Let's see the CAPM explain this

From Slate:

The nonpartisan Center for Responsive Politics recently performed the Herculean task of determining which members of Congress own what stocks. Its reports, which you can browse here, are an enthralling psychofinancial portrait of political America. For example, it turns out that oil giants BP and ExxonMobil as well as tobacco/food company Altria are overwhelmingly favored by Republicans, while Democrats are heavily into tech stocks such as Sun Microsystems, Texas Instruments, and Vodafone, the British-based mobile-phone giant.

Weather and War

In today's NY Times, the Freakonomists have a nice piece on the economic impact of weather. An excerpt:

The economists Edward Miguel, Shanker Satyanath and Ernest Sergenti have written a paper that uses rainfall to explore the issue of civil war in Africa. Twenty-nine of 43 countries in sub-Saharan Africa, they note, experienced some kind of civil war during the 1980’s or 1990’s. The causes of any war are of course incredibly complex — or are they? The economists discovered that one of the most reliable predictors of civil war is lack of rain. Using monthly rainfall data from many different African countries (most of which, significantly, are largely agricultural), they found that a shortage of rain in a given growing season led inevitably to a short-term economic decline and that short-term economic declines led all too easily to civil war. The causal effect of a drought, they argue, was frighteningly strong: “a 5-percentage-point negative growth shock” — a drop in the economy, that is — “increases the likelihood of civil war the following year by nearly one-half.”

Here is the Miguel et al. paper.

Applying to Grad School

A student emails me a question about the strategy of applying to PhD programs in economics:

I am currently applying to Ph.D. programs in economics, and though my primary interests are teaching undergraduates and doing policy work, I am told to hide these facts from graduate admissions committees. Judging by your teaching and your "policy wonk" status, you obviously share my interests. Why is it that such interests are looked down upon my graduate committees, and what advice can you give someone like me?

There are many jobs a person can get with a PhD in economics, including those at research universities, teaching colleges, policy organizations, think tanks, consulting firms, Wall Street, and so on. But your adviser is surely right that what PhD admission committees most like to hear from candidates is a statement of deep interest in academic research.

Why? Because these admission committees are made up of professors at research universities. When you claim to be interested in academic research, you are saying to the committee members, "I want to be just like you." Their natural response is, "Here is a smart student with sound judgment."