The Invisible Forces–the invisible hand, the invisible foot, and the invisible handshake–stem from Adam Smith, who  discussed the invisible hand in The Wealth of Nations (1776), Book IV, Chapter 2.  This idea was subsequently extended to “the invisible forces” by economist David Colander in Microeconomics, 2nd ed. (1995), pp. 17-19.

According to Colander:

the invisible hand refers to economic forces that influence human behavior

the invisible foot refers to legal and political forces that influence human behavior

the invisible handshake refers to social and historical forces that influence human behavior

Simply put, the invisible forces comprise a system that influences and is influenced by human behavior.  Since this behavior takes place in a physical and biological environment, and influences that environment, matters relating to the physical and biological environment are also relevant.  It is this broader view of economics that The Invisible Forces Weekly illustrates and explores.

The Invisible Forces Weekly is produced and published by Bruce Larson.  You may contact him at: brucedeanlarson@gmail.com.

Resources

Proximate Origins and Purposes

The BCE Model with the Invisible Forces

The BCE Model with the Invisible Forces Fully Extended

Notes on Entrepreneurship

 

317 (16 May 2018)

Welcome to week 317!  The articles below caught my attention this week.  What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  Article titles preceded by [SR] require a subscription to be read in their entirety, although complete articles may be found by an Internet title search.

Please feel free to share this information with others.  If you have questions or comments, please send them my way.

(5 May 2018): New Orleans News Site Finds Actors Were Paid To Support A Power Plantnpr.org

——–“Multiple actors were paid to appear at City Hall meetings in New Orleans and express support for a proposed gas-powered power plant, an investigative news site reports, citing interviews with actors and messages with organizers.”  The news site is “The Lens.”  It has published evidence “suggesting a campaign to recruit, organize and pay people, including people from outside on New Orleans, to express support for the power plant.  The Lens notes that “the practice appears to be legal.”  According to The Lens, “participants were paid $60 for showing up and wearing a shirt, and $200 for delivering a speech in support of the plant.  The news outlet also said that in one message, the organizer referenced ‘Crowds on Demand.’  In 2016, Dave Rothbart wrote about that company, which supplies fake crowds for events, for The California Report.”

********Here is the link to the foundational article in “The Lens” and here is the link to the website of Crowds on Demand.  The website of Crowds on Demand draws attention to its services in the areas of Celebrity Events, Protests, Rallies And Advocacy, and Corporate Events And Audiences.  The event in New Orleans falls squarely in Protest services and the link for “The Lens” seems to provide a good illustration of that service in action.  All of this is another clear example of the many ways that human behavior expresses itself on “the market” broadly considered.  In an update on May 10th, “The Lens” reports that the energy company “Entergy has acknowledged that a public-relations firm working on its behalf was responsible for paying people to attend and speak at two public meetings in support of a new power plant in New Orleans.  The company said it hired the PR firm to bring supporters to the meetings, but it didn’t know those people had been paid.”

(10 May 2018):Canadian newsprint tariffs start to take a toll on U.S. newspaper industry The Los Angeles Times

——–“Little noticed amid the trade war discussion, tariffs levied by the Trump administration on the Canadian paper used to make newsprint are starting to take a toll on U.S. newspapers and printers.”  Two sets of interventions “have raised the price of newsprint by about 30%.”  As a result, the “Tampa Bay Times said it will eliminate about 50 jobs by June to try to manage the estimated $3.5-million additional cost the paper will pay per year as a result of the tariffs.”  According to Paul Boyle of News Media Alliance, there were about 15 newsprint mills in the U.S., but the mills began disappearing as the demand for newsprint declined.  Now “there are only a handful left in the nation.”  Canadian paper mills provide 60% of the 2.4 million tons of newsprint in the U.S.  Boyle notes, “I think it’s foolish to believe someone’s going to start a newsprint mill and spend $200 million to $300 million to build a mill . . . when you see a decline in newsprint.”

********It is always good to have specific examples to look at when examining the impact of a policy which, by its nature, must be general.  Here, tariffs (invisible foot) on Canadian newsprint reduce the supply of newsprint in the U.S. and drive up the price of newsprint (invisible hand).  In the short run and, if we are to believe Paul Boyle, the long run there will be little supply response by U.S. newsprint producers due to the tariff.  The higher price of newsprint decreases the supply (and increases the prices) of products that use newsprint, especially newspapers.  This makes newspapers relatively more expensive than alternatives like online media, decreasing the demand for those who produce newspapers in their traditional form.  This is only a glimpse of the ramifications.

********I’m currently reading You Had a Job for Life: Story of a Company Town, by Jamie Sayen.  It is a history, based upon oral histories, of a paper mill in Groveton, New Hampshire, not too far from the Canadian border.  The book has kept my attention and, in its later stages, has shown the challenges that arise for a company town when it loses its connection to local ownership and becomes just another unit to be managed by a larger business.  (I would be grateful to anyone who could point me in the direction of a good history of the paper mill in Canton, North Carolina, which has also had multiple owners.)  On that reading trajectory, I am looking to read for my next book Annie Proulx’s novel Barkskins, which follows the families of two wood cutters over 300 years.  I became aware of this book via a review of The Overstory, by Richard Powers, another novel about trees and the people who relate to them.  Maybe I’ll read both.

(10 May 2018):Bans on paying for human blood distort a vital global marketThe Economist

——–“The global demand for plasma is growing, and cannot be met through altruistic donations alone.  Global plasma exports were worth $126bn in 2016—more than exports of aeroplanes.  But paid plasma raises ethical, social and medical concerns: that it will lead to health catastrophes, as in the 1980s when tainted blood spread HIV and hepatitis; that it exploits the poor; and that it reduces the supply of ‘whole’ blood, which is almost all donated voluntarily.  None of these worries is well-founded.”

********The article goes on to elaborate upon why these worries are not well founded.  It turns out that plasma can be highly processed and checked for purity in a way that whole blood cannot.  Still, many countries tend to treat plasma like whole blood and ban payment for plasma.  The U.S. does not, and that is why it is responsible why it collects three-quarters of global blood plasma.  Unsurprisingly, countries that pay for plasma tend to be exporters while countries that ban pay for plasma tend to be importers.  A surprising fact: “plasma makes up 1.6% of America’s total goods exports.”

********There is a good deal of academic literature on the market for blood.  An accessible article is “The Market for BloodThe Journal of Economic Perspectives (2014).

(11 May 2018): [SR] “Maryland’s Crab Country: Not Enough Visas, Not Enough WorkersThe Wall Street Journal

——–In Fishing Creek, Maryland, on Hoopers Island, 21 Mexican women at G.W. Hall & Sons are cracking open steamed crabs that will be processed and sold to wholesalers in the mid-Atlantic states and as far away as Canada.  Just one-half mile away, “the picking room at a competing company, Russell Hall Seafood, was silent, no workers to be seen. . . . The difference: one firm won the visa lottery, and the other didn’t.  This year, for the first time, demand for the low-skilled, seasonal H-2B visas was so high that the U.S. government awarded them by lottery.”  The worker shortage on Hoopers Island was unexpected and has disrupted its economy.  “Processors that don’t have pickers aren’t buying crabs.  Those crabbers aren’t buying bait fish from local fishermen.  The combination has slashed sales at the Hoopers Island General Store to its lowest level in six years, said owner Katie Doll.”  Fisherman Burl Lewis “recently laid off a crew member from his 52-foot boat,” noting “The Mexican labor creates jobs for Americans.  It’s creating my job.”

********Another clear illustration of the invisible foot—legal and political forces that influence human behavior—in action.  In addition, it shows how a change at one part of a supply chain are transmitted to its other parts and beyond, i.e., it illustrates multiplier effects.  It strikes me that that the lottery approach to allocating H-2B visas would strike many as being fair but inefficient, whereas as market approach to visa allocation would strike many as being unfair but efficient.  Fairness and efficiency are important considerations in all policy decisions.

********While we are on the subject of lotteries as an allocation method, it is used to allocate affordable housing, too.  Check out “These 95 Apartments Promised Affordable Rent in San Francisco.  Then 6,580 People Applied The New York Times.

(13 May 2018):Atlantic City’s Grand Casino BustJSTOR Daily

——–“On May 26th, 1978, a grand social experiment began in Atlantic City, New Jersey.  the first legal American casino not located in Nevada opened, less than two years after New Jersey voters approved a referendum to allow gambling in the battered resort community.”  Gambling supporters saw casinos as a way “to boost the economy and create jobs.  Moralists argued that casinos would erode the country’s moral fiber.  But the jobs argument won out, and by the 1990s, casinos were seemingly everywhere.”  It was anticipated that casino gambling would increase tax revenues for states, but the “concept was based on a false hope.  The original gambling mecca, Las Vegas, was an isolated locale that became a tourist destination.  Its imitators, including Atlantic City, relied on locals and day hoppers, who play at the casinos and then go home, contributing few outside tourist dollars to their localities.  In Atlantic City, a third of that town’s local businesses closed within four years of the casino openings.”

********This post shows all of the invisible forces in action.  It also connects with the two articles immediately above.  First, it provides a look at yet another example of probability-related activity.  Second, and more interestingly, it shows that the economic impact difference of casino gambling between Las Vegas and Atlantic City relates to the size of their multipliers—relatively large if most spending comes from outside the community and relatively small if it comes from inside the community.  (Where economic development is concerned, bigger is better.)  In the latter case, gambling money would likely have been spent locally anyway, so there is simply a redistribution of expenditures, which is why so many local businesses closed in Atlantic City after casinos were introduced.  In the former case the additional expenditures are all new.

********It will be interesting to see how state governments respond to the recent decision by the U.S. Supreme Court to allow sports gambling.  States must still act, however, and it is possible that the federal government will, too.  What arguments will be made and to what extent do those arguments lie upon factual grounds rather than wishful thinking?  It shouldn’t be long before we find out.

May you have a good week!  Bruce

316 (9 May 2018)

Welcome to week 316!  The articles below caught my attention this week.  What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  Article titles preceded by [SR] require a subscription to be read in their entirety, although complete articles may be found by an Internet title search.

Please feel free to share this information with others.  If you have questions or comments, please send them my way.

(2 May 2018): America’s Last-Ditch Climate Strategy of Retreat Isn’t Going So WellBloomberg.com

——–The village of Sidney, New York flooded in 2006 and 2011.  After the second flood, its mayor, Andrew Matviak, recognized that “we can’t operate the way we’ve operated before and say it’s not going to happen again.”  What they have tried to do is engage what is known as “managed retreat” from flood exposure.  This contrasts with what has been “the guiding philosophy behind attempts to protect U.S. homes and cities against the effect of climate change . . . to build more defenses.  Houses can be perched on stilts, surrounded by barriers, buttressed with stormproof windows and roofs.”  With managed retreat the approach is to move out of harm’s way.  In Sidney the idea was to move impacted homes and neighborhoods out of the current flood plane and to higher ground, paying residents for the flood-damaged homes they had.  But this has proven hard to do with a set of hard-to-navigate state and federal agencies to deal with.

********I appreciated the contrast between defense in the face of climate change and managed retreat.  Given the very long time lags involved in action and result regarding climate, one or both of these approaches to “managing” climate change will likely be adopted.  Of course, in some places defense is not really an option due to natural forces.  In other places, so Sidney’s case seems, managed retreat is strongly affected by the invisible foot, i.e., legal and political forces.  By the way, there is another option regarding climate change: do nothing.  This seems to be the approach of Greenland, which is welcoming climate change as a way to make its environs more accessible to tourists and miners.  There is a brief article to this effect in The Economist.

(2 May 2018):Why farmers only get 7.8 cents of every dollar Americans spend on foodThe Washington Post

——–“For every dollar consumers spend on food, only 7.8 cents goes to farmers—a record low that reflects shifts in how Americans eat, according to the Department of Agriculture.  Where once consumers cooked most of their meals at home, they’re now buying just as many at cafes and restaurants.  And while shoppers were once content to husk their own corn and slice their own apples, they now buy those foods—and thousands of others—pre-husked, pre-sliced and otherwise processed. . . . While falling share doesn’t hurt farmers, necessarily, it does expose the long-term, macro trends that shape the supply and cost of food.”

********What I found especially interesting in this article is the bar graph titled “Where your grocery money actually goes” that shows the composition of “every dollar spent on food.”   Leading the way in terms of the share of each food dollar are Food services (36.3 cents) and Food processing (15.2 cents), followed by Retail trade (12.4 cents) and Wholesale trade (9.1 cents).  What I would really like to see is a so-called “Percentage stacked area chart” for the share of each food dollar over time.  One really can’t begin to tell a story with only one datum.

(4 May 2018):Can Markets Make Us Equal?Bloomberg.com

——–“Proposed solutions for inequality are depressingly familiar. . . . Doesn’t anybody have anything new to offer?  Actually, yes: One big new idea is to unleash the awesome power of markets and push them into parts of life where they have never operated before. . . . Taking markets more seriously is the thrust of a surprising book, Radical Markets: Uprooting Capitalism and Democracy for a Just Society . . . It’s be Eric Posner, a University of Chicago Law School professor, and Glen Weyl, an economist and principal researcher at Microsoft Corp.  They’re smart and iconoclastic, and their book bursts with ideas like kernels of corn on a hot stove.”

********This post is a review, by Peter McCoy, of Radical Markets.  As the reviewer notes, some of the ideas in the book are impossible, offensive, or both.  But that seems not to concern the Posner and Weyl.  For example, the authors suggest that people be allowed to “decide how much they want to pay in property taxes by setting their own valuations for their property.  Every kind of property, not just real estate.”  Read the article to see how this would work.  Suffice it to say that this book seems to have some unusual ideas that are sure to stretch one’s mind.

********For an earlier opinion piece by the authors, which appeared in The New York Times, see “The Real Villain Behind Our New Gilded Age.”  In contrast to the review by McCoy, Posner and Weyl focus primarily on the role of market (monopoly) power in current times.  As such they hark back to the regulatory responses to the great monopolies of the late 19th century, in particular “Standard Oil, the sugar trust, [and] the financial and railroad interests” that used “their power to corrupt the economy and politics.”  As they say, “Today, market power takes new forms, but the solution is the same: antimonopoly laws and laws protecting workers, but updated for the problems of the 21st century.”  Posner and Weyl also have some things to say about the current state of academic economics.  Read them in “How Economists Became So TimidThe Chronicle of Higher Education.

********Eric Posner is the son of Richard Posner, who was recently recognized as a Distinguished Fellow of the American Economic Association.  According to the citation, “Richard Posner is the most significant pioneer in the economic analysis of law.”  From 1981 to 2017 he was a federal circuit court judge.  Posner wrote prolifically throughout his career.  “His treatise/textbook Economic Analysis of Law, published in 1973 and now in its ninth edition (2014), has provided generations of law students, economics students, and lawyers who had not studied economics, the frameworks and methods for applying economic analysis to all major legal domains.”

(4 May 2018): [SR] “Why Not All Tolls Rise to Nearly $50The Wall Street Journal

——–“States are increasingly turning to a free-market solution for highway congestion, putting in demand-based tolls that rise in price as traffic builds.”  Although the goal is to differentiate between those willing to pay for more speed and those who aren’t, there is a hitch.  “Some places like Los Angeles and Miami have put caps on tolls to spare drivers potential sticker shock.  Such price limits make jams more likely in express lanes, eroding their efficacy and prompting driver complaints.  Without a cap, tolls on a 9-mile stretch in Virginia have almost hit $50.”

********Evidently there are “now more than 30 such [demand-based toll] roadways in the U.S., most with a cap, and 13 others where tolls vary by time of day.”  Nobel laureate William Vickrey (1914-1996) is the originator of what is now called “congestion pricing.”  The Tri-State Transportation Campaign has a 12-page summary of the congestion pricing experiences of London, Singapore, and Stockholm.  All this will sound familiar to those who have followed the news about the “surge pricing” of Uber and others.

(4 May 2018):A healthy re-examination of free trade’s benefits and shocksThe Economist

——–“Economists have long argued that free trade makes everyone richer.  But lately that view has come under attack.”  As a result, economists are now “asking themselves some tough questions.  Is free trade always a good thing?  Do the losers from free trade need to be compensated?  To explore the basics of free trade, The Economist spoke to John Van Reenen an economist at MIT.”  According to Van Reenen, free trade as “four big benefits” and some “well-known downsides.”

********Van Reenen provides brief and clear discussions of the benefits and downsides of free trade, which he defines as “allowing good[s] and services to move as freely as possible across different countries.”  One of the things that stood out for me in the article is Van Reenen’s discussion of what a country can do to “compensate those people who do lose out” from free trade.  The absence of a meaningful social safety net in the U.S. means that compensating losers from trade is more challenging than in some European countries.

(9 May 2018):When All Else Fails, Tax Incentives Probably Will, TooThe New York Times

——–The state of Wisconsin has offered $3 billion to Foxconn to bring a $10 billion television plant to Racine and New Jersey has offered $5 billion to Amazon to bring its second headquarters to Newark.  “Giveaways like these are often a waste of public money.  Research on a program of corporate tax breaks in Texas found that 85 to 90 percent of the projects benefiting from such incentives would have gone forward without them.  Even when tax breaks work and spawn new jobs, local residents gain little if anything.”

*******Eduardo Porter, the columnist who wrote this article, goes on to ask, “So why does everybody do it?”  I.e., why do states (and regions) pursue policies that, on the face to things, deliver few if any (net) benefits to the people politicians represent?  Porter explores many facets of these questions, and while doing so he provides links to a variety of resources that can be easily consulted for those who wish to learn more.  Certainly, one aspect of this is the time horizons of most politicians tend to be relatively short while the time horizons for most economically evolutionary projects tend to be long.  This is a familiar story, except that instead of talking about corporate management tied to short-run financial results, we are confronted with politicians tied to short-run political results.  Real development, economic or other, takes time.

May you have a good week!  Bruce

315 (2 May 2018)

Welcome to week 315!  The articles below caught my attention this week.  What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  Article titles preceded by [SR] require a subscription to be read in their entirety, although complete articles may be found by an Internet title search.

Please feel free to share this information with others.  If you have questions or comments, please send them my way.

(26 April 2018):A market-design economist wins the John Bates Clark medalThe Economist

——–The John Bates Clark medal is given each year to an outstanding economist under 40.  This year Parag Pathak received the medal for his work on market design, e.g., “creating mechanism to allocate resources without money, such as school places in Boston.”  According to the American Economics Association, Pathak’s work on improving pupil allocation has “influenced the lives of over 1m public school student.”

********As a graduate student, Pathak worked with Alvin Roth, who later won a Nobel Prize for his work on market design.  The complete AEA award announcement for Pathak can be read online.

(29 April 2018):In Fire-Scorched Oklahoma, Help Comes One Bale at a TimeThe New York Times

——–“The hay began arriving before the fires were out.  It came stacked on pickup trucks and strapped onto semis.  From a few counties away.  From halfway across the country.  For ranchers whose grazing land was destroyed by wildfires that tore across western Oklahoma this month, the cylindrical bales were an economic lifeline, a way to feed cattle marooned on grassless patches of charred red soil.  The hay was also free, provided not by lawmakers in Washington or Oklahoma City, but mostly by strangers in other corners of rural America.”

********This is one of the most thought-provoking articles I’ve read in a while.  Some of those donating hay did so because they had recently suffered the ravages of a wildfire, I suppose it is one variation of the expression “giving back” that is frequently heard, a sort of “do unto others as others have done unto me.”  The views expressed about asking and not asking for help are interesting, as is the importance of giving help without being asked.  All these point to deep-rooted attitudes formed by social and historical factors that affect what people do in times of crisis.  Most of all, though, I have been challenged to think of the role of time in relation to loss.  People who suffered loss long ago are not as likely to be the recipients of generosity as those who just incurred it.  It is as if some type of “discounting” of suffering is at work.  Although discounting is generally seen as a matter of time, no doubt there is “spatial discounting” also at work.  Spatial discounting, it turns out, is of increasing importance in public and environmental policy.

(2 May 2018): “The World’s Largest Brewers Have a New Weapon: Weak Beer” Bloomberg.com

——–“To boost sales in Australia, a land where the ability to drink large quantities of ale can be a badge of honor, brewing giants Anheuser-Busch InBev NV and Kirin Holdings Co. think they’ve found a new weapon: weaker beer. . . . a new era of healthier, image-conscious drinkers is cutting back on booze, forcing brewers to roll out weaker versions of everything from Stella Artois to local tipples such as James Boag and Hahn.”  According to global drinks analyst Jonny Forsyth of Mintel Group Ltd., “The mentality now is not to get drunk, but to drink.”  He notes that social media has played a role in this shift to weaker brews.  “Younger consumers weaned on smartphones are becoming wary of having embarrassing drunken photos of themselves appear on Instagram or of not looking their absolute best of Facebook the next day.”  This is not only an Australian trend, as “Around the world, brewers are turning to lighter liquids as beer consumption falls.”

********The expression “session beer” comes to mind, something I first read about some years ago in an article by former Asheville Citizen Times reporter Tony Kiss, aka, The Beer Guy.  Perhaps Tony was ahead of his time.  Evidently the so-called “midstrength segment” is expected to help “draw more young women to beer as well as bring back older drinkers who’d become fed up with the physical effects of full-strength ale.”  As Forsyth says, “That’s the way the market’s going.”  In craft beer, too, there is an increasing demand for “lighter and healthier drinks.”  It will be interesting to see if this shows up in Asheville . . . How could it not?

********Just as a note, Bloomberg.com is changing.  It now has a different appearance and more written content, and it is introducing a metered paywall.  Now one “can view 10 articles each month at no charge, as well as 30 minutes of Bloomberg TV livestream daily.  After 10 articles, we [Bloomberg] will ask you to become a digital subscriber.”  I do not welcome this development, but I can understand it.  In this form Bloomberg begins to be a closer substitute for The Wall Street Journal.  Something I will consider in the year to come.

May you have a good week!  Bruce

314 (25 April 2018)

Welcome to week 314!  The articles below caught my attention this week.  What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  Article titles preceded by [SR] require a subscription to be read in their entirety, although complete articles may be found by an Internet title search.

A reader last week indicated that the “invisible links” now used were preferred to “visible links” but that it would be beneficial to include the name of the source of the article, e.g., The Washington Post.  This is a nice middle ground between the visible and the invisible.  The name of the source now follows the title of the article, much like scholarly citation practices.

Please feel free to share this information with others.  If you have questions or comments, please send them my way.

(19 April 2018):Science hinted that cancer patients could take less of a $148,000-a-year drug.  Its maker tripled the price of a pillThe Washington Post

——–“A group of cancer doctors focused on bringing down the cost of treatments by testing whether lower—and cheaper—doses are effective thought they had found a prime candidate in a blood cancer drug called Imbruvica that typically costs $148,000 a year.”  But before they could develop a study and secure funding they learned “of a new pricing strategy by Janssen and Pharmacyclics, the companies that sell Imbruvica through a partnership.  Within the next three months, the companies will stop making the original 140-milligram capsule . . . [and] will instead offer tablets in four strengths—each of which has the same flat price of about $400, or triple the original cost of the pill.”  The pricing scheme “ensures dose reductions won’t save patients money or erode companies’ revenue from selling the drug.”

********The article goes on to discuss some of the complexities involved with the management of patients using Imbruvica and how the new pricing scheme will reduce the ability of physicians to respond to drug interactions in a timely way.  This situation simply calls out for a more rigorous and systematic analysis.

(19 April 2018):Why a Cashmere Sweater Can Cost $2,000 . . . or $30Bloomberg.com

——–“A plain, yet meticulously crafted, sweater made of the world’s finest cashmere can cost $2,000 or more from premier fashion labels such as Loro Piana.  You can also grab a simple sweater of 100 percent cashmere off a discount rack at Uniqlo for as little as $29.90. . . . So what makes one sweater better than another?  The price depends on the quality of the yarn, where the garment was manufactured, the number of units purchased by the brand, and the markup.  The quality of the raw material often matters the most.”

********The article provides a nice description of some of the things that producers look for in terms of fiber characteristics and what consumers look for in terms of the finished sweater.  Evidently American consumers value garment softness “above all else.”  Reminiscent of the sparkling wine called Champagne, which must come from a specific region of France, “only the product of the Kashmir goat is true cashmere.”

(20 April 2018): [SR] “Climate Fears Reshape Miami’s Housing MarketThe Wall Street Journal

——–“Concerns over climate change are beginning to reshape one of the country’s largest housing markets, with properties closer to sea level now trading at discounts to those at higher elevations.  Research published Friday in the Journal of Environmental Research Letters shows that single-family homes in Miami-Dade County are rising in value more slowly near sea level than at higher elevations, as buyers weigh the possibilities of more-frequent minor flooding in the short term and the challenge of reselling properties that decades from now could be permanently submerged.”  The Miami area is “a testing ground for the vulnerability of housing markets in other coastal cities, such as New York and Boston, because its elevation is as little as one foot above sea level and its porous limestone makes it especially vulnerable to rising sea levels.”

********The foundation publication of this article is “Climate gentrification: from theory to empiricism in Miami-Dade County, Florida,” which is downloadable in its entirety.  Its Abstract gives a clear statement of the hypotheses under consideration and the results found.  In short, climate risk as measured by elevation is clearly being reflected in the price of single-family homes in Miami-Dade County.  If you have had some exposure to multiple regression models in an economics or statistics course, you can study the results for yourself.

********Climate change is not restricted to coastal areas, as is pointed out in “Climate Lawsuits, Once Limited to the Coasts, Jump InlandThe New York Times.  Boulder and San Miguel Counties in Colorado, along with the city of Boulder, Colorado, have filed lawsuits against ExxonMobil and Suncor Energy arguing that “fossil fuels sold by the companies contribute to climate change, which in turn has exacerbated wildfires, droughts, sever storms and other symptoms of a warming planet that have far-ranging effects on agriculture and tourism.”  The article discusses some of the legal issues involved in such cases, including property rights, nuisance doctrines, state vs federal jurisdiction, and the role of the EPA.

(25 April 2018):The Fighting Has Begun Over Who Owns Land Drowned by Climate ChangeBloomberg.com

——–“A decade after the global financial crisis popularized the term ‘underwater real estate,’ parts of the U.S. are grappling with a new, more literal version of the problem.”  Holly Doremus, a law professor at the University of California at Berkeley, notes: “There’s no question it will be a huge fight . . . We don’t exactly know the boundaries of what the state can do.”  Although the “public trust doctrine” has long stipulated that “when it comes to coastal property, anything below the average high-tide line is owned by the government for the use and benefit of the public . . . [those] rules also cover what happens when the high-tide line moves.  If the movement happens suddenly—for example, if a portion of beach is washed away by a storm—the land owner retains title to the property provided he or she restores it to dry land.”  However, “if the high-tide line moves slowly, state ownership moves with it.  And because it’s Mother Nature taking the land, not the government, there’s no legal requirement for the government to compensate property owners.”  According to one legal scholar, due to climate change some of these rules, “don’t really make as much sense anymore.”

********This article is filled with interesting twists and turns.  Clearly our legal system has not sufficiently evolved to the point where ready answers can be provided for a long list of issues and actions related to climate change.  For example, if I am a landowner and my land is submerged, do I still have to pay taxes on the land?  Is it still my land?  If it isn’t my land, whose is it?  Will the ownership status of the land change if a state or federal agency reclaims the land and returns it to “dry” status?  Those who are going into environmental law will have much work to do in the decades to come.  Perhaps there are other areas, too, that are at issue but simply aren’t as dramatic, i.e., visible, as those related to inundated lands.

May you have a good week!  Bruce

313 (18 April 2018)

[The Invisible Forces Weekly: Economics with a Broader View] 313 (18 April 2018)

Welcome to week 313!  After a one-year sabbatical from TIF Weekly, I am looking forward to the discipline of summarizing and expanding upon online articles that catch my attention each week.  Thank you for joining me on the journey.

The setup of TIF Weekly will largely remain the same.  What are intended to be relatively objective “briefs” are preceded by dashes (——-), whereas additional material or relatively subjective comments are preceded by asterisks (*******).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may be found by an Internet title search.

In the past I have made visible the links for each article, but I will no longer follow this practice, using “invisible” links instead.  This will result in posts that are neater and more compact.

(12 April 2018):Why undertakers are worried

——-“Every minute more than 100 people die.  Most of these deaths bring not just grief to some, but also profits to others.”  As population aging takes place in the United States and many other countries of the developed world, annual death rates will climb, thus making the death business more attractive to a wide range of investors.  “The dead-body business is seen as highly predictable, uncorrelated with other industries, inflation-linked, low risk and high margin.”  But “in some of the world a profound shift is under way in what people want from funerals.”  According to Sherri Tovell, a Windsor, Canada undertaker, “the modern undertaker’s job is increasingly one of event planning.”

*******The article clearly lays out the wide range of developments taking place in the funeral industry and why an increase in the death rate may not result in increased revenues for members of the National Funeral Director Association.  Simply put, a wide range of substitutes for traditional funerals have been developed and are increasingly being purchased by the bereaved.

(13 April 2018):Climate Change Is Messing With Your Dinner

——-“The world’s dinner tables are seeing the impact of climate change.  As cold regions become warmer, and warm places hotter still, farming and fishing are shifting.  An evolving climate means big changes for people who grow, catch and rear for a living, and everyone else who buys and eats what they produce.”  Through it all, there are winners and losers.  “As temperatures rise, the best growing conditions for many crops are moving away froom the tropics, and from lower lying land to cooler climbs.  Fish and other underwater catches, too, are migrating to colder seas as their habitats warm.”

*******This article examines the impact of climate change on a small number of objects of human desire, for example, wheat, wine, coffee, lobster, and the like, as well as the predictable impacts on price, lower prices when supply increases and higher prices when it falls.  In addition, it says a little bit about the people who will be impacted by climate change; people in tropical and equatorial regions seem to be in for the worst of it.  What is especially useful, though, is its effort to say something about how quality will be affected by climate change.  This is done most notably for the nutrient levels of rice, wheat, and corn, which have been shown to have lower amounts iron, protein and zinc when CO2 levels increase.

*******The methods used to arrive at predictions are multiple, but one that is increasingly being used due to rapid growth of computational power is agent-based modeling.  There is a nice discussion of it in an article in Science, “Free agents.”  Investing ten minutes reading the article will give you a sense of the promise and the substantial development costs of modeling social behavior “from the bottom up.”  The Santa Fe Institute now offers a free tutorial on agent based modeling, using the NetLogo programming language as its vehicle.  You can learn more about it here.

(17 April 2018):2018 Pulitzer Prize Winners: Full List

——-The 2018 prizes “encompassed, among other topics, stories of abuse in the workplace; construction of a U.S.-Mexico border wall; and a profile of Dylann Roof, who was charged with killing several people in a Charleston, S.C., church.”  For Local Reporting, the staff of “The Cincinnati Enquirer” won for its “multimedia narrative of seven days inside the city’s heroin epidemic, a period in which 18 people died and at least 180 overdoses were reported across the area.”

*******The Pulitzer Prize was first awarded in 1917 and has undergone changes over time due to the “flexible will” of Joseph Pulitzer.  It is instructive too look through the list and see the variety of topics (and papers) that were thought to be Pulitzer worthy.  A look through the list will surface work that encompass all of the invisible forces: hand, handshake, and foot.  The work of “The Cincinnati Enquirer” is an exceptionally clear case.  The book by Jack E. Davis, The Gulf: The Making of an American Sea, sounds intriguing.  The Gulf referred to, by the way, is the Gulf of Mexico.  Evidently, the book by Davis is the first “comprehensive history” of “the world’s tenth-largest body of water.”  Another book that bears notice is Locking Up Our Own: Crime and Punishment in Black America, by James Forman, Jr.

May you have a good week!  Bruce

312 (12 April 2017)

Welcome to week 312!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

Sabbatical

According to Wikipedia (https://en.wikipedia.org/wiki/Sabbatical),

Sabbatical or a sabbatical . . . is a rest from work, or a break, often lasting from two months to a year. The concept of sabbatical has a source in shmita, described in several places in the Bible. For example, in Leviticus 25, there is a commandment to desist from working the fields during the seventh year. Strictly speaking, this means a sabbatical would last one year.

With this definition, I am announcing that, after six years—312 weeks—I am taking a sabbatical in the strict sense, i.e., one year.  That means that issue 313 of The Invisible Forces Weekly will appear on Wednesday, April 18th, 2018.  I hope you will be open to receiving my “briefs” and comments at that time, whatever form they might take.

Let me say that I don’t intend to write the great American novel during the next year, although I will probably read a few, and I don’t intend to climb Mount Everest, although I do hope to climb a few mountains in western North Carolina.  Without going into detail, I look at the next year as a time to “freshen up,” in effect, spring cleaning for the rest of my life.

While I am “freshening up” you might want to check out a few of the many “substitutes” for TIF Weekly.  I suggest two sources to investigate: the listings of Blogs and Journalists presented at Economic Principals (http://www.economicprincipals.com/) and the Blogs, Commentaries, and Podcasts listed by Resources for Economists (https://www.aeaweb.org/rfe/showCat.php?cat_id=96).  I am confident that you will find something that will address your interests.  With that said, thank you for your interest in TIF Weekly.

(6 April 2017): “Cannabis Two-Step: Raise Cash in Canada, Spend It in U.S.” (https://www.bloomberg.com/news/articles/2017-04-06/pot-companies-flock-to-canada-as-u-s-laws-stymie-share-listings)

——–“When Hadley Ford created a company for investing in the fast-growing business of legal marijuana, the former Goldman Sachs Group Inc. investment banker left New York and headed north of the border.  While more than half of U.S. states allow marijuana for medical or recreational use, the drug is still outlawed by the federal government, starving pot entrepreneurs of institutional capital. . . . So Ford created a public company that raises money in Canada, where medical marijuana is allowed. . . . The move gave Ford entrée into a vibrant public market for cannabis and a way to fund investments in the U.S. . . . Ford, 57, is among a growing list of entrepreneurs who are capitalizing on the difference between the two nations when it comes to marijuana.”

********Different legal treatments for the same product almost always create an opportunity for gain.  People like Hadley Ford, who identify these differences and are able to conceive of a business model that will realize those gains, have the potential to reap large financial gains.  In essence, differences in social and historical forces (the invisible handshake) give rise to differences in legal and political forces (the invisible foot), which give rise to differences in economic forces (the invisible hand).  I think we need more educational opportunities for students to range broadly over the disciplines of sociology, political science and law, and economics.  Those students would benefit, too, from the knowledge being constructed by researchers on complexity.  Melanie Mitchells’ book Complexity: A Guided Tour (https://www.amazon.com/Complexity-Guided-Tour-Melanie-Mitchell/dp/0199798109/) provides an introduction to the subject.

(10 April 2017): “Fewer Tomatoes in Ketchup?  East Europeans Pursue Parity at the Grocery” (https://www.nytimes.com/2017/04/09/world/europe/fewer-tomatoes-in-ketchup-east-europeans-pursue-parity-at-the-grocery.html)

——–“The countries of Eastern and Central Europe have long bridled at being treated like the poor cousins of the European Union family.  It does not help that even after more than a dozen years in the bloc, wages remain lower, corruption persists and public services, like schools and hospitals, are far scruffier.  But now that sense of resentment—of being treated as second-class citizens by more prosperous neighbors—is reaching even into the regions refrigerators and cupboards.  With rising passion, prominent politicians and local news media have taken up the issue of whether Eastern Europeans are being sold inferior products.”

********The article clearly indicates that there is evidence to suggest that Eastern and Central European countries are being sold products that are different from, indeed inferior to, those sold in adjacent countries like Austria and Germany.  It seems like the time is right for a more comprehensive comparative study of products in the EU countries.  The article indicates that product differentiation, for whatever reason, is being seized upon by politicians in Eastern and Central European countries.

(10 April 2017): “The Birth of Planned Obsolescence” (https://daily.jstor.org/the-birth-of-planned-obsolescence/)

********In this post, Livia Gershon outlines “the story of how we became a nation that buys stuff and then throws it away at an astonishing pace.”  She does this by summarizing Nigel Whiteley’s 1987 article “Toward a Throw-Away Culture.  Consumerism, ‘Style Obsolescence’ and Cultural Theory in the 1950s and 1960s.”  Important to this development was the 1932 book Consumer Engineering: A New Technique for Prosperity, by Roy Sheldon and Egmont Arens, in which the expression “creative waste” was introduced.  1932 was not an auspicious time to introduce a book espousing creative waste, to say the least.  But “for a rising middle class in the 1950s, possessions—particularly cars—became a way to advertise a family’s social position.”  All this is, of course, an echo of Thorstein Veblen’s “conspicuous consumption” as developed in his classic 1899 book The Theory of the Leisure Class (https://www.amazon.com/gp/product/0199552584/).

(11 April 2017): “Book Pins Corporate Greed on a Lust Bred at Harvard” (https://www.nytimes.com/2017/04/10/business/dealbook/11-andrew-sorkin-harvard-business-school.html)

——–“If you were to look for one ingredient that binds together the nation’s chief executives, top managers and boards of directors, you’d find a remarkably consistent commonality, now and in generations past: A disproportionate number of them are graduates of Harvard Business School. . . . It is hard to overstate the school’s influence on corporate America.  That’s why a new, exhaustive history of the school is causing a stir before it is even out.  The book, “The Golden Passport,” by the veteran business journalist Duff McDonald, is a richly reported indictment of the school as a leading reason that corporate America is disdained by much of the country.”  McDonald points to the arrival of financial economist Michael C. Jensen in 1985 as contributing to an “ideologically driven hijacking of the study of finance [that] served as a cynical repudiation of everything that come before him at the school.”

********You can learn more about McDonald’s book at: https://www.nytimes.com/2017/04/10/business/dealbook/11-andrew-sorkin-harvard-business-school.html.  At 672 pages, this is a lengthy indictment of H.B.S.  As the reviewer, Andrew Ross Sorkin, notes, “in example after example, Mr. McDonald sets out his thesis that money and influence have distorted both the school’s curriculum and the worldview espoused by its professors, who themselves are on the payroll of corporate America as part-time advisers and consultants.”  This seems like a book that will repay careful reading when it is released later this month.  I encountered the George Bernard Shaw story related in the review when I took my first undergraduate course in microeconomics.

********The relationship between the university and business, as developed by McDonald, has long been a matter of discussion.  I see some of this in President Eisenhower’s Farewell Address, which is amply discussed in the book Unwarranted Influence: Dwight D. Eisenhower and the Military-Industrial Complex (https://www.amazon.com/Unwarranted-Influence-Eisenhower-Military-Industrial-Complex/dp/0300177623/).  But a much fuller development is provided in the post “Scientists Have Always Been Political” (https://daily.jstor.org/scientists-have-always-been-political/) and its foundation article (2009) “The Professional and the Scientist in Nineteenth-Century America.”

(12 April 2017): “In the Tennessee Delta, a poor community loses its hospital—and sense of security” (http://wapo.st/2nAF1Z8)

——–Haywood Park Community Hospital of Brownsville, Tennessee closed its doors three years ago this summer.  Its closing is one story in “an epidemic of dying hospitals across rural America.  Nearly 80 have closed since 2010, including nine in Tennessee, more than in any state but Texas.  Many more are considered fragile—downstream victims of federal health policies, shifts in medical practice and the limited tolerance of distant corporate owners for empty beds and financial losses.  In every rural community, the ripple effects of a lost hospital are profound, reverberating beyond the inability of would-be patients to get immediate care.  Many of the best jobs in town vanish.  Local leaders trying to recruit new industry face an extra hurdle.”  People needing emergency health care do not vanish, however, leading Brownsville mayor Bill Rawls to say, “The emergency room now is the back of an ambulance.”

********A brief summary of state-by-state rural hospital closings can be found a t: http://www.beckershospitalreview.com/finance/a-state-by-state-breakdown-of-80-rural-hospital-closures.html.  The summary, in turn, seems to be based upon the work of the North Carolina Rural Health Research Program (http://www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-closures/).  The latter resource is especially interesting and flexible as it provides the ability to sort on various criteria and provides a map of closed-hospital locations.  There are some discrepancies regarding numbers, e.g., the article indicates that 9 Tennessee hospitals have closed but I only see 8 in the sources but probably not a matter of concern.  This is another indicator of how the changing conditions of life in rural areas.

May you have a good year!

Bruce

311 (5 April 2017)

Welcome to week 311!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

Upcoming Sabbatical.  Please note that TIF Weekly will be on sabbatical for one year following the distribution of 312, which will complete its sixth year.  More details will be provided when 312 is distributed.  TIF Weekly 313 will be distributed on Wednesday, April 18th, 2018.

(29 March 2017): “Chase Had Ads on 400,000 Sites.  Then on Just 5,000.  Same Results.” (https://www.nytimes.com/2017/03/29/business/chase-ads-youtube-fake-news-offensive-videos.html)

——–“As of a few weeks ago, advertisements for JPMorgan Chase were appearing on about 400,000 websites a month. . . . Now, as more and more brands find their ads popping up next to toxic content like fake news sites or offensive YouTube videos, JPMorgan has limited its display ads to about 5,000 websites it has preapproved, said Kristin Lemkau, the bank’s chief marketing officer.  Surprisingly, the company is seeing little change in the cost of impressions or the visibility of its ads on the internet, she said. . . . The change illustrates the new skepticism with which major marketers are approaching online ad platforms and the automated technology placing their brands on millions of websites.”

********As the article notes, the practice of preapproving sites is known as “whitelisting.”  When one considers the care that businesses and other organizations give to nurturing their brand, it is hard to believe that JP Morgan Chase is just becoming aware of its importance.  The terms ‘whitelists’ and ‘blacklists’ are both in common use.  Blacklisting is the practice of disapproving sites.

(29 March 2017): “Elephants Get a Reprieve as Price of Ivory Falls” (https://www.nytimes.com/2017/03/29/world/africa/ivory-elephants-china.html)

——–“The price of ivory in China, the world’s biggest market for elephant tusks, has fallen sharply, which may spell a reprieve from the intense poaching of the past decade.  According to a report released on Wednesday by Save the Elephants, a respected wildlife group in Kenya, the price of ivory is less than half of what it was just three years ago, showing the demand is plummeting.  Tougher economic times, a sustained advocacy campaign and China’s apparent commitment to shutting down its domestic ivory trade this year were the drivers of the change, elephant experts said.”

********You can find the press release from Save The Elephants at: http://www.savetheelephants.org/about-ste/press-media/?detail=dramatic-changes-in-china-s-ivory-trade.  At that site it is possible to download a pdf of the 88-page report “Decline in the Legal Ivory Trade in China in Anticipation of a Ban,” by Lucy Vigne and Esmond Martin.  STE is based in Nairobi, Kenya.

(1 April 2017): “Free exchange: Will robots displace humans as motorized vehicles ousted horses?” (http://www.economist.com/news/business-and-finance/21719761-probably-not-humans-have-lot-learn-equine-experience-will-robots)

——–“In the early7 20the century the future seemed bright for horse employment.  Within 50 years cars and tractors made short work of equine livelihoods.  Some futurists see a cautionary tale for humanity in the fate of the horse: it was economically indispensable until it wasn’t.  The common retort to such concerns is that humans are far more cognitively adaptable than beasts of burden.  Yet as robots grow more nimble, humans look increasingly vulnerable.”

********This appeared as “Remember the mane” in the print edition of The Economist.  The article appears to be based upon “Robots and Jobs: Evidence from US Labor Markets,” by Daron Acemoglu and Pascual Restrepo.  A pdf of this lengthy mathematical paper can be downloaded at: http://www.nber.org/papers/w23285.  The abstract of the article notes: “According to our estimates, one more robot per thousand workers reduces the employment to population ratio by about 0.13-0.34 percentage points and wages by 0.25-0.5 percent.”

********If robots have something to say about the demand for human labor, so-called labor-saving devices do, too.  This second dimension shows up, albeit in a minor way, in the JSTOR Weekly post “How America Tried (And Failed) To Solve Its ‘Servant Problem’” (https://daily.jstor.org/how-america-tried-and-failed-to-solve-its-servant-problem/).  “In 1928, a group called the National Council on Household Employment brought together working servants, labor activists, efficiency experts, and even future First Lady Eleanor Roosevelt to try to solve the so-called ‘servant problem.’”  When it released its report, the concluded that “not only was domestic service undesirable because of its low pay and unlimited hours, but that the terms ‘servant’ and ‘maid’ alienated would-be domestics.”  The unwillingness of the employers of servants to pay more (or enhance the prestige of servant labor), as well as the expansion of non-servant employments led to the virtual elimination of servants as an employment category.  The article on which this post is based, “Experts and Servants: The National Council on Household Employment and the Decline of Domestic Service in the Twentieth Century,” is downloadable as a pdf.

(2 April 2017): “A Real Estate Boom, Powered by Pot” (https://www.nytimes.com/2017/04/01/business/a-real-estate-boom-powered-by-pot.html)

——–“Legalized marijuana has already upset societal norms, created a large legal gray area and generated a lucrative source of tax revenue.  Now it is upending the real estate market, too.  In the more than two dozen states that have moved to legalize pot, factories, warehouses and self-storage facilities are being repurposed for the cultivation and processing of potent marijuana plants and products.  Suburban strip malls and Beaux-Arts buildings have been reimagined as storefronts selling pre-rolled joints and edibles.  And because the marijuana business comes with added baggage, landlords and property owners are charging a premium for new tenants working in the cannabis business.”

********This article, in fact the paragraph above, shows all the invisible forces at work.  The shifting boundaries of marijuana law at the state level, take center stage; federal law regarding marijuana, but not its enforcement, has remained unchanged in recent years.  This has increased the demand for warehouse-type buildings suitable for growing marijuana.  Of particular interest is the role of uncertainty in marijuana operations.  Increased enforcement of federal law would diminish the retail and wholesale markets for marijuana, as well as property values.  Legalization of marijuana at the federal level would decrease the risk of participating in the industry and likely lead to an increase in supply and lower prices at retail and wholesale, reducing property values.  Then there is the interesting question of interstate commerce, mentioned in the article.  Moving marijuana across state lines is currently illegal, effectively creating as many (legal) markets for marijuana as there are states in which it is legal.  But a federal law legalizing marijuana and its movement across state lines would dramatically change where marijuana is grown, no doubt leading it to be cultivated where energy costs are low, although some brands will promote that their product is locally grown.  Is there another market where so much seems to be in play?

********I recently read The Economics of Prohibition (https://www.amazon.com/Economics-Prohibition-Mark-Thornton/dp/1610160479/), by Mark Thornton.  I was looking for a book that took a broad view of prohibitive activities, not just alcoholic prohibition, and the book provided an entry into the literature.  Thornton is a member of the Austrian school of economics (https://en.wikipedia.org/wiki/Mark_Thornton) and those ideas are reflected in the book.  What struck me as particularly valuable in the book was its emphasis on the existence of substitutes, sometimes many substitutes, for any given product.  What is true for a Toyota Corolla is also true for marijuana.  That being the case, the recent Guardian article “Big Pharma’s anti-marijuana stance aims to squash the competition, activists say” is very interesting.  The gist of the article is that marijuana is viewed by pharmaceutical companies as a substitute for some of their products.  It is no surprise, then, that Insys (http://www.insysrx.com/) is reported as having contributed $500,000 to (successfully) defeat a recent marijuana legalization effort in Arizona and not long afterward obtained FDA approval for its own “lab-made liquid form of tetrahydrocannabinol (THC).”  The product, Syndros (http://syndros.com/), is “approved for use in treating anorexia associated with weight loss in patients with AIDS, and nausea and vomiting associated with cancer chemotherapy in patients who have failed to respond adequately to conventional antiemetic treatments.”

********While we are on the subject of marijuana, here is a related piece on hemp and the N.C. Industrial Hemp Commission, the latter of which was create by the General Assembly in 2015.  The Commission is considering joining a suit against the DEA and its ruling that “products made with CBD or cannabidiol hemp, which are in the same cannabis family as marijuana, are illegal and cannot be transported across state lines.”  From what I gathered from the article, it is currently legal “to import [hemp] seed from Europe or Canada” but it is illegal to purchase hemp seed from another state.  It is easy to understand the frustrations of would-be and actual hemp producers of having to operate in such a legal environment.  The article includes an informative two-minute video with David Schmitt of Industrial Hemp Manufacturing that discusses how hemp is processed and its economic benefits for farmers.

(5 April 2017): “Minority Neighborhoods Pay Higher Car Insurance Premiums Than White Areas With the Same Risk” (https://www.propublica.org/article/minority-neighborhoods-higher-car-insurance-premiums-white-areas-same-risk)

********An interesting piece of investigative journalism by ProPublica.  The introductory material for the article notes: “Our analysis of premiums and payouts in California, Illinois, Texas and Missouri shows that some major insurers charge minority neighborhoods as much as 30 percent more than other areas with similar accident costs.”  The article is lengthy but you can get a clear picture of instances of disparate premiums from two graphical figures showing GEICO premiums in Illinois and Missouri.  A very attractive feature of the article is that it provides detailed information about how it did its study (https://www.propublica.org/article/minority-neighborhoods-higher-car-insurance-premiums-methodology).  Consequently, it should be (relatively) easy to use their work to study other states.

May you have a good week!

Bruce