Cringe!

| Gabriel |

I knew this was coming but it’s still cringe-inducing to see rapping by any person who doesn’t usually rap, especially if that person’s real job involves using phrases like “aggregate demand.” This rule should not be violated for any reason, ever. Let the economy fall into structural deficits and/or a liquidity trap, but for the love of all that is decent and holy, do not rap about macro!

Links

| Gabriel |

• One of the several intersections between social movements, cultural soc, and econ soc is the “repertoire,” which is basically a special case of the cultural toolkit as applied to activism. The fun thing is that they are culturally specific and usually tie into some broader institutional logic. Here’s a Slate story on the roadblock protest. The story describes it as peculiar to Argentina, but I know of similar protests in France and in Mexico there was even a longstanding airport-runway-block protest.
• Talk about the socialist calculation problem, Marginal Revolution describes a project by the Allende government to create a central planning computer (complete with a control center that looks like the original queue for Space Mountain).

Science (esp. econ) made fun

| Gabriel |

In a review essay, Vromen talks about the (whodathunkit) popular book/magazine-column/blog genre of economics-made-fun that’s become a huge hit with the mass audience in the last 5 to 10 years. Although Vromen doesn’t mention it, this can be seen as a special case of the science-can-be-fun genre (e.g., Stephen Jay Gould’s short essays that use things like Hershey bars and Mickey Mouse to explain reasonably complex principles of evolutionary biology.)

Vromen makes a careful distinction from the older genre of economists-can-be-funny (currently exemplified by the stand-up economist), which is really a special case of the general genre of scientists doing elaborate satires of their own disciplines for the benefit of their peers. There is an entire journal of this, but my all time favorite example is a satire of mid-20th century psychology in the form of a review of the literature on when people are willing to pass the salt at the dinner table.  Two excerpts from the “references” section should suffice to convince you to click the link and read the whole thing.

• Festinger, R. “Let’s Give Some Subjects $20 and Some Subjects $1 and See What Happens.” Journal for Predictions Contrary to Common Sense 10, 1956, pp. 1-20.
• Milgram, R. “An Electrician’s Wiring Guide to Social Science Experiments.” Popular Mechanics 23, 1969, pp. 74-87.

If you don’t remember what Festinger and Milgram actually did in the 50s and 60s this won’t be funny, but if you do it’s hilarious. Hence, the scientists-can-be-funny genre is a self-deprecating genre for an audience of insiders that simultaneously demonstrates the joker’s mastery of the field and the field’s foibles. In contrast, the science-can-be-fun genre is targeted to a mass audience and is about demonstrating the elegance and power of the field. The former inspires humility among practitioners, the latter awe among the yokels.

One of the interesting things about the econ-made-fun literary genre is that it is largely orthogonal to any theoretical distinction within scholarly economics. The most prominent “econ made fun” practitioners span such theoretical areas as applied micro (Levitt), behavioral (Ariely), and Austrian (Cowen). In part because the “econ made fun” genre exploded at about the same time as the Kahneman Nobel and in part because “econ made fun” tends to focus on unusual substantive issues (i.e., anything but financial markets), this has led a lot of people to conflate “econ made fun” and behavioral econ. I’ve heard Steve Levitt referred to as a “behavioral economist” several times. This drives me crazy as at a theoretical level, behavioral economics is the opposite of applied micro, and in fact Levitt has done important work suggesting that behavioral econ may not generalize very well from the lab to the real world. That people (including people who ought to know better) nonetheless refer to him as a “behavioral economist” suggests to me that in the popular imagination literary genre is vastly more salient than theoretical content.

I myself occasionally do the “sociologists can be funny” genre (see here , here, and here) but these are basically elaborate deadpan in-jokes and I am under no illusions that anyone without a PhD would find them at all funny. I have no idea how to go about writing “sociology can be fun” (this is probably the closest I’ve come) along the lines of Levitt/Dubner or Harford, nor to be honest do I see any other sociologist doing it particularly well. There are plenty of sociologists who try to speak to a mass audience, but the tone tends to be professorial exposition or political exhortation rather than amusement at the surprising intricacy of social life. Fortunately Malcolm Gladwell has an intense and fairly serious interest in sociology and is very talented at making our field look fun.

Team Sorting

| Gabriel |

Tyler Cowen links to an NBER paper by Hoxby that shows that in recent decades, status sorting has gotten more intense for college. Cowen asks “is this a more general prediction in a superstars model?” The archetypal superstar system is Hollywood, and here’s my quick and dirty stab at answering Tyler’s question for that field. Faulkner and Anderson’s 1987 AJS showed that there is a lot of quality sorting in Hollywood, but they didn’t give a time trend. As shown in my forthcoming ASR with Esparza and Bonacich, there are big team spillovers so this is something we ought to care about.

I’m reusing the dataset from our paper, which is a subset of IMDB for Oscar eligible films (basically, theatrically-released non-porn) from 1936-2005. If I were doing it for publication I’d do it better (i.e., I’d allow the data to have more structure and I’d build confidence intervals from randomness), but for exploratory purposes the simplest way to measure sorting is to see if a given film had at least one prior Oscar nominee writer, director, and actor. From that I can calculate the odds-ratio of having an elite peer in the other occupation.

Overall, a movie that has at least one prior nominee writer is 7.3 times more likely than other films to have a prior nominee director and 4.4 times more likely to have a prior nominee cast. A cast with a prior nominee is 6.5 times more likely to have a prior nominee director. Of course we already knew there was a lot of sorting from Faulker and Anderson, the question suggested by Hoxby/Cowen is what are the effects over time?

This little table shows odds-ratios for cast-director, writer-director, and writer-cast. Big numbers mean more intense sorting.

...+--------------------------------------+
...| decade    cd       wd       wc       |
...|--------------------------------------|
1. | 1936-1945 6.545898 6.452388 4.306554 |
2. | 1946-1955 9.407476 6.425553 5.368151 |
3. | 1956-1965 12.09229 8.741302 6.720059 |
4. | 1966-1975 4.697238 5.399081 4.781106 |
5. | 1976-1985 4.113508 6.984528 4.450109 |
6. | 1986-1995 4.923809 7.599852 3.301461 |
7. | 1996-2005 4.826018 12.35915 3.641975 |
+-----------------------------------------+

The trend is a little complicated. For collaborations between Oscar-nominated casts on the one-hand and either writers or directors, the sorting is most intense in the 1946-1955 decade and especially the 1956-1965 decade. My guess is that this is tied to the decline of the studio system and/or the peak power of MCA. The odds-ratio of good director for nom vs non-nom writers also has a jump around the end of the studio system, but it seems there’s a second jump starting in the 80s. My guess is that this is an artifact of the increasing number of writer-directors (see Baker and Faulkner AJS 1991), but it’s an empirical question.

Putting aside the writer-director thing, it seems that sorting is not growing stronger in Hollywood. My guess is that ever more intense sorting is not a logical necessity of superstar markets, but has to do with contingencies, such as the rise of a national market for elite education in Hoxby’s case or the machinations of Lew Wasserman and Olivia deHavilland in my case.

The Stata code is below. (sorry that wordpress won’t preserve the whitespace). The data consists of film-level data with dummies for having at least one prior nominee for the three occupations.

global parentpath "/Users/rossman/Documents/oscars"

capture program drop makedecade
program define makedecade
gen decade=year
recode decade 1900/1935=. 1936/1945=1 1946/1955=2 1956/1965=3 1966/1975=4 1976/1985=5 1986/1995=6 1996/2005=7
capture lab drop decade
lab def decade 1 "1936-1945" 2 "1946-1955" 3 "1956-1965" 4 "1966-1975" 5 "1976-1985" 6 "1986-1995" 7 "1996-2005"
lab val decade decade
end

cd $parentpath

capture log close
log using $parentpath/sorting_analysis.log, replace

use sorting, clear
makedecade

*do odds-ratio of working w oscar nom, by own status

capture program drop allstar
program define allstar
preserve
if "`1'"!="" {
keep if decade==`1'
}
tabulate cast director, matcell(CD)
local pooled_cd=(CD[2,2]*CD[1,1])/(CD[1,2]*CD[2,1])
tabulate writers director, matcell(WD)
local pooled_wd=(WD[2,2]*WD[1,1])/(WD[1,2]*WD[2,1])
tabulate writers cast, matcell(WC)
local pooled_wc=(WC[2,2]*WC[1,1])/(WC[1,2]*WC[2,1])
shell echo "`pooled_cd' `pooled_wd' `pooled_wc' `1'" >> sortingresults.txt
restore
end

shell echo "cd wd wc decade" > sortingresults.txt
quietly allstar
forvalues t=1/7 {
quietly allstar `t'
}

insheet using sortingresults.txt, delimiter(" ") names clear
lab val decade decade

 

*have a nice day


La vie en mort

| Gabriel |

Denis Colombi has contributed a few entries to the thriving sociology of zombies literature. His abstracts (including a description of zombie habitus) are all funny, but for my money the most sublime satire is his rational choice marginal analysis of zombie equilibrium:

Il faut comprendre les zombis en restituant les “bonnes raisons” de devenir zombis, afin de le faire apparaître comme un comportement rationnel. Ainsi, le choix de devenir ou non zombi dépend avant tout d’un calcul en fonction du rendement espéré de cette transformation. L’agrégation de ces comportements se traduit par un effet émergents, à savoir la réduction du nombre d’humains non-zombifiés ce qui réduit les gains de sa propre zombification. On peut ainsi parler d’une inflation zombifique, comme pour les diplômes.

It’s been a long time since lycée, but here’s my loose translation

We can understand zombies by restoring the “good reasons” to become zombies and thus make it apparent that it is a rational behavior. Thus the choice to become a zombie or not depends primarily a calculation based on the expected value of this transformation. The aggregation of these behaviors results in an emergent phenomenon, that is increasing the number of zombies reduces the marginal value of zombification. We can thus speak of zombification inflation, as with credential inflation for diplomas.

Towards a sociology of living death

| Gabriel |

Daniel Drezner had a post a few months ago talking about how international relations scholars of the four major schools would react to a zombie epidemic. Aside from the sheer fun of talking about something as silly as zombies, it has much the same illuminating satiric purpose as “how many X does it take to screw in a lightbulb” jokes. If you have even a cursory familiarity with IR it is well worth reading.

Here’s my humble attempt to do the same for several schools within sociology. Note that I’m not even to get into the Foucauldian “whose to say that life is ‘normal’ and living death is ‘deviant’” stuff because, really, it would be too easy. Also, I wrote this post last week and originally planned to save it for Halloween, but I figured I’d move it up given that Zombieland is doing so well with critics and at the box office.

Public Opinion. Consider the statement that “Zombies are a growing problem in society.” Would you:

1. Strongly disagree
2. Somewhat disagree
3. Neither agree nor disagree
4. Somewhat agree
5. Strongly agree
6. Um, how do I know you’re really with NORC and not just here to eat my brain?

Criminology. In some areas (e.g., Pittsburgh, Raccoon City), zombification is now more common that attending college or serving in the military and must be understood as a modal life course event. Furthermore, as seen in audit studies employers are unwilling to hire zombies and so the mark of zombification has persistent and reverberating effects throughout undeath (at least until complete decomposition and putrefecation). However race trumps humanity as most employers prefer to hire a white zombie over a black human.

Cultural toolkit. Being mindless, zombies have no cultural toolkit. Rather the great interest is understanding how the cultural toolkits of the living develop and are invoked during unsettled times of uncertainty, such as an onslaught of walking corpses. The human being besieged by zombies is not constrained by culture, but draws upon it. Actors can draw upon such culturally-informed tools as boarding up the windows of a farmhouse, shotgunning the undead, or simply falling into panicked blubbering.

Categorization. There’s a kind of categorical legitimacy problem to zombies. Initially zombies were supernaturally animated dead, they were sluggish but relentlessness, and they sought to eat human brains. In contrast, more recent zombies tend to be infected with a virus that leaves them still living in a biological sense but alters their behavior so as to be savage, oblivious to pain, and nimble. Furthermore even supernatural zombies are not a homogenous set but encompass varying degrees of decomposition. Thus the first issue with zombies is defining what is a zombie and if it is commensurable with similar categories (like an inferius in Harry Potter). This categorical uncertainty has effects in that insurance underwriters systematically undervalue life insurance policies against monsters that are ambiguous to categorize (zombies) as compared to those that fall into a clearly delineated category (vampires).

Neo-institutionalism. Saving humanity from the hordes of the undead is a broad goal that is easily decoupled from the means used to achieve it. Especially given that human survivors need legitimacy in order to command access to scarce resources (e.g., shotgun shells, gasoline), it is more important to use strategies that are perceived as legitimate by trading partners (i.e., other terrified humans you’re trying to recruit into your improvised human survival cooperative) than to develop technically efficient means of dispatching the living dead. Although early on strategies for dealing with the undead (panic, “hole up here until help arrives,” “we have to get out of the city,” developing a vaccine, etc) are practiced where they are most technically efficient, once a strategy achieves legitimacy it spreads via isomorphism to technically inappropriate contexts.

Population ecology. Improvised human survival cooperatives (IHSC) demonstrate the liability of newness in that many are overwhelmed and devoured immediately after formation. Furthermore, IHSC demonstrate the essentially fixed nature of organizations as those IHSC that attempt to change core strategy (eg, from “let’s hole up here until help arrives” to “we have to get out of the city”) show a greatly increased hazard for being overwhelmed and devoured.

Diffusion. Viral zombieism (e.g. Resident Evil, 28 Days Later) tends to start with a single patient zero whereas supernatural zombieism (e.g. Night of the Living Dead, the “Thriller” video) tends to start with all recently deceased bodies rising from the grave. By seeing whether the diffusion curve for zombieism more closely approximates a Bass mixed-influence model or a classic s-curve we can estimate whether zombieism is supernatural or viral, and therefore whether policy-makers should direct grants towards biomedical labs to develop a zombie vaccine or the Catholic Church to give priests a crash course in the neglected art of exorcism. Furthermore marketers can plug plausible assumptions into the Bass model so as to make projections of the size of the zombie market over time, and thus how quickly to start manufacturing such products as brain-flavored Doritos.

Social movements. The dominant debate is the extent to which anti-zombie mobilization represents changes in the political opportunity structure brought on by complete societal collapse as compared to an essentially expressive act related to cultural dislocation and contested space. Supporting the latter interpretation is that zombie hunting militias are especially likely to form in counties that have seen recent increases in immigration. (The finding holds even when controlling for such variables as gun registrations, log distance to the nearest army administered “safe zone,” etc.).

Family. Zombieism doesn’t just affect individuals, but families. Having a zombie in the family involves an average of 25 hours of care work per week, including such tasks as going to the butcher to buy pig brains, repairing the boarding that keeps the zombie securely in the basement and away from the rest of the family, and washing a variety of stains out of the zombie’s tattered clothing. Almost all of this care work is performed by women and very little of it is done by paid care workers as no care worker in her right mind is willing to be in a house with a zombie.

Applied micro-economics. We combine two unique datasets, the first being military satellite imagery of zombie mobs and the second records salvaged from the wreckage of Exxon/Mobil headquarters showing which gas stations were due to be refueled just before the start of the zombie epidemic. Since humans can use salvaged gasoline either to set the undead on fire or to power vehicles, chainsaws, etc., we have a source of plausibly exogenous heterogeneity in showing which neighborhoods were more or less hospitable environments for zombies. We show that zombies tended to shuffle towards neighborhoods with low stocks of gasoline. Hence, we find that zombies respond to incentives (just like school teachers, and sumo wrestlers, and crack dealers, and realtors, and hookers, …).

Grounded theory. One cannot fully appreciate zombies by imposing a pre-existing theoretical framework on zombies. Only participant observation can allow one to provide a thick description of the mindless zombie perspective. Unfortunately scientistic institutions tend to be unsupportive of this kind of research. Major research funders reject as “too vague and insufficiently theory-driven” proposals that describe the intention to see what findings emerge from roaming about feasting on the living. Likewise IRB panels raise issues about whether a zombie can give informed consent and whether it is ethical to kill the living and eat their brains.

Ethnomethodology. Zombieism is not so much a state of being as a set of practices and cultural scripts. It is not that one is a zombie but that one does being a zombie such that zombieism is created and enacted through interaction. Even if one is “objectively” a mindless animated corpse, one cannot really be said to be fulfilling one’s cultural role as a zombie unless one shuffles across the landscape in search of brains.

Conversation Analysis.

1  HUMAN:    Hello, (0.5) Uh, I uh, (Ya know) is anyone in there?
2  ZOMBIE1:  Br:ai[ns], =
3  ZOMBIE2:       [Br]:ain[s]
4  ZOMBIE1:              =[B]r:ains
5  HUMAN:    Uh, I uh= li:ke, Hello? =
6  ZOMBIE1:  Br:ai:ns!
7  (0.5)
8  HUMAN:    Die >motherfuckers!<
9  SHOTGUN:  Bang! (0.1) =
10 ZOMBIE1:  Aa:ar:gg[gh!]
11 SHOTGUN:         =[Chk]-Chk, (0.1) Bang!

So long (distinctive) Notre Dame economics

| Gabriel |

For many years Notre Dame had a “heterodox” economics department known for approaches that were less rosy on laissez-faire policy and formal modeling methods than your typical econ department. A few years ago the university created a conventional econ department alongside the heterodox department. Now it is closing down the old heterodox department and spreading the faculty among sister departments.

Even though I’m an economic sociologist (and thus by definition think conventional economics leaves out a lot of interesting stuff about markets and exchange), I think overall Chicago style economics has a more accurate and parsimonious model of exchange than does the style of economics that we can no longer associate with Notre Dame. Nonetheless even though I don’t agree with many of their models and conclusions, I think it’s unequivocally a shame both for economics as a discipline and Notre Dame as an institution that a department providing a distinctive perspective has been turned into yet another second-tier conventional department.

First, what this means for economics as a discipline. The development of ideas come out of meaningful intellectual diversity, especially when there are viable circles where people who have novel ideas can bounce off of each other. So long as the departure from the discipline’s dominant paradigm is not truly ridiculous (e.g., a biology or geology department known for young Earth creationism), I think it’s healthy for the field to have a few circles that break from the consensus.

Second, for Notre Dame as an institution. Notre Dame is embracing the strategy of middle-range conformity and this strikes me as a bad idea. Let’s take it as granted that there is no way that Notre Dame economics is going to crack the US News or NRC top 10 in the medium-term. If so, it seems like Notre Dame is better having a deviant but distinctive department than a conventional department without any reputation at all (in the Zuckerman “focused identity” sense). This is the exact opposite of the famous GMU strategy to raise up their third-tier law school and econ department into the top half of the second-tier by developing a high profile and distinctive identity by emphasizing “law and economics” and the Austrian school. This was incredibly successful and managed to put GMU on the map (and raise the profile of these ideas, see point #1). GMU administrators describe their strategy as “moneyball,” meaning they found a niche with a lot of unappreciated and underpriced faculty talent, but I think of equal or greater importance was that they created a very focused and distinctive identity. [See the Crooked Timber book symposium on Rise of the Conservative Legal Movement for some very interesting thoughts on this].

The only way it could possibly benefit Notre Dame is in undergraduate education, if we feel (plausibly but not certainly) that undergraduates benefit from learning the conventional theories and (plausibly but not certainly) that most high school seniors aren’t aware of the specific intellectual reputations of specific departments. However if undergraduates know broadly what to expect of an institution (perhaps because Catholic universities are known for embracing the church’s “social doctrine” of center-left economic policy) then they’ll understand what they are signing up for and I think it’s good that they have the option of choosing an unconventional economics education.

Finally, I think it’s ironic that conventional economics assumptions of perfect information and free competition make a more plausible case that Notre Dame should keep a heterodox econ department (for reasons of undergrad pedagogy) than do the heterodox assumptions of bounded rationality and captive audiences. On the other hand, heterodox econ and econ soc are much better at predicting that Notre Dame would conform to disciplinary conventions.

links

| Gabriel |

NYT: Statistics jobs

Note that a lot of what they are calling statistics is really more about data mining, which is why several of the people they highlight are computer scientists not statisticians. This is consistent with my belief that our training ought to give more emphasis to workflow and data cleaning. Despite the usual standard-error-centric statistics training I’ve managed to develop a decent workflow, but (as can be seen by reading my shell scripts) I still really struggle with data cleaning languages like awk and perl.

Apple Rejecting All e-Book App Store Submissions?

Long story short, Apple is worried about confirming whether the application developers have clear title to the copyright. I see this as indirect fallout from the Kindle “1984″ scandal, as well as a good illustration of transaction costs (and by extension, a good argument for limited copyright terms).

Incentives vs institutions

| Gabriel |

As anyone who has ever written an empirical paper knows, one of the hardest things is coming up with what can charitably be called a “compelling null” and cynically a “good straw man.” Behold, a gift I bestow (via MR) unto macro economic sociologists of the world polity school. A new NBER theory piece argues that the global institutionalization of child labor bans will delay the actual diffusion of child labor bans in low income countries. From henceforth, anyone caring to do a world polity paper (or conversely, a public choice / RCT political economy paper) can have that most desirable of things, a “competing predictions” lit review.

You’re welcome.

Lights, cameras, corporate welfare!

| Gabriel |

The current episode of KCRW’s radio show The Business (or as I call it, Production of Culture: The Series) is all about state tax incentives for film production. They talk to Bill Gerber (a producer who chose to shoot in Michigan over Minnesota because of tax breaks) and host a debate between Steve D’Amico (a Massachusetts legislator who killed a local tax break proposal) and Cameron Henry (a Louisiana legislator who has helped build up his state’s program). The first thing to note is that Gerber tells us that he (a) shopped his production between states and (b) imported 70% of the film’s workforce from Los Angeles. From that it’s pretty easy to infer that Representative D’Amico is right and Representative Henry is wrong about whether states benefit from production credits but it’s worth unpacking why.

A few decades ago the Canadians wanted to create a jobs program and were scared of American cultural imperialism so they fostered their domestic film and television industry with tax incentives. At the time (though no longer) the loonie was weak against the greenback so between the tax breaks and the exchange rate a fair amount of production took a two hour flight from LA to Vancouver. Although the commodity boom of 2007 hurt Vancouver production in the last few years (a case of Dutch disease), the city has developed a viable film industry. Largely imitating the Vancouver example, an increasing number of jurisdictions, including most American states have created film incentives of their own. Of course this results in the situation seen in Gerber’s example, where states end up bidding against each other for one or two shoots, with none of them becoming the next Hollywood, or even the next Vancouver.

Throughout this California has refused to match the incentives and only in the last year has the state begun seriously considering offering film incentives of its own. In the meantime, although a lot of film production has left California, a lot of it has not. Why is actually an interesting question since it’s not like the film industry has a lot of big factories that would be difficult to move. We’re talking about a project-based industry with equipment that is routinely moved by truck on a daily basis, so you might expect that if some state offered tax breaks the industry would run for it. The answer is that as the incumbent Los Angeles benefits from cluster economies and so it doesn’t have to match incentives to remain an attractive place to shoot. Some of this is simply because there are so many stage sets, subcontractors, skilled labor, etc within an hour’s drive. (And it actually is fair to say “an hour” because location shoots often have really long days that start before morning rush hour and end after evening rush hour). There’s also the fact that many elite cultural workers live in Los Angeles and prefer not to travel. Most famously, David Duchovny insisted that the X-Files relocate from Vancouver to LA because he wanted to spend more time with his family (why exactly his wife wanted him to stay home so badly became apparent a few years later). Of course it is itself endogenous that most of these elite workers live in Los Angeles. Give it a few years and you may find that elite workers are insisting that shooting stay not in Los Angeles, but in New Orleans, or Austin, or Vancouver, or wherever it may be that is an attractive place for elite film workers to live because it has a critical mass of production (and perhaps personal income tax shelters).

Representative Henry’s favorite talking point on the program was that every dollar the program costs Louisiana is returned to the economy sevenfold. Although this sounds like pure magical thinking, it’s known in the policy literature as the “fiscal impact multiplier.” The idea is that if a local government subsidizes a farm growing magic beans, not only does the local economy get the payroll for the farmhands, but the farmhands buy services and (locally-produced) goods so the local economy gets not just farmhand jobs but jobs serving farmhands. Plus, you may get tourists coming in to gawk at the magic beans and the economy gets their tourism expenditures too. This kind of crap is endemic to policy discussions of things like sports stadiums and academic economists mostly agree that it’s total flim-flam. The way it works is that somebody will propose that the local government use public funds to build a stadium and instead of just saying “because I like sports,” they hire consultants to make a utilitarian case that we can’t afford not to subsidize sports. Typically the argument goes that Magic Beans Stadium will attract thousands of out-of-town visitors, none of whom would have visited anyway, none of whom are displacing other visitors, and all of whom stay at the Ritz and eat nothing but foie gras during their visit.

So here’s how it works for film. If a movie shoots in New Orleans there are basically two things that can occur. One is that they use local labor. However because the volume of film production is extremely variable these workers will have a lot of downtime between shoots, during which the local economy will be underutilizing skilled labor. The other is that the film producers can bring in labor from Los Angeles who will take up an enormous amount of tourism resources (hotel rooms, air travel, restaurant meals, etc) which is serviced by locals. If this tourist infrastructure is to always be available for visiting film production then it means that the rest of the time these hotel rooms, flights, etc will be empty and you have a peak load problem. Now the peak load problem is of hotel rooms (and hotel maids) rather than sound stages (and key assistant grips). Also note that there is a huge deadweight loss involved since it’s cheaper and more comfortable for that key assistant grip to live his wife in Santa Clarita and drive to shooting locations listed by their Thomas Guide grid coordinates than it is for him to fly to Detroit and stay in a motel for three months, go home for a few months, then fly to New Orleans and stay in a motel, etc. On the other hand if the hotels are continuously full, taken up by tourists and non-film business travelers whenever there is no shooting, then the film workers are just displacing these other travelers. This is an important point because fiscal impact multipliers usually fails to factor in the (public and private) opportunity cost of developing the subsidized sector. The only real solution to the deadweight loss of the peak load problem is risk-pooling, but then you’re back to cluster economies and you could have stayed in Los Angeles to get that.

So, aside from simply being mistaken about the merits, why would a politician support tax breaks? Representative D’Amico’s theory is that they are mesmerized by the glamor of Hollywood. This is plausible as Hollywood has always been able to attract (this is a technical term) “sucker money.” However I think equally important is the basic dynamic of public choice theory — note that Representative Henry has three film facilities in his district. The tax breaks may very well be a good thing for his district and yet still be a bad thing for both the state of Louisiana and America as a whole. On the other hand, Representative D’Amico seems to have been arguing against interest as his district is near the proposed film facility in Plymouth and his constituency includes craftworker unions. You might be asking where is my stake in this? Given that I live in LA, it’s in my personal interests for the state of California to give tax breaks to Hollywood as this represents a net transfer of wealth from Northern California to SoCal. Better yet for me if no jurisdictions offer tax incentives and cluster economy dynamics alone keep production in LA so you can consider this post to itself be rent-seeking.