Canada v. U.S. on Health Care
Jason Shafrin, the Healthcare Economist, has a good review of the O’Neil and O’Neil NBER working paper, Health Status, Health Care and Inequality: Canada vs. the U.S. (This paper was also mentioned by Tyler recently).
American are less healthy than Canadians. What this paper finds, however, is
that this is mainly due to the fact that the U.S. has a higher incidence of
disease. It turns out that Americans may have slightly higher access to
treatment than Canadians.
Read the full review. Of course, the Canadian system is cheaper but very few people are willing to lobby for less health care.
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
aircraft.
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.
Landsburg at GMU
Steven Landsburg will be at GMU this Thursday Oct. 4 to talk about why more sex is better safer sex. He will be speaking at 6 pm in Enterprise Hall, Room 80. The event is free and open to the public. Don’t miss what is sure to be an excellent event!
Justin Wolfers to Guest Blog!
Justin Wolfer’s work on prediction markets, racial bias in the NBA, happiness, and divorce has been mentioned on this blog many times so we decided to cut out the middlemen, i.e. us, and let Justin do all the work. The amazing thing is he said yes. Tyler and I are delighted to have Justin guest blogging with us this week.
The aforementioned works are just a portion of Justin’s output. The media love his work on sports and betting but Justin’s work with Oliver Blanchard on European unemployment, for example, has been influential in the profession (and come to think of it also made the papers). Justin has also worked on business cycle theory and with Greg Mankiw on inflation expectations.
Justin is known for careful, thorough and compelling empirical work. He often has what I think of as the last word on a subject as with his paper on the Coase theorem and divorce or his work with John Donohue on the death penalty.
An open secret and an open sin in economics is that many empirical studies are difficult to replicate, even when journals supposedly require authors to make their data publicly available. Here is how you replicate a Wolfers paper: You go to his web page you download the data and often the code, you run it – and damn it you get exactly what is in the journal. I have done this several times and every time I am shocked that this actually works. (And before being accused of being a hypocrite let me acknowledge that I too have sinned but under Justin’s example I am resolved to do better in the future.)
With all this in his favor I almost want to report to you that this guy may be a excellent economist but oh what a jerk. Alas, Justin is modest to a fault, highly supportive of the work of others and great fun to talk with over a beer. The worst thing I can say about him – and I feel I must say something bad if only to be credible – is that he really needs a haircut. Welcome to MR, Justin!
Heroes are not Replicable
You know the plot. Young, idealistic teacher goes to inner-city high school. Said idealistic teacher is shocked by students who don’t know the basics and who are too preoccupied with the burdens of violence, poverty and indifference to want to learn. But the hero perseveres and at great personal sacrifice wins over the students using innovative teaching methods and heart. The kids go on to win the state spelling/chess/mathematics championship. c.f. Stand and Deliver, Freedom Writers, Dangerous Minds etc.
We are supposed to be uplifted by these stories but they depress me. If it takes a hero to save an inner city school then there is no hope. Heroes are not replicable.
What we need to save inner-city schools, and poor schools everywhere, is a method that works when the teachers aren’t heroes. Even better if the method works when teachers are ordinary people, poorly paid and ill-motivated – i.e. the system we have today.
In Super Crunchers, Ian Ayres argues that just such a method exists. Overall, Super Crunchers is a light but entertaining account of how large amounts of data and cheap computing power are improving forecasting and decision making in social science, government and business. I enjoyed the book. Chapter 7, however, was a real highlight.
Ayres argues that large experimental studies have shown that the teaching method which works best is Direct Instruction (here and here are two non-academic discussions which summarizes much of the same academic evidence discussed in Ayres). In Direct Instruction the teacher follows a script, a carefully designed and evaluated script. As Ayres notes this is key:
DI is scalable. Its success isn’t contingent on the personality of some uber-teacher….You don’t need to be a genius to be an effective DI teacher. DI can be implemented in dozens upon dozens of classrooms with just ordinary teachers. You just need to be able to follow the script.
Contrary to what you might think, the data also show that DI does not impede creativity or self-esteem. The education establishment, however, hates DI because it is a threat to the power and prestige of teaching, they prefer the model of teacher as hero. As Ayres says "The education establishment is wedded to its pet theories regardless of what the evidence says." As a result they have fought it tooth and nail so that "Direct Instruction, the oldest and most validated program, has captured only a little more than 1 percent of the grade-school market."
Happiness advice from my wife
My wife, a PhD microbiologist, told me once that when she was at work she felt guilty about not being at home with the kids and when she was at home with the kids she felt guilty about not being at work.
This problem may explain a surprising finding from Betsey Stevenson and one of your leading candidates for "most wanted economist blogger," Justin Wolfers. Stevenson and Wolfers have a new paper showing that happiness is up for men but down for women. They write:
By most objective measures the lives of women in the United States have improved over the
past 35 years, yet we show that measures of subjective well-being indicate that women’s happiness
has declined both absolutely and relative to male happiness. The paradox of women’s declining
relative well-being is found examining multiple countries, datasets, and measures of subjective wellbeing,
and is pervasive across demographic groups. Relative declines in female happiness have eroded
a gender gap in happiness in which women in the 1970s typically reported higher subjective wellbeing
than did men. These declines have continued and a new gender gap is emerging–one with
higher subjective well-being for men.
One reason is suggested by Stevenson in a NYTimes article on her research with Wolfers and similar independent research from Alan Krueger.
Ms. Stevenson was recently having drinks with a business school
graduate who came up with a nice way of summarizing the problem. Her
mother’s goals in life, the student said, were to have a beautiful
garden, a well-kept house and well-adjusted children who did well in
school. “I sort of want all those things, too,” the student said, as
Ms. Stevenson recalled, “but I also want to have a great career and
have an impact on the broader world.”
Opportunity brings opportunity cost.
In the NYTimes article David Leonhardt correctly notes that "Although women have flooded into the work force, American society hasn’t fully come to grips with the change." Alas, all he has to offer as solution is the usual platitudes about subsidized daycare and how men should do more of the housework – peculiar solutions to women’s unhappiness with increased opportunities. Leonhardt should instead have talked to my wife.
As I wrote this post, I asked my wife about her feeling guilty at home and at work but she told me she no longer feels this way. "Really?" I asked, "Why not?"
"I decided to act more like a man and get over it," she responded.
Housekeeping
The MR Google Search bar is very useful but it was hard to find so I have made it more prominent near the top left corner.
Also, if you are going to buy anything at Amazon, whether it’s a book Tyler recommended or a diamond engagement ring, then please click to Amazon through the link on the left. It costs you nothing but it will help to cover Tyler’s prodigious book budget. Our wives wish that blogging would cover a diamond budget but alas no.
Road Pricing
Beginning early next year, drivers in six states will begin testing a
new way to pay for roads and transit: Commuters will be charged for the
miles they drive rather than paying taxes on gasoline purchased.
GPS will make road pricing and auto insurance by the mile common in the near future. Widespread road pricing will increase investment in private roads. See Street Smart (I was the general editor) for more.
I am not laughing any more
In late August, Maryland’s Joppatowne High School became the first
school in the country dedicated to churning out would-be Jack Bauers.
The 75 students in the Homeland Security and Emergency Preparedness
magnet program will study cybersecurity and geospatial intelligence,
respond to mock terror attacks, and receive limited security clearances
at the nearby Army chemical warfare lab.The new school is funded and guided by a slew of federal, state, and
local agencies, not to mention several defense firms. Officials say it
will teach kids to understand the "new reality," though they hasten to
add that the school isn’t focused just on terrorism. School
administrators, channeling Cheneyesque secrecy, refused to be
interviewed for this story. But it’s no secret that the program is seen
as a model for the rest of the country, with the Pentagon and other
agencies watching closely.
More here. And do remember that vouchers are a bad ideas because we need public education to teach civic values.
The Straight Talk from Market Prices
According to the betting markets (at least intrade.com), Ron Paul has officially passed John McCain in terms of the probability of winning the Republican nomination. Amazing – however you read the tea leaves.
Thanks to Tim Groseclose for the pointer.
No More Making Fun of Canadian Money
The Canadian dollar hit parity with the US dollar today, the first time this has happened in over thirty years. Inflation on the return?
Why Most Published Research Findings are False (2)
John Ioannidis’s argument that most published research findings are false has been getting some attention in the blogosphere because of a recent article in the WSJ. In an earlier post I explained why most published research findings might be false using a simple diagram.
Hat tip and thanks to Steve Novella at Neurologica Blog and Mark H at Denialism both of whom refer to my analysis adding many excellent insights of their own.
Markets in Everything? We can only hope so.
The International Crisis Group (ICG) says some
Zimbabweans are in favor of a retirement package, which would be
attractive enough for President Robert Mugabe to step down.
More here.
Student Blog Contest
America’s Future Foundation is pleased to announce a nationwide
contest for the best conservative or libertarian college blogger. The
purpose of the contest is to encourage original liberty-minded blogger
journalism on college campuses and to identify young conservative and
libertarian talent who wish to pursue careers as journalists and
writers.The contest is open to all graduate and undergraduate bloggers age
25 and younger. The winning blog will be awarded a cash prize of $10,000,
and be invited to be a panelist at an AFF Roundtable on higher
education in Washington, D.C. Awards will be announced on April 7, 2008.
A Law and Economics Exam Question
In Virginia the common law has long held that if a neighbor’s tree encroaches on your yard you may cut the branches as they fall over the property line but any damage the tree does to your property is your problem. Your neighbor can even sue if your pruning kills the tree. Last week the Virginia Supreme Court overruled this 70 year-old precedent so that now it’s your neighbor’s duty to prune or cut down the tree if it is a "nuisance."
Discuss. Which rule is better the new rule or the old? What does this ruling imply about Posner’s hypothesis about the efficiency of the common law? What would Coase say?