Tuesday, November 18, 2008

Wednesday, November 12, 2008

Wealth Effects

I seldom agree with Dean Baker, but here he has a good point.
This is truly incredible. Homeowners have lost more than $5 trillion in housing wealth. There is a very well established wealth effect whereby $1 of housing wealth is estimated as leading to 5 to 6 cents of annual consumption. This implies that the loss of wealth to date would cause consumption to fall by $250 billion to $300 billion annually (1.7 percent to 2.0 percent of GDP). If you add in the loss of around $6 trillion in stock wealth, with an estimated wealth effect of 3-4 cents on the dollar, then you get an additional decline of $180 billion to $240 billion in annual consumption (1.2 percent to 1.6 percent of GDP).

These are huge falls in consumption that would lead to a very serious recession, like the one we are seeing. This would be predicted even if all our banks were fully solvent and in top flight financial shape. Even the soundest bank does not make loans to borrowers who it does not think can pay the loans back (except during times of irrational exuberance).

Google Flu Trends

Technology can help public health officials more quickly identify outbreaks of disease. Yesterday the NYtimes carried a story about Google tracking the geographic dispersion of the flu by tracking the origin of searches. It turns out the first thing people do before calling the doctor, is Google for "flu symptoms".
In early February, for example, the C.D.C. reported that the flu cases had recently spiked in the mid-Atlantic states. But Google says its search data show a spike in queries about flu symptoms two weeks before that report was released. Its new service at google.org/flutrends analyzes those searches as they come in, creating graphs and maps of the country that, ideally, will show where the flu is spreading.

The C.D.C. reports are slower because they rely on data collected and compiled from thousands of health care providers, labs and other sources. Some public health experts say the Google data could help accelerate the response of doctors, hospitals and public health officials to a nasty flu season, reducing the spread of the disease and, potentially, saving lives.

“The earlier the warning, the earlier prevention and control measures can be put in place, and this could prevent cases of influenza,” said Dr. Lyn Finelli, lead for surveillance at the influenza division of the C.D.C. From 5 to 20 percent of the nation’s population contracts the flu each year, she said, leading to roughly 36,000 deaths on average.

The NYTimes graphic is here and more importantly the data are here . The data would make an excellent weekly instrumental variable for certain activity.

Monday, November 10, 2008

Visualizing the Election

CNN and other news outlets would have you believe this is still a divided country with red states and blue states.

But a better visualization would shade the areas based not upon who won the state, but by the degree to which they won the state. And the states themselves shouldn't be represented as a function of their geographic size, but rather the size of their population. Here we have just such a picture, and its clear, we are all purple now. More can be found here.

Saturday, November 08, 2008


Apparently Botox makes it harder to make angry facial expressions, and since emotions are transmitted through facial expressions, it appears that you will be happier talking to botoxed people. So maybe we should subsidize botox treaments, since they are clearly a positive externaility? Marignal Revolution has the links and the lowdown.

Technology and Matching

With all of the new technology out there to aid the marriage/mate/sexual partner matching process. I wonder if it is leading to better matches or more matches, or both? Or maybe it is only lowering transaction costs and another constraint is still binding on the quantity of partners. Another mashup is provided to make hooking up a little easier.It combines the craigslist personal with google maps. Genius. Hookups.

Thursday, November 06, 2008


I find it ironic that African Americans celebrated the election of Obama as a symbolic victory for the civil rights movement, while they voted in droves to rescind civil rights for California's gay population. How soon the oppressed become the oppressors.

I have not voted Republican in the last three presidential elections, and I think Greg Mankiw captures the reasons quite succinctly. And heck, I didn't go to Harvard. I just hope the Republicans find their way out of the social conservative woods, back to their fiscal conservative roots. Or maybe they spend the time studying a map of the world with Gov. Palin?

Wednesday, November 05, 2008

Voter Turnout

Voter Turnout, via Andrew Gelman.

Ray Fair's equation did pretty well. Underpredicting Obama's share by 1.1%.

Andrew has some more comments here, with plenty of data analysis.