"No, I said 'self-select for attitude.'"

One of the many weird aspects of the charter school debate has been the non-exchanges over selection effects. Critics suggest that students who choose to go through the application process will tend to be more motivated, more committed to school, more interested in college, and more open to the idea of a heavier work load and will tend to have more stable, supportive families.

Here's an example:

Some observers, such as the authors of The Charter School Dust-Up, say that KIPP's admission process self-screens for students who are both motivated and compliant, from similarly motivated and compliant—and supportive—families. Parents must commit to a required level of involvement, which rules out badly dysfunctional families.

This would seem to be fairly straightforward. Almost every school could do a good job if it were populated solely by students who worked hard, followed instructions and had the full support of their families. A strong selection effect here could explain away most or all of the positive results observed in KIPP schools. This hypothesis even raises the possibility that KIPP schools are actually doing worse than public schools would under comparable circumstances.

(You'll notice that no mention is made of race, poverty or test scores.)

Now here's how SRI responds:

KIPP schools’ higher-than-expected test score results draw both attention and claims that they “cherry-pick” high-achieving students from poor neighborhoods. This is the first report to closely scrutinize the praise and criticisms associated with KIPP, as well as key challenges facing Bay Area KIPP schools today.

In the three KIPP schools where they were able to draw comparisons, SRI researchers found that students with lower prior achievement on the CST were more likely to choose KIPP than higher-performing students from the same neighborhood, suggesting that, at least at these schools, cherry-picking does not occur.

And here's the much-touted Mathematica report:

Our nonexperimental methods account for the pre-KIPP (baseline) characteristics of students who subsequently enter KIPP schools: not only demographic characteristics such as race/ethnicity, gender, poverty status, and special education status, but also their achievement test results for two years prior to entering KIPP. We examine the achievement levels of the students for up to four years after entering KIPP schools. In our preferred models, we compare these trajectories to the achievement trajectories of a matched set of local public school students who have similar achievement test results and demographic characteristics in the baseline period (typically third and fourth grades) but who do not enroll in KIPP.

Waiting for Superman... to get bored and drop you like a bad habit

From Roger Ebert's review of Waiting for Superman:

We have met five of these students, heard from them and their parents, and hope they'll win. The cameras hold on their faces as numbers are drawn or names are called. The odds against them are 20 to 1. Lucky students leap in joy. The other 19 of the 20 will return to their neighborhood schools, which more or less guarantees they will be part of a 50 percent dropout rate. The key thing to keep in mind is that underprivileged, inner-city kids at magnet schools such as Kipp L.A. Prep or the Harlem Success Academy will do better academically than well-off suburban kids with fancy high school campuses, athletic programs, swimming pools, closed-circuit TV and lush landscaping. [emphasis added]

Probably the most comprehensive study of the KIPP program was done by SRI, which looked at KIPP schools in the Bay Area. Here's one of their findings (again, emphasis added):

As researchers analyzed the student achievement data and KIPP’s approach, they also identified challenges facing Bay Area KIPP schools, including high student attrition rates, teacher turnover, and low state and local funding. For example, 60 percent of students who entered fifth grade at four Bay Area KIPP schools in 2003-04 left before completing eighth grade.

More that any other player in the charter school movement, KIPP has relied on the cheese effect to generate its results. It's a profitable and highly praised business model built entirely of the backs of discarded students.

"5 Myths about Federal Taxes"

From Bob Stoker via John Sides at the Monkey Cage, here are some relevant numbers for the tax debate:

Myth #1: Federal taxes are higher than they have ever been.

According to the Congressional Budget Office (CBO), the opposite is true. Budget analysts typically measure the federal tax burden as a proportion of GDP because this accounts for the amount of our economic output that is devoted to paying federal taxes as the economy grows or contracts. Federal taxes from all sources were 14.8% of GDP in 2009 and are projected to be 14.6% of GDP in 2010. See the CBO report, "The Budget and Economic Outlook: An Update," August 2010, Table 1-2 (pdf).

By comparison, the lowest tax burden during Ronald Reagan's Presidency was 17.3% of GDP. Under President Bush federal taxes reached their low point at 16.3% of GDP. See the CBO historic budget tables: http://www.cbo.gov/budget/data/historical.pdf

Myth #2: People at the top of the income distribution pay more than half of their incomes in federal taxes.

According to the Tax Policy Center, the average federal tax rate in 2009 (including income taxes, payroll taxes, estate taxes, and corporate taxes) among the top 20% of the income distribution was 22.9%. Among the top 1% of the income distribution, 26.1%; among the top 0.1 of the income distribution, 27.9. The top one tenth of one percent of the income distribution paid an average federal tax rate of less than 28%.

Myth #3: Poor people don't pay taxes.

It would be more accurate to say working poor families with several children don't pay federal taxes. According to the Tax Policy Center, the average federal tax burden on the bottom 20% of the income distribution is negative...that means, people in this income range typically get more money back from the federal government than they pay in federal taxes. However, this is a consequence of the Earned Income Tax Credit (EITC) and the Child Tax Credit. For most families the most generous benefits are provided by the EITC and you must work to receive this credit. The current value of the credit is $5,657 for families with three or more qualifying children. Although modest EITC benefits are available to childless taxpayers, the credit is much more generous for families with children. When the generous benefits that are provided for working poor families are aggregated with others in the bottom 20% of the income distribution, the overall federal tax rate for this group is negative.

Myth #4: Federal marginal tax rates always go up as income increases.

The marginal tax rate is the rate that is applied to the last dollar of taxable income. Although it is generally true that federal marginal tax rates increase with income (because the personal income tax is progressive), this is not always true. The FICA tax that supports Social Security and Medicare is a significant portion of the federal tax burden for many taxpayers. The part of the FICA tax that supports Social Security (a 6.2% tax on earned income that is paid by employees and employers) has an income cap (currently $106,800). Earned income above that cap is excluded from the tax. Beyond this, at present unearned income is entirely excluded from the FICA tax (though this is scheduled to change for the part of the FICA tax that supports Medicare under provisions of the federal health care reform). Because most calculations of the federal tax burden include both the employer's and employee's share, moving earned income just above the cap reduces the federal marginal tax rate by 12.6%. Here is a history of FICA tax rates from the Social Security Administration.

Myth #5: Only affluent people pay federal taxes.

It is true that people in the top 20% of the income distribution provided 67.2% of federal tax revenues in 2009. However, they receive 54.3% of cash income. Despite this however, most American households pay a share of the federal tax burden. Although 47% of households paid no federal income taxes, two-thirds of these households did pay social insurance taxes to support Social Security and Medicare. The "deadbeats" who paid neither tax were mostly elderly people and people with annual incomes below $20,000. See again the analysis of the Tax Policy Center:

Punch, brothers! punch with care!

Conductor, when you receive a fare,
Punch in the presence of the passenjare!
A blue trip slip for an eight-cent fare,
A buff trip slip for a six-cent fare,
A pink trip slip for a three-cent fare,
Punch in the presence of the passenjare!

CHORUS

Punch, brothers! punch with care!
Punch in the presence of the passenjare!

If you don't recognize these lines, you should probably go here before going any further. If you do catch the reference, be warned. Some news stories are like Sam's jingle and unfortunately this is one of them:

"Pat Sajak: Should Public Employees Always Be Allowed To Vote?"

MBA thinking , gestalt and the death of humanities

The following comes from Stanley Fish:

What he didn’t know at the time is that it had already happened, on Oct. 1, when George M. Philip, president of SUNY Albany, announced that the French, Italian, classics, Russian and theater programs were getting the axe.

For someone of my vintage the elimination of French was the shocker. In the 1960s and ’70s, French departments were the location of much of the intellectual energy. Faculty and students in other disciplines looked to French philosophers and critics for inspiration; the latest thing from Paris was instantly devoured and made the subject of conferences. Spanish was then the outlier, a discipline considered stodgy and uninteresting.

Now Spanish is the only safe department to be in. Russian’s stock has gone down, one presumes, because in recent years the focus of our political (and to some extent cultural) attention has shifted from Russia to China, India, Pakistan, Iran, Iraq. Classics has been on the endangered species list for decades. As for theater, the first thing to go in a regime of bottom-line efficiency are the plays.

And indeed, if your criteria are productivity, efficiency and consumer satisfaction, it makes perfect sense to withdraw funds and material support from the humanities — which do not earn their keep and often draw the ire of a public suspicious of what humanities teachers do in the classroom — and leave standing programs that have a more obvious relationship to a state’s economic prosperity and produce results the man or woman in the street can recognize and appreciate. (What can you say to the tax-payer who asks, “What good does a program in Byzantine art do me?” Nothing.)

President Philip cites as one justification for his action the fact “that there are comparatively fewer students enrolled in these degree programs.” Of course, in a bygone time seats in those programs’ classes would have been filled by students who were meeting quite specific distribution requirements; you remember, two advanced language courses, one course in American lit and another in British lit, and so on.

Those requirements have largely gone away. SUNY Albany does have general education requirements, but so many courses fulfill them — any one of dozens will meet your humanities requirement — that they are hardly a constraint at all, something the Web site acknowledges and even underlines with pride. This has happened in part because progressive academics have argued that traditional disciplinary departments were relics from the past kept artificially alive by outmoded requirements.

Perhaps this is being unfair to MBAs (God knows there are plenty of examples elsewhere), but there's a certain misguided kind of thinking that's common in business school graduates, an approach to complex problems that fetishizes metrics yet takes a dangerously naive approach to numbers. Factors that are difficult to quantify are casually dismissed. Synergy is a heavy-rotation buzzword but simplistic reductionism is the actual default.

New Coke was a notorious example of metric-driven thinking. The metric here was a taste-test score, a well-defined scalar that seemed to measure the nebulous concept of appeal. The executives were so pleased to have an actual number that they put one of the world's most popular and profitable brands at risk in an effort to optimize that metric.

What they overlooked was the need to look at every successful product, institution or organization as a gestalt where the success is a function of the whole.

I am certain president Philip can point to extensive cost benefit analyses justifying the school's decision. I am also certain that these analyses rely almost entirely on easy-to-measure quantities and short-term projections and largely (if not completely) ignore important factors that are more difficult to deal with.

The American university system has been a tremendous success over the past century or so and a major part of that success has been the rich and diverse intellectual gene pool that universities offered. It would be next to impossible to quantify the value of that gene pool but it's safe to say that narrowing it will come with hidden costs.

Wolfmeat

It's time to face the ugly truth: the readership of Observational Epidemiology tends to run more than a little nerd-heavy. That's okay. With the success of the Big Bang Theory, geek chic has never been less uncool.

So there's no reason not to check out this list of math-based games I put together for beginning teachers. You can even go here and find still more.

Of course, I still wouldn't mention it around the cool kids.

Greg Mankiw's reply -- dishonesty or just bad prose?

From Mankiw's follow-up to his NYT editorial:

Aren't you motivated by more than money? Of course. I have never suggested that money is my, or anyone's, sole motivation in choosing a lifestyle.

The phrase "sole motivation in choosing a lifestyle" is going to cause us some problems; it's difficult to rebut this kind of practiced vagueness, but we were talking about the choice to do certain work. If we read choice of lifestyle to mean choice of work, then yes, he did suggest exactly that.

Let's roll the tape:

By contrast, without the tax increases advocated by the Obama administration, the numbers would look quite different. I would face a lower income tax rate, a lower Medicare tax rate, and no deduction phaseout or estate tax. Taking that writing assignment would yield my kids about $2,000. I would have twice the incentive to keep working.

If doubling the money you're paid doubles your incentive, doesn't that suggest that your incentive is solely pecuniary?

Make sure to thank the senator

I forgot to mention in my last post that Senator Richard Shelby (also known for his work as a character actor in shows such as Dark Shadows and Nero Wolfe) was the one who pointed out the nominee's lack of qualifications.

So thanks, senator. We certainly appreciate everything you and your party has done to uphold the quality of the Fed.

If the President wants to get his nominees approved...

Maybe he should stop nominating boobs who can't even stay awake through a seminar.

The indispensable Professor Thoma

Having spent a lot of time recently on the issue of compensation, this post by Mark Thoma caught my eye:

Greg Mankiw complains that if taxes go up for people with incomes as high as his, he won't work as hard and that means he won't be able to leave as much for his kids. Incentives matter he says. If that's the case, I wonder why someone who is trying to take away the incentive for his kids to work hard and be successful on their own doesn't leave academia and become a high paid consultant.

I'm sure Greg Mankiw could clean up as a consultant. The same effort he puts into academics would be much more highly compensated somewhere else. The fact that he decided to become an academic in the first place indicates that it's not all about the money.

As Greg Mankiw makes clear every chance he gets, he's at Harvard. That tells me that the return to his ego is every bit as important as the financial return. I'd further guess that even if the New York Times stopped paying him for his column, he'd write it anyway. It's a boost to his ego and reputation that he'd want even without whatever small payment he gets for each column (he could make more by using the time to prepare a talk "to a business group, consulting on a legal case, [or] giving a guest lecture," so the opportunity cost of the column is quite high).

I have only anecdotal evidence for the following statement (but it is pretty damned extensive anecdotal evidence so here goes):

When it comes to assumptions, statisticians and economists (particularly freshwater economists) tend to take opposite approaches. Statisticians generally insist on running through more assumptions than the listener has any interest in hearing about, often including those of no relevance to the situation you're in. (A former manager of mine once joked that it was easy being a statistician -- whatever the question, you just answered "it depends.") Economists tend to leave assumptions unsaid, even the really important ones that probably aren't being met.

I can give you plenty of examples of these buried assumptions (if you can make it through a chapter of Freakonomics without finding a few you're not paying attention), but there are also economists who do their best to unearth these assumptions, to bring them back into the debate where they belong. One of the best and most diligent of those diggers is Mark Thoma.

Which brings us back to Greg Mankiw's recent column. On one level, Mankiw's argument is sound. Every product that reaches the marketplace did start with the producer asking "Is this worth my while?" Tax rates do factor into that calculation, so, yes, there can a situation where dropping the Bush tax cuts would cause someone to decide not to make a product.

But there are a couple of big assumptions here. First, since we're talking about a return to Clinton (not Eisenhower) era tax rates here, a product would have to be just barely worth doing now -- the drop in returns under the proposed change is very small. Since this is known economic territory, we know that Clinton's tax increase caused at most a trivial number of products and services to be dropped for the reason Mankaw suggests and the Clinton rates were as high or higher than anything proposed by Obama. (Mankiw gets around this by starting out talking about the income tax increases for people making over 250K then slipping in the estate tax about half a page down, leaving most readers with the impression that making the income tax slightly more progressive will cut his take home pay in half but that's more a case of lying through misdirection than of burying the assumption).

The second, and more important assumption is where Thoma really shines. The idea that a producer will stop making a product if the tax rate passes a certain point assumes that primary return on that product is taxable, an assumption that is in no way justified here. As Thoma points out, the compensation Mankiw receives in the form of ego-stroking and reputation-building far exceed the $650 he gets for each column. I would add to that the satisfaction of influencing the debate. Conservative groups spend millions of dollars getting anti-tax arguments in the papers. When Mankiw does it, the papers send him the check.

When the compensation for a product or service is overwhelmingly non-taxable, an increase in tax rates will almost never cause a provider to drop that product or service. Mankiw is smart enough to be aware of this (he is at Harvard, after all); he just doesn't want the rest of us to realize it.

"Who would have thought that Erik Estrada would have the more dignified career?"

Just to start your Monday off on a sufficiently weird note.

Education Reform

I want to very quickly return to first principles. When Mark and I began discussing tenure reform, it was in the context of a "crisis" in education. This terminology continues to this day.

However, the real impact of recent news is that proposed reforms don’t have the potential to make immediate and dramatic improvements in education outcomes. Why does this matter?

Because if there is an incipient crisis and known strategies can directly address them then it would be grossly unethical not to try and address this in the fastest way possible. However, if there is not an immediate crisis the correct way forward is one that addresses all of the stakeholders and not radical top-down driven reform. In other words, Baltimore and not Washington, DC.

In the long run educational reform may be inevitable and positive. One of our well versed commentators (Stuart Buck) opined about the evidence:

It's consistent with any number of stories, including increased quality of teaching, better curriculum, finding a better fit for each individual students (some do better in a smaller school, for example), and the factors that you mention.

In my view, this suggests that we are going to experiment with news modes of education. After all, many people who I respect are strongly advocating for experimenting further with education reform (Jon Chait, Megan McArdle, Matt Yglesias, Alex Tabarrok come immediately to mind).

So why are there concerns about the process by which educational reform is occurring? Because, the discussion began with a question of where to allocate resources. Seyward Darby was arguing that we needed to accept teacher layoffs as part of the price if educational reform:

The president's beef is with a provision to prevent teacher layoffs, which Democrats tacked onto the bill along with several other domestic priorities. To pay for the measure, the House agreed to cut money from some of the president's key education reform initiatives. Obama isn't happy about it. Nor should he be.

Now, if there is a real and immediate crisis in education than, of course, dramatic measures can make sense. But is this really the time to spark a round of teacher layoffs in order to make slow improvements in who decides to apply for teaching jobs? Maybe, but it seems naive to think that we should fuel the testing of educational reform with layoffs at this precise moment. Readers of Felix Salmon may remember this week's jobs report:

Meanwhile, as the school year begins, we have this:

Employment in local government decreased by 76,000 in September with job losses in both education and noneducation.

As states and municipalities around the nation start running out of money, they’re going to fire people; this is only the beginning. And if October is any indication, the job losses in the local government sector are going to be at least as big as the job gains in the private sector.

So the real issue is whether this is the time for radical teacher employment restructuring -- should we lay off teachers to test educational reform? We do have a duty to the future but we also have a duty to the current students as well. The conversation would be different if the net resources for education were increasing but claiming that education is a priority in the midst of layoffs due to lack of funding seems disingenuous.

My interest in this subject grew from two arguments in the blogosphere. One, that the crisis in educational was so bad that the state should massively break contracts without cause. Notice that in cases like AIG and TARP, we were willing to spend a lot of money as a society to preserve financial contracts. Two, that reform has likely to be so important that teacher lay-offs in the midst of a recession were an acceptable sacrifice as the students would be better off.

If we don't accept that there is an immediate crisis then we can still move forward. But then it becomes an American-style bottom-up reform and not a Soviet-style top down reform. I like the Baltimore example -- specific communities negotiating ways to respond to the crisis and continuing to try ways to create a better future for their children. The result of a thousand experiments with engaged communities could very well result in a far better educational system in the long run.

And I think that is a good outcome.

"The Secret of Doublets"

I've got a new (OK, newish) site up called "Education and Statistics." The idea is to have a place that's more focused on education and less scary to the general reader (I've noticed people tend to shy away when I tell them I blog at "Observational Epidemiology").

There will be lots of dual posts and reprints, but you'll also find quite a bit of E and S exclusives like this introduction to Lewis Carroll's addictive word game, doublets (a.k.a. word links, word ladders and word golf). Come by and see if you too can evolve APE into MAN

I don't like to go to the well too often, but...

(I know this is two in a row, but how could I let this one go?)

When mortgage bankers engage in strategic default, the cost in PR damage, public backlash and potential regulation far exceed the savings on mortgage payments. When a wealthy lawyer writes self-pitying articles about the difficulty of scraping by on three or four hundred K, he builds support for the very progressive tax policies he opposes. When Wall Street millionaires publicly and angrily insist they were entitled to every penny of support they were given, they make it much more likely that the next time they need assistance it will come at a cost to them.

These people are not stupid nor are they irrational. They do these things because of their worldview.

It is not just that we have a group of people who believe they are entitled to a special set of rules; it is that they have internalized this belief so completely that they no longer see it as a belief. The concept has become as intuitive and self-evident to them as Euclidean geometry. The thought that others might see things differently doesn't occur to them.

This can lead to some embarrassing spectacles, but it does make life easy for Daily Show writers.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Mortgage Bankers Association Strategic Default
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Red Half-state, Blue Half-state

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Indecision 2010 - Divided Delaware
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