teacher testing & teaching quality

By requiring teachers to pass tests or receive certifications, we can ensure that public school teachers obtain some minimum level of education and knowledge. Does imposing such requirements increase student performance?

Joshua D. Angrista (MIT) and Jonathan Guryanb (U Chicago) find no evidence that increasing teacher requirements increases teacher quality. This may be because the increased requirements makes it more difficult to become a teacher, which likely affects the types of students who choose to become teachers. It also forces schools to hire along this one-dimension, even if the school believes that an uncertified teacher would make the better teacher.

What's more, the authors show that the increase in requirements increases teacher wages (without increasing teacher quality). This is unsurprising since increasing teacher requirments likely decrease the supply of teachers--in the labor market this means higher wages. This article suggests that increasing teacher teasting and certification requirments increases the cost of education without increasing the quality of education.

link to the article

racial bias among NBA referees

Although this article made headlines a while back, I still want to include it on this blog. Joseph Price (BYU) and Justin Wolfers (Penn) find evidence of racial bias among NBA referees. They show that the number of expected fouls given to a player during a game depends on the player's race and the racial mix of the refereeing crew. They identify a own-race bias amongst the referees. A white refereeing crew, compared to a black refereeing crew, calls relatively fewer fouls on white players than on black players; and vice versa. Although the bias is small--small enough that it would not be noticed just by watching the games--it is large-enough to affect the outcome of a close game.

Why is this interesting? Because NBA referees are amongst the people we would expect to be least biased. If race influences the split-second decisions of the referees, then it probably also influences the split-second decisions of almost everyone else, even it we don't intend for it to.

read the article

pay peanuts, get monkeys

In American academics, professors in certain fields make significantly more than professors in other fields. Here salaries are usually correlated with the salaries paid in the private (non-academic) sector. Outside of America, on the other hand, it is often the case that all assistant professors are paid (roughly) the same, and all full professors are paid (roughly) the same, independent of one's field. That's only fair, right? If the history prof and the engineering prof both have to teach and conduct research, why should the engineering prof earn more?

New Zealand is one such country in which academic salaries are independent of one's field. Using data from New Zealand universities, Glenn Boyle shows that if you don't pay the engineering prof more, the quality of engineering research will fall. This is because the best engineers will find it more attractive to accept high-paying private sector jobs. Academic research productivity in different fields depends the how a field's academic salary compares to salaries outside of academia. This suggests that if academic economists earn the same as English professors, the best economists will find it even more attractive to accept a high-paying job on Wall Street, and the quality of economics research will fall. A similar effect isn't present for English professors because they don't have as high-paying of outside options.

read the article

what you should know about politics

Ok, so this isn't a research paper. It isn't even written by a Ph.D. academic. But it is a good book, and gives a well-balanced overview of the issues.

What you should know about politics... but don't

do political parties matter?

Does it matter if we elect a democrat or a republican to local office? If we elect a republican, will government be smaller? Do democrats allocate the budget differently than republicans? Which party is better at fighting crime? These are the questions asked in a careful analysis by Fernando Ferreira and Joseph Gyourko (both at the Wharton School). Their surprising result: the political party doesn't matter.

This result is in contrast to state and national politics, where the party matters. How to explain this difference? The authors suggest that it comes from the relative homogeneity of cities, which "appears to provide the proper incentives for local politicians to be able to credibly commit to moderation and discourages strategic extremism."

The paper will appear in an upcoming issue of the QJE. Download it here (or here).

missing women and the price of tea in china

In developing countries, there are often more male children than female children, and male children often achieve a higher level of education. Nancy Qian (Brown University) considers whether increasing female income may affect these gender differences. To do so properly, she uses a creative data source to consider exogenous changes in income that tend to affect women differently than men. From the abstract:

This paper uses exogenous increases in sex-specific agricultural income caused by post-Mao reforms in China to estimate the effects of total income and sex-specific income on sex-differential survival of children. Increasing female income, holding male income constant, improves survival rates for girls, whereas increasing male income, holding female income constant, worsens survival rates for girls. Increasing female income increases educational attainment of all children, whereas increasing male income decreases educational attainment for girls and has no effect on boys' educational attainment.

Read the article.

women's suffrage and child health

Are women more concerned than men about the wellbeing of children? If that is true--or if politicians perceive it to be true--then increasing female participation in politics could lead to more policies that benefit children. Grant Miller (Stanford) tests this hypothesis in a new paper in the Quarterly Journal of Economics. He finds evidence suggesting that giving women the right to vote led to higher child wellbeing. From the paper abstract:

...Suffrage rights for American women helped children to benefit from the scientific breakthroughs of the bacteriological revolution. ... Suffrage laws were followed by immediate shifts in legislative behavior and large, sudden increases in local public health spending. This growth in public health spending fueled large-scale door-to-door hygiene campaigns, and child mortality declined by 8–15% (or 20,000 annual child deaths nationwide)...

Read the article

building criminal capital behind bars

If you hang out with a bunch of a talented chefs, you may learn something about cooking during the time together. If you hang out with car thieves, you may learn a thing or two about stealing cars.

Patrick Bayer, Randi Hjalmarsson, and David Pozen apply this logic to their analysis of juvenile detention centers. They show that future criminal behavior of detention center residents depends, at least somewhat, on the criminal background of the other detention center residents. From their abstract:

We find strong evidence of peer effects for burglary, petty larceny, felony and misdemeanor drug offenses, aggravated assault, and felony sex offenses; the influence of peers primarily affects individuals who already have some experience in a particular crime category.

If you have access to NBER, download there paper here. Otherwise, google scholar.

lottery tickets and lucky stores

Jonathan Guryan (Chicago) and Melissa Kearney (Maryland) point out that stores that sell a large-prize winning lottery tickets experience a significant upturn in lottery sales in the following weeks. They show that this upturn is largest in poorer areas. Why is this? The authors test two explanations. First, having a lottery winner in the local area may help advertise the lottery, which could increase demand for tickets. Second, people may believe in the "lucky-store effect".

They find evidence in support of the lucky-store effect and not in support of the advertising story. Because lottery winners are determined randomly, such a lucky store effect does not exist, and their paper provides evidence of irrational behavior.

The paper was published in the AER. Gambling at Lucky Stores

diplomats, corruption, and NYC parking tickets

United Nations officials had diplomatic immunity from parking tickets until 2002. Ray Fisman (Columbia) and Edward Miguel (Berkeley) look at the number of unpaid parking tickets held by diplomats from various countries. They find that diplomats from countries with high corruption indexes had a significantly higher number of unpaid parking tickets compared with diplomats from less corrupt countries. This suggests that in corrupt countries, breaking the law by public officials is seen as more acceptable behavior. The paper is forthcoming in the Journal of Political Economy.

Download the paper

casket regulation and price of funerals

Some states regulate the sale of caskets, only allowing funeral homes to sell them. Other states allow casket sales by other retailers (e.g., Costco). My initial impression: the cost of caskets (and thus the overall cost of funeral services) will be lower in unregulated states. This makes sense: increased competition reduces prices. In their recent Journal of Law and Economics paper, Judith Chevalier and Fiona M. Scott Morton (Yale) show why my initial intuition is wrong.

Although increasing casket competition decreases the price of caskets, that doesn't mean a drop in the overall price of a funeral. This is because you still need to hire someone to organize the funeral and bury the casket, services for which funeral homes do not face competition. To offset the lower price of caskets, funeral homes increase the price of other services, keeping their revenue and the end price of a funeral roughly the same. Since people buy caskets and funeral services together, increasing competition on only one of the dimensions doesn't reduce the market power of funeral homes overall.

Download the article

pirate economics

Peter Leeson (George Mason University) studies pirates. How can you beat that for interesting economics? He hopes that by better understanding pirate organizations, we can better understand other criminal enterprises.

His abstract:

This article investigates the internal governance institutions of violent criminal enterprise by examining the law, economics, and organization of pirates. To effectively organize their banditry, pirates required mechanisms to prevent internal predation, minimize crew conflict, and maximize piratical profit. Pirates devised two institutions for this purpose. First, I analyze the system of piratical checks and balances crews used to constrain captain predation. Second, I examine how pirates used democratic constitutions to minimize conflict and create piratical law and order. Pirate governance created sufficient order and cooperation to make pirates one of the most sophisticated and successful criminal organizations in history.

The paper will be published in a future issue of the Journal of Political Economy.

download the paper

the press release