by Tyler Cowen
on August 16, 2006 at 4:26 pm
1. "Put all of it back in the trash and get off the property now," the employee ordered.
2. What is driving differences in gas prices? Lots of weird little factors.
3. Lott vs. Levitt, another article, this time with some new bits, circa Tim Lambert.
4. Dubner and Levitt do Markets in Everything, here and here.
Boy, one hesitates to comment on this one, given
Lott’s propensity to sue, although I do not have
a best-selling book, so he presumably would not
find it worth his time to go after me. But this
guy is really a walking embarrassment. No
wonder he is having trouble getting a job.
BTW, while the case can be made within the US,
where guns are all over the place, that looser
gun control might be correlated with lower crime,
the international evidence goes just the other
way, not that Lott worries about that. The US
clearly has a far higher murder rate than
other countries of its level of income, and
so forth. The obvious big difference is that
virtually all those countries have far stricter
gun control than we do and have had it for a
long time. We simply have let the horses out
of the barn.
Anyway, it looks to me like Lott has seriously
shot himself in the foot. The man deserves
unemployment for his clearly unethical conduct.
From the dumpster diving article, the most unintentionally funny quote from anything I’ve ever read on MR:
“I’m struck by the absurdity of how the American economy works.”
Wasn’t there an item #5 on this post?
Levitt’s most famous theory, that legalizing abortion cut crime, continues to be battered by economists, most recently by Dills and Miron.
Last fall, economists Christopher Foote and Christopher Goetz finally reran Levitt and Donohue’s original state-level analysis and found Levitt had made two fatal technical mistakes. When those flubs were corrected, his entire claimed effect disappeared.
Levitt & Donohue’s response was to present a new data set, which they claimed validated their original theory.
Now, two economists have analyzed their new data and here’s the beginning and the end of their brief paper:
“A Comment on Donohue and Levitt’s (2006) Reply to Foote and Goetz (2005)”
Angela K. Dills Department of Economics, Clemson University and Jeffrey A. Miron Visiting Professor of Economics, Harvard University April, 2006
“Donohue and Levitt (2001) (DLI) consider the hypothesis that U.S. legalization of abortion in the early 1970s caused much of the decline in crime in the 1990s. Foote and Goetz (2006) (FG) show, however, that one key result in DLI contained a coding error; dummies for state-year interactions were inadvertently omitted from the regressions. FG demonstrate that correcting this error, along with estimating the regressions using arrest rates rather than arrest levels, suggests virtually no effect of legalized abortion on crime.
“Donohue and Levitt (2006) (DLII) acknowledge the coding error and agree that correcting the mistake and using arrest rates suggests no effect of legalized abortion on crime. DLII argue, however, that use of an improved abortion measure and an instrumental variable revives or even strengthens their original result…
“Our conclusion is that the kind of analysis considered in Table VII of DLII does not suggest a quantitatively important effect of legalized abortion on crime. The best case for such an effect is the IV results in columns (6) and (7); these imply that abortion legalization explain 24-25.9% of the 1991-1998 decline in violent crime and 7.1-8.1% of that in property crime. None of these coefficients is statistically significant at conventional levels, however, and the results in column (8) suggest they rely on an implausible mechanism relating abortion to crime.”
In summary, large assertions require large proof, and after seven years, Levitt hasn’t come close to meeting the burden of proof.
Mr. Sailer: Your credibility would be much improved if you tried to be somewhat scientific with your
assertions. “His entire claimed effect disappeared” is ridiculous. The paper presents a series of results
and the last one is the subject of this debate. What about all the rest? Even Foote agreed they were fine.
Please don’t respond with reams of drivel (again). Levitt made a mistake and has owned up to it. Time
to move on with your life and begin to be constructive rather than continually destructive. Your story is
What have you ever created that was intellectually stimulating?
No, the rest of Levitt’s arguments never passed simple credibility tests. For example, his famous contention that crime fell first in the early 1990s in the states that legalized abortion in 1970 — as I pointed out to him in Slate in 1999, that’s also where it went _up_ first among 14-17 year-olds in the late 1980s. Levitt himself always fell back on his state level analysis.
When I pointed out to Steven D. Levitt in 1999 that not only did crime not drop among the first cohort born after the legalization of abortion, but that the age 14-17 homicide rate hit its historic peak in 1993-94, his defense was, in effect, well, okay, but that’s only at the national level. If you had run a massive econometric study at the state level, like I did, you’d see my theory is validated.
As it turned out, Levitt’s state-level analysis was fatally flawed. His response was to produce a new database that he claimed supported his original theory. Miron and Dills have now shown that claim is not valid.
I present Miron & Dills new study, and in return I get only an ad hominem smear. Isn’t it about time for the Levitt fan club to objectively consider the work of the many economists who have debunked Levitt’s most famous theory?
There is a curious nugget buried in the gas prices story. According to the story, wholesalers set zone prices, ie, they price discriminate across neighborhoods by income. Normally, one would expect that the owner of the land on which the gas station sits would capture the locational rents, especially as the wholesalers are selling a commodity. The wholesalers ability to price discriminate would suggest anti-competitive behavior on their part.
Concerning the first one that caught your eye (the freegan dumpster diver):
Had you heard that Northwest Airlines has made that exact recomendation to employees about to be laid off?
Perhaps this is one that should be explored for “markets in everything”. Surely one of these companies are letting their dumpsters go under utilized. Perhaps for a small fee, and of course a waver for any damages suffered, the contents of dumpster, via dumpster diving could be marketed to those in “need”.
gateway 4ur1865of-2-qc-oa2 battery
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