Category: Law

More guns, more crime?

The full title of the paper is “More Guns, More Unintended Consequences: The Effects of Right-to-Carry on Criminal Behavior and Policing in US Cities” and the authors are John J. Donohue, Samuel V. Cai, Matthew V. Bondy, and Philip J. Cook (does Cook get enough credit for his trajectory of ongoing productivity?) and here is the abstract:

We analyze a sample of 47 major US cities to illuminate the mechanisms that lead Right-to-Carry concealed handgun laws to increase crime. The altered behavior of permit holders, career criminals, and the police combine to generate 29 and 32 percent increases in firearm violent crime and firearm robbery respectively. The increasing firearm violence is facilitated by a massive 35 percent increase in gun theft (p=0.06), with further crime stimulus flowing from diminished police effectiveness, as reflected in a 13 percent decline in violent crime clearance rates (p=0.03). Any crime-inhibiting benefits from increased gun carrying are swamped by the crime-stimulating impacts.

Here is the link to the NBER working paper.

How much pilot training should be required?

[Derek} Thompson: To what extent do you think regulatory policy is making America’s airlines particularly fragile to the sort of problems we’re currently experiencing?

[Scott] Keyes: One of the front-and-center issues discussed in the airline industry right now is this question of pilot training. Is 1,500 hours the proper amount of air time we should be expecting from pilots before we certify them to fly commercial jets? On the one hand, it’s easy to say, “You can’t be too careful.” Just imagine the attack ads if somebody votes to decrease the training requirement, and then all of a sudden there’s a crash. The optics are horrendous. On the other hand, the U.S. is a bit of an outlier. Most other countries do not require anything near this level of training ahead of being certified. The U.S. historically has not required that level of training. And we let foreign pilots fly to JFK and SFO and LAX without this requirement. All that said, there’s still no quick overnight fix that will immediately get you more flights, more pilots, and a greater supply of air travel. Certainly not for this summer.

Here is more on why air travel is so screwed up this summer, via Daniel Wilner.

Regulatory quality is declining

One example of such evidence-free regulation in recent years comes from the Department of Health and Human Services (HHS). In 2021, HHS repealed a rule enacted by the Trump administration that would have required the agency to periodically review its regulations for their impact on small businesses. The measure was known as the SUNSET rule because it would attach sunset provisions, or expiration dates, to department rules. If the agency failed to conduct a review, the regulation expired.

Ironically, in proposing to rescind the SUNSET rule, HHS argued that it would be too time consuming and burdensome for the agency to review all of its regulations. Citing almost no academic work in support of its proposed repeal — a reflection of the anti-consequentialism that animates so much contemporary regulatory policy — the agency effectively asserted that assessing the real-world consequences of its existing rules was far less pressing an issue than addressing the perceived problems of the day (by, of course, issuing more regulations).

Through its actions, HHS has rejected the very notion of having to review its own rules and assess whether they work. In fact, the suggestion that agencies review their regulations is an almost inexplicably divisive issue in Washington today. “Retrospective review” has become a dirty term, while cost-benefit analysis has morphed into a tool to judge intentions rather than predict real-world consequences. The shift highlights how far the modern administrative state has drifted from the rational, evidence-based system envisioned by the law-and-economics movement just a few decades ago.

Here is more from James Broughel at Mercatus.

Roland Fryer on DEI

One of the most important developments in the study of racial inequality has been the quantification of the importance of pre-market skills in explaining differences in labor market outcomes between Black and white workers. In 2010, using nationally representative data on thousands of individuals in their 40s, I estimated that Black men earn 39.4% less than white men and Black women earn 13.1% less than white women. Yet, accounting for one variable–educational achievement in their teenage years––reduced that difference to 10.9% (a 72% reduction) for men and revealed that Black women earn 12.7 percent more than white women, on average. Derek Neal, an economist at the University of Chicago, and William Johnson were among the first to make this point in 1996: “While our results do provide some evidence for current labor market discrimination, skills gaps play such a large role that we believe future research should focus on the obstacles Black children face in acquiring productive skill.”

…the key step that is missing in every DEI initiative I have seen in the past 25 years: a rigorous, data-driven assessment of root causes that drives the search for effective solutions. In other aspects of life, we would not fathom prescribing a treatment without knowing the underlying cause.

…Solutions that yield measurable results can be substantiated into company policy, while those that don’t should be discarded. In the case of the hospital network, once a small change was made to the structure of their scheduling, gender differences were reduced. Despite countless hours spent in training and seminars, their results were unchanged for years. The solution was hidden in plain data.

Roland Fryer on using data not feelings to address diversity, equity, and inclusion.

The predictability of Chicago shooting victims

Out-of-sample accuracy is strikingly high: of the 500 people with the highest predicted risk [ of being shot], 13 percent are shot within 18 months, a rate 130 times higher than the average Chicagoan.

Yikes!  That is from a new NBER working paper by Sara B. Heller, Benjamin Jakobowski, Zubin Jelveh, and Max Kapustin.  The Spielberg movie was indeed a good one…

China depredation of the day

People who have arrived in Zhengzhou to withdraw money from embattled regional banks said they have found their health codes turn red — a label mostly reserved for potential COVID-19 carriers or those infected with the virus — after arriving in Henan province’s provincial capital, prohibiting them from accessing transportation networks, public services, and even going to the banks to lodge their grievances.

Who needs deposit insurance?  Here is the full story, via B.

Stop school shooting drills

…this article applies machine learning and interrupted time series analysis to 54 million social media posts, both pre- and post-drills in 114 schools spanning 33 states. Drill dates and locations were identified via a survey, then posts were captured by geo-location, school social media following, and/or school social media group membership. Results indicate that anxiety, stress, and depression increased by 39–42% following the drills, but this was accompanied by increases in civic engagement (10–106%). This research, paired with the lack of strong evidence that drills save lives, suggests that proactive school safety strategies may be both more effective, and less detrimental to mental health, than drills.

That is from Mai ElSherief, et.al., published in 2021.  Via Gabriel Demombynes.

A Bloody Waste

Image by Satheesh Sankaran from Pixabay

Hemochromatosis is a disorder in which extra iron builds up in the body. A potential treatment is phlebotomy so patients with hemochromatosis want to donate blood and donate regularly. The American Red Cross, however, does not permit people with hemochromatosis to donate blood. Why not? The blood is safe and effective. The blood of these patients doesn’t have much, if any, extra iron (the iron builds up in the body not so much in the blood per se). The “problem” is that people with hemochromatosis benefit themselves by giving blood and for this reason their blood is considered tainted by the American Red Cross.

The American Red Cross, which controls about 45% of the nation’s blood supply, does not currently accept donations from people with known hemochromatosis. Everyone agrees that the blood is safe and of high quality. There is no risk of passing on a genetic disease through blood transfusions. But the Red Cross has a long-standing policy that potential donors are not allowed to receive direct compensation for their donation (beyond the usual orange juice and cookie). Because people with hemochromatosis would otherwise have to pay for their therapeutic phlebotomies, they would in effect be getting something of value for being able to donate for free. Thus the Red Cross has ruled that such donations violate their policy.

The FDA does allow patients with hemochromatosis to donate blood so long as there is no charge for phlebotomy (i.e. so long as patients don’t have an incentive to lie to obtain free phlebotomy via donation.) Some countries and some blood banks within the US do accept donations from people with hemochromatosis as do some Kaiser locations. But the American Red Cross is the biggest collector of blood and so it is very often the case that when people with hemochromatosis get a phlebotomy their blood is simply thrown away.

Once a week, Dan Gray pays to have a pint of blood taken at Franklin Memorial Hospital. And once a week, that blood is thrown out rather than donated to someone in need.

It frustrates him.

“You could take a pint out of me, a pint out of you and a pint out of somebody else and play three-pint monte with it and they wouldn’t know whose is whose,” Gray said. “As far as the analysis of it, no one would know.”

and here:

The Cape Fear Valley Blood Donor Center put out a desperate call this past week for blood donations.

…Every time Carol Barbera hears of such pleas, she gets upset. She was once an avid blood donor and would be one still.

She also has plenty of blood to give.

A medical condition requires her to have a pint of blood drawn at least every two months. The blood is perfectly usable as donor blood. Instead, it goes straight into medical waste.

The Red Cross’s antipathy towards donations from people with hemochromatosis appears to stem from a confused ethical view that incentivized donations are either “coerced” or “non-altruistic” and an old bias against paid donations coming from Titmuss. Actual studies of paid donation, however, show that incentives increased donations without reducing quality.

Thus, as far as the evidence is concerned, there are no good reasons to prohibit people with hemochromatosis from donating blood and given the repeated shortages of blood in the United States there are many good reasons for allowing them to donate.

Hat tip: The tireless Peter Jaworski.

Factory Built Housing

Government concerns about great disparities in housing conditions, what are often called housing crises, date to at least the 1920s. These great disparities are, of course, still with us 100 years later. In this essay, we argue there will be no progress ending these great disparities until the residential construction industry adopts technology that other industries began adopting more than 100 years ago – factory production methods. There have been attempts to introduce these methods in residential construction for the last century, but they are always blocked and sabotaged by monopolies in the traditional construction sector, that is, the sector producing homes outside, on-site, using “stick-built” methods. Monopolies in traditional construction sabotage many types of factory-built homes. In this essay, we focus on the sabotage of particular types of such homes, what we call small-modular homes. These homes can be produced and sold at very-low prices, so that the sabotage of these homes has disproportionately hurt the low-income. The sabotage is the primary reason for the existence of, and perpetuation of, U.S. housing crises.

[Small-modular homes]…are blocked from most areas of the country – it’s simply illegal for a household to purchase such a home and place it on land owned by the household. In areas where they are “allowed,” they are often zoned for areas like manufacturing districts and dumps. Even then, regulations mean higher production costs for these homes in factories. They also mean the homes are financed as automobiles (with personal loans, or chattell loans) and not real estate loans. It’s clear why these homes are a threat to those constructing stick-built homes, especially in the lower-priced home market, and why monopolies in traditional construction have invested so heavily in blocking these small-modular homes. The homes are of high-quality, built to a strict national building code. They are manufactured at a cost per square foot that is one-third to one-half less than the cost per square foot to construct homes with traditional methods.

That’s from James Schmitz’s paper for the Minneapolis Fed, Solving the Housing Crisis will Require Fighting Monopolies in Construction.

Amazingly, a majority of the houses produced in the early 1970s were factory-built before these types of houses were driven out of the market. Capps at Bloomberg notes:

Manufactured homes briefly dominated the U.S. housing market during the 1960s. By 1972, these homes — not just mobile homes but small-scale modular houses — accounted for some 60% of all new single-family homes produced nationwide, according to census data. That number has diminished so much that the role of factories in building affordable housing has gone all but forgotten.

The Biden administration wants to put America’s house factories — those used to be a thing, really — back to work. A new housing plan by the White House offers a set of actions designed to close the nation’s massive affordability gap.

As Schmitz discusses at length in another paper, part of the reason economists have ignored the destruction of factory built housing is that economists came to think of the danger of monopoly as solely involving price (or, to put it the other way as Austrians do, they thought of the virtue of competition as only involving price.). In fact, monopolies reduce productivity and they use the political process to sabotage other firms. Competition isn’t just about price but about increased productivity and creative destruction.

P.S. I am in the process of building a factory-built house. The factory part was by far the easiest and most efficient part of the process.

A Ross Douthat proposal on guns

So I would like to see experiments with age-based impediments rather than full restrictions — allowing would-be gun purchasers 25 and under the same rights of ownership as 40- or 60-year-olds, but with more substantial screenings before a purchase. Not just a criminal-background check, in other words, but some kind of basic social or psychological screening, combining a mental-health check, a social-media audit and testimonials from two competent adults — all subject to the same appeals process as a well-designed red-flag law.

Here is the full NYT Op-Ed.  And speaking of Ross, and guns, or rather gun, Ross gives the correct Straussian reading of Maverick, namely that Tom Cruise dies early in the movie, and the rest of the film is his pre-death fantasy.  This take is all the more plausible if you have seen Michael Powell’s Stairway to Heaven/Matter of Life or Death, where this is clearly the correct interpretation.

Moving From Opportunity: The High Cost of Restrictions on Land Use

ImagePeople are more productive in cities. As a result, people move to cities to earn higher wages but some of their productivity and wages is eaten up by land prices. How much? In a new paper Philip G. Hoxie, Daniel Shoag, and Stan Veuger show that net wages (that is wages after housing costs) used to increase in cities for all workers but since around 2000 net wages actually fall when low-wage workers move to cities. The key figure is at right.

As I wrote earlier, it used to be that poor people moved to rich places. A janitor in New York, for example, used to earn more than a janitor in Alabama even after adjusting for housing costs. As a result, janitors moved from Alabama to New York, in the process raising their standard of living and reducing income inequality. Today, however, after taking into account housing costs, janitors in New York earn less than janitors in Alabama. As a result, poor people no longer move to rich places. Indeed, there is now a slight trend for poor people to move to poor places because even though wages are lower in poor places, housing prices are lower yet.

Ideally, we want labor and other resources to move from low productivity places to high productivity places–this dynamic reallocation of resources is one of the causes of rising productivity. But for low-skill workers the opposite is happening – housing prices are driving them from high productivity places to low productivity places. Furthermore, when low-skill workers end up in low-productivity places, wages are lower so there are fewer reasons to be employed and there aren’t high-wage jobs in the area so the incentives to increase human capital are dulled. The process of poverty becomes self-reinforcing.

Why has housing become so expensive in high-productivity places? It is true that there are geographic constraints (Manhattan isn’t getting any bigger) but zoning and other land use restrictions including historical and environmental “protection” are reducing the amount of land available for housing and how much building can be done on a given piece of land. As a result, in places with lots of restrictions on land use, increased demand for housing shows up mostly in house prices rather than in house quantities.

Moreover, as I also argued earlier, even though the net wage is still positive for college-educated workers a signficant share of the returns to education are actually going to land owners!  Enrico Moretti (2013) estimates that 25% of the increase in the college wage premium between 1980 and 2000 was absorbed by higher housing costs. Moreover, since the big increases in housing costs have come after 2000, it’s very likely that an even larger share of the college wage premium today is being eaten by housing. High housing costs don’t simply redistribute wealth from workers to landowners. High housing costs reduce the return to education, reducing the incentive to invest in education. Thus higher housing costs have reduced human capital and the number of skilled workers with potentially significant effects on growth.

My Conversation with Jamal Greene

Here is the audio, video, and transcript.  Here is part of the summary:

Jamal and Tyler discuss what he’d change about America’s legal education system, the utility of having non-judges or even non-lawyers on the Supreme Court, how America’s racial history influences our conception of rights, the potential unintended consequences of implementing his vision of rights for America, how the law should view economic liberty, the ideal moral framework for adjudicating conflicts, whether social media companies should consider interdependencies when moderating content on their platforms, how growing up in different parts of New York City shaped his views on pluralism, the qualities that make some law students stand out, and more.

Here is one excerpt:

COWEN: There is a crude view in popular American society — even possibly correct — that, simply, American society is too legalistic. There’s that book, Three Felonies a Day. If you have expired prescription medicine in your cabinet, you’re committing a felony. People who are very smart will just tell me, “Never talk to a cop. Never talk to an FBI agent.” I’m an upper-class White guy who’s literally never smoked marijuana once, and they’re telling me, “Don’t ever speak with the law.”

Isn’t something wrong there? Is the common intuition that we’re too legalistic correct?

GREENE: I think that we are too apt to submit political disputes to legal resolution. I think that for sure. What your friends are telling you about police officers is slightly different, insofar as one can have a deeply non-legalistic culture in which the correct advice is to not talk to police officers if those people are corrupt, if those people are abusive.

When I hear that advice — and I might be differently situated than you — that’s what people are saying is, someone might be out to trick you. And that might be a mistrust of state power, as you mentioned before. Maybe it’s a rational mistrust of state power, but I don’t know that that’s about legalism, which again, is a separate potential problem.

We tend to formulate our problems in legal terms, as if the right way to solve them is to decide how they are to be resolved by a court, or how they are to be resolved by some adjudicative official, as opposed to thinking about our problems in terms of just inherent in, again, pluralism, which has to be solved through politics, has to be solved through conversation.

COWEN: But we still have whatever is upstream of the American law, the steep historical and cultural background, so anything we do is going to be flavored by that. We’re not ever going to get to a system where the policemen are like the policemen in Germany, for instance, or that the courts are like the courts in Germany.

Given that cultural upstream, again, isn’t the intuition basically correct? Just be suspicious of the law. We should have fewer laws, rely less on the legal process, in essence, deregulate as many different things as we can. Why isn’t that the correct conclusion, rather than building in more rights?

Interesting throughout.

Fact Checking Increases Fake News

Florian Ederer and Weicheng Min have an interesting new paper called Bayesian Persuasion with Lie Detection which shows that under some conditions fact checking can increase fake news.

How does lie detection constrain the potential for one person to persuade another to change her action? We consider a model of Bayesian persuasion in which the Receiver can detect lies with positive probability. We show that the Sender lies more when the lie detection probability increases. As long as this probability is sufficiently small, the Sender’s and the Receiver’s equilibrium payoffs are unaffected by the presence of lie detection because the Sender simply compensates by lying more. However, when the lie detection probability is sufficiently high, the Sender’s equilibrium payoff decreases and the Receiver’s equilibrium payoff increases with the lie detection probability.

The paper is difficult so here’s my stab at the intuition.

Suppose that politicians always want war but war is not always good. If voters can always detect a lie, politicians would always report war-is-good only when war was good and not-war when war was bad. Now suppose that voters can never detect a lie and also that the true probability of war being good is low. In this case, if politicians always report war-is-good then the voters would always ignore the politicians and choose no-war. But suppose that politicians always report war-is-good when war is good but sometimes report war-is-bad when war is bad (and, of course, sometimes report war-is-good when war is bad). In this situation, voters could be better off listening to politicians than ignoring them completely and the politicians will also be better off because they will get war more often—always when it is good and sometimes when it is bad. So, even though they always want war, how often should politicians report war-is-bad when war is bad? Just enough so that the voters are indifferent between following the politician’s advice and ignoring it altogether. In other words, voters have a threat point—ignore the politician completely. Knowing this threat point, politicians should tell the truth just enough so that voters prefer following the politician’s advice to ignoring them completely. Thus, even though voters can never detect a lie, politicians should sometimes tell the truth.

Now assume that there is (imperfect) lie detection. It’s immediately obvious that holding all else equal voters will be better off because now they will detect some of the times politicians say war-is-good when in fact war-is-bad. But precisely for this reason, all else will not be held equal, politicians will now report war-is-good when it is bad more often, i.e. they will lie more often. Working “backwards”, the voters threat point—ignore the politicians altogether—hasn’t changed and so their expected utility won’t change but that means that lie detection can’t make them better off and the reason is that politicians will lie more often.

In fact, lie detection doesn’t help the voters unless it is very accurate–perhaps more accurate than in our world.

Note that in this model voters cannot punish politicians for lying nor is there any opportunity for politicians to signal, to take costly actions that could separate truth tellers from liars. The model is all about “senders” and “receivers” of information–it’s a model of Bayesian persuasion not Bayesian punishment. In a model with punishment the ability to detect lies–even the ability to detect lies ex post–could result in more optimistic scenarios. Similarly, signaling might help, at the expense of some cost.

Nevertheless, the lesson I take is that information revelation is rarely pure. Information revelation is strategic–what is revealed and when it is revealed are choices in a game that may have complex and counter-intuitive equilibria.

For more, see Peter Coy’s interesting article on Bayesian persuasion in the New York Times.