The Regents' Cube

Apparently the official name for what I think of as the rotating lawsuit generator is actually the Regents' Cube. How can this heavy moving object not have a fence around it when it is less than 100 meters from the law school?

The last word on productivity

This blog rather sums it up.

Via: marginal revolutionaries

Dropping twenties in NYC

A fascinating Esquire piece on the power of the $20 bill.

It would be interesting to do a more systematic comparative study of different cites across the US:- NYC, DC, Atlanta, New Orleans, Chicago, Minneapolis, Salt Lake City, LA.

This piece is worth remembering next time one reads some sanctimonious study of petty corruption in the third world.

Via Gulliver

Enough Obama

I'm sure you've been thinking the same thing I have. Where is Obama? You never see him on TV and no one ever seems to talk about him on the internet. So, if you are suffering from Obama deprivation, you can add more Obama to your life with these Obama checks. Four options are offered, each with a different picture and different inspirational saying, like "Yes, We Can!".

Actually, I'll just remain perplexed that people look to politicians of any flavor for guidance or inspiration. For me it is one of those mysteries of life, like the continued existence of White Castle restaurants.

Hat tip: Lisa Smith

Author bios

I found it very difficult the first time I had to write a little puff paragraph about myself. In my case it was for a conference program or web page and not a book, but the principle is the same as when you are writing it for a book, a magazine or an op-ed.

Dan Drezner wonders what it would be like if author bios were honest. I suspect that all of these are actually disguised references to real people but I only picked up two or three. Cass Bunstein, in particular, is not very well disguised, but then it is pretty flattering as well!

Stanford 34, Washington 14; Michigan 36, Indiana 33

Washington was done in at Stanford by lack of focus, three Jake Locker turnovers and Stanford's running back.

Michigan needed a (really) bad call in the last few minutes to save the day against Indiana.

I think both teams made it into the top 25 a bit prematurely. MSU is going to be even more pissed off than usual next week when Michigan comes to town given their close losses to Wisconsin and Notre Dame. On the other hand, I think ND is beatable for UW, given that they barely made it by Purdue yesterday and lost to Michigan.

And, to go back to last week when all things were glorious and good, here are some letters from USC fans in the LA times. My favorite:

Pete Carroll was simply protecting his princes by taking full responsibility for the Washington loss. To know what he was really thinking, simply recall former USC coach John McKay's reaction as coach of the newly formed, inept Tampa Bay Buccaneers.

After another error-filled loss, he was asked, "What do you think of your team's execution?" "I'm all for it," McKay quipped.

David Wilczynski

Manhattan Beach

Boring parts of otherwise interesting jobs

The boring parts of my job are grading exams and writing letters of recommendation.

The boring part of the president's job is, evidently, taking photos. Obama demonstrates.

Via: instapundit

Dave Barry on free speech at universities

Someone should have restrained the producer from over-producing, but otherwise it is interesting to hear Dave Barry.

Big city police pick on undergraduates

Pittsburgh police get out of control at the G-20 meetings.

Not cool.

Assorted links

1. Malcolm Gladwell as Casanova; but he won't reveal his secrets.

2. 100 Best Blogs for economics students (but they leave out this one!)

3. Last words of executed criminals (one hopes) in Texas.

4. Advice for students from Dan Drezner.

5. Famous doctored photos.

Air travel and health care

Jonathan Rauch imagines air travel organized like health care.

One of the big attractions of the Canadian system is its administrative simplicity. You go to a provider (if you can find one taking new patients) and show your card and you're done.

My sense is that health insurance systems in other countries with universal coverage but without a single payer are also substantially simpler on the administrative dimensions highlighted in Rauch's piece.

This suggests that the key is not single payer but some other aspect of regulation. Put differently, I have wondered for some time what aspect of the US health industry regulatory environment prevents it from acting like the airlines? Is it some obscure aspect of antitrust legislation or case law? Is it the lack of national market? Is it state insurance regulators captured by some part of the industry that benefits from this inefficiency? I've never seen a clear discussion on this aspect of the current situation but would like to.

Jon Stewart on ACORN

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
The Audacity of Hos
www.thedailyshow.com
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Stewart gets this exactly right on several dimensions.

Hat tip: graduate student

It could be worse ...

Next time you are tempted to complain about the vast wasteland of American television, just keep this in mind.

Miss Manners may have omitted this case

Is it good manners to text someone if you are government child welfare agent and are notifying a woman who is soon to give birth that you will be confiscating her child?

Does the answer depend on whether or not you have already tried to contact the person in person and by phone? Or on how much effort you put into trying to do so?

I am conflicted about this one. It seems inappropriate to send this information by text message, but at the same time how much taxpayer money should be spent trying to contact someone by other means who is avoiding contact?

Driving in A2

annarbor.com lists the top ten spots for traffic citations in Ann Arbor.

More surprising, I thought, was the total number of citations: 23,358 in a year in a city of only 125,000. That is a lot of bonus taxes. Of course, if they are doing their job, the A2 police are concentrating their efforts on non-residents of Ann Arbor.

Cash for Clunkers

The Economists' Voice offers up a quick and easy cost-benefit analysis on the cash-for-clunkers program. Here is the summary from the website:

Burton Abrams and George Parsons of the University of Delaware evaluate the efficiency of the recently introduced 'Cash for Clunkers' program and conclude that the cost exceeds the benefit by approximately $2000 per vehicle.

In fact, things are worse than this because the authors omit the "excess burden", the social loss associated with raising the funds for the program via a distortionary tax system.

A crude version of this cost-benefit calculation could have been done ex ante by replacing some of the at-that-time unknown values with estimates. This should have been done and the program never should have seen the light of day.

Seattle Times on Amazon

An interesting piece from the Seattle Times on Amazon's growth beyond books, music and video.

I like this comment:

Thank God for Amazon so I don't have to leave my house and see you freakos. Posted on September 20, 2009 at 2:11 AM by Thatsthebaby.

I wonder what fraction of retail sales Sears, Montgomery Ward and other catalog retailers had back in their heydey? Amazon is in some sense their conceptual heir.

Krugman (and others) on macro

Paul Krugman posted this piece on the state of current macroeconomics and it has generated a fair amount of discussion. I have not followed all of it, but did quite like the response by Narayana Kocherlakota, now at Minnesota.

There is a whole genre of these sorts of "economics is going (or has already gone) to hell" sorts of essays, many of them written by disappointed Austrian or post-Keynesian economists. Unlike many authors of such pieces, Krugman actually knows the economics in question.

Narayana and I overlapped at Chicago but were largely in different circles. He was clever enough to marry my friend and classmate Barb McCutcheon.

Addendum: David Warsh's take from Economic Principals, which includes some additional links.

Feminist humor

Via: instapundit

More on Washington's win

I want to savor this victory with a second post! It has been a while.

Here is the main article from the Seattle Times, as well as thoughts from Times' columnists Bud Withers, Jerry Brewer and Steve Kelley and the "2 Minute Drill".

Here is the AP story.

And, just 17 hours after the end of the game, I received an email from Washington's athletic department offering me a new t-shirt commemorating the "bark heard round the world".

Washington 16 USC 13

That's not a typo. Unbelievable.

Bow Down to Washington!

Movie: Julie and Julia

We saw Julie and Julia last week. It intertwines a biography of Julia Child, played by Meryl Streep, with the story of a blogger who achieves minor fame by making every recipe in Child's famous cookbook over the course of a year.

My thoughts:

1. This is a good date movie.

2. Cutting out the part about the blogger and making a full-length biopic of Julia Child with Meryl Streep would have made for a truly amazing movie. As it is, the two parts of the film are of jarringly different quality.

3. If the portrayal of the blogger accurately captures her real life behavior, her partner deserves some sort of award. Yikes.

Recommended for the Julia Child parts.

Frontiers of political correctness

This is from the terms of use for the American Psychological Association's analogue to the American Economic Association's publication Job Opening for Economists:

EQUAL EMPLOYMENT OPPORTUNITY
The American Psychological Association endorses equal employment opportunity practices and accepts only ads that are not discriminatory on the basis of race, color, gender, religion, age, national origin, veteran status, or physical disability. In addition, APA encourages advertisers to not discriminate on the basis of marital status, the numbers and ages of dependent children, mental disability, or sexual orientation. In keeping with this policy, the use of "recent PhD" in the Monitor on Psychology, gradPSYCH, and the PsycCareers advertising is not allowed on the basis that it is potentially age-discriminatory (see U.S. Department of Labor prohibition on use of "recent graduate"). The term "beginning-level salary" may be used. Positions may also be defined in terms of teaching load, specified number of years away from a tenure decision, or requirements of certain skills. We reserve the right to edit all copy and to refuse ads that are not in consonance with the principles of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Veterans' Reemployment * Rights Act Handicap Bias, the Vietnam-Era Veterans' Readjustment Assistance Act of 1974, and the Americans With Disabilities Act of 1990. The Equal Employment Opportunity Act, in addition to Public Law 100-238, makes specific legally permissible exceptions to discrimination in hiring by religious institutions, Indian tribes, and federal correctional facilities. For this reason, certain Position Openings advertisements will include job opening restrictions on the basis of religious, racial, and age factors.

The bit that is new to me is the prohibition of the use of the term "recent graduate" and its replacement by "beginning level salary". I am not sure what to say about this other than that I think we may be near some margin or another.

Hat tip: two anonymous colleagues

The ethics of random assignment

Tyler Cowen at MR asks for information related to the ethics of random assignment.

I am going to put my comments here as not everyone who reads this blog may delve into the comments (or even, gasp, the posts) at MR.

Most of my experience with these issues is in the context of randomized evaluations of social and educational programs rather than the clinical trials that are likely to be of greater interest at NIH.

I have the following comments:

1. Ethical concerns about random assignment in the social policy world are nearly always fake. They are a nice way of saying that the person has some interest in there not being compelling evidence on the effectiveness of the treatment being evaluated.

2. It is easier to sell random assignment for demonstration programs, which by design are going to leave many people who want service without it in any event, than on-going programs. With on-going programs it is easier to sell random assignment for programs that are capacity constrained, so that services will have to be rationed in some way even in the absence of random assignment. Random assignment then just becomes a way of doing the rationing that happens to yeild an informative byproduct. This is the line that was popularized by Judy Gueron during her days running MDRC, which did many of the welfare-to-work experiments in the US in the 1980s and 1990s.

3. An argument that is not often made, but which in my experience is quite convincing even to non-classical-liberal types is that there is a competing ethical claim associated with using tax money to fund the provision of services without solid evidence of their efficacy. Just as the shareholders of a firm would rightly be upset if it undertook major investments without doing its due diligence beforehand, taxpayers should rightfully be upset when government spends money on programs without doing the (in many cases) simple, obvious and relatively inexpensive things required to determine their efficacy, or lack thereof.

Health care myths - I

A common theme in the media of late has been the writing of articles that address various health care "myths" or even "lies". Let's look at three of these in separate posts.

The first comes from Newsweek. Helpfully, the article announces its political bias in the first sentence, which implicitly suggests that only the opponents of health care reform tell lies that need to be addressed.

This paragraph is a wonder:

"The general claim that care will be rationed under health-care reform is less a lie and more of a non-disprovable projection (as is Howard Dean's assertion that health-care reform will not lead to rationing, ever). What we can say is that there is de facto rationing under the current system, by both Medicare and private insurance. No plan covers everything, but coverage decisions "are now made in opaque ways by insurance companies," says Dr. Donald Berwick of the Institute for Healthcare Improvement."

So, let's see, we have rationing now under private health insurance and under Medicare, but whether or not there would be rationing if current reform proposals are implemented is just a "projection". Do they have editors at Newsweek? A newsmagazine that wanted to do some good would make clear that the question is not whether there is rationing but how it is set up. Most introductory economics texts have some wording about how the price system allocates scarce resources in a market. Allocate is just a more apt term for rationing. Resources are always scarce, some mechanism has to sort them among individuals (taking note that the mechanism also affects the amount of resources available).

Next we learn that

"[t]he House bill does not use the word `ration.'"

I suppose there could be two reasons for this. One is that there is actually no rationing implicit in the reform. The other is that the politicians who wrote the bill avoided the very naughty word rationing. I wonder, which of these could it be?

Of course, it is great to know that

Nor does [the health care reform bill] call for cost-effectiveness research, much less implementation—the idea that "it isn't cost-effective to give a 90-year-old a hip replacement.

What do we learn from this? To begin, we learn that the Newsweek writer does not know what cost-effectiveness research is, something one might consider odd given that she is writing about it in a major newsmagazine. We also learn that, whatever she thinks it is, she does not like it. That is too bad, because the lack of a serious cost-effectiveness component is a major flaw of the bill - not a feature, but a bug. A serious writer and a serious magazine would explain to its readers what cost-effectiveness research is, why it is a good thing, and why its absence indicates a lack of seriousness about controlling expenditures on the part of the bill's authors.

The article is on point about illegal immigrants and death panels. In particular, the right should be ashamed of itself about the death panel business. Counseling old people that it is okay not to waste a lot of taxpayer dollars on end of life care with little if any health payoff is a good thing, not a bad one. Moreover, it is much nicer to pass on at home in a warm environment with your family and familiar things nearby than in some hospital room with people you do not know.

Finally, we have:

The government will set doctors' wages.
This, too, seems to have originated on the Flecksoflife blog on July 19. But while page 127 of the House bill says that physicians who choose to accept patients in the public insurance plan would receive 5 percent more than Medicare pays for a given service, doctors can refuse to accept such patients, and, even if they participate in a public plan, they are not salaried employees of it any more than your doctor today is an employee of, say, Aetna. "Nobody is saying we want the doctors working for the government; that's completely false," says Amitabh Chandra, professor of public policy at Harvard's Kennedy School of Government.

Apparently when government sets reimbursement rates for a large segment of the market it has no effect on wages in the rest of the doctor labor market. Any economist, including my friend Amitabh, whose quote here is unrelated to the point at issue, could have told the author that this is a very silly argument, indeed.

So, what are we left with at the end of the day? The article gets a couple of things right and a lot more things wrong, usually in ways that involve basic knowledge about the policy area under discussion or simple logic. Moreover, the article focuses exclusively on lies from the right and ignores the many lies offered up by proponents of the current reform proposoal. This piece is a D, at best.

You lie?

There have been lots of nice words from the Obama administration about free trade but when it came down to a decision between a small, well-organized group and both consumers as a whole and America's foreign relations interests, they caved on tire tariffs.

The AP story never mentions the effect of the tariffs on workers other than than the relative handful who produce tires in the US. That effect, of course, is higher prices for tires. It is always hard to tell whether omissions like this represent bias or just incompetence. My personal rule (a variant on Occam's razor) is to assume incompetence in preference to more malevolent explanations when it suffices to explain the phenomenon at hand.

Note too that free trade is an area where economists pretty much all agree on the right thing to do, so the administration is bucking the science here as well.

An extraordinary weekend of football

I only got to watch bits and pieces as I was at a wedding, but this has not particular constellation of winning teams has not happened in quite a while:

Washington 42, Idaho 23

Michigan 38, Notre Dame 34

Seattle 28, St. Louis 0

Washington avoided have sole possession of the longest losing streak in Pac-10 history. They remain tied with Oregon State (who has not one but two streaks of length 15 in its past).

Michigan made its way back into the top 25.

Marketing Denmark

Imagine a government tourism agency that produces a fake viral video of an attractive women looking for the father of her new baby, the result of a drunken one night stand with a tourist whose name she does not even remember.

Implausible? Perhaps.

But also reality in (you guessed this already) Denmark. The video has been pulled from Youtube but you can watch it here and read the story. You will find some comments from VisitDenmark, the Danish government tourist agency, in this story. Best bit:

VisitDenmark disagrees.

”Karen’s story shows that Denmark is a broad-minded country where you can do what you want. The film is a good example of independent, dignified, Danish women who dare to make their own choices,” says VisitDenmark CEO Dorte Kiilerich.

Why have you chosen to market Denmark as a country with drunken women who have unsafe sex with casual acquaintances?

”That is not a story that I recognise. We tell a good and sweet story about a mature, responsible woman who lives in a free society and shoulders the responsibilty of her actions. And she uses a modern social medium,” Kiilerich says.

Hat tip: Lars Skipper

A chewable mystery

Though it is not obvious from the packaging, this chewing gum is from Munich.

The question: what is it about this particular chewing gum that makes it "PROFESSIONAL"?

Addendum: Reader Don from Seattle suggests that perhaps you can call your gum professional if it receives a really positive review in Chewing magazine.

Wages and outsourcing

The write-up is a bit of a mess but this Danish study appears to conclude (with a sample size of four countries) that high wages do not lead to outsourcing. Or is it better management that seeks "out new markets, new production methods and new products."? Or are Danish workers more skilled and so more productive?

Correlation? Causation? Journalistic confusion? All of the above?

Sigh.

Hat tip (but you knew this already): Lars Skipper

Obama's healthcare speech

Views from the Economist, from reason magazine and from Jay Cost at RealClearPolitics.

I did not watch the speech - I don't think I have watched a presidential speech in decades - but that is because they generally contain no actual information, because I tend to want to throw things at the screen (and screens are expensive) and because it takes much less time (and emotional pain) to simply read about them ex post. I do remember watching both Nixon's resignation speech and Ford's embarrassing "Whip Inflation Now" speech as a wonky child.

My guess is that all three of the views have some truth to them. It will be interesting to see what happens. I suspect that the net effect will be either a reform that costs a lot and does not fix many of the universally agreed-upon problems with the current system (e.g. preferential tax treatment of health insurance, too much end of life spending, etc.) while extending care to some (maybe even most) of those not presently purchasing insurance, or nothing at all.

College completion rates

The NYT wades into the discussion about completion rates with this article inspired by the new book by Bill Bowen, Mike McPherson and doctoral student Matthew Chingos. Full disclosure: I know McPherson a bit (and think very well of him) and I've heard Bowen give an after-dinner talk at the NBER Education meetings (and read his earlier book, the Shape of the River, that addresses affirmative action in higher education).

The article again illustrates the hard life of the newspaper reporter, who has to write about new subjects on deadline, with a skill set that may not include much that is helpful in particular contexts.

The first key problem with the discussion is that the socially optimal graduation rate from four year schools does not equal one, though the article implicitly suggests that it does. College is an experience good and some students who, optimally, give it a try, will learn that it is not a good match for them and, again quite optimally, drop out.

Moreover, having that learning occur at second-tier schools may be preferred to having it occur at top-tier schools because second-tier schools cost society less to operate. Thus, it may be optimal to have higher dropout rates at what researchers in this area call "directional schools" like Western Michigan and Eastern Michigan rather than at places like Michigan. A student who does well at a directional school can always transfer up.

The second issue is that graduation rates vary over time both because of the numerator and the denominator. For example, the graduation rate might fall at a particular state university because the state introduces a new scholarship or loan program and so induces some additional students at the margin to experience the experience good of unversity education. If students at the margin of giving college a try are less likely to finish, then this will lower the graduation rate even if the university's behavior does not change at all. This, of course, suggests that unadjusted graduation rates do not make a good performance measure even ignoring the fact that the optional rate is not one and probably not even close to one.

Third, the article leaves out any mention of post-secondary alternatives to college, such as vocational training. High dropout rates from directional schools may imply not that they are failing but rather that students who should be getting vocational training are instead being pushed into college programs for which they are poorly suited via policies based on the (quite deeply, I think) mistaken idea that everyone should get a university degree.

The article also notes that:

Congress and the Obama administration are now putting together an education bill that tries to deal with the problem. It would cancel about $9 billion in annual government subsidies for banks that lend to college students and use much of the money to increase financial aid. A small portion of the money would be set aside for promising pilot programs aimed at lifting the number of college graduates. All in all, the bill would help.

Now, how exactly do we know that this will help? Changing who issues student loans does not change their terms and so should have no effect on graduation rates. We are not told the nature of the promising pilot programs nor, more importantly, whether they will be evaluated in a serious way, e.g. with a random assignment experiment, or in a non-serious way, e.g. with a before after comparison and/or "stakeholder" interviews. I suspect the latter, in which case this is just money wasted. A bit of skepticism here would help the NYT reporter.

And then there is this bit:

About half of low-income students with a high school grade-point average of at least 3.5 and an SAT score of at least 1,200 do not attend the best college they could have. Many don’t even apply. Some apply but don’t enroll. “I was really astonished by the degree to which presumptively well-qualified students from poor families under-matched,” Mr. Bowen told me.

They could have been admitted to Michigan’s Ann Arbor campus (graduation rate: 88 percent, according to College Results Online) or Michigan State (74 percent), but they went, say, to Eastern Michigan (39 percent) or Western Michigan (54 percent). If they graduate, it would be hard to get upset about their choice. But large numbers do not. You can see that in the chart with this column.

This bit treats graduation rates as structural parameters that do not vary across persons. Does anyone really think that the graduate rate of someone who chooses to attend WMU instead of Michigan would be the same at Michigan (or at WMU) as students who make the opposite choice?

Finally, the jewel in the crown:

Last year, even in the grip of a recession that has spared no group of workers, the gap between what a college graduate earned and what everyone else earned reached a record. Workers with bachelor’s degrees made 54 percent more on average than those who attended college but didn’t finish, according to the Labor Department. Fifty-four percent — just think about how that adds up over a lifetime. And then think about how many students never cross the college finish line.

Let's think about what this paragraph does. It treats a simple mean difference as a causal effect. There is a giant (really, giant) literature in labor economics devoted to establishing, beyond any reasonable doubt, the untruth of exactly this proposition. How can the author not have learned that in the course of researching the article? Moreover, even if the mean difference were an average treatment effect, it is almost surely not the treatment effect that is relevant to students at the margin of choosing to go to college or not. There is an equally large, but less definitive literature here, as it appears that the effects of college at the margin vary by margin and by quality of college attended. But I don't know of any papers that suggest it is anywhere near the difference implied by the simple comparison of means.

To recap: the article suffers from major conceptual errors, leaves out key policy dimensions, praises pending legislation with no good reason, confuses simple mean differences with treatment effects and confuses average treatment effects with treatment effects on individuals at the margin.

Sigh.

On men and women

The Telegraph (in the UK) reports on a study of men's cognitive performance following interactions with attractive women. Key bit:

The research shows men who spend even a few minutes in the company of an attractive woman perform less well in tests designed to measure brain function than those who chat to someone they do not find attractive.

There is no similar effect of attractive men on women.

Note that this has important implications for things like co-author selection and study group formation. Dan Drezner draws implications for international relations.

Male readers can test the theory using this fine picture of Scarlett Johansson.

Bad behavior at Easyjet

You never know when the customer you decide to dump on will have access to an internationally read blog.

Easyjet (and many other companies) should do a better job at training their staff to deal with unhappy customers. An astounding number of companies seem to think that either having staff repeat pre-written (and often inappropriate to the particular situation) messages as though they were human ipods, or, worse yet, lose their cool with the customer, is the best way to go. The Easyjet staff appear to have combined both approaches.

The truth about economists?

A cynic might say that it is a testament to the security that economists feel in their position in life that Greg Mankiw would post this light-heartedly on his blog.

Status relationships on facebook

This is both quite funny and quite true.

And there is no well-developed facebook etiquette yet. Is it better to post more interesting information from exciting locations or less interesting information from home?