The price of nails since 1695

 If your friends and relatives wonder why economists write about the things we do, this interesting paper should reassure them that someone is minding the economics store and thinking deeply about prices...

THE PRICE OF NAILS SINCE 1695: A WINDOW INTO ECONOMIC CHANGE by Daniel E. Sichel

NBER Working Paper 29617, http://www.nber.org/papers/w29617

Abstract: This paper focuses on the price of nails since 1695 and the proximate source of changes in those prices. Why nails? They are a basic manufactured product whose form and quality have changed relatively little over the last three centuries, yet the process for producing them has changed dramatically. Accordingly, nails provide a useful prism through which to examine a wide range of economic and technological developments that touch on multiple areas of both micro- and macroeconomics. Several conclusions emerge. First, from the late 1700s to the mid 20th century real nail prices fell by a factor of about 10 relative to overall consumer prices. These declines had important effects on downstream industries, most notably construction. Second, while declining materials prices contribute to reductions in nail prices, the largest proximate source of the decline during this period was multifactor productivity growth in nail manufacturing, highlighting the role of the specialization of labor and re-organization of production processes. Third, the share of nails in GDP dropped back from 0.4 percent of GDP in 1810—comparable to today’s share of household purchases of personal computers—to a de minimis share more recently; accordingly, nails played a bigger role in American life in that earlier period. Finally, real nail prices have increased since the mid 20th century, reflecting in part an upturn in materials prices and a shift toward specialty nails in the wake of import competition, though the introduction of nail guns partly offset these increases for the price of installed nails.

"nails are ideal for this analysis because there has been relatively little change in the product itself (unlike the production of computing power or lighting), thereby greatly simplifying the task of adjusting for changes in quality over time.

...

" In 1810 (the earliest year for which I could assemble necessary data), the use of nails in the US (measured as production plus imports minus exports) was about 0.4 percent of nominal GDP as shown in Figure 1. To put this share into perspective, in 2019 household purchases of personal computers and peripheral equipment amounted to roughly 0.3 percent of GDP and household purchases of air travel amounted to about 0.5 percent. That is, back in the 1700s and early 1800s, nails were about as important in the economy as computers or air travel purchased by consumers are today. "

Stanford Institute for Theoretical Economics (SITE) Conference from July 1 to September 16, 2022.

 Here's the call for papers for the series of summer conferences to be held at Stanford this summer, hopefully in person.

SITE 2022 Conference: Call for Papers

There are 17 mini-conferences this year: details at the link.

Legally fragmented markets for marijuana create unusual alliances

 Who will be most in favor of eliminating the federal ban on marijuana in the US?  Not necessarily growers and sellers in the many states in which marijuana can legally be grown and sold.  There are some advantages to being in a legal market that is illegal elsewhere (and not just because of the possibility of illegally selling at the higher prices that black markets command...)

The WSJ has this story:

Cannabis Overhaul in Washington Is Only Getting Harder. Legalization agenda could be complicated by states that want to defend their nascent marijuana industries and associated tax revenues  By Carol Ryan

"To date, 18 states have legal adult-use cannabis industries, according to the latest tally from the Marijuana Policy Project. As the drug can’t be transported across state borders while it is still federally outlawed, anything that is smoked within a state has to be grown and sold locally. These independent fiefs, which are growing bigger every month, would be disrupted by national legalization.

"One of the biggest concerns is what happens when cannabis can be traded across the country. More mature marijuana markets such as California and Oregon see interstate commerce as an opportunity to get excess stock off their hands. For recent converts such as New York and New Jersey, a gush of cheap outside inventory would be a threat to their nascent industries. This is particularly sensitive for small, minority-owned cannabis businesses that are being given priority for licenses but would be rapidly undercut.

"States also want to protect the tax windfall that cannabis creates. Illinois has collected more taxes from cannabis than liquor every month since February, according to the Illinois Department of Revenue. Since 2014, when legal sales began in Colorado and Washington, cannabis has raised $7.9 billion in taxes for states, according to the Marijuana Policy Project. Sales levies should stay with local markets, but those associated with production could be hard for certain states to hold on to if the drug is federally legal. Cultivation is likely to shift to warm and low-cost states where cannabis can be grown cheaply outdoors."

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And then there's Oklahoma. The NY Times has the story:

How Oklahoma Became a Marijuana Boom State. Weed entrepreneurs have poured into Oklahoma from across the United States, propelled by low start-up costs and relaxed rules.  By Simon Romero

"Ever since the state legalized medical marijuana three years ago, Oklahoma has become one of the easiest places in the United States to launch a weed business. The state now boasts more retail cannabis stores than Colorado, Oregon and Washington combined. In October, it eclipsed California as the state with the largest number of licensed cannabis farms, which now number more than 9,000, despite a population only a tenth of California’s.

"The growth is all the more remarkable given that the state has not legalized recreational use of marijuana. But with fairly lax rules on who can obtain a medical card, about 10 percent of Oklahoma’s nearly four million residents have one, by far the most of any other state.

...

"That unfettered growth has pitted legacy ranchers and farmers against this new breed of growers. Groups representing ranchers, farmers, sheriffs and crop dusters recently joined forces to call for a moratorium on new licenses. They cited climbing prices for land, illicit farms and strains on rural water and electricity supplies as among the reasons. In some parts, new indoor farms are using hundreds of thousands of gallons of water.

...

"But unlike local businesses, where the customers are typically residents, critics assert that growers in Oklahoma are producing far more marijuana than can possibly be sold in the state and are feeding illicit markets around the country.

"Because of lower costs for licensing, labor and land, growers can produce cannabis for as little as $100 a pound, and then turn around and sell that for between $3,500 to $4,000 a pound in California or New York, said Mark Woodward, a spokesman for the Oklahoma Bureau of Narcotics.

Black markets in border crossing

 Human smuggling across borders has become a substantial business, with the demand by desperate migrants being filled by criminal gangs, some of them more used to smuggling drugs. Here's a story from the WSJ about migrants aiming to come to the U.S. through Mexico, and then a somewhat similar story about crossing the Mediterranean to reach Europe.

Truck in Fatal Mexican Crash Was Packed With Over 160 Migrants. Smugglers said to cram people into tractor-trailers to avoid increased inspections of passenger buses on way to U.S.  By José de Córdoba  and Anthony Harrup

"It was the worst accident involving migrants in Mexico and the highest single-day toll since the killing of 72 migrants by the Zetas drug cartel in the border state of Tamaulipas in 2010. A group of Guatemalan migrants were massacred earlier this year by Mexican security forces, also in Tamaulipas.

"More than have 650 people died this year attempting to cross the U.S.-Mexico border, more than in any year since 2014, the United Nations International Organization for Migration said Friday.

"Most of the migrants were from Guatemala, although there were several from the Dominican Republic, Honduras and Ecuador, Gen. Rodríguez Bucio said.

"He said the migrants entered Mexico through mountain paths and dirt roads in smaller groups several days earlier. They had gathered at safe houses used by smugglers in the city of San Cristóbal de las Casas, from where they were loaded onto the truck Thursday afternoon.

...

"Guatemalans have few legal pathways to emigrate to the U.S., said Andrew Selee, the president of the Migration Policy Institute, a Washington-based think tank. In fiscal year 2020, the U.S. provided about 4,000 seasonal work visas to Guatemalans.

“We urgently need to find ways of creating legal pathways for people to migrate instead of driving them further into the hands of smugglers and raising the risk of the journey,” Mr. Selee added."

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And this from Associated Press via the Guardian:

At least 16 dead after third migrant boat in three days sinks in Greek waters.  People still missing despite major rescue effort as smugglers switch to more perilous route from Turkey

"At least 16 people have died after a migrant boat capsized in the Aegean Sea late Friday, bringing to at least 30 the combined death toll from three accidents in as many days involving migrant boats in Greek waters.

"The sinkings came as smugglers increasingly favour a perilous route from Turkey to Italy, which avoids Greece’s heavily patrolled eastern Aegean islands that for years were at the forefront of the country’s migration crisis.

...

"“People need safe alternatives to these perilous crossings,” the Greek office of the United Nations Refugee Agency, UNHCR, said in a tweet.

...

"Greece is a popular entry point into the European Union for people fleeing conflict and poverty in Asia, the Middle East and Africa. But arrivals dropped sharply in the last two years after Greece extended a wall at the Turkish border and began intercepting inbound boats carrying migrants and refugees – a tactic criticised by human rights groups.

"More than 116,000 asylum-seekers crossed the Mediterranean to reach EU countries this year as of 19 December, according to UNHCR. The agency said 55% travelled to Italy, 35% to Spain and 7% to Greece, with the remainder heading to Malta and Cyprus."

The design and performation of markets: a discussion, by Michel Callon and Alvin Roth in the AMS Review

 The AMS Review, a journal of the American Marketing Society, has put together an issue on the theory of markets.  When I was approached by Professor Hans Kjellberg to contribute a paper, I replied that I would rather engage in a dialog with one of the other proposed contributors, the great French economic sociologist Michel Callon.  Professor Kjellberg conveyed that proposal to Professor Callon, and so it was that we corresponded by email, over a pandemic year and a half.  Professor Kjellberg edited the emails to make an article of them, and also wrote an introduction. Here they are (still behind a paywall).

Kjellberg, H. Market expertise at work: introducing Alvin E. Roth and Michel Callon. AMS Rev (2021). https://doi.org/10.1007/s13162-021-00217-9

Callon, M., Roth, A.E. The design and performation of markets: a discussion. AMS Rev (2021). https://doi.org/10.1007/s13162-021-00216-w

"This discussion between Alvin Roth and Michel Callon is the result of a series of e-mail exchanges over the course of 18 months. It was triggered by an invitation extended to both authors to contribute to this special section of AMS Review on theories of markets. The discussion starts off with direct responses to the question put by Hans Kjellberg in his preceding commentary, which introduces the work of Roth and Callon, respectively. Then follows a discussion that touches upon, develops, and clarifies a number of issues related to the two authors’ respective positions on and approaches to markets and their organizing."

********

Professor Kjellberg asked each of us to begin the exchange by answering the question "Why and how did you come to work on market design and the performativity of economics, respectively? "

Here are some paragraphs excerpted from the first and last paragraphs of my answer:

"I received my Ph.D. in Operations Research (OR) in 1974. (That "7" makes it sound as if it were a long time ago…) I studied game theory, and in those days, before game theory blossomed in economics, it seemed that it would find a natural home in OR. I’ve sometimes been asked how I switched from OR to ECON, and my answer is that I just stayed where I was as the disciplinary boundaries shifted around me. 

"Even though market design (or marketplace design) wasn’t yet recognized as a part of economics, game theory was its natural starting place.

...

"I was privileged to be involved in the first kidney exchange between the United Arab Emirates and Israel in the summer of 2021 (della Cava, 2021; Roth, 2021). That exchange shows that kidney exchange, and markets more generally, can do more than save lives and promote health and welfare, and are not just the fruits of peace: they can also help make and solidify peace. (Perhaps Michel would say that peace is one of the social arrangements that promote markets, and well-designed markets are among the social arrangements that promote peace.)

"The Covid pandemic shed light on the fact that even when in normal times there is social support for using money as a primary way to allocate many scarce goods, in an emergency this social support can be strained. When masks, ventilators, and vaccines were in short supply, there was no widespread attempt to allocate them within countries primarily to those who could pay the most. That is, in emergencies it can be both operationally difficult and socially repugnant to rely on prices to allocate scarce goods, and so markets sometimes need to shift from their normal design to an emergency mode (Cramton et al., 2020). Thus after natural disasters, we often see rationing, price controls, subsidies and other temporary interventions.

"This should help us keep in mind that marketplaces are human artifacts: they are tools. When well designed to meet the needs of the larger environment in which they operate, they may work well, and when they are not, they may need to be redesigned. So, market design, and “design economics” more generally, can be thought of as the engineering part of game theory. Michel’s work on “performativity” in economics can help expand on this distinction between science and engineering.

"In short, market design, which is an ancient human activity, is naturally studied by economists, engineers, sociologists, and marketers, and is intimately involved with the human experience. I hope you can see why I couldn’t resist being drawn in."

***********

On related matters:

Professor Callon has a book newly translated into English:

Markets in the Making: Rethinking Competition, Goods, and Innovation, by Michel Callon, Translated by Olivia Custer, Edited by Martha Poon, Princeton University Press, Published (US): Dec 7, 2021.

Here's my blurb for the book:

"“In Markets in the Making, Michel Callon explains the unique view of markets he has distilled from his long career observing markets, in detail, from the perspective of an engineer-sociologist. In a book that will fascinate economists as well as sociologists, he introduces us to a new vocabulary to help us think about markets whose participants may be collectives, and whose infrastructure helps participants determine what they want, and calculate what they need.”—Alvin Roth, Nobel Memorial prize winner for economics and Craig and Susan McCaw Professor of Economics, Stanford University"

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And here are some of my other posts on sociology and economics from the point of view of performativity.  Here's one of those that may have first planted the seed for my desire to correspond with Michel Callon, it's a link to a blog post of Jose Ossandon:

Thursday, April 11, 2013

The economics of designing markets, and the sociology of "civilizing" them

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(this post "The design and performation of markets: a discussion, by Michel Callon and Alvin Roth in the AMS Review" appeared for a few hours as if published on 6 December rather than 6 January, due to a keyboarding error...:(

The Professional Psychology Match and post-match scramble

 Here's an article that (among other things) describes the APPIC Match, and the more recently organized (and regularized) post-Match scramble for unfilled positions.

JenniferA.Erickson Cornish and Jeff Baker

"A Brief History of the Association of Psychology Postdoctoral and Internship Centers:  Trends and Directions for the Education and Training of Health Service Psychologists," Training and Education in Professional Psychology  

(2021,December20)  http://dx.doi.org/10.1037/tep0000401

Abstract: The Association of Psychology Postdoctoral and Internship Centers (APPIC) is the largest health service psychology education and training council in the U.S. and Canada, with approximately 787 internships, 238 postdoctoral programs, and 431 doctoral program associates. APPIC regularly interacts with the other major training councils over the entire developmental graduate sequence from doctoral education through postdoctoral fellowships. All psychology doctoral students in accredited clinical, counseling, and school programs are required to complete an internship in health service psychology, with a significant majority of those students (3,684 in 2021) obtaining those internships via the APPIC match. Although there is no current similar APPIC match for postdoctoral training, APPIC provides selection guidelines for such training and hosts a list of over 1,600 positions available each year. 

"A computerized national match began with the 1998–1999selection process (10 years after a less than successful trial led tothe board deciding to discontinue it) in which 2,923 students applied for 2,631 positions, and 83% were matched (Keilin, 2000). This match, overseen by NMS, used an algorithm based on the NationalResidency Match Program (Roth & Peranson, 1999) and was deemed a success in a subsequent survey, although applicants and directors of clinical training were more satisfied than internship training directors (Keilin, 2000). In 2010, due to the leadership of then chair Sharon Berry, Phase II of the match was launched. Phase II brought about significant changes since it allowed applicants additional time to review and apply to another program if unsuccessful in Phase I, gave internship programs additional time to review Phase II applicants in a more thorough manner, and removed much of the fairly chaotic process that was frantic for both applicants and training directors (some of whom had to replace their fax machines due to overload). The former clearinghouse became the PMVS in 2011. The PMVS currently does not include a match but rather lists postings of positions that are still available on the APPIC website, allowing candidates and sites to participate in an informal selection process as needed. The PMVS will become part of the AAPI process in 2022 and will bring some additional order for those programs that still have openings and for trainees who haveeither not matched or were recently able to participate in the match. In2012, the Nobel Prize for Economics was given for the Roth–Peranson Algorithm used in the match by NMS. The match became limited to students from doctoral programs accredited by the APA or Canadian Psychological Association (including those with a site visit scheduled) and in 2021 to APPIC member internship programs. Previously, nonmember programs could participate in the match with the development of“ Provisional” membership; all programs would now have undergone review by the APPIC membership committee prior to participating in the match.

**********

Some historical background:

Roth, A.E. and X. Xing, "Turnaround Time and Bottlenecks in Market Clearing: Decentralized Matching in the Market for Clinical Psychologists," Journal of Political Economy, 105, April 1997, 284-329.

Paul Milgrom and Robert Wilson. From theory to practice in auctions (in French)

 Here's a tribute to Milgrom and Wilson in French (but Google translate does a pretty good job):

Paul Milgrom et Robert Wilson. De la théorie à la pratique des enchères, par Florence Naegelen, Dans Revue d'économie politique 2021/6 (Vol. 131), pages 825 à 847

G translate: Paul Milgrom and Robert Wilson. From theory to practice in auctions

Here's one snippet:

"R. Wilson ([1967], [1969] and [1977]) provided the first analysis of Bayesian equilibrium strategies in the case of a common and uncertain value. This work was extended by P. Milgrom [1981a] and by many other authors subsequently. [6] Introducing the hypothesis of conditional independence according to which the signals received are positively correlated, Wilson [1969] thus showed that, in this context, the winner was the one who overestimated the true value of the object the most. He also highlighted how agents should determine their offers by incorporating into their strategies that the winner is the one with the highest signal."

Rising Stars in Market Design, featuring Alex Chan, Aram Grigoryan and Dong Woo Hahm, at the Tokyo Market Design center

 The University of Tokyo Market Design center hosts Rising Stars in Market Design

Alex Chan, Aram Grigoryan, Dong Woo Hahm

Decriminalizing personal drug use

 The WSJ has the story

Some Cities Turn to Decriminalizing Drugs as Overdoses Climb. Toronto follows Vancouver and the state of Oregon in seeking to make it legal to carry small amounts of heroin, fentanyl and other drugs for personal use.  By Vipal Monga

"Canada’s largest city is the latest jurisdiction aiming to decriminalize drug possession as it faces a surging overdose epidemic.

"Toronto’s board of health this month said it would seek permission from Canada’s federal government to allow drug users to carry small amounts of drugs for personal use, including heroin, fentanyl and cocaine, without fear of prosecution. The exemption wouldn’t cover drug trafficking, which would remain a criminal offense.

"City officials hope that decriminalization will make it easier for people to get help. They say it could also make it easier for drug users to get jobs and stable housing because they won’t have criminal records.

...

"The new policies and proposals come as officials say they are seeking ways of handling an overdose epidemic that has swept across North America. Drug users are dying in record numbers as an increasingly toxic drug supply overwhelms the black market.

“The current approaches to drug policy and regulation are not working,” said Dr. Eileen de Villa, medical officer for Toronto, during a presentation to the city’s board of health on Dec. 6."

Rainbow over Stanford

A little sunshine after a tough Covid year and more, and a long drought. I took this picture looking out from in front of the Math building.  Here's hoping for 2022.

The year in passings

 This year I noted the following deaths:

Wednesday, November 17, 2021

John Morgan (1967-2021)

Thursday, October 21, 2021

Janos Kornai (1928-2021)

Thursday, September 16, 2021

David Grether, 1938-2021

Saturday, July 31, 2021

Tom Payzant, Boston schools superintendent who reformed school choice, dies at 80

Thursday, July 15, 2021

Hugo Sonnenschein (1940-2021)

Saturday, March 6, 2021

Tom Schelling (who passed away in 2016) gets a Memorial Minute at Harvard

Sunday, February 14, 2021

Margo St. James, (1937-2021) fought to make sex work safer, and legal

Disgust

 The NY Times has a story about the emotion of disgust, focusing on the work of psychologists Paul Rozin and (his student) Jonathan Haidt.  It focuses on some of the ways that biological/psychological notions of disgust can be carried over to disapproval of more political kinds (and of the kinds of transactions that some people disapprove of involving what economists have started to call repugnance).

Here's the Times' story:

How Disgust Explains Everything. For psychologists who study it, disgust is one of the primal emotions that define — and explain — humanity.  By Molly Young

"Haidt continued to zero in on the political uses of the word, noticing that Americans often listed as “disgusting” such things as racism, brutality, hypocrisy and ambulance-chasing lawyers. “Liberals say that conservatives are disgusting. Conservatives say that welfare cheaters are disgusting,” he wrote in a paper with Rozin and two others in 1997.* What was that about? Was the use of “disgust” for such a wide range of activities simply a metaphoric quirk of the English language? Did the pundits who sat around all day expressing disgust on TV have to keep a vomiting bucket next to their desks, or were they just being linguistically imprecise?

"Neither, exactly. When Haidt and Rozin looked at other languages, they found that many contained words with a compound meaning equivalent to “disgust” — single words that could be applied to both legislation and diarrhea. German had ekel. Japanese had ken’o. Bengali had ghenna. Hebrew had go-al. When an Israeli woman was asked what situations made her feel go-al, she cited “a horrible accident and you see body parts all over the place” and a person “who just picked his nose and ate it later.” But she also said that “If you really dislike a politician, you would use the word go-al.”

...

"These two types of human — which broadly map onto “liberal” and “conservative,” or “relatively disgust-insensitive” and “relatively disgust-sensitive” — live in separate moral matrices. If it seems bizarre that disgust sensitivity and politics should be so closely correlated, it’s important to remember that disgust sensitivity is really measuring our feelings about purity and pollution. And these, in turn, contribute to our construction of moral systems, and it is our moral systems that guide our political orientations."

***********

*Haidt, J., Rozin, P., McCauley, C., & Imada, S. (1997). Body, psyche, and culture: The relationship of disgust to morality. Psychology and Developing Societies, 9, 107-131. View article at: Journal webpage, Ungated version 

Intergalactic market for organs

 Sometimes it seems that those who are most worried about markets for kidneys are worried about different things than those who are most worried about kidney patients.  

In case you were wondering, here's a video game to help you empathize with those you might otherwise disagree with: Space Warlord Organ Trading Simulator . It can be yours for just $19.99, much less than the cost of an eyeball.

"ORGANS. Everyone has them, and everyone wants them. You are an Organ Trader, the funnel for fleshy meat parts into a strange, evolving, and desperate universe full of clients.

"Contend with the cutthroat organ market. Trade viscera with dubious figures. Keep vampire-leech organs from devouring the rest of the goods inside your cargo hold. Flood galaxies with meat. Make a profit.

"This is Space Warlord Organ Trading Simulator: the sci-fi body horror market tycoon you didn't know you needed."

*************

And,  in case you aren't tuned into repugnant transactions via video game, here's a review of the game in the Guardian:

Space Warlord Organ Trading Simulator review – ghoulish satire of human greed

"It’s a premise as old as time: buy low, sell eyes. And spleens. More of a frantic clicker-game than a strategy sim, Space Warlord Organ Trading Simulator is only slightly more complex than a screensaver, though still chemically compulsive. Days are split between navigating a fleshy stock market, and trying to outbid cyborgs and dogs with names like Chad Shakespeare on the freshest human cuts. Think eBay as overseen by Harlan Ellison’s Allied Mastercomputer. You accept orders, wait for the organs to show up, grab them before a rival trader does and try to make a profit. As you progress, your customers get fussier. Organs are graded like trading cards, or Destiny loot drops. Where does a mythic lung come from, anyway? No time to think about it. The market wants what it wants."

**********

All of which reminds me of this old/new question:

Sunday, September 18, 2011

If it were legal to sell organs for transplantation, what would the ads look like?

SMBC on economists and money (and game theory)

 Here's Saturday Morning Breakfast Cereal on economists: https://www.smbc-comics.com/comic/econs

And it's a two-fer, economists are hot over at SMBC: https://www.smbc-comics.com/comic/holes

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Overcoming taboos concerning organ donation: a BBC broadcast

 Here's a BBC broadcast on generational change that talks about how young people are helping to overcome taboos regarding organ donation. (They chat with me about organ exchange, including a liver lobe for a kidney, and about having hairdressers talk to customers about deceased donation.)

Listen now

"Generation change: Part two, The Documentary

"BBC presenter Babita Sharma and correspondent Megha Mohan meet the young people from India, Nigeria, the United Kingdom, the United States and the United Arab Emirates fighting to change taboos around organ donation and for greater diversity in the critical fields of science, technology, engineering and maths. We also speak to Nobel Prize awarded contributors including kidney transfer campaigner and economist Alvin Roth as well as astronomer and Physics Laureate Andrea Ghez."

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Earlier: 

Monday, May 6, 2019

A (first) liver-kidney exchange

A call for kidney exchange in Brazil, in the Brazilian Journal of Nephrology

 Here's a call to allow kidney exchange in Brazil, to address the shortage of kidney transplants there.

Increasing transplantability in Brazil: time to discuss Kidney Paired Donation, by Juliana Bastos, David José de Barros Machado, and Elias David-Neto, Braz. J. Nephrol. • 17 Dec 2021 • https://doi.org/10.1590/2175-8239-JBN-2021-0141

"According to the 2020 Brazilian Dialysis Census, an estimated 45 thousand new patients started dialysis in the last year, totaling more than 144 thousand patients undergoing this therapy in the country. The estimated gross mortality of the patients varied between 18 and 20% in period 2016-2019.

"The number of KT performed in Brazil is increasing, although it is still less than half of the annual need estimated by the Brazilian Association of Organ Transplantation. Thus, the number of patients on the waitlist grows annually, having surpassed 26 thousand in 2020.

...

"Brazilian legislation does not contemplate the possibility of KPD. Law no. 9.434 from February 4, 1997 states that the removal of tissues, organs and body parts of a person in exchancge for payment or promise of reward, as well as for frivolous motives, constitutes a criminal offence37. Although organ exchange could be understood as a "promise of reward", it is evident that the law seeks to prohibit the commercialization of organs. In February 2020, a bill was implemented (95/2020) to add to the aforementioned law the following article: "For the effects of this Law, it shall not be considered commercialization the reciprocal donation of organs and tissues (exchange transplantation), so long as it does not involve any monetary benefits stemming from the act"; among other alterations, legitimizing the legality of KPD38. Similar legal obstacles have been overcome in other countries to encourage donor exchange28. It is important to remember that in KPD, all donors are non-relatives. According to national legislation, they must have prior legal approval, granted by the hospital ethics committee and the organ procurement center.

"In 2018, the Brazilian Federal Council of Medicine issued a statement opposing the implementation of KPD in Brazil39. The document stated, among other things, that KPD was a controversial concept, still in development and implemented only in a few countries; that it would incur high costs due to the logistical difficulties of the country, with its continental dimensions; that the increase in CIT could affect graft survival; that it would benefit only "a minimal part of the population"; and that it would jeopardize the credibility of the transplant program in Brazil39, an analysis that must be re-evaluated in light of currently reported data.

...

"We believe we have clarified in this review that, contrary to what has been said, KPD programs are no longer "controversial concepts in programs under development"(39 )but robust programs that are used almost everywhere in the world and show excellent results, comparable to other LDKT, despite focusing on a population with higher risk and a possible increase in CIT. Another critical issue relates to the main part of the affected population, the highly sensitized people who are sometimes referred to as non-transplantable. A national study in a single center estimated an increase of 7% in the total number of transplants with KPD (which is consistent with the results in the aforementioned countries), and an increase of more than 70% in the number of transplanted recipients with PRA > 80%41. If those figures were extrapolated nationally, for example, this would mean an increase of 420 LDKT in 2019.

"Thus, there seems to be no reason for Brazil not to join KPD, even if initially only locally and then implemented regionally/nationally according to the acceptance of the centers and the necessary logistical adaptation.

"At the HCFMUSP, KPD research seeks to determine the percentage of living donors rejected due to incompatibility and are eligible for KPD and to determine how many recipients would benefit from such a strategy. As part of this program, the first kidney exchange was carried out in Brazil in March 2020 and 28 additional pairs are currently under evaluation.

"Nowadays, all the leading countries in world are practicing this procedure and continue to develop it to include more recipients thanks to their excellent results.

...

"Finally, it is essential to emphasize that KPD also benefits those on the waitlist who do not have a donor, as it reduces the number of recipients waiting for an organ from a deceased donor. We believe that the Brazilian transplant program is mature enough to take up the challenge of starting a KPD program, primarily to benefit patients who have a low probability of receiving a transplant from a deceased donor."

Advertising, and kidney donation.

The Guardian has the story:

He put up a Times Square billboard in search of a kidney – and saved more lives than his own.  by Joshua Needelman

"Marc Weiner booked one of the world’s most visible advertising spots, hoping his life would change. He ended up changing the lives of dozens of others, too."

Costly information gathering to form preferences in school choice

 Here's a model suggesting that people for whom it is more costly to gather information about school quality will do less well in preference based school choice.

Inattention and Inequity in School Matching, by Stefan F. Bucher & Andrew Caplin, NBER WORKING PAPER 29586, DOI 10.3386/w29586

Abstract: The attractive properties of the Deferred Acceptance (DA) algorithm rest on the assumption of perfect information. Yet field studies of school matching show that information is imperfect, particularly for disadvantaged students. We model costly strategic learning when schools are ex ante symmetric, agree on their ranking of students, and learning is rationally inattentive. Our analytic solution quantifies how each student’s rank, learning costs and prior beliefs interact to determine their gross and net welfare as well as the extent and form of mistakes they make. In line with the evidence, we find that lower-ranked students are affected disproportionately more by information costs, generally suffering a larger welfare loss than higher-ranked students. Interactions between mechanism design, inattention and inequity are thus of first order importance.

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"The challenge faced by matching models with endogenous information is that students face three sources of uncertainty: signal-based, deriving from uncertainty about what information their learning strategy will produce; strategic, deriving from uncertainty about others’ submissions and thus the resulting matching outcome; and value-based, referring to the remaining uncertainty about the student’s valuation of their tch.

We introduce a tractable model of strategically rational inattention in a matching market that parsimoniously captures this complexity. To focus on the interplay with inequity we assume that schools agree on their ranking of students. For analytic tractability we assume that schools are ex ante symmetric (exchangeable) and that learning is rationally inattentive (Sims, 2003; Caplin and Dean, 2015; Matejka and McKay, 2015). While our symmetry assumption implies that schools are ex ante identical, it does not require that students’ valuations are independent across schools so that information on a school can update beliefs about others.

...

"A central finding is that DA exacerbates inequity. Lower-ranked students attain a lower fraction of their net welfare surplus under full information than do higher-ranked students, even if they have the same costs of learning. This is because lower-ranked students face greater uncertainty about the outcome resulting from any submission, which disperses and often dilutes their incentive to acquire information.

...

"The fact that lower-ranking students are more likely to be matched with a school further down their list results in very unequal learning incentives..."

College as a Marriage Market, by Lars Kirkebøen, Edwin Leuven, Magne Mogstad

Here's a recent working paper about college and marriage in Norway:

College as a Marriage Market, by Lars Kirkebøen, Edwin Leuven, Magne Mogstad

Abstract: Recent descriptive work suggests the type of college education (field or institution) is an important but neglected pathway through which individuals sort into homogeneous marriages. These descriptive studies raise the question of why college graduates are so likely to marry someone within their own institution or field of study. One possible explanation is that individuals match on traits correlated with the choice of education, such as innate ability, tastes or family environment. Another possible explanation is that the choice of college education causally impacts whether and whom one marries, either because of search frictions or preferences for spousal education. The goal of this paper is to sort out these explanations and, by doing so, examine the role of colleges as marriage markets. Using data from Norway to address key identification and measurement challenges, we find that colleges are local marriage markets, mattering greatly for whom one marries, not because of the pre-determined traits of the admitted students but as a direct result of attending a particular institution at a given time.

 Here's a summary from the Becker-Friedman Institute:

College as a Marriage Market, by Larn Kirkebøen, Edwin Leuven, Magne Mogstad

"The context of the authors’ study is Norway’s postsecondary education system. The centralized admission process and the rich nationwide data allow them to observe not only people’s choice of college education (institution and field) and workplace, but also if and who they marry (or cohabit with), and to credibly study effects of college enrollment. The authors find the following:

"The type of postsecondary education is empirically important in explaining whom but not whether one marries. 

"Enrolling in a particular institution makes it much more likely to marry someone from that institution. These effects are especially large if individuals overlapped in college, are sizable even for those who studied a different field and are not driven by geography.

"Enrolling in a particular field increases the chances of marrying someone within the field but only insofar as the individuals attended the same institution. Enrolling in a field makes it no more likely to marry someone from other institutions with the same field. 

The effects of enrollment on educational homogamy (or marriage between people from similar backgrounds) and assortativity vary systematically across fields and institutions, and tend to larger in more selective and higher paying fields and institutions. 

Only a small part of the effect of enrollment on educational homogamy can be attributed to matches within the same workplace.

Lastly, the effects on the probability of marrying someone within their institution and field vary systematically with cohort-to-cohort variation in sex ratios within institutions and fields. This finding is at odds with the assumption in canonical matching models of large and frictionless marriage markets.

Taken together, these findings suggests that colleges are effectively local marriage markets, mattering greatly for the whom one marries, not because of the pre-determined traits of the students that are admitted but as a direct result of attending a particular institution at a given time."

Will unionization at universities change the United Auto Workers?

 There is an increasing presence of labor unions at American universities, which may well bring big changes to those universities. Here is an article from the Chronicle of Higher Ed suggesting that it may also bring big changes to some labor unions.

A New Force in American Labor: Academe--One in five members of the United Automobile Workers is in higher education.By Barry Eidlin, NOVEMBER 29, 2021

"But why would a philosophy major at UC Berkeley join a campaign to change how an auto-worker union chooses its leadership? As a tutor in the University of California system, Huang is a member of UAW Local 2865 — along with other academic workers like graduate-student instructors and “readers,” students hired to grade assignments. With 19,000 members, Local 2865 is now the second-largest local in the entire union.

"Organizing those members has been challenging. “It’s hard enough to get them to recognize themselves as workers,” explained Keith Brower Brown, a Ph.D. candidate in the UC Berkeley geography department. “It’s a whole other step to get them to embrace that they’re a part of this international union, and they have a stake in changing the leadership of the union.” To help colleagues take that step, Cyn Huang tries to connect the referendum to familiar issues: “You explain how the ability to elect top leadership could lead to better contracts, greater accountability, new organizing. It makes sense to people. Once they hear that, it’s pretty intuitive.”

"In recent decades, academic workers like Huang and Brown have become an increasingly large part of the UAW. This group — which includes undergraduate tutors, graduate-student teachers and researchers, postdoctoral fellows, and adjunct instructors — now constitutes roughly one-fifth of the UAW’s active membership."

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The UAW has organized student workers at Harvard, and just reached an agreement on a new contract. Some details are here:

https://studentunionization.harvard.edu/contract-overview