The Internet did not raise a generation of loners

The image of the basement-dwelling World-of-Warcraft-playing loner is often shown as an example of the adverse impact of the Internet on social capital and in particular social interactions. Whether this is true is not so obvious, as the Internet also makes possible social interactions that could not exist before, as this blog shows in a limited way.

Stefan Bauernschuster, Oliver Falck and Ludger Woessmann study the impact of broadband Internet on social capital using a natural experiment in Eastern Germany. There, some choice by the telecommunications provider resulted in 11% of East German households to be on OPAL lines instead of DSL, which better supports high speeds. Using the German Socio-Economic Panel, they measure social capital with the frequency of going out, visiting friends and performing volunteer work. They find that Internet access has no visible impact on social capital. To the contrary, for children it seems to enhance social capital, possibly because it makes them aware of new opportunities to interact in real life. This is in stark contrast with television use, which has many times been shown to be detrimental to social capital, likely because it is a one-way communication, while the Internet can build two-way communication.

Animals as forecasters

Futures markets and in particular prediction markets are a good way to hedge against various risks as well as establish what people really think about the likelihood of some event. As they a putting money on the line, these markets are deemed (and have proven) to be more really than surveys and polls. Of particular interest in this context was the short-lived "terrorism futures market" organized by the Pentagon, which was supposed to offer an additional tool for predicting terrorist threats, and which would allow those who could suffer from terrorism to buy insurance against it. Unfortunately, there was also a fear that threats could materialize because of the market, as people would try to manipulate it.

Adi Schnytzer and Yisrael Schnytzer point out that there is another potential for prediction markets: natural disasters. Of course, we humans are so far not particularly good at forecasting such events as earthquakes, but some animals have evolved a sixth sense in this respect that is rather underexploited. While it seems difficult for scientists to drum up money to study this, maybe because this technology does not seem credible or usable, the Schnytzers point out that if prediction markets are created for natural disasters, then funding would emerge if money is to be made. And this would also establish whether these theories have credibility.

The economic behavior of bees

I find it fascinating that there is also plenty of Economics in the animal kingdom. Two recent papers about bees just caught my attention.

Antoine Champetier studies the interaction of bees and farmers, as bees play an important role in pollination and are thought to be subject to a mysterious decline in numbers. He takes California almonds as an example and builds a model of pollination supply with hive owners and bees that forage. One aspect appears to be rather important: economies of scale in the hive, as larger hives have an easier time regulating the temperature and can devote more time to more aggressive foraging. Champetier formulates a spatial model of foraging and coordination in the bee colony, where energy used and gained by foraging is assessed, as well as time costs in each step of pollen acquisition and storage.

Noam Bar-Shai, Tamar Keasar and Avi Shmida study what makes that a bee departs early or stays longer in a flower patch. Looking at videos, they concluded that bees cannot count, but are rather governed by clues left by odor marks (to prevent revisiting the same flowers) and current foraging success.

Breastfeeding and cognitive skills

Breastfeeding is now almost universally promoted as the healthiest way to feed a baby. And indeed, while breastfed babies are a little smaller and than bottle-fed ones and gain a little less weight, they are healthier, it is thought mainly because the mother milk transmits antibodies and relevant nutrients. But not every mother breast feeds, maybe because not every mother realizes all the benefits, or because some of the costs are high (time management for working mothers or aesthetic issues). Or there are some other benefits that are not well known.

Maria Iacovou and Almudena Sevilla-Sanz report that breastfeeding has significant positive impacts on cognitive skills (reading, writing and mathematics). While this correlation is well known, it may be spurious because mothers who breastfeed are more likely to be well educated (Irish example), and their children are also more likely to be well educated as well. The obvious way to overcome this statistical issue, a randomized trial, is not feasible on ethical grounds. What Iacovou and Sevilla-Sanz do is use propensity score matching, which essentially matches babies that have the same characteristics but breastfeeding and then compare their cognitive skills. What is particularly impressive in this study is that the retained characteristics are very broad beyond baby demographics and health, including parent characteristics such as education, job, income, and even pre-birth attitude towards breastfeeding or home and neighborhood. And even after controlling for all these variables, the impact of breastfeeding is still significant on babies from Bristol (England), and it may even grow with age.

Suicide in happy places

It is quite baffling that the countries with the highest standards of living, and among several dimensions the happiest ones, also exhibit the highest suicide rates. Is it that places where material necessities are easily met other more psychological worries take over? Is it that somehow happiness is more volatile, or more diverse?

Mary Daly, Andrew Oswald, Daniel Wilson and Stephen Wu use two data sets that allow to compare suicide rates and happiness across US states to show that this paradox is also true within the United States. This thus invalidates the cultural or institutional explanations of the international paradox. This also allows to use all sorts of cross-state controls, but none makes the paradox disappear. Daly, Oswald, Wilson and Wu then conclude that there must be a direct causality from happiness to suicide: living among happy people is depressing for some. This may be consistent with the fact that suicide rates drop in war time. And it is difficult to imagine the reverse causality, that high suicide rates make survivors happy.

The economics of swinging

This is not about economic fluctuations or long cycles like Kondratieff cycles, this is about the sexual practice of partner exchanges or group sex. This practice that started in US military families in World War II has now spread world-wide, first as wife swapping than with women's emancipation into couple exchanges that a organized through websites or swinging clubs. Estimates vary widely, but somewhere between 1 and 15% of the population practices it.

Fabio d'Orlando tries to explore the economics of swinging. In the absence of much data and theory about it, he draws heavily on Jeremy Greenwood and Nezih Guner's theory of the emergence of premarital sex (discussed here) and modifies it to a theory of increasing kinkiness of sex. I did not think this was very inspiring in this paper, but a (long) footnote caught my eye.

Swinging clubs charge an entrance fee, which depends on who enters. Couples pay, say, $50, but single men $150. This is more than a night with a prostitute, but single men seem to value of having sex with a woman who does not fake it. Single women, however, are typically not allowed in on the premise that they are prostitutes. The interesting bit is how a swinging club owner should maximize profits, given that couples are more likely to come if there are fewer single men. Given the hidden nature of this market and thus the lack of information, it would interesting to see the diversity of outcomes.

Syphilis cannot be eradicated

Syphilis is back. As the most widespread venereal disease in the 1930's it was curtailed after huge efforts, both in developed and developing countries. And ten years ago a push was made to finally eradicate it. But syphilis is quietly making a comeback, hidden in the shadows of AIDS. And because the transmission of this disease is primarily driven by risky sexual behavior, it can be a leading indicator of other sexually transmitted diseases on the rise.

David Aadland, David Finnoff and Kevin Huang use a model of human behavioral response to study this resurgence and come to the conclusion that there is a fundamental cycle that cannot be broken. The point is that the transmission model that epidemiologists use has constant parameters tracing back to biological features of the disease, but these parameters can change through human intervention, and they do. Call this a Lucas Critique of epidemiology. The key here is that when prevalence is low, individuals in a riskier fashion and in particular have more sexual partners. No reasonable policy can overcome this.

When should amniocentesis be performed?

Every pregnant woman past some age is recommended to perform an amniocentesis to check whether her fetus suffers from Down syndrome. The reason is that the risk of this syndrome increases with the age of the mother. But the test is risky, as it can lead to miscarriage, thus it is only performed for higher (syndrome) risk pregnancies.

Eduardo Fajnzylber, Joseph Hotz and Seth Sanders tell us that the logic that the medical profession has adopted is wrong. The basic idea is that the risk of miscarriage is constant with the mother's age, while the risk of Down syndrome is increasing. At first sight you would only want to test older women. That is the logic from the perspective of the physician. They now propose to see this from the perspective of the mother. An older women will have fewer opportunities to conceive, thus a miscarriage is much more costly to her compared to a young woman. This would make her to want to avoid the risk of miscarriage. The recommended strategy becomes much less obvious and could in fact be that young women carry out the test and older ones bypass it. It all boils down to a personal evaluation of the cost of miscarriage, Down syndrome and abortion. Not as easy as the physicians say it is.

Laws and attitudes: which comes first?

It is said that laws reflect current morals and that laws cannot influence morals. I imagine that it is rather difficult to find more than anecdotal data to test such a hypothesis.

Niklas Jakobsson and Andreas Kotsadam claim to have found the right natural experiment. In January 2009, buying sex became a criminal offense in Norway. The explicit goal of the law was to change the attitude of the people towards buying sex. Looking at Norway and Sweden (where there was no such change on law), they find that attitudes did not change more in Norway than in Sweden, if anything, people become a little more liberal. Save for one case: Oslo. There, prostitution is more visible, thus people were more aware of it and responded the way the lawmakers wanted.

The analysis is based on survey data. It would be interesting to know whether the actual purchases of sexual services were also affected. Indeed, it does not matter much if someone who would not buy sex anyway now has a negative attitude towards it. The paper clearly shows that people who are not close to the problem are not affected. Those that are at the margin of changing a decision are those you would want to affect. And only market data can reveal their choices.

Veiling bans can be counterproductive

Several countries are currently contemplating veiling bans, and some, such as France, have already adopted such measures. Their stated goal is to alleviate the oppression of veiled women within their communities, but it is also feared that it will only keep them away from public areas. Economists have always been suspicious of bans, as they are not efficient or can have adverse effects. They can contribute to the debate with some structured reasoning about this issue.

Jean-Paul Carvalho uses game theory to analyze veiling bans. The premise is that the recent rise of veils coincides with the Islamic renewal and is mostly voluntary. Indeed, veiled women are mostly new adoptees that started this despite oppositions from their mothers or husbands. They do it for three reasons: 1) they use the veil as a commitment device to remind themselves to avoid secular activities, 2) the veil is a signal to others that one is religious, 3) the veil is used to conform in a social group.

Now imagine that there are few religious people in the population. Then there is no veiling, as even the religious conform with the majority. With a larger religious population, their is veiling by that group only. And if that group is sufficiently large, everybody veils to conform. The interesting case is the middle one. If a veiling ban is imposed, if there is little return to deveiling, these women may segregate further by seeking reclusion in their group, where the returns from conformity become larger. The goal of the ban to expose them to more secularity would then fail completely.

Richard Wagner's Lohengrin and game theory

The analysis of fiction or fictional worlds from an economic point of view is an interesting "hobby" of some economists, from the Economics of Harry Potter, World of Warcraft to CSI: Crime Scene Investigation. There appears to be also a stream of research dealing with operas, and in particular Wagner's, which are full of intrigues, hard decisions and conflicting beliefs.

Ilias Chrissochoidis and Steffen Huck look at Lohengrin. The story is about whom to believe, commitment, signaling, normal form games, Bayesian updating, and asymmetric information. I need to listen again to Lohengrin, which I have not touched in decades. Maybe I will hear it with a new ear now that I can recognize all the Economics in it. This paper is totally useless for policy, yet fascinating.

Vegetarianism and income

I am sure you wondered what makes that vegetarianism is more prevalent in some countries than others. I am glad to help you today.

Eimear Leahy, Seán Lyons and Richard Tol make a distinction between developing and developed economies. In developing ones, vegetarianism is mainly an issue of necessity, as meat is harder to come by. In developed ones, it is an increasingly popular lifestyle choice, which the authors interpret as an increasing awareness of the environmental impact of meat production. They come to this conclusion by combining household level survey data, to infer the number of vegetarians, in various countries and years with national level data. Interestingly, religion and in particular hinduism does not appear to be a factor.

An economic model of God

To publish in Economics, marketing your paper is unfortunately very important. And it all starts with a catchy title. Some subjects can inspire you to absolutely great titles, like this one: "An Economist's Guide to Heaven." Dan Hamermesh could have penned that, but it is a paper by Nick Muller, Jo Anna Gray and Joe Stone.

The paper is not about how you can make sure the Pearly Gates are open to you, but rather it "offers an economic model of God and humanity as optimizing agents in the context of concrete belief archetypes (religious ‘contracts’) in Judeo-Christian theology." In plainer words, they study how belief about God influences the behavior of optimizing agents. In this paper, God optimizes, too, and believers know that. People care about private consumption, public goods and what God does to them, if they are believers. God benevolent, as He cares about public goods and likes to reward people instead of punishing them. Believers have a contract with God that entices them to provide public goods in exchange of godly rewards or punishments. Contracts can take four different forms, depending on the archetype within the Judeo-Christian belief system, which lead to different outcomes that can be tested using the General Social Science Survey.

Results are consistent with the model: strength of faith is irrelevant if there is no penalty in the contract, believers renege if there is no penalty, and contracts with penalty work, even if penalties are never exercised. What remains to be understood, though, is why there are believers in the first place.

Ideological segregation is low on the internet

In terms of politics, one of the big fears that the Internet brings is the potential for radicalization of supporters at the extremes of the political spectrum. Indeed, the Internet allows them to find each other, confirm each other's radical views and in particular dream up conspiracy theories without being challenged by reality. And that is where it becomes dangerous. Think of the various terrorist movements in the 1970s in Europe, where members lived in something like reclusive communes. The Internet allows these communes to be virtual and thus recruit more members. Should we be worried?

Matthew Gentzkow and Jesse Shapiro say that the contrary is actually the case. They look at the segregation on news consumption and find that it is low for Internet news. It is higher than for offline news, as I would have suspected, but much lower than for face-to-face interaction. And it should thus be encouraging that people are moving more and more from face-to-face interactions to online interactions. I am thus reassured.

Peer alcohol consumption and adolescent sexual activity

One nightmare of parents of a girl is that she would get drunk and get into "unanticipated" sexual acts. If you told your daughter not to drunk with this in mind, be advised that her drinking is not really an issue here. And this advice come from an economist.

Glen Waddell uses the National Longitudinal Study of Adolescent Health and finds that sexual activity does not depend on one's own drinking. And, interestingly, female sexual activity depends (positively) on the male's drinking, but not the reverse. In other words, tell your daughter to get involved with boys who do not drink, but she can drink.

How to become a successful French chef

Every serious hobby cook has dreamed at some point to open a restaurant, preferably in France. What does it take to do this successfully? Of course, economists have the answer.

Olivier Gergaud, Valérie Smeets and Frédéric Warzynski study the careers of 1000 French cooks over more than twenty years and find that late starters do not have a chance. So much for us hobby cooks. To become a successful French chef, you should start with an apprenticeship in the best place, and the quality of the restaurants you work at is generally declining after that. It is like ofter in sports: you need to find the right coach to get successful right away, and then things only go downhill.

Further evidence on the profit motive of churches

The Catholic Church is facing quite a lot of heat lately, to a large extend because it put the welfare of the organization far ahead of the welfare of its constituents. The Church denies this, of course. It is of interest here whether its other actions corroborate its social welfare motives.

Carla Marchese and Giovanni Ramello find an intriguing fact: since 2005, the teachings of the Pope are copyrighted. Copyright is like a monopoly in that it reduces quantity and maximizes private profits. Why would the Church adopt this model if it were trying to save as many souls as possible? The authors are gentle here and claim that the Church just wants to tax other media outlets that would make money by diffusing the Pope's message. I would not be that lenient. Indeed, this motivation only works if there is imperfect competition across media outlets, and then only under specific conditions. It is true that proceeds can be used to subsidize the Church's own publications, but seeing the profit margin of the Vatican's publisher (16%), it does not look likely.

Accounting for moderate religion

Religions are clubs and theory tries to explain why people want to join them and then stay. Current theory is good at replicating corner solutions: extremists that invest at high cost (time, money and future prospects) to participate in a religion, like it is the case for sects, strict religious orders or extremist militants. But this theory has nothing to say about moderate religion, that is people that participate in religion an hour every Sunday and then occasional additional activities, and thus provide much less sacrifice and yet still .

Michael Makowsky shows that ones you combine agent heterogeneity and repeated decisions, moderate religious groups are viable and may even dominate the landscape. Members of a group contribute time and money, and the wage heterogeneity convexifies the scale of agents. One more area where heterogeneity appears crucial to understanding data, even if this means that solutions are complex and may have to be solved by computer.

Divorce and the happiness gap

Why do people divorce? One spouse having some "escapades" is grounds for divorce, but it is a relatively rare occurrence. Much more frequent is "unhappiness." That is obviously difficult to quantify as this is fundamentally subjective, and it usually not advised to compare measure of happiness across people. Yet, analyzing such data is quite revealing.

Cahit Guven, Claudia Senik and Holger Stichnoth show that divorces are predictable by self-reported happiness gaps within couples. One interpretation is that somehow within couple transfers of utility are not working (one spouse is not making concessions). And divorce is more likely to happen if the wife in unhappy. That should surprise no one. What would be really interesting here is to see what the expectations are. After all, happiness is all about how expectations are met. And I wonder whether women have relatively high expectations from marriage, and the disappointment of not meeting those expectations leads to unhappiness and then divorce. But that is probably even more iffy to measure than happiness.

Why families?

Why do humans life in families, while examples of families in the rest of the animal kingdom are extremely rare? Yes, economists have an answer to that.

Marco Francesconi, Christian Ghiglino and Motty Perry say when the evolutionary objective is to maximize the dissemination of one's genes and 1) paternity is uncertain, 2) children need a long time to develop and they overlap during that time, then families are optimal. Why? Because fathers will only care for the children they recognize as theirs. Fidelity of the mother is crucial for this. Add the fact that children need to stay with the parents for a long time, and you have a family.

All this hinges on the assumption that paternity in uncertain. Why did evolution not solve this? It did in a way, as it seems babies resemble more their fathers than their mothers, at least initially, as mothers naturally bond with their children and fathers need a little more "help" (Abstractless reference). Why did such a mechanism not reinforce itself? Probably because the emergence of the family made it less necessary. And maybe the family emerged for other reasons than this, as evolution had found a solution to this problem.