Morning roundup

The computer begs to be rebooted. But the tabs...

• There's an underlying demand-side problem to misinformation. You can't con an honest man...


• Some days, I love our Environment Minister. Here's David Parker giving Auckland Council a deserved slap for nonsense around character designations. People who want to protect character are "entitled to do that in respect to their own property. But in other parts of their suburb, there will be areas where more intensive housing will and should be built." EXACTLY!! If only central government would fix the incentives that encourage councils to do this...


• New Zealand regime around medicinal cannabis remains a broken mess. I think it was allowed to fall into disrepair on expectation that legalisation would be coming and make it redundant. It has to be very frustrating for anyone who needs cannabis as treatment, and anyone who wants to supply it. The Newsroom column is gated today, but I think will ungate tomorrow if you pull out the /pro from the link. In addition to all the other problems, medicinal cannabis suppliers have a tough time finding banking or insurance. 


• Kate MacNamara keeps digging on the messes around Covid testing regulation. Just impossibly frustrating. You can use a LAMP test to meet the testing requirements to fly to NZ. It's way more accurate than a RAT. But they're banned in NZ. If you try begging permission to use one here just to give some added assurance before going to visit a vulnerable relative, the Government just doesn't answer. Vogons would give the MoH an award for being more Vogon than anything they'd ever come up with. 


• One problem for all the "let's base policy on happiness" people at Treasury and elsewhere: the measures are crap and you can't do anything with them. Here's Bond & Lang, JPE 2019:

  "The necessary conditions for nonparametric identification are strong and unlikely to ever be satisfied. Standard parametric approaches cannot identify this ranking unless the variances are exactly equal. If not, ordered probit findings can be reversed by lognormal transformations. For nine prominent happiness research areas, conditions for nonparametric identification are rejected and standard parametric results are reversed using plausible transformations."

  If you can just run a plausible transformation on the dependent variable to reverse a result, you've got another degree of freedom to justify whatever policy you'd wanted to rationalise. 


• National Party leader Chris Luxon says he doesn't like corporate welfare in the climate response. Good! But the ETS revenues are hypothecated. Does he support putting them back into general revenues? Or, better, would he support a carbon dividend? I like National's emphasis on an ETS led approach, but that's harder if you don't rebate ETS revenues back to households. If he's not going to, he should promise to end the hypothecation that's let Robertson have a slush fund. 
  


• Princeton no longer supports academic freedom.


• Regulatory regimes can embed fragility against shocks. NZ building materials supply, US baby formula...

Ok. I think I can reboot now. 

Afternoon roundup

A closing of some the browser tabs brings a few worthies:

• Roland Fryer Was Railroaded
• Brian Easton on the perils of ignoring economics
• Pay for defection. It raises the cost of attacking. 
• The Canadians get stuck with a copyright term extension. Cosh is excellent here. Why does the Canadian government figure it can ignore the dairy provisions in trade agreements but bound by dumb copyright stuff?
• The extortion attempt continues. [Me on this, previously]
• Ontario's Housing Affordability Taskforce report from February has a lot of good stuff. I'll need to read through it more carefully. Looks like Ford won't be implementing it but there are ideas worth thinking through for NZ. 
• Superb BusinessDesk piece on the cost of building infrastructure in NZ. I wish Auckland could outsource both construction and all of the approvals for its transport/infrastructure projects to whoever sorts that out in Seoul. 
• Liberal Education
• Ages back, Hess & Orphanides found that discretionary wars were more likely for first term Presidents presiding over poor economic conditions. Simple little model. Re-election depends on demonstrating competence, two margins for demonstrating it, if you've failed at the one worth the punt on the other. Ashani Amarasinghe has a forthcoming piece at J. Pub that's far more extensive. Lots of governments aim to distract from domestic turmoil. But it doesn't work all that well.

The Case Against Democracy

The New Yorker (!) has a great summary of some of the recent academic work showing the failings of democracy and the potential upsides of epistocracy. 

If we economists worry about negative externalities, the great big unmentionable one is the negative voter-on-voter externality caused by, well, the things Jason Brennan and Bryan Caplan worry about.

In a new book, “Against Democracy” (Princeton), Jason Brennan, a political philosopher at Georgetown, has turned Estlund’s hedging inside out to create an uninhibited argument for epistocracy. Against Estlund’s claim that universal suffrage is the default, Brennan argues that it’s entirely justifiable to limit the political power that the irrational, the ignorant, and the incompetent have over others. To counter Estlund’s concern for fairness, Brennan asserts that the public’s welfare is more important than anyone’s hurt feelings; after all, he writes, few would consider it unfair to disqualify jurors who are morally or cognitively incompetent. As for Estlund’s worry about demographic bias, Brennan waves it off. Empirical research shows that people rarely vote for their narrow self-interest; seniors favor Social Security no more strongly than the young do. Brennan suggests that since voters in an epistocracy would be more enlightened about crime and policing, “excluding the bottom 80 percent of white voters from voting might be just what poor blacks need.”

The article continues - and I'm again entirely amazed that this work is now hitting the mainstream like this:

Brennan draws ample evidence of the average American voter’s cluelessness from the legal scholar Ilya Somin’s “Democracy and Political Ignorance” (2013), which shows that American voters have remained ignorant despite decades of rising education levels. Some economists have argued that ill-informed voters, far from being lazy or self-sabotaging, should be seen as rational actors. If the odds that your vote will be decisive are minuscule—Brennan writes that “you are more likely to win Powerball a few times in a row”—then learning about politics isn’t worth even a few minutes of your time. In “The Myth of the Rational Voter” (2007), the economist Bryan Caplan suggested that ignorance may even be gratifying to voters. “Some beliefs are more emotionally appealing,” Caplan observed, so if your vote isn’t likely to do anything why not indulge yourself in what you want to believe, whether or not it’s true? Caplan argues that it’s only because of the worthlessness of an individual vote that so many voters look beyond their narrow self-interest: in the polling booth, the warm, fuzzy feeling of altruism can be had cheap.

Viewed that way, voting might seem like a form of pure self-expression. Not even, says Brennan: it’s multiple choice, so hardly expressive. “If you’re upset, write a poem,” Brennan counselled in an earlier book, “The Ethics of Voting” (2011). He was equally unimpressed by the argument that it’s one’s duty to vote. “It would be bad if no one farmed,” he wrote, “but that does not imply that everyone should farm.” In fact, he suspected, the imperative to vote might be even weaker than the imperative to farm. After all, by not voting you do your neighbor a good turn. “If I do not vote, your vote counts more,” Brennan wrote.

My old Public Choice students will be well familiar with these arguments. And so too will some of the students at Victoria University: Ilya Somin was in town last year, and we helped host a guest lecture by him at Vic, attended by at least some of my Public Finance students there.

The article even reminds people about the excellent old British institution in which the Universities had their own constituencies until 1950, where their graduates got an extra vote. If you were an Oxford grad, you got to vote in your home constituency, and for the Oxford seat.

Consequences of the current system?

The political scientist Scott Althaus has calculated that a voter with more knowledge of politics will, on balance, be less eager to go to war, less punitive about crime, more tolerant on social issues, less accepting of government control of the economy, and more willing to accept taxes in order to reduce the federal deficit. And Caplan calculates that a voter ignorant of economics will tend to be more pessimistic, more suspicious of market competition and of rises in productivity, and more wary of foreign trade and immigration.

You could argue that the current system prevents armed insurrection by the less-franchised. But you could also observe Trump hinting that his followers might do that anyway if he doesn't win.

Read the whole piece. Strongly recommended.

Utilitarian abortion

Bryan Caplan asks:

Pro-life utilitarians are very scarce.  A philosophy professor recently told me that he knows of zero pro-life utilitarians in the entire philosophy profession.  

This is deeply puzzling.  While I'm not a utilitarian, the utilitarian case against abortion seems very strong.  Consider: Even if a pregnant woman deeply resents her pregnancy, she is only pregnant for nine months.  How could this outweigh the lifetime's worth of utility the unwanted child gets to enjoy if he's carried to term?  

I expect it hinges on your model of whether abortion simply changes the identity of which children a woman bears or the number of children that would be born.

I don't have any strong priors on which is true on average, but in some cases it would simply be a shifting in timing of births where a woman intends on having a family of fixed size and isn't ready yet to start it. In those cases, and where the woman has reasonable expectations that a child later would be happier than a child now, pro-choice utilitarianism makes a lot of sense.

If instead we're considering options where the number of children isn't fixed and where abortion reduces the number of kids who get to be born, then Bryan's puzzle holds - but doesn't utilitarianism run into trouble where n isn't fixed?

Morning roundup

Short notes on the worthies from the open tabs, each of which would merit a full post in an unconstrained world.

• If this high court ruling holds, expect no new policies to cover full replacement. Justice Whata ruled that Vero must cover the full costs associated with reinstating a Christchurch building, even where some of those costs are due to things like requiring deeper piles than were necessary when the policy was set. I think the insurer is right that it should not be liable for costs that are consequent to changes in Council rules; alternatively, Councils could give free money to each and every person in town by requiring that, post-quake, every house be made of gold and have platinum spouting. I also do not think that Councils should be changing the building requirements for a reasonable interval between an insured event and the completion of earthquake repairs. If the building code isn't good enough, fix it ahead of the event so that insurance pricing can incorporate a better measure of expected repair costs or so owners can insure to a higher value to allow for the higher costs.

• Remember "Shoot, shovel and shut up"? Property owners have incentive to take defensive action before a costly regulation is put in place, even if that means destroying valuable habitat. I wonder if that's what's happening in this story. A church is bulldozing two houses to put up a parking lot; the street is about to be designated as a "special character area" in the Unitary Plan. Could be that they'd have held onto the houses if they'd reckoned they'd face much much higher costs if they wanted to demolish sometime down the line. I wonder whether other areas about to come under such protections are seeing similar precautionary demolitions.

• I almost hope that San Francisco does pass a $0.24/can soda tax, just so we can estimate the effects. Prior work shows no evidence of threshold effects on caloric intake at tax levels up to about 12%; this would give evidence at higher tax levels. The costs would be borne by people in San Francisco, and I'd get some information about how the world works. 

• There'd be a billion screaming anti-tobacco activists if tobacco sponsorship of an arts festival resulted in the cancellation of some anti-smoking play. Government anti-tobacco health funding of the West Australian Opera has resulted in the cancellation of Carmen because there would have been on-stage smoking; I've seen outcry from Catallaxy and Crikey. Nothing much otherwise. 

• The Canterbury Earthquake Recovery Agency stole land from Christchurch land-owners under compulsory acquisition. They haven't even bothered paying some of the owners. And people criticise the government for having left the recovery to 'the market'. You can't steal land from its rightful owners under market-based approaches. If this kind of thing happened under a Labour government, National would be standing up for property rights. Under Brownlee, well, it won't happen.

• Addiction is something most addicts grow out of. I love this quote: 

  So why do so many people still see addiction as hopeless? One reason is a phenomenon known as “the clinician’s error,” which could also be known as the “journalist’s error” because it is so frequently replicated in reporting on drugs. That is, journalists and rehabs tend to see the extremes: Given the expensive and often harsh nature of treatment, if you can quit on your own you probably will. And it will be hard for journalists or treatment providers to find you.

  Similarly, if your only knowledge of alcohol came from working in an ER on Saturday nights, you might start thinking that prohibition is a good idea. All you would see are overdoses, DTs, or car crash, rape or assault victims. You wouldn’t be aware of the patients whose alcohol use wasn’t causing problems. And so, although the overwhelming majority of alcohol users drink responsibly, your “clinical” picture of what the drug does would be distorted by the source of your sample of drinkers.

  
  

  Bryan Caplan has similar thoughts. 

  
  
  
• Political ignorance remains a major source of political failure. How can we get things right where voters fundamentally fail to understand the basics on the composition of federal spending?

It takes two to take offence

...the one who's doing something, and the one who takes offence.

This is a classic Coasean-style problem. Should we blame the person who does something that offends somebody else, or should we blame the hypersensitive?

The usual approach is to condemn somebody who's offended people and to push for sensitivity training. This week's example, the Engineering Association at Canterbury does what it does every year: run a road trip where folks decorate their cars and dress up in costume, usually ones that provoke reaction.

Back circa 2006, I remember heading out to the Arts parking lot to see the costumes and the cars before they all headed out to Dunedin for their road trip. A guy dressed as a giant penis walked around the parking lot shooting white ribbons out of the top of his costume.

This year's Roundie 500 drew critique. Maybe it was really worse than prior years' iterations, but I've seen no evidence of it. A group calling themselves the "Taliband" dressed in bathrobes with turbans and had cardboard electric guitars. And the University issued a press release noting that it "strongly disapproves". The association of professional engineers didn't like it either.

I recommend instead Bryan Caplan's excellent proposed hypersensitivity training course. He has 7 recommended exercises. Here are the first few:

Hypersensitivity is a grave social ill.  It leads to needless conflict, lingering fear,suppression of important truths, and even, as the Astor Place Riot shows, violence and death.  Learning from the success of sensitivity training, I suggest we combat hypersensitivity with Hypersensitivity Training Workshops.  Small groups of students or co-workers, under the guidance of a certified Hypersensitivity Coordinator, must come together to explore the dangers of hypersensitivity.  This evil will always be with us, but by raising awareness we can hopefully make the problem more manageable.

Hypersensitivity Training is still in its infancy.  At the moment, I'm the world's only certified Hypersensitivity Training Coordinator, and even my experience is limited.  But I here propose the following exercises to start a dialog about proper program design.

Exercise #1: The Wall of Hypersensitivity.  Find a partner.  You start talking.  His job is to take visceral offense at everything you say.  After five minutes, reverse roles.  Then we have a class discussion about how your partner's hypersensitivity made you feel.

Exercise #2: In General.  Write down five groups that you identify with, then find a partner and swap lists.  Take turns going down the list telling each other, "In general, group X is Y."  Y can be anything you sincerely believe.

Exercise #3: An Awkward Moment.  Stand before the group and tells a story about a time you inadvertently gave offense.  After each story, the group chants, "It was no big deal!"

Completion of the course should be mandatory for signing up for a Twitter account.

Exercise #3 sounds really great. I bet there isn't an economist alive who doesn't have at least a dozen. If you don't think you do, ask your spouse.

Welfare paternalism

Paul Ryan's welfare plan, including stronger reliance on case managers to guide clients out of income support and into work, reminds me an awful lot of the Beaulier and Caplan piece on behavioural economics and welfare. It was published in Kyklos; the link above goes to the ungated version.

I'd paraphrased their paper a few years ago:

If we take behavioural economics seriously, we've good reason to believe that the anomalies it describes are found primarily among the poor and are exacerbated by the welfare system. Poor people are more likely to exhibit behaviours that reflect more than just high rates of time preference: they demonstrate little ability to foresee the consequences of actions. The poor (and less educated / lower IQ - the two go together) are more likely to be heavy drinkers, to be obese, to smoke, to buy lotto tickets, to take illegal drugs, and to commit even non-economically motivated crimes (theft would not be surprising, but violent crime isn't lucrative). Low IQ amplifies behavioural anomalies. And, the dole makes things worse. If you start out with big self-control problems, you're likely to overestimate your ability to motivate yourself to find work - "I'll go on the dole for now but will look hard for work tomorrow". Absent the income backstop, you'd have to look for work. Worse, if welfare payments are more comfortable than the first year of work, after which work is better as income rises, folks with high discount rates and self-control problems may decide never to leave even though it would be in their long run interest. Consequently, welfare payments may make welfare recipients worse off, contra neoclassical economics.

Ryan's plan has recipients working with case managers to develop short- through long- term goals, with wraparound tailored support in place of some current federal programmes:

The OG system will promote a more holistic form of aid to move individuals and families out of poverty. One promising method this proposal envisions is the use of case management. Here’s an example of the number of steps illustrating the OG in practice:

• First, each state will approve a list of certified providers that are held accountable for providing quality service and achieving results (such as moving people to work, out of poverty, and off of assistance).
• Next, a person will select a provider, and the provider will conduct a comprehensive assessment of that person’s needs, abilities, and circumstances. 
• Then, the two of them will develop a customized plan to address the recipient’s needs. The plan could take the form of a contract—with sanctions for failing and bonuses for exceeding expectations. The plan would offer financial assistance to address immediate needs, like food, clothing, child care, and housing. But it would also work on setting goals, learning skills, and developing a broader support system.
• At the most basic level, successful completion of a contract will involve an able-bodied individual obtaining a job and earning enough to live above the poverty line. Each state may choose to define success slightly differently insofar as those basic conditions are met.

I'm not a particular fan of paternalistic approaches. They're insulting. But at least this variant is targeted at those who have demonstrated that they need a bit more of this assistance. Further, help to get out of poverty already comes with strings. Between this kind of approach and one that simply provided a minimum income with no strings, well, it's a tough call. I don't like the paternalism, but I do expect it could be more effective in getting people into better situations, conditional on there being some sufficiently competent and empathetic army of social workers to do the job. [update: link fixed]

Previously:

• Welfare reform
• The poor aren't like us
• Coercion everywhere: welfare edition
• Guaranteed income and living wages

Nerd Pride

Tyler Cowen reminds us of a Hanson point: politics is about status.

I was disappointed but not surprised by this passage by Gary Silverman:

What I like about Obamacare is that it shows some respect for “those people” – as Hudson called them in Giant – who are good enough to work the fields and mow the lawns, and build the roads and sew the clothes, and diaper the babies and wash the dishes, but somehow aren’t good enough to see a doctor from time to time to make sure there is nothing wrong inside.

That is in fact what most of politics is about, namely debates over which groups should enjoy higher social status and which groups should receive lower social status. Of course critics of Obamacare have their own versions of desired status reallocation, typically involving higher status for the economically productive.

...

The deeper point is that virtually all of us argue this way, albeit with more subtlety. A lot of the more innocuous-sounding arguments we use all the time come perilously close to committing the same fallacies as do these quite transparent and I would say quite obnoxious mistaken excerpts. One of the best paths for becoming a good reader of economics and politics blog posts (and other material) is to learn when you are encountering these kinds of arguments in disguised form.

I agree.

And so we come to Noah Smith's article wishing for higher nerd status, or at least an end to nerd-bashing.

Seriously, America. The nerd-bashing has gone too far. Sure, there is a grain of truth in all of the criticisms of the tech industry -- but only a grain. Yes, startups are riskier than many founders realize; but founders are people with good skills who will never go hungry. Yes, San Francisco rents are out of control, but this is more about development policy and NIMBYism than Google and Apple. Yes, inequality is increasing, but it’s increasing across all industries and classes, and bashing Silicon Valley isn't going to stop the march of automation. Yes, big American companies and corporate governance need to improve, but bashing “disruptive” startups isn't going to help the situation. Yes, some tech companies ignore the public interest when pushing for deregulation, but show me an industry that doesn’t do that. Yes, there are sociopaths and wackos among the ranks of tech entrepreneurs, but they’re certainly a tiny minority. (The only tech industry problem that really seems to live up to the hype is the sexism.)

...

We’re looking for rich, successful people to bash. And Silicon Valley happens to be where the rich, successful people are right now. So we’ve turned on the nerds.

... 

Still, I’m irked. I’m a child of the 1980s, when jocks ruled the high schools, and nerds were confined to the basement while the good ol’ boys slapped backs and made deals. When the bespectacled Bill Gates became the world’s richest person, something changed for the better, and I don’t want to go back to the old days. The tech backlash is just another situation where America needs to put aside its urge to turn inward and demonize some subset of the population. We should work to fix the problems associated with the industry, of course, but vitriol isn't the way to do it. The nerds are not the hosts of Mordor.

 Bryan Caplan arguably predicted much of this in his nerd/jock theory of history:

Notice: For financial success, the main measure where nerds now excel, governments make quite an effort to equalize differences. But on other margins of social success, where many nerds still struggle, laissez-faire prevails.

It's suspicious - and if you combine the Jock/Nerd Theory with some evolutionary psych, it makes sense. When the best hunter in the tribe gets rich, his neighbors will probably ask nicely for a share, if they dare to ask at all. But if the biggest nerd in the tribe gets rich, how long will it take before the jocks show up and warn him that "You'd better share and share alike"?

Punchline: Through the lens of the Jock/Nerd Theory of History, the welfare state doesn't look like a serious effort to "equalize outcomes." It looks more like a serious effort to block the "revenge of the nerds" - to keep them from using their financial success to unseat the jocks on every dimension of social status.

I'd love to see a version of Piketty that looks at inequality in dating success for those aged 16-25. Has that inequality gotten larger or smaller over time? Does anyone know? Does anyone other than the nerds care?

It wouldn't be hard to build a stylised case that social changes from the 1960s through to present that decoupled dating from marriage-search for the first decade of dating strongly benefited the jocks at the expense of the nerds. But we have no empirics on it. How would a Herfindahl dating concentration index change over time? Or a Gini coefficient?

Which inequalities matter is more interesting than what's going on on any particular margin of inequality.

Margins and averages: college edition

College grads earn more than those who don't go to college. Does it follow that governments should encourage more kids into university? Not necessarily. 

Bryan Caplan here points to work by Eberly and Athreya showing that while the college premium increased substantially, college enrolment did not. Why? Because mediocre students are likely to fail out, and the returns to dropping out of college aren't that high. Caplan summarises:

Let me illustrate.  Suppose you're at the 90th-percentile of high school graduates, so your probability of graduating college if you enroll is around 90%.  When the college premium ascends from 50% to 70%, your expected premium goes from 45% to 63%.  In plain English, the payoff goes from very good to excellent.  Either way, enrollment is a no-brainer.

If instead you're at the 25th-percentile of high school graduates, your probability of graduating college if you enroll is around 20%.  When the college premium ascends from 50% to 70%, your expected premium goes from 10% to 14%.  In plain English, the payoff goes from really crummy to crummy.  Either way, non-enrollment is a no-brainer... especially when you dwell on the fact that colleges don't refund drop-outs' tuition, much less the earnings and work experience they forfeited to attend.

 Bryan then looks to other "no-brainers":

My favorite feature of Eberly-Athreya: Their story readily generalizes to other weighty life choices widely seen as "no-brainers."  Conventional wisdom condemns dropping out of high school.  After all, standard estimates say that finishing high school raises your income by 50%.  For good students, it's easy money.  For stereotypical "bad students," though, it's hard money - or a waste of money.  Why?  Because when bad students attend high school, their probability of graduation - and their expected return - remains fairly low.

The same holds for marriage.  The economic benefits of stable marriage are massive.  But as Charles Murray explains, the probability of stable marriage varies widely by social class.  Divorce rates for the working class are about four times as high as for professionals.  Marginal brides and grooms therefore face a high probability of marital failure - and can reasonably fear that marriage will make them worse off despite its palpable benefits.

To be fair, Eberly and Athreya are not the first or only education researchers to highlight the chasm between ex ante and ex post returns to education.  But as far as I can tell, no one makes the logic clearer.  If anyone taunts, "So your kids should go to college, but other people's kids shouldn't," the honest answer is "Don't shoot the messenger - or his kids."  The numbers don't lie: College is a great investment for great students, a mediocre investment for mediocre students, and a bad investment for bad students.  

This mirrors what Wolfers and Stephenson have been saying about the returns to marriage: the decline in marriage among the poor comes down to its lower expected value for poor people.

I will leave as an exercise for the student the following problem. New Zealand recently changed the university funding model. Previously, universities were funded based on student numbers and research output. Now, they're also rewarded for their degree-completion rates: they're punished for drop-outs. What happens to:

• equilibrium standards for passing grades
• the average college premium
• the absolute college premium for better students
• the expected college premium for better students
• the absolute college premium for worse students
• the expected college premium for worse students

Migration beats activism

I agree with everything in Bryan Caplan's post. If you have the option to move away from an oppressive place, moving makes far more sense than trying to change the system. You're doing pointless harm to your family by staying.

Now imagine that you live in a place that, while pretty prosperous, has a whole lot of things you find oppressive. You spend a lot of time complaining about those things. Your sons stand a non-trivial chance of someday being drafted into the army or some kind of national service. While you don't find the laws against using drugs to be personally binding, there's the lowish probability risk of being subject to an erroneous no-knock armed police raid if the cops get something wrong. Cops kill people very often in these raids; at best, they just terrify your children. If you drive near the country's borders, the internal security police might stop you and demand your papers. There's the low but real risk that the cops will just decide to seize whatever cash you have with you. The schools are guarded like a prison camps. You like betting on odd claims; the local police in your county have a history of showing up at the front door of people who make bets and shooting them - this happened to a dentist just a few miles from your own house. And the police could use selections from your anarchist writings to ex post justify just about anything they decided to do, if you get the unlucky lotto ticket. If your kids screw up a bit when they're older or are even suspected of having done so (again, low but non-zero chance), the system's really pretty horrible. If one of your children messes up and sells drugs even once from your house (very very unlikely, but not impossible), the government can make you homeless.

While you're able to live most of the time unimpeded by this stuff in a bubble of like-minded friends, the random-draw risks are a bit worrying. You could kinda model it as living in a nice place, but with a small risk that you and your family will be the ones selected for some horrible annual ritual sacrifice. You never attend the annual sacrificial ritual despite its broad popularity; you instead do what you can to try and stop the ritual. Maybe you have more protection against being selected for the annual sacrifice ritual than do most folks because you're not really in the typically preyed-upon cohort, but that risk is still there. You pay your taxes, knowing that that money is taken to fund the annual sacrificial ritual.

Yes, the case for migrating out of really terrible third world places is definitely much much stronger than the case for moving out of Fairfax County. But still...

Previously:

• Libertarian migration
• Revealed preferences and liberty
• Emigration

All joy no fun? You're failing.

Parenting is only "all joy and no fun" if you decide to run things that way. It's totally up to you. If you like that kind of thing, well, de gustibus. But know that it doesn't have to be that way, and especially so if all the doomsayers have put you off having kids.

Things we've done that make parenting fun.

• The kids never got to see any TV shows we don't like so they don't ask for them. They get to choose among TV shows we do like. The Wiggles have never entered our house. We don't have Sky with insipid Disney cartoons. Instead, the kids get:
• Classic episodes of Sesame Street
• Animaniacs
• Pinky and the Brain
• Adventure Time
• PowerPuff Girls
• Samurai Jack
• Classic Bugs Bunny
• Freakazoid
• The kids never get cutesy kid music that we don't like. They can choose among the things we do like. And, I spend time finding music that we'll all like. Like Dan Marcotte's brilliant Dungeons & Dragons kid-friendly tunes. My daughter demands "Jello Music" sometimes when we're driving. What's Jello Music? This is Jello Music. Songs sung by Jello Biafra. The kids love Weird Al Yankovic. Why oh Why are you listening to The Wiggles?
• We buy books to read to them that we also like reading. Our son started into illustrated versions of The Hobbit, The Odyssey, and the Ring Cycle before he was 4. There are TONS of books that are great for both parents and kids. Shaun Tan works great. We've almost finished Eddings' Belgariad series. 
• Audiobooks while commuting can be great too. StoryNory.com has, for free (donation recommended), great audio renditions of:
• The Norse mythology
• Greek Myths
• Kipling: From the Just-So stories through Rikki-Tikki-Tavi, The White Seal and more
• Tales from 1001 Arabian Nights
• Classic fairytales from home and abroad
• Brothers Grimm
• We downloaded enough audiobooks to cycle round once every two months or so. And so the kids learned the classics, we all were entertained, and their vocabulary is way the hell better than it would have been if we were listening to The Wiggles on the drive.
• We play games with them that we also enjoy playing. You can totally run Dungeons & Dragons scenarios that work for 3 year olds if you don't expect that they'll be writing things down on their character sheets. Set up simple puzzle quests and see how they work them out. What could be more fun than that? They beg for me to run scenarios while we're commuting to and from daycare/school. Because of bad traffic, I sometimes have to turn down my childrens' pleading requests that we play Dungeons and Dragons in the car. My children have excess demand for Dungeons and Dragons. What could be better?

• For a few months, when he was 5, the boy's favourite thing in the whole world was to play Skyrim with me. I'd play, he'd watch for monsters and point out things I should be doing. All joy, all fun. Then, when we'd go out to the park afterwards, we'd LARP Skyrim. He'd set up an alchemy table on a stump and we'd find things to mix together. Then we'd kill monsters with sticks. So long as you don't care about looking ridiculous, it's awesome. And ceasing caring about what other people think about stuff is a great general purpose technology anyway.
• We've been playing 2-player Lego Batman. The three year old is almost old enough to handle a controller - I give it another couple of months. She's ridiculously good at solving some of the puzzles and giving advice as her brother and I go though. 
• If he's good, I'll play Pocket Minecraft with him as LAN play. And if he saves up enough money from doing chores around the house, he'll be able to buy PC Minecraft for the machine in the living room. 
• If you've forgotten how to have fun playing LEGO, are you sure that kids are right for you in the first place?

Yes, the first year's insomnia is awful. Toilet training is horrible. Feeding can be a disgusting mess. There's much tedious training required if you want to produce kids that others might find acceptable adults later on. But the fun stuff should be fun for both of you. I don't get people who decide to kill the fun stuff. What a horrible horrible pointless and stupid waste. There are little people in your house who would love to play Dungeons and Dragons with you, if only you would give them a chance.

Folks like Ruth Graham need to ignore all the whiny parents. A lot of it is just signalling from people who think that others will hold them in higher esteem because of all of the work they've put into parenting. Don't encourage this labour-theory-of-value-thinking by sympathising or awarding approbation. Read Bryan Caplan's serenity approach to parenting and have fun.

Odd Japanese labour markets

Am I the only one who read the various stories on impending social collapse in Japan and reckoned there to be a potentially large opportunity for a firm that would be happy to hire women on flex-time arrangements?

Tyler pointed to one story yesterday; another hit the Washington Post today. Short version of both: Japanese labour markets are a disaster. Employers expect that a woman getting married has shifted to the mommy track and so pull her from opportunities for advancement, because she's likely to leave work after childbirth. And they're not wrong: the Guardian story says 70% of women leave work after having had a kid. Women wanting to have a career then don't get married.

Suppose that were all that were going on. We'd then expect some clever firm would figure out that there are tons of qualified women itching to get back into the labour market on flex-time arrangements and would hire them on a compensation bundle including less salary, on-site daycare*, and flex-time. Further, the peculiarities of the Japanese labour market could really work to such a firm's advantage. If you expect that a firm will dump you post-kid, then you don't make relationship-specific investments with that firm pre-kid. If you expect that you can flip to a decent flex-time arrangement post-kid, you work much harder for the firm pre-kid. And while the "job for life" norm seems to be abating in Japan, I'd be surprised if it were less true there than elsewhere.

So, why isn't this happening? First explanation: work norms. Where everyone's expected to put in really long hours, and where a firm has a mix of 16-hr workers and 7.5-hr workers, there's really no choice but to sideline the 7.5-hr workers onto the slow-track. But surely that's somewhat question-begging: it seems pretty improbable that you get that more output from one worker on 16-hour days than from two workers each on 8-hour days (who are on the same hourly but different annual total pay). And even if the 16-hour worker is more productive than two 8-hour workers, you could then just pay the 8-hour worker proportionately less.

Next explanation: The Guardian says kids are unaffordable unless you're on two incomes, but it's impossible to be on two incomes. Tokyo's expensive, but it's not the world's least affordable place. Beijing, Rome, Mumbai, London and Paris all come out worse on this index. But, where that index is conditioned on disposable incomes, and where salaries are based on crazy-long hours, then affordability could be a serious issue for those wanting to move to sane work hours. Maybe this part starts sorting itself out as homeowners die off faster than houses depreciate. Housing prices then fall rapidly as supply starts exceeding the number of people.

I can imagine a story where tight space constraints in Tokyo combined with pretty strong work norms have folks bidding up housing prices until it's pretty tough to afford a spot big enough for a family without two incomes with long work hours. But that story then conflicts with survey data that has money and housing as trivial reasons for not marrying; the Post story reports instead that "Do not feel the necessity" and "Do not want to lose freedom or comfort" were the main reasons given by both sexes for not marrying. And wanting to enjoy hobbies or entertainment was a slightly more commonly given reason for not marrying than wanting to concentrate on work or studies.

Maybe we need a Japanese translation of Bryan Caplan's book on low-effort parenting. The integral under the kid marginal-benefit curve is a lot bigger if you figure out ways of continuing to enjoy freedom and comfort.

Update: Brennan MacDonald points out that visas for domestic guest workers are much more difficult in Japan than in Singapore; if it's much harder to get a nanny, then that too helps explain female labour supply differences.


* Daycare availability seems a serious problem.

Kid Sanity

Bryan Caplan tells us that because the return to parental input is low, we can all ease up on the parental production function. Parents agonise about whether they're doing enough; the ones who do so-agonise are usually doing far too much on any rational cost-benefit calculation. Conclusion? Spread the same amount of total effort over more kids. The reduction in average child quality really won't be that big and you'll be a lot happier in your old age.

But Bryan errs a bit. He neglects that we also could be putting too much effort into antenatal care. Sure sure, there's a big left tail that are screwing up horribly on that front. But that tail isn't reading economics blogs or parenting books written by economists. Instead, the folks who do read econ blogs are busily beating themselves up for having a bit of soft cheese or sneaking a sip of wine during pregnancy. If we are erring in making pregnancy far more costly for our wives than it really needs to be, then we're really screwing up: no matter how convinced we are about Bryan's arguments, if pregnancy is really unpleasant, that up-front cost can kill our future potential unrealised children.*

Emily Oster's forthcoming book then will be a beautiful complement to Bryan's work. Amazon should sell them as a bundle. Doctors, midwives, and right-thinking-tut-tutting-jerks give us all kinds of advice about what good people do. A lot of those really just seemed to be nonsense.

Take alcohol. When we were expecting, none of the advice on alcohol seemed to make sense. Sure, getting drunk seemed a really bad idea. But the dose always makes the poison. So I went and checked the literature and concluded that light drinking during pregnancy was effectively harmless. So Susan had the occasional glass of wine; we were also big fans of Harrington's SobeRing Thought - the low alcohol beer that local brewer Harrington's made for the Lord of the Rings.** And I blogged a bit on how the risks of alcohol during pregnancy seem overstated: if anything, public health folks' warnings that there's no safe level of drinking seem a noble lie intended to dissuade those pregnant women who'd otherwise drink a bottle of scotch in an evening.

If you can't have a glass of wine with dinner every other night during pregnancy, then pregnancy is less fun than it otherwise would be. And so the kind of people who listen to this kind of advice are having too few kids.

Oster seems to have been as annoyed as we were. But she's done something far more constructive about it - she's compiled the evidence for those of us who care about evidence. From the Amazon blurb:

When Oster was expecting her first child, she felt powerless to make the right decisions for her pregnancy. How doctors think and what patients need are two very different things. So Oster drew on her own experience and went in search of the real facts about pregnancy using an economist’s tools. Economics is not just a study of finance. It’s the science of determining value and making informed decisions. To make a good decision, you need to understand the information available to you and to know what it means to you as an individual.

Take alcohol. We all know that Americans are cautious about drinking during pregnancy. Official recommendations call for abstinence. But Oster argues that the medical research doesn’t support this; the vast majority of studies show no impact from an occasional drink. The few studies that do condemn light drinking are deeply flawed, including one in which the light drinkers were also heavy cocaine users.

Expecting Better overturns standard recommendations for alcohol, caffeine, sushi, bed rest, and induction while putting in context the blanket guidelines for fetal testing, weight gain, risks of pregnancy over the age of thirty-five, and nausea, among others.

The tut-tutters are doing real harm here. Lower decile groups hear the "drink nothing" warnings, dismiss them entirely as nonsense, and go on to drink way too much while pregnant, doing real harm. High decile groups hear the "drink nothing" warnings and, adding that to all the other advice they're given about all the other costly-and-useless rituals they must follow during pregnancy, rationally decide to have fewer kids. This is a bad equilibrium. Shame that Oster's book won't be out for another year - the current equilibrium is costly, and the faster we can start fixing it, the better.

* As clarification: there's some optimal number of kids that each couple will decide to have. If the actual cost of having one more kid is lower than the cost parents think they have to face, or the cost they mistakenly decide to impose upon themselves, then optimal family size is a bit larger than the deciding-couple thinks. The deadweight costs of kids who optimally would be born from the parents' perspective but aren't born because of parental cost misperceptions is the problem - I don't think I'm pushing into Parfit territory here. But the problem is my wording, now clarified. Thanks

** Yeastie Boys and Kelly Ryan brewed the beers in this year's Hobbit film.

Thinking like economists and thoughts about economists

Chris Auld finds that people without a high school education are most likely to think that economists are know-nothings. The proportion of GSS respondents having such views is mostly declining in education. From Auld:

This is consistent with what I'd found on correlates of economic thinking in New Zealand - the more educated are more likely to agree with what I'd taken as consensus economist views. And, with what Bryan found in the States. But I don't recall seeing anything like that uptick among grad school folks, though I'd have to double check. The questions I'd used as indicating economic thinking all touched on microeconomic rather than macro issues: whether wage and price controls are a good idea; whether high income taxes make people less willing to work hard; whether we should have import controls.

Perhaps folks who've gone to grad school encounter too many folks who've done too much macro?

Rationality and economists

Andrew Gelman takes a swipe at economists. I think he's got things wrong. Let's work through it.

First, Gelman argues economists are inconsistent in arguing for consumer rationality while arguing that people need economists to help them overcome their irrationalities, largely about government policies. But these arguments are hardly inconsistent. In environments where individuals face real costs of being wrong or irrational, they consume little irrationality. At the voting booth, their likelihood of decisiveness is sufficiently low that they can indulge biased but comforting beliefs about the true state of the world. That's Caplan's rational irrationality model; I find it rather convincing.

Here's how Gelman thinks we square the circle:

OK, now to return to the puzzle that got us started. How is it that economics-writers such as Levitt are so comfortable flipping back and forth between argument 1 (people are rational) and argument 2 (economists are rational, most people are not)?

The key, I believe, is that “rationality” is a good thing. We all like to associate with good things, right? Argument 1 has a populist feel (people are rational!) and argument 2 has an elitist feel (economists are special!). But both are ways of associating oneself with rationality. It’s almost like the important thing is to be in the same room with rationality; it hardly matters whether you yourself are the exemplar of rationality, or whether you’re celebrating the rationality of others.

I think it's rather that economists recognize that there can be a rather large disconnection between policies that are politically popular and ones that would maximize a reasonable conception of a social welfare function. You can get it through the combination of rational ignorance and logic of collective action or other public choice problems; you can also get it through Caplan's rational irrationality.

Now, I know Gelman rejects that the expected instrumental benefits of voting are low; he says that an altruist weighs the benefits to everybody else of his voting to make things better and consequently voting passes a rational instrumental cost benefit analysis. But surely if your vote is the decisive one making everybody better off as you see it, it's also the one that makes half the voting population worse off as they see it. And so Gelman's argument fails unless the voter can place himself in an epistemically privileged position: he has to know that he's making the voters who disagree with him better off. And I just can't see how that happens. That half the population disagrees with you at the ballot box ought to make you more uncertain about the benefits of your preferred policy unless you truly have expert knowledge.

Fortunately, we economists often do have expert knowledge about economic policy. Well, maybe not about macro beyond a short list of "don't do these twelve things lest you completely ruin everything". But in micro and applied price theory, we're decent.

I rather liked Gelman's PS:

P.S. Statisticians are special because, deep in our bones, we know about uncertainty. Economists know about incentives, physicists know about reality, movers can fit big things in the elevator on the first try, evolutionary psychologists know how to get their names in the newspaper, lawyers know you should never never never talk to the cops, and statisticians know about uncertainty. Of that, I’m sure.

Expressive voting

Hamlin and Jennings survey the expressive voting literature. It's a nice piece, and I like how they've brought Kuran's preference falsification arguments. I'll quibble on two points, mostly because I like the word quibble and need excuses to use it. They write:

Caplan is careful to distinguish between [rational irrationality and expressive voting]: 'In expressive voting theory, voters know that feel-good policies are ineffective. Expressive voters do not embrace dubious or absurd beliefs about the world ... In contrast, rationally irrational voters believe that feel-good policies work.'

Therefore, a further condition would need to be fulfilled in order to judge a vote to be expressive of true preferences rather than rationally irrational ones; we would need to check how well informed the voter is. One suspects that this issue may be similar to social pressure. If voting is both expressive and 'rationally irrational', making information available might be expected to result in a rapid and significant shift in the political equilibrium. If, by contrast, voting is an expression of truly-held expressive preferences, the political equilibrium will be much more stable.

I doubt that Caplan would argue that rationally irrational voters need only be provided more information in order to improve outcomes. If information provision were the sole problem, voters wouldn't be openly hostile to the provision of information with which they disagree. And the rise of the Econoblogosphere would have quickly led to substantially better economic policy.

Here would be a rather better test of Caplan's rational irrationality model. I've not seen it conducted, but more experimental economics applications have been melding voting and markets. Here goes. Set up an experimental double-auction environment framed in a salient way - buyers and sellers of labour, for example. Run a few rounds of the experiment as baseline. Then, let folks vote on whether they'd like to make a change to the trading environment: policy changes that either improve or reduce overall efficiency. A price floor, for instance - a minimum wage. Set treatment groups that vary in individual expected decisiveness: the odds that any player's vote will determine the trading structure for the next round, with the sum of all player odds being less than or much less than one. Then run a few rounds with the (potentially) changed trading environment before offering other votes - some which augment and some which attenuate efficiency, with varying expressive framing. If traders make better choices when more decisive, that would be consistent with rational irrationality. It wouldn't distinguish between expressive voting and rational irrationality, but I'm more interested in testing the broader concept anyway.

Hamlin and Jennings later discuss the implications of expressive voting for constitutional choice. Brennan and Hamlin worried that constitutionalism exacerbates expressive voting problems and suggested that constitutional questions be left to small but statistically representative groups in order to avoid the Veil of Insignificance. They write:

Perhaps these proposals should be decided by small (but representative) groups, which might be more likely to take an all-things-considered view. Crampton and Farrant make explicit the potential problem that such a small group might design institutions that enrich themselves if they are not fully representative in a relevant sense. Therefore, a trade-off may exist between the problem of expressiveness, on the one hand, and allowing too much room for the narrow self-interest of unrepresentative groups, on the other.

It's probably semantics (a lot can be packed into "in a relevant sense"), but our main worry (ungated) was that the perfectly statistically representative group would have, by virtue of being the constitutional committee, a newly granted interest in enriching the members of the committee. If the group is small enough to overcome expressiveness problems, it may also be small enough to solve internal collective action problems and set itself up as effective dictator post the constitutional phase. The only way of breaking past the Veil of Insignificance is by reintroducing the problem that constitutional political economy in the Buchanan sense was meant to solve: separating individuals at the constitutional level from their particular interests in order that the constitution foster the general interest. Absent the Veil of Insignificance, the constitution serves the general interest of those writing the constitution.

Paper gated permalink below:

Expressive Political Behaviour: Foundations, Scope and Implications

Alan Hamlin and Colin Jennings (2011).

British Journal of Political Science,
Volume 41, Issue 03, July 2011 pp 645-670

http://journals.cambridge.org/abstract_S0007123411000020

Fractional reserve banking

Bryan's post at EconLog critiquing Rothbard on fractional reserve banking is entirely correct.

And it brings back memories of the Rothbard Graduate Seminar that I attended in the summer of '99 in Auburn. I pressed a couple of the folks there: if we were in a free banking system and people chose, with full knowledge, to use deposit accounts that paid interest in exchange for the bank being able to lend that money out to others, we could hardly call the arrangement fraudulent. The answer I'd then received, if I recall correctly, was that such an arrangement was fine, but it shouldn't be called banking.

I'd be pretty surprised if the nominal change resulted in less confusion. Jimmy Stewart reminded folks pretty well how banking as we now know it works.


And the Simpsons reminded us a bit more recently.

Fiscal externalities of population

Bryan Caplan's changed my mind again. I'd always expected that the overall fiscal externality of having more children was small and, perhaps, slightly negative. Public schooling isn't cheap and neither are the per student subsidies for tertiary education. But I'd not thought too hard about it. I choose to mood-affiliate with Julian Simon and consequently tend to expect that increased population is generally beneficial; I'd just not expected that the effect on the government's coffers was particularly positive on average.

Bryan cites Wolf et al's finding that replacing the average non-parent with the average parent provides a $217,000 net fiscal benefit: total taxes paid by the children less total government services consumed by the children. Since lots of government services like national defence are non-rivalrous, having a bigger population reduces the average burden. The average additional child confers $83,000 in additional net fiscal benefit. The greater is the proportion of spending on rivalrous rather than non-rivalrous goods, the lower will be the fiscal benefit: the numbers for New Zealand would have to be lower since more of our spending is on transfer payments relative to defence.

Bryan argues for child tax credits to encourage greater fertility. Relatively small baby bonuses can push folks at the margin into having an additional child - Bryan says about $9000 would do it, citing work by Kevin Milligan. If folks whose children are expected to have lower than average positive fiscal contributions were more responsive to the tax incentive, the policy's consequences would not be what Bryan's expecting. But the Milligan paper finds the opposite: richer couples' fertility was much more responsive to the Quebec tax credit. There's reasonable heritability of income generating capacity; the baby bonus would increase the average positive fiscal effect over time rather than reduce it.

There's still something weird in the Wolf et al paper.

Nonparents pay about $327,000 more in taxes than they receive in benefits, while parents pay about $278,000 more in taxes than they receive in benefits. The offspring of the parents, in turn, pay over $266,000 more in taxes than they receive in benefits. In each case, the excess of tax payments over benefit consumption results partly from the exclusion of pure public goods from the benefit side of the balance sheet: whereas all tax payments represent a reduction in private consumption possibilities, only the “excludable” part of public expenditures belong in these accounts.

Suppose that the "non-excludable" part of public expenditures totals $300K per capita, giving a slight overall deficit. If those expenditures are invariant to new persons' entry, then we're right to exclude that portion since the benefits received by the new persons come at zero marginal cost. The bulk of the new entrants' taxes help defray the average cost of providing a fixed set of public goods.

But why should we expect that government expenditure on nonrivalrous goods is invariant to population? If spending instead is elastic, then we'd need to count the new spending on rivalrous goods for which the new person's entry were responsible. Depending on that elasticity, we could quickly get back into the world where the fiscal effect is ambiguous.

I'm generally very nervous about taxes intended to rectify fiscal externalities. If the numbers came out showing a negative fiscal effect of additional children, would Bryan recommend per-child taxes? Suppose that more disaggregated data showed that the negative fiscal externalities of children born to poor unwed mothers were large and that abating subsidies for such births weren't sufficient to counteract the negative effect. Taxes? Regulatory measures? Note that the Wolf paper shows a much smaller positive fiscal effect for parents with less than a high school diploma; the required responsiveness of government spending on nonrivalrous goods to increased population need not be large to there flip the sign of the effect.

The permissible boundaries of taxation, regulation, and subsidy effectively disappear if policy needs to correct fiscal externalities.

Pacifism

Bryan Caplan advocates pacifism.

He lives in Fairfax County, which has one of the more militarized and non-pacifistic police forces in the United States. Fairfax SWAT teams murder dentists who wager on sports; best I'm aware, Sal Culosi's murderer is still on the police force. Here is the list of people officially killed under authority of the State of Virginia since 1982. I'm not going to make a guess as to the Caplan household tax burden, but about a fifth of his federal taxes go to the military.

How much weight does pacifism have in Bryan's overall utility function? He almost certainly rightly concludes that the total amount of pacifism in the world is unaffected by his marginal tax contribution to Virginian and American anti-pacifism, and that he probably does more to further pacifism where he is now as compared to moving to a place like New Zealand where less than a twentieth of his taxes would go to pay for a military whose main function is assisting in civil defence, emergencies, and enforcing property rights in fishing quotas in New Zealand's territorial waters.* But if Bryan's pacifism includes an unwillingness to pay for a war machine as well as a refusal to serve in one, I'd be very happy to have Bryan as a neighbour some day.

* Here's the appropriation summary for Vote.Defence 2010. Total NZ military spending of some $2.85 billion includes only some $79 million on "operational deployments"; I'd have to guess most of that is the Afghanistan deployment. If I'm one of two million or so taxpayers, my share is about $40. I doubt that the overall Afghanistan mission passes cost benefit, but at least the NZ involvement is relatively minor. New Zealand has no air combat wing (Kiwis are flightless). This has far less to do with New Zealanders being inherently pacifistic than with that we face such tiny external threat, and such low odds of repelling any country with sufficient blue water forces to actually get out here, that the optimal level of national defence is near zero.

Too many people?

Bryan Caplan's new book tries to convince middle to upper income folks to have more kids. The kind of folks who are holding back because they reckon that they can't afford the time investment. Caplan argues that kids don't need to be as big a time sink as folks think - since the marginal effect of parental effort on kid outcomes is very low, why not just have fun with your kids instead?

It's a reasonably convincing argument. It won't change the equilibrium size of our household as we don't think we can afford the additional childcare expenditures and we'd likely need a bigger house. And if your consumption bundle requires family trans-Pacific travel, additional kids are definitely not low marginal cost.

But I've been most surprised at one of the more common lines of critique he's been getting in comments. Here's a representative selection.

From NPR:

Boy, what an appropriately named book. I'm amazed that with dwindling natural resources your show would promote the selfish (and environmentally irresponsible) act of having more than two children in a family. That makes me one of a very significant minority, but I don't think it's something to brag about in the current environment. At some point, societies are going to have to address the spread of humans is having on the planet--not unlike a virus.

128 people "recommended" this comment over at the New York Times:

There are great reasons to have fewer children, or none. Overpopulation, for one--and it's behind so many of the other social problems we have. ...

I didn't see any such comments over at the Wall Street Journal.

Even if you want to come down on the side of the folks freaking out about population, middle to upper class Americans having more kids is hardly the cause of any problems. It's far more likely rather to be a solution.


Caplan's talking to Trevor and Carol, the couple who hesitated too long and had no kids, not to Clevon, whose great great great grandkids wind up starring in "Ow My Balls!" It's mildly insane to think that his argument, directed as it is, does harm by contributing to overpopulation.

The more kids Bryan and Corina have, the better for everyone else.

Will Wilkinson's critique misses the mark as well, and more widely if you consider just how damned good he is on everything else.

Economists generally begin from the assumption that we’re rational decision-makers who do the best we can to achieve our aims given the constraints we face. In Mr. Caplan’s previous book, “The Myth of the Rational Voter,” he lays out an elaborate theory of “rational irrationality” in order to explain how it is possible for voters to act on irrational beliefs about politics and policy without having to abandon the economist’s foundational rationality assumption. But Mr. Caplan offers us no analogous theory of the rationally irrational mother. He simply begins with the ad hoc hypothesis that mothers are forgoing body-reconfiguring pregnancy, excruciating childbirth and the massive time-cost of additional children (which women disproportionately shoulder) not because they are rational beings taking into full account the manifold considerations relevant to profoundly life-shaping choices, but because they are in error about the power of parenting to shape “adult outcomes.” I like it better when Mr. Caplan reasons like an economist.

All that is required for Caplan's argument to hold is that parents largely misattribute good outcomes to high parental effort when high parental effort generally is confounded by good genes. The misattribution leads to overestimation of the amount of effort required for good outcomes and consequently leads parents to perceive the marginal effort cost of acceptable quality children as being higher than it really is. If the amount of effort needed for good outcomes is really lower than folks think, at least some of those people will be having fewer than their optimal number of children. Caplan's not trying to convince folks like Will to have children - best evidence suggests he sees them as a bad rather than a good; rather, he's trying to convince the folks who already like kids and are waivering about having one (another) because of the costs.