Assorted links

by on May 27, 2011 at 11:20 am in Uncategorized | Permalink

1. Prices are collapsing in the market for stolen credit card information.

2. Mark Bils on CPI bias.

3. China prison markets in everything fact of the day.

4. Cognitive bias in the LeBron James narrative.

5. Just send Congress home.

6. We are underestimating heritability.

7. Paul Romer will head to NYU, congratulations!

Rich Berger May 27, 2011 at 12:55 pm

5. If I am reading this graph correctly, we just have to raise taxes to 30% of revenue over the next 70 years and everything will be fine. I never realized that it was this easy, a lot easier than restraining government spending.

Andrew' May 27, 2011 at 1:00 pm

6. Wait a second, that’s changing the rules mid-game. “People are different while their DNA is the same, therefore heritability is…higher”?

dirk May 27, 2011 at 5:53 pm

Confused me as well. Assume he must be referring to this point:

“apparently de novo mutations may have actually arisen at an early stage in the germline and not just at the final division generating the sperm or egg. The parent in question may not actually “carry” the mutation, but their germline does.”

But that makes me wonder about the current definition of “heritability”. This sounds more Lamarckian than Darwinian.

Cliff May 27, 2011 at 11:09 pm

Huh? The point is their DNA is NOT the same, although people at first thought that it was. So DNA must play a bigger role than we realized.

Slocum May 27, 2011 at 1:34 pm

@2 Very nice. These paragraphs seems particularly to the point (my boldface):

Bils: I’ll pick on the vehicles again because it makes such a huge difference in how you treat these products. If I look just at what people are paying, the unit price on a car over time, it grows. For the period I looked at, from the late ’80s to around 2008 or so, the dollar amount spent on cars increased by something like 3 percent per year. But if I looked at holding it literally constant, comparing apples to apples, once a product is out there, it’s clearly dropping in price by 4 percent per year.

How do I explain that? It must be the quality is actually growing like 7 percent per year, if I literally treated the right index as following that same model car over time. The BLS doesn’t do that. They treat a lot of these new-model price changes as inflation. They wind up with a much more conservative measure of quality growth. But if I say real quality growth of cars is a couple percent per year, versus 6 or7 percent per year, I am going to have a very different picture of, certainly, productivity growth in producing cars, but also the real income side of consuming cars. The same holds for any good.

For some goods, again, like bananas and milk, there is not this product turnover, so it’s not going to be important. But for virtually all durables and many services, this phenomenon is there, with the nature of the products changing. So it can matter a great deal if you’re thinking about what the standard of living is today versus the past.

The difference between 3 percent price inflation (not accounting for quality improvements) and 4 percent deflation (including quality improvements) means a big effect after years of compounding. The way to really see the effects is through something like Don Boudreaux’s Sears Catalog exercise.

Peter H May 27, 2011 at 2:11 pm

The thing is, used cars also become worse quality over time. A 2000 Toyota Camry with 0 miles on it would not fall nearly as much in value as one with 132,000 miles on it, but the average Camry is driven 12,000 miles a year.

Silas Barta May 27, 2011 at 1:50 pm

@2: Yeah, I guess I must be missing all the quality improvements I’m getting in healthcare, all that extra 7% more health care that my jacked up premiums are buying me. I’m getting crappier service at the doc, I’m in the waiting room a lot longer … the doctor has to bolt out to do his next 30 seconds with another patient, they still can’t do jack sh** about any problem I come to them with … but I’m *TOTALLY* getting better quality health care. Cause, like, they’re using iPads and stuff. Yeah. That’s it.

How dare you think you’re paying more can getting less, you terrorist? Our specially collected data in our little ivory tower says your health care is better and who the **** are you, you, a mere PEASANT, to inject all your claims about “experience” and “getting in the ER waiting behind 50 elderly people and 50 illegals”? That doesn’t show up on our precious data, so it aint’ happening.

Enjoy your rapidly-improving health care, and be sure to draw down your cake stockpiles when you’re out of bread. It’s what we do in our office when we’re out of bread for our between-bl**-j** meals.

TallDave May 27, 2011 at 2:50 pm

The problem is that there’s so much insulation between prices and consumers that there’s little disincentive to overpay for small improvements in outcomes.

Silas Barta May 27, 2011 at 3:06 pm

Well, they’re definitely an incentive for clinics to get more poorly run each year.

Floccina May 27, 2011 at 2:47 pm

IMHO LeBron is the best there has ever been. Cleavland went from the top to the bottom when he left.

Floccina May 27, 2011 at 2:55 pm

Further Wilt Chamberlain was much, much better than Bill Russel. We grossly over value winning it all.

Miley_Cyrax May 27, 2011 at 5:10 pm

I agree that rings don’t make the man, but Cleveland going from top to bottom does not lead to the conclusion that Lebron is “teh best evar.” The PER is stupid statistic for ESPN readers who couldn’t handle real statistical/economic thinking, but you can inspect the box score comparisons between Lebron and Jordan yourself: http://espn.go.com/blog/truehoop/miamiheat/post?id=8143

Jordan put up similar/better numbers in a time where pace was slower and officiating was less generous with foul calls, thus leading to lower points and assists and maybe rebounds, and higher turnovers.

Most of ESPN’s writing is opiate for the unwashed masses, fabricating narratives. Sportswriting = narrative alchemy.

spencer May 27, 2011 at 3:01 pm

Since 1975 the CPI implies that the quality adjusted price of new cars has gained about 4% annually — that measures what they estimate a new 1975
vintage car would cost you now.

Over the same time the BEA reports that the average transaction price of a new car has risen about 12% annually.

Virtually all this gain was before 1999 as since 1999 both sets of prices have been virtually flat.

This implies that the quality improvement of autos improved at about an 8% annual rate.– these are rough back of the envelop calculations, but they are not that different from what Blis said.

Over the same period the CPI reports that real used car prices fell in most years.

Borgol May 27, 2011 at 4:41 pm

Strict fact: the government decided that adding ethanol or MTBE to gasoline was a “quality improvement” so increases in fuel prices should not be counted in the CPI.

This despite the fact that ethanol/MTBE contains less energy (so same-car/same-trip gas mileage declined by 4% or so), ethanol is hygroscopic so fuel-system and engine corrosion (and therefore repair costs for older cars and fancy stainless-steel parts costs for new cars) increased dramatically, and MTBE and to some extent ethanol is poisonous and volatile, harming health and increasing photochemical smog. AND tax shenanigans such as the ethanol subsidies and per-gallon taxes on ersatz gasoline (remember, drivers have to buy almost 21 gallons of 10% gasohol to replace 20 gallons of straight gasoline) greatly increase the $/mile cost of fuel.

TGGP May 29, 2011 at 8:06 pm

Mark Bils seems to have a very different perspective on measuring healthcare quality/inflation than Tyler.

I think Romer’s new job is bad news for his charter cities initiative.

Unburdened Water Spout May 30, 2011 at 12:32 pm

And Mark Bils is by far the more credible source for information. I wouldn’t trust Tyler to measure anything.

Ray Ban Eyeglasses June 9, 2011 at 4:00 am

This shows which they last very much lengthier and thus saving you income which could otherwise are actually utilized to purchase new ones.cvhh

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