Killing in L.A. drops to 1967 levels

LA Times article "Killing in L.A. drops to 1967 levels" (December 26th, 2010)" makes the common and unfortunate mistake of claiming, without cause, that crime rises during economic downturns.

Strikingly, homicides in the city have dropped by about one-third since 2007, the last full year before the economic downturn, according to a Times' analysis of coroner records.

It's unclear why a reasonable person would think that murders rise during bad economic times, beyond some primitive association of poverty and criminality. Certainly, all evidence is to the contrary. The graphs below show the trends in homicide rates over time (first in per capita rates, and second in per capita percentage changes in crime). Nothing in these trends supports the Time's "predictions that a bad economy would inexorably lead to higher crime."
(click to enlarge)

(click to enlarge)

In addition, a 2004 Journal of Economic Perspectives article written by University of Chicago economist Steven Levitt (available here) argues that the impact of macroeconomic variables on crime such as murder is theoretically ambiguous, and that violent crimes do not vary systematically with the unemployment rate. Pointing out how little "experts" seemed to know about crime trends, the article includes the following graph (re-printed without permission, click to enlarge), which could have served as a warning to the LA times.

One number can't illustrate teacher effectiveness

Los Angeles Times article "One number can't illustrate teacher effectiveness" (August 25th, 2010) criticizes Richard Buddin's scoring of Los Angeles teachers, arguing that it isn't taking everything into account and that there's an "ethical issue" publishing his research:

Given analytic weaknesses, the ethical question that arises is whether The Times is on sufficiently firm empirical ground to publish a single number, purporting to gauge the sum total of a teacher's effect on children.

Corrections had a number of issues with the article's criticism of Buddin's procedure. However, the more interesting issue was the author's raising of "ethicality" in the Times decision to publish Buddin's research. Theory suggests that unions may raise short-run pay but they flatten skill differentials. Perhaps to that end, teacher's unions have nearly uniformly opposed the ranking of teachers and anything that might help that process.

One reason for this is so fellow travelers might then criticize any empirical ranking that breaks a union's power by encouraging best practices and getting rid of bad teachers. What, then, might a strategy be to break this cartel of unions denying statistics, and education professors criticizing studies using bad statistics? To publish the best studies we can using the statistics we are given. Why?

Let us imagine that there are two types of teachers, good teachers, and bad teachers. They both have the same baseline utility. Both their utilities may be decreased by increased supervision. However, given that they'll be ranked, good teachers would rather have good statistics. The idea is displayed graphically below (click to enlarge).

What might this do? If they aren't being graded, both good teachers and bad teachers prefer to obstruct good statistics being collected. However, if they are being graded, good teachers now prefer good statistics while bad teachers like them even less. However, a wedge has now been created, and it's an empirical question whether or not good teachers will be able to outvote bad teachers in the quest for the collection better statistics.

In this vein, publishing well-done, competent research that admits its flaws (which an article criticizing it then rehashes) and encourages the destruction of union power to the detriment of bad teachers and benefit of students would appear the only "moral" choice.

College loans, no middleman

LA Times Editorial "College loans, no middleman" (April 2nd, 2010) claims that

The primary obstacle for young adults seeking to complete a college degree isn't that their public schools failed to prepare them or that their colleges somehow alienated them to the point of dropping out. It's money. Even solidly middle-class families can seldom cough up the more than $160,000 that private college will cost over four years.

Virtually all private institutions (certainly those of quality) offer need-based tuition waivers and partial tuition waivers. Many private institutions offer "no-loan" packages to poor families. As a rule, the lower family income, the more generous the funding package. Of course, if any price is too high a price, the author can be guaranteed that truly deserving students are offered merit-based awards.

In addition, colleges, especially private ones, live off of endowments. These institutions understand that funding poor students for four years will likely payoff in terms of future donations to university from these students. In fact, poorer students' lives will have improved relatively more due to their post-secondary education, and we should expect them to be relatively more "grateful" to their undergraduate institution--especially if tuition was free. In this sense, colleges are motivated already to fund lower income students, and certainly are in a better position than the government to select high-quality low income students for need-based aid.

Finally, increasing aid may make schooling less worthwhile for everyone. One purpose of schooling, as Michael Spence has argued in the Quarterly Journal of Economics is to provide a signal to employers. The more bright a student is, the easier school is for them on every level. School becomes not worth the effort for the worst students first, and so the fact that someone achieved a degree provides a valuable quality signal to employers. Certainly taking away the cost component of schooling will differentially impact rich and poor students. Wealthy students will make a drop-out decision based on a far more lucrative outside option, and so we should expect a relatively weaker quality signal from poor students who graduate. Of course, this decreases the very "value" of education on which funding would be based.

Reining in patents

LA Times article "Reining in patents" (March 30th, 2010) complicates a very simple question: without profit based incentives, would firms bother to look for new goods?

Underlying many of these disputes is a fundamental question about what patents should cover. It's easy to articulate the principle that patents should apply only to inventions, not discoveries. It's not so easy to draw that distinction in practice, especially when technology is changing so rapidly. What's more, any decision to rein in patent protection risks reducing the incentives that lead people to invest in research and development. But it also could lead to more knowledge being shared sooner, leading to further innovation.

In order to make public any new drug, whether it be "discovered" or "invented," a firm needs profit-based incentives. Without the potential for profits, we can expect drug companies will stop looking for gene-based solutions to disease. Simply put, without a patent, competition ensues and profits are whittled away. Patents give companies the right to set prices and make profits. When so much in the drug industry is patentable, why should we expect any firm to bother looking for cures that are not?

College tuition is expensive enough, let alone the textbooks

Los Angeles Times article "College tuition is expensive enough, let alone the textbooks" (March 15th, 2010) offers an interesting but empirically faulty conjecture concerning textbook revisions. Textbooks are durable goods that may be bought, used, and sold. Furthermore, they are in monopolistic competition with one another. The Times suggests that editors come out with new editions to generate revenue.

A US Government Accounting Office report shows that textbook prices rose 40 percent between 2002 and 2007, and 186 percent between 1986 and 2004, so that a college student’s annual book bill averages $900!

Publishers claim sky-high prices are necessary to offset losses from used-book businesses that recirculate titles, killing sales of new books.

So publishing reps compete for their piece of the multibillion-dollar pie, throwing book release parties with refreshments and gifts for faculty, including free examination copies. Additionally, they lure professors to tweak and rewrite new editions each year, to render obsolete the slightly used copies and create new demand.

In an NBER Working Paper, "Are Durable Goods Consumers Forward Looking?" Judith Chevalier and Austen Goolsbee find that students do indeed spend approximately $900 purchasing textbooks every year. Chevalier and Goolsbee examine student sensitivity to price. Students buy books and often sell them back, used, at the end of the term. They are able to sell them for a fraction of the price (between 50%-75%) if no new edition has come out, and a smaller sum (approximately 20%) if a new edition has come out. Corrections notes in passing that this indicates students are not paying $900 net, but quite a bit less than that.

A student's willingness-to-pay, absent discounting (which Goolsbee and Chevalier do not neglect) for a book will be equal to the difference of price paid and cost recovered through resale, plus the gain a student gets from using the book in the meantime. If companies accelerate their revision cycle, a student's willingness to pay will go down.

Indeed, Goolsbee and Chevalier find just that: students are patient and forward-looking, and become more sensitive to price as the likelihood of a new revision increases. Indeed, they find that textbook firms cannot increase profits by accelerating their product cycle--the decrease in value to a patient student causes fewer sales.

They find that students are not myopic in their purchase decisions, and their sensitivity to reap greater profits appears to be incorrect, due to the patience and rational expectations of college students.

The argument offered by the Times, that textbook companies accelerate their revision cycles to gain profit, appears to be contradicted by empirical evidence.

A registry of animal abusers is a bad idea

LA Times editorial "A registry of animal abusers is a bad idea" (February 25th, 2010) correctly notes the reasons why an animal-abusers registry would be poor policy in California, Corrections would only add one consideration: such a registry disproportionately affects the difficulty of obtaining work in fields other than animal abuse.

California already prohibits their cruel behavior, and a registry, however tempting, won't help them to learn compassion.

As Amanda Agan notes in an upcoming paper (available here), sex offender registries do not impact recidivism. There is little reason that we would expect presumably weaker animal registries to have such an effect. In addition, animal abusers often exploit animals for profit, knowing the illegality of their actions. Presumably, they only work with other animal exploiters and try very hard to keep their abuse a secret from those who support animal rights. A registry would not change the circumstances of this line of work. However, a registry may make legitimate sector employment more difficult to obtain, so that work promoting animal abuse becomes only more attractive to offenders. An animal registry may make recidivism more likely, and for this reason alone, it should not be enacted.

A poor prison plan for California

L.A. Time's OpEd entitled "A poor prison plan for California" (January 17th, 2010) does not take note of one major reason that researchers would have trouble establishing the superiority of public prisons relative to private prisons, even in the presence of such a relationship: private prisons will generally, if not always, replace failing or poorly run public prisons--necessarily, then, it will be difficult to find public prisons with which to properly compare these private replacements.

Studies on whether rent-a-reformatories are cheaper for taxpayers than government-run prisons have had conflicting results, largely because the data are hard to compare. Opinions also differ widely on whether private prisons, which tend to have lower guard-to-inmate ratios than public lockups, experience more violence. It's safe to say that if differences exist, they aren't very big.

Of course, private prisons are often established only where public prisons fail, or are on an unsustainable cost path. This will generally mean that when a private prison is built in a state, those public prisons that remain were already preforming better than the public prison that was replaced. Similarly, cross-state comparisons will suffer from the problem that states with private prisons were likely in a worse starting condition than states that have maintained public prisons only. Again, if the worst prisons in a state are replaced with privately-run prisons, then a zero difference between the new private prison and the remaining public prison is likely evidence of private success. This is because had the worst prisons remained public, they would (presumably) continue to do worse than the rest of the prisons in the state.

Swine flu has hit about 1 in 6 Americans, CDC says

Los Angeles Times article "Swine flu has hit about 1 in 6 Americans, CDC says" (December 10th, 2009) neglects to mention a curiosity in mathematical epidemiology that appears to have been under-looked in our Swine Flu vaccination push.

At least 50 million Americans had contracted pandemic H1N1 influenza through Nov. 14, according to the newest estimates from the Centers for Disease Control and Prevention released today -- meaning that about 15% of the entire country has been infected, about one in every six people.

And

Swine flu vaccine supplies continue to grow, he said. There are now 85 million doses available, up by 12 million from last week. As supplies have continued to increase, many communities have begun to expand eligibility requirements for the vaccine to include the population at large.

Given the ever-present reminder of H1N1's potential for mutation, it is not apparent that vaccination is beneficial. While vaccination, elimination, and eradication contains massively monetarily valuable pursuits, when a vaccination supply does not outstrip the number of vaccinations required for herd immunity, then all vaccination does is to slow infection. More generations of a virus are visited upon a population, and the costs of delaying may be greater than what is essentially a rapid (but costly) "vaccination" system.