Month: November 2012

The myth of the rational donor? (model this)

At first glance this may sound a little whacky, but perhaps the deeper question is why more donors are not like this?:

“I’m all mixed up between being a conservative and a liberal,” said Kurt Schoeneman, a grape grower from Northern California, who added that some of his friends thought he was “senile.” He had found himself seized by waves of enthusiasm, Mr. Schoeneman said — first for one candidate and then for the other.

“Some of these people, they just loathe Obama, and they’ll write something really nasty about him,” said Mr. Schoeneman, who has given checks to both candidates, most recently $100 to Mr. Romney in June and $100 to Mr. Obama in July. “And then something else will happen, and I’ll go give Romney some money.”

Charles Y. Chen, a salesman in Virginia, gave Mr. Romney $100 on the day of his convention speech in late August. But in September, Mr. Chen donated to Mr. Obama every few days, $50 here, $55 there. Then he switched again, giving Mr. Romney $50.

“I think the Republicans have better ideas on the economy and the Democrats have better ideas on social issues, immigrationand social justice,” Mr. Chen said in an interview. “Just like anything, both have something that they do great and something that they need to improve.”

Gretchen Davidson, a homemaker in Birmingham, a Detroit suburb, said she had gone to several events to hear different ideas and arguments. She gave $500 to Mr. Romney in early August and $1,500 to Mr. Obama in late September.

“You have friends that throw parties on each side, and honestly, I am someone in the middle that didn’t really know which way I was going,” Ms. Davidson said. “You try to sort of see what people are so excited about.”

These are not lobbyists who need to hedge their giving:

Mr. Bagchi gave $100 each to both candidates on Sept. 8, he said, because “they are doing good work for the country. And I want them to come together. So for that reason, I gave to them both.”

Mr. Bagchi said that while he usually gave equally to both candidates, he had recently responded to a particularly personal appeal from the Obama campaign.

“I have given a little more to Barack Obama because he and Michelle were celebrating their anniversary,” he said. “But on balance it was very equal.”

Very good sentences

Call this hyperscience, a claim to scientific status that conflates the PR of science with its rather more messy, complicated and less than ideal everyday realities and that takes the PR far more seriously than do its stuck-in-the-mud orthodox opponents. Beware of hyperscience. It can be a sign that something isn’t kosher.  A rule of thumb for sound inference has always been that if it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck. But there’s a corollary: if it struts around the barnyard loudly protesting that it’s a duck, that it possesses the very essence of duckness, that it’s more authentically a duck than all those other orange-billed, web-footed, swimming fowl, then you’ve got a right to be suspicious: this duck may be a quack.

That is from Shapin on Velikovsky, with the link from The Browser.

Political sorting in social dating relationships

Gregory Huber and Neil Malhotra have a new research paper Political Sorting in Social Relationships: Evidence from an Online Dating Community (pdf).  Here is one useful bit:

Relative to the average standard deviation by respondent for each outcome…shared ideology increases interest in responding by 12% of that amount, interest in long-term dating by 16%, and assessments of shared values by 20%.  By the same comparison, shared lack of political interest increases assessments of likelihood of responding by a statistically significant 18%, but has more modest…effects on interest in long-term dating and assessments of shared values, respectively.

There is much more data in this paper, including a discussion of which issues matter to people the most.  Here is one upshot:

…online dating pairings where communication takes place display greater political homogeneity than the population as a whole.

When the hoarding equilibrium sets in

There were no laws against price gouging. But the petrol stations knew that every single customer would hate them if they were the only station to let prices rise such that supply and demand came back into equilibrium. And so because the stations didn’t gouge, we were in a terrible equilibrium where everyone’s rational response to the below-clearing price was to hoard, because there was real risk that the stations would run out of fuel. And there was real risk of running out of fuel because of the hoarding. Breaking the hoarding equilibrium would have required a coordinated price hike that both allocated fuel to its highest valued uses and told everyone that there would be fuel available for them in an emergency if they really really needed it. That latter part is crucial – it kills the incentive to hoard.

That is from Eric Crampton.  Eric makes a further point.  Even in the absence of laws against price gouging, individual stations may be reluctant to raise prices and incur the wrath of customers.  Yet if all stations would raise prices, and markets would clear, consumers would know they could get emergency gasoline if they had to.  That would help break the hoarding equilibrium, if done collectively.  The real market failure may be the unwillingness to raise prices.

Addendum: Here is what we are getting: “He also said the Defense Department was sending in 12 million gallons of fuel to be pumped from five mobile stations. “They’ll have a 10-gallon limit,” the governor said. “The good news is, it’s going to be free.”

Enable talk gloves

Four Ukrainian students have created gloves that allow speech- and hearing-impaired people to communicate with those who don’t use or understand sign language. The gloves are equipped with sensors that recognize sign language and translate it into text on a smart phone, which then converts the text to spoken words.

That is from Time’s list of the notable inventions of 2012, the link to that item is here, the entire series starts here.  For the pointer I thank Matthew Petersen.

Assorted links

From Nick Rowe

“Cyclically-adjusted deficit” is not a macroeconomic concept

It shouldn’t be, anyway.

Tyler Cowen says: “These cyclically adjusted measures are useful information and should not be discarded, but I don’t wish to use them as the sole or main or dominant source of information about the stance of fiscal policy.

I’m going to make a stronger claim. One I have made before.

Consider two countries. Both countries are identical, except:

Country A has an activist government, which likes to be seen as “doing something” when there’s a recession. It rushes around passing new laws increasing government spending and cutting taxes whenever there’s a recession.

Country B has a lazy government, which likes the idea of “fire-and-forget” fiscal policy. It passes a law before the recession, which ensures that government spending automatically rises and taxes automatically fall whenever there’s a recession. Then it goes back to sleep.

Both countries have exactly the same levels of government spending and taxes during a recession (and during a boom too).

A recession hits both countries. The accountants measure the “cyclically-adjusted deficits” (“structural deficits”) in both countries. They ask “under existing tax laws and spending laws, what would the deficit be if there were no recession?” They conclude that country A has a big cyclically-adjusted deficit, and country B has none.

But there is no macroeconomic difference between the two countries.

You cannot say that country A had a good “countercyclical fiscal policy”, and country B didn’t. They had exactly the same fiscal policy. They just implemented it in different ways.

A second example. Country C has a strong system of automatic stabilisers, including a steeply progressive tax system, but increases tax rates in a recession. Country D has a flat tax system, but fails to cut taxes in a recession. They end up with exactly the same taxes in a recession. C has imposed “austerity”, and created a ‘cyclically-adjusted surplus”, and D has not. But there is no macroeconomic difference between the two countries’ fiscal policies. C has sinned by commission; D has sinned by omission.

“Cyclically-adjusted deficit” is a political/legal concept. It is not a macroeconomic concept.

(There might be some important macroeconomic differences between those two ways of implementing fiscal policy: maybe automatic stabilisers work more quickly than activist policies; maybe automatic stabilisers give more certainty about the future and help stabilise expectations better. But you won’t see those differences captured in the cyclically-adjusted deficit number.)

Update: what should replace it? Maybe deficit/GDPgap? Or percentage deviation from a cross-country regression of deficit on GDPgap? Crude, but simple. Still vulnerable to Tyler’s objection that the gap between actual and “potential” GDP is a judgement call. But better than “cyclically-adjusted deficit”, which makes the same judgement call about potential GDP, and then adds a lot of legal/political noise.

The link is here.

MOOC cheating (model this)

From an email from Coursera:

Several students have contacted me about cases of cheating on the Final Exam. Frankly, why anyone who do this in a course that focuses on learning and offers no credentials, beats me. Students who cheat are really cheating themselves. If you are sure an answer is plagiarized from somewhere else (often easy to determine with a quick web search), you could simply award 1’s everywhere, which amounts to a score of 0. Whether you do that for one question or the whole exam is up to you. If there is any doubt that the student has broken the honor code, you have to give the student the benefit of that doubt. 0 on the whole exam is more significant than on one question. Though again, the stakes here are essentially zero; it’s mostly about self esteem, surely. For truly egregious cases, send me the details (your login id and the Student number (1, 2, or 3) and I can take it from there. Violation of the honor code is cause for expulsion from the class. Expulsion has occurred, in this class and others, I’m sad to say.

Meanwhile, if you want to know how evaluation training and peer grading looked from our side (the instruction team and the folks at Coursera who were making sure the ship stayed afloat), check out my latest post at to see what was going on behind the scenes. Enjoy! 🙂

I thank AA for the pointer.

A Bet is a Tax on Bullshit

Nate Silver, whose models give Obama a high probability of winning reelection, has offered one of his critics a bet. “Putting your money where your mouth is,” is a time-honored principle of integrity in my view but the NYTimes Public Editor is very upset. Margaret Sullivan, however, never offers an argument against betting instead treating it as unseemly.

[Betting is] inappropriate for a Times journalist, which is how Mr. Silver is seen by the public even though he’s not a regular staff member.

“I wouldn’t want to see it become newsroom practice,” said the associate managing editor for standards, Philip B. Corbett. He described Mr. Silver’s status as a blogger — something like a columnist — as a mitigating factor…

…When he came to work at The Times, Mr. Silver gained a lot more visibility and the credibility associated with a prominent institution. But he lost something, too: the right to act like a free agent with responsibilities to nobody’s standards but his own.

The closest to an argument against betting is this:

…whatever the motivation behind it, the wager offer is a bad idea – giving ammunition to the critics who want to paint Mr. Silver as a partisan who is trying to sway the outcome.

My best parse of the argument is that by betting Silver has given himself an interest in the election and this hurts his credibility. Nothing, however, could be further from the truth.

A properly structured bet is the most credible guarantor of rigorous disinterest. In order to prove his point, Silver is not required to take the Obama side of the bet! At the odds implied by his model (currently between 3 and 4 to 1) Silver should be willing to take either side of a modest bet. Indeed, we could hold a coin toss, heads Silver takes the Obama side, tails he takes Romney.

In fact, the NYTimes should require that Silver, and other pundits, bet their beliefs. Furthermore, to remove any possibility of manipulation, the NYTimes should escrow a portion of Silver’s salary in a blind trust bet. In other words, the NYTimes should bet a portion of Silver’s salary, at the odds implied by Silver’s model, randomly choosing which side of the bet to take, only revealing to Silver the bet and its outcome after the election is over. A blind trust bet creates incentives for Silver to be disinterested in the outcome but very interested in the accuracy of the forecast.

Overall, I am for betting because I am against bullshit. Bullshit is polluting our discourse and drowning the facts. A bet costs the bullshitter more than the non-bullshitter so the willingness to bet signals honest belief. A bet is a tax on bullshit; and it is a just tax, tribute paid by the bullshitters to those with genuine knowledge.


That is a new paper by Pierre Azoulay, Jeffrey Furman, Joshua Krieger, and Fiona Murray, and here is the abstract:

To what extent does “false science” impact the rate and direction of scientific change? We examine the impact of more than 1,100 scientific retractions on the citation trajectories of articles that are close neighbors of retracted articles in intellectual space but were published prior to the retraction event. Our results indicate that following retraction and relative to carefully selected controls, related articles experience a lasting five to ten percent decline in the rate at which they are cited. We probe the mechanisms that might underlie these negative spillovers over intellectual space. One view holds that adjacent fields atrophy post-retraction because the shoulders they offer to follow-on researchers have been proven to be shaky or absent. An alternative view holds that scientists avoid the “infected” fields lest their own status suffers through mere association. Two pieces of evidence are consistent with the latter view. First, for-profit citers are much less responsive to the retraction event than are academic citers. Second, the penalty suffered by related articles is much more severe when the associated retracted article includes fraud or misconduct, relative to cases where the retraction occurred because of honest mistakes.

This of course may suggest one reason why some scientists are not so keen to force retractions from other researchers in their field.

Very good points on FEMA

From Jordan Weissmann:

We’ve nationalized so many of the events over the last few decades that the federal government is involved in virtually every disaster that happens. And that’s not the way it’s supposed to be. It stresses FEMA unnecessarily. And it allows states to shift costs from themselves to other states, while defunding their own emergency management because Uncle Sam is going to pay. That’s not good for anyone.

When FEMA’s operational tempo is 100-plus disasters a year, it’s always having to do stuff. There’s not enough time to truly prepare for a catastrophic event. Time is a finite quantity. And when you’re spending time and money on 100-plus declarations, or over 200 last year, that taxes the system. It takes away time you could be spending getting ready for the big stuff.

Nobody is taking the position, that I know of, saying get rid of FEMA, the federal government should have no role responding to disasters. The position is, no no, we need to save FEMA and the Federal Government for the big stuff: Sandy, Katrina, Northridge. But states should be charged to take care of the other, more routine stuff that happens every year. There are always going to be Tornadoes in Oklahoma and Arkansas. There are always going to be floods in northwest Ohio and Iowa. There are always to be snowstorms in the Northeast. There are always going to be rain storms, fires in Colorado. They happen every year. There’s no surprise here. And they don’t have national or regional implications, economically or otherwise. If they do, that’s a different question.

Read the whole thing.