Month: March 2010
Sentences to ponder
In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
There is much more here. I would be surprised if the proposed incentive of $1,500 made a noticeable difference. If I understand the program correctly, the servicing bank also gets $1,000, plus $1,000 toward a new loan.
Perkins versus Promise Academy Charter School
I was astounded to read in the NYTimes that Bill Perkins, state senator from Harlem, opposes charter schools:
Over the last decade, as charter schools have multiplied, Mr. Perkins has undergone a dramatic shift and emerged as their most outspoken critic in the Legislature, writing guest columns in newspapers and delivering impassioned speeches criticizing the “privatization” of public schools.
When officials of the city’s Department of Education announced last year that they planned to place a charter school inside the Public School 123 building in Harlem, Mr. Perkins was infuriated. With help from his chief of staff, several parents and teachers’ union representatives staged a protest there on the first day of school, holding signs that labeled charter schools as “separate and unequal.”
Perkins's opposition is astounding because among the charter schools he opposes are Geoffrey Canada's Harlem Children’s Zone schools. Here from the NBER Digest is a summary of recent research on these schools:
Will Dobbie and Roland Fryer find that in the fourth and fifth grade, the math test scores of charter school lottery winners and losers are virtually identical to those of a typical black student in the New York City schools. After attending the Promise Academy middle school for three years, black students score as well as comparable white students. They are 11.6 percent more likely to be scoring at grade level in sixth grade, 17.9 percent more likely to be scoring at grade level in seventh grade, and 27.5 percent more likely to be scoring at grade level by eighth grade. Overall, Promise Academy middle school enrollment appears to increase math scores by 1.2 standard deviations in eighth grade, more than the estimated benefits from reductions in class size, Teach for America, or Head Start.
These increases are very large and although supported by randomized experiment I wouldn't be surprised if future research cuts them down but if the true effect were even a quarter as large it would still be big news. As Fryer told David Brooks “The results changed my life as a researcher because I am no longer interested in marginal changes."
I don't know why anyone interested in the welfare of children would want to discourage this kind of experimentation.
Academic wage stickiness
The percentage of faculty members receiving no salary increase this year is 21.2 percent, while 32.6 percent had their salaries reduced, with a median decrease (among those who saw a decrease) of 3 percent.
Here is more information. I see the overall trend as toward lower wages, with many cut-deserving people put at zero to shut them up. We'll see how long they stay there.
*Country Driving*
The author is Peter Hessler and the subtitle is A Journey Through China from Farm to Factory. It is the account of the author's driving journeys throuh the Middle Kingdom. Here is one bit:
…Chinese drivers haven't grasped the subtleties of headlight use. Most people keep their lights off until it's pitch-dark, and then they flip on the brights. Almost nobody uses headlights in rain, fog, snow, or twilight conditions — in fact, this is one of the few acts guaranteed to annoy a Chinese driver. They don't mind if you tailgate, or pass on the right, or drive on the sidewalk. You can back down a highway entrance ramp without anybody batting an eyelash. But if you switch on your lights during a rainstorm, approaching drivers will invariably flash their brights in annoyance.
I found this to be an excellent travel memoir, a very good book on transportation economics, a wonderful book on China, and most of all a first-rate study of the adjustments and changing norms which accompany rapid economic development. I also found it to be a very funny book and, for whatever reason, I don't find most books funny.
Here is another bit on China:
Often I passed billboards dedicated to the planned-birth policy, whose catchphrases ranged from tautology ("Daughters Also Count as Descendants") to unsolicited advice ("Marry Late and Have Children Late") to outright lies ("Having a Son or a Daughter Is Exactly the Same"). As I drove west, the messages became bigger, until barren hillsides were covered with slogans, as if words had swelled to fill the empty steppes, "Everybody Work to Make the Green Mountain Greener" — this in forty-foot-tall characters across an Inner Mongolian mountain that was neither green nor the site of a single working person.
Recommended.
Assorted links
The culture that is Italy
The goal is to target molecular gastronomy and effectively ban many of its forms. Oddly, the bill is slated to last for only a year.
For the pointer I thank Steve Silberman.
Problems with Haitian land rights: nowhere to call home
This article is excellent on one of the mounting problems in Port-au-Prince, namely the sudden absence of well-functioning land rights (which were hardly ideal in the first place). The earthquake destroyed a lot of homes, stores, and plots and now many of the owners cannot be located. So it's hard to determine what can be done with the property. Ideally it should be razed, rebuilt, and dedicated to some new uses but as it stands a lot of activity is simply frozen.
Or maye it is known that the owner is now dead and the estate has not been settled and won't be settled anytime soon.
Here is one quotation:
“We have the stocks to shelter a lot of people. We do not have the land to put them on. I cannot invent land,' Gregg McDonald, lead coordinator for the U.N. shelter cluster said. “There are lots of discussions going on around land, and land issues. Nothing is resolved.''
Even if all the owners were identified, present, and in a position to deal, there is then the famous Grossman-Hart 1980 free-rider problem. "Urban renewal" can bring big increases in value, but the individual incentive is to be a hold-out on the sales front and capture those value increases, rather than sell out at the earliest possible moment.
Haiti right now has a massive scarcity of land — in the legally usable sense — and is facing a massive recalculation problem as a result. Keep in mind that in relative terms, land is a more important part of the Haitian economy than almost anywhere else. After food, land is arguably the most important market in the Haitian economy and that has ceased to work.
This disaster-related problem is frequently overlooked and kudos to The Miami Herald for publishing an intelligent article on it.
Addendum: Here is an update on Haitian education.
What the brain values vs. what you wish to buy
I have not read this paper (gated full copy here), and I usually get nervous when it comes to brain scan interpretations, not to mention press release interpretations, but even if this has been botched it is still worth thinking about. A new paper suggests the following:
Researchers at Duke University Medical Center found that as participants were watching a sequence of faces, their brains were simultaneously evaluating those faces in two distinct ways: for the quality of the viewing experience and for what they would trade to see the face again.
As the authors put it, experienced value and decision value are not the same. The main test involves heterosexual men looking at the faces of women and thus one concrete implication, or so it seems to me, is that the pornography men enjoy the most is not necessarily what they are willing to pay the most for. The authors also note:
…that decision value signals are evident even in the absence of an overt choice task. We conclude that decisions are made by comparing neural representations of the value of different goods encoded in posterior VMPFC in a common, relative currency.
Hat tip goes to MoneyScience on Twitter.
Assorted links
1. Via Chris F. Masse, Al Roth in video and Paul Milgrom (unviewed, but self-recomending).
4. Does calling a wine organic lower its price?
Theory of optimal punishment, Stanley Kubrick edition
The headmaster of the school where children are forced to listen to classical music as a punishment for bad behaviour said infractions of school rules have dropped by about 60 per cent since he began the special detentions.
"What he's saying in effect is children don't like classical music and we will exploit this fact by using it as a punishment against them," O'Neill said in an interview Wednesday with CBC's Q cultural affairs show.
The state school system seems to have abandoned the idea of educating children about great culture, he added.
More good news about Africa
This time it is from Alwyn Young:
Measures of real consumption based upon the ownership of durable goods, the quality of housing, the health and mortality of children, the education of youth and the allocation of female time in the household indicate that sub-Saharan living standards have, for the past two decades, been growing in excess of 3 percent per annum, i.e. more than three times the rate indicated in international data sets.
I thank an MR commentator for the pointer. Addendum: Link is now corrected.
My favorite things Grenada
This one may seem like a stumper but in fact it's a breeze. Here goes:
1. Painter: Canute Calliste, who paints in a naive style. You'll find four images and a bit of biography here. I first encountered his work at a Quito biennial in the mid-1990s. His best works are not on-line. Here is one other painting by Canute Caliste.
2. Short story writer: Paul Keens-Douglas. This pick is a no-brainer. Here is Keens-Douglas telling a story. Here is Keens-Douglas doing a comedy routine. I used to have some very good cassettes of him telling folk tales.
3. Musical artist: The calypso genius Mighty Sparrow is usually thought of as coming from Trinidad, but in fact he was born in Grenada. Here is a YouTube clip.
4. 19th century Haitian revolutionary: Henri Christophe was born in Grenada.
5. Movie, set in: I can only think of one, namely the 1957 Island in the Sun, starring Harry Belafonte, which is well known for its early portrayal of an interracial embrace. I haven't seen it, but I guess I like it in principle. Much of it was filmed in Grenada as well.
The bottom line: For an island of about 100,000 people, that's not bad.
Assorted links
2. Why we are not living in Western civilization (video).
3. Tim Harford's tips for writing non-fiction; I agree.
4. Contrarian claims about performance enhancers in baseball; caveat emptor.
5. Bastiat and Say on fiscal stimulus (though I don't think they would favor ARRA as a whole).
Department of Yikes
According to USA Today:
Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.
These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.
Thus, if these numbers are to be believed, federal workers on average earn in wages and compensation 50% more than workers in the private sector doing the same job. Bear in mind that the federal workers are paid by the private sector workers. We can't all be insiders.
The figures do seem large to me, however, and they do not correct for a variety of factors such as age or experience so take them with a grain of salt.
Much cheaper, almost as good
Here is part of the problem behind health care cost control, from the Annals of Internal Medicine:
Under conditions of constrained resources, cost-saving innovations may improve overall outcomes, even when they are slightly less effective than available options, by permitting more efficient reallocation of resources. The authors systematically reviewed all MEDLINE-cited cost–utility analyses written in English from 2002 to 2007 to identify and describe cost- and quality-decreasing medical innovations that might offer favorable “decrementally” cost-effective tradeoffs–defined as saving at least $100 000 per quality-adjusted life-year lost. Of 2128 cost-effectiveness ratios from 887 publications, only 9 comparisons (0.4% of total) described 8 innovations that were deemed to be decrementally cost-effective. Examples included percutaneous coronary intervention (instead of coronary artery bypass graft) for multivessel coronary disease, repetitive transcranial magnetic stimulation (instead of electroconvulsive therapy) for drug-resistant major depression, watchful waiting for inguinal hernias, and hemodialyzer sterilization and reuse. On a per-patient basis, these innovations yielded savings from $122 to almost $12 000 but losses of 0.001 to 0.021 quality-adjusted life-years (approximately 8 hours to 1 week). These findings demonstrate the rarity of decrementally cost-effective innovations in the medical literature.
Let me just repeat that last sentence: "These findings demonstrate the rarity of decrementally cost-effective innovations in the medical literature."