Showing posts from December, 2011

Heat, Humidity and Crop Yields

At the ASSA meetings next month I'm going to present some new research wherein we (Wolfram Schlenker, Jon Eyer and myself), incorporate vapor pressure deficit (VPD) into earlier regressions linking crop yields to weather.  Vapor pressure deficit, a close cousin to relative humidity, has a linear relationship with evaporation, and is a key input in many crop models.  For this meeting we're only presenting evidence on Illinois, which has been our testing ground for fine-scale data development. If you haven't been following, I've written a lot about the strong and robust association between extreme heat and crop yields. This puzzles some crop scientists who focus on soil moisture and precipitation as the key impediments to higher yields.  But in comparison to any precipitation or soil moisture variable we've constructed, extreme heat, measured as degree days above 29C, is a far better predictor of yield.  And the underlying relationship is similar across widely varyi

The Problem with ECB Lending

The other day Floyd Norris deftly explained the delicate situation with the Euro and the debt crises facing Italy, Spain, and other European nations, and how the ECB is now, finally, taking concrete steps to deal with the problem.  But I'm worried that what the ECB is doing won't be enough.  I haven't seen much about this, perhaps because I've been looking in the wrong places, so I thought I'd throw this out there. The situation is fragile and markets are volatile mainly because the outcome is expectations dependent.  If financial markets believe countries like Italy and France will surely honor their debts, interest rates will fall and the debt burden will be manageable.  But if financial markets believe these countries will not honor their debts, interest rates will rise to a point that their debts will become impossible to pay back, thereby forcing default. In other words, expectations, good or bad, will be self-fulfilling.  Global markets are volatile bec

Health Care and Tiebout Sorting: Someone Please Look at Massachusetts

Very thin posting these days because, well because I've been trying to get real papers out and preparing for the upcoming ASSA meetings in Chicago.  I'll try to post something about at least one of my presentations there in the next few days. Anyway, amid debate about Obamacare, Romneycare, and how Newt has felt about Romneycare both past and present, I think it would be interesting if someone were to take a closer look at how Romney's health care bill in Massachusetts has affected migration to and from the state, as well as real estate prices, wages and unemployment.  This would seem to be a perfect application of modern empirical sorting models . The change in the law in Massachusetts would seem be a reasonably viable, if imperfect, natural experiment for the Northeastern corridor. It's not my area and there's no chance I'll get to anything like this in the next decade.  But if no one is doing this right now, someone should, preferably before the general e