The financial/credit crisis and our recent economic woes looms large in everyone's mind these days. Even in my counter-cyclical student bubble haven, there are daily reminders (both on the news and in the flesh) of people who have been hurt by the recent economic downturn (much more trivially, my own paltry investments have taken a huge hit these last 10 days, to the point where I've stopped logging into E-trade to view the carnage). All of this has deepened my resolve to try and understand how this crisis originated, how it can be prevented in the future, and what our country's economic prospects are for the next year or two.
My usual source for this kind of knowledge is The Economist. Lately though, I've found the stuff on the financial crisis to be a bit incomprehensible (is it just me or are they being a bit too jargony?). Thus, after a steady dose of the Englishmen, I felt up-to-date on all the news (like which bank went down most recently), but the hows and whys were still unclear.
Today, I did some browsing and found three pieces that really helped me gain a conceptual understanding about the financial system and what went wrong. The links are provided below. The first two couch the crisis in the form of hokey stories. It might seem a bit Mickey Mouse, but the insights are powerful and the analogies accessible. I would classify these as must reads for anyone who wants to understand what is going on without having to decipher all the usual Wall Street gibberish. The third is a guest post on the Freakonomics blog: also very good, and goes through the key questions and players and also provides some insights into what might happen in the future.
Finally, if any of you have found other sources/websites that explain the crisis in easy-to-understand terms, please post a link in the comments. Thanks in advance.
Links:
1. Interfluidity blog: Credit Crisis for Kindergarteners
2. CNN.com: Glenn Beck
3. Freakonomics: Diamond and Kashyap on the Recent Financial Upheavals
Thursday, September 18, 2008
Saturday, September 13, 2008
The Dubious Legacy of Candy Cigarettes?
I remember getting my first candy cigarette from a classmate at school when I was eight years old. I had no idea what it was, but it seemed pretty exciting and, despite my unusually high discount rate when it comes to candy (ask anyone in my family), I ended up saving it for when I got home.
This turned out to be a huge mistake. My mom saw me "smoking" and completely flipped out. From then on candy cigarettes were banned from my house (and, to this day, my mom gets mad if my sister and I pretend carrot sticks or pens to be cigarettes or cigars). Later, enough mothers were upset by the whole idea that candy cigarettes were banned from my elementary school, as well.
What worried moms across the country was the possibility that smoking candy cigarettes would induce children to take up the real thing a few years later. Is there good evidence that candy cigarette use has a causal effect on later smoking? I trolled around the internet and found some interesting links off the candy cigarettes Wikipedia page. As it turns out, there IS a study on the association between candy cigarette and nicotinic cigarette use (see here for a summary and here for the actual piece). Here are the findings (lifted from the abstract):
26.4% of respondents reported current smoking and 29.4% reported former smoking. Candy cigarette use was reported by 88% of both current and former smokers and 78% of never smokers (p ≤ 0.001). Logistic regression showed that the odds of smoking for those who used candy cigarettes was 1.98 (95% CI: 1.77, 2.21) for ever (current plus former) smokers and 1.83 (1.59, 2.10) for current smokers, compared to those who had not used candy cigarettes. Odds for current and ever smoking increased with increasing candy cigarette use.
The main issue here, of course, is whether the link between candy cigarettes and smoking is causal. For example, if individuals who really want to fit in use candy cigarettes to appear "cool" and later smoke for the same sense of social acceptance, one would see an association between the two behaviors, but this association certainly would not be causal. Even so, the results are pretty intriguing and worthy of further exploration.
This turned out to be a huge mistake. My mom saw me "smoking" and completely flipped out. From then on candy cigarettes were banned from my house (and, to this day, my mom gets mad if my sister and I pretend carrot sticks or pens to be cigarettes or cigars). Later, enough mothers were upset by the whole idea that candy cigarettes were banned from my elementary school, as well.
What worried moms across the country was the possibility that smoking candy cigarettes would induce children to take up the real thing a few years later. Is there good evidence that candy cigarette use has a causal effect on later smoking? I trolled around the internet and found some interesting links off the candy cigarettes Wikipedia page. As it turns out, there IS a study on the association between candy cigarette and nicotinic cigarette use (see here for a summary and here for the actual piece). Here are the findings (lifted from the abstract):
26.4% of respondents reported current smoking and 29.4% reported former smoking. Candy cigarette use was reported by 88% of both current and former smokers and 78% of never smokers (p ≤ 0.001). Logistic regression showed that the odds of smoking for those who used candy cigarettes was 1.98 (95% CI: 1.77, 2.21) for ever (current plus former) smokers and 1.83 (1.59, 2.10) for current smokers, compared to those who had not used candy cigarettes. Odds for current and ever smoking increased with increasing candy cigarette use.
The main issue here, of course, is whether the link between candy cigarettes and smoking is causal. For example, if individuals who really want to fit in use candy cigarettes to appear "cool" and later smoke for the same sense of social acceptance, one would see an association between the two behaviors, but this association certainly would not be causal. Even so, the results are pretty intriguing and worthy of further exploration.
Wednesday, September 10, 2008
Health Policy Seminar Series at Yale
If you are a Yale student or someone who happens to be visiting on a Monday between noon and 1:30 PM, be sure to check out this semester's Division of Health Policy and Administration's seminar series. The bill looks fantastic and represents a good mix of economics, health services research and management. It also features me, bringing up the tail end with a talk on a subject that is as of yet unknown (you'll hear more about it what I am doing in the next few weeks).
Hope to see you here!
Hope to see you here!
Tuesday, September 9, 2008
Public Nutrition Programs and Child Health
Two interesting working papers this week on the effect of major U.S. nutrition programs and child health. The first, by Douglas Almond and coauthors, examines the effect of the Food Stamp Program (FSP) on birth outcomes. Using variation in the roll-out of the program (Food Stamps became operative in different counties at different times during the 60s and 70s) to identify causal effects, the authors find that women exposed to the policy for three months or more of their pregnancy gave birth to heavier babies.
Daniel Millimet and coauthors study the School Breakfast Program (SBP) and the National School Lunch Program (NLSP), looking at the link between school feeding and childhood obesity. The authors find that the SBP works against the rising tide of childhood obesity while NSLP exacerbates it. Unfortunately, they offer little intuition for these opposing findings, especially when the two programs have similar inclusion criteria (i.e., they target poor students). One possibility might be the scope of the program: the NSLP serves twice as many students as the SBP. Another is the nutritional content of the meal: lunch is higher in calories (though similar in "healthiness").
Besides discussing issues of intrinsic interest to public health, these two papers are also noteworthy in their rigor in pursuing causal effects. The Millimet, et al study, in particular, uses a methodology where, recognizing that kids who enroll in SBP and NSLP are likely different than those who do not, they study the sensitivity of their results to different degrees of selection bias. Basically, the authors define a parameter for non-random selection into the program, and dial the level of this parameter up and down to see how their econometric results change. Very clever stuff. It's nice to see that, lacking experimental or even quasi-experimental program variation, such as that exploited in the Almond paper, it is still possible to say something about causality. The selection correction method utilized by Millimet, et al is simple and intuitive: I hope it finds it way into medical journals soon!
Daniel Millimet and coauthors study the School Breakfast Program (SBP) and the National School Lunch Program (NLSP), looking at the link between school feeding and childhood obesity. The authors find that the SBP works against the rising tide of childhood obesity while NSLP exacerbates it. Unfortunately, they offer little intuition for these opposing findings, especially when the two programs have similar inclusion criteria (i.e., they target poor students). One possibility might be the scope of the program: the NSLP serves twice as many students as the SBP. Another is the nutritional content of the meal: lunch is higher in calories (though similar in "healthiness").
Besides discussing issues of intrinsic interest to public health, these two papers are also noteworthy in their rigor in pursuing causal effects. The Millimet, et al study, in particular, uses a methodology where, recognizing that kids who enroll in SBP and NSLP are likely different than those who do not, they study the sensitivity of their results to different degrees of selection bias. Basically, the authors define a parameter for non-random selection into the program, and dial the level of this parameter up and down to see how their econometric results change. Very clever stuff. It's nice to see that, lacking experimental or even quasi-experimental program variation, such as that exploited in the Almond paper, it is still possible to say something about causality. The selection correction method utilized by Millimet, et al is simple and intuitive: I hope it finds it way into medical journals soon!
Thursday, September 4, 2008
Anyone Interesting in Working on a Small Project?
"Guess who's back, back again..."
That's right. I'm back to blogging after several weeks off - August turned out to be an exceptionally busy month (more on that in the next few days). It's great to come back to this space and resume writing about health economics and other topics of interest.
To start off September, I'd like to use this post to solicit help on a small project I am starting. Basically, I want to look at published studies of industry sponsorship bias in drug trials (a very hot topic: see here, from the recent issue of JAMA) and understand what we can learn with the existing statistical evidence, and need a research assistant to do some data collection and extraction. You will also be able to help out in designing the analysis. Here is what you get in return: authorship if the work gets published, and experience on what should be an interesting, fun, non-trivial and short project.
If you are interested in learning more, write me at this e-mail address.
Finally, I realize I'm being especially vague here about what the project is actually about. This is because I recently had a bad experience getting scooped and do not want to go through that again. However, you can trust me on the fact that this will, indeed, be interesting!
That's right. I'm back to blogging after several weeks off - August turned out to be an exceptionally busy month (more on that in the next few days). It's great to come back to this space and resume writing about health economics and other topics of interest.
To start off September, I'd like to use this post to solicit help on a small project I am starting. Basically, I want to look at published studies of industry sponsorship bias in drug trials (a very hot topic: see here, from the recent issue of JAMA) and understand what we can learn with the existing statistical evidence, and need a research assistant to do some data collection and extraction. You will also be able to help out in designing the analysis. Here is what you get in return: authorship if the work gets published, and experience on what should be an interesting, fun, non-trivial and short project.
If you are interested in learning more, write me at this e-mail address.
Finally, I realize I'm being especially vague here about what the project is actually about. This is because I recently had a bad experience getting scooped and do not want to go through that again. However, you can trust me on the fact that this will, indeed, be interesting!
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