Posts tagged ‘economic sociology’

Breaking Bad Edges

| Gabriel |

First let me say that I love Breaking Bad for exactly the same reasons as Ross Douthat. If you haven’t watched it, go to Amazon and buy the first and second seasons — it will be the best $29.98 plus shipping you ever spend.

It struck me that the season 3 finale is entirely about exchange theory. [really serious spoilers follow].

(more…)

June 18, 2010 at 1:16 pm 1 comment

Doing well by doing good

| Gabriel |

In the course of a recent post describing Haitian resentment of relief workers (who they view as stealing their jobs), Bryan Caplan links to a much older post he wrote (as inspired by a Cowen talk) about the “cargo” practice in rural Mexico. In this system anyone with wealth is expected to take on public office during which he funds public expenses from his private wealth. Caplan and Cowen describe this as providing an extreme incentive to either avoid wealth accumulation or to become an evangelico, which is a voluntary form of social death.

At first I found this pretty convincing (in part because I’ve heard an almost identical analysis from Alex Portes). However I was thinking about it some more and I realized that it’s a little more complicated than that. First of all, this dynamic is not unique to modern rural Latin America. An almost identical practice of euergetism was common in the ancient world, which didn’t exactly have the state capacity to collect a Value-Added Tax. Instead they relied on a combination of direct levies (conscription from the middle classes and euergetism from the big shots) and the relatively minor state treasuries came from the highly inefficient practice of tax farming the provinces. For instance, although Pericles financed most of his Athenian public works out of tribute from the other members of the Delian League, he offered to pay for them out of pocket on several occasions. Although euergetism was important in classical Greece and the Hellenistic world, I’m going to focus on Republican Rome as an example.

The main way euregetism worked in Republican Rome was through the aedileship (municipal officer), which was the second step in the cursus honorum. Every year four ambitious young men were made aediles and during their tenure they provided many municipal services, especially the ludi (games) which provided the young man an opportunity to show off his wealth and connections by bringing in exotic animals, gladiators, performers, etc. An arms race developed for largesse and spectacle and many aediles went heavily into debt.

So far this is all consistent with the picture drawn by Caplan, Cowen, and Portes, of the expectation of magnificent philanthropy being an indirect form of high marginal tax rates, with all that implies. Note though that their model implies that:
a) people would tend to avoid public service either directly or by forgoing wealth accumulation in the first place
b) the poor bastards who get stuck with public service would be bled dry

However neither of these are entirely true in the Roman Republic. The simplest way to demonstrate this is that there is a power-law distribution for how often families held the consulship. This implies cumulative advantage and thus holding high political office must have been, on net, profitable. How could this be given the massive expenses necessary to achieve and exercise high political office?

Consider the case of Gaius Julius Caesar. He was driven heavily into debt by his aedileship and praetorship (a judicial office that followed the aedileship). However then he was made propraetor (military governor) of outer Spain during which he won a lot of wealth by conquest and acquired the patronage of Crassus. Caesar then became consul (albeit in an especially ugly fashion) and went back North of the Alps to acquire enormous wealth in Gaul. So basically, the early stages of political office were expensive, but they provided the opportunity for later provincial administration where one could squeeze the provincials. Put more broadly, philanthropy is the price of purchase for political rent-seeking which could be extremely valuable. Likewise, my understanding is that in Latin America there are many opportunities for rent-seeking that are opened by embedding oneself in a patronage system. This may actually be the most invidious aspect of the system — it may not so much discourage wealth accumulation per se so much as redirect efforts away from positive sum wealth creation and to negative sum rent-seeking.

May 20, 2010 at 3:00 pm 2 comments

Misc links (niche partitioning and categories edition)

| Gabriel |

  • Attention niche partitioning people in search of a research topic! For awhile there was a fairly clean divide between ethnic shops and general shops in the advertising industry. Now the general shops are increasingly creating multicultural divisions and taking market share from the specialists. For some good background reading on ethnic partitioning of the ad market see Davila and Turow.
  • Intel is creating a more powerful dual-core version of the Atom chip that is found in most netbooks. This of course blurs the boundary between netbooks and laptops since the whole point of a netbook was it was weak but only cost $250, so if it’s powerful and $500 doesn’t that make it a laptop? (h/t Mark Kennedy.) On the other hand, this could actually heighten the contrast between netbooks and laptops. Suppose that in its quest to climb back up the value chain, Intel effectively prices itself out of the netbook market. If there is still a demand at or below the $250 price point, it will be met by computers based on ARM chips (the same thing that’s in the iPad and most cell phones) which are even cheaper and weaker than the Atom. The hitch is that ARM chips can’t run software compiled for an x86 which in practice means they can only run Linux. (Windows CE runs on ARM but there’s very little application software available for it whereas it’s pretty easy to recompile open source software for ARM and cloud services don’t care what chips or OS you’re using). In this scenario the current netbook niche would fragment into two, with some climbing the value chain to be low-end laptops running Windows and others being dirt cheap and running Chrome OS or Ubuntu Netbook Edition.
  • Everything I needed to know about economic sociology I learned from watching this old Disney cartoon. The main focus is on categorical uncertainty but it’s also got legal-rational authority/ bureaucracy, the railroads as the archetypal organizations of the second industrial revolution, reliance on expertise, social construction of price, exponential growth processes, etc.
  • Finally, it’s worth remembering that niche partitioning specifically and the organizational ecology paradigm more broadly is based on regular old biology and so even more than your average liberally educated person, econ soc folks should know something about biology. Fortunately, Stephen Stearns has podcast his intro to EEB. EEB is short for “evolution, ecology, and behavior” which us laymen can think of as the kind of biology that’s interesting, in contrast to MCB (molecular cell bio) which is the kind of biology that’s boring but will get you a job at Pfizer. As usual, Yale did a great technical job of capturing a talented lecturer. FWIW, Stearns’ voice sounds a little like that of President Obama so I keep expecting to say things like “if you like your genome, you can keep your genome.”

May 5, 2010 at 4:38 am 2 comments

Ratings game

| Gabriel |

David Waguespack and Olav Sorenson have an interesting new paper on Hollywood (their earlier Hollywood paper is here) that contributes to the literature on categorization, rankings, and sensemaking that increasingly seems to be the dominant theme in econ soc. The new paper is about MPAA ratings (G, PG, PG13, R, NC17) and finds that, controlling for the salacious of the content, the big studios get more lenient ratings than small studios. The exact mechanism through which this occurs is hard to nail down but it occurs even on the initial submission so it’s not just that studios continuously edit down and resubmit the movie until they get a PG13 (which is what I would have expected). Thus the finding is similar to some of the extant literature on how private or quasi-private ranking systems can have similar effects to government mandates but adds the theoretical twist that rankings can function as a barrier to entry. This kind of thing has been suspected by the industry itself, and in fact I heard the findings discussed on “The Business” in the car and was planning to google the paper only to find that Olav had emailed me a copy while I was in transit.

Aside from the theoretical/substantive interest, there are two methods points worth noting. First, their raw data on salaciousness is a set of three Likert scales: sex, violence, and cussing. The natural thing to do would have been to just treat these as three continuous variables or even sum them to a single index. Of course this would be making the assumption that effects are additive, linear, and the intervals on the scale are consistent. They avoided this problem by creating a massive dummy set of all combinations of the three scores. Perhaps overkill, but pretty hard to second guess (unless you’re worried about over-fitting, but they present the parametric models too and everything is consistent). Second, to allow for replication, Olav’s website has a zip with their code and data (the unique salaciousness data, not the IMDB data that is available elsewhere). This is important because as several studies have shown, “available on request” is usually a myth.

March 22, 2010 at 4:27 am

Age, Period, Flim Flam

| Gabriel |

A few months ago, The Chronicle had a very interesting article on generation gurus, who claim insight into the “millenials,” or as actual social scientists boringly call them, “the 1980s and 1990s birth cohorts.” Lots of organizations, including college admissions boards, are really interested in these gurus’ advice on how to understand the kids these days. (Which reminds me of the obnoxious creative team of Smitty and Kurt, who were brought on to Sterling Cooper to sell Martinson’s coffee to the Pepsi generation).

I remember way back when I was in high school reading a long-form magazine article (The Atlantic?) on Howe and Strauss and I thought it was a great theory, in part because some of the details seemed like they were (or ought to be) true and in part because the generational dialectic struck me as plausible. Basically they say that idealistic generations are followed by cynics who in turn are followed by pragmatic workhorses who are in turn followed by idealists, with the mechanism being that each generation reacts against its parents’ excesses. According to this schema, the reason I grew up listening to Nirvana was as a reaction to the “All you need is love” stuff of the boomers.

When I got all growed up and actually started dealing with, you know, systematic data, I was more than a little disappointed that while cohort change is not always linear, it is basically monotonic and it is definitely not cyclical or dialectical. I’m primarily an orgs guy rather than a people guy, but I’ve still done some moderately extensive age/period/cohort stuff with the GSS and SPPA and on everything I looked at (mostly social attitudes and cultural consumption), there’s absolutely no evidence whatsoever for the Howe and Strauss dialectic. So for instance, if you look at strong preference for opera and classical you first have to limit the data to BA or higher education (less educated people don’t like this music regardless of cohort) and then you see a clear trend that the music is popular with educated people born before 1950 and unpopular with educated people born after 1950. There is no distinction between “boomers” and “gen X” in the data, and in fact older boomers are still into high culture. The only issue that I’m aware of that even vaguely approximates the Howe and Strauss model is abortion attitudes, but a) the cohort effects on abortion attitudes are weak and b) the effects of cohort on other sex/reproduction opinions, like gay marriage, are monotonic.

So given that the empirical evidence for these ideas is so weak, why are college administrators, marketers, etc, so into it? I think the answer has to be that it was facially plausible and more importantly that it was pretty clear. A money quote from the article is:

Amid this complexity, the Millennials message was not only comforting but empowering. “It tickled our ears,” says Palmer H. Muntz, director of admissions and an enrollment-management consultant at Lincoln Christian University, in Illinois. “It packaged today’s youth in a way that we really wanted to see them. It gave us a formula for understanding them.”

This is reminiscent of the argument that John Campbell gave for explaining the popularity of supply side economics. His argument is basically that the idea gained popularity not because it had especially powerful theory or empirics behind it, but because it was comprehensible and gave a tractable guide to action. In theory, Lafferism is contingent on the important question of where the current tax regime lies relative to the curve’s maximum, but in practice this contingency was elided and people took it to mean “always cut taxes.” That is the appeal of the idea was not so much that we had good reasons to think it reflected reality (or more specifically, that it was applicable to current circumstances), but because it clearly prescribed action — and I think it’s worth adding, actions that were desirable in a free lunch kind of way. In the same way, if you read Howe and Strauss, they are relentlessly positive about the millennials, portraying them as a dialectically-generated reproduction of the go-getters who first stormed the beaches of Normandy and then nested into Levittown. Victory, affluence, swing music, what’s not to love about these kids?

You can see similar wishful thinking in the eagerness of municipal officials to throw consulting contracts at Richard Florida. Florida’s basic shtick is that if Methenburg, PA wants to develop they should just rezone old warehouses and put up a sign reading “Methenburg Arts District,” this will attract artists, who in turn will attract engineers, who in turn will turn Methenburg into the next Silicon Valley. I always imagine after Florida gives his powerpoint, the city councilmen or county selectmen are enthusiastically coming up with ideas about how to be “cool” like Murray Hewitt on Flight of the Conchords. It sounds like a perfect plan: Methenburg get to be “cool,” we get development, and it doesn’t require either making expenditures or forgoing revenues to any appreciable extent.

If only it were true.

January 19, 2010 at 5:14 am 2 comments

Sampling on the independent variables

| Gabriel |

At Scatterplot, Jeremy notes that in a reader poll, Megan Fox was voted both “worst” and “sexiest” actress. Personally, I’ve always found Megan Fox to be less sexy than a painfully deliberate simulacra of sexy. The interesting question Jeremy asks is whether this negative association is correlation or causation. My answer is neither, it’s truncation.

What you have to understand is that the question is implicitly about famous actresses. It is quite likely that somewhere in Glendale there is some barista with a headshot by the register who is both fugly and reads lines like a robot. However this person is not famous (and probably not even Taft-Hartleyed). If there is any meritocracy at all in Hollywood, the famous are — on average — going to be desirable in at least one dimension. They may become famous because they are hot or because they are talented, but our friend at the Starbucks on Colorado is staying at the Starbucks on Colorado.

This means that when we ask about the association of acting talent and sexiness amongst the famous, we have censored data where people who are low on both dimensions are censored out. Within the truncated sample there may be a robust negative association, but the causal relationship is very indirect, and it’s not as if having perky breasts directly obstructs the ability to convincingly express emotions (a botoxed face on the other hand …).

You can see this clearly in simulation (code is at the end of the post). I’ve modeled a population of ten thousand aspiring actresses as having two dimensions, body and mind, each of which is drawn from a random normal. As built in by assumption, there is no correlation between body and mind.

Stars are a subsample of aspirants. Star power is defined as a Poisson centered on the sum of body and mind (and re-centered to avoid negative values). That is, star power is a combination of body, mind, and luck. Only the 10% of aspirants with the most star power become famous. If we now look at the correlation of body and mind among stars, it’s negative.

This is a silly example, but it reflects a serious methodological problem that I’ve seen in the literature and I propose to call “sampling on the independent variable.” You sometimes see this directly in the sample construction when a researcher takes several overlapping datasets and combines them. If the researcher then uses membership in one of the constituent datasets (or something closely associated with it) to predict membership in another of a constituent datasets (or something closely associated with it), the beta is inevitably negative. (I recently reviewed a paper that did this and treated the negative associations as substantive findings rather than methodological artifacts).

Likewise, it is very common for a researcher to rely on prepackaged composite data rather than explicitly creating original composite data. For instance, consider that favorite population of econ soc, the Fortune 500. Fortune defines this population as the top 500 firms ranked by sales. Now imagine decomposing sales by industry. Inevitably, sales in manufacturing will be negatively correlated with sales in retail. However this is an artifact of sample truncation. In the broader population the two types of sales will be positively correlated (at least among multi-dimensional firms).

clear
set obs 10000
gen body=rnormal()
gen mind=rnormal()
*corr in the population
corr body mind
scatter body mind
graph export bodymind_everybody.png, replace
*keep only the stars
gen talent=body+mind+3
recode talent -100/0=0
gen stardom=rpoisson(talent)
gsort -stardom
keep in 1/1000
*corr amongst stars
corr body mind
scatter body mind
graph export bodymind_stars.png, replace

January 4, 2010 at 4:51 am 10 comments

I got a “5” on the performativity exam!

| Gabriel |

So apparently high schools are encouraging huge numbers of kids to take advanced placement tests. If you’ve ever seen one of those surveys where 40% of high school kids think Obi Wan Kenobi was one of the founding fathers, you’ll be able to guess that the outcome is that very few of them pass the test. In a rare triumph of reason in things having to do with education, there is now a backlash against this. I find this interesting for two reasons:

1. I actually know something about this topic. Although I never published it, one of my two youthful forays into ethnography was at a high school college counseling office in the late 90s. One of the main things going on there was the struggle to organize the AP exams. When kids took AP classes they were obligated to take the AP exam in the spring. However in part because the school had a dismal track record of AP passage and in part because the kids themselves had to pay the AP fee, the students resisted taking the exam. This put the counselor in an adversarial relationship with the students as she tried to coerce and cajole them into paying for and taking the exam, which they (but not she) recognized was a humiliating waste of time and money.

2. Apparently the main driver of AP creep is that some high school ratings algorithms count how many kids in a high school take the AP rather than, oh, I don’t know, pass the AP. This of course is consistent with the typical nonsense you see of highly institutionalized sectors measuring performance by inputs rather than outputs. Likewise, here in California the CSU and UC have long had the concept of a weighted GPA where an AP class adds a full letter grade such that a lot of my friends in high school had GPAs of 4.2. High schools pander to these magazine rankings / college admissions criteria by adding more AP classes than they have competent students to fill. This ratings performativity is well familiar to economic sociologists thanks to work done recently on law school ratings by Espeland and Sauder. Likewise, McArdle has had two posts (part 1, part 2) recently on the development and now perfection of CBO-scoring gamesmanship.

December 23, 2009 at 1:50 pm 3 comments

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