Month: October 2007

The Significance of Changes in the Gender Happiness Gap

  • A
    . I suspect that the
    claim that happiness did not significantly change from 1972-2006 comes from the
    fact that we did not include stars when reporting the implied gender gaps in Table
    1 of our paper. Thus, the claim that

the ordered probit analysis found that the "Gender
happiness gap" was not statistically significant, either in 1972 or in
2006, even at the 0.10 level

is simply untrue. Here’s the relevant part of Table 1, which is
an ordered probit regression, of happiness on time trends by gender:

The right way to test for whether women
were, on average, happier at the start of the sample is to look at the “Female
dummy”, which is clearly significant. The right way to ask whether this gender gap has changed is to look at
the difference in trends, which is also clearly significant. The last two rows are regression-based predicted
values, so we didn’t think we should put stars next to these numbers.

  •  Statistical
    : When you want to make a result go away, throw away enough data,
    and a result will become insignificant. For instance pooling all of the data gives us a useful 46,303
    observations. Analyze any specific year,
    and you are left with only 1,500-3,000 data points. Even so, let’s analyze only data from 1972
    and 2006:

    • %Very happy = 28.7 + 3.1*Female +1.6*(Year2006)
      – 2.4*(Female in 2006)
    • %Not too happy = 18.1 -3.2*Female – 5.5*(Year2006)
      + 4.1*(Female in 2006)

In the first case, no coefficients are
statistically significant, and in the latter, all are. In both cases, the estimates say that women
were once a fair bit happier than men, and this is no longer true. Comparing this regression with those in our
paper, we simply learn that a smaller sample yields similar estimates, but they
are less likely to be statistically significant.

  • Looking for
    a masterpiece, when we are doing collage
    . Sometimes studying social
    phenomena is hard, and one draws on many data sources to put together a collage
    of evidence. Our paper finds declining
    happiness among women relative to men in: the General Social Survey (n=46,303
    from 1972-2006); the Virginia Slims Poll (n=26,701 from 1972-2000); among U.S.
    12th graders (Monitoring the Future; n=433,906 from 1976-2005); in the
    United Kingdom (British Household Panel Study data from 1991-2004; n=121,135);
    in Europe (the Eurobarometer analysis has n=636,400 from 1973-2002, covering 15
    countries), and across developed countries (the International Social Survey
    Program contains surveys 35 countries from 1991-2001 yielding n=97,462). The only dataset that does not yield clear
    results of a decline in women’s happiness relative to men’s is the World Values
    Survey, and even there, the data do not speak clearly.

Let me try to give a particularly transparent description of the data,
simply splitting the GSS data into two periods, 1972-1989 v. 1990-2006. There was a clear gender happiness gap in the
earlier period (34.3% of women were very happy v. 31.8% of men). This difference is clearly statistically
significant (t=4.1). In the later
period, 30.9% of women were very happy, compared with 31.1% of men. This recent gender happiness gap is
insignificant (t=-0.3). The decline in
the share of women who were very happy (34.3% v. 30.9%) is clearly significant
(t=5.9), while the corresponding changes for men were not (t=-1.1). The decline in the share of women who were
very happy relative to men is also significant (t=-3.1). Analyzing the share who are “not too happy”
yields a roughly similar pattern (but in reverse): an insignificant “unhappiness
gap” in the earlier period, but a significant gap emerged in the latter period. Interestingly, the “unhappiness gap” emerged
because as men became less likely to be unhappy, as women’s unhappiness
remained largely stable. The ordered
probit is a regression technique that allows one to make these happiness and
unhappiness comparisons all at the same time; these regressions tell us that
there was a gender happiness gap favoring women in the earlier period, and it
now favors men. For the
regression-heads, if your library subscribes can download the GSS data from the
ICPSR here. I’ll post some stata code in the comments.

This post only deals with whether the effects we
describe in
the paper are statistically significant. The other complaint is that
our results are too small to matter. Later today, I’ll turn to how we
about whether these are large or small effects.

[Written jointly with my coauthor Betsey Stevenson]

UPDATE: See discussion of "economic significance" here.

Pay what you want for the new Radiohead album

Here is the story, but no this model won’t much change the music industry.  Yes you really can download this album and "tip" Radiohead as you feel inclined to.  But note that:

1. Radiohead is an indie cult band with extreme loyalties from its partisans and the possibility of attracting more such partisans by seeming "cool."

2. Radiohead peaks high on the charts (#3 for their last release, if I recall…) but I believe they sell the product pretty quickly and don’t have a long run at the top.  Again, they’d like to widen their fan base.

3. Radiohead’s gambit has reaped enormous publicity, but this won’t be the case next time.

4. Many donors will give to a highly visible "cause of the month" (remember the outpouring of support for the tsunami victims?) but they won’t necessarily give on a regular basis.

5. Radiohead probably has an especially high ratio of touring to CD and iTunes income; see #1.  This scheme is a natural for them but not for Kelly Clarkson. 

What we will see is lots of lesser bands (and authors) giving their work away for free, but that trend has been underway for some time.  And by the way, Radiohead’s best album is Kid A.

Why aren’t there more dating coaches?

Once a week, I go to some guy’s house and pay him a fairly significant
sum of money so he can tell me in which order I should pluck strings on
my guitar.  I would like to learn to play guitar well.  But it’s nowhere
near as central to my happiness as my lovelife.  Yet I’m allowed — even
praised — for seeking expert guidance there, but would be roundly
shamed if I sought a dating coach.

That’s Ezra (and here), with nary a mention of the single payer.  I’m all for the idea, but I see at least two reasons why the concept does not thrive. 

First, many of the people with dating problems are their own worst enemies.  Paying for advice won’t much help because self-sabotage is the goal and the advice-giver can’t disassemble the relevant weirdnesses.  And many people would hire the coach as a substitute for actually making themselves emotionally available.

Second, I do not believe it much benefits "losers" to learn additional slickness.  The more likely result is that the coach tells the loser about seven of his mistakes, thereby discouraging him altogether.

Whereas when the guitar teacher screams "Ezra, that ain’t no G7!", I suspect Ezra still goes home feeling pretty good about himself, as indeed he should.  But even guitar teachers (and I have had several) rely on lessons for income and they aren’t so inclined to give honest feedback.  They fear making their students feel bad and thus losing them.  After all most guitar students are terrible (except for me all my teachers told me I was pretty good.)

The bottom line: It is much easier to sell aspirational goods than honesty.

Private Fire Prevention

Here’s an interesting story:

In Idaho, when the Castle Rock wildfire started with a lightning
strike, broke out and started to rapidly spread, hundreds of high-end
homes were immediately evacuated. At that point a national insurance
company which caters to America’s wealthy decided that it needed to act
quickly. The insurance company sent a private crew of firefighters to
Wood River Valley, near Castle Rock, to protect 22 homes that it has
insured for millions of dollars.

…The insurance company
provided a fire truck and two man team to douse the insured homes with
Phos-Chek, the same fire retardant dropped from U.S. Forest Service

Insurance services like this have a long history not just in fire fighting but also in crime-fighting.  In 18th and 19th century Britain long before the advent of government police, members of the public organized themselves into prosecution associations – essentially insurance clubs that would pay for the investigation, detection and prosecution of crime.  You can still see a faint imprint of this lost system today when insurance companies hire detectives to investigate large property crimes.  See The Voluntary City for more.

Intriguing numbers on conscientious objectors

The GAO reports only 425 applications for conscientious objector status from 2002-2006, compared with 2.3 million servicemembers (including Reserves).  Just over half were approved.  Read more here.

Hat Tip, Zubin Jelveh, who also notes:

 For reference, the Vietnam war had about 200,000 such applications.

(Of course, Vietnam did have a draft.)

Prediction Markets: Some assorted news

  1. Wrap-up of an interesting conference run by Consensus Point (HT: Midas Oracle;  Disclosure: I’m an occasional advisor to Consensus Point).  Robin Hanson tells me that he is now (back to) bullish on prediction markets – he saw real evidence of real firms implementing prediction markets and taking them seriously.
    UPDATE: Another nice summary available here.
  2. How to bet real money, in a country in which real money markets are illegal? allows you to bet your charitable donations against mine.  You win the bet?  My donations go to your charity.  I win the bet?  Your donations go to my preferred charity.  Brilliant.  Incentives, charitable donations, and legal protection – all good things.  A longer description here.  (HT: Emile Servan-Schreiber of NewsFutures)
  3. The ’08 race at InTrade: Latest trading suggest Hillary is a strong favorite to win the Democratic nomination (66% chance).   The Republican primary is a true three horse race.  Most puzzling (to me): How is Obama only a 16% chance?  Some say he is really running for VP, but the markets suggest he is only a 27% chance to win the second spot on the ticket.  My tip: Buy Obama for Prez at 8%.

    [Full disclosure: I’m an occasional advisor to both Consensus Point and NewsFutures]

The economics of strikes, update

The United Auto Workers union could become General Motors’ biggest shareholder under a deal to transfer the carmaker’s healthcare obligations to a huge union-managed trust.

The two sides agreed last week to set up the Voluntary Employees’ Beneficiary Association as part of a four-year labour contract.  GM’s $29.9bn contribution to the Veba will include a $4.4bn note convertible into GM shares.  GM’s market value of almost $21bn plus that of the bond, if converted at par, would give UAW a stake of about 17 per cent.

Here is the story, had I mentioned that the strike is over?  Here is my previous post on strikes and the Coase Theorem.

Facts and True Facts: More on Divorce

initial guest post
noted that recent
divorce statistics were misinterpreted widely
in both the media,
and by the academics interviewed by the press. The question is what went wrong with the latest data?

First, some necessary background. This
was published by the Census Bureau counting the proportion of those
who had wed in each year who subsequently celebrated various
anniversaries. Here’s a quick test: Look
at the data, and decide for yourself what is happening to marital
stability. Or if you are lazier, let me
help with an example: the Census reported that 76.4% of men whose first wedding
occurred in 1985-89 had celebrated a tenth anniversary; this declined rather
dramatically to 70.0% among those who marrying in 1990-94. By jingo, it looks like recent marriages have
become much less stable!

Not so fast. The
marital history data were collected from July-September 2004, and hence those
who had married in, say, October 1994, simply
could not have reached their tenth anniversary
by the survey date. Because this affected around one-in-ten of
those wed from 1990-94, this statistical factor alone explains what looked like
a decline in marital stability.

How do we interpret what happened?

  1. The
    Census Bureau reported true and useful facts:
    The data are interesting, and
    the table includes a small footnote, noting “Approximately 10 percent of the
    cohort has not reached the stated age by the end of the latest specified time
    period. Because of this, estimates for this group for the highest anniversary
    are low.”  With this qualification, one
    should not conclude that divorce is rising. (But what should one conclude? No
    guidance is given.)
  2. The
    Census Bureau reported true, but useless facts:
    The tables measure exactly
    what it says it measures. The Census
    Bureau is like Fox news:
    We report, you decide. And we report,
    even if the number we report is meaningless.
  3. The Census
    Bureau reported misleading facts:
    It is obvious that a qualifying footnote will
    be ignored by most. Indeed, the New York
    Times printed
    the table
    but omitted the footnote. But
    let’s not be too harsh on the NY Times: I talked about these data with several excellent
    economists, and none even noticed the
    . Headline numbers deserve
    headline qualifications.
  4. The
    survey was flawed:
    If the Census is interested in measuring the survival of
    a set of marriages to their tenth anniversary, then failing to wait ten years after
    a wedding to measure this is a surveying glitch.

So what is the mission of a statistical agency? If the Census’ job is to just report back
what we (the surveyed population) tell them, then they performed that task
adequately. If their job is to report
parameters – useful facts – then they failed miserably, as the data they
reported are hopeless biased indicators of marital stability. Alternatively, the question is: Does the
Census provide facts, or interpretation? I’m happy if they present only facts and leave the interpretation to experts. But is there an obligation to report only interpretable

Stephen Colbert’s term “truthiness“,
the reigning word of
the year
, refers to what you
want the facts to be as opposed to what the facts are
. I’m wondering, what is the right word is for something that is a fact but isn’t true? Untruthiness, anyone?

Ad-supported cell phones

Can you stand the idea? You have to hear ads before you can make a call, of course the calls are free or at least cheaper.

This service would improve my life, as would any net per unit tax on cell phone calls, but that is hardly a predictor of future marketplace success.  Most people tolerate ads in their TV and radio shows, and indeed most of cable has evolved into an ad-supported medium.  so why ads in phone calls?  I suspect the difference is this: many viewers turn on the TV or radio to dull their senses and simply to hear voices or see faces.  Those who want more buy HBO and TiVo.  In contrast, we call on the cell phone to feel in control of a situation (am I too influenced by my experience of a teenage stepdaughter?).  The last thing the caller wants is to have that feeling of control interrupted by…lack of control.

May I presume that calls to 911 would not first be interrupted by an ad for Nikes?

People, readers, speak to me on this…