The FT has a report on Global Brands today; meanwhile, the NBER tells me about this research from economist Gary Richardson:

In medieval Europe, manufacturers sold durable goods to anonymous consumers in distant markets, this essay argues, by making products with conspicuous characteristics.  Examples of these unique, observable traits included cloth of distinctive colors, fabric with
unmistakable weaves, and pewter that resonated at a particular pitch.
 These attributes identified merchandise because consumers could observe them readily, but counterfeiters could copy them only at great cost, if at all.  Conspicuous characteristics fulfilled many of the functions that patents, trademarks, and brand names do today.
The words that referred to products with conspicuous characteristics served as brand names in the Middle Ages.  Data drawn from an array of industries corroborates this conjecture.  The abundance of evidence suggests that conspicuous characteristics played a key role in the expansion of manufacturing before the Industrial Revolution.

The Centre for Economic Policy Research reports that:

Soap operas (novelas) are watched by the vast majority of the population in Brazil, and often portray families that are much smaller that the reality for the country. The authors of CEPR DP6785 use this to examine the effects of television, and of role models portrayed in these novelas, on individual behaviour, specifically fertility choices.

Rede Globo has a virtual monopoly on the production of novelas, and an analysis of differences in the timings of Globo’s entry into areas of the country, coupled with census data, reveals that areas reached by the Globo signal had significantly lower fertility than comparable areas not reached by Globo. The magnitude of the effect is about one tenth of the effect of being married on fertility, and is comparable to that associated with an increase of 1 doctor or nurse per 1,000 people.

The authors find that the effect is strongest for women of lower socioeconomic status, and (a) is insignificant for women aged 15-24; (b) leads to an 8% decrease in the mean probability of giving birth for women aged 25-34; and (c) leads to an 11% decrease in the mean probability for women aged 35-44.

Further evidence from naming patterns and the impact of the introduction of foreign soap operas that are not seen as realistic portraits of Brazilian life indicates that it is novelas, not just televisions per se, that are behind the results.

Question - is this good news or bad news? Steve Landsburg would say bad news.

At the Royal Economic Society conference a couple of weeks back, I sat in on an interesting overview of the Mirrlees Review of taxation in the UK. Time constraints - and fire alarms - stood in the way of a detail discussion, but lots of early position papers are up here, and I am told that the latest drafts are to follow very shortly. Here is the original Meade Review.

Alan Blinder famously spoofed the economics of brushing teeth (here, JSTOR only).  A. Wuffle also offered a rational choice perspective on the subject [pdf]. Well, mock ye not! A new NBER paper shows that good teeth boost the income of women by 4 per cent. The NBER version is here.  Abstract:

Healthy teeth are a vital and visible component of general well-being, but there is little systematic evidence to demonstrate their economic value. In this paper, we examine one element of that value, the effect of oral health on labor market outcomes, by exploiting variation in access to fluoridated water during childhood. The politics surrounding the adoption of water fluoridation by local water districts suggests exposure to fluoride during childhood is exogenous to other factors affecting earnings. We find that women who resided in communities with fluoridated water during childhood earn approximately 4% more than women who did not, but we find no effect of fluoridation for men. Furthermore, the effect is almost exclusively concentrated amongst women from families of low socioeconomic status. We find little evidence to support occupational sorting, statistical discrimination, and productivity as potential channels of these effects, suggesting consumer and employer discrimination are the likely driving factors whereby oral health affects earnings.

Yes, this is April 1, but the paper is dated March.

A nice paper at last week’s Royal Economic Society conference from Oxford’s Michael Mikhail Drugov (sorry, Mikhail):

This paper studies the consequences of introducing competition between bureaucrats. Bureaucrats are supposed to grant licences to firms that satisfy certain requirements. Firms have to invest into satisfying these requirements. Some bureaucrats are corrupt, that is, they give the licence to any firm in exchange for a bribe. Some firms prefer to buy the licence rather than to invest and satisfy the requirements imposing negative externalities on the society. The competition regime is found to create more ex ante incentives for firms to invest while the monopoly regime is better at implementing ex post allocation, that is, distributing the licences given the firms’ investment decisions. Additional results on the effects of intermediaries, staff rotation, punishments and endogenous entry to the bureaucracy are provided.

Drugov pointed out that, for instance, in India you have only one local bureaucrat you can go to for a driving licence, while in Russia you have a choice of different offices. If bureaucrats demand bribes, which situation is preferable?

The answer, by the way, is not obvious. We prefer bribes to be low if the bureaucrats are extorting from qualified drivers; but if the bureaucrats are colluding to give licences to unsafe drivers, we’d like the bribes to be high. The paper has much more, for those of a technical bent.

Richard Easterlin - he of the Easterlin Paradox - has a new working paper [pdf] out:

In the transition from socialism to capitalism in Eastern Europe life satisfaction has followed the V-shaped pattern of GDP but failed to recover commensurately. In general, increased satisfaction with material living levels has occurred at the expense of decreased satisfaction with work, health, and family life. Disparities in life satisfaction have increased markedly with those hardest hit being the less educated and persons over age 30; women and men have suffered about equally. The asymmetric response of life satisfaction to decreases in GDP in transition countries and increases in GDP in non-transition countries is arguably due to loss aversion.

Here is an earlier essay I produced about the economics of happiness.

Over Easter, the FT’s leader writing team commented:

The Royal Economic Society held its annual conference this week to debate and analyse the pressing economic issues of the day. Naturally, the best-attended lectures focused on the credit crisis. Yet investment bankers in distress might have been intrigued by research presented in one of the more obscure parallel sessions.
There, in one of the rather cute pieces of statistical analysis that have become all the rage in recent years, the economist Andrew Clark presented the discovery that religious belief cushions the impact of adverse events. It is not that divine intervention is at work to protect the faithful. Rather, Catholics and Protestants alike are less depressed when bad things happen to them – for example, when they lose their jobs. Religious belief provides comfort in troubled times.
Fine. An economist once again states the obvious in technical terms, backed up by a battery of statistical tests. Even if this result was surprising – it is not – it would not change the behaviour of the devout…

A little harsh, perhaps. Here is the paper [pdf]. I was at the Royal Economic Society conference and found much to enjoy. Reports wll follow.

Zubin Jelveh points us to a pretty grim chart: the location of suicide jumps from the Golden Gate Bridge. If that isn’t cheerful enough for you, here is a piece from Slate on the economics of suicide:

Marcotte’s study found that after people attempt suicide and fail, their incomes increase by an average of 20.6 percent compared to peers who seriously contemplate suicide but never make an attempt. In fact, the more serious the attempt, the larger the boost—”hard-suicide” attempts, in which luck is the only reason the attempts fail, are associated with a 36.3 percent increase in income. (The presence of nonattempters as a control group suggests the suicide effort is the root cause of the boost.)

Why should suicide be an economic boon? Once you attempt suicide you suddenly have access to lots of resources—medical care, psychiatric attention, familial love and concern—that were previously expensive or unavailable. Doubters may ask why the depressed don’t seek out resources earlier. But studies have demonstrated that psychological and familial resources become “cheaper” after a suicide attempt: It is difficult to find free medical care when you are sad, but once you try to kill yourself, it’s forced on you.

I have to advise you not to try this at home.

The BBC reports:

Wine, we know, gets better with age - but now it appears it tastes better the more it costs.
Researchers at the California Institute of Technology have shown that a person’s enjoyment of wine can be heightened if they are simply told that it is an expensive one.
Twenty-one volunteers were asked to sample different bottles of Cabernet Sauvignon and rate the ones they preferred.
The only information they were given was the price of the wine - but in a number of cases, they were not told the real price. In one case, the volunteers were given two identical red wines to drink and were told that one cost much less than the other.
Most described the "higher priced" wine as much more enjoyable.
Researchers also managed to pass off a $90 (£46) bottle of Cabernet Sauvignon as a $10 bottle and presented a $5 as one worth $45.

Daniel Ariely, author of the (recommended) new book "Predictably Irrational", would not be surprised. Ariely managed to enhance the placebo effect of a (fake) painkiller by telling people it was expensive, and also enhance the perceived taste of coffee by offering odd condiments such as orange peel in better  containers. Nobody ever took the condiments, but they said the coffee tasted better when the condiments
were nicely presented than when they were offered in cheap plastic cups.
Alex Tabarrok is not so impressed with this kind of thing.

From 02138:

One of academia’s up-and-coming darlings is Roland Fryer, an assistant professor in the economics department who began teaching at Harvard just last year. Fryer is a media star: He has appeared on CNN and been written about in the New York Times, Esquire, and this issue of 02138 (see page 34). Fryer’s group, the American Inequality Lab, works on a half-dozen or more major research areas at a time. To do so, Fryer now employs seven full-time “project managers,” mostly recent college alums, and works with dozens of others. The students, generally recent college graduates like David Toniatti, each manage a research project, from designing the methodology to collecting the data and running the numbers. Fryer writes the final papers, for which he is accorded primary authorship. “It’s him casting a vision, us working through the details, and him correcting it,” Toniatti says. “Everyone can run the regression; it’s really the idea that counts.”
Different fields have different customs; what wouldn’t raise an eyebrow in the economics department might raise havoc in English. But across the academic board, the celebrity culture poses a dilemma for young scholars: Should they simply churn out the one or two serious books necessary to get tenure, and then ignore the writing of such books to focus on opportunities that bring more exposure and money? After all, writing scholarly tomes is probably the least glamorous and least lucrative of the many opportunities open to a Harvard professor, and thus one of the easiest to either outsource or abandon.

(HT: New Economist.) This makes perfect sense to me, but the 02138 article also lays out some of the risks and problems of too much outsourcing. Roland Fryer, incidentally, is a very impressive figure and features in The Logic of Life. Stephen Dubner (co-author of Freakonomics) wrote a truly astonishing profile of him here - if you never read anything about an economist every again, at least read that.