Readings: Millennial drivers, Racehorses, Crypto closures, & credit default swaps

PREAMBLE

I generally find it more satisfying to find out that I’m wrong about something material than finding out that I’m right. After all, I usually expect that I’m right, so finding out that I’m still right about something isn’t very exciting. Finding out I’m wrong, however, is gratifying, a sort of reassuring signal of both brain plasticity and exposure to people and data defensibly different from my biases. 

I got to thinking about that recently when I asked myself why I was so convinced that millennials were different from the rest of us with respect to driving. I cited data to me showing that millennials drive less, and are less likely to have cars. And I murmured LyftUberCarSharing to myself over and over. These all seem like good reasons, but I was still worried, given that Millennials Don’t Want To Drive (MDWTD) is a pat story, almost too good to check. After all, I want millennials to want to drive less, even if it always seemed wildly unlikely we could have such a rapid shift in a single quasi-generation. But hey, It is a good story! It is good for us!

But it seems increasingly likely that MDWTD is wrong, or at least highly, highly incomplete. A new NBER paper argues fairly convincingly that, adjusted for demographic and macroeconomic variables, not only do millennials not want to drive less, it seems like they drive more, at least as measured by vehicle-miles traveled (VMTs).  The real story may be that MDWTD was because of various choices — locations, jobs, etc. — that manifested themselves in somewhat less driving, but adjusted for those choices millennials are just as car-happy as the rest of us cheery planet-wreckers.

Whew. Apocalypse, on. More seriously, this is a nice example — like another one was needed — why the early presentation of an unlikely solution to a problem so easily blocks out more plausible ones, whether we are talking card tricks or young humans not wanting to get out there and race around.

HEALTHCARE

• It seems possible that our ardor to eliminate ulcers and stomach cancers is increasing the likelihood of esophageal cancer 
• While complex drug interactions are the bane of the over-medicated elderly, we are getting better at modeling how drug interactions can work in a good way

FINANCE & ECONOMICS

• Changing employee reviews of current employers matters for future stock performance, especially if said employee works near headquarters 
• Auctions of racehorses overvalue early development, and undervalue late development
• Firms become more innovative and take more risks after credit default swaps begin trading on them
• Homes and apartments exposed to sea level rise sell for approximately 7% less than comparable properties elsewhere, and the discount is growing 
• More equity market indexing lowers returns to stock picking, increases returns to trend-following, and causes more crashes 
• Public Japanese electrical data is a good predictor of Japanese GDP 

SCIENCE & TECHNOLOGY

• The academic publishing industry has larger global revenues than the recorded music industry, and is not far short of the film industry. 
• The US is second in the world in how much auto electrification is contributing to fuel savings

CRYPTO THINGS

• Top reasons for crypto exchange shutdowns 

MOVING OBJECTS

Energy researcher Carey King gives a fascinating talk on how economic models need biophysical principles. Long, but rich and full of data.