Blackjack in stata (wonkish)

You can do much more with stata than run regressions. Here's how you play blackjack:

 ht: Justin Wolfers.

New econ dept. ranking based on research output

Actually an update of this Tilburg-based ranking, based on research produced between 2007 and 2011.

Rank	University
1	HARVARD UNIVERSITY
2	UNIVERSITY OF CHICAGO
3	NEW YORK UNIVERSITY
4	UNIVERSITY OF CALIFORNIA, BERKELEY
5	MIT
6	STANFORD UNIVERSITY
7	COLUMBIA UNIVERSITY
8	YALE UNIVERSITY
9	NORTHWESTERN UNIVERSITY
10	UNIVERSITY OF PENNSYLVANIA
11	LSE
12	UNIVERSITY OF MICHIGAN
13	DUKE UNIVERSITY
14	UNIVERSITY OF OXFORD
15	PRINCETON UNIVERSITY
16	UNIVERSITY OF CALIFORNIA, LOS ANGELES
17	UNIVERSITY OF TORONTO
18	CORNELL UNIVERSITY
19	UNIVERSITY OF MARYLAND
20	UNIVERSITY OF CALIFORNIA, SAN DIEGO

Book review: An economist gets lunch, by Tyler Cowen

Tyler Cowen gets it when it comes to food. He wants to eat tasty stuff at every meal. He knows there is good food everywhere, if you know where to look. And he understands the economic forces that shape food consumption.

His latest book is "An economist gets lunch: New Rules for Everyday Foodies". The two best chapters of the book are “How to find a good place to eat” and “Why does food taste different in the US and Mexico”. The rest is too random, i.e. a chapter about barbecue variations across states, a chapter about which kitchen technology he uses. What?

So why is food different in El Paso and Ciudad Juarez, despite the same population, same geography, and same history? Food-safety regulation, much stricter north of the border, leads to refrigerated but less tasty meat and vegetables, a different selection of cheese, and make it harder to dig a hole for a traditional barbecue.

How to find a good place to eat? Well, he makes many good points without structuring them and convincing us about each of them but here are some rule-of-thumbs. Food is best where labour is cheap, ingredients are fresh, and consumers are informed. Sounds obvious? Maybe, but would you have realized it explains why food in Mahajanga , on the west coast of Madagascar, is much better than in Paris? The fresh seafood, the 5 maids cooking, the shredded green mango, the cucumber salad. As simple as that!

These principles can somehow explain the English food revival as England imports tons of cheap labour from France, Poland, Italy, and Spain that ends up working in restaurants, allowing for affordable labour-intensive delicacies.

Having lived and travelled to a bunch of places I agree with much of his statements, while he may be a bit too quick to generalize from his random observations across Europe. He definitely knows where to eat the best ethnic food in the US, and having had the best Thai of my life from a street cart in Denver, some amazing ceviche in a strip mall in Virginia, and amazing tostadas in the streets of Panajachel, I’m happy to see that such an enlightened thinker validates my impressions.  He understands why a street hot dog in Copenhagen is better than a dinner in a random 4-star hotel.

While all his arguments are good, he doesn’t spend enough time structuring them for a more convincing effect. When reading his book, I get the impression he sat, wrote, and the publisher printed. He seems to want to get it out too fast like a blog post. Some mistakes here and there get irritating. For example, he writes about tacos del pastor, rather than tacos al pastor, or mention food from the Reunion islands. The Reunion is only one island. He translates “sous vide” as slow vacuum, but there is no mention of speed in “sous vide”.

And while he definitely makes it clear that there is an abundant supply or amazing food around the world, the greatest puzzle remains. Why does taste disappear with development? Cheap labour and fresh ingredients disappear (unless cheap migrants come in like in the US or the UK, but then these will disappear with development). As I noted on Rigotnomics two years ago, I never eaten as well as in Madagascar, where zebu carpaccio and mango foie gras are ubiquitous and extremely cheap. In rich countries such as Switzerland, service is boring at its best, food, even in the most expensive places, is ordinary. Now that is a question to address.

How poor is Japan?

The Economist has a Daily Chart about Japan being overtaken by Asian Tigers in terms of living standards. As it writes, "most economists reckon that the best way to compare living standards is to take GDP per person measured at purchasing-power parity (PPP)". In other words, the Japanese are now able to consume less stuff then the Tigers, including South Korea in a near future. That is indeed remarkable, when one thinks about where South Korea started in 1980.

But what is also remarkable is that when GDP per capita is measured at market exchange rates, Japan is still the richest (Taiwan is not in the graph below due to Chinese interference).

Is this because the yen is worth too much, boosting Japan's GDP per capita at market exchange rates? The yen has indeed been appreciating quite a lot against the dollar since 1980. Or is it because goods are too expensive in Japan, reducing people's purchasing power? Maybe goods are too expensive because Japan is too protectionist, not allowing cheap Chinese goods to flow in. Or maybe its goods are of higher quality, something PPP exchange rates capture rather imperfectly. 


So here's what's weird. When the Japanese travel to the US, there are much richer than the Koreans. But back home, they both live as comfortably. Do they really?

How not to go Nash in a prisonner's dilemma (wonkish)

Discussion here.

ht: Friedschmidt

Heading the World Bank

The debate around who had to become the new head of the World Bank has been quite fierce, on blogs and on twitter. Now yesterday it was just revealed (surprise surprise) that Jim, the US's choice, was to become the new boss. Many are angry because this is a continuation of a political arrangement between Europe and the US, rather than a transparent selection process. But having Jim head the bank is certainly gonna be interesting, mostly because he comes as a complete outsider. The Economist had strongly backed the Nigerian candidate, stating that she was by far more qualified. Yet as I outlined in a letter to the editor, it wasn't so clear:

Sir,
Your leader on who is to head the World Bank is somewhat contradictory. On one hand you say that development is not something rich countries do to poor ones. On the other you claim that an experienced economist should head the Bank because the Bank is about bringing development.
In any case it seems to me the mandate of the Bank goes against recent advances in development economics. One the one hand the randomistas argue that small and targeted aid projects in health and education do have a positive impact on the treated. On the other macroeconomists like Acemoglu and Robinson argue that growth cannot come through outside help. As Easterly reviews their recent book, "Why Nations Fail", he puts it simply: “experts cannot engineer prosperity with the right advice to rulers on policies and institutions. Rulers "get it wrong not by mistake or ignorance but on purpose."”
Has the World Bank helped poor countries by suggesting the right policies? Nope. Can it? Of course not. Why stick to a failed model? Better stick to assistance projects that can actually make a difference. And for that Jim Yong Kim may be the right candidate. For sure it makes no sense to have Obama decide who is to head the Bank. But this doesn’t mean this is an obvious choice. There is no doubt that Ngozi Okonjo-Iweala is one of the world’s best hopes for development. Yet the main advantage of having Jim head the Bank is that Ngozi avoids useless meetings in DC and remains where she can change the world, i.e. in Nigeria.

And a few days later Acemoglu and Robinson said the same thing on their blog:

Perhaps the Bank could focus on doing a few things such as investing in health infrastructure, hospitals, perhaps some educational facilities targeted for the most disadvantaged populations in only the parts of the world that are most in need... perhaps this year offers another historic opportunity: to change the vision and structure of the World Bank.

EconAcademics.org

Rigotnomics is now on RePec:

The Federal Reserve Bank of St. Louis is lauching a blog aggregator,  EconomicAcademics.org, to highlight and promote the discussion of  economics research. Your blog is part of this effort. This email explains  why and how you can help promote the discussion of economic research in  the blogosphere. 

EconAcademics.org aggregates blog  posts that discuss economic research. The aggregator looks through blog  posts for a link to some research indexed on a RePEc service... IDEAS then also links back from the abstract  page to the blog posts... 

This blog aggregator is provided by the Federal Reserve Bank of St.  Louis, which also offers with FRED database and graphing tool as a useful  resources for bloggers. Feel free to use the graphs on your blog, best  done by embedding them so that readers can click on them to get more  details about the data....

Also, ... if you have a topical blog, you can have the  latest papers in your field featured in an RSS widget. See  http://nep.repec.org/. If you have suggestions, comments, or questions, do not hesitate to  contact me.

Sincerely, 

Christian Zimmermann

Rodrik on UNCTAD

Rich countries want to reduce UNCTAD's work on macro/finance. Pity since UNCTAD reports are far more value-for-money than World Bank WDRs. -- Dani Rodrik (@rodrikdani)

Accessing World Bank Data in Stata

Via Vox.LACEA via facebook:

In stata window type:

"ssc install wbopendata"

then,

"db wbopendata"

 A box like this should appear:

And you're set! More here.