The fourth installment in my series on geomagnetic storms is now up on the GiveWell blog.
The first three posts were about the odds of a big storming hitting earth. This one shifts to the question of likely impacts. Mostly I think the evidence is reassuring. But given the stakes, I think we should not relax, and instead support more thorough research.
The Open Philanthropy Project just released another big literature review of mine, this one on whether taxing alcohol save lives. I conclude that it probably does.
That’s hardly shocking. Making stuff more expensive generally leads to people to buy less. And alcohol in excess is bad for you. Perhaps the more significant finding is about the number of lives that could be saved, which is not so great next to other things that “Open Phil” might fund. E.g., we dream of financing the invention of a new research technique that leads to a cure for Alzheimer’s. The grant chasing that dream would be a longshot…but then so might be funding advocacy for raising taxes.
Coroners in the US attribute 23,000 deaths/year to alcohol-caused diseases, according to my calculation (see the report for more). The most rigorous studies I found produced a rather wide range of elasticities of death rates with respect to alcohol prices: 1–3. That means each 1% price rise reduces deaths 1–3%. And, if you do the math carefully, tax hikes sufficient to raise alcohol prices 10% would cut the alcohol death rate 9–25%, or 2,000–6,000 lives/year. This math leaves out any reduction in deaths from drunk driving, which currently amount to 10,000/year. The benefit there would presumably be of the same order of magnitude.
A few interesting things I learned and did along the way:
My third GiveWell post on geomagnetic storms is up. This one marshalls a branch of statistics called Extreme Value Theory, which I learned about through this work. Last year I wrote a program to bring EVT techniques to Stata.
The second post in my series on geomagnetic storms is up on GiveWell.org. It is arguably the most important and interesting in the series. It explains why I think past storms, reaching back to 1859, were probably at most twice as strong as anything our electricity-dependent societies have experienced in recent decades—and shrugged off.
Do you remember the great storms of 1982 and 2003? I didn’t notice them either. And probably you survived the Québec blackout of 1989, which was mostly over within 11 hours. Yet maybe that last doubling in storm intensity would inflict far, far more than twice as much destruction on the grid. Or maybe the grid has become much more vulnerable since 1989, even though grid operators have learned from that experience. It’s also possible I’m wrong that doubling is the worst we should fear. For all these reasons, I still think the threat deserves more attention from researchers, industry, and governments.
As I mentioned in my previous post, the strongest proponent for the view that the worst case is much worse, is John Kappenman, who has argued for a multiplier of 10 rather than 2. In the new post and the report, I trace this number in part to an obscure book of scientific scholarship written in 1925 by a Swedish telegraph engineer in French. The search involved talking to an electrical engineer in Finland, people at the Encyclopedia Britannica in Chicago (who were very helpful), and ordering said obscure book from a German book shop. Author David Stenquist describes how the storm of 1921 caused copper wires running into a telegraph office to melt—but not iron ones. He deduces that the storm-induced voltage on the line could not have been as high as 20 volts/kilometer. Yet through a scholarly game of telephone over the decades, this observation got turned on its head.
My long-promised report for the Open Philanthropy Project on geomagnetic storms is posted. (Data, code, and spreadsheets are here.) The first of a series of posts based on the report just appeared on the GiveWell blog.
This has been one of the most fun projects I’ve worked on because it slices across so many disciplines, from statistics to power engineering to astrophysics. My grasp of those subjects declines in the order listed…but I think I learned enough to reach a preliminary assessment.
The risk that a major solar cataclysm could so disrupt the earth’s magnetic field as to deprive continent-scale regions of power for years looks low to me—lower than the most attention-getting voices, almost by definition, have suggested (Pete Riley, John Kappenman). Nevertheless, a long-term, large-area blackout would do so much harm, and the risk is so poorly studied, that it absolutely deserves more attention from researchers, industry, government, and philanthropies. My preliminary risk assessment could be wrong.
I just discovered that an elite, independent scientific advisory group for the US government arrived at a similar conclusion in 2011.
It follows that the most emphatic analysts, even if they have overshot, have done a service by drawing attention to the issue. This is for me a familiar paradox.
After I blogged Cirillo and Taleb’s new paper on the long-term trend in war deaths, I read other commentaries on the debate (William Briggs, Dart-Throwing Chimp, STATS.org) and interacted with the authors. All that sharpened my thinking. Refinements:
- The paper is postured as a rejoinder to Steven Pinker. But I think if you are going use statistics to show that someone else is wrong, you should 1) state precisely what view you question, 2) provide examples of your opponent espousing this view, and 3) run statistical tests specified to test this view. Cirillo and Taleb skip the first two and hardly do the third. The “long peace” hypothesis is never precisely defined; Pinker’s work appears only in some orphan footnotes; the clear meaning of the “long peace”—a break with the past in 1945—is never directly tested for.
As promised, I have posted a database of variables that I developed for my analyses of the contributions of loans to aid. Also now available is an SQL Server database with the underlying data and logic (You can download the needed software, SQL Server Express, for free but you need to know what you’re doing.)
This database includes a construction of the new DAC ODA variable—which I think you can’t get anywhere else—and my preferred alternatives based on DDRs. All are back-calculated to 1980.
I have also posted a new version of my ODA redefinition paper, “Straightening the Measuring Stick,” which updates last year’s CGD working paper. I presented the newer one last month in Geneva at a conference jointly organized by the IMF and the Graduate Institute Geneva. The proceedings of the conference, including my paper, are now in process with a journal. The largest changes were necessitated by the Development Assistance Committee rule changes agreed in December: rather awkwardly, I had to switch my theme from what the DAC should do to what it had and ought to have done. I blogged the most interesting updates to my thinking in March.
Two intellectual titans are arguing over whether humanity has become less violent. In his 2011 book, Steven Pinker contends that violence is way down since the stone age, or even since the Middle Ages. He looks at murder, war, capital punishment, even violence against animals.
But in a working paper released yesterday, Pasquale Cirillo and Nassim Taleb, the latter the author of The Black Swan: The Impact of the Highly Improbable, contend that Pinker has it wrong. Well, more precisely (lest I incite a riot with demagoguery) they challenge the notion that the great powers have enjoyed a distinctly long peace since World War II.
This paper launches a second round in a war of words (and equations) over the long peace. Previously, Taleb said the The “Long Peace” is a Statistical Illusion. Pinker suggested Taleb was Fooled by Belligerence.
Everything I know about the history of violence, I learned from Pinker’s TED talk. And I have not mastered the mathematical methods marshalled by Cirillo and Taleb. But I do know something about them, having written a program to do them. I think Taleb’s latest salvo mostly misses its mark. Here’s why:
I’ve been reviewing two questions in depth for the Open Philanthropy Project, my 75% employer: How much should we worry about geomagnetic storms? And do alcohol taxes save lives? I hope to share drafts on both soon.
In the meantime, I want to share what is for me a surprising discovery, assuming it is true. The idea that moderate drinking is better for your heart than abstention looks headed for the ash heap of history like so many upended lessons from observational epidemiology. (Years ago, I blogged a certain example of this trend, relating to hormone replacement therapy for post-menopausal women: roughly speaking, observational studies said it was good; randomized trials showed it was not just not good, but bad.)
Here’s a chunk from the draft text that explains how this issue relates to whether alcohol taxes save lives (net), and how I reached my current understanding. I emphasize that I based this write-up on a day or so of reading. That said, my priors about the reliability of studies of various types come from longer experience. I’d welcome critical reactions, and sharing of this post in order to provoke them.
Last year I blogged much about how the Development Assistance Committee (DAC) should revise the definition of Official Development Assistance, particularly in its treatment of loans. Then in December, the DAC members made their decision. Some changes I advocated (though hardly with originality), entered the revised definition of ODA. Others did not. On the day of the announcement I blogged my reactions and some preliminary analysis.
Now I am revisiting this matter as I prepare for an IMF-organized conference next month in Geneva.
Using historical data, I have done my best to apply the new ODA loan rules to historical data. So I can compare ODA computed the new way to ODA computed according to the old way, and to ODA computed in a couple of ways I prefer.
To recap, the DAC decided to:
Just over a year has passed since I hung out my consulting shingle. I have so enjoyed myself: the freedom of being my own boss, the diversity of clients (from Oxfam to the Boston Consulting Group), the variety of work.
But as 2014 drew to a close, I realized that the work I had done for most of the clients was not the stuff of long-term fulfillment; that for me, I came to see, requires being given latitude to delve into a substantial research question that matters, charting my course as I go. One client stood apart in offering the most assignments like that: the Open Philanthropy Project. “Open Phil” is a partnership of the charity evaluator GiveWell, started by Holden Karnofsky and Elie Hassenfeld, and the foundation Good Ventures, co-founded by Cari Tuna and her husband Dustin Moskovitz, himself one of the creators of Facebook. It was for Open Phil that I wrote about whether saving lives causes population growth, whether immigration lowers employment or pay for workers in receiving countries, and how much we should worry about geomagnetic storms (foretaste).
So I decided I’d like to work for them. More…
Years ago when I was building parts of the Commitment to Development Index, I decided to tweak the official computation of countries’ foreign aid spending. It didn’t make sense to me that Net Official Development Assistance (ODA) was “net” of principal repayments received on old aid loans, but not of interest paid on those same loans. As if $1 million flowing from Ghana to Japan had different consequences when it was interest instead of principal… Meanwhile, ODA totals would spike when donors officially recognized losses on aid loans that hadn’t really been serviced in years. Yet writing off loans gone bad didn’t in itself increase transfers from rich to poor nations.
Addressing the first of these concerns was easy. The Development Assistance Committee reports interest received even if it doesn’t subtract it from Net ODA. Addressing the second concern proved surprisingly hard using the information that DAC made available. So I documented both tweaks in a CGD working paper, created a variable called Net Aid Transfers (NAT), and shared the data set publicly.
This graph shows total aid from members of the Development Assistance Committee computed the two ways for 1960-2013, in inflation-adjusted dollars of 2012:
On Sunday I blogged the new Stata program I wrote for applying extreme value theory. It includes a novel computation to reduce bias for the generalized extreme value distribution (GEV). To document the efficacy of that correction and the package as a whole, I set my computer to testing it on simulated data. Since Sunday the little Lenovo has run half a billion regressions.
One topic I’m studying for my main client, the Open Philanthropy Project, is the risk of geomagnetic storms. I hadn’t heard of them either. Actually, they originate as solar storms, which hurl magnetically charged matter toward earth, jostling its magnetic field. Routine-sized storms cause the Auroras Borealis and Australis. Big ones happen roughly once a decade (1972, 1982, 1989, 2003, a near-miss in 2012…) and also mostly hit high latitudes. The worry: a really big one could send currents surging through long-distance power lines, frying hundreds of major transformers, knocking out power to continent-scale regions for months or even years, and causing an economic or humanitarian catastrophe.
My best assessment at this point is that if one extrapolates properly from the available modern data, the risk is much lower than the 12%-chance-per-decade cited by the Washington Post last summer. But that’s a preliminary judgment, and I’m not a seasoned expert. And even if the risk is only 1%, it almost certainly deserves more attention. More from me on that in time. (For a mathematician’s doubts about the 12% figure see Stephen Parrott.)
As they committed to do, the members of the Development Assistance Committee have struck a deal to revise how loans are counted as Official Development Assistance (ODA). They announced it today at the end of their two-day High-Level Meeting in Paris.
The specifics validate the rumors I passed on last month. The benchmark discount rate will be changed from the fixed 10% to the IMF’s new “unified” rate. Now, that rate is 5%. Based on a 10-year moving average of the U.S. 10-year treasury rate, it will plunge to 4% in a little over two years, I estimate, if its formula is followed faithfully. However, I believe that the IMF has not yet committed to updating the rate so mechanically, perhaps because a lower rate would make borrowers’ current debt loads look less sustainable, leaving less room for new lending, to the discomfort of some donor governments. So the DAC has hitched itself to a benchmark whose future is a bit fuzzy.
To the IMF rate will be added a simple risk premium, so that loans will count more as aid when going to countries deemed more likely to default: a 1% premium for upper-middle-income countries (UMICs), 2% for lower-middle-income countries (LMICs), and 4% for low-income countries (LICs). As it happens, the IMF’s sibling, the World Bank, curates this three-way classification of developing countries, which is effectively annexed to the statistical definition of aid.