Weekend Gaming -- Agon

I don't know exactly what happened to Agon, but I'm pretty sure those damned orthogonalists had something to do with it. The game was all the rage in Victorian England where it was appreciated for its simple rules but surprisingly complex strategies. (the Victorians were also big fans of Lewis Carroll's Doublets, thus showing remarkably good taste in diversions.) The game was and is remarkably challenging and enjoyable but early in the Twentieth Century it faded away, perhaps due to the hegemony of orthogonal game boards.

You can find a complete set of rules on my game site. You can also buy boards there but obviously waiting for delivery would undercut the whole 'here's a game for this weekend' concept so I've included two JPEGs that you can print off if you can't find a suitable substitute (lots of games use a 6x6x6 hexboard so locating one shouldn't be that difficult).


The game is extraordinarily easy to learn. Each player starts out with six pawns and a queen spread out around the edge out the board.

A piece can either move around a concentric hexagon or go toward the center. The object is to get your pieces arranged like this (black wins):

'Capturing' is done in the style of many older games by placing two of your pieces on either side of the opponent's piece. I put the word in quotes because a captured piece is not removed from the board. Instead, it is moved back to the outer ring. Agon is therefore entirely a game of position. Novice chess players have a tendency to play for points and measure how well they're doing by how many of their opponent's pieces are lined up by the side of the board. Learning Agon can help break them of some bad habits.

I first came across Agon in David Parlett's Oxford History of Board Games -- an excellent resource if you're thinking about teaching a math class and not a bad read if you just enjoy games. Parlett is also a game designer of some note so he brings a lot of insight to the discussion.

Credit where credit is due

Seyward Darby has a thoughtful and balanced piece on education in today's New Republic. Here's the conclusion:

But, even when better evaluation methods exist, is it really a good idea to publish, en masse, the ratings of every public school teacher? I’m not convinced. Yes, the information should be available to those in the public who want it—namely parents. But schools or school districts, not newspapers, should share it with parents in a constructive manner, so that they are able to ask questions and understand fully what the information means. Teachers’ unions and districts should also use it to remove underperforming instructors from their jobs, and to ensure that no school has a high concentration of ineffective teachers, such that its student are getting the short end of the stick. And teachers should use it either to ask for additional training resources—or to gain recognition of the good, hard work that they’ve done.

I’m all for transparency. But a wide-open view of incomplete information isn’t what we need to improve education. What’s more, broadly publicizing even the most thorough of information isn’t always productive; complexities and nuances are often best conveyed in smaller settings, with the stakeholders who matter most.

The media shouldn’t focus on shaming individual teachers, because there are bigger fish to fry. Indeed, across the country, they should focus on shaming the entrenched bodies, structures, and policies that allow poor teaching to continue unchecked, fail to reward good teaching, and don’t provide enough support for teachers who want to improve their skills.

I don't agree with everything Darby says here and there are omissions that bother me (relying on Kyle Spencer's reporting probably didn't help). On the whole, though, this is an entirely reasonable piece of analysis. I complained earlier that there wasn't really an education debate in this country. Perhaps we're about to start one.

Alignment of Incentives

Professor in Training has a post on selfishness in Academia:

I’m at the point where I’m jumping up and down in frustration because I can’t get what I want when I want it (which is always yesterday or last week or last year). My resources are limited and dwindling at an alarming rate. My students are swamped with classes and assistantship responsibilities. And yet I’m expected to push out papers. I’m expecting them to push out the papers. And data. Let’s not forget the new data.

I think that the incentives are more aligned here than it appears on first glance. Students will benefit from having a successful professor as a mentor. They benefit from being involved in a lot of successful research projects.

What I suspect the core problem is that academia is set up to make a lot of things urgent (the class you need to teach today, the faculty meeting, the memo you need to write) but they are not especially important. In the long run, success in a biomedical tenure track role requires research output. Other things matter, but this one is key. Students are just as susceptible as professors to getting caught up in things that do have the potential to consume all of ones time. Participating in student goverence, for example, rarely is worth the time that is removes from the student. As a result, everybody feels overwhlemed and tempers fray.

I think the secret here is to realize what are the things that will matter in the long run and what needs to be done adequetely but is not worth a lot of time.

Hoisted from comments -- still more on Mankiw's assumptions

Following this and this, here's the latest in my ongoing debate with David over Mankiw's use of assumptions.

Drawn from a longer comment, here's David:

Assumptions may be very sensitive in a model such that if they deviate even slightly, then the results change substantially. And, of course, some assumptions are robust to substantial changes. It would seem that this is the language that Mankiw is speaking in, according to the few short quotes in the past post.

This seems to me to be a different question when evaluating the policy conclusion. For example, I don't believe that all workers earn their Marginal Product (and in some sense there's no way that we could ever tell). In this sense, Mankiw is mostly likely wrong. However, I do strongly believe that there is an important relationship between productivity and wages. The more productive a worker is, the more he or she will likely be paid. This latter formation is much less precise than the former, but I would submit that they carry very similar policy conclusions. Importantly, the assumptions necessary to make the latter statement are much more robust than the former.

Here's my reply (adapted from a previous comment):

David,

Everything you've said is correct but here's the problem: at the level of generality you're talking about, everyone from Mankiw to Paul Krugman to Dan Ariely is in agreement, but many of Mankiw's arguments seem to require much more specific definitions. Rather than being robust, they are so sensitive that making small, common-sense changes can do great damage.

Keep in mind I'm a statistician, not an economist, so I may be getting some of this wrong but let's assume (except for workers on commission -- I'll grant you linearity for that one) the relationship between a worker's productivity and wages is generally monotonic but with plateaus and possibly even the occasional local optimum. I'm not saying this is the case but I suspect it's a pretty good description of what's going on. More importantly, I wouldn't be comfortable assuming this isn't the case.

I'm pretty sure some of Mankiw's arguments break down if you make this assumption. There's a luck factor now as to whether a change in productivity will result in an increase in wages. You also have an asymmetry problem -- the employer has a better idea where the plateaus are.

Or look at his statements about the inheritance tax. He assumes that one component of money's value to a worker is the pleasure of leaving money to an heir (so far, so good) and that the value of that component holds its value even as the inheritance gets well into the millions. If parents start to worry progressively less about each dollar after, say, the first million then the other value components (such as spending, bragging, charitable giving) will swamp the inheritance component long before the inheritance taxes kick in. If this is true, Mankiw's policy arguments simply collapse.

In other words, if pundits' arguments are sufficiently robust or their assumptions are obviously true, they can do what Mankiw does. Unfortunately, neither case applies here.

Contractually obligated to mention Canada again

I'm as tired of it as you are, but as long reform movement advocates* keep bringing up Singapore, I feel someone has to point out that Canada is neck-and-neck with countries like Singapore (except in post-secondary education where it pretty much blows them away) and that Canada, which is a far better match for the U.S. culturally, historically and demographically, has achieved this by taking most of the steps the movement suggests and doing the exact opposite.

If we had a properly functioning debate on education reform in this country, movement advocates would expect to be presented with counter-arguments; they would even anticipate them. New examples would be sought out, positions would be refined and the intellectual framework of the reform movement would be stronger for it.

But we don't have a properly functioning debate. Hell, we don't really have a debate at all. Instead, we have a situation where advocates can talk about Singapore without anyone bringing up Canada, or about PISA without anyone bringing up TIMSS, or about lottery-based analyses without anyone bringing up peer effects (or placebo effects or volunteer effects or treatment/selection interaction or...). Instead of being challenged and having to prove themselves, these claims go directly into the conventional wisdom pile where they are accepted by smart, otherwise well-informed people like Seyward Darby, Ray Fisman and Jonathan Chait.

This is not likely to end well.

* For the distinction between advocating for reform and advocating for the reform movement, see here.

In good company

Joseph,

Have you ever been called 'fascinating' before? It sort of turns a fellow's head.

Mark

p.s. This would still be a cool list even if we weren't on it.

Achilles and the Tortoise, the CBO and the GOP

Perhaps it's just the lateness of the hour but this post by Brad DeLong on the Republicans' refusal to accept CBO numbers reminded me just a bit of the Tortoise's refusal to accept a simple argument in Lewis Carroll's follow-up to Zeno's best-known paradox.

I really need to get to bed.

The Self-esteem gap

Michelle Rhee was on Marketplace yesterday. She's worried about all the coddling and empty praise we've been heaping on our children.

We've lost our competitive spirit. We've become so obsessed with making kids feel good about themselves that we've lost sight of building the skills they need to actually be good at things.

I can see it in my own household. I have two girls, 8 and 12, and they play soccer. And I can tell you that they suck at soccer! They take after their mother in athletic ability. But if you were to see their rooms, they're adorned with ribbons, medals and trophies. You'd think I was raising the next Mia Hamm.

I routinely try to tell my kids that their soccer skills are lacking and that if they want to be better, they have to practice hard. I also communicate to them that all the practice in the world won't guarantee that they'll ever be great at soccer. It's tough to square this though, with the trophies. And that's part of the issue. We've managed to build a sense of complacency with our children.

Take as a counterpoint South Korea, where my family is originally from. In Korea, they have this culture that focuses on always becoming better. Students are ranked one through 40 in their class and everyone knows where they stand. The adults are honest with kids about what they're not good at and how far they have to go until they are number one. Can you imagine if we suggested anything close to that here? There would be anarchy.

This is an old and much loved refrain in the reform movement, but when you look closely and take the time to disaggregate the data the argument completely collapses. The problem is that the culture of esteem-building Rhee describes is essentially a suburban phenomena. In poor neighborhoods, the situation is exactly the opposite:

Hart and Risley also found that, in the first four years after birth, the average child from a professional family receives 560,000 more instances of encouraging feedback than discouraging feedback; a working- class child receives merely 100,000 more encouragements than discouragements; a welfare child receives 125,000 more discouragements than encouragements.

Other words, our best performing schools are filled with kids who, according to Rhee, should be complacent and lacking competitive spirit while most of the kids in our worst performing schools have received little of the empty praise that so concerns her.

Perhaps we should worry less about the exaggerated self opinions of students and more about that of our pundits and commentators.

Department of better late than never

I just came across this excellent piece on President Obama's education speech at FactCheck.org. It is essential reading for anyone who wants to keep up with the education debate, but if you just want the punchline, here it is:

Most of the major claims in the president's speech were either based on highly selective reading of the data or were simply wrong.

This brings us to one of the strangest aspects of the education debate: the way it makes smart, conscientious people act grossly out of character. Consider this representative example from FactCheck:

But the claim that "our high school dropout rate has tripled in the past thirty years"? That’s not even in the ballpark. According to the Department of Education’s National Center for Education Statistics, the "status dropout rate" – defined as the percentage of people between ages 16 and 24 who are not in school and do not have high school diplomas or GEDs – was 9.3 percent in 2006. In 1976, 30 years before that, it was 14.1. That’s actually a 34 percent decrease in the high school dropout rate.

Of course, dropout rates are notoriously hard to measure and compare. For instance, while NCES shows a status dropout rate of 9.3 in 2006, the high school completion rate for that year was only 74.8 percent. Why the discrepancy? Instead of counting people of a certain age with a diploma or equivalency certificate, this figure compares the number of high school freshman in a certain year to the number receiving a high school diploma four years later. Those who take more than four years to finish aren’t counted, nor are students who get GEDs instead of diplomas. But using this calculation still doesn’t back up Obama’s claim. The dropout rate – that is, the discrepancy between incoming freshmen and graduates – would have been 25.2 percent in the 2006-2007 school year. The rate in 1976-1977 was 25.6 percent.

Even pessimistic accounts don’t show a tripled dropout rate. According to a report by the Educational Testing Service, titled "One Third of a Nation" after the number of students they say are high school dropouts, high school completion rates peaked at 77.1 percent in 1969 and dropped to 69.9 percent in 2000. (NCES shows higher numbers in both years.);That would put dropout rates at 22.9 and 30.1 percent respectively – a 30 percent increase over 31 years. As many sixth-graders could tell you, tripling would mean a 200 percent increase.

So where did Obama’s figure come from? A White House spokesman pointed us to a report by the College Board, which said: "The rate at which American students disappear from school between grades nine and 12 has tripled in the last 30 years." But the College Board’s report included a mistake, which it later corrected: The rate really refers to what happened between grades nine and 10. More important, however, it is not really a "dropout rate." The College Board report in turn cites a 2004 study by the National Board on Educational Testing and Public Policy, which actually shows a tripling of the attrition rate between grades nine and 10, not the dropout rate. In other words, the difference between the number of students enrolled in grade nine in one year and the number enrolled in grade 10 the next year has increased threefold. At the same time, there has been a corresponding threefold increase in grade nine enrollments relative to grade eight. The report shows more ninth-graders failing that grade, not dropping out.

Given that the reform movement has been railing against social promotion for years, it's hard to argue that an increase in students held back is a cause for alarm.

The spam filter on Blogger... what's the word?...

Oh, I remember, sucks.

It seems to have a problem with long comments so if you write a comment and it doesn't appear, please follow up with a short note and Joseph or I will check the filter.

Sorry for the inconvenience.

Jonathan Chait disapproves of a liberal journalist's flip-flop on unions

In today's TNR:

New York has a mordantly funny piece about the effort by staffers at Harper's to unionize. The saga begins with gross mismanagement by owner Rick MacArthur, spurring the staff to organize. Then the left-wing MacArthur started to act a lot like a union-crushing boss.

I have a bit more sympathy for MacArthur. He's in a difficult situation trying to save a tremendously worthwhile institution. I tend to be very union-friendly but the situation can get murky when the business in question really is struggling to survive, not just making a play for sympathy. Given that my only source of information is the gossipy and badly written New York piece, it's difficult to assign much blame.

Besides, it's not like he attacked a fundamental role of unions like the right to protect their employees from unfair termination.

Mortgage Questions

This post had a very perceptive take on a question from Megan McArdle:

McArdle: “Let’s turn it around,” I asked. “What if the bank decided that it wanted to exercise the same sort of option?…What if the bank foreclosed on your house, even though you made the payments, because it figured it could make more money taking the house and selling it?” (Not a likely scenario, I know, but a useful thought experiment.).

Response:

Banks exercise the same sort of option all the time when they resell mortgages (and hopefully notes!) from one entity to another entity. That’s the problem we have right now, that this reselling option banks use was so sloppy it’s tearing up the economy.

This is why if you are the type of person who thinks markets self-regulate through consumer demand and reputation there’s a major problem, as consumers have no choice over their mortgage servicer. If you don’t like your servicer, and refinance your mortgage with another bank, that bank can still sell off your mortgage and you can still end up serviced by the same institution.

I never quite thought of the decision to resell mortgages in this light, but this is a remarkably good point. It's not quite the same scenario as "seize the house" (which I think was the actual tactic that McArdle had in mind) but it certainly does put the decision to resell mortgages in perspective.

In a more pragmatic light, the decision to try and do regulation by reputation (long a bad idea) has even less relevance in the modern world. First of all, job tenures at banks may be quite short so the people making decisions that undermine a firms reputation may be elsewhere at the end of this period. Second, firms themselves often vanish or are absorbed by other firms (consider Washington Mutual as an example). These features of the modern corporate environment make it difficult to use a reputation based system as the primary check on the system.

This is not to say that homeowners who are in default should be given free houses (I'd think that was obviously an incorrect conclusion) but rather that we should give the regulatory structure of banks some serious thought.

The Golden Globes as a collective action problem

Even by the standards of Hollywood awards, the Golden Globes was a largely pointless exercise, selected by small and lightly credentialed group of no particular standing. For awhile, it represented a small net positive for the industry -- it did generate publicity and the large number of categories meant that a lot of shows could add "winner of..." to their promotional material -- but eventually the meaninglessness, the poor choices and the suspicion that nominations were made based on who might attend the ceremony all pushed the Golden Globes into the liability category. This came to a head this year with multiple nominations for the Tourist, one of the worst-reviewed pictures of the season, and with a payola scandal.

I suspect that most of the industry would like to see the Golden Globes go away but here's where the collective action problem comes in. If everyone who disapproved would stop covering or attending the event, they could probably kill it in a year or two (I'm counting being bumped to E! as virtual death), but even the Globes' harshest critics haven't been able to go cold turkey. As long as the show is there, all the incentives on the individual level are lined up to keep the show going. The journalist who refuses to write about the nominations or the ceremony loses ground to competitors. The nominated star who boycotts the awards passes up publicity and may be seen as difficult to work with (a label that can devastate an actor's career).

There's something refreshingly trivial about Hollywood versus the Golden Globes, but it does raise an interesting point: just how embarrassing does a situation have to be for an industry to find a solution to a collective action problem? Apparently it need to be worse than having the host of a prime-time network awards show opening with jokes about the fact that the nominations are fixed.

School segregation

From Dana Goldstein:

American schools are more segregated by race and class today than they were on the day Martin Luther King, Jr. was killed, 43 years ago. The average white child in America attends a school that is 77 percent white, and where just 32 percent of the student body lives in poverty. The average black child attends a school that is 59 percent poor but only 29 percent white. The typical Latino kid is similarly segregated; his school is 57 percent poor and 27 percent white.

There are clearly some places that our current educational system could stand to be reformed. I would rather focus on issues like segregation and access rather than whether removing tenure would be a panacea.

h/t Tyler Cowen of Marginal Revolution

What can I say, I'm a sucker for a good Procrustes joke

Click for the full strip.

Academics

Female Science Professor has an absolutely delightful take down of a Andrew Hacker and his book:

My vote for the strangest part of the book is the paragraph in which the authors describe a "workingman" who "jumped on a subway track to rescue a child who tripped and fell." The workingman didn't think; he just did it. The authors posit that professors on that same platform would not have jumped on the track to save the child:

"We wonder if, had some professors been on the platform, would they have paused to ponder how John Stuart Mill might have parsed the choices?"

I wonder if that is a sane thing to wonder. Of course the professors would save the child. What better way to combine broader impacts, a synergistic activity, and outreach?

and

Similarly, what is your evidence for your contention that professors don't work as much as they say they do? This seems to be it: "A story is told of a classroom where all the students were busy scribbling as the professor droned on. All, that is, but one, a young woman in the back row, who wrote down nary a word. How so? She had with her the notes that her mother had taken for that class during her own student days." That's the evidence? A possibly apocryphal story?

and

For example, your book starts with the story of a candidate who, in his interview for a faculty position, makes it clear that he is not interested in teaching and is only interested in research. The fact that he was not hired indicates to me that the system worked well, yet you used this anecdote to illustrate your hypothesis that professors don't care about teaching and try to do as little of it as possible.

There are a lot more really good examples in this text, these were just my favorites. It is definitely worth an afternoon read.

Joe Gores wrote the best chimpanzee sex scene you'll ever read

That sounds like a joke (and a rather tasteless one given that Gores died this week). It's not. The scene occurs in the book Menaced Assassin and in the most unlikely of settings it goes from wrenching despair to a moment of extraordinary sympathy. It was, like much of Gores' writing sentimental, but it was always honest and hard-earned sentiment.

And damn, the man could write.

Continued (battery issues)

My first exposure to Gores was the short story "The Second Coming" about two hipsters who volunteer as witnesses to an execution, just for kicks. It was published in 1966 in a now forgotten men's magazine and was, in its way, as unlikely as that chapter in Menaced Assassin. There was no mystery -- the accused was guilty -- and no violence except for that mandated by the state, but like the chapter in Menaced Assassin, it will stay with you.

When relative rates are misleading

Mark points me to this article.

To me these effects are hard to interpret in terms of relative growth rates given that rich areas of the country remained richer (on average) than the poor areas of the country. Let us consider a thought experiment to see what I mean by the problem of relative rates.

One region, call it sunbelt, has income of $1,000 per capita and this income increases by $20 (2% growth per year).

Another region, call it rustbelt, has an income of $500 per capita which increases by $15 (3% growth per year).

Clearly the rustbelt region has better growth (in % terms) but has a lower growth in absolute wealth. Now let us presume that the absolute growth rates remained constant over a decade.

At the end, despite always having lower growth, sunbelt has $1,200 in income while rustbelt has $650 per capita. The relative difference is smaller (as 650 > 50% of 1200) but, in absolute terms, the people in sunbelt now make $550 per year more than the people in the rustbelt.

Are we sure that % growth rates are always the best metric of economic progress?

Quality journalism -- only available for a limited time

Mainly limited by the fact that it took me four days to get around to posting this:

"The Invention of Money" from This American Life

More thoughts on fluoride and lithium

Yesterday, Joseph posted his reaction to the possibility (discussed by Mike Moffatt at Worthwhile Canadian Initiative) of adding lithium to the municipal water supply of cities with low naturally occurring lithium levels. Joseph made some good points but I'd like to go a bit further, starting with the way the original question was stated:

How Much Would You Be Willing to Pay to Reduce Murders by 30%?

I don't have a problem with assigning a dollar value to a life when discussing policy (there's generally no alternative), but I think this is the wrong way of framing the problem for a number of reasons. We are talking about getting a drug to the relatively small portion of the population that needs it by giving it to everybody. There are other options for getting lithium to the people who need it. The water supply approach has the advantage of missing fewer people though not all (I suspect this will make some people, particularly the paranoid, switch to bottled water), but it comes with other concerns.

The obvious comparison here is with fluoride, a comparison that Moffatt himself makes here:

Will it work? I don't know. It seems like it would be worthy a pilot study or two. Although those levels of elemental lithium are believed to be safe, there may be side-effects we are not considering. There are ethical considerations as well, but it is hard to make a case that adding fluoride to the water supply is ethical but lithium is not - and we've been adding fluoride to drinking water for over half a century.

But there are at least two important differences between lithium and fluoride, and both differences have practical and ethical considerations.

First, tooth decay affects most people and virtually all children (whose health society has a responsibility to protect). There was no other practical way to get this treatment to everyone who needed it. Relatively few people need lithium treatment. As mentioned before, there may be other options for getting treatment to those people.

From an ethical standpoint, we are talking about exposing the majority of the population to a heightened level of a chemical that treats a condition that they don't have. This doesn't mean that adding lithium is a bad idea, but it is certainly possible to make an ethical case for fluoride that doesn't hold for lithium.

Add to that the concerns, noted by Joseph, over adding a mind-altering substance to a city's water supply. On the practical side, there have to be unexpected consequences (even with fluoride, there were enough minor side effects to reduce the level used). On the ethical side, you're adding a mind-altering substance to a city's water supply.

I don't know whether we should consider manipulating lithium levels, but I'm pretty sure we should start by acknowledging the complexity of the problem and taking a good look at the alternatives. Though much beloved by economists, this is one situation where "how much would you pay to..." is not going to cut it.

The middle of January and already in reruns -- Alice in Lawyerland

This post from Matt Yglesias on intellectual property (with additional comments by Joseph here), got me thinking about this post from a few months ago. I apologize for repeating myself, but this is one of my favorite examples of copyright hypocrisy:

Alice in Lawyerland: would the laws Disney lobbied for have prevented Disney from existing in the first place?


(disclaimer: I have cashed a number of royalties checks over the years so the following is obviously not an attack on the concept of intellectual property. I like royalty checks. I'm just worried about the consequences of taking these things to an extreme.)

In 1998, the Walt Disney company had a problem: their company mascot was turning 70. Mickey Mouse had debuted in 1928's "Mickey Mouse In Plane Crazy" which meant that unless something was done, Mickey would enter the public domain within a decade. This was a job for lobbyists, lots of lobbyists.

From Wikipedia:

The Copyright Term Extension Act (CTEA) of 1998 extended copyright terms in the United States by 20 years. Since the Copyright Act of 1976, copyright would last for the life of the author plus 50 years, or 75 years for a work of corporate authorship. The Act extended these terms to life of the author plus 70 years and for works of corporate authorship to 120 years after creation or 95 years after publication, whichever endpoint is earlier. Copyright protection for works published prior to January 1, 1978, was increased by 20 years to a total of 95 years from their publication date.

This law, also known as the Sonny Bono Copyright Term Extension Act, Sonny Bono Act, or pejoratively as the Mickey Mouse Protection Act,[2] effectively "froze" the advancement date of the public domain in the United States for works covered by the older fixed term copyright rules. Under this Act, additional works made in 1923 or afterwards that were still copyrighted in 1998 will not enter the public domain until 2019 or afterward (depending on the date of the product) unless the owner of the copyright releases them into the public domain prior to that or if the copyright gets extended again. Unlike copyright extension legislation in the European Union, the Sonny Bono Act did not revive copyrights that had already expired. The Act did extend the terms of protection set for works that were already copyrighted, and is retroactive in that sense.

Mickey had been Disney's biggest hit but he wasn't their first. The studio had established itself with a series of comedies in the early Twenties about a live-action little girl named Alice who found herself in an animated wonderland. In case anyone missed the connection, the debut was actually called "Alice's Wonderland." The Alice Comedies were the series that allowed Disney to leave Kansas and set up his Hollywood studio.

For context, Lewis Carroll published the Alice books, Wonderland and Through the Looking Glass, in 1865 and 1871 and died in 1898. Even under the law that preceded the Mouse Protection Act, Alice would have been the property of Carroll's estate and "Alice's Wonderland" was a far more clear-cut example of infringement than were many of the cases Disney has pursued over the years.

In other words, if present laws and attitudes about intellectual property had been around in the Twenties, the company that lobbied hardest for them might never have existed.

There's nothing unusual about a small company or start-up exploiting lapsed or unenforced copyrights to get a foothold. The public domain has long been fertile ground for stage companies, record companies, publishers, and producers of movies or radio and television; it's just been getting a lot less fertile lately.

More on Just Desserts

Matt Yglesias has a very good point:

And this is for good reason. It’s pretty clear if you read the paper that Mankiw doesn’t intend to be arguing for any really radical changes in the structure of American society. He wants to defend modern industrial capitalism, while bolstering the case for lower taxation of the rich and less generous spending on the non-rich. But think about his examples here. How is it that you can get rich writing books, making movies, designing MP3 players, or making TV shows? Well it’s thanks to statutory definitions of intellectual property. If the copyright on a book only lasted two years, JK Rowling wouldn’t be nearly as rich. If the inventor of the Xerox Alto owned some kind of perpetual right to the concept of a graphical user interface, Steve Jobs’ whole career would be unimaginable. And the firms involved in these industries are constantly “manipulating the system” of intellectual property to try to maximize their own advantage.

I think that this is a very astute point; the structure of modern intellectual property laws have made the creation of these goods very lucrative. But linking success to morality is a very tough proposition because most people who are very successful are going to benefit from favorable regulation (because in places where regulation is unfavorable, it ia harder to be a success).

Consider this small businessman in California (who has discovered that there is a tax for have retail hand scanners):

Then yesterday the bill arrived. Sure enough, the people of California had enacted a new tax on small business. $205 in my case, including $100 for existing and $105 for having a POS system with one barcode scanner. It's like a tax on progress, only applicable to forward thinking businesses that have migrated away from the inefficiency of the cash register. Want to raise state revenue? Require retail businesses to have a point-of-sale machine or pay a $205/year fine. At least then you'll have capital investments in equipment and services that lead to jobs and more tax revenue.



The bottom line is that politics in this state preclude tax increases and our state is tens of billions of dollars over budget. Conservatives decry tax increases while liberals won't budge on public services. This naturally results in the nickel and diming of small businesses. We don't have a union or trade group to defend us, so watch as our business fees silently rise 20%.

The merits of one specific tax may or may not be justified. But people can work hard at a socially productive activity and still end up with a marginal income due to the choices we make on how to tax and regulate business activity. We may have chosen the optimal levels of these things (anything is possible) but ascribing moral superiority to classes of people who manage to obtain favorable regulatory treatment does not appear to be ideal.

Hoisted from comments -- more on Mankiw's assumptions

David had this to say about my post critiquing the way Greg Mankiw and many other economist who defend the magic of the market don't spell out the highly restrictive assumptions they use in their arguments:

An often neglected aspect of these standard assumptions is that they are *sufficient* not necessary conditions. Perfect information, for example, might not exist, but that doesn't mean there won't be an equilibrium capturing all the potential gains from exchange.

These statements may well form a set of conditions that are sufficient but for the most part not necessary to support Mankiw's conclusions. You could say the much same foe some list of statements in most intellectually mature movements. With Mankiw, I'd go even further and say that if these statements don't have to be true; they just have to approximate reality to a sufficient degree in order to make his case.

But we're talking about something slightly but significantly different. In this context, these assumptions are part of the arguments that Mankiw is making. It is, of course, possible for invalid argumnts to lead to correct conclusions and you can have a trivially valid argument that starts with a false premise, but (putting aside those old logic lessons about the implications of the existence of unicorns) you can't have a valid and meaningful argument based on false assumptions.

It's important to put this in context. Mankiw is arguing that, in addition to being immoral, a return to Clinton era tax rates would cause a sharp drop in productivity and economic growth. It is possible that he's right, but there is considerable historical evidence and any number of counterarguments (many by Nobel Prize winners) that contradict his conclusions. Under those circumstances, I think the burden of proof should rest with the guy who's saying this time it will be different.

"The generosity collapse"

Frances Woolley has an interesting post on the nonlinear relationship between demand and charitable giving:

People give when they're asked.

Jim Andreoni and Justin Rao have proved it. They ran the following experiment: one person, the allocator, was given 100 'money units', worth $10 in real money. She was free to choose how much to keep for herself and how much to give to another person, the recipient. The recipient, however, had an opportunity to ask for a particular division of money - 50/50, say, or 30/70 or 60/40.

It turns out that people who ask for more get more - up to a point. When the recipient asks for, say, 70 percent of the money in the envelope, the allocator is quite likely to say "sorry" and give nothing. But a recipient who asks for a 50/50 split on average receives more than the recipient who asks for nothing.

I'm not entirely comfortable with the way Woolley generalizes these results (I suspect her conclusions are correct; it just feels like a bit of a jump getting there), but it's a thought-provoking piece with important implications.

And the fishing analogy is pretty cool.

If a PhD isn't worth it, you can always get a law degree

Fresh on the heels of this, Felix Salmon continues to be the world's most depressing guidance counsellor:

David Segal is the best writer on the NYT’s business desk, so it’s a good thing that he was chosen to pen today’s 5,000-word disquisition on the economics of law degrees. He’s taken a particularly dry subject and turned it into a compelling and accessible read; that’s no mean feat.

At the heart of the article is law schools’ bait-and-switch operation: universities rake in millions of dollars in tuition fees from students who are given to understand that a well-paid job lies waiting for them upon graduation. But such jobs are hard to find and precious few law graduates will ever waltz straight into a $160,000-a-year Biglaw job, especially if they graduate from a non-top-tier school.

Yes, they really are looking at you

This is why it's creepy to serve the whole fish.



Thanks to Andrew Gelman for this cautionary tail.

Andrew Gelman on the methodological attribution problem

Andrew Gelman has a post in which he brings up the following insight:

This sort of thing comes up a lot, and in my recent discussion of Efron's article, I list it as my second meta-principle of statistics, the "methodological attribution problem," which is that people think that methods that work in one sort of problem will work in others.

I think that this concern is especially key for scientists who are moving between fields. The ideas and techniques in my field have been honed to a fine edge dealing the types of biases and design issues that often occur in our problems. I focus a lot on issues like "confounding by indication" and a lot less on other issues that can be very important in other fields. If I moved to another field, say economics, I might easily focus too much on small points (that really are not an issue in economics research) and yet miss the major points in the field. This type of translation issue is not inevitable but it is worth keeping in mind.

Lithium in the water supply

There is an interesting post over at Worthwhile Canadian Initiative on whether to add Lithium to the water supply:

A city with no-to-little elemental lithium would need to add 70 micrograms/L of elemental lithium to the water supply. Since we're adding lithium carbonate (not pure lithium), we would need roughly 200 micrograms/L. (For reference, there are a million micrograms in a gram).

The average Canadian domestic user uses just over 100,000 L of water a year (Source). At 200 micrograms/L, we would need to add roughly 20 grams per person of lithium carbonate for a total cost of $1.53 per person, or $153,000 per 100,000 people.

The city of Toronto has 3.3 murders/100,000 people (Source). A 30% reduction in this rate would lower it by 1 murder per year per 100,000 people. If our rough back-of-the-envelope calculations are correct and the lithium carbonate method works like the Texas study suggests, $153,000 buys us one less murder. That does not take into account the reductions in rapes, suicides, drug use or thefts.

Will it work? I don't know. It seems like it would be worthy a pilot study or two. Although those levels of elemental lithium are believed to be safe, there may be side-effects we are not considering. There are ethical considerations as well, but it is hard to make a case that adding fluoride to the water supply is ethical but lithium is not - and we've been adding fluoride to drinking water for over half a century.

My first reaction is to note that Lithium is clearly a mind-altering drug and there does seem to be a basic principle that adding mind altering drugs to the water supply is a generally bad idea. Heck, the theme of the Firefly movies (Serenity) was all about a plan like this going very, very wrong. Or, more realistically, one could easily imagine the addition of sedatives to the water as being a response to political unrest (and this would also reduce the murder rate).

Furthermore, the original (ecological) study in Texas was based on naturally occurring Lithium in the water. This brings up two questions to me:

1) Is the distribution of Lithium independent of the characteristics of the inhabitants? This is necessary to make sure that this is not a confounding effect, of some kind (another way to say the same thing is whether water supply is a valid instrument for an instrumental variables analysis).

2) Is the causal agent lithium, or is it another substance that is associated with Lithium?

It is a complex question but it is very effective at making us evaluate our intuitions on public health intervention. Go read . . .

Google -- Over-spammed or over-engineered (or both)?

Brad DeLong points to a couple of posts on the declining quality of Google searches. Jeff Attwood concisely sums up the central point:

People whose opinions I respect have all been echoing the same sentiment -- Google, the once essential tool, is somehow losing its edge. The spammers, scrapers, and SEO'ed-to-the-hilt content farms are winning.

This is certainly right as far as it goes, but the Google searches that annoy me the most are the ones where Google decides I don't want what I just asked for, sometimes even ignoring quotation marks. For example, if you query "jeff bridges true grit", about a third of the results on the first page don't contain the string "jeff bridges true grit". This is an unlikely example but I've frequently found myself looking for an obscure search term that was similar to something popular. The results were unspeakably aggravating.

The great irony here is that by taking control away from the searchers, Google is making search engine optimization easier. If you really want to screw with the people trying to reverse engineer your algorithms, make the searches more interactive. If Google let us tune our searches with dials that changed the weights of parameters such as word order or proximity of words in our search, the results would be less annoying for us and more annoying for the SEO people.

'Standard' does not mean 'sound'

Eric Schoenberg is raising some important points:

[Greg] Mankiw concisely summarizes the theory underlying the ethical argument for market capitalism: "under a standard set of assumptions... the factors of production [i.e., workers] are paid the value of their marginal product... One might easily conclude that, under these idealized conditions, each person receives his just deserts." Mankiw's long-standing opposition to higher taxes on the wealthy suggests that he thinks these conditions usually pertain in the real world, too.

Consider me skeptical. The list of "standard assumptions" open to question is long... I believe, progressives must directly challenge the claim that unfettered markets create just deserts. This won't be easy. Free market fundamentalists have the advantage of a simple message -- ending bailouts will deliver just deserts -- and of nearly limitless funds from rich folks who benefited from the bailout but are happy to claim that it should never happen again.

Mankiw's assumptions may all be correct, but they are not all self-evident. Some are at odds with experience. Some are in conflict with findings from related fields like psychology and behaviorial economics. Some are just hard to buy. These are the kind of assumptions that need to be stated and supported.

As mentioned before, the way language is used in the debate compounds the problem. The 'free-market fundamentalists' (to use Schoenberg's phrase) often affect a folksy, plain-spoken tone. They make common-sense statements like "people are rational" or "people respond to incentives." They generally don't add that they are using these terms in a technical, highly specialized sense.

Damned Canadian Show-offs

From the aforementioned paper by Lane Kenworthy:

At the risk of repeating myself, if we want to use the experiences of other countries to help us improve our education system, the first place we should look is probably Canada, even if those experiences don't support the conventional wisdom.

"Two and a Half Cheers for Education"

I've only had a chance to briefly skim this paper by Lane Kenworthy, so I can only give it a so-far-so-good recommendation, but what I've seen definitely looks interesting.

Here's a taste:

Some home environments are less helpful to children's development than we would like them to be. Schools tend to do better. Evidence on this in the U.S. context comes from the natural experiment that is summer vacation. During those three months out of school, the cognitive skills of children in lower socioeconomic status (SES) households tend to stall or actually regress. Kids in high-SES households fare much better during the summer, as they are more likely to spend it engaged in stimulating activities. Cognitive psychologist Robert Nisbett concludes that "much, if not most, of the gap in academic achievement between lower- and higher-SES children, in fact, is due to the greater summer slump for lower-SES children."

This is relevant also for inequality of opportunity. Some argue that
schools actually worsen inequality, because children from high-income households benefit more than their less advantaged counterparts, thereby widening the disparity. As the evidence from summer breaks attests, that is wrong. Without schools the gap in cognitive and noncognitive abilities almost certainly would be greater. Though they can't possibly produce full equalization, schools do help to equalize.

To get a fuller picture of this phenomena, listen to this segment on the Harlem Children Zone's Baby College from This American Life.


Thanks to Mark Thoma for the link.

Political rhetoric and political violence -- the McKinley Assassination

William Randolph Hearst was relentless in his attacks on President McKinley. When the president was assassinated, those attacks had consequences:

Hearst Burned in Effigy

The publisher learned of the shooting in Chicago and said quietly to editor Charles Edward Russell of the American, "Things are going to be very bad." All of his papers took a sorrowful, solicitous, hopeful stance while waiting for news of McKinley's fate. When the president died, Hearst's enemies reprinted the cartoons, the poem, and the editorial that seemed to incite assassination. It was widely believed that Czolgosz was carrying a copy of the Journal in his pocket when he shot the president, but that story is apocryphal. Nonetheless, the Hearst papers were widely boycotted, and their publisher was burned in effigy along with anarchist Emma Goldman, whose lecture Czolgosz cited as his true inspiration for the assassination. Hearst punished none of the writers or cartoonists but soon changed the name of the Journal to the American. A cloud hovered over his empire for about a year, but by 1902 he was popular enough to win election to the House of Representatives from New York.

We'll have to wait to see if there will be any real consequences for this.

Dark days

In Arizona this morning:

Rep. Gabrielle Giffords (D-AZ) has reportedly been shot in the head at point blank range at an event in her district.

The incident took place in the parking lot of Safeway in Tuscon where Giffords was hosting a "Congress on Your Corner" event. The first 911 call came in at 10:11 local time, according to the Pima County sheriff's office. Local news confirmed that there were 5 dead at 3:34 ET. In a 4:00 ET press conference, UMC trauma surgeon Peter Rhee confirmed that they had received a total of 10 victims, one of whom had died, five of whom were in surgery and 5 of whom were in critical condition. Giffords, he said, was shot once in the head "through and through" but was responding to commands and had made it through surgery. Rhee said he was optimistic that she could recover.

The deceased victim at UMN, Rhee said, was a child.

Also from Talking Points Memo:

A federal judge was killed in the same incident in which Rep. Gabby Giffords was shot on Saturday morning.

A federal law enforcement official first confirmed to TPM that a federal judge was shot. The U.S. Marshals Service is on the scene of the shooting, the federal official told TPM. The Marshals Service employees responded to the scene after the shooting, the official said.

WNBC reporter Jonathan Dienst confirmed Roll was killed. A statement from Homeland Security Secretary Janet Napolitano said in a statement that Roll had been attacked.

Roll faced death threats in 2009 after presiding over a $32 million civil-rights lawsuit, the Arizona Republic reported:

When Roll ruled the case could go forward, Gonzales said talk-radio shows cranked up the controversy and spurred audiences into making threats.

While we're doing "then and now"

Back in June, 2009, this is how Edward L. Glaeser felt about the bailouts:

Since the collapse of Lehman Brothers, the public sector has spent billions saving the banks. While these decisions are certainly debatable, they are understandable. The US financial industry misbehaved badly,... but it is still a sector with a future. ... After all, every other sector in the economy depends on banks for their financing.

But what about cars? ... Does anyone, other than GM's management, believe that this company can come back? The current treatment, cash infusion and a reduction in corporate liabilities, provides a solution for a company that is broke, not for one that is broken.

The future of the financial sector is looking pretty scary these days. How about the auto industry and GM in particular?

Although the transformation has been a long time coming, Ford and the rest of the domestic auto industry appear to be finally giving up their addiction to gas-guzzling trucks and sport utility vehicles. Prodded first by rising federal fuel economy standards, then shocked in 2008 by $145-a-barrel oil and a global credit crisis that forced General Motors and Chrysler to seek federal bailouts, Detroit is making a fundamental shift toward lighter, more fuel-conscious cars — and turning a profit doing so.

Lone star, bad portents

Then:



Now (from Paul Krugman):

These are tough times for state governments. Huge deficits loom almost everywhere, from California to New York, from New Jersey to Texas.

Wait — Texas? Wasn’t Texas supposed to be thriving even as the rest of America suffered? Didn’t its governor declare, during his re-election campaign, that “we have billions in surplus”? Yes, it was, and yes, he did. But reality has now intruded, in the form of a deficit expected to run as high as $25 billion over the next two years.

And that reality has implications for the nation as a whole. For Texas is where the modern conservative theory of budgeting — the belief that you should never raise taxes under any circumstances, that you can always balance the budget by cutting wasteful spending — has been implemented most completely. If the theory can’t make it there, it can’t make it anywhere.

How bad is the Texas deficit? Comparing budget crises among states is tricky, for technical reasons. Still, data from the Center on Budget and Policy Priorities suggest that the Texas budget gap is worse than New York’s, about as bad as California’s, but not quite up to New Jersey levels.

The point, however, is that just the other day Texas was being touted as a role model (and still is by commentators who haven’t been keeping up with the news). It was the state the recession supposedly passed by, thanks to its low taxes and business-friendly policies. Its governor boasted that its budget was in good shape thanks to his “tough conservative decisions.”

Oh, and at a time when there’s a full-court press on to demonize public-sector unions as the source of all our woes, Texas is nearly demon-free: less than 20 percent of public-sector workers there are covered by union contracts, compared with almost 75 percent in New York.

So what happened to the “Texas miracle” many people were talking about even a few months ago?

Part of the answer is that reports of a recession-proof state were greatly exaggerated. It’s true that Texas job losses haven’t been as severe as those in the nation as a whole since the recession began in 2007. But Texas has a rapidly growing population — largely, suggests Harvard’s Edward Glaeser, because its liberal land-use and zoning policies have kept housing cheap. There’s nothing wrong with that; but given that rising population, Texas needs to create jobs more rapidly than the rest of the country just to keep up with a growing work force.

And when you look at unemployment, Texas doesn’t seem particularly special: its unemployment rate is below the national average, thanks in part to high oil prices, but it’s about the same as the unemployment rate in New York or Massachusetts.

What about the budget? The truth is that the Texas state government has relied for years on smoke and mirrors to create the illusion of sound finances in the face of a serious “structural” budget deficit — that is, a deficit that persists even when the economy is doing well. When the recession struck, hitting revenue in Texas just as it did everywhere else, that illusion was bound to collapse.

The only thing that let Gov. Rick Perry get away, temporarily, with claims of a surplus was the fact that Texas enacts budgets only once every two years, and the last budget was put in place before the depth of the economic downturn was clear. Now the next budget must be passed — and Texas may have a $25 billion hole to fill.

As a native of the Lone Star state (now happily on the West Coast), I've got to go with General Sheridan on this one.

Defining Denominators

Via Mark Thoma, I discovered this very interesting article looking at group of gross domestic product by working age population (WAP):

When one looks at GDP/WAP (defined as population aged 20-60), one gets a surprising result: Japan has actually done better than the US or most European countries over the last decade. The reason is simple: Japan’s overall growth rates have been quite low, but growth was achieved despite a rapidly shrinking working-age population.

The difference between Japan and the US is instructive here: in terms of overall GDP growth, it was about one percentage point, but larger in terms of the annual WAP growth rates – more than 1.5 percentage points, given that the US working-age population grew by 0.8%, whereas Japan’s has been shrinking at about the same rate.

Another indication that Japan has fully used its potential is that the unemployment rate has been constant over the last decade. By contrast, the US unemployment rate has almost doubled, now approaching 10%. One might thus conclude that the US should take Japan as an example not of stagnation, but of how to squeeze maximum growth from limited potential.

This is a very good illustration of how important it can be to understand the structure of a population under study. I don't know if the proposed metric is the most relevant metric for the phenomenon under study but it's sure interesting how it completely changes the interpretation of the result. That could have very profound policy results when we consider questions like "would it be a bad thing to emulate Japan's industrial policy?".

Rajiv Sethi was there first

While going through the comment section of this post by Tim Duy, I was reminded that Rajiv Sethi was talking about broadcast HDTV long before the rest of us and was doing a remarkably thorough job of it.

Earnings of Post-Docs

Felix Salmon links to this post from the Economist and extracts this rather amazing statistic:

In Canada 80% of postdocs earn $38,600 or less per year—the average salary of a construction worker.

Mark has previously quoted from the same post. But I do think that post-doctoral training is a very interesting place to look at; the PhD program is educational and credentialing in a way that the post-doctoral process is not. In a sense, a PhD student is being partially compensated by acquiring their degree, which in theory can open up many career options (only some of which are academic). But a post-doctoral fellow is focused entirely on academics. So long as the success rate among post-doctoral fellow is high, the post-doc can be considered to be an internship. But if the success rate gets too low then the issue of exploitation comes up.

On the other hand, if the post-doctoral fellowship is a time of enrichment and job satisfaction is very high then maybe it is okay. I'm sure I would prefer to be a post-doc than a construction worker, myself. It's a tough issue . . .

Research Plans

In the comments to this post, PhysioProf draws a very interesting distinction:

You know all the people at Drugmonkey’s blog and Writedit’s blog who are constantly ranting and raving about how their science is so totally awesome and there must be something NEFARIOUS AND UNFAIR going on in study sections that fail to fund their MAGNIFICENT AND BOLD GROUNDBREAKING RESEARCH? Those people fail to distinguish between appropriate design of their actual research programs and appropriate crafting of a fundable grant application, taking account of their career stage and prior accomplishments. If they keep willfully ignoring this distinction, they are going to keep failing to secure NIH funding.

I think that this is correct, even if I don't especially like the reality of it. Scientific writing is based on a very stylized approach and it makes sense to learn the rules of how to communicate effectively in this medium. It's also true that one needs to put forth a plan that is realistic in a grant proposal. I don't think anybody was ever admonished for accomplishing more than they expected in a research plan.

The hardest thing I am finding in year one of the tenure track position is rescaling the speed at which I can do things. I was a very fast post-doctoral fellow and I could do an amazing amount by just working insane hours. But training junior graduate students takes a lot of time and I find my net productivity is dropping as I focus on training (well, designing courses isn't helping either). So I am sympathetic to the NIH wanting to see realistic goals for a research grant.

But I really liked the clear distinction that was being made between the two processes . . .

The Scalar Fallacy

Sometimes the things that give us the most trouble are most obvious. When something is completely self-evident, it can be difficult to wrap your mind around it and think through its implications. Important points can be mistaken for tautologies (and vice versa) and when you try to work through the questions with essays or conversations, you often find yourself feeling pretentious and, for lack of a better word, silly.

Here's an example: neither vectors, random variables nor vectors of random variables are scalars. This statement is obvious to anyone familiar with the basic terms. Equally obvious is the fact that when you try to represent one of these complex, multidimensional creatures as a point on a line, you will invariably lose some information.

The implications of these points, however, are often not obvious at all.

We have to assign scalars to things all the time because, among other reasons, scalars are the only things we can rank. Any time you want to decide what's the best _____ (car, job offer, candidate), you have to start by assigning _____ a scalar. You can do this by finding a proxy that's already a scalar (like the answer to a survey question) or by using a function of the vector. Simple examples include taking the sum or the sum of the squares or the average or the maximum value. (I'm going to limit this to vectors from here on but everything should generalize to random variables and vectors of random variables fairly easily.)

But, though we have to do it all the time, no one has ever found a perfect way of assigning scalars to vectors and no one ever will. This isn't pessimism; it's mathematics. You lose information when you go from a vector to a scalar. That loss means you have to be careful about contextual questions like range of data. Though there may be a few cases where we can derive the scalars from first principles, we generally have to arrive at the assignments through experimentation. We find methods that have produced useful metrics in previous situations. Unfortunately, when you move out of the range of data you encountered in those previous situations or when you otherwise find yourself in a new context, the information you could safely omit before becomes essential and the metric that has done such a good job up till now suddenly becomes worthless.

Here are a couple of examples:

A "rate your experience" question might do a good job comparing the impact of bad beverage service versus that of short delay in take-off but it will probably not do a satisfactory job comparing a forced landing and a seven hour stay on the tarmac on a hot summer day . These events fall outside the range of data the question was developed for.

A weighted average of nutrients might provide a good way of ranking most of the foods you find in the produce aisle. In the context of comparing different fruits and vegetables found in your neighborhood grocery store, you might be able to get by assuming a linear relationship between the amount of certain nutrients and healthiness. If, however, you move to the context of the dietary supplement aisle, making that linear assumption about certain nutrients can be dangerous, even deadly. Having a bottle of iron supplement pills for lunch is an extraordinarily bad idea.

These are relatively simple examples but think about all the unspeakably complicated things like happiness that people routinely discuss as if they were scalars -- "people in group A were 42% happier than people in group B." Worse yet, many researchers insist on pushing these scales to ludicrous extremes, using the same metrics to measure the impact of everything from trivial lifestyle changes to the birth of a first child. (How this affects theories like rational addiction is a subject for another post.)

Perhaps even more important than being context-specific, the scalars we assign to vectors are generally question-specific. Take the example of health. There's no meaningful way to boil this complex, multidimensional concept down to one number, but we can come up with scalars that are useful when answering certain questions. Let's say we have formulas for deriving two metrics, L and Q. L correlates very well with longevity; Q correlates very well with quality of life. For most questions about health policy, you will get similar answers with either metric, but there are cases where the two diverge sharply. Both L and Q are good measures of health, but their usefulness depends on the question you need answered.

Part of the blame for the tendency to take scalars as ideal representations of vectors rests with the "magic of the market" faction of economists and their camp followers. Markets are basically in the scalarizing business and under the proper conditions they do a pretty good job. It's easy to see how researchers grew enamored with markets' ability to set prices in such a way that resources are effectively allocated. It is a remarkable process.

But as impressive as markets are, they still are not exempt from the laws of mathematics and the limitations listed above. Prices are scalars assigned the values of things. They generally provide us with an excellent tool for prioritizing purchases and production but when you start to think of the scalars as actually being the vectors they represent, your thinking becomes sloppy and you open yourself up to dangerous mistakes.

"Why doing a PhD is often a waste of time"

Via Felix Salmon, there's a bleak but informative article in the Economist on the PhD glut. Here's a sample:

For most of history even a first degree at a university was the privilege of a rich few, and many academic staff did not hold doctorates. But as higher education expanded after the second world war, so did the expectation that lecturers would hold advanced degrees. American universities geared up first: by 1970 America was producing just under a third of the world’s university students and half of its science and technology PhDs (at that time it had only 6% of the global population). Since then America’s annual output of PhDs has doubled, to 64,000.

Other countries are catching up. Between 1998 and 2006 the number of doctorates handed out in all OECD countries grew by 40%, compared with 22% for America. PhD production sped up most dramatically in Mexico, Portugal, Italy and Slovakia. Even Japan, where the number of young people is shrinking, churned out about 46% more PhDs. Part of that growth reflects the expansion of university education outside America. Richard Freeman, a labour economist at Harvard University, says that by 2006 America was enrolling just 12% of the world’s students.

But universities have discovered that PhD students are cheap, highly motivated and disposable labour. With more PhD students they can do more research, and in some countries more teaching, with less money. A graduate assistant at Yale might earn $20,000 a year for nine months of teaching. The average pay of full professors in America was $109,000 in 2009—higher than the average for judges and magistrates.

Indeed, the production of PhDs has far outstripped demand for university lecturers. In a recent book, Andrew Hacker and Claudia Dreifus, an academic and a journalist, report that America produced more than 100,000 doctoral degrees between 2005 and 2009. In the same period there were just 16,000 new professorships. Using PhD students to do much of the undergraduate teaching cuts the number of full-time jobs. Even in Canada, where the output of PhD graduates has grown relatively modestly, universities conferred 4,800 doctorate degrees in 2007 but hired just 2,616 new full-time professors. Only a few fast-developing countries, such as Brazil and China, now seem short of PhDs.

Correction

I was wrong when I said industry watchers had been incorrectly announcing the death of network television for over thirty years.

I should have said over forty years:

An awestruck audience at the 1970 CES loved the VCR's convenience -- but Hollywood battled back, warning that piracy would run rampant and kill network television.

Definition of the Day

I hear a lot about "rent-seeking" and have been looking for a very straightforward definition. This is one from Maxine Udall:

The excess of profits over what they would be in a competitive market is called economic rents.

Actually, search engines are like bananas

And Google is like either the the Gros Michel or the Cavendish, but that's a picky complaint (I used to teach SAT prep classes) and it's the only problem I have with Felix Salmon's sharply-written and insightful discussion of the dangers of monoculture:

How Google is like bananas

Definitely worth a look.

Incentives, the TSA, and a question for Tyler Cowen

Tyler Cowen has a post up looking at a Washington Post article on airports considering private options to the TSA. The underlying assumption here is that competition will improve service and satisfaction but neither Cowen nor the Post writer address the big question:

Why should market forces act differently on security than they did on the rest of the industry?

From the moment you miss the shuttle to the long wait for your bags to come down the conveyor belt, air travel may provide the worst customer experience of any major industry. It's true that introducing market-based incentives a few years helped give us cheap flights (though I don't know enough about the underlying economics to say whether they actually bent the curve), but it did nothing to improve a system that was inconvenient, poorly designed and indifferent to the needs (not to mention feelings) of passengers -- pretty much the same problems that market forces are supposed fix in airline security.

In most industries, competition forces players to maintain reasonable customer service and to come up with customer-facing innovations, but only because almost all of the customers can easily choose between different products offered by different sellers. Cars are a good example.

Three years ago, I bought my first new car, a Nissan Altima hybrid. It had been about a decade since I had bought a car and I was amazed by the innovations that were available in mid-priced autos. Some of the innovations were impressive from a technological standpoint like regenerative braking and continuously variable transmission (the first automatic transmission I actually enjoyed driving), others were just well designed like dual climate controls and cleverly arranged storage compartments, but all were indicative of tremendous effort and ingenuity focused on providing me with a car I would like to own.

Nissan invested all of this into my car because they knew that Toyota and Ford and Volkswagen and a number of other companies also made cars I would like to own, just as the dealers I bought the car from knew that other dealers also carried the make and model I wanted.

Market forces don't address every potential automotive concern. There are externalities and asymmetries of information to be taken into consideration but putting those aside, competition has done a great job. The auto industry has produced a stream of innovative, appealing products because the makers and the dealers both know that I have plenty of choices.

But what would happen if customers were frequently forced to buy one particular make and model and having a choice in dealers might mean going a hundred miles out of your way? Then the automotive industry would probably look a lot like the air travel industry.

There are major constraints on where you can build an airport. Even if you put aside safety and environmental concerns, there are limits to how many airports an area can support. At the risk of stating the obvious, every flight is associated with two of these airports and your flying options are based on the worse of the two. For example, I'm based in L.A. My co-blogger, Joseph, teaches in a college town in the Southeast. I have an unusually large selection of airports, including LAX which, as far as I know, is serviced by all the major carriers, but if I want to do a face to face collaboration with Joseph I have to fly Delta because that's the only major airline that services his airport.

For the majority of itineraries, passengers have little choice as to airports and often as to airlines (market forces exert enough pressure on airlines to give a reputation for good customer service some value -- look at Southwest -- but not enough to make it standard -- look at almost everybody else). This lack of choice greatly limits the pressure market forces can exert on airport-based services. How many people would drive an extra hour or two (we're talking about a round trip) to save a few minutes in the security line and to have access to a better food court?

If anything, competition will do less to improve customer satisfaction with security than it will with the rest of the services airports provide. Whether done by the TSA or private firms, the basic procedures remain the same and it's the procedures that have people upset.

Of course you might get people driving out of their way to avoid things like full body scans, but that's an entirely different discussion.

Maybe they're sneaking across the border to have their car accidents

Over at The Incidental Economist (with a h/t to Prof. DeLong), Aaron Carroll looked into a familiar health care meme:

Based on the comments I’ve seen over the last week, many of you are still going with that well used meme in the health care debate that people in other countries – frustrated by wait times and rationing – come to the United States for care. These are almost always anecdotal stories and you should know by now how much stock I put in anecdotes.

As always, when we can we should turn to evidence and research, and on this topic it does exist. The most comprehensive work I’ve seen on this topic was published in a manuscript in the peer-reviewed journal Health Affairs. That study looked at how Canadians cross the border for care. Most anecdotes involve Canadians, since it’s easy for those on the border to come here. And, the authors used a number of different methods to try and answer the question*:

1) First, they surveyed United States border facilities in Michigan, New York, and Washington. It makes sense that Canadians crossing the border for care would favor sites close by, right? It turns out that about 80% of such facilities saw fewer than one Canadian per month. About 40% saw none in the prior year. And when looking at the reasons for visits, more than 80% were emergencies or urgent visits (ie tourists who had to go to the ER). Only about 19% of those already few visits were for elective purposes.

2) Next, they surveyed “America’s Best Hospitals”, because if Canadians were going to travel for care, they would be more likely to go to the most well-known and highest quality facilities, right? Only one of the surveyed hospitals saw more than 60 Canadians in one year. And, again, that included both emergencies and elective care.

3) Finally, they examined data from the 18,000 Canadians who participated in the National Population Health Survey. In the previous year, only 90 of those 18,000 Canadians had received care in the United States; only 20 of them had done so electively.

Education thought for the New Year

Here is a point from Matt Yglesias:

I think the evidence suggests that one of the most important skills people learn (or don’t) in school is self-discipline rather than specific knowledge. I don’t think learning the chronology of ancient near eastern empires (Sumeria then Assyria then Babylonia then Persia then Greece then Rome) in elementary school has ever been useful to me, or even that the chronology I learned is especially accurate, but a lot of life involves semi-arbitrary tasks and it’s worth one’s while to get used to performing them.

Going down this path would suggest that a lot of curriculum might be made optional and teachers might be able to focus on what they love (and are best at inspiring the students they teach). This could be another reason why approaches like the "Freedom Writers" could still have decent results despite completely ignoring the normal educational programme.

Unemployment

A new post by Mark Thoma fits in, I think, with recent thoughts about minimum wage. It is true that, as the time of unemployment increases, some workers will find jobs that are vastly inferior (but way better than nothing). This suggests that the unemployment rate will become a less and less reliable marker of the strength of the economy.

Now, it might be true that some of this could be an unrealistic expectation of compensation on the part of workers who had unusually good jobs during the past expansion. But I note that the financial industry (apparently where the recession began) is not necessarily hurting:

"Wall Street earned $21.4 billion during the first three quarters of 2010," Comptroller Tom DiNapoli said.

"While much less than last year's record of $61.4 billion, which was fueled by federal assistance, the securities industry is on track in 2010 for the second-highest level of profitability on record," he said.

So I think we should be sceptics about narratives that include the need for "shared sacrifice" from all segments of society. I do note that the idea that last year's record profits where fuelled by government assistance ironic given the concerns over matters like pay forK-12 teachers. I don't have a good road map forward except to note that simple solutions and metrics seem unlikely to be helpful under these conditions.

Old School versus New School RPGs

A very perceptive quote on the difference:

Old School is about saying smart things, New School is about rolling hot dice. They cannot get any more different than that. In Old School you succeed or fail based on your ability to make clever inferences about the game world and/or say things which count as clever within the context of that world. But it's basically a test of the cleverness of the player. New School, on the other hand, is a test to see whether you can roll high. If you roll high, you win. Those are very different games.