Tuesday, June 20, 2006

A Great Line

Here is a great line from a recent post by Arnold Kling:

...and I continue to say that as a conservative/libertarian I would rather have a Democratic President who listens to Democratic economists than a Republican President who does not listen to Republican ones.


Thursday, June 15, 2006


I recieved this email yesterday:

It is my unfortunate duty to inform you that the session you submitted for the January, 2007 American Economic Association meetings in Chicago has not been accepted. The title for that session is: The Economics of Sexuality

I am very sorry about this decision. There are many superb papers that could not be accepted. I divided papers among members of a program committee, who chose which papers will be on the program. They had a difficult choice because both the submitted sessions and the individually submitted papers were very good. Very many good papers could not be accepted. I estimate that only about 10 % of the submissions have been accepted. I also know personally from looking over all the sessions prior to sending them on to the individual committee members that almost very one of them would have been a fine contribution to the AEA program. Especially, I appreciate the imagination and hard work that you put into arranging this session and making this submission to the AEA. I hope that you will accept my apology. I would be most grateful if you, as the organizer of this session, could forward this e-mail on to those who were in it.

Thomas J. SargentPresident-Elect, AEA

The details of my proposal are here:

The Economics of Sexuality, I18

Session Chair: Lena Edlund, Columbia University

"Sexual Violence and Female Homosexuality" Andrew Francis,
University of Chicago

In this paper, I will examine the link between sexual
violence and female homosexuality in the US. Specifically, I
will empirically estimate the direct and indirect effects of
forced sex in adolescence and adulthood, as well as
molestation in childhood, on the likelihood of homosexual
behavior, desire, and identity in female respondents. I test
and rule out potential counter-theories, such as the effect
of recall bias, education, and the propensity for risk
taking or social deviance. I hence present evidence that non- biological variables significantly affect sexual orientation
at the margin, as economic models of sexuality predict.

Discussant: Scott Drewianka, University of Wisconsin - Milwaukee

"HIV and Sexual Behavior Change: Why not Africa", Emily Oster, University of Chicago

Despite high HIV rates in Africa, there seems to have been little widespread change in sexual behavior, such as in the choice to have multiple partners, premarital or extramarital sex. This is in contrast to large changes among high risk groups (e.g., gay men) in the United States. One widely discussed explanation for this discrepancy is differences in preferences or ``culture". In this paper, I consider the possibility that much of the puzzle as to why there has been so little behavioral change in response to HIV in Africa, can be explained without accounting for differences in tastes. This is done by simply noting that future utility lost from HIV infection is higher for individuals who are richer or expect to live longer. Using microdata on individuals in Africa I show that, on average, sexual behavior is unresponsive to the HIV rate. I account for potential endogeneity of HIV rate by instrumenting for the prevalence rate with the distance that individuals live to the origin of the virus. I find however, that behavior is much more responsive for those who are richer or expect to live longer. That is, when the cost of a sexual partner (based on the dollar value of individual future utility) is the independent variable, rather than the HIV prevalence rate, I find consistent and significant decreases in risky behavior among individuals in Africa. This adjustment for cost explains as much as 80\% of the difference between the behavior change with respect to gay men, and those in Africa; knowledge of HIV also plays an important role in determining safe sexual behavior in response to the HIV epidemic.

Discussant: Richard Posner, Judge, US Seventh Circuit Court of Appeals and University of Chicago
"The Wage Effects of Municipal Ordinances:  An Application to the Wages of Exotic Dancers", Taggert Brooks and Keith Sherony, University of Wisconsin – La Crosse

In California v. Larue the Supreme Court found exotic dancing to be a form of expressive speech protected by the First Amendment, yet many local municipalities have tried to severely restrict or eliminate it through the passage of municipal ordinances.  Some of the typical ordinances include eliminating the ability to serve alcohol, limiting hours of operation, or regulating the physical distance between dancer and customer.  Since exotic dancers are in the business of selling intimacy – albeit counterfeit – these ordinances likely affect the dancer’s wages (Boles and Garbin, 1974; Enck and Preston, 1988; Frank, 1998).  While some “feature” dancers may earn six figure incomes, many dancers do not.  Most dancers are hired as independent contractors without benefits and rely on dancing as their primary source of income (Sanchez, 2005).  A sudden loss of wages caused by passage of municipal ordinances can force dancers to look for other means of support outside the industry, which is often difficult due to the social stigma often associated with exotic dancers (Thompson and Harred, 1992; and Thompson, Harred, and Burks, 2003).  This project measures the employment and wage effects of municipal restrictions on exotic dancers and finds that wages and the stringency of ordinances are inversely related.  

Discussant: Jim Leitzel, University of Chicago
"Enforcing Licensing Requirements: Implications for Disease Transmission in the Sex Market" Manisha Shah, University of California - Berkley

Several countries are pursuing the regulation of commercial sex work in order to decrease the spread of sexually transmitted infections (STIs) and reduce the probability of a generalized HIV/AIDS epidemic. In many Latin American countries, the commercial sex market is characterized by two sectors, brothel and street, where the latter is marked by riskier behavior (e.g., lower rates of condom use) and higher prevalence of STIs. This paper studies the public health effects of enforcing licensing requirements in a two-sector commercial sex market, where enforcement varies between sectors. Specifically, we use nationally representative data from Ecuador to examine the effects on condom use and STI prevalence of enforcement in brothels vs. enforcement in the street. We exploit regional variation in the frequency of police visits to verify sex worker compliance with licensing requirements. The findings indicate that increasing enforcement in the street sector significantly increases condom use by 11 percent and decreases
sexually transmitted infections by 8 percent, yet increasing enforcement in brothels has no such effect. This paper proposes a theoretical model that explains this divergence as a consequence of sex workers’ sectoral choice. Increasing enforcement on the street unambiguously improves public health outcomes by encouraging sex workers to enter the more regulated brothel sector, where STI prevalence is lower. Increasing enforcement in the brothel sector induces counteracting effects, as some sex workers choose to comply with the licensing requirements (and undertake less risky behavior as a result), but others move to the street sector and are exposed to greater risk of infection. To minimize perverse incentive effects of regulation, enforcement should take into account the underlying characteristics of the commercial sex market, and should be concentrated in the sector which is marked by lower condom use and higher STI prevalence.

Discussant: Lena Edlund, Columbia University

Tuesday, June 13, 2006

Statistical Problems: Intermediate Outcomes

Via Newmark's Door:
Andrew Gelman presents a nice example of, and briefly discusses, a statistical issue that should get more attention: "the fallacy of controlling for an intermediate outcome". (Economist Mark Killingsworth--American Economic Review, May 1993--labels it "the included-variable problem".)
The fallacy of intermediate outcomes, or what has sometimes been called the included varaible. If one is interested in income in 1991, but they use total education measured in 1993 as a RHS variable, then thye have commited this mistake.

For more details see Andrew Gelman at the must read blog: Statistical Modeling, Causal Inference, and Social Science.

Keywords: ECO307, BUS735

Sunday, June 11, 2006

Confused in Duluth

The Duluth Newspaper is clearly confused. In an recent editorial they blame the potential closure of a strip club on the fact that another club is trying to open.

Ever have a teacher who, to discipline one student for talking during a lesson, made the whole class stay in for recess? Fair or not, the idea is that everyone has to pay for the misbehavior of one.

The operators of the Saratoga Club must be thinking as much after the city moved to limit the hours of exotic dancing or shut down the Canal Park venue yesterday. The enforcement follows a hornet's nest of protest over Dr. Eric Ringsred's plans to convert his historic NorShor Theatre into a strip club -- a notion that city officials are seeking to thwart by invoking a newly passed state law prohibiting adult entertainment establishments from operating near residences, schools and houses of worship. Now, having uncorked the legal genie to halt the NorShor's plans, city officials appear to have little choice but to apply the law equitably throughout Duluth.

The new state law does have a section suggesting previously established clubs may be allowed to continue, a provision that would seemingly exempt the Saratoga. But city officials and the law's co-author, Sen. Steve Dille (R-Dassel) maintain the grandfather clause only applies to permitting, not the restrictions on location and hours of operation.

Expect it all to end up in court.

Legal challenges were anticipated even before the bill was signed into law by Gov. Tim Pawlenty on May 26. But forcing an establishment that has been operating relatively unobtrusively for four decades to go to court to stay in business is a shame, the blame for which lies squarely at Dr. Ringsred's door.

Yes. You see if you want to exercise your right to free speech, and the politicians don't like your kind of speech, they might actually have to employ their censorship to everyone, thus making it the fault of those who wanted to exercise their rights. I think this is one of the worst cases of blame the victim I've seen.

It will be interesting to see how the new Minnesota law (HB 3779) progresses. Here is when I wish I had a GIS capable computer map readily at my hands. It can't locate near another adult business, church or school.
Proximity. An adult entertainment establishment may not operate in the same building as, or within 1,500 feet from, another adult entertainment establishment; within 500 feet of residential property, regardless of how the property is zoned; or within 2,800 feet of a public or private elementary or secondary school or a church, synagogue, mosque, or other place of worship. Distances are measured between the closest property lines.

I'm pretty sure that covers most land in Minnesota, except of course the Boundary Waters.