People puzzled by Trump's near-win forget how hard it is to form beliefs about the world. Even for professional policy analysts, your views about nearly all topics are heavily shaped by deferring to those around you. If you had the wrong epistemic community, you'd be sunk too!
Judgments that seem like ones "every decent person should hold" are judgments that you yourself would almost certainly fail to hold if all the seemingly decent people around you also did not hold them.
It takes immense sophistication and knowledge to make reasonable inferences about political questions directly, let alone figure out who you should defer to on topics where you have no first-hand expertise.
The question is not why some people defer to the wrong people (everyone does!), but how a handful of communities manage to defer well-enough over the very long-term that knowledge accumulates.
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I took the NYTimes Ohio results from 10 minutes ago, computed the margin in each county, divided by the % of votes in, then added up across counties. Result: Biden ahead by 500K in Ohio?!
Note: lots of reasons this might be misleading, e.g., maybe current counts include early voting which skew Biden.
Key point: health economists need to change the way we think about health insurance plans. Premiums, out of pocket costs, risk aversion, and adverse selection are all important. But *which plans reduce your chance of dying* is more important (given VSLs)
We show (i) there is large variation in MA causal mortality effects (ii) these effects are *uncorrelated* with existing quality ratings (iii) better plans spend more, but this accounts for little variation, and (iv) consumers massively underrespond to mortality effect differences
It's time for normative economics Saturday wherein we discuss whether economic analysis reaches insane conclusions about racism. (Indirectly inspired by:
Suppose society is 75% white people who like being racist and are rich(er), so they are willing to pay $50,000 to preserve the racist status quo. It's 10% black people who are each willing to pay $50,000 to end the racist status quo. Does pareto efficiency say: let's be racist?
After all, we might say, instead of ending racism, keep being racist, but tax rich white people, subsidize black people, and then everyone is better off?
We have two principal recommendations: 1) everyone should immediately begin wearing cloth masks in public, 2) The govt. should immediately use all available means to increase the supply of medical masks, especially by heavily rewarding producers.
The basis for our recommendation is simple: anything that combats the spread of the virus is absurdly valuable due to the resulting reduction in mortality risk (not to mention accelerating resumption of normal economic activity).
There is near unanimity among economists I know that a war-level investment is needed on policies designed to directly counteract the spread of the virus. Any investment that will marginally reduce R_0 may have a return in the hundreds of billions or trillions of dollars.
Let's try to get an order of magnitude sense of the returns that a policy like universal mask-wearing might have (and if such policies are not adopted immediately, the benefits of quickly evaluating their effectiveness).
Table 2 bfi.uchicago.edu/wp-content/upl… estimates total mortality risk of $60,000 per person in the US (adjusting appropriately for age in the VSL calculation).
If a rich person spends $200 million on a painting, someone else gains ~$200 million. If a rich person spends $200 million to build a yacht, many resources are exhausted on yacht building rather than being allocated to something that helps people. This distinction matters.
Someone should compile a list of the social marginal cost of different types of consumption (have they?). How much spending is like art (i.e. transfers) and how much is like yachts (i.e. consuming scarce resources). How does this proportion vary as people become wealthier?
This distinction is important for thinking about optimal taxes as well as for individuals deciding what to consume. Social judgments about wasteful and lavish consumption seem not to track underlying marginal costs, but this is an error.