Thursday, January 31, 2013

Surveys And Opinions: Has No One Ever Heard Of Selection Bias?

I feel like banging my head against the wall (excerpt):

Study shows Barisan expected to win GE13

KUALA LUMPUR: Barisan Nasional is expected to win the 13th general election (GE13) which will be held this year, according to a study.

Titled “Study on Feedback of Undergraduate Voters”, it covered 3,000 respondents from Universiti Malaya (UM), Universiti Kebangsaan Malaysia (UKM) and Universiti Putra Malaysia (UPM).

The respondents involved undergraduates aged 21 and above from the Malay, Chinese and Indian communities, some of whom would be voting for the first time.

Global Inequality: By The Numbers

This is an old blog post from the World Bank – I’m catching up on my reading – but still very relevant. Branko Milanovic is an acknowledged expert on global inequality (his “The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality” is a great, non-technical introduction to the subject), and this post takes a fresh look at the issue (excerpt):

The Real Winners and Losers of Globalization

It is generally thought that two groups are the big winners of the past two decades of globalization: the very rich, and the middle classes of emerging market economies…

…However, thanks to a database of household surveys put together recently by the World Bank, we can actually find out for the first time, from a single and consistent data source, who the real winners and losers of globalization are. The results give us a much more finely grained picture of the effects of the two recent decades of globalization…

Wednesday, January 30, 2013

The Freedom Of Prediction, Or, Problems In Small Sample Estimation

While waiting for the dentist this weekend, I came across this article in the Selangor Times (excerpt):

The Personal and The Professional
Tricia Yeoh

YET another Malaysian incident has made it into international news.

The Wall Street Journal, amongst other newspapers since, has reported on Bank Islam’s suspension of Azrul Azwar Ahmad Tajudin after his analysis of a possible Opposition win at Federal Parliament was presented at a Regional Outlook Forum in Singapore last week.

Azrul’s presentation on Malaysia’s economic and political outlook of 2013 included a section on the domestic political landscape, which outlined three possible scenarios as a result of the upcoming 13th General Election…

Friday, January 25, 2013

December 2012 Consumer Prices

The rate of increase in consumer prices in December has continued to slow, pretty much across all measures (log annual and monthly changes; 2000=100):


Wednesday, January 23, 2013

November 2012 Employment

November’s employment data shows the Malaysian economy adding 165k jobs, the first increase since July’s bumper crop (‘000):


Friday, January 18, 2013

This Just In: Facebook Won’t Really Make You Happy

Previous research on the impact of online social networks suggest that they have a positive influence on happiness, but there’s a possible omitted variable bias involved. Larger online social networks might just be indicative of someone who would tend to have a larger network of friends anyway.

In this new NBER paper, a new Canadian dataset that covers both online and real world friendships offers a potential avenue to disentangle which one is actually more important (abstract):

Comparing the Happiness Effects of Real and On-line Friends
John F. Helliwell, Haifang Huang

A recent large Canadian survey permits us to compare real-time and on-line social networks as sources of subjective well-being. The sample of 5,000 is drawn randomly from an on-line pool of respondents, a group well placed to have and value on-line friendships. We find three key results. First, the number of real-life friends is positively correlated with subjective well-being (SWB) even after controlling for income, demographic variables and personality differences. Doubling the number of friends in real life has an equivalent effect on well-being as a 50% increase in income. Second, the size of online networks is largely uncorrelated with subjective well-being. Third, we find that real-life friends are much more important for people who are single, divorced, separated or widowed than they are for people who are married or living with a partner. Findings from large international surveys (the European Social Surveys 2002-2008) are used to confirm the importance of real-life social networks to SWB; they also indicate a significantly smaller value of social networks to married or partnered couples.

Basically what they found was that real life friendships matter the most – the effect of online social networks was negligible. Marriage or even dating act as effective potential substitutes, as does close family.

All those “likes”? Don’t count on’em.

Technical Notes

Helliwell, John F. & Haifang Huang, "Comparing the Happiness Effects of Real and On-line Friends", NBER Working Paper No. 18690, January 2013

Thursday, January 17, 2013

Investment In ASEAN post-AFC: Explaining The Drop

One of the policy problems after the recovery from the Asian Financial Crisis, was the steep drop in private sector investment relative to GDP. There have been not a few papers on the subject, with multiple explanations put forward.

This new one under the IMF working paper series offers a fresh take on the issue (abstract):

Explaining ASEAN-3’s Investment Puzzle A Tale of Two Sectors
Zhou, Yong Sarah

Summary: The prolonged investment decline in post-Asian crisis emerging Asia, in contrast to the swift recovery of economic growth, has remained a puzzle. This paper shows that the post-crisis investment recession has been mainly concentrated in the nontradable sector, and hypothesizes that the slowdown is because firms operating in that sector are financially constrained. Empirical results based on macro and firm-level data from Indonesia, Malaysia, and Thailand (ASEAN-3) support this hypothesis.

Tuesday, January 15, 2013

Political Forecasting: Anybody Can Do It; That Doesn’t Mean Everybody Should

I hadn’t intended to write on this topic, but my boss pulled me aside yesterday and said he’d been inundated with emails over the weekend – some asking about the controversy, and some asking if we could do the same type of forecasting!

In case you missed what I’m talking about, here’s a snippet (excerpt):

In tea leaves, economist sees slender Pakatan win

KUALA LUMPUR, Jan 11 — Pakatan Rakyat (PR) will notch a slim victory over the ruling Barisan Nasional (BN) in Election 2013, according to calculations by Bank Islam Malaysia’s chief economist Azrul Azwar Ahmad Tajudin.

In a report by The Straits Times of Singapore, Azrul’s computations found that BN was likely to win only between 97 and 107 of the 222 parliamentary seats — insufficient to reform the next administration.

Friday, January 11, 2013

November 2012 Industrial Production

If you’re a pessimist over Malaysia’s economy. stop reading now. This post might be a little challenging.

Most months, industrial production and trade numbers generally track each other. This time, while export growth was somewhat positive, industrial output was by comparison positively bubbly. Yesterday’s industrial production report shows output building on last month’s positive increase and accelerating to 7.2% y-o-y in log terms (annual and monthly log changes; seasonally adjusted):


Thursday, January 10, 2013

Messages on Facebook

For some reason, I haven’t been getting notifications about some messages on my Facebook page. For those who sent messages and never received a reply, my sincerest apologies.

Previously, I’ve rarely check the page directly, just relying on email notifications to alert me on messages and posts. That won’t happen again in future, and I’ll be doing a daily check whenever possible. If you post a query on the Facebook page but don’t get a reply within a day or two, please email me directly instead.

Again, for those who’ve haven’t received a reply to their messages, my apologies.

Same Research, Two Viewpoints

President Harry Truman of the US was once reputed to have said, “Give me a one-handed economist! All my economists say, On the one hand…on the other.”

Here we see a corollary to that truism – for every economics research paper, there’s two (or more) perspectives.

So, on the one hand (excerpt, emphasis added):

IMF's economist: budget cuts may hurt growth less now

WASHINGTON: Belt-tightening in advanced economies may not be as harmful to growth now as it was during the height of the financial crisis, but governments should still be careful about drastic cuts, an International Monetary Fund research paper found on Thursday.

November 2012 External Trade

Yesterday’s trade report was mildly positive, with both exports and imports showing faster growth (log annual and monthly changes; seasonally adjusted):


The reason why I’m saying mildly positive is that there’s no clear evidence that growth will get any better as yet. As far as I’m concerned, external trade growth hasn’t gone anywhere this past year, and the ups and downs we’ve seen this year is no more than “noise”.

Wednesday, January 9, 2013

November 2012 Monetary Conditions

One of the toughest challenges a writer can face is overcoming writer’s block – it’s hard to start writing again once you’ve stopped for a while. It’s even harder when there’s not much to write about, as Malaysian data over the past couple of months have been indicating an economy that’s been cruising along (in other words, b-o-o-oring).

So here’s my attempt at getting things going again. There’s all sorts of stuff I plan on covering, but it might take a while to get around to all of them, especially with my present work load (I’m currently working, among other things, on a country profile for a GCC member – not exactly helpful for thinking about the Malaysian economy).

In any case, here goes:

Wednesday, January 2, 2013

Happy Belated New Year! And Welcome To The Minimum Wage

I’ve been on an extended break from blogging, what the holidays and all, and just as importantly, from a lack of issues to really talk about.

But I suspect that will change this year, as we get closer to the deadline for the general election and all that entails.

In the meantime, Malaysia’s minimum wage regulation came into effect on the 1st, and it’ll be interesting to see what kind of impact it really has – there’s been a bevy of companies, largely smaller SMEs who’ve already been granted exemptions until the middle of the year.

Inflation? Unemployment? We’re about to find out. I suspect any effect would be minor in aggregate, though no less real to the ones most affected. For the academics out there, here’s a prime opportunity for research grants a couple of years down the road.