• Economic News Summary and Academia Gender Discrimination

    Why Women Don’t Get the Credit They Deserve

    Nov 16 • Behavioral Economics, Economic History, Economic Thinkers, Education, Gender Issues, Lifestyle, Thinking Economically • 99 Views

    Please decide how you perceive Dr. Goldin in each of the following sentences:

    “Lawrence Katz, a professor at Harvard and a leading scholar of education economics, co-wrote a paper a few years ago with Claudia Goldin…”

    “Claudia Goldin and Lawrence Katz, both professors at Harvard and leading scholars of education economics, co-wrote a famous paper a few years ago in which they pointed out…”

    Planet Money journalist Adam Davidson initially used the first sentence in a NY Times Magazine article but then replaced it with the second one and apologized to Dr. Goldin.

    Where are we going? To expectations bias.

    Second Billing for Female Economists

    In economic research, co-authors are listed in alphabetical order and assumed to have contributed equally. Only when one author does more than the other(s) will that person’s name move out of the traditional sequence and precede the others.

    The press though usually ignores the proper author sequence. Referring to a paper co-written by Anne Case, an esteemed Princeton economist and her husband Angus Deaton, Princeton Nobel laureate, they cited Deaton first.

    This is a screen shot from an academic journal of the paper’s title and its authors:

    gender issues and female economists

    Yes, we could say Deaton was named first by the press because of his Nobel. However, in a NY Times Upshot column, economist Justin Wolfers convinces us with a host of examples that what happened to Dr. Case is the rule rather than the exception. Citing his own experience, Dr. Wolfers recalled that Anne Marie Slaughter in her article, “Why Women Still Can’t Have It All,” slighted his significant other Betsey Stevenson, then chief economist at the Department of Labor, by naming her as the second author of a paper she had written with him.

    On the paper, this is how their names appeared:

    Gender issues and respect for female scholars

    The problem? When a female scholar’s work is inaccurately depicted as less than a male’s, her status diminishes and so too do our expectations.

    Our Bottom Line: Expectations Bias

    Less scholarly images of women could be shaping our behavior when they create an expectations bias. Shown by the following experiment, what we expect can determine what we believe.

    During a 1960s lab experiment, Harvard professor Robert Rosenthal falsely labeled average rodents as either smart or dumb. Because his students seemed to have an affinity for the rats they assumed were smart, they handled them more frequently and more gently. Since touch affects a rat’s behavior, the “smart” ones not only outperformed the “dumb” ones but also were tamer, cleaner, more pleasant and more likable. Dr. Rosenthal concluded that his students had demonstrated an expectations bias that affected their subsequent attitude.

    Similarly, whenever the press lists a male economist as lead author instead of the female economist who belongs there, that journalist is reflecting and reinforcing an expectations bias that stops female economists from getting the credit they deserve.

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  • economic news summary and credit card winners and loser

    Credit Card Winners and Losers

    Nov 15 • Businesses, Financial Markets, Lifestyle, Money and Monetary Policy, Thinking Economically • 99 Views

    At a Sotheby’s auction in Hong Kong, a Chinese businessman used his credit card to buy a $36 million ancient ceramic cup. He got nearly 422 million American Express points.

    I hope they don’t drop the cup.

    Winners and losers from credit cards

    On the other side of the transaction, American Express collects a fee from retailers that averages 2.5 percent per sale.

    Credit Card Losers

    Because retailers typically raise prices to pay their card fees, you and I helped to pay for Mr. Liu’s rewards points. But if we used a card that offers points for transactions, we still get something in return. Those who pay cash do not.

    And that is the problem.

    The less educated and less affluent you are, the more likely you will pay with cash or a debit card. However, the people who pay with cash or cash equivalents get nothing in return. Consequently, when it comes to credit cards, the poor subsidize the rich.

    More specifically, according to a San Francisco Fed 2014 paper, as we move from an associate’s degree to a bachelor’s degree and beyond, we find an increasing preference for a credit card. Individuals with a four year degree are “three times more likely to prefer credit cards over cash.” Similarly, as we ascend the income ladder, so too does the probability that we will pay with a card. But the higher we go, the more we prefer a credit card over a debit card.

    Our Bottom Line: The Regressive Impact

    When lower income individuals suffer more of a financial hit than those who are wealthier, we can call the impact regressive. In addition, because the effect is felt by third party, it is a negative externality.

    So, when Liu Yiqian used his Amex Card this month to buy a $170 million Modigliani painting, he created a regressive negative externality for those of us who have much less.

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  • The econlife.com economics news summary

    Weekly Roundup: From Fast Food Grades to Movie Reviews

    Nov 14 • Behavioral Economics, Environment, Households, Labor, Macroeconomic Measurement, Money and Monetary Policy, Regulation, Tech, Thinking Economically • 56 Views

    Posts Roundup

    economic news summary and movie inflation Sunday 11.08.15

    When movies have too many stars…more

    animal welfare grades and demand elasticity Monday 11.09.15

    How Starbucks got an “F”…more

    economic news summary and airline productivity Tuesday 11.10.15

    Why baggage can help airline productivity…more

    Economic news summary and Low Unemployment Leads to a War of Economics Wednesday 11.11.15

    Deciding when unemployment is too low…more

    economic news summary and singles' day Thursday 11.12.15

    Where Chinese consumers spend money…more


    Bovine Economic news summary, methane and cows Friday 11.13.15

    Meat…a source of global warming…more

    Ideas Roundup

    • inflation
    • demand elasticity
    • tradeoffs
    • innovation
    • productivity
    • physical capital
    • monetary policy
    • interest rates
    • unemployment
    • consumer spending
    • externalities


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  • Bovine Economic news summary, methane and cows

    The Problem With Bovine Burps

    Nov 13 • Behavioral Economics, Demand, Supply, and Markets, Economic Debates, Environment, Government, Households, Innovation, Labor, Lifestyle, Regulation, Thinking Economically • 71 Views

    In 2010, a reader told the the New Yorker Magazine that the artist who drew their May 17th cover “…has the ‘ends’ mixed up.” He was referring to an image of a cow emitting methane from its rear. Instead, the burps are the problem.

    Where are we going? To greenhouse gas emissions.

    Cows and Methane

    Cows burp a lot because of what they eat. Called the rumen, the front section of their four-part stomach is particularly adapted to processing tough to digest fiber-laden substances like grasses. One by-product of the process is hydrogen and carbon dioxide gas which then combine, make methane, and soon are burped into the world. Together, these burps compose slightly more than one-quarter of U.S. methane emissions,

    Methane is a potent greenhouse gas. With a large possible impact on climate because it is so good at retaining heat, methane’s Global Warning Potential (GWP) number is 25 while CO2‘s (Carbon Dioxide) is 1. Or, we could just say that when we look at equivalent amounts, methane creates 25 times more warming than CO2 during 100 years.

    Consequently, a steak dinner is more than a good meal with a health downside. As the graph indicates, to produce one 6 oz. Kobe steak on a commercial farm, the CO2 equivalent is considerable when compared to fruit and rice.

    Climate externalities from cows

    From: Michigan State University

    The Solution

    Predictably, scientists are trying to develop bovine food substitutes. In one experiment, cows consumed a new compound called 3NOP. To quantify the impact, researchers attached a device that captured and measured the methane. So far, with the diet having reduced emissions by 30 percent while doing no harm, they think they might be on to something. Specifically, the cows’ were okay with digestion, milk production and even gained some weight when eating 3NOP.

    These are three of the wired cows:

    Environmental externalities and methane from cow burps

    From: National Geographic

    Our Bottom Line: Externalities

    As a potentially harmful side effect of raising cattle and other ruminants, methane production could be called a negative externality.

    This xkcd cartoon displays the size of the problem:

    Externalities from ruminants

    From: xkcd

    You can see why ruminants like cows, sheep and goats have a disproportionate impact on the environment.

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  • economic news summary and singles' day

    How Alibaba Grossed More than $14bil in a Single(s’) Day

    Nov 12 • Behavioral Economics, Businesses, Demand, Supply, and Markets, Developing Economies, Economic History, Entertainment, Health Care, Households, International Trade and Finance, Lifestyle, Tech • 83 Views

    November 11th is Singles’ Day in China. Small until Alibaba made it big, the day was originally a time to celebrate being single by giving yourself a gift. Now a “frenzy of consumerism,” Singles’ Day is on 11/11 because the four ones-1-1-1-1 resemble four bare single sticks.

    Speaking as the House of Cards (fictitious) 45th president of the U.S., Kevin Spacey wishes us a happy Singles’ Day.

    Where are we going? To what consumers buy in different countries.

    Singles’ Day

    Mostly through online spending, Chinese consumers placed more than 120,000 orders a minute yesterday. To process and deliver those orders, Alibaba says its logistical units and its partners had 1.7 million couriers, 400,000 vehicles and 200 planes. After 12 hours they topped last year’s gross merchandise volume of $9.3 billion. By the end of the day, the total was $14.32 billion.

    Our Bottom Line: Consumer Spending


    Looking at the Chinese consumer, the following chart from McKinsey shows how they spend their money. Do notice that spending on necessities like food gradually becomes relatively smaller as discretionary spending grows.

    Chinese consumer spending

    Other Countries

    Meanwhile, this chart (below) reveals that consumer spending reflects the impact of government and national wealth. When healthcare is primarily private as in the U.S., it takes proportionally more from the consumer’s wallet than where the government pays. Similarly, if government subsidizes housing then more remains to spend elsewhere. Still though, it all comes down to national wealth. In richer countries like Australia food requires a smaller percent of total spending .

    Consumer spending in different countries

    From: the Economist

    I guess we can return to where we began. During Singles’ Day, Alibaba has created the incentive for considerable consumer spending by offering heavily discounted discretionary items and necessities.

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