Give Peaceful Resistance a Chance

New York Times opinion "Give Peaceful Resistance a Chance" (March 9th, 2011) offers insight into part of an economist's raison d'être. The article by Erica Chenoweth, a Professor of Government at Wesleyan University, misunderstands heterogeneity in revolutionary starting conditions. Her claim:

Unfortunately for the Libyan rebels, research shows that nonviolent resistance is much more likely to produce results, while violent resistance runs a greater risk of backfiring.

To back up this statement, she claims that:

Indeed, a study I recently conducted with Maria J. Stephan, now a strategic planner at the State Department, compared the outcomes of hundreds of violent insurgencies with those of major nonviolent resistance campaigns from 1900 to 2006; we found that over 50 percent of the nonviolent movements succeeded, compared with about 25 percent of the violent insurgencies.

Why is this bad research? Because not all revolutions have the same starting conditions. Imagine a world in which there exist dissidents who optimally choose between armed rebellion and peaceful protesting. These dissidents know the government they face and the probability of success of a given venture. Then the observed probability of failure for armed revolution may be higher than of peaceful protest even when both were always chosen optimally. To understand why Chenoweth and Stephan get the results they do, observe the following conjecture in figure form (click to enlarge).

A rational rebel will take the upper envelope of these two decisions. If this is the case, then we will see violent revolutions under oppressive regimes that generally fail, and peaceful protest under non-oppressive regimes that generally succeed. There will be no Ghandi's under Hitlers, Stalins, and Mussolini's. Ghandis can only be successful under men who are inherently peaceful when others are peaceful with them, such as Churchill. Similarly, it may often be difficult for Malcolm X's or The Weathermen to succeed in vastly less oppressive societies, where hoses and dogs rather than machine guns and concentration camps are used to control protest. They are unable to gain the sympathies of the populace. Martin Luther Kings are better suited for the United States than the Malcolm Xs or Bill Ayers of the world.

It is no coincidence that Bill Ayers changed from attempting to bring down the United States by armed rebellion to bringing it down from within--he reoptimized.

The conclusions Chenoweth attempts to draw are faulty due to sample selection.  Armed rebellion may be more likely to succeed conditional on the situation but less likely to succeed when looking at the unconditional success rate.

Case of soup-kitchen thief fuels critics of three-strikes laws

Christian-Science Monitor article "Case of soup-kitchen thief fuels critics of three-strikes laws" (August 19th, 2010) discusses California's three-strikes law, a law that requires an individual be sentenced to life imprisonment after being convicted of three felonies. It leaves relatively undiscussed the statistical reasons for such a law.

Los Angeles Superior Court Judge Peter Espinoza said Taylor’s sentence was one of many third-conviction cases that brought “disproportionate” sentences and “resulted in, if not unintended, then at least unanticipated, consequences.”

[...]

But stories like Taylor’s are useful in illustrating the problems behind the law's implementation, says Ms. Levinson. The challenge for critics will be trying to prove that society does not benefit from decades-long or even life sentences for nonviolent – or at least not serious – crimes.

Corrections suggests that it may make sense to permanently incarcerate individuals who have been convicted of only minor crimes previously, because the likelihood that they have committed unobserved and serious crimes is high. It's worth noting that, truncating the distribution of claims at the 90th percentile, burglars appear to commit about 38.1 burglaries per year (Visher 1986, reported by NSW Bureau of Crime Statistics and Research). The Senate Congressional record from 2004 indicates that rapists commit between 8 and 10 rapes on average, before being caught (Congressional Record, page 22999). Car Thieves in England appear to steal 45 cars before they're 18, and 94 when they're older (Car Theft: The Offender's Perspective, Light, Nee and Ingham, 1993, page 11). Between 545 and 707 metric tons of cocaine was shipped toward the United States in 2007. Two-hundred and fifty-nine metric tons were caught by U.S. authorities, either internally, at arrival zones, or in transit. Given the discrepancy, Corrections conjectures that distributors of cocaine go through hundreds, or thousands of transactions without being caught.

Perhaps some of these statistics are individually not dependable, but their consistency and magnitude serve as more general suggestive evidence. Given someone has been convicted of one crime, the likelihood that they have committed an order of magnitude more without having been caught appears rather large. The idea that crimes someone is convicted for are simply a signal for the crimes they have committed is the impetus for the point Corrections makes here.

Let us imagine, before we have caught and convicted an individual, that we have some probability distribution that we believe they are sampled from, some likelihood that they are a career criminal, irredeemable recidivists. This is our "prior probability," a distribution between zero and one, that someone will be a recidivist, displayed graphically below (the image is rather small, click to enlarge).

Someone's criminal act or acts provide a data distribution that the person will be a recidivist. One example of this might be their being caught and convicted of breaking into a building. Our hypothetical probability distribution we might place that someone has committed a major crime given they have been caught committing a serious crime like breaking an entering is displayed graphically below


We have distribution of the data on the probability of another criminal act, displayed graphically below (click to enlarge).



We can combine our data on our parameters of interest with our prior beliefs about the parameters, in this case the likelihood that someone will commit another criminal act (click to enlarge)



We can summarize bayesian update by displaying our prior, data, and posterior in one graph, displayed graphically below (click to enlarge). For those interested, in this case we took data to be drawn from a binomial distribution, and assumed its conjugate prior distribution, a beta distribution (therefore making the prior distribution is a beta distribution--of course, our assumptions are without loss of generality, merely for mathematical convenience).



To summarize the point Corrections is making: given that someone has committed and for two felonies previously and has been convicted of a third felony, the likelihood that they have committed dozens, or hundreds of felonies and crimes is high. Convicting and imprisoning these career criminals for life, for their three observed, and dozens of unobserved felonies and crimes, may simply be the optimal response of a justice system that is sentencing people for their likely crimes (the likely crime they were convicted, and the likely crimes they were not caught for).

For those concerned that we are convicting individuals for crimes they have only likely committed, we remind them that this is precisely what the judicial system does currently. The question is how to decide the threshold for punishment.

Corrections finally notes that it is possible punishments already take this into account--that is, the penalty for marijuana distribution, in locations (excepting those with marijuana legalization or decriminalization) are deliberately punishing crimes for which one has not yet been caught. Our discussion took place under the assumption that punishments reflect only the crime for which one was convicted.

Handguns shouldn't be a household staple

Chicago Tribune article "Handguns shouldn't be a household staple" (July 9th, 2010) argues that handguns in homes make suicide easier for young people:

A gunshot is quick and irreversible. About 90 percent of suicide attempts with a firearm are fatal, compared with 2 percent of drug overdoses and 3 percent of attempts by cutting. Adolescents who experience a moment of despair and act impulsively with easy access to a gun almost always have a deadly result. Adolescents also are likely to survive most other methods of suicide, and nine out of 10 who attempt suicide and survive will not die by suicide at a later date.

Of course, people choose different weapons when they want to die with certainty. Those who take drugs or cut their wrists may not substitute into a handgun even if one is available because they seek attention or risk, not certain death. The proper comparison for the author to make would be whether suicide rates rise as soon as gun laws change in a state. A study by doctor David C. Stolinsky published in the Medical Sentinel notes that

The U.S. suicide rate has fluctuated between 10 and 17 for a century, with peaks in 1908 and 1932, and shows no relation to gun laws or gun availability.

Further research that exploits within-state variation is necessary to fully understand the impact of gun availability on suicide rates. Nonetheless, the Chicago Tribune's article attempts to make fact from what is quite possibly fiction, using irrelevant statistics to convince readers of a largely untested hypothesis.

A smart bill to fight smoking

Los Angeles Times editorial "A smart bill to fight smoking" (June 22nd, 2010) offers another endorsement of another paternalistic bill that would increase deadweight loss in society. Specifically, it advocates the coverage of anti-smoking programs. It offers two ludicrous claims.

Some people might object that smokers choose their unhealthful habit. But since insurance covers the cancer and emphysema that result from cigarette use, it makes sense to help smokers when they decide to quit.

We should note that the above statement, while sounding innocuous, has an unintended consequence: it makes becoming addicted less costly. Corrections conjectures some subset of people who do not smoke, or try drugs such as heroin, because they fear the consequences of becoming addicted. If cigarettes were no longer addictive, then the cost of becoming addicted would be lifted, and we would observe more smoking from this crowd. Whether or not it is larger than the number of people who would stop smoking is an empirical question. Obviously, an insurance program serves the same purpose.

We can discuss whether or not more people being able to smoke would be a good thing--Corrections posits that if it were, then competitive insurance companies or cigarette companies would be willing to set such a thing up, and therefore our system is clearly less efficient, but the point is tangential.

We should further add another point the Times offers that is empirically contentious.

Less smoking means less chance of catastrophic illnesses that are much more expensive to cover; lower rates of disabilities that taxpayers end up footing the bill for; less secondhand smoke; and even less litter.

The first claim, that less smoking means lower insurance is unclear. Indeed, for the people who would quit because of the lower premiums, we should have seen them already quit, if insurance companies can discriminate on smoking behavior--this would therefore make the statement of the Times patently untrue. People who smoke also die younger and more quickly, and the costs/benefits to society appear to be a wash (for example, they pay to social security but do not collect as much as were they a nonsmoker).

We should finally add that such coverage is not free. Individuals will have to pay for it. The Times appears to pretend that by requiring insurance companies to pay for these new treatments, they are somehow "free" to consumers. Prices will rise, and there is no such thing as a free lunch.

Corrections recognizes that the set of benevolent or honest paternalists is zero--if Rothbard noted that government was "a band of thieves writ large," we would be benefitted by noting that paternalists are, to coin a phrase, "slavemasters with a smile." In articles such as this, the Times earns its paternalist credentials.

Parenting should be a nonissue in gay marriage debate

Los Angeles Times article "Parenting should be a nonissue in gay marriage debate" (June 16th, 2010) concerns itself with the issue of gay marriage. However, it cites a study that is incapable of properly identifying what the Times suggests it identifies.

And a key reason, one of the lawyers said, is that children fare best when raised by a married couple of opposite genders.

The premise itself is dubious. A longitudinal study published online this month in the journal Pediatrics found that the adolescent children of lesbian couples fare very well. In fact, they 'rated significantly higher in social, school/academic and total competence and significantly lower in social problems, rule-breaking, aggressive and externalizing problems' than others their age.

The study in question, "US National Longitudinal Lesbian Family Study: Psychological Adjustment of 17-Year-Old Adolescents" in June 2010 Pediatrics, by Gartrell and Bos, examines sons and daughters from 154 volunteer lesbian couples. The note that the children rated significantly higher should raise some alarms for the people at the Times, especially given the study's 7% attrition rate. Why would we assume volunteer lesbian couples would be representative of marginal lesbian couples who get married and have children because of a change in law?

That is to say, if we are to evaluate public policy, we should evaluate the individuals whose decision would change due to the law. However, we are by definition not examining these individuals in this study, and we are not identified. We might further imagine that a change in the law will change the "rules" under which the data was observed, further rendering the study irrelevant.

The Times is better served by its next, well-made point, that "The premise is also irrelevant," rather than unidentified studies.

America's 'casualty gap'

Los Angeles Times opinion editorial "America's 'casualty gap'" (May 28th, 2010) reports the difference between the percentage of total wartime casualties suffered by members of poor communities relative to members of rich communities.

Nationally, in the Korean, Vietnam and Iraq wars, communities in the lowest three income deciles suffered 35%, 36% and 38% of the casualties, respectively. Yet communities in the top three income deciles sustained significantly fewer casualties — 25%, 26% and 23% of the casualties, respectively.

The United States has a volunteer army. Soldiers are compensated by regular pay, hazard pay, enlistment bonuses, government benefits, and well-earned gratitude from present and future generations. When the United States has a volunteer army, which it has since December 1972, the last month in which an individual was conscripted into the U.S. Armed Forces, it is an exercise in futility to argue any sort of discrimination. Individuals freely choose the Armed Services over their other options. They further choose their branch of service, as well as their military occupational specialty, generally speaking. If poorer people choose the military, it would appear, in a rough analysis, that they are benefitting more from its presence.

This may be especially true during wartime. Corrections cobbled together military pay for E-2 (an enlisted pay-grade corresponding to a Private in the Army, PFC in the Marine Corps, Airman in the Air Force, and Seaman Apprentice in the Navy and Coast Guard. It is a pay grade relatively rapidly achieved for enlisted men. Military pay sheets for every year were not easily available. Corrections imputed pay for those years in which it is not, denoted by a circle. Years featuring a war in which more than one-hundred Americans died (as well as the first three years of Operation Enduring Freedom, in which fewer than 100 Americans died) are denoted in red, while years without such a conflict are denoted in blue. It appears to Corrections, generally speaking, that post-draft wartime has caused more rapid increases in inflation-adjusted military pay. Therefore, it is difficult to discern without more careful calculus whether or not individuals are being compensated for the risks they are taking--with heterogeneous valuations, we might expect wartime military service to be better for poorer Americans who choose to serve, rather than worse. Our data is displayed graphically below (click to enlarge).

We note the sharp spike in pay occurred when Richard Nixon was engaged with the idea of an all-volunteer army.

Corrections should further add that including Operation Enduring Freedom, Operation Iraqi Freedom and Operation New Dawn in their analysis, without including the enrollment, average length of service, and rate of ascent figures for each income decile is egregiously misleading. In fact, both the lower class and the upper class are underrepresented in enrollment--this article's analysis would suggest that the middle class suffers disproportionately the costs of war.

In addition, a low-income recruit may not be identical to a high-income recruit, making it difficult to compare their wartime outcomes directly. For example, it is well known that income is correlated with education. If the army recruits more "high-quality" soldiers from higher income brackets, then we would expect these "high-quality" recruits to more quickly achieve higher and higher military rank, making them potentially less likely to be in the line of fire than their low quality counterparts. In this sense the article may be taking issue with the fact that more intelligent soldiers are less likely to die in battle. Similarly, if the poor serve longer than the rich, these statistics could be driven by the relative density of poor servicemen. Ultimately, the number of confounds in this analysis make it completely incredible.

Child mortality rates dropping, study finds, but U.S. lags

LA Times article "Child mortality rates dropping, study finds, but U.S. lags" (May 24th, 2010) argues that

The U.S., which is projected to have 6.7 deaths per 1,000 children this year, saw a 42% decline in child mortality, a pace that is on par with Kazakhstan, Sierra Leone and Angola.

"There are an awful lot of people who think we have the best medical system in the world," said Dr. Christopher Murray, who directs the institute and is an author of the study. "The data is so contrary to that."

The statistic the article uses, however, does not speak to the quality of the medical system. The mortality rate equals the number of children who die divided by the number of children who are born. The number of children born very prematurely in the US has increased dramatically in the past twenty years, as we show in the graph below (click to enlarge).

In fact, the great improvements in delivering children who have a low survival rate may fight any improvements in lowering the mortality rate among more healthy children. The greater number of at-risk children delivered, the greater the mortality rate will be. Such success should not suggest a "lag" on the part of the US, and it may simply indicate that few at-risk children are born alive in other nations.

Obama announces 15 recess appointments, scolds GOP

Reuter's News article "Obama announces 15 recess appointments, scolds GOP" (March 27th, 2010) offers a quotes that deserves further scrutiny. The article quotes Harry Reid on appointments and nominations:

The Senate's top Democrat, Harry Reid, welcomed Obama's move. "Regrettably, Senate Republicans have dedicated themselves to a failed strategy to cripple President Obama's economic initiatives by stalling key administration nominees at every turn," said Reid, the majority leader from Nevada.

Corrections has a harder time seeing this from the data. On average a confirmed appointee spent 75.78 days waiting until their confirmation vote. On average, the 15 appointed nominees spent 214 days waiting until their confirmation vote. Of the 13 not-appointed nominees who spent 214 or more days waiting until their nomination vote but were confirmed, the average appointee spent 238.5 days waiting. Twenty-two individuals who waited 214 or more days remain unconfirmed.

Examining these twenty-two, none seem to be "key", as Senator Reid claims. As this can be seen as a subjective claim, Corrections offers a list of positions for the purposes of information dissemination and self-evaluation.

• Four are members of the Commodity Credit Corporation Board of Directors. 
• One is the Director of Civilian Radioactive Waste Management. 
• There are three Assistant Attorney Generals (of various counsels). 
• One is the Deputy Director for State, Local, and Tribal Affairs. 
• Another is a Commissioner of the Federal Election Commission.
• Assistant Secretary for Planning and Evaluation
• Five Judges-two local D.C., two Court of Appeals, and a district court judge
• Two board members of the Legal Services Center
• A board member for the national labor relations board
• Chief Counsel of Advocacy
• Under Secretary of International Affairs

It is not immediately apparent whether or not Senator Reid's comment is deserving of correction.  For better understanding of the distribution of waiting times, Corrections offers a Kaplan-Meier plot for political appointees and their confirmation (click to enlarge).  We mark individuals not yet confirmed and individuals appointed.

Finally, and perhaps most relevantly, we can see that all appointments come after a large expected increase in their expected waiting days for confirmation, examining the conditional expectations (though a Heckman selection model with dubious exclusion restrictions gives an expected average waiting time of between 40 and 88 days, depending on specification).  This would perhaps be a more economic explanation of these recess appointments.

Tyler Perry's Crack Mothers

New York Times editorial "Tyler Perry's Crack Mothers" (February 26th, 2010) confuses level of drug rates with per capita crack consumption. Specifically, it claims that depictions of black women as crack-addicted are improper because the total number of blacks admitted to clinics for addiction is now less than the total number of whites.

Furthermore, data from the Substance Abuse and Mental Health Services Administration revealed that of the total admissions to treatment services for crack use, blacks outpaced whites in 1996, but whites outpaced blacks in 2005 for those under 30 years old.

There are six whites in the U.S. for every black. If blacks used crack cocaine less than whites, as the Times appears to attempt to suggest, one should see black admissions to clinics being one sixth that of whites, rather than approximately the same.

This piece of evidence that the Times gives is simply ludicrous. If movies are to be ethnically fair, then they would show (approximately) six times as many black crack addicts as white.

One might add that a priori we expect that whites, who are on average weathier, are over-represented in the data the Times provides.

Researchers Find Study of Medical Marijuana Discouraged

New York Times article "Researchers Find Study of Medical Marijuana Discouraged" (January 18th, 2010) propagates a mistake in analyzing the impact of any drug on a population. In this case, the Times fails to report on possible treatment-response heterogeneity.

But there is no good evidence that legalizing the smoking of marijuana is needed to provide these effects. The Food and Drug Administration in 1985 approved Marinol, a prescription pill of marijuana’s active ingredient, T.H.C. Although a few small-scale studies done decades ago suggest that smoked marijuana may prove effective when Marinol does not, no conclusive research has confirmed this finding.

And Marinol is no panacea. There are at least three medicines that in most patients provide better relief from nausea and vomiting than Marinol, studies show.

Not all individuals are the same. Individuals have different reactions to different drugs. A drug may have phenomenal effects on twenty percent of the population it works on, while being no different than placebo for the other eighty percent.

Let's imagine a world in which each of the three medicines mentioned in the quote the Times exist, and marijuana is also a potential drug. Let us further imagine that there are four types of responders. Responders who respond to all three drugs but not marijuana, responders who respond only to Drug I and Drug III, responders who only respond to Drug I and Drug II, and responders who only respond to marijuana. This setup is displayed graphically below (click to enlarge), where a "1" denotes effective treatment, and a "0" denotes ineffective treatment.

From this we can see that, if we had a random sampling of all four people types in our drug testing  and assuming each is of equal size (unnecessary for the point, but convenient), then we should see that Drug I is "more effective for most of the population" than Drug II and Drug III, which are in turn "more effective for most of the population" than marijuana.

However, any discerning eye would see that keeping only the three "most effective" drugs offers no alternative for Person Type IV.  The Drug/Person-Type matrix is not of full rank--some individuals are left with nothing.  One might even notice that Drugs II and III are not even necessary, they are redundant, while marijuana is not.

In the above scenario, with treatment-response heterogeneity in the population, relative average effectiveness of a drug is not nearly as important as the population-specific average, and the existence of alternatives within population.

Gauging the Dedication of Teacher Corps Grads

New York Times article "Gauging the Dedication of Teacher Corps Grads" (January 3rd, 2010) does a miserable job of critical thinking when reporting on a study about "Teach for America."Specifically, it does not note that the study has no ability to claim causal relations:

In areas like voting, charitable giving and civic engagement, graduates of the program lag behind those who were accepted but declined and those who dropped out before completing their two years, according to Doug McAdam, a sociologist at Stanford University, who conducted the study with a colleague, Cynthia Brandt.

The reasons for the lower rates of civic involvement, Professor McAdam said, include not only exhaustion and burnout, but also disillusionment with Teach for America’s approach to the issue of educational inequity, among other factors.

The study used a survey to compare the three types of individuals. Yet there are reasons why some individuals decline an offer for Teach for America and others accept it. By definition, they had a better alternative, while those who accepted did not. That in and of itself signals that they are different and not comparable. Similarly there are reasons individuals drop out. To pretend that all three types are the exact same save for some random outcome is a ludicrous conjecture on its face.

If the study wanted to be causal, it would have to use an instrumental variable approach, or randomized trial, or natural experiment. All the study does is to examine sample selection, and is not causal in the least.

Heath Cuts With Little Effect on Care

New York Times article "Health Cuts With Little Effect on Care" (December 29th, 2009) offers poor partial equilibrium analysis of Richmond health care. Specifically, it makes inferences from data on local rationing of health care to the impact of a global rationing of health care. This is improper in the presence of control group substitution, the search for alternative treatment by individuals denied it by an experiment (in this case, natural).

Since 1996, the Richmond area has lost more than 600 of its hospital beds, mostly because of state regulations on capacity. Several hospitals have closed, and others have shrunk. In 1996, the region had 4.8 hospital beds for every 1,000 residents. Today, it has about three. Hospital care has been, in a word, rationed.

And

The quality of care in Richmond is better than in most American metropolitan areas, according to various measures, and it continues to improve. Medicare data, for example, shows that Richmond hospitals do a better-than-average job of treating heart attacks, heart failure and pneumonia.

The New York Times is broadly examining the impact of a natural experiment in medical care. It implicitly compares a forced change in hospital bed capacity, using a difference-in-difference model. Specifically, the article examines how the difference between American metropolitan hospitals and an unconstrained Richmond changed when Richmond become constrained.

However, it is important to note that individuals living in Richmond who may have been made worse off (implicitly, the control group in this natural experiment) had the capacity to seek out-of-area hospitals that were not limited by (control group substitution). We could therefore observe an increase in Richmond health statistics due to this local prohibition, while observing a decrease in health due to a global prohibition.

Corrections notes that these observations are predicated on the premise that the New York Times is doing proper analysis to begin with. Observations about hospital care rates alone, neglecting individuals that never went to the hospital, would obviously be severely flawed. The claim that quality of care is better when not considering the quantity, which the New York Times appears to do, is an additional and fatal flaw.

New York Can Do Better By Juvenile Offenders

Wall Street Journal opinion editorial "New York Can Do Better By Juvenile Offenders" (December 18th, 2009) neglects one potentially large channel through which crime rates are lowered. Specifically, it appears focused only of incapacitation, omitting deterrence.

What does $210,000 buy in New York State? These days, as two recent reports demonstrate, that's what it costs to lock up one child in a brutal juvenile justice system so dysfunctional that its reform-minded commissioner, Gladys Carrion, advises judges not to place children in her facilities.

And

We could not do worse. But 10 years of research shows that we know how to do much better—incarcerate less, and use the latest research to treat delinquents in community-based programs.

The Empire State runs one of the country's largest juvenile prison systems. At its height in 2005, it operated 31 facilities housing 2,500 children. Like many other states in the 1970s and '80s, New York responded to rising crime rates with a get-tough approach that included more punitive laws, more arrests, and more incarceration for both juveniles and adults. In an iconic moment in 1995, the state put razor wire fences around its juvenile facilities.

This approach doesn't work: Almost every boy and girl (nine out of 10 boys and four out of five girls) who leaves state custody is rearrested before the age of 28 and, even within just three years, 75% are rearrested. And the costs are jaw-dropping. This year the operating budget for the juvenile facilities will top $220 million.

It is important to note that there are two ways through which the "get-tough" approach reduces crime. The first is longer prison sentences incapacitates past offenders from committing current crimes because they are locked up for their past crime. The second is longer prison sentences deter past and prospective offenders because it is costly, insofar as it is unpleasant and undesirable, to be locked up.

In Economic Inquiry (Levitt, 1998) there is strong evidence that both deterrence and incapacitation play roles, but that deterrence plays a much larger role in preventing crimes, especially for property crimes. Additionally, in American Law and Economics Review (Katz, Levitt, Shustorovich, 2003) shows that poorer prison conditions, represented by a higher death rate among prisoners, deters crime.

The article in the Wall Street Journal completely neglects deterrence as a factor that mitigates crime rates. Even if more prison sentences and worse prison conditions increases crime rates for those who were incarcerated, which the article, without proper counterfactual, does not show, it is unclear whether this is still an effective tactic through the channel of deterrence.

Pittsburgh Sets Vote on Adding Tax on Tuition

New York Times article "Pittsburgh Sets Vote on Adding Tax on Tuition" (December 15th, 2009) provides an inadequate analysis of the consequences of Pittsburgh's proposed tax on tuition:

On Wednesday, the City Council is expected to give preliminary approval to Mayor Luke Ravenstahl’s proposal for a 1 percent tuition tax on students attending college in Pittsburgh, which he says will raise $16.2 million in annual revenue that is needed to pay pensions for retired city employees. Final Council action will be on Monday.

When considering the tax, there are three aspects to consider: the marginal student's decision, the marginal dollar of the University, and the incidence of the tax.

The price elasticity of demand for education from Carnegie Mellon (and other colleges in Pittsburgh) is likely quite elastic, while price elasticity of demand for education is likely to be highly inelastic. Goods become more elastic as fraction of expenditure increases for normal goods like education. Therefore, we expect full time students, poorer students, and students with less lifetime income to be the marginal exiting individuals. We might expect Carnegie Mellon's english students to leave the program more quickly than its engineering students. We expect that "national" students are more elastic than "local" students and would leave more quickly. In the long run (presumably four years as the pre-tax stock of students fully depreciates) the composition of local colleges will change, presumably to include more wealthy and local students.

The price elasticity of supply for education from Carnegie Mellon (and other colleges in Pittsburgh) is likely to be relatively inelastic in the short run and relatively elastic in the long run, especially as the composition of students shifts.

The incidence of the tax, therefore, is likely to fall primarily on Universities at first, and, as it is able to shift capital and become a more local university populated by wealthier students.

Correction's conjecture about the direction of our four relevant variables is graphically displayed below (click to enlarge).

Video poker? Not here.

Chicago Tribune article "Video poker? Not here." (December 14th, 2009) submits legalized gambling to an auto-de-fé. The Illinois legislature has passed a law enabling legalized video poker machines. A portion of the revenue generated by these machines is transferred to the state. The Chicago Tribune vociferously objects:

If your county or community is on the first of these two lists, congratulations. Your local officials have "opted out" of legalized video gambling. They have declared their disgust with the Illinois legislature's decision to bankroll a $31 billion capital improvements bill in part by luring more people into neighborhood gambling. These communities have said: Go somewhere else.

If your county or community isn't on the first list, get cracking.

It is a herculean task to describe the foolishness this represents. Six powerful economic arguments for legalizing video gambling abound. First, and foremost, individuals should be free to choose. Second, even if gambling is addictive, individuals still make rational decisions. Third, when utility is concave, even taking unfair bets can be a rational decision. Fourth, if even unfair bets are in the interest of multiple individuals, they will likely provide gambles privately. Fifth, the creation of another good to tax decreases deadweight loss for all other objects, on average. Sixth, if all other districts ban gambling, and a significant number of individuals from other counties are willing to travel to gamble in mine, it is in my interest to provide gambling to other districts.

The first argument, that individuals should be free to choose, should not need explanation. As a matter of conditional probability, the chances that a government has decided to limit an individual's liberties for his own good, and is correct in its conjecture, is miniscule compared to the chance that it is doing so for the narrow, personal incentives of legislators, or that it is incompetent in execution, even if well-meaning.

The second point, that gambling may be addictive but should still be legal, is more interesting. Following the earlier argument in Corrections, there is ample evidence that individuals are rational in their decisions, even about addictive goods.

The third point, that individuals are able to accept even unfair gambles is best depicted graphically below (click to enlarge). If they find themselves at a spot where there is local convexity, expected utility from a gamble is greater than expected utility without that gamble. Our fourth point, related to this, is that if we take away efficient private means of redistributing wealth efficiently, individuals will provide them, under the conditions that they are able to match with one another properly and able to provide bets with sufficiently cheap overhead, which it seems apparent they would be able to do.

We turn to the fifth point: the "creation" of a new, taxed good decreases existing deadweight loss (the amount of possible economic gain that disappears in the face of taxation) on average. This point is a subtle one, an idea that will likely be entertained in more depth in a later article. The idea behind this is the same lessons as one gains from the Ramsey Tax problem: if one can, one wants to tax every good at an equal percentage--given that one cannot, one wishes to tax the most inelastic goods. This new good decreases deadweight loss from all other goods, which all have increasing marginal deadweight loss, while creating its own (which starts at a smaller base for its increasing marginal deadweight loss). Additionally, presuming video poker is as addictive as many detractors would claim, the deadweight loss from taxing it is minimal, and such a tax decreases the deadweight loss for other goods.

Sixth and finally, if all or most other localities have successfully banned gambling in their districts, then it is in one's own localities interest to legalize video poker, provided that a large enough number of individuals from foreign localities put a sufficient amount of their money in local businesses for a locality to recoup whatever moral deracination that occurs from allowing the travesty that is video poker to exist.

10 years after its implementation, One Florida defies its critics

Miami Herald article "10 years after its implementation, One Florida defies its critics" (November 13th, 2009) may be correct in its noting that the critics of ending affirmative action were wrong, it fails to provide adequate evidence.

A decade after Gov. Jeb Bush announced his controversial plan to end race-based university admissions, the number of minority students statewide has risen, according to a Miami Herald/St. Petersburg Times review of enrollment figures.

`That certainly flies in the face of those who were predicting Armageddon all those years ago,' said universities chancellor Frank Brogan.

However, as the article notes, the number of minorities in Florida has also risen. It is unclear from the article if the ratio of the proportion of minorities in college to minorities in state and the proportion of whites in college to whites in state has similarly risen.

Additionally, the article notes that there has been an increase at some colleges but not in others. An increase at minorities at poorer schools with a decrease in minorities at better schools would be relevant.

Finally, we should note that the report fails to have any attempt at a proper counterfactual. If college minority representation around the country went up 25%, while at Florida it only rose by 15%, then it is possible that ending affirmative action was indeed a catastrophe.

The Herald's failure to report the ratio of minority proportion in college against minority proportion in state, the total quality units of minority education (rather total units), and a proper counterfactual gives it little latitude to conclude the ending of affirmative action did not drastically harm minorities. They do, perhaps, have latitude to condemn critics of ending affirmative action if their predictions were off-base.

A Parking Gift on a Holiday That Was

New York Times news article "A Parking Gift on a Holiday That Was" (November 27th, 2009) suggests that people who get parking tickets on the biggest shopping day of the year are not knowingly taking on more parking risk than they would on an average Friday:

Every year, a sleeping army of New Yorkers and their out-of-town guests forget that Friday is not a holiday and fail to move their cars for street cleaning.  But the city does not forget:  Traffic agents give out parking tickets furiously, more than three times the number on a usual day.  The post-Thanksgiving bonanza of roughly 20,000 tickets is worth some $900,000 to the city.

It seems a more rational explanation is that individuals recognize the risks they are taking, but their demand for goods complementary to illegally parking have increased dramatically.  The price of staying with friends and family, shopping on Black Friday, or sleeping in may seem paltry to a tripling of the probability they will get a $115 dollar ticket.

Additionally, it is worth noting that a number of tickets in New York may triple, but the number of cars that plan on paying their tickets may decrease.  The increase of individuals who live out-of-city also provides a degree of cover for New Yorkers who would like to park illegally.

Yes, she can: Palin has a shot at the presidency

Washington Post article "Yes, she can: Palin has a shot at the presidency" (November 24th, 2009) misunderstands sample selection and causality. The argument states that above a certain approval rating, no United States president has ever lost reelection; below a certain approval rating, no President has ever won. This is a double fallacy of using inductive logic, and further, misunderstanding sample selection.

First, Gallup polls over the past 60 years show that no president with an approval rating under 47 percent has won reelection, and no president with an approval rating above 51 percent has lost reelection. (George W. Bush's approval rating in the weeks before the 2004 election hovered around 50 percent.)

The 2012 election will be primarily about our current president and whether voters are satisfied with the country's direction.

From the above, the article's central conclusion:

Who the Republican candidate is, and his or her qualifications and abilities, will matter only if Obama's approval rating is between 47 and 51 percent going into the fall of 2012. Interestingly, in the latest Gallup poll Obama's approval rating was at a precarious 49 percent.

This misses two points, one obvious, the other subtle. The obvious point is simply that the past is no guarantee of the future. The subtle point is that Presidential approval ratings may cause certain types of candidates to come to the fore. Take Barry Goldwater and Lyndon Johnson in 1964. Before the election, Johnson's approval ratings were around 74%. They were similar while Goldwater won the republican nomination in the face of competition from William Scranton and Nelson Rockefeller, both moderate "Rockefeller" republicans (Nelson was the namesake). In the face of a widely popular President, the party chose a firebrand. In the face of an unpopular George H. W. Bush, whose approval rating was 41% by the time Bill Clinton cleaned up on Super Tuesday in 1992, democrats nominated a New Democrat to office--had Jerry Brown been nominated, it's by no means clear that even a 41% approval rating would have caused a Republican loss .

The lesson that matches with intuition might be: given you are challenging an incumbent, when a race is hopeless, pick candidates who appeal to your base. When a race is winnable, pick moderate candidates who have a chance.

To be sure, one can object to this specific conclusion as much as the Washington Post's. Nonetheless, the point remains that the qualities of the candidate of choice vary with Presidential approval ratings and are not exogeneous to them. The author's suggestion that a party can "break" with tradition and choose a firebrand is ludicrous--the prediction is outside his implicit model.

A Powerful Idea on Youth Violence

New York Times editorial "A Powerful Idea on Youth Violence" (November 4th, 2009) fails to provide adequate analysis of a counterfactual to make its point. Indeed, speaking of Ron Huberman's observations about Chicago Public Schools, it claims

But the chaotic schools attended by high-risk students tend to differ from better-run schools in measurable ways. They have fewer counselors and social workers. They have higher rates of suspension and expulsion. They more often involve the police in minor skirmishes, like shoving matches, that then go unresolved.

By no stretch of the imagination does it necessarily follow that these schools are not minimizing violence with respect to the resources that they have. It may be that were they to have equivalent levels of resources as schools where high-risk students do not attend, they would have equivalent levels of resources. Additionally, it may be that "well-run" schools have more counselors precisely because they didn't have to pay for security guards, as they were in better neighborhoods.

To conclude that schools with less violence have more counselors implies more counselors will cause less violence is folly. Unfortunately, that appears the thrust of Mr. Huberman's hopes.

Mr. Huberman wants to remake the high-risk schools by beefing up the social work and counseling staff, by better training security guards and overhauling a disciplinary process that seems designed to throw out as many children as possible as quickly as possible.