Sunday, August 7, 2022

Jobs and spouses in Denmark

 Matching is both consequential and difficult: it is how we sort into jobs and careers, and marriages and families.  Here's a paper that looks at the relationship between those two matching markets, taking advantage of the fact that Danish medical grads get random priorities, which determine their early-career job matches.

Causal Effects of Early Career Sorting on Labor and Marriage Market Choices: A Foundation for Gender Disparities and Norms  by Itzik Fadlon, Frederik Plesner Lyngse & Torben Heien Nielsen, NBER WORKING PAPER 28245, DOI 10.3386/w28245 ISSUE DATE December 2020, REVISION DATE July 2022

Abstract: "We study whether and how early labor market choices determine longer-run career versus family outcomes differentially for male and female professionals. We analyze the physician labor market by exploiting a randomized lottery that determines the sorting of Danish physicians into internships across local labor markets. Using administrative data spanning ten years after physicians’ graduations, we find causal effects of early-career sorting on a range of life cycle outcomes that cascade from labor market choices, including human capital accumulation and occupational choice, to marriage market choices, including matching and fertility. The persistent effects are entirely concentrated among women, whereas men experience only temporary career disruptions. The evidence points to differential family-career tradeoffs and the mentorship employers provide as channels underlying this gender divergence. Our findings have implications for policies aimed at gender equality in outcomes, as they reveal how persistent gaps can arise even in institutionally gender-neutral settings with early-stage equality of opportunity."

"placement into medical internships—i.e., physicians’ first jobs—is governed in Denmark by a purely randomized lottery ... As we verify, students with the best lottery ranks,who are the ones that choose  first,are  effectively  unrestricted in their  choices  and  are assigned  their  highest priorities,whereas students with the worst lottery ranks,who are the ones that choose last and well after their choice sets have narrowed, are assigned their lowest priorities.


"we exploit a novel dataset that combines the formal lottery data we have digitized with a range of administrative datasets on all medical doctors in Denmark. ... we can link households using spousal and parent-child linkages to investigate family formation and fertility. Together, the data allow us to study a wide range of lifecycle choices, in both the labor market and the marriage market, which provides us with the unique advantage of conducting a comprehensive analysis on the broad potential causal effects of early careerson work versus family tradeoffs. The data allow us to track our sample over a long period of up to ten years after the treatment.


"We show that the women who have more children due to the treatment also invest less in human capital, and that their location decisions reflect family considerations as they show increased propensity to live near grandparents. This is consistent with women crowding out long-run career goals for more family-oriented choices as  a  result  of  unfavorable early-career placements.  In  comparison,  men engage in career-oriented actions in response to unfavorable placements,which help them fend off potential adverse effects. .... the data are strongly inconsistent with differential preferences  over  entry-level  positions as  a  channel. Males  and  females  reveal  very  similar  aggregate preferences in their choices over entry-level markets and positions.

Saturday, August 6, 2022

Market design in an historical perspective, by Basshuysen in J. Economic Methodology

 I pay some attention to how market design is discussed in the history/sociology of science and methodology/history of thought literatures (even though I know how Feynman thought they are related to ornithology).

 Here's a pretty sympathetic, modern view.

Philippe van Basshuysen (2022) Markets, market algorithms, and algorithmic bias, Journal of Economic Methodology, DOI: 10.1080/1350178X.2022.2100919

ABSTRACT: "Where economists previously viewed the market as arising from a ‘spontaneous order’, antithetical to design, they now design markets to achieve specific purposes. This paper reconstructs how this change in what markets are and can do came about and considers some consequences. Two decisive developments in economic theory are identified: first, Hurwicz’s view of institutions as mechanisms, which should be designed to align incentives with social goals; and second, the notion of marketplaces – consisting of infrastructure and algorithms – which should be designed to exhibit stable properties. These developments have empowered economists to create marketplaces for specific purposes, by designing appropriate algorithms. I argue that this power to create marketplaces requires a shift in ethical reasoning, from whether markets should reach into certain spheres of life, to how market algorithms should be designed. I exemplify this shift, focusing on bias, and arguing that transparency should become a goal of market design"

I have to admit, I found this section heading charming (and not as funny as everyone else should:)

"2. What are markets, what can they do? From Hayek to Hurwicz to Roth"

Friday, August 5, 2022

Busing for schools in Boston and NYC, by Angrist, Gray-Lobe, Idoux & Pathak

 One of the spinoffs of the design of school choice systems in Boston, NYC and elsewhere is that it has opened up the empirical study of school effectiveness, by allowing economists to use some randomness in the assignments while controlling for family preferences to distinguish school effects from student selection.  It has turned out that it's hard to change test scores through school assignments, and neighborhoods remain important. But integration responds to voluntary choice, although the paper below doesn't find effects on college attendance after controlling for the selection of travel by students.

Still Worth the Trip? School Busing Effects in Boston and New York by Joshua Angrist, Guthrie Gray-Lobe, Clemence M. Idoux & Parag A. Pathak, NBER WORKING PAPER 30308  DOI 10.3386/w30308  July 2022

Abstract: "School assignment in Boston and New York City came to national attention in the 1970s as courts across the country tried to integrate schools. Today, district-wide choice allows Boston and New York students to enroll far from home, perhaps enhancing integration. Urban school transportation is increasingly costly, however, and has unclear integration and education consequences. We estimate the causal effects of non-neighborhood school enrollment and school travel on integration, achievement, and college enrollment using an identification strategy that exploits partly-random assignment in the Boston and New York school matches. Instrumental variables estimates suggest distance and travel boost integration for those who choose to travel, but have little or no effect on test scores and college attendance. We argue that small effects on educational outcomes reflect modest effects of distance and travel on school quality as measured by value-added."

"School transportation expenditures today are driven in part by the fact that many large urban school districts allow families to choose schools district-wide, lengthening school commutes for some. District-wide  choice  is  a  feature  of  school  assignment  in  Boston,  Chicago,  Denver,  Indianapolis,Newark,  New Orleans,  Tulsa,  and Washington,  DC, to name a few.  In choice districts,  seats at over-subscribed schools are typically allocated by algorithms that reflect family preferences in the form of a rank-order list and a limited set of school priorities.  ...  Choice in large urban districts is appealing because choice systems potentially decouple school assignment from underlying residential segregation.  Moreover, where school quality is unevenly distributed over neighborhoods, district-wide choice affords all students a shot at schoolsviewed as high-quality.

"This  paper  asks  whether  school  travel  in  the  modern  choice  paradigm  is  working  as  hoped, boosting integration and learning, especially for minority students.  Our investigation focuses on Boston and New York, two cities of special interest because of their high transportation costs and because they’ve long been battlegrounds in the fight over school integration.  We estimate the effects of non-neighborhood school enrollment for students for whom school travel is facilitated by school choice.  In both cities, students who opt for non-neighborhood schooling have higher test scores and are more likely to go to college than those who travel less.  But these estimates may reflect selection bias arising from the fact that more motivated or better-off families are more likely to travel. 

"We  solve  the  problem  of  selection  bias  using  the  conditional  random  assignment  to  schools embedded in Boston and New York’s school matching algorithms.  A given student may be offered a seat at a school in his or neighborhood, or a seat farther away.  Conditional on an applicant’s preferences  and  school  priorities,  modern  choice  algorithms  randomize  seat  assignment,  thereby manipulating distance and travel independently of potential outcomes.


" A parsimonious explanation for our findings, therefore, is that travel facilitates integration but does not translate into large enough changes in value-added to change education outcomes much."

Thursday, August 4, 2022

UNOS hearing in the Senate

 Yesterday in D.C. ... a tough hearing of the Senate Finance committee.  You can listen to the video now, but it looks like the committee will populate the links to documents only slowly.

[Update: better video link-- ]

A System in Need of Repair: Addressing Organizational Failures of the U.S.’s Organ Procurement and Transplantation Network

Date: Wednesday, August 3, 2022Time: 02:30 PMLocation: 215 Dirksen Senate Office Building


Pursuant to guidance from the CDC and OAP, Senate office buildings are not open to the public other than official business visitors and credentialed press at this time. Accordingly, in-person visitors cannot be accommodated at this hearing. We encourage the public to utilize the Committee’s livestream of the hearing, available on the website at

Member Statements

  1.  Ron Wyden (D - OR)
  2.  Mike Crapo (R - ID)


  1. Brian Shepard
    Chief Executive Officer
    United Network for Organ Sharing (UNOS)
    Richmond , VA
  2. Diane Brockmeier, RN
    President And CEO
    Mid-America Transplant
    St. Louis , MO
  3. Barry Friedman, RN
    Executive Director
    AdventHealth Transplant Institute
    Orlando , FL
  4. Calvin Henry
    Region 3 Patient Affairs Committee Representative
    Organ Procurement and Transplantation Network (OPTN)
    Atlanta , GA
  5. Jayme Locke, M.D., MPH
    Director, Division Of Transplantation, Heersink School Of Medicine,
    University of Alabama at Birmingham
    Birmingham , AL

Related Files

 How do I submit a statement for the record?

Any individual or organization wanting to present their views for inclusion in the hearing record should submit in a Word document, a single-spaced statement, not exceeding 10 pages in length. No other file type will be accepted for inclusion. Title and date of the hearing, and the full name and address of the individual or organization must appear on the first page of the statement. Statements must be received no later than two weeks following the conclusion of the hearing.

Statements can be emailed to:

Statements should be mailed (not faxed) to:

Senate Committee on Finance
Attn. Editorial and Document Section
Rm. SD-219
Dirksen Senate Office Bldg.
Washington, DC 20510-6200


Here's a Washington Post story that came out yesterday, while the hearing was in progress:

70 deaths, many wasted organs are blamed on transplant system errors An investigation by the Senate Finance Committee blamed the fatalities on errors in screening organs for disease, blood-type mix-ups and other mistakes  By Lenny Bernstein and Todd C. Frankel August 3, 2022 at 2:30 p.m. EDT

Wednesday, August 3, 2022

UNOS and organ transplant technology

 Organ transplant  communications and logistics are difficult, and current procedures are clunky. But never attribute to malevolence what can be accounted for by incompetence (and difficulty).

The Washington Post has the story:

Thousands of lives depend on a transplant network in need of ‘vast restructuring’. White House Digital Service found that the technology that matches donated organs to patients has failed repeatedly  By Joseph Menn and Lenny Bernstein

"The system for getting donated kidneys, livers and hearts to desperately ill patients relies on out-of-date technology that has crashed for hours at a time and has never been audited by federal officials for security weaknesses or other serious flaws, according to a confidential government review obtained by The Washington Post.

"The mechanics of the entire transplant system must be overhauled, the review concluded, citing aged software, periodic system failures, mistakes in programming and over-reliance on manual input of data.

"In its review, completed 18 months ago, the White House’s U.S. Digital Service recommended that the government “break up the current monopoly” that the United Network for Organ Sharing, the non-profit agency that operates the transplant system, has held for 36 years. It pushed for separating the contract for technology that powers the network from UNOS’s policy responsibilities, such as deciding how to weigh considerations for transplant eligibility.


"UNOS is overseen by the Health Resources and Services Administration (HRSA), but that agency has little authority to regulate transplant activity. Its attempts to reform the transplant system have been rejected by UNOS, the report found. Yet HRSA continues to pay UNOS about $6.5 million annually toward its annual operating costs of about $64 million, most of which comes from patient fees.


"UNOS considers its millions of lines of code to be a trade secret and has said the government would have to buy it outright for $55 million if it ever gave the contract to someone else, according to the report.


"UNOS oversees what is formally known as the Organ Procurement and Transplant Network, a complex collection of about 250 transplant-performing hospitals; 57 government-chartered non-profits that collect organs in their regions; labs that test organs for compatibility and disease; and other auxiliary services.

"Located in Richmond, UNOS sits at the center of the system. It is the only organization to ever hold the 36-year-old contract to run the operation, currently a multi-year pact worth more than $200 million, funded mainly by fees patients pay to be listed for transplants."

HT: Martha Gershun


My understanding is that the contract is occasionally put out to bid, but that any successful bidder would have to be prepared to operate the whole national deceased organ transplant system immediately from a cold start, which is why the issue of who owns the existing software, data, etc. is important.

Tuesday, August 2, 2022

American Finance Association guidelines to prevent unravelling of the job market

 Zoom is changing interview practices, and there's concern that academic markets for new Ph.D grads could unravel. The AFA is on the case for the finance market with these guidelines:

Guidelines for the AFA Rookie Recruiting Cycle

The AFA rookie job market cycle of 2021-2022 created uncertainty, confusion, and unneeded stress for job market candidates and for recruiters. In the interest of developing a more coordinated job market that benefits all involved, the AFA Board has the following suggested guidelines.

Timing of interviews:

Initial interviews can be virtual or in person, but the AFA recommends that the initial interviews should not begin before December 15, 2022, and that the timing of the “campus visit” should occur after the AFA meeting.

Timing of job offers:

In order to facilitate the best matching between candidates and positions, the AFA Board believes strongly that job offers should remain open until at least February 20. The AFA Board also encourages employers to abstain from giving exploding offers with too short of a time frame, since they are unfair to the candidates. Consequently, the AFA promotes the following professional norm: If a job candidate receives and accepts a coercive exploding offer (i.e., one that expires before February 20), the AFA does not consider such an acceptance to be binding.

These guidelines are designed for the AFA rookie recruiting cycle and do not pertain to recruiting cycles for other job markets such as the FMA or European job markets.

HT: Alex Chan

Monday, August 1, 2022

The Allocation of Food to Food Banks by Canice Prendergast in the JPE

 The Allocation of Food to Food Banks by Canice PrendergastJournal of Political Economy 130, 8, 1993-2017.

Abstract: "Feeding America allocates donated food to over 200 food banks. In 2005, it transitioned from a queueing mechanism to one where food banks use a specialized currency to bid for food. Food banks chose very different food than they received before. Small food banks acquired 72% more pounds per client than large food banks at little nutritional cost. This reallocation of food is estimated to have increased its value by 21%, or $115 million per annum. Food banks also sourced food much closer, saving an additional $16 million per annum. Finally, donations of food rose by over 100 million pounds."

"The old assignment algorithm gave each food bank an equal number of (random) pounds of food per needy client. This was problematic for a variety of reasons, despite its perceived fairness. First, food banks differ in their needs. The [old assignment algorithm] allocated an average of 10% of food distributed to food banks, but Feeding America knew little about the other food. This was further complicated by food richness, where some food banks had better access to outside food donations and had different residual needs. Second, food was randomly assigned on the basis of geography, leading to high transportation costs. Third, the allocation system was slow and deterred some donations. 

"Instead of equal pounds per client, the Choice System gives food banks an equal number of shares per client. These are used to bid in first-price sealed bid auctions, run twice a day. Shares can be saved and borrowed, and any shares spent on a given day are recirculated back to food banks that night. Bids can be negative, a feature used to ease donor relations. Through this mechanism, shares allow a food bank to match its purchases to both its permanent and transitory needs and to the geographic location of the donor.

"Despite the benefits that choice allows, many of the practitioners involved in the redesign were initially skeptical of a market-based system. Their concerns were primarily focused on the fear that smaller or less sophisticated food banks would suffer. To ensure equity across food banks, a series of safeguards outlined below were used, among them access to credit and the ability to bid jointly with other food banks. 

"The Choice System went live on July 1, 2005. We consider a variety of outcomes from 2002 to 2011. A feature of the design is that any food bank can purchase its old allocation, assuming that food banks face common prices. As a result, all food banks are at least as well off as before. This assumes that transactions costs are low enough that all food banks engaged with Choice, and a concern raised was that smaller food banks may not do so. We show that food banks quickly engaged, bidding over 200 times a year and winning more than 70 times. Furthermore, small food banks bid more per client than do large ones. We also show that the safeguards implemented to encourage the participation of small food banks were used as intended. We then quantify how different outcomes were under Choice. "



Tuesday, December 4, 2018

Sunday, July 31, 2022

No divorce in Missouri while pregnant

The post-Roe change in the availability of abortions will have many consequences, not all of them obvious.  It may prevent some divorces in Kansas City.

The Kansas City Star has the story:

Women in Missouri can’t get a divorce while pregnant. Many fear what this means post-Roe BY ANNA SPOERRE

"In Missouri, divorce cases cannot be finalized if a woman is pregnant, since a custody agreement must first be in place, multiple attorneys told The Star. That custody agreement cannot be completed until the child is born.

"The state law, while old, gained renewed attention after the Supreme Court on June 24 overturned Roe v. Wade, repealing the constitutional right to abortion. The decision immediately made abortion illegal in Missouri."

Saturday, July 30, 2022

Harm reductions (fentanyl test strips) remain illegal in Texas

It's a long way from Texas to Vancouver. This recent story from the Texas Monthly caught my eye:

Fentanyl Test Strips Could Save Lives—But They’re Illegal in Texas By Jeff Winkler, July 22, 2022

"The most widely embraced method of harm reduction is offering users naloxone, known by the brand name Narcan, an easy-to-use medication capable of reversing the effects of an opioid overdose. All U.S. states, including Texas, have relaxed restrictions on access to naloxone amid the opioid epidemic’s “third wave,” which began in 2013 with the rise of fentanyl’s presence on the black market. A less-popular harm-reduction method is the creation of government-approved, supervised sites where users can get clean syringes and take drugs in the presence of a health-care worker. Just two such sites in the nation have been authorized—both in New York City.

"Fentanyl test strips fall somewhere in the middle in terms of their acceptance. The strips have become easier to access, as several states, including Tennessee and New Mexico, have recently decriminalized their possession. But they remain illegal in about half the states, including in Texas, where the strips are considered “drug paraphernalia,” meaning they fall into the same category as bongs and blunt papers. Since the passage of the 1973 Controlled Substances Act, Texas has banned any material intended for use in testing for or “analyzing” a controlled substance."


It's based in part on this earlier report from State of Reform:

 Drug testing strips remain illegal in Texas despite recent rise in overdose deaths, by Boram Kim | May 14, 2022 

"In Harris County alone, fatal drug overdoses increased 52% from 2019 to 2021. County statistics show deaths involving fentanyl skyrocketed by 341% in the same period, from 104 to 459.

"Meanwhile, the Travis County Medical Examiner’s Office released 2021 figures that showed drug overdoses were the leading cause of accidental deaths for the first time in a decade. Approximately one-third of overdose deaths were caused by fentanyl."



Tuesday, May 17, 2022

Friday, July 29, 2022

Fentanyl by prescription: a Vancouver experiment

 Part of the problem of black markets, particularly for drugs (but not just for drugs) is that customers are dealing with criminals who are neither as honest nor as skilled as pharmacists. This means that drug buyers don't know what they are getting, and can overdose, sometimes fatally, when the mixture they have purchased contains drugs or quantities of drugs that they don't know about.  As fentanyl has started to show up mixed into heroin, and to replace it, this seems to have been one of the big causes of inadvertent overdoses.

In Vancouver, an experiment is underway to make drugs safer by having pharmacists dispense them, in prescribed dosages. (Not everyone thinks this is a good idea.)

The NYT has the story:

Fentanyl From the Government? A Vancouver Experiment Aims to Stop Overdoses. A city on the forefront of harm reduction has taken the concept to a new level in an effort to address the growing toxicity of street drugs.  By Stephanie Nolen

"the breadth of Vancouver’s services and interventions is almost unimaginable in the United States, less than an hour’s drive to the south. Supervised injection sites and biometric machines that dispense prescription hydromorphone dot the city center; naloxone kits, which reverse overdoses, are available free in every pharmacy; last year, a big downtown hospital opened a safer-use site next to the cafeteria, to keep patients who are drug users from leaving in order to stave off withdrawal.

"And since April, Chris... has received pharmaceutical-grade fentanyl through the dispensary, which sells to those who can pay and provides free drugs through the program’s operational budget to those who cannot.

"The new program aims to provide a safer alternative to the fentanyl available on the streets, where the supply is increasingly lethal and is responsible for most of the overdose epidemic that was declared a public health emergency here six years ago.

"Dr. Christy Sutherland, a board-certified addiction medicine specialist who set up the program, said its goal was, first, to keep people from dying, and, second, to help bring stability to their lives so that they may think about what they might want to change."

Thursday, July 28, 2022

The market for alcoholic drinks in Bangladesh

Doctors can prescribe alcohol in Bangladesh.

The Economist has the story:

Bangladesh loosens its booze laws

"Consumption of alcohol has long been outlawed for Muslims, who today make up 90% of the population. Other religions are exempt but need a permit issued by the government. A loophole for Muslims was introduced in 1950, but it includes a requirement for a doctor’s certificate. The permit declares that the holder “requires liquor on medical grounds” and is “hereby permitted to possess and consume foreign liquor”. Few bother. Most drinking is illicit and feeds a lucrative black market for imported liquor. Cases of people dying after drinking dodgy home-brew are not uncommon. 

"The government has acknowledged the problem. It is overhauling the rules in a simultaneous bid to boost domestic industry and bring boozing within the law. Individuals will still require permits, but the process for restaurants and bars to get liquor licences will be made less ambiguous. The new laws, which were introduced in February, also oblige establishments to buy 60% of their stock from the country’s two licensed producers: Jamuna Group, which makes Hunter, Bangladesh’s only home-grown beer, and Carew & Co, a state-run distiller of such fine tipples as Gold Riband Gin, Old Rum and Imperial Whisky."

HT: Alex Chan

Wednesday, July 27, 2022

Drugs, drug regulation, and chemistry: the case of nicotine (following Rob Jackler)

 My Stanford colleague Dr. Rob Jackler has a longstanding interest in nicotine as an addictive drug that continues to be effectively marketed and ineffectively regulated.

Lately he's been concerned with novel delivery systems, such as the non-combustion vaping devices offered by sellers like Juul (which  has recently been on a regulatory roller coaster.)

You can find many of his papers at the Stanford Research into the Impact of Tobacco Advertising (SRITA) site.  The most recent of these papers concerns the fact that a lot of regulation is focused on "tobacco products," but that nicotine itself--the addictive chemical in tobacco--has been successfully synthesized in the lab, and so can be marketed as a "tobacco free" product.

Here's a recent NY Times article on his work:

The Loophole That’s Fueling a Return to Teenage VapingSales are rising of flavored e-cigarettes using synthetic nicotine that evades regulatory oversight, a gap that lawmakers are now trying to close.  By Christina Jewett

And here's the paper:

Marketing of “Tobacco-Free” and “Synthetic Nicotine” Products. Ramamurthi D, Chau C, Lu Z, Rughoobur I, Sanaie K, Krishna P, Jackler RK. SRITA White Paper. March 8, 2022.

"Executive Summary:

• A 2009 US law assigned tobacco regulation to the FDA, created its Center for Tobacco Products, and defined a tobacco product as derived from any component of the tobacco plant.

• As the September 2020 deadline for submission of application to the for FDA authorization of novel tobacco products (PMTA) approached, major tobacco companies submitted application for their brands, but innumerable smaller companies lacked the resources needed to undertake the extensive studies required.

• In an effort to circumvent FDA tobacco regulations, and thus exempt their products from the PMTA process, numerous brands claimed to be formulated with tobacco-free and/or synthetic nicotine.

• Following the late 2021denial of their PMTA applications, some brands which were ordered off the market promptly relaunched claiming that they had been reformulated with tobacco-free or synthetic nicotine.

• Brands claiming to use non-tobacco derived nicotine are offered in a wide array of youth-appealing sweet & fruity flavors – which have been systematically denied market authorization during the ongoing FDA PMTA process.

• Synthetic nicotine is currently expensive, costing approximately 4x tobacco derived nicotine. 

• While residuals from tobacco leaf derived nicotine are well known, byproducts of the chemical synthesis of nicotine have not been characterized for potential human toxicity and carcinogenicity.

• Justified by concerns for unknown safety risk, the FDA should insist upon toxicity/carcinogenicity studies of synthetic nicotine products before they are marketed.

• The FDA should also consider systematic testing of products claiming to be tobacco-free as at least a portion of them may prove to have chemical signatures indicative of tobacco origin.

• Some brands marketed as “tobacco-free” or “tobacco leaf-free” use a purified form of tobacco derived nicotine and thus are legally tobacco products under US law and thus subject to the PMTA requirements.

• Terms describing nicotine products as “tobacco-free,” “non-tobacco,” and “zero tobacco” need regulation as consumers may perceive such products as having reduced addictive potential.

• Marketing claims such as “clean,” “pure,” and “free of carcinogens” should be disallowed absent modified risk designation by the FDA.

• “Tobacco-free” nicotine brands have been allowed to post paid advertisements, and are widely sold on major online stores (e.g., Amazon, eBay, Google Shopping), which prohibit sale of all tobacco products.

• Underage sales of “tobacco-free” nicotine products are common via major online stores.

• As it is a potently addictive substance, and harmful to the developing adolescent brain, there is no justification for nicotine, regardless of its source, to be exempt from regulation.

• The synthetic nicotine regulatory loophole should be closed by designating such products as unauthorized drugs requiring pre-market authorization. "


Congress closed the synthetic nicotine loophole in March, and since July 2022 synthetic nicotine products can only be on the market if they have been authorized by the FDA – none have been so yet.   Here's the story from the Washington Post:

Congress moves to give FDA new powers over synthetic nicotine products including a youth favorite — Puff Bar e-cigarettes By Laurie McGinley, March 8, 2022


There have also been bans on flavored nicotine, aimed at children as well as adults. These may be doomed to be at least partly ineffective. Menthol flavored cigarettes are likely to be banned in the U.S., and have already been banned in Britain and elsewhere. But just as cocktail mixes can be sold separately from alcohol (but ready to mix), so apparently can flavorings for cigarettes and e-cigarettes... e.g. search for "menthol flavour cards for cigarettes" or "menthol crush balls" to see how to add menthol back into your smokes in England.

Here's a recent NBER working paper comparing menthol smokers to non-menthol smokers:

Are Menthol Smokers Different? An Economic Perspective, by Yu-Chun Cheng, Donald S. Kenkel, Alan D. Mathios & Hua Wang, WORKING PAPER 30286, DOI 10.3386/w30286, July 2022


And here's an old NYT story in which Rob describes himself as “an accidental tourist in the world of advertising.”



Sunday, January 30, 2022

Tuesday, July 26, 2022

The (local) labor markets for terrorists and drug traffickers

 It's so hard to hire good help nowadays, but two papers in the latest Econometrica give us some insight into how that problem is solved in the labor markets for terrorists, and for narcotics.

First terrorism, which turns out to have a local financing element, suggesting frictions in moving money and terrorists...

TERRORISM FINANCING, RECRUITMENT, AND ATTACKS, by NICOLA LIMODIO, Econometrica, Vol. 90, No. 4 (July, 2022), 1711–1742

Abstract: This  paper  investigates  the  effect  of  terrorism  financing  and  recruitment  on  attacks. I exploit a Sharia-compliant institution in Pakistan, which induces unintended and quasi-experimental variation in the funding of terrorist groups through their religious affiliation. The results indicate that higher terrorism financing, in a given location and period, generate more attacks in the same location and period. Financing exhibits a complementarity in producing attacks with terrorist recruitment, measured through data from Jihadist-friendly online fora and machine learning. A higher supply of terror is responsible for the increase in attacks and is identified by studying groups with different affiliations operating in multiple cities. These findings are consistent with terrorist organizations facing financial frictions to their internal capital market.

"I study two aspects of the relationship between terrorism financing and attacks: (1) the correlation between the timing of financing and attacks; (2) the relation between financing and recruitment in generating attacks. To investigate the first point, I follow 1750 cities over 588 months between 1970 and 2018 containing the universe of terrorist attacks (e.g.,more than 14,000 events). I also build a panel with 29 terrorist groups operating in the same number of cities and the same period. To study the second point, I combine data from multiple online fora active in Pakistan disseminating Jihadist-friendly material with the work of two judges and a machine-learning algorithm, leveraging novel techniques from the computer science literature.

"The  natural  experiment  affects  a  specific  form  of  charitable  donation  and  terrorism financing through an Islamic institution: the Zakat. During Ramadan, Muslim individuals offer this Sharia-compliant contribution to philanthropic causes. While the amount is a personal choice, the Pakistani government collects a mandatory payment through a levy on bank deposits applied immediately before Ramadan.1When the tax hits fewer people due to its unique design, there is an increase in donations. This expansion in charitable donations boosts the probability that funds reach terrorist organizations due to multiple extremist groups having a legal charity branch.2 This unintended channel through which the design of the Zakat levy promotes terrorism financing has also been acknowledged by Pakistani government officials in the past.#"

# (cited newspaper article):"Information Minister Pervaiz Rashid has advised people to pay Zakat and charity to institutions which save lives and not to those producing suicide bombers."


And then there's narcotics production and narco-terrorism, which to some extent runs in families.  The paper begins with this quote:

"The only way to survive, to buy food, was to grow poppy and marijuana, and from the age of 15, I began to grow, harvest, and sell.– Joaquin “El Chapo” Guzman, when asked how he became the leader of the Sinaloa drug cartel"

Making a Narco: Childhood Exposure to Illegal Labor Markets and Criminal Life Paths, by Maria Micaela Sviatschi,, ECONOMETRICA: JUL 2022, VOLUME 90, ISSUE 4, p. 1835-1878

Abstract: This paper provides evidence that exposure to illegal labor markets during childhood leads to the formation of industry‐specific human capital at an early age, putting children on a criminal life path. Using the timing of U.S. antidrug policies, I show that when the return to illegal activities increases in coca suitable areas in Peru, parents increase the use of child labor for coca farming, putting children on a criminal life path. Using administrative records, I show that affected children are about 30% more likely to be incarcerated for violent and drug‐related crimes as adults. No effect in criminality is found for individuals that grow up working in places where the coca produced goes primarily to the legal sector, suggesting that it is the accumulation of human capital specific to the illegal industry that fosters criminal careers. However, the rollout of a conditional cash transfer program that encourages schooling mitigates the effects of exposure to illegal industries, providing further evidence on the mechanisms.

"To establish these results, I take advantage of drug enforcement policies in Colombia that shifted coca leaf production to Peru, where 90% of coca production is used to produce cocaine. In particular, in 1999, Colombia, then the world’s largest cocaine producer, implemented Plan Colombia, a U.S.-supported military-based interdiction intervention.One of the main components was the aerial spraying of coca crops in Colombia. This intervention resulted in higher prices and expanded coca production in Peru, where production doubled in districts with the optimal agroecological conditions.2 By 2012, Peru had become the largest producer of cocaine in the world.3 

"This setting yields three useful sources of variation: (i) geographic variation in coca growing  in  Peru,  (ii)  over  time  variation  in  coca  prices  induced  by  Colombian  shocks, and (iii) variation in the age of exposure, exploiting the fact that in Peru children are more  likely  to  drop  out  from  school  in  the  transition  between  primary  and  secondary education at the ages 11–14. I thus define age-specific shocks by interacting coca suitability measures and prices. Differential exposure by age arises since children within a district or village experience the changes in coca prices at different ages and due to variation in coca suitability across districts, villages, and schools."

Monday, July 25, 2022

Efficient school choice when schools are not players: Phil Reny in the AER

 In some school choice systems, such as in New York City, the schools (represented e.g. by the school principals) as well as the students and families are strategic players. I think the weight of the evidence in those cases clearly points to the importance of having stable matchings, to forestall various forms of strategic behavior by blocking pairs.  

But in many school choice systems the individual schools (although not necessarily the school district) are not strategic players. In those, the school choice problem can usefully be viewed as a problem of allocating objects, namely school places, and only the students and their families are participants for whom we should have incentive and welfare concerns. In these cases, pairwise stability of the matching may be a fairness consideration, but not one with critical strategic or welfare implications.  A Pareto improvement in this case is one that improves matches according to student preferences--the priorities that schools have over students are part of the mechanism, but they don't have welfare consequences.

Here's a nice recent paper by Phil Reny which considers that latter situation, and investigates an outcome that improves student welfare compared to stable matchings, while still making a substantial bow to fairness of the sort captured by stability.  His results give new insight into the mechanism proposed by Onur Kestin in his famous 2010 paper in the QJE*.

Reny, Philip J. "Efficient Matching in the School Choice Problem." American Economic Review 112, no. 6 (2022): 2025-43.

Abstract: "Stable matchings in school choice needn’t be Pareto efficient and can leave thousands of students worse off than necessary. Call a matching μ priority-neutral if no matching can make any student whose priority is violated by μ better off without violating the priority of some student who is made worse off. Call a matching priority-efficient if it is priority-neutral and Pareto efficient. We show that there is a unique priority-efficient matching and that it dominates every priority-neutral matching and every stable matching. for every student in the mechanism that selects the priority-efficient matching"


*Kesten, Onur. "School choice with consent." The Quarterly Journal of Economics 125, no. 3 (2010): 1297-1348.


So I think we're now seeing a dialog between two approaches to improving student welfare in school choice environments in which pairwise stability (avoiding blocking pairs consisting of schools and students/families) doesn't seem critical to success (i.e. environments in which schools aren't able to participate in blocking pairs).  Reny and Kesten present a path towards doing that while paying a lot of respect to the priorities that schools have for students. (The success of the deferred acceptance algorithm even in these environments may have a lot to do with the fact that school administrators are often quite invested in the priorities that schools are specified to have over students, since these are intended to shape who goes to which schools.)

The alternative approach looks at an efficient and strategy-proof mechanism like top trading cycles  (TTC) that pays some respect to those priorities, but not at the expense of strategy-proofness, i.e. while keeping it completely safe for students/families to state their true preferences straightforwardly.

For that discussion, see this previous post:

Wednesday, December 9, 2020

Update: Péter Biró alerts me to this recent paper that also relates to my concluding comments above.

Biró, P. and Gudmundsson, J., 2021. Complexity of finding Pareto-efficient allocations of highest welfare. European Journal of Operational Research, 291(2), pp.614-628.

Abstract: We allocate objects to agents as exemplified primarily by school choice. Welfare judgments of the object-allocating agency are encoded as edge weights in the acceptability graph. The welfare of an allocation is the sum of its edge weights. We introduce the constrained welfare-maximizing solution, which is the allocation of highest welfare among the Pareto-efficient allocations. We identify conditions under which this solution is easily determined from a computational point of view. For the unrestricted case, we formulate an integer program and find this to be viable in practice as it quickly solves a real-world instance of kindergarten allocation and large-scale simulated instances. Incentives to report preferences truthfully are discussed briefly.

Sunday, July 24, 2022

School choice in Amsterdam: a counterfactual analysis

 Forthcoming in the JPE (It looks like the refereeing process worked its magic on this paper, whose first version was distributed in 2015...):

Haan, Monique De, Pieter Gautier, Hessel Oosterbeek, and Bas Van der Klaauw. "The performance of school assignment mechanisms in practice." 

This is the author’s accepted manuscript without copyediting, formatting, or final corrections. It will be published in its final form in an upcoming issue of Journal of Political Economy, published by The University of Chicago Press. Include the DOI when citing or quoting:  Copyright 2022 The University of Chicago Press.

Abstract: "We use a unique combination of register and survey data from Amsterdam to investigate the performance of school assignment mechanisms in practice. We find that Deferred Acceptance (DA) results in higher mean welfare than the adaptive Boston mechanism. This is due to students making strategic mistakes. The welfare gain o fa switch from actual Boston to DA is over 90 percent of the welfare difference be-tween actual Boston and optimal (proxy) Boston. Disadvantaged and lower ability students would benefit most from such a switch."

"We contribute to the existing literature by complementing register data of the actual choices of secondary-school students in Amsterdam with survey information from the same students. Students’ actual choices reveal their behavior under the Amsterdam version of the Boston mechanism, where students apply in the first round to one school and ties are broken by lotteries. The survey asks students to rank schools according to their true preferences. For each of the ranked schools, the survey asks students to give preference points that reflect the valuation of these schools relative to the valuation of their most-preferred school. The data enable us to (i) quantify the welfare differences between Boston and DA without making strong assumptions about beliefs and choice behavior,(ii) identify the students who are revealed-strategic under the manipulable mechanism,(iii) identify which students make mistakes in their application choices, separately for students who are revealed-strategic and those who are not, (iv) investigate what type of students are hurt (the most) by making suboptimal choices under the Boston mechanism, and (v) quantify the welfare gain of Boston without mistakes (optimal Boston) relative to actual Boston and DA."