Posts Tagged ‘economics’

Standup Economist: Politics & federal budget

Saturday, August 6th, 2011

Some good stuff for you politics and economics people. My favorite joke was the one at 4:05:


How Not To Make a Chart, Episode 302

Tuesday, January 11th, 2011

From CBS News:

It still amazes me that people whose job it is to visualize data would abuse the y axis like that, making it look like the debt had tripled. Nobody can comprehend trillions of dollars, so I think in this case the relative change is far more important than the raw numbers. I’m not trying to minimize the importance of the debt, of course.

I went to the trouble of repairing the chart for them:

Income vs. taxes

Saturday, May 29th, 2010

(via greg mankiw)


Monday, December 21st, 2009

I had missed this brief Planet Monday podcast about the economics of gift giving. It’s worth a listen if you’re at all interested in economics. Basically, gift giving is wasteful because the person buying the gift can’t do a good job of estimating the value of the gift on behalf of the recipient. The author of the paper being discussed eventually promotes charitable donations as a gift since there is no loss in economic efficiency and it doesn’t have the same stigma of giving cash. I couldn’t figure out what didn’t seem quite right about this solution until I discussed it with Abe yesterday. I think a major deficiency of donation giving is that one of the positive outcomes of altruism is the good feeling you get when you’re actively helping out. If someone donates on you behalf, they are really the person being altruistic, so the positive feeling is limited on your end.

I think I came up with a solution this morning, though: charity gift cards. It’s not for a donation at just one charity, but it gives you a bunch of options to choose from. That way, the gift giver is paying for the donation, but the recipient gets to perform the actual allocation, more directly involving them in the process. I wonder if this sort of thing already exists.


Monday, September 28th, 2009

The Economist on “The Idiocy of Protectionism”:

Ford makes transit vans in Turkey, with passenger seats in the back. When the vans are shipped to America, the brand-new seats are immediately torn out and recycled.

Why? Because 46 years ago, Europe slapped tariffs on American chickens. America retaliated with a tax on European commercial vans.

To get round this, an American firm’s European factory adds passenger seats to its commercial vans so they can be classified as passenger vans, which attract a lower tariff. Then it trashes the seats once the vans are safely landed in Baltimore.

Sometimes the rules that make the least sense last the longest.

I was disappointed with Obama’s tariff on Chinese tires. I hope we won’t see much more of that.

Quite a divide

Wednesday, September 9th, 2009

Taking a quick break from work to write a bit..

I haven’t seen any of Obama’s speech, but this sentence on the FiveThirtyEight liveblog struck me:

Note, though, that many Republicans didn’t stand up and clap when Obama said “no one should go broke because they get sick.”

That’s a real fundamental value difference between the sides of the debate. I think how you answer that question really defines where you want to go from here.

The tie between bankruptcy and medical problems is quite clear and seems to be getting stronger, according to the Washington Post earlier this year:

Sixty-two percent of all bankruptcies filed in 2007 were linked to medical expenses, according to a nationwide study released today by the American Journal of Medicine. That’s nearly 20 percentage points higher than that pool of respondents reported were connected to medical costs in 2001.

Of those who filed for bankruptcy in 2007, nearly 80 percent had health insurance.

That last sentence never ceases to amaze me.

Ok, hopefully this is my last one

Monday, August 31st, 2009

Greg Mankiw is still defending his SAT scores post while completely missing the point. This time he shares a graph that shows children’s IQs being correlated with their biological father’s income, for both adopted and non-adopted children. The suggestion being that test scores are largely inherited and high income is just an effect of raw intelligence. However, he ignores the fact that the IQ and SAT tests are not the same! They are trying to measure different things, IQ attempts to measure some sort of innate intelligence, while SAT tries to measure college preparedness with regard to things like literacy and mathematical knowlege. Certainly there is an interaction between the two, but the effects of preparation and education should be reflected in the SAT to a much greater degree.

His post title “Test Scores and Biological Father’s Income” seems to try to blur the issue and he never mentions differences between the tests, as far as I can tell. To be clear, IQ was certainly a factor in the SAT scores, but his claim that it’s “the key omitted variable” isn’t supported by this evidence.

Ugh, really?

Saturday, August 29th, 2009

Greg Mankiw, whose post about test scores and household income elicited my response, seems to be bewildered about why people are pushing back against his post. It’s really too bad that he doesn’t have comments or a public email on the blog, as the reason is quite simple: yes, genetics and innate inherited intelligence have some effect on IQ, and IQ does correlate with income to some degree, but the claim it the key omitted variable is making an even stronger statement. It’s saying that these genetic effects outweigh the affordances that affluent people have in society. It’s making a social darwinist claim that society is roughly able to sort people by intelligence.

Stuff like this make me wish I had found better conservative bloggers…

Test scores and household income

Friday, August 28th, 2009

Greg Mankiw called this graph “the least surprising correlation of all time”:

(SAT scores by family income)

I agree that it’s unsurprising, but for different reasons. Certainly, this correlation shouldn’t imply direct causation, as Mankiw states:

Suppose we were to graph average SAT scores by the number of bathrooms a student has in his or her family home. That curve would also likely slope upward. (After all, people with more money buy larger homes with more bathrooms.) But it would be a mistake to conclude that installing an extra toilet raises yours kids’ SAT scores.

Agreed, but I don’t agree with this:

The key omitted variable here is parents’ IQ. Smart parents make more money and pass those good genes on to their offspring.

While I’ll admit that parents’ IQ would show some correlation with test scores, I don’t think that this is the “key variable”. First of all, the SAT does not measure IQ, it attempts to measure language and math skills. I’d expect there to be a better correlation with some measure of the parents’ educational achievements.

August 14th’s must-listen episode of This American Life touched on this subject in the first act. Childrens’ academic success (and success in general) tracks very well with how much their parents talk with them when they’re very young and how much they read to/with them. Parents who read on their own are more likely to do these things.

Additionally, there’s plenty of training that goes into doing well on the SAT. More affluent parents can afford to pay for tutoring for their children and, more importantly, move to a town with a better school system. If standardized test scores were just measures of innate ability, then it would be absurd to measure the performance of a school system based upon them, and you could just test a child once. (Not saying that they’re a great way to measure, but I think that there are other problems with that.)

Growing up in Avon (suburban CT), I saw plenty of very wealthy homes produce terrible students, but the student body as a whole did well largely because we had a good school system, involved parents, and a culture that said it was OK to be smart.

So, yeah, I’m in the ‘nurture’ camp on this one.

Payday Loans

Thursday, June 11th, 2009

This American News Project video explores payday loans by talking to a family who used them and looking at the politics and lobbying in the industry:

It’s the same story again and again: the family is just getting by, making ends meet, then suddenly there’s a medical problem that they can’t really afford, and everything falls apart.
(via 1gm)