A feminist capitalist's manifesto

In a recent piece titled "Feminism and anti-Capitalism, a love story" on Feministe and Girldrive, Nona argues that because structural sexism is built into a capitalistic economy, fiscal conservatism and feminism are inherently incompatible, and in fact in conflict with one another.  In fact, she seems to single out fiscally conservative beliefs above even socially conservative ones for exclusion from the feminist paradigm.  While it is "[effed] up to leave conservative women out of the conversation, especially if they felt torn between their family’s traditions and their own reality," fiscal conservatism is a different issue because "capitalism needs to be humanized" and "business [needs] to be regulated."

And yet, here I am.  I am a feminist and I am a capitalist.  I am a feminist because I believe in expanding the choice set for women everywhere.  I am a feminist because I work to challenge systematic oppressions.  I am a feminist because my life's work is women, and I have never felt satisfied doing anything else.  And yet, I am a capitalist.  I am a capitalist because I believe in making the pie bigger, and then trying to divide it as equitably as possible.  I am a capitalist because I am an economist, and I believe that markets tend to offer more efficient solutions to problems (and in fact, often more equitable) than governments, although I also believe that sometimes they don't.  I am a capitalist for reasons that have nothing to do with ideology, because my ideology is that none of us have any moral claim to the endowments of our birth, and thus a good life is one that serves others.  I am a capitalist because I think it works. 

I am not a capitalist because I think the interests of business should come before the interests of women.  Far from it. I have seen big government oppress women, and business and free markets help them.  I believe systematic oppression is every bit as entrenched in government forces as it is in market ones, and that both can be tools to either rectify or reinforce the hierarchies of the past.  I believe there is a role for government in correcting inequalities, but I also believe that government helped to put them there in the first place, both in the US and the world over.  In places where governments continue to oppress, I have seen the remarkable effect of freedom, both market and personal, in improving the quality of life for people in need.  I believe that women's right to vote in this country, a fundamental accomplishment of feminism, is also integrally tied to immigrant and otherwise under-privileged women's participation in the labor force, even under sub-human conditions--sheer, brutal, ugly capitalism. 

Saving "Africa"? Who said they want it?

People, generally, have good intentions.  This is one of my ingoing assumptions in most interactions.  Generally, people do not deliberately hurt others.  Generally, people would like to take actions that help themselves, but would prefer, all else equal, if these actions help others rather than hurt them.  But guess what?  It doesn't matter.  Because these well intentioned people hurt others all the time.  Especially when the people they are trying to "help" are low status groups (I mean based on societal hierarchies, not as a value judgment) who are given limited to voice to express what kind of help they actually need or want.

With that said, let me introduce the cautionary tale of #1MillionShirts.

Charter cities: We might need big new ideas in development, but do we need this one?

Last night I heard Paul Romer give his charter cities spiel at Columbia Business School.  Romer starts from the premise that one major problem facing developing countries is their lack of good institutions that promote investment, and their lack of credibility in adopting these institutions.  His idea is that instead of trying to change the problems in developing countries' governments, we should circumvent them altogether, by creating developed country satellites that people from developing countries can move into.  A developed country or consortium of developed countries would make a deal with the government of a developing country to annex some underutilized land, let the developed country put in place institutions and serve as a security guarantor to potential investors, and then allow citizens of the developing country to freely choose to move to the charter zone, or not.  When I first heard of the idea, I thought it reeked of neo-colonialism, and Romer didn't do much to change my mind.  But, I'll let you see if he can change yours.  Here's the 20 minute version of his talk from TED:

This NYT taxicab thing is stupid (Or, how I know the NYT has never interviewed for McKinsey)

If you live in New York, read the NYTimes, or read any bloggers who like fun econ-y facts, you've probably heard about this study done by the Taxi and Limousine Commission to track customer pickups using GPS.

From the NYT:

It is a question that taxi-seekers in New York often ponder: Is there some kind of secret formula for where to find a cab in this town?  Turns out, there is.  A new mobile application allows would-be riders to see a map of nearby street corners, ranked by the number of taxi hails they attract at that hour, on that day of the week.  The most popular corners to catch a yellow cab in Manhattan can now be pinpointed, at any hour of any day of the week, thanks to a record of 90 million actual taxi trips that have been silently tracked by the city.

OK, so far so good, so this data can tell me where most people take cabs from.  But then the article goes on to say:

On a Saturday at 11 p.m., it is easier to hail a cab on the nightclub-and-bar-filled Lower East Side than at Grand Central Terminal. Columbus Circle gets more passenger pickups than the Port Authority bus station. And make sure you are in the right neighborhood: taxi rides are 25 times as likely to start in the West Village as in Washington Heights.

The problem with this is that it's not true. 

The 5% rule: Marginal Revolution says statistical significance is often misleading

I recently came across two good posts from Alex Tabarrok (at Marginal Revolution, via @TimHartford) about the dubious achievement of statistical significance.  A standard "rule" for acceptable statistical significance is 5%--If your paper achieves a p-value of 5%, it gets published; otherwise, maybe not.  Statistical significance is the probability that a difference of a certain level could have occurred by chance, rather than because of true underlying differences.  An example may clarify (skip to the jump if you're familiar with this): Suppose I have two classrooms of 30 kids, and each takes a test.  If one classroom scores an average of 78% and the other scores an average of 75%, this might not mean that one classroom is smarter than the other.  Even if the kids in both classrooms had exactly the same average ability, there's a certain probability that, just by chance, we'd see a difference at least as big as the one we observed.  That probability is called the p-value.  Obviously, if the p-value is quite large, say, 70%, we would think it more likely the results occurred by chance.  If the p-value is quite small, using the scientific community's rule, under 5%, we would say it seems much more likely that the two groups are in fact different, because otherwise observing such a large difference would be very unlikely.

The gender wage gap: So true that it's just a textbook example?

Last week, as part of my graduate student duties, I had the pleasure of grading some undergraduate econometrics midterms. Now, I've taken a few economics/statistics classes in my life, and I've noticed that all professors have the same two favorite textbook examples of basic linear regressions that they like to put up on the board to explain how regressions work and write on their tests for students to derive: the "returns to education" equation and the "gender wage gap" equation. Following suit, the econometrics midterm that I was grading featured the latter. And maybe my brain was a little fuzzy by the 70th midterm, but I started thinking - is the fact that the "gender wage gap" equation is seen as a textbook example good because it means that people acknowledge it (and hence maybe would support efforts to push for more equal pay for women)? Or is it not so good because it just means we take it as a basic fact that's not debatable and hence it can function as a classroom example or a test problem without much controversy?

Correlation does not equal causation (or, why journalists should have to take statistics)

 Image via SSSB

Saudi Arabia: Can it be the 13th easiest place to do business when women can't do business there at all?

Saudi Arabia has been named the 13th easiest place to do business by the Doing Business Project and the World Bank.  Sure, they still have some things to work out, reports the Financial Times, like getting visas for foreign workers and enforcing contracts.  And, oh yeah, not allowing women to share workplaces with men or participate in any number of careers deemed "inappropriate."  Says the FT:

The rankings do not take into account issues such as rules on segregation of women in the workforce. Businesses that employ women must either build special sections to accommodate them or risk being closed or fined. 

When I worked as a business consultant, I did a stint living and working in Bahrain, which is right off the coast of Saudi.  We felt the proximity in more ways than one, especially since there was a causeway connecting the two lands, that Saudi men and women would head across on weekends, eager for freedom.  For men, this often meant drinking and women, and for women this meant driving, trying on clothes in a mall, and being without male escorts.  Many of our colleagues who worked in the Mideast office had clients in Saudi Arabia, but of course no female consultants could work there.  I always thought our company should refuse to do business with Saudi under these conditions: like, we're a workplace that values gender equality, and if having you as a client precludes that, we're not interested.  Of course, I was also told not to tell our clients I was Jewish, so I guess we were a long way from perfection on that score.  But how, how can you be considered the 13th easiest place to do business, right between Thailand and Iceland, when 50% of the population can't do business there at all?  Let's say a major bank wanted to set up a division there.  Half of their workforce (ok, who are we kidding, a quarter) would be out of the running.  How can they send their best people?  What if a company that just wants to make a deal with a Saudi company.  What do they do about their female executives at the meeting?  (I'm honestly not sure--can they not come?  Do they have to wait outside?)  I repeat: How can it be easy to do business without half the population?  If Saudi Arabia scores so highly, is the Doing Business Project really measuring the right things?

[Hat tip Institute on Women]

Women can't be men: Social expectations and salary negotiations

Earlier at Femonomics, we discussed the pressure for women to behave like men to be successful, and why this won't work. The Harvard Business Review brings us more evidence for why this is an unsuccessful strategy, especially when negotiating salary. It turns out women are in a classic catch-22 when it comes to negotiating compensation.

Although it may well be true that women often hurt themselves by not trying to negotiate, this study found that both men and women were more likely to subtly penalize women who did ask for more, the perception being that women who asked were "less nice."

Women cannot succeed simply by changing their behavior if the true criteria for success is others' perception of that behavior. The original study can be found here.

Economist? Statistician? Epidemiologist? Why modern Economics' branching out is starting to make me nervous

 

Economists may think we have the biggest shovels, but does that mean we can build the best castles?

When I first read Freakonomics, I was captivated.  I was an undergraduate economics major who already delighted in describing things to my family in terms of "opportunity cost," "marginal utility," and "widgets."  I was enthralled with the idea of applying economic concepts and techniques to puzzles that had nothing to do with firms, finance, or fiscal policy.  This, I realized, was what I wanted to do with my life: a) apply the study of incentives and game theory from economics to households, businesses, and individuals in the real world; b) use econometric techniques to understand questions in development and policy.  It was only later, after furthering my study of economics, and reading and critiquing countless articles doing similar things, that I realized the difference between statements a and b.  Economics is fundamentally about understanding scarcity, incentives, decisions, and tradeoffs.  Econometrics has become a useful technique for studying how these forces have played out in the real world.  Econometrics is a tool.  Economics is a science.  Yes, the tools of econometrics can be applied in many different settings.  The question is, do economists have a competitive advantage in doing so?

CSMonitor's Patchwork Nation: A cool new journalistic display of quantitative news stories

Today I discovered Patchwork Nation over at the CSMonitor website. It's a geospatial display of statistics (by US county) that the publication talks about in news articles, and is correlated with demographic characteristics of each county. I'm not sure how accurate the demographic information is, but the stories are pretty compelling. Today's article on the use of payday lending across the US is not particularly surprising, but interesting nevertheless.

This just in: Women are earning more now than in 1970, marriage is not easy

The most popular article on NYTimes.com today reveals the shocking news that women's increasing income has led to shifting patterns of dating and marriage. The article seems pretty even-handed (if heteronormative), but is surprising to me for two reasons. 1) That this is news at all. The article analyzes income data from 1970 to 2007, and we've known about these changes for quite a while now (decades). 2) For a man bites dog story, this has resonated hugely with readers. It was posted yesterday and is already the number one story.

The Pew Center (who wrote the report) gives the topic an interesting spin: women's gains in income are relatively better for men when the marriage market is taken into consideration. I think this kind of messaging can convince skeptics that feminism is good for everyone (including men). However, I think the NYTimes' focus on how the new dynamics tilt the marriage market against high-achieving women is not so great. This was definitely not the main message of the report, and seems like imposing a narrative that might not be quite right or appropriate.

Gender discrimination or different preferences? And does it matter?

As an economics student, I've encountered two strands of literature on gender discrimination. There is one side that attempts to expose and document discrimination against women by measuring the wage gap that is unexplained by observable factors, by showing that the hiring and promotion of women orchestra players is increased when there are blind auditions with a screen, and by finding other examples of blatant gender discrimination in the job market. In the rest of the world, people often point out how women are portrayed differently in the media than men (Sarah Palin, for example), or how there's too much focus on women to be thin and young, or how women are stereotyped as being sensitive on the job. On the opposite extreme, there is a strand of literature that dismisses any notion of gender discrimination. This literature claims that women simply have different preferences than men (for example, they want to have children or to stay home with their children rather than work, or to be fit and work out), and that any evidence of "discrimination" is completely explained by these different tastes.