Results for “Tests”
772 found

The relative value of health care

In a 2003 study, another Dartmouth team, led by the internist
Elliott Fisher, examined the treatment received by a million elderly
Americans diagnosed with colon or rectal cancer, a hip fracture, or a
heart attack. They found that patients in higher-spending regions
received sixty per cent more care than elsewhere. They got more
frequent tests and procedures, more visits with specialists, and more
frequent admission to hospitals. Yet they did no better than other
patients, whether this was measured in terms of survival, their ability
to function, or satisfaction with the care they received. If anything,
they seemed to do worse.

That’s because nothing in medicine is
without risks. Complications can arise from hospital stays,
medications, procedures, and tests, and when these things are of
marginal value the harm can be greater than the benefits. In recent
years, we doctors have markedly increased the number of operations we
do, for instance. In 2006, doctors performed at least sixty million
surgical procedures, one for every five Americans. No other country
does anything like as many operations on its citizens. Are we better
off for it? No one knows for sure, but it seems highly unlikely. After
all, some hundred thousand people die each year from complications of
surgery—far more than die in car crashes.

To make matters worse,
Fisher found that patients in high-cost areas were actually less likely
to receive low-cost preventive services, such as flu and pneumonia
vaccines, faced longer waits at doctor and emergency-room visits, and
were less likely to have a primary-care physician. They got more of the
stuff that cost more, but not more of what they needed.

Why is there an IQ test for many contest winners?

Bob Baxley, a soon-to-be-loyal MR reader, asks me the following question:

In considering entering in an online drawing for a bicycle, I read the complete rules. The contest is billed as a random drawing of those entered. But what struck me is that "Before being declared a winner, the selected entrant must first correctly answer, unaided, a time-limited, arithmetical, skill-testing question."(http://www.cervelo.com/contestrules.aspx)

Curious about the occurrence of this rule in other contests, I Googled this long phrase and it turns out it is very common in contest drawings: (http://www.google.com/search?hl=en&rlz=1C1GGLS_enUS291US305&q="correctly+answer,+unaided,+a+time-limited,+arithmetical,+skill-testing+question."&btnG=Search).  Shorter snippets of this phrase return even more Google hits.

Any thoughts on why this stipulation is listed in the rules?

Maybe his contest is offering up this question to me.  But I cannot answer it unaided.  Help!

Financial crisis update

The TARP money seems to be for bank bondholders (not bank lending), banks are gaming the system like crazy and winning the public relations earnings announcement battle, and step-by-step the Obama team has ended up painted into a corner and now needs to publicly announce the results of the bank "stress tests."  No one wins when the government pronounces a bank "weak" (and thus destroys it) and no one wins when the government pronounces a bank "good" (and thus to some extent owns it).

That's the latest.

Should chess moves be subject to copyright?

There has been a controversy:

Last week, ChessBase was apparently ‘forced to cease Internet broadcasting of the Topalov-Kamsky match’. As we noted
in our report on the first match game, live broadcasting of the chess
moves in this match without permission was prohibited by the Bulgarian
Chess Federation (although they didn’t seem to have a problem with
Chessdom’s, Crestbook’s, ICC’s and TWIC’s live coverage). This has led
to heated discussions on this site. The key question here is: can you copyright a chess move at all?

Plus this is transmission over the internet, so which law applies?  As I understand U.S. law, you can put chess moves into a book and the players have no rights to residual income from that book.  Which is how it should be.  Transferring income to chess players is not a goal per se.  Useful chess books usually contain many games, and requiring rights permission would make the volume harder to assemble.

Maybe grandmasters would play more games, or play better games, if they could charge for rights of reproduction.  When it comes to playing more games, I suspect there is already an ample supply of games and easy reproduction will do more to increase real consumption than spurring more contests over the board.  If anything is underproduced, it is the salience of the games which have been played (take a game between two 2550 players and call it "Clash of the Titans" and produce more excitement; most chess players won't know the difference between that and a game between the two best players at 2770.) 

And better chess?  I believe the effort elasticity is low with respect to residual rights income from reporting of the games.

Comparable debates have been held over residual rights to reporting real time stock prices and NBA scores.

Keith Stanovich and what IQ is good for

The always-interesting-and-still-underrated Michelle Dawson points me to this batch of work.  Here is one of the papers, by Keith E. Stanovich and Richard F. West:

In 7 different studies, the authors observed that a large number of thinking biases are uncorrelated with cognitive ability. These thinking biases include some of the most classic and well-studied biases in the heuristics and biases literature, including the conjunction effect, framing effects, anchoring effects, outcome bias, base-rate neglect, “less is more” effects, affect biases, omission bias, myside bias, sunk-cost effect, and certainty effects that violate the axioms of expected utility theory. In a further experiment, the authors nonetheless showed that cognitive ability does correlate with the tendency to avoid some rational thinking biases, specifically the tendency to display denominator neglect, probability matching rather than maximizing, belief bias, and matching bias on the 4-card selection task. The authors present a framework for predicting when cognitive ability will and will not correlate with a rational thinking tendency.

Even more interesting, in my view, is that higher-IQ people are more likely to behave rationally when they are told that a rationality issue is on the table, but less so otherwise. 

If you are interested in issues of IQ, or for that matter overcoming bias, you should read Stanovich's work.  As noted above, higher-IQ people seem to be just as guilty of "myside bias."

Stanovich has a new book summarizing some of the results, namely What Intelligence Tests Miss: The Psychology of Rational Thought.  It is more idiosyncratic than the articles (he overcommits to one very particular model of the mind; cognitive laziness, without regard for margin) but recommended nonetheless.  For those who care about these issues, a must.

Markets in everything

I'm afraid to give this one much of a subtitle:

India's Hindu nationalist movement is launching a new soft drink made from cow urine.

The
bovine brew is in the final stages of development by the Cow Protection
Department of the Rashtriya Swayamsevak Sangh (RSS), India's biggest
and oldest Hindu nationalist group, according to the man who makes it.

Om
Prakash, the head of the department, said the drink – called "gau jal,"
or "cow water" – in Sanskrit was undergoing laboratory tests and would
be launched "very soon, maybe by the end of this year."

"Don't
worry, it won't smell like urine and will be tasty too," he told the
Times of London from his headquarters in Hardwar, one of four holy
cities on the River Ganges. "Its USP will be that it's going to be very
healthy. It won't be like carbonated drinks and would be devoid of any
toxins."

The drink is the latest attempt
by the RSS – which was founded in 1925 and now claims 8 million members
– to cleanse India of foreign influence and promote its ideology of
Hindutva, or Hindu-ness.

I thank John de Palma for the pointer.

Do people get stuck on QWERTY?

No, and Hossain and Morgan explain their tests:

In this paper, we offer new evidence regarding the economic importance of QWERTY type outcomes. We use laboratory experiments to study platform competition. Experiments have several advantages in studying platform competition: the identity of the inferior platform is clearly defined; the degree to which a platform has a “head start” is controlled; and the “life cycle” of platform competition is reproducible. So far as we are aware, we are the first to study QWERTY in the lab.

We can easily summarize our results: Somehow, the market always manages to solve the QWERTY problem. In sixty iterations of dynamic platform competition, our subjects never got stuck on the inferior platform–even when it enjoyed a substantial first-mover advantage. The remainder of the paper describes in detail the experiments and the results.

This is another theory which probably should be laid to rest.  I do think it can explain being stuck in an inefficient language (switching is then truly difficult), but traditional economic examples are hard to come by.

Do we compete more against fewer competitors?

This caught my eye:

If you’ve ever had to take a test in a room with a lot of people, you may be able to relate to this study: The more people you’re competing against, it turns out, the less motivated and competitive you are. Psychologists observed this pattern across several different situations. Students taking standardized tests in more crowded venues got lower scores. Students asked to complete a short general-knowledge test as fast as possible to win a prize if they were in the fastest 20 percent completed it faster if they were told that they were competing against 10 people rather than 100. Students asked how fast they would run in a race for a $1,000 prize if they finished in the top 10 percent said they would run faster in a race against 50 people rather than 500. Similarly, students contemplating a job interview or Facebook-friending contest said they would be less competitive if they expected more competitors – even if "winning" only required finishing in the top 20 percent. The authors conclude that competitiveness was curtailed because the larger the group, the more difficult it is to compare oneself directly to others.

The original paper is here, but note that context effects may well give you varying results in other settings.  The initial article, from the Boston Globe, discusses several other social science mechanisms of interest, although I was not surprised to learn that your dog relaxes you.

Addendum: Here is my earlier article on invisible competition.

Rich brains vs. poor brains in childhood

You may have heard about the recent study by Mark Kishiyama et.al. described by USA Today as follows:

A new study finds that certain brain functions of some low-income 9-
and 10-year-olds pale in comparison with those of wealthy children and
that the difference is almost equivalent to the damage from a stroke.

Here is more detail:

…[they] rigged up the noggins of 26 kids — with an average age of 9.5 years —
with probes that sense the ebb and flow of electrical current in
different regions of the brain. Then, they put them through a battery
of neuropsychological tests. Half of the kids came from families with
annual incomes that averaged just over $27,000 and generally had low
levels of parental education; the other half came from families where a
primary caregiver had completed at least four years of college and in
which annual household income averaged a little more than $97,000.

The paper is here.  Who better to ask about this than Michelle Dawson?  Michelle wrote to me:

I read the poor vs rich
kids brains study (Kishiyama et al.). It’s a very small study (13 in
each group) and the groups aren’t matched on ethnicity. In the major
task (the one which got media attention), where the authors looked at
ERPs [TC: here is a link on ERP], the performance of the two groups was the same. The performance
of the two groups on a Stroop task, a classic test of what the poor
kids are said to be incapable of, was also the same. The major
performance difference between groups was on vocabulary (the WISC-III
vocabulary test), but only a few tests were used. There was no attempt
to match the groups on IQ.

Just to repeat two key points: a) the observed difference in electrical current patterns may depend on IQ differences, not poverty, and b) on the actual major task the poor kids did just as well.  There are tasks where the poor children do less well but this is hardly news.

Popular science reporting on neuro issues is very often not to be trusted.

Addendum: There is more from Michelle Dawson in the comments.

Advertising markets in everything

Tom Farber gives a lot of tests. He’s a calculus teacher, after all. So when administrators at Rancho Bernardo, his
suburban San Diego high school, announced the district was cutting
spending on supplies by nearly a third, Farber had a problem…

"Tough times call for tough actions," he says.
So he started selling ads on his test papers: $10 for a quiz, $20 for a
chapter test, $30 for a semester final.

San Diego magazine and The San Diego Union-Tribune
featured his plan just before Thanksgiving, and Farber came home from a
few days out of town to 75 e-mail requests for ads. So far, he has
collected $350. His semester final is sold out.

Here is the story and I thank Hunter Amor Williams for the pointer.

Credit Card Crunch?

Frankly, I am tired of this topic but every time I try to check the data – as best as I can – it doesn’t seem to support the rhetoric we are hearing from people at the top [despite real problems blah, blah, blah].  Here’s Paulson today:

At least some of the remainder [of the bailout money], Paulson said, should be used to
reinvigorate the market for credit cards, student and auto loans —
which combined account for some 40 percent of consumer credit.

"This market, which is vital for lending and growth, has for all practical purposes ground to a halt," Paulson said. (emphasis added)

I’ll focus on credit cards.  It is true that credit card offers, i.e. junk mail, is down:

…one billion fewer offers mailed during the course of the year.
Households with incomes under $50,000 will receive about 700,000 fewer
offers in 2008 compared to 2007. These households account for the
majority of the cutback and clearly indicate a major change in strategy
by card issuers.

"The souring economy and industry consolidation have driven volumes
down to levels not seen since 2003 [Crisis! AT]" said Andrew Davidson, Vice
President of Competitive Tracking Services for Synovate’s Financial
Services Group. "Card issuers are taking a more cautious approach, with
lower income and high risk households receiving fewer offers or no
offers at all."

But even so:

Despite the decline in offers for new cards, US consumers still
have access to an increasing amount of credit. Household credit lines
across all cards edged up to an average of $27,626 per household (YTD
3Q 2008) from $26,902 in 2007 despite evidence that issuers are cutting
credit lines on certain customers.

…"Much has been reported about issuers reducing credit lines for
certain customers but this is not the case for the majority of people.
Across the industry as a whole, we continue to see credit access and
usage at record high levels" said Davidson.

By the way, after listening to Tyler and me debate this topic Bob Murphy and Megan McArdle decided to run some tests.  So if you prefer your data by anecdote you can read Bob’s results here and Megan’s here.  I am partial to Megan’s hypothesis #5.

Do economists think TV is good for you?

In a nutshell, yes:

The variation Mr. Gentzkow
and Mr. Shapiro exploited was the timing of the introduction of TV into
different cities. Television began taking off in the U.S. in 1946,
after a wartime ban on TV production was lifted. But the Federal
Communications Commission stopped granting new commercial television
licenses from September 1948 to April 1952 while it made changes in
allocating broadcast spectrum. There was a long lag between when some
cities got television and when others did.

The economists then
looked at results of a survey of 800 U.S. schools that administered
tests to 346,662 sixth-grade, ninth-grade and 12th-grade students in
1965. Their finding: Adjusting for differences in household income,
parents’ educational background and other factors, children who lived
in cities that gave them more exposure to television in early childhood
performed better on the tests than those with less exposure.

The
economists found that television was especially positive for children
in households where English wasn’t the primary language and parents’
education level was lower. "We don’t exactly know why that is, but a
plausible interpretation is that the effect of television on cognitive
development depends on what other kinds of activity television is
substituting for," says Mr. Shapiro, 28.

Here is much more.  And yes the "Mr. Shapiro" is in fact Wunderkind Jesse Shapiro, a familiar figure to MR readers everywhere.  You’ll find two versions of the paper here.

Addendum: Here is Alex’s excellent post on the topic.

The Worst Idea I have Heard Today

One idea that might prevent a repeat of the turmoil: a commission that
would vet financial products before their release, akin [to] the Food and Drug Administration’s
evaluation of drugs before they’re released to the market. McFadden
suggested, “we may need a financial-instrument administration that
tests the robustness of financial instruments and approves only the
uses where they can do no harm.”

Nobel laureaute Daniel McFadden quoted at Real Time Economics.  Do tell what will be left when we approve only things "that can do no harm."? 

Might I also suggest that before calling for a financial FDA, Prof. McFadden should investigate what economists who have studied the matter have concluded about the safety and effectiveness of the real FDA.   

Should we pay doctors to ignore patients?

Here is one interesting proposal for reforming Medicare:

Each fee is meant to reimburse the doctor for the time and skill he
or she devotes to the patient. But it is also supposed to pay for
overhead, and this is where the problem begins. To Medicare, a doctor’s
overhead (or “practice expense”) includes such items as rent, staff
salaries and the cost of high-tech medical equipment. When the agency
pays a fee to a doctor who has performed a CT scan, it is meant to
cover some of the cost of buying or leasing the scanner itself.
Services using more expensive equipment generate higher fees.

…The cost of a CT scanner is fixed, but a doctor earns fees each time it
is used…a scanner becomes highly profitable as soon as
it’s paid for.

In contrast, the doctor-patient visit, which
involves no expensive equipment, offers no significant profit
opportunity. So the best way for a doctor to make money in his practice
is not to spend time with patients but to use equipment as much as
possible.

Get this:

Doctors who do their own CT scanning and other imaging order roughly
two to eight times as many imaging tests as those who do not have their
own equipment, a 2002 study by researchers at the University of North
Carolina found. Altogether, doctors are ordering roughly $40 billion
worth of unnecessary imaging each year…

So what’s the solution? 

For their time, doctors should be given a stipend for each of their
patients. It should be larger for patients with complicated medical
conditions and smaller for those who are healthy, and it should not be
influenced by the number of services or tests a doctor orders.

For
overhead, doctors should be paid an amount that covers the typical cost
of tests and treatments needed to address a patient’s condition. This
strategy – known as “case rate” or “prospective” payment – is standard
in American hospitals. The hospital receives a payment for dealing with
a patient’s underlying condition rather than individual payments for
each test and treatment. This approach offers no incentive to run
unneeded tests, and it has been credited with substantially slowing the
growth in Medicare payments to hospitals.

Of course this penalizes patients with chronic conditions, namely those which show more complications over time than average for the specified class of ailment (e.g., Bill Walton’s foot).  At some margin of unexpected complicatedness, the money runs out and people find it very hard to get their doctor on the phone or for an appointment.  If the relevant alternative is death, this policy is relatively egalitarian; if the relevant alternative is a smooth recovery, this policy is relatively inegalitarian.

I believe this idea deserves serious consideration.

Addendum: Via Mark Thoma, here are other ideas.