I’m fortunate to have been preselected as the ALP candidate for the federal seat of Fraser (AAP report here). I haven’t been discussing the preselection much on this blog, but it’s been the main thing occupying my attention over the past three months, as I’ve spent my nights and weekends speaking with the 240 Labor Party members who eventually voted yesterday. Thanks to a great campaign team, I’m slowly making the evolution from the academic style of hard facts and sharp differences to the political style of storytelling and common ground, but it’s been one heck of a learning experience.

The other candidates – Christina Ryan, Jim Jones, Michael Pilbrow, Mike Hettinger, Chris Bourke, Nick Martin and George Williams – are people for whom I have great respect. I was friends with most of them before the campaign began, and my admiration for them has only grown over past months.

In the meantime, I’m about to head to the US for what might be my last academic conference – the NBER economics of education meetings in Cambridge MA. I’ll be overseas from 26 April to 5 May. I haven’t seen Gweneth and my two little boys for nearly a month, and am missing them like crazy. Skype helps, but since the boys are aged 10 months and 3 years respectively, they don’t exactly want to talk to a computer screen for long.

For my wife Gweneth, this is going to be a particularly unusual experience. She passed her citizenship test last month, and becomes a dual Australian/US citizen on 4 June. So she’ll cast her first Australian ballot for her husband (if I’m lucky, that is…).

For Core Economics, this may be my last post. Joshua has done a superb job making this into the premier economics blog in Australia. I might not be contributing to it any longer, but I’ll be a devoted reader. As to my personal blog – andrewleigh.com – I have to think about the right way to evolve it, or whether to draw a line by starting a new blog in my capacity as an ALP candidate. So please forgive me while I try to sort that out.

(a similar post was posted at andrewleigh.com)

Writing on InsideStory, Peter Brent argues:

But it is not clear that boat people really had much effect on the election result. When the Tampa arrived, the Howard government had already been steadily improving its opinion poll position from the early 2001 nadir. Tampa and, later, “children overboard” melted the talkback lines, but so do lots of issues that don’t change votes.

It was September 11, two weeks later, that sent Howard’s voting-intentions figure skywards, but by polling day they had subsided, and the result of fifty-one to forty-nine, while respectable for a government in good economic times asking for a third term, was no landslide.

To answer the question, we need regular and precise estimates of who is likely to win the election. Unfortunately, polls are pretty irregular, and very imprecise (evidence here, anecdote here). But betting markets provide a stable, daily estimate. Here’s the time series for 2001, with the Tampa incident and September 11 attacks marked on the chart.

The chart is from this paper. To my mind, it doesn’t support Brent’s argument that the Howard government were sailing to victory before the Tampa incident. But it does accord with his view that the September 11 attacks were pretty important.

(xposted @ andrewleigh.com)

Inspired by the Netflix contest, Nicholas Gruen and Anthony Goldbloom have created Kaggle, a site where would-be predictors go head-to-head to build a model that best forecasts the future. You can read more about it at Club Troppo, and at the Kaggle site.

Their first competition is to build a model that predicts the results of Eurovision 2010. Given the large idiosyncratic component in this kind of contest, I’m not sure how well suited it is to prediction models (the model that best predicts the 2010 result is unlikely to be the model that best predicts the winners for 2010-2019). But it’s a clever way of getting the Kaggle idea out there quickly.

Statisticians of the world, unite. You have nothing to lose but your residuals.

(xposted @ andrewleigh.com)

My op-ed today is on the economics of sleep. Full text over the fold.

Continue reading “A tired old story”

Rob Bray points out to me some interesting data from 1999, in which Peter Saunders (SPRC, UNSW) asked respondents to place themselves in an income decile. Of course, 1/10th of the population falls in each decile, so if people are accurate, then the result should be 10 bars, each containing 1/10th of the population. But here’s what Saunders finds:

And for those who like decimal points with their data, here are the percentages:

Decile	%
1	1.3
2	4.8
3	14.1
4	23.7
5	25.8
6	15.6
7	10.6
8	3.3
9	0.7
10	0.1

In other words, only 1/10th of those in the poorest decile know it, and only 1/100th of the top decile are willing to admit it.

A decade on, it’d be worth seeing whether Australian are any better informed about their true position in the income distribution than we were in 1999.

I’ve been writing for nearly a decade (much of it with Justin Wolfers) about the predictive power of election betting markets. So why is it that now I’m running for ALP preselection in Fraser, none of the election betting websites can tell me my odds?

Some years ago, I published a paper with Tony Atkinson looking at trends in Australian top incomes since 1921. We’ve now updated the results to the 2007-08 tax year (the latest available from the ATO). Here’s the Excel spreadsheet. The ANU media release is over the fold.

Continue reading “Top Incomes in Australia, Updated”

Cathy Gong, Xin Meng and I have a new paper out, looking at intergenerational mobility in urban China. After making a bunch of adjustments to the data, we find a strikingly high intergenerational elasticity (implying a very low level of social mobility). The abstract is below – click on the title for the full paper.

Intergenerational Income Mobility in Urban China
This paper estimates the intergenerational income elasticity for urban China, paying careful attention to the potential biases induced by income fluctuations and life cycle effects. Our preferred estimates are that the intergenerational income elasticities are 0.74 for father-son, 0.84 for father-daughter, 0.33 for mother-son, and 0.47 for mother-daughter. This suggests that while China has experienced rapid growth of absolute incomes, the relative position of children in the distribution is largely determined by their parents’ incomes. Investigating possible causal channels, we find that parental education, occupation, and Communist Party membership all play important roles in transmitting economic status from parents to children.

Don Arthur alerts me to a new report from MDRC (the organisation that administers many of the US randomised trials) on Opportunity NYC, a conditional cash transfer program in New York city that’s based loosely on the Mexican Progresa/Oportunidades program. Here’s the overview:

Continue reading “Mexican antipoverty program might work in the US too”

Last year, the Productivity Commission ran an event on the topic ‘Strengthening Evidence-based Policy in the Australian Federation’, of which I was one of the participants (my contribution was titled: ‘Evidence-based policy: summon the randomistas?’). The PC has now produced a mighty two-volume set, which is also available on their website. If you’re short on time, go to the background report (volume two), which is likely to become a standard reference for anyone thinking about evidence-based policy in Australia. We’ll see if George Pell gets around to reading Appendix A.