my hands and bills to pay. I don’t want a permanent position and I don’t necessarily need much work, just enough to keep the lights on and food on the table.

My brother-in-law is a graphic designer and does some freelance work on the side which made me wonder if there could be such a thing as a freelance economist. There must be many small companies or organizations who cannot afford staff economists or expensive consultants, but have data they don’t know what to do with or questions about how their business runs that they don’t know how to answer. Freakonomics readers know that economics shows up all over the place.


The Status Quo

If you ever travel to Israel (which, BTW, is a phenomenal place to visit regardless of your attitudes toward religion or Middle Eastern politics), you’ll certainly see the Church of the Holy Sepulchre, built on what many believe is the site of Jesus’ crucifixion and burial. But you might come away a bit disappointed; the church has something of a disorganized and ramshackle feel.

The problem is not that the site isn’t considered sacred, but that it’s considered too sacred. Thanks to its obvious import, it is shared—and has been for thousands of years—by multiple religious denominations, including the Greek Orthodox, Roman Catholic, Coptic Orthodox, Armenian Apostolic, Ethiopian Orthodox and Syriac Orthodox sects. (Sorry, Protestants, since Luther’s 95 Theses were not posted until 1517 you are Johnny-come-latelys and don’t get a piece of the action.)


How to Cut Prison Costs Without Driving Up Crime?

Putting people in prison helps drive down crime but it’s not cheap, a fact that is troubling some states. So is there a way to cut  incarceration rates without spiking crime?  Yes, says economist Ben Vollaard in a recent article (long version) arguing in favor of “selective incapacitation”:

The idea of selective incapacitation is to make a distinction between offenders with a high and with a low propensity to commit crime. Those of the high propensity type – the prolific offenders – are responsible for a large share of violent and property crime (Tracy et al. 1990). To them, the default penalties have little deterrent effect. By making the length of a prison sentence conditional upon an offender’s criminal record, enhanced prison sentences can be targeted at this population. After all, by repeatedly breaking the law, these offenders reveal themselves to be of the prolific type (Polinsky and Rubinfeld 1991). Once the harsher sentences apply, the penalties may begin to make a difference, if not through deterrence, then by way of incapacitation in prison. 


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!


Special Parking for Hybrids

My wife took four grandkids to the Adventure Aquarium in Camden, New Jersey.  Looking for a parking space, she noticed the usual handicapped parking spots near the entrance, but also parking spaces reserved for hybrid vehicles.  The Aquarium, though not government-run, appears concerned about environmental issues and apparently tries to encourage energy conservation by making a visit easier for those who have chosen energy-efficient vehicles.  The private sector is implicitly subsidizing the purchase of hybrid cars, not by offering monetary incentives, but by subsidizing the time cost of owning these cars.  I suppose one can object that the subsidy matters more to those whose time is more valuable—presumably higher earners; but it’s still a neat way for the private sector to encourage energy efficiency.  I wonder how many other examples exist of explicit non-monetary subsidies by the private sector? (HT to FWH)


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?