Results for “average is over” 1569 found
Negative charity
Buried away in a tiny Telegraph column this week was a reference to one of the best academic studies
to emerge in a long time. Doctors in a Scottish hospital have looked at
the hidden costs of charitable parachuting, to the health service in
particular, and published the results in the journal Injury (the link
is to the abstract unless you or your institution subscribe). They
found that the injury rate was 11% and the serious injury rate 7%.
Minor injuries cost the National Health Service £3751 on average and
serious injuries £5781.As the average parachutist raised all of
£30 (this is just a day out after all) each pound raised for charity
cost the NHS £13.75. Every one of the charitable types who feels
terribly virtuous raising money for charity in this way is actually
preventing the health service treating the sick.
Here is the link, and thanks to Matthew Sinclair for the pointer. Can you think of other comparable examples of negative charity?
Addendum: Jeff Ely directs my attention to this example; buy and drink some water, so that Starbucks will donate money to address the water shortage (in other countries).
Department of Uh-Oh, a continuing series
Reading web sites raises my estimate of the benefits of being already married:
Half of all women make their minds up within 30 seconds of meeting a man
about whether he is potential boyfriend material, according to a study
on speed-dating.The women were on average far quicker at making a decision than the
men [emphasis added] during some 500 speed dates at an event organised as part of
Edinburgh Science Festival.The scientists behind the research said this showed just how
important chat-up lines were in dating. They found that those who were
"highly skilled in seduction" used chat-up lines that encouraged their
dates to talk about themselves in "an unusual, quirky way".The top-rated male’s best line was [TC: yikes, and what kind of British abomination is this?] "If you were on Stars In Their
Eyes, who would you be?", while the top-rated female asked bizarrely:
"What’s your favourite pizza topping?"Failed Casanovas were those who offered up hackneyed comments like "Do
you come here often?", or clumsy attempts to impress, such as "I have a
PhD in computing".
Here is the link, and yes sadly I prefer my pizza plain. Perhaps some of you must now, over longer periods of time, simply blog your potential conquests into submission. By the way, the researchers also suggest that "travel" is the best topic of conversation for spurring a connection and future dates.
Opposite day: Tyrone on resource pessimism
Tyler, you are always so optimistic. But your own "dismal science" offers neither empirics nor analysis to back this attitude up.
The standard economic arguments about resources focus on the margin, while the real problem is infra-marginal. Don’t be misled by all that talk of prices and substitution. We are running out of resources and soon.
Think about eating your beloved dark chocolate, Tyler. Let’s say you have only four squares left of Lindt in the cupboard. Yes, as you eat more the shadow price of each remaining square goes up. Big deal. You are still going to eat all the chocolate before dinner. Economics tells us only that you will end up on the Pareto frontier, but that frontier still has some pretty miserable points. We are about to approach them. Who cares if prices mean that we meet our doom while equating private first-order conditions? We are simply too voracious for the resources at our disposal.
Market signals and property rights do not work for the globe as a whole, unless you have monopoly ownership of the entire world (hmm…). Property rights work best for local problems, such as fishing in a single lake or who should wash the dishes. Private property won’t cure the problems of bad air, poisoned oceans, global warming, or the overall carrying capacity of the planet. We will get doom, doom, and more doom.
The real question is empirical: are global demands for resources big enough so that the problem resembles you with your four squares of chocolate? Yes. The environment is toast, sooner or later and probably sooner. And it is doomed precisely because capitalism is such a wonderful productive machine. Do you really think you can fill the planet with so much rapacious human biomass without significant and indeed overpowering external effects? Our only hope is that we all become plugged-in machines who don’t need much of an environment any longer.
It is true that resources prices have been falling, on average, for some time now. But the Industrial Revolution is a remarkably recent development and we are just getting started. Mankind’s current productive powers truly are unprecedented, a fact which you libertarians love to stress in other contexts, just not this one.
It would be mere luck if energy-saving technologies outraced nature-destroying ones. And even if this were the case for a while, energy-saving technologies, in the long run, simply encourage us to raise our rapaciousness up another notch. The infra-marginal becomes even more infra- than we ever dreamed.
Now let us get speculative. Did I mention that in the economics of the future — once we are in exponential growth modes — the concept of price will hardly matter? It will be more like an engineering problems where 10x of today’s gdp is produced every week, and we have to see whether this wrecks the globe in ten or rather twenty years’ time. Don’t even bother recycling. Furthermore all you futuristic nerds out there should downgrade the relevance of price theory, given the size of the changes you have in mind.
My parting shot: Maybe you think I am a pessimist. But it probably is better if resource pessimism is true. Life as a hunter-gatherer is still life. And those Pygmies produced some pretty good vocal music. If the price of energy were to keep falling, that would mean everyone could, within a few generations time, own the destructive power of a nuclear weapon in his or her iPod. Now that’s scary.
As I have said in the past, Tyrone really is a pessimistic fellow. If that dark chocolate is gone, it is usually because I ate it in advance, knowing he would otherwise steal my supply. There are only so many cupboards in the kitchen, and Tyrone has learned all my hiding places. And why didn’t I buy more at the store in the first place? It is simple: I had to take Tyrone to his Zen Buddhism class; this sad sack doesn’t own a car.
What is Massachusetts doing?
1. All but the very rich must buy health insurance.
2. Business that don’t offer health insurance to their employees will have to pay a tax.
3. Individuals can buy insurance with pre-tax dollars, eliminating the favoritism currently shown to employment-linked insurance.
4. Insurance companies will be subsidized to offer barebones policies to the current uninsured.
There is more, here is a Boston Globe summary. Here is the LA Times. The Washington Post surveys various reactions.
Arnold Kling is skeptical:
…the politicians’ plan will force insurance companies to offer
no-deductible health insurance to people on modest incomes, at premiums
ranging from $1000 to $2000 per year. My guess is that the insurance
companies will not be willing to pay for more than about $2000 per
person per year in claims, and they will demand that the state provide
reinsurance for the rest. Given average health care spending in
Massachusetts of $6000, "the rest" could be a big number.
Andrew Sullivan approves, mostly for general reasons — "let the states try."
My take: This kind of approach will prove increasingly popular. You claim to cover everybody. It doesn’t sound very socialistic and most of the costs are hidden. It appeals to voters’ sense of justice; there is a general belief that many individuals and businesses are free-riding upon the ready availability of hospital emergency rooms. It keeps private insurance rather than trying to eliminate it (single-payer plans) or eliminate its tax advantages (HSAs). This latter feature I find appealing, since I think the private insurance mode, for all its flaws, is or at least should be, the future of the sector. "Not enough private insurance" is the relevant externality relative to the social welfare function, not "too much private insurance." Of course various lobbies — most of all the insurance companies — also will like this feature of the program.
In a political debate, this will, for better or worse, probably crush the more ambitious Democratic plans for national health insurance.
The crunch comes, as Kling points out, when you pretend that covering the uninsured will be cheap or can happen under current levels of program budgeting. Can you imagine California or Texas, both of which have higher levels of uninsured than Massachusetts, trying such a plan? The long-run future of the idea replaces the insurance company subsidies with health insurance vouchers for the poor. They would be means-tested, of course, and the expense would require federal involvement.
To me the Massachusetts plan sounds messy and fragmented. It is a series of concessions rather than a set of solutions. It relies too heavily on unfunded mandates rather than improving incentives. I am not sure it will make anyone healthier. It does nothing to solve the number one problem of the sector, namely bringing competitive forces to bear on improving product quality, accessibility, and affordability. I just bought a new Toyota Corolla for a lower nominal (much less real) price than I paid nine years ago for the same but inferior make without side air bags. Why can’t we have more stories like that in health care? It is the person who figures out how to point health care competition in the right direction who will deserve the brass ring.
That all being said, the Massachusetts plan is better than I would have expected. I am not convinced that the plan will work out badly, at least relative to feasible alternatives.
Inconvenient questions about immigration
MR readers will know I hold a relatively cosmopolitan stance, sympathetic to immigration, including the immigration of low-skilled labor. But notice the tension with Milton Friedman’s classic stance that businesses should maximize profit only, without regard for broader social concerns. If businesses have this liberty to behave selfishly, why do not governments? Similarly, cannot a mother give priority to her child, rather than selling it to save ten babies in Haiti? Why should governments be the unique carrier of cosmopolitan obligations?
I see a few possible stances:
1. Randall Parker thinks Western governments should be be elitist, nationally selfish, and determined to maximize national average IQ.
2. Perhaps government holds special obligations. Robert Goodin argued that government should be utilitarian while other institutions pursue selfish concerns. But where does this dichotomy come from, and still, why should the concerns of a government stretch past its citizenry?
3. Peter Singer and Shelley Kagan believe that all entities, whether collective or individual, should take the most cosmopolitan view possible. For Singer this includes the consideration of other species. Few people are willing to live the implications of this.
4. We have not (yet?) found a universally correct perspective from all vantage points. We have public obligations, private obligations, and no clear algorithm for squaring the two. We nonetheless can find local improvements consistent with both, or which do not greatly damage our private interests. Freer immigration, even when costly, is one of the cheapest and most liberty-consistent ways of addressing our (admittedly ill-defined) obligations to others. But surely those obligations are not zero. This implies, by the way, that Friedman’s maxim is not strictly accurate.
Note that libertarians are often extreme nationalists when it comes to foreign policy ("Darfur is no concern of ours") but extreme cosmopolitans when it comes to immigration.
My views are closest to #4. Our inability to fully embrace cosmopolitanism is a central reason why the case for open borders is not more persuasive. Many people hear the cosmopolitan call and sense, instinctively, that something is wrong. But when we view the argument in explicitly economic terms — what is the best way of satisfying marginal obligations which are surely not zero? — the case for a liberal immigration policy is stronger.
Against accountability in the arts
The value of “accountability” is often counterproductive when applied to direct subsidies for art. To be sure, accountability is critically important in many contexts. For instance CEOs should be accountable to shareholders. But we do not stress accountability in every sphere of human activity. For instance, tenured college professors are not (usually) accountable to university administrators for the content of their ideas. Instead we believe that an ethic of academic freedom will best promote the mission of the university. Supreme Court Justices are not accountable for the content of their decisions, although Congress may respond by passing new laws, or the Constitution may be amended.
Along these lines, direct subsidies stand the greatest chance of making a positive difference when they are insulated from many pressures of accountability. We should return to the stylized facts about artistic discovery, namely that there are many failures for every success. Too much direct accountability causes the funder to be excessively afraid of failure. This limits risk-taking and in the longer run limits the number of successes. Accountability works best when the quality of the average outcome is a good indicator of the tails of the distribution; this is not generally the case with the arts.
By the way, here is the last paragraph of the book:
Given that so much of the aesthetic is hidden, what appears to be the subordination of poetry to philosophy is an illusion, albeit a creativity-enhancing illusion. Rather than subordinating poetry to philosophy, at most I have subordinated the public conception of art to philosophy. Poetry remains secure in its diverse and hidden niches, and indeed is healthiest when philosophy directs the public conception of art toward a regime of markets, indirect subsidies, and decentralization. In this sense we can put philosophy at the service of art, and not at war with it. I wish to overturn the victory that Socrates pretended to award to philosophy over poetry, and to paint an alternative vision of the broader compatibility between the two enterprises.
In defense of the university
I have never been much of a university-basher, and in my new book Good and Plenty I attempt to explain why:
The university also injects diversity into the broader societal discovery process. Faculty tenure is based on two principles: free inquiry and intellectual autonomy. Taken together, these principles also could be described by the less favorable sounding phrase "lack of accountability." A tenured faculty member simply is not very accountable to deans and department chairs. This absence of accountability, while it comes under heavy criticism, is part of the virtue of the university. The university works by generating and evaluating ideas according to novel and independent principles, relative to the rest of society. Direct commercial considerations drive most sources of ideas in society, including corporate research and development, commercial culture, advertising, and celebrity culture. The university is an alternative and complementary mechanism for producing and evaluating social ideas. In the university professors are, at least in theory, insulated from direct commercial pressures. Most academic rewards are determined by peer evaluation.
Tenure and non-accountability work especially well for a process that depends on intellectual or creative superstars. The average producer might use lack of accountability to shirk, or to pursue self-indulgent ideas of little value. But the superstars will use lack of accountability to pursue their own visions without outside hindrance. We like to think of "creative freedom" as good, and "lack of accountability" as bad, but in fact they are two sides of the same coin. If most of the value added comes from the superstars, the gains from their freedom may exceed the losses from the shirking of the average producer. Given that most artistic experiments are failures, effective discovery procedures often succeed by supporting the extremes, rather than trying to generate a good outcome in every attempt.
Since we should evaluate institutions as a bundle, the excesses of the university, which include conservatism and overspecialization, should be seen as part of a broader picture. All methods of producing ideas involve biases. The question is whether these biases tend to offset or exaggerate the other biases — usually commercial — that are already present in the broader system. To the extent the biases are offsetting, the benefits of the university are robust. Counterintuitively, one of the great virtues of commercial society is its ability to augment non-commercial sources of support, including the university. Academic institutions, whatever their particular failings, increase the diversity of the social discovery process, including in the creative arts.
DVDs and Movie Theaters
A lot of people have argued that DVDs, home theater, and the shrinking time from big screen to DVD sales are spelling doom for the movie theater business. Michael Campbell, CEO of Regal, the nation’s largest chain of theaters, has some smart things to say in response. I particularly like his first response which shows a keen appreciation of market inter-dependencies, "general equilibrium" in econ-speak.
I think DVD’s have been the savior of not only the studio model but
have been beneficial to theater owners, too, because it funnels more
money back into the studios, which in turn fuels higher production
budgets, greater numbers of films, and so on.We have seen the
window shrink from an average of about six months between theatrical to
video 10 years ago to about four and a half months today. Some
compression of that window over time is justified, or has been
justified at least in the past, because we generate our piece of the
pie at the box office much quicker today than we did a decade ago.People
who run the studios are smart people, and I think they realize the
tremendous value of having that theatrical launch pad. And I don’t
think that’s going to change. They make films to be released on the big
screen.
Should you be a maximizer?
Five hundred and forty-eight graduating students from 11 universities were categorised as maximisers or satisficers based on their answers to questions like “When I am in the car listening to the radio, I often check other stations to see if something better is playing, even if I am relatively satisfied with what I’m listening to”.
When questioned again the following summer, the maximisers had found jobs that paid 20 per cent more on average than the satisficers’ jobs, but they were less satisfied with the outcome of their job search, and were more pessimistic, stressed, tired, anxious, worried, overwhelmed and depressed.
“We suggest that maximisers may be less satisfied than satisficers and experience greater negative affect with the jobs they obtain because their pursuit of the elusive ‘best’ induces them to consider a large number of possibilities, thereby increasing their potential for regret or anticipated regret, engendering unrealistically high expectations”, the researchers said. Indeed, the researchers found that maximisers were more likely to report fantasising about jobs they hadn’t applied for and wishing they had pursued even more jobs than they did.
Here is the link, and by now you know the usual caveats for such research. Number one is whether the survey evidence measures true commitment to maximization, or whether it simply picks up grumps who are fussy and determined to portray a fussy image to the world. Number two is whether they properly adjust for IQ, which may be causing both superior results and greater returns to search behavior.
In defense of polygamy
I’m not convinced by Tyler’s arguments against polygamy. Let’s clear away some misconceptions.
First, it’s important to note that polygamy (specifically polygny) not monogamy is the norm in human society – some 75% of the known human societies have approved of polygny.
Second, we sometimes look around the world, note that polygny is approved of in societies such as Saudi Arabia that are not exactly women-friendly and conclude that polygny must be against the interests of women. The problem with this argument is that most societies with monogamous marriage have also not been women-friendly. Women can’t drive in polygnous Saudi Arabia but they couldn’t vote in monogamous United States until circa 1920, nor could they easily get a credit card in their own names or easily go to law school as late as the 1960s.
The basic economic argument that polygny increases the demand for women – under polygny Bill Gates can have two wives which by demonstrated preferences makes at least the second wife better off – suggests, but does not prove, that polygny can favor women. (Consider polyandry – would men complain if Angelina Jolie could have two husbands?)
Third, let’s consider Tyler’s argument that polgyny reduces investment in children. It is true that to the extent that polygny increases the number of any particular man’s children that his attention will be divided. But there are two counter effects. First, there is a selection effect. The men with more children will be the wealthier and healthier men – the better providers. If polygny increases the number of children that Bill Gates (oh what the hell my wife doesn’t always read the blog, or me!) has then average child quality over society as a whole will increase.
Moreover, if child quantity is the problem then that problem ought to be addressed directly. Does Tyler support a tax on children ala China?
Also, Tyler puts too much attention on the man. Polygny probably increases the fertility of the polygnous man but it also decreases the fertility of the polygnous woman (not by as much as it increases the fertility of the man because women are already much closer to the physical limit on children than are men but by an appreciable amount), thus the attention of mothers will increase.
Aside: Tertilt argues that polgyny decreases investment but on the basis of a model which combines polygny with many other factors such as brideprice being paid to the bride’s male relatives – this would not apply in the contemporary United States. (It also appears to me on a quick reading that the Tertilt argument may commit the Junker fallacy.)
Polygny could be very well suited to a modern society in which women work. Working women already contract out child care services – a second, stay at home wife, is not that different.
Polygny will be bad for poor men who lose out in the competition for
first wives to rich men who are on their second. This already happens,
by the way, because of serial polygamy – older men divorce their older
wives and marry younger ones leaving older women unmarried and some
younger men without young wives. Bad for the young men but not
necessarily bad for the young wives. For this reason it’s probably
true that polygny cannot be countenanced in a democracy. At least not
until the supply of young men is reduced enough so that every many can
have at least one wife even if some can have two.
On the whole, therefore, I see no strong arguments that banning polygamy (either polygny or polyandry) is socially optimal but due to the power of the patriarchy I don’t expect polygny to be approved of in the United States any time soon.
Comments are open.
Do competitive House seats make for ideologues?
It has been suggested that congressional polarization is exacerbated by new districting arrangements that make each House seat safe for either a Democratic or a Republican incumbent. If only these seats were truly competitive, it is said, more centrist legislators would be elected. That seems plausible, but David C. King of Harvard has shown that it is wrong: in the House, the more competitive the district, the more extreme the views of the winner. This odd finding is apparently the consequence of a nomination process dominated by party activists. In primary races, where turnout is low (and seems to be getting lower), the ideologically motivated tend to exercise a preponderance of influence.
Thanks to Eric Rasmusen for the pointer, comments are open. The implication, of course, is that electoral competition is overrated. If we think of more moderate outcomes as better on average (debatable, admittedly), we can view the problem of politics in a new way. Do aggregation mechanisms produce better decisions when individuals feel that less is on the line? Is this the opposite of everything we learned from Anthony Downs?
More familiar walks seem longer
Andrew Crompton at Manchester University, UK, wanted to see how good we are at judging distances in the real world.
He
asked 140 architecture students in their first, second and third years
of study to estimate the distance from the university’s student-union
building to familiar destinations along a straight road, so the length
of journeys that they would have strolled (or staggered) many times.
The
more times students had walked the route, the further they estimated
the journey to be. First year students, for example, estimated a
mile-long path to be around 1.24 miles on average, while third year
students stretched it to 1.45 miles. Crompton publishes his results in Environment and Behavior1.The
results match those from other studies in which, for example, people
moving through a virtual world tend to overestimate how far they have
travelled…The finding backs the idea that
distances elongate in our minds because, over time, we begin to notice
more and more minutiae about a route, an idea called the
feature-accumulation theory. "As detail accumulates, the distance seems
to get bigger," Crompton says.
Here is the full story. Remember the earlier result that if you are going and returning only once, the ride back seems shorter. Furthermore life speeds up as you get older. There is no contradiction across these results, if you hold all ceteris paribus, but my subjective time clock will admit to being confused. Thanks to the still-excellent www.geekpress.com for the pointer.
Do future generations pay for deficits?.
Assume that government spends some money today on consumption. That money could have been spent on a durable bridge, but it wasn’t. Some current people benefit from the consumption and future generations get nothing.
Above and beyond that effect, do future generations bear the burden of deficit spending? That it, are they worse off if we finance the consumption with government bonds rather than higher taxes?
Under one scenario, future generations bear no additional burden. Assume the government bonds are paid off fifty years from now. Future generations pay the taxes. But they also inherit the bonds. Might that be a wash?
Wealth effects complicate the story. The old people, who are holding bonds, may spend more in the meantime (spend more relative to a tax increase, that is) and this may pull away some resources from future generations. If old people just sit on their bonds and make no other expenditure changes, the burden on the future is nil.
If old people spend more today, and John is born thirty years later, how much worse off is John from this extra spending? And would having saved that same money necessarily have directed resources toward John, as opposed to directing resources toward the later consumption of the elderly? What if the extra spending doesn’t occasion much in the way of a supply response? Then it is just a sloshing around of some paper. To ask an Austrian question, what is the net injection effect here from the bonds?
I don’t know.
Often deficit critics focus on the moral issues. On average future generations are better off than their parents, at least in a growing economy. They are less well off if their parents spend more rather than less. Is this immoral on the part of the parents?
Alternatively, let’s say we pay off the debt in fifteen years’ time. Furthermore assume that the future elderly (who are now middle-aged) have stopped paying taxes, but they are not yet dead. They are still holding the government bonds. Then we must tax the young, who currently are described by the phrase "future generation." Then, through a different mechanism, future generations will bear a chunk of the tax burden.
Even then the burden will not be full. By letting the elderly off the hook, we increase the sizes of their eventual bequests (what is their marginal propensity to bequeath?). Furthermore a VAT tax, or means-testing of benefits, will keep the elderly paying taxes and diminish the potential burden on future people.
Offsetting bequests, a’ la Robert Barro, makes deficits less relevant rather than more. If people know their children will pay higher taxes, maybe bequests will go up a bit to make up for that burden.
There is also tax smoothing. Nominal tax rates can only be so high in each period before a taxation system breaks down. By postponing tax boosts, we make it harder for future generations to engineer other tax increases for other reasons. This could make them either worse off or better off, depending on your point of view.
You can put these scenarios together in different combinations and achieve many differing results.
The bottom line: We are running large deficits. The case for boosting taxes today rather than tomorrow lies in the fear that financial markets will get spooked, rather than in intergenerational considerations. Some time ago I put this spooking at p = 0.2; I have revised that estimate upwards only slightly.
Chicago fact of the day
The average wind speed down Michigan Ave.: 10.4 mph
The average wind speed in Boston: 12.5 mph
The average wind speed in New York City: 12.2 mph
The Windy City, anyone? It turns out the name was adopted in the 19th century to promote the city’s beaches. That is from Discover magazine, March 2006 issue, back page.
Update: Wikipedia offers a different perspective on the origins of the name. Read this too. The trail also leads to my childhood chess-playing friend Barry Popik.
Modal wives and why it is hard to marry well
I define a modal wife (or husband) as a person you would have married (could have married?) had you met them at the right time, unattached, and under normal life conditions. The number of modal wives is typically greater than or equal to the number of real wives, although clever philosophers will recognize possible [sic] counterexamples.
Under one view, you have hundreds or thousands of modal wives, most of whom you never meet. (How many does the average person meet, how soon do you know when you meet one, and how confused would you be if they were all in the same room at once?) Your correct dating strategy is to cast your net very widely, and hope to find and marry one of these people.
Under another view, modal wives are no big deal. Your so-called "modal wives" are no better for you than, say, the best woman you could pick out of a lot of thirty eligibles. The key inputs for a good marriage are attitude and a minimum degree of compatibility, not search and discovery.
If this is true, searching for modal wives, or perhaps even thinking about the concept, can make you worse off. The quest for the perfect mate makes it harder to come to terms with what is otherwise a compatible marriage. Which perhaps is all you are going to get anyway. Marriage is good for you, and don’t be too fussy, this is not iTunes. Too much choice, or too much perceived choice, is problematic.
The two views offer directly conflicting advice (TC: My views are closer to the first position, although attitude remains all-important). Yet we may be uncertain which view applies to us and to what extent. You could put all your eggs in one basket and pursue just one strategy, but what a risk if you are wrong. You could act upon some weighted average of the two views; I suspect this is what most people do. But then the two strategies are constantly undercutting each other.
That is one reason why it is hard to marry well.
Addendum: Here is a good post on Deception Island, and do also read the excellent comments thread on this post.