Afternoon roundup

The tabs...

• Earthquake strengthening costs on one Wellington performance venue have increased from $90m to $182m and now to $329m (Dom, Herald). We have no clue what strengthening the recently quake-designated Michael Fowler Centre and Opera House might cost. Would it be crazy to expect a billion dollars across all three? After $100m more than necessary on a library? All for a town of about 200,000 people where the water pipes are a century-old collapsing mess? It's a good thing Wellington's pretty...
• Mothers of underweight babies below a cut-off get substantial US government support; those just above the cut-off don't. Run the RDD and find no effects of funding on outcomes. 
• NZ's National Party promises non-finance spending two percentage points of GDP higher than Ardern promised in the 2019 Wellbeing Budget. 
• Devastating New Yorker piece on the Ariely / Gino mess. Harvard's Business School is not a serious place. 
• Admin staff at the Auckland Uni law school are substantially happier than faculty. I keep wondering when somebody might set up a union that represents only academic staff. 
• Superb BusinessDesk piece on Sean Colgan, who backed Rako in its fight with the Ministry of Health. And has leant David Seymour a plan for the election campaign. 
• My piece in this past weekend's Stuff papers covers two recent NBER working papers on zero-sum thinking. 
• California's math curriculum is nuts. Unfortunately, this kind of nuttiness is also infecting New Zealand.
• A lot of US voters are confused about whether Robert F Kennedy Jr is Bobby Kennedy. They identify the picture of Bobby Kennedy from the 1950s, the father of Robert F Kennedy Jr, as being Robert F Kennedy Jr. He's aged remarkably well if so; the father would be turning 98 later this year. Every time you learn a little bit more about voters, just be amazed that the world isn't even worse. 
• For six years, NZ had a government that expressed commitment to wellbeing as its highest goal, and yet this. 
• So Sanitarium ran into some supply issues and cut supply to The Warehouse before either Foodstuffs or Woolworths. Which seems more plausible: that the whole thing is a stitch-up by the big supermarkets to get Sanitarium to cut out a low-price potential competitor, with a new grocery regulator watching? Or that the big supermarkets have longstanding contracts where they pay a bit more to have clauses providing greater security of supply? I'd bet on the latter, but nobody else seems to have considered that possibility.

Afternoon roundup

The worthies, as I try to stop Chrome from crashing and crashing and crashing...

• The 9th Edition of Cato's Handbook for Policymakers is up. The things that can happen in bigger countries with much larger thinktanks...
• Simply amazing. A Korean provincial government backed the bonds for building Legoland Korea. Then an incoming provincial government wanted to change the terms. And the entire Korean bond market exploded. Remember kids: using the government's balance sheet to back bonds and bring down interest costs doesn't reduce the real cost. It just shifts risk onto the government's books. And sometimes that all goes ridiculously badly. 
• Some parts of NZ policy are frustrating because obvious ways of fixing things are ignored. Other parts are frustrating because they seem to be unfixable. Consider the current messes in immigration policy. 
• The folk economics of housing is folked up. "As Larry Summer said, "There are idiots. Look around.""
• It is illegal to access the updated vaccines in New Zealand and the government is ignoring advice around masks. 
• One potential conclusion from the latest from Arthur Grimes: allow unlimited inbound migration of happy people.
• Environmentalists oppose NZ biofuel mandates. Biofuel mandates never make sense, but they especially don't make sense when the sector's covered by an ETS with a binding cap. 
• Piles of detail on fights over consenting on the Waiau River.
• Government just doesn't seem all that good at managing pay structures. Also, if the government wants more nurses, requiring unpaid hospital placements like this as part of the training for new nurses might not be helping. 
• Matt Levine's rollercoaster ride through FTX.

Afternoon roundup

Another long-belated closing of the browser tabs:

• Requiring MIQ for people arriving in Auckland is nonsense when the Covid-positive rate among vaccinated and test-screened arrivals is lower than the Covid-positive rate in Auckland. Labour wants to ignore it, because the status quo is the thing always to be defended against challenges from the outside; National ignores that the recommendation here also says to strengthen the defences at the Auckland boundary. See also coverage at Politik ($). It's particularly messy for travel from India.
• Getting carbon accounting right matters. So this is depressing. 
• If you didn't already read it, and I did point to it earlier this week - Jenny Ruth's story on RBNZ burying research that contradicts Adrian Orr's assertions around systematic financial sector risk from climate change. 
• Select Committee has reported back on COVID-19 Public Health Response Amendment Bill (No 2). All the bad stuff is still there. They are still letting MoH supplant ISO standards with their own worse standards. They are maintaining the ability for the government to just take testing away from private providers. Our submission on it was here. At least National and ACT said how stupid this all is. 
• Singaporeans choosing to be unvaccinated will be out of pocket for more of their Covid treatment costs
• Kate MacNamara has another shocker. Te Punaha Matatini worked to block more Covid testing in South Auckland by claiming that it would be racist to have more testing in South Auckland. They wanted that relatively scarce testing resources be devoted to symptomatic testing rather than broad surveillance testing where it looked like there were undetected cases. You may recall my yelling around that time about getting more testing capacity, thinking about rapid antigen tests, finally getting Rako's saliva testing rolled out everywhere.
• The government will finally have some AstraZeneca available for those with allergies relevant to the Pfizer vaccine, and for workers under vax mandates who just don't like mRNA. I don't understand why this has to be so restrictive. AZ holds in fridges for a long time. Just make it broadly available. If that's the vax someone will take, it has to be better than their remaining unvaccinated. 
• The scrap between MoH and the folks who could actually get vaccines out in Northland continues. MoH doesn't want to give individual-level data to one agency. And one can imagine good reasons for that, especially if there are local iwi objections. But I'd wonder whether MoH couldn't give fine-grained meshblock detail on vax rates. Like, "Here are the census meshblocks in your area where less than half of the eligible population is vaccinated. If you go fishing there, you'll likely catch some." 
• Too many people still see climate change as a "We have to transform all of society into the vision I have for what good looks like". Like read this on urban planning and transport. It totally makes sense for councils to think hard about what a $100/tonne carbon price would mean for transport demand and how to build the infrastructure that people will want when the price gets there. But this isn't that. Turn GHG mitigation policy into some demand that everyone buy in to particular versions of urbanism, and you're not gonna build support for mitigating emissions.
• Sadly, I'll soon get to start pointing at NZ data rather than Alberta data on vaccines and Covid risks. The Spinoff's been tracking it. It's still not as good as Alberta data, because they won't have as fine-grained official data to work from. But it does show very clearly the overrepresentation of the unvaccinated in hospitalised cases, and the underrepresentation of the fully vaccinated. 
• The government had well over a year to prepare for the Covid outbreak. They spent it cheering themselves for having defeated Covid rather than preparing for what would be needed if it ever did get out. A few months ago, even suggesting that it was gonna get out and that obvious holes needed fixing was considered treasonous. And now, just look at this mess. 
• In a just world, this move would make it easier for older people to move to New Zealand. 
• NZ remains relatively unpolarised. 

Afternoon roundup

 The afternoon's worthies on the closing of the browser tabs for a system update:

• This mess has been a long time coming. There are piles of small rural water schemes that largely supply stock water. The government has been trying to figure out how to apply water quality standards to that sector where the number of people on those water supplies is tiny, where treating huge volumes of water intended for stock is just stupid, but where government and councils worry that cost-effective solutions could leave them legally liable if anything goes wrong. You'd think there'd be some way of letting households on those schemes install their own UV filtration on a caveat emptor basis. Three cheers for the Local Democracy Reporting fund that helps this kind of journalism. 

• Getting a tenant who terrorises the neighbours evicted apparently takes long enough that the neighbours have all gotten security cameras installed, there have been multiple police calls, and finally the tenant breaking into the neighbour's house at night. It's great that the Tenancy Tribunal granted the immediate eviction, but you've got to wonder about a process that takes all that to get there. I wonder what things would look like if landlords, including state housing providers, could evict a problem tenant on having letters requesting it from a supermajority of neighbours. 

• The Ministry of Health does not like to comply with the Official Information Act. Just read through this mess. Some journalists wanted to be able to map out vaccination rates by neighbourhood. The data exists. It wouldn't have been hard for the Ministry to aggregate it up from meshblock to neighbourhood if it wanted to confidentialise, but nothing really enforces the Official Information Act. 

• I am still angry about an old Circa Theatre play that cast developers as moustachioed villains, and NIMBYs as heroes. Continuing to try to get housing built in a housing crisis, despite the best efforts of the politically powerful, is heroic. So three cheers to Ian Cassels, and brickbats for everyone else trying to stop Shelly Bay.

• The RBNZ is again talking about LVRs. House prices are terrible, and RBNZ policy is exacerbating things because of the existing supply constraints. But Michael Reddell's critiques the last time through remain pertinent. Is there really a plausible financial stability / prudential regulation basis for the rules? They never made much sense to me on that basis, or at least the case for them hadn't seemed to have been made. I could kinda see how they might make sense if the Bank were targeting not just CPI but also wanting to pull the peaks down on asset price inflation. 

• Jack Vowles starts parsing the numbers on party switching in the NZ election. For every voter National lost to ACT, it lost about 2 to Labour. And Labour pulled in a pile of votes from people who hadn't voted in the prior election. One bit relevant to some speculation:

  There has been speculation that many of those switching from National to Labour did so to keep the Green Party out of a coalition and thus prevent any possibility of a wealth tax being introduced. When asked the reason for their vote, five people who switched from National to Labour did mention the wealth tax and the need to keep the Green Party out of government. For only three of these was this the major reason for their vote shift; and these people form a small minority of the 500 National to Labour switchers in the sample. In their responses to another question in the survey, two thirds of those 500 switchers indicated they were actually in favour of a wealth tax. 

Civic knowledge

The Initiative commissioned a poll earlier this year, pre-Covid, checking on whether voter knowledge about some basic civics had improved since the last iterations of the New Zealand Election Survey.

It hasn't. 

Our report on it came out this morning; I chatted about it with Duncan Garner, Jenny-May Clarkson, and Mike Hosking.

None of the results were particularly surprising for those who pay attention to voter knowledge surveys. The NZ Election Survey regularly finds that roughly half of voters don't get how MMP works; we found the same. NZES often finds 16-17% of voters not knowing the lead party in the governing coalition; we found a bit over 30% can't identify which parties are in Parliament. As usual, Green Party supporters had more political knowledge than supporters of other parties. In prior work on the NZES, that looked to be the case even accounting for Greens' higher education levels; in this one, it looked to be explained by those higher education levels. 

I had thought that this kind of thing was more common knowledge, so I learned something too! I didn't know that it wasn't!

We made a couple of suggestions about ways of improving things. Civics education is the standard one, but I'm a bit of a pessimist on that one. Nearly ubiquitous civics education in the US hasn't seemed to have done much there for civic knowledge, and one rather neat experiment found that what is taught washes out a couple years after the classes are over. In that experiment, a civil liberties group tested whether an intensive instructional module on the US Bill of Rights might improve appreciation of civil rights. They found it did nothing to change student views on civil liberties, and only increased understanding of the Bill of Rights, as compared to a control group, shortly after the course was done. Two years later, there were no differences. 

So maybe it's worth trying, but only as an experiment: try it in a few spots, see if it works, see if the knowledge holds, and see whether it's crowded out instruction on other things. 

We had a bit more fun with another suggestion, stolen shamelessly from Bryan Caplan and adapted to local circumstances. Basically, you need to improve the incentive to acquire political knowledge. Rational ignorance is a tough beast otherwise. We suggested a few options, but one fun one would just have the Electoral Commission publish ads with some of the civics basics, then give a prize to the enrolled voter who, on getting that morning's random-draw phone call, successfully answered a question drawn from those basics. Even a $10,000 daily prize would only cost $3.65 million over the course of a year - plus the cost of the ads and the staffing of course. But the all-up costs wouldn't be that high relative to curriculum pushes, for example. 

You could even think about an extended version, like I'd discussed in Newsroom a while back (ungated), that would add in questions drawn from the headlines of papers and outlets covered by the press council.

The Herald covered the report here.

Referendums are great

I just love this thread about Saskatoon's 1988 referendum on school store closing times. I'd not heard of it before; I was 12 years old in Manitoba when this would have happened.

Let me introduce you to the most confusing referendum result. It occurred in Saskatoon in 1988, held at the same time as the municipal election.

— Paul Fairie (@paulisci) September 29, 2019

It was about store openings, and there were five questions posed to voters.

The first was straightforward enough:

"Are you in favor of all stores being allowed to be open on Sunday? "

YES 22,497
NO 35,319

Simple enough -- no to Sunday shopping.

— Paul Fairie (@paulisci) September 29, 2019

Question 2 is OK by itself.

"Are you in favor of grocery stores being open on Sunday?"

YES 28,461
NO 27,485

No general Sunday shopping, but grocery stores are OK.

— Paul Fairie (@paulisci) September 29, 2019

The word 'only' complicates question 3.

"Are you in favor of only drug stores and confectionary stores being open on Sunday?"

YES 30,444
NO 24,434

Now people have voted against Sunday shopping, allowing grocery stores but also *only* drug stores and confectionary stores.

— Paul Fairie (@paulisci) September 29, 2019

Question 4 is also OK by itself.

"Are you in favor of city council regulating store hours to close all stores between 1:00 am and 5:00 am?"

YES 32,768
NO 20,223

So no late night shopping.

— Paul Fairie (@paulisci) September 29, 2019

Question 5 is weird with Question 4.

"Are you in favor of all stores being allowed to set their own hours Monday to Saturday?"

YES 30,363
NO 24,384

Now a majority want stores to be able to set their own hours, but not from 1am to 5am.

— Paul Fairie (@paulisci) September 29, 2019

To summarize:

A majority wanted no Sunday shopping, and for grocery stores to be open on Sundays, but also *only* drug stores and confectionary stores to be open, and a majority also wanted stores to not be allowed to open from 1-5 am, but also be able to set their own hours.

— Paul Fairie (@paulisci) September 29, 2019

The result of all this? pic.twitter.com/jw2WeT1Fmv

— Paul Fairie (@paulisci) September 29, 2019

More aftermath: https://t.co/MMzpzhBDLH

— Paul Fairie (@paulisci) September 29, 2019

When I was in grad school, Bryan Caplan liked to tweak a standard rally chant:

The People!
United!
Will Never Be Defeated Coherent!

I wish that I'd known about the Saskatoon referendum when I was teaching public choice.

Update - I dunno what happened the first time I wrote the first line. I was thinking about schools perhaps.

Let's make a polling deal

IRD has gotten in trouble for doing some polling about potential changes to the tax system.

Inland Revenue has admitted it was wrong to ask for New Zealanders' political persuasions in a survey they are carrying out for the Government on the eve of the release of a crucial tax reform report.

The taxman is researching the public's views on globalisation and fairness in the tax system. Questions had included where respondents sit on the political spectrum, prompting questions of whether taxpayers are funding sensitive political polling.

It would be bad if IRD were doing this kind of polling to help its political masters to sell whatever tax changes might be coming, but that's not the only possible interpretation.

We can also imagine scenarios where the political masters wanted changes that IRD knew to be a bad idea, that the politicians thought were popular, and that IRD wanted to be able to demonstrate were not only bad policy but also bad politics. "See? It isn't just rich pricks and right-wingers who hate this particular part of your tax package which we've also told you is a terrible implementation issue. Would you please now consider not doing this?"

I have zero inside line on this one, but it's not unimaginable.

Perhaps, as penance, IRD could just release the polling data for all of us to play with. It would be super awesome to have the full results. And then there'd be no worries about whether they were doing secret political polling for Labour - the results would be up for everyone to play with.

Around 1000 people are being asked questions about their views on Inland Revenue, whether they are generally trusting, believe what they read in the media, pay too much tax or whether public services should get more funding.

A question on where respondents sit on a left/right political spectrum threatens to skirt the department's legal obligation for political impartiality.

Polling experts said the results could give politicians valuable insight on how different demographics view the tax system

I for one would love... hmm. I'll try OIAing the full results.

Afternoon roundup

The closing of many days' worth of browser tabs finds some gems.

• WeWork will be opening an entrepreneurship-focused primary school in New York. 


• Legal entrepreneurship provides a new variant on tax farming in America. One law firm's figured out how to cut a deal with city council letting it prosecute code violations on Council's behalf, and charge those fined for their prosecutions. We don't know how lucky we are in New Zealand.


• Sam Bowman on minimum alcohol pricing. One caution there: Pryce's thesis does show far less price responsiveness among heavy drinkers, but one reason for that is that they shift on the quality dimension rather than the quantity dimension. Minimum pricing makes it harder to shift to lower per-unit-price products in response to a price rise for those heavy drinkers who have already downshifted to low-value products. Pryce does correctly warn that the benefits of minimum pricing in curtailing heavy drinking are highly overstated - the stupid models have a baked-in assumption that heavy drinkers are more price responsive than moderate drinkers, and that has things backwards.


• Marco Tabellini finds voter backlash against immigrants despite immigrants' increasing employment among natives. He looks at European immigration to the US from 1910 to 1930. From his abstract:

  Immigration increased natives employment and occupational standing, and fostered industrial production and capital utilization. However, it lowered tax rates, public spending, and the pro-immigration party's (i.e., Democrats) vote share. The inflow of immigrants was also associated with the election of more conservative representatives, and with rising support for anti-immigration legislation. I provide evidence that political backlash was increasing in the cultural distance between immigrants and natives, suggesting that diversity might be economically beneficial but politically hard to manage.

  Sounds like the last NZ election.


• This is just amazing. Here's some folks at Laurier University in Canada berating a TA for a critical thinking course for having encouraged critical thinking. She showed video clips on two sides of an issue. The one that she's in trouble for using was a clip from a University of Toronto professor. The cultural revolution has hit Canadian academia. May New Zealand continue to be immune.


• Another sledgehammer taken to Nancy MacLean's Democracy in Chains. This one hits on her allegation that James Buchanan supported school segregation. He didn't.  

And a couple bits from me:

• I'm quoted in this piece where I argue the case for Working for Families instead of minimum wage hikes. 


• I provided Interest's Top 10 last week. Highlights there include a nice NYT piece on the alcohol-cancer studies, a great piece from Russell Brown on how Auckland Council's liquor people screwed up a Lorde all-ages show, and Dunedin's impending problem where the Easter trading ban will coincide with an Ed Sheeran concert. 

Conditioning on partisanship

Glad to see somebody's worked out the numbers on this one.

It's bugged me how American papers have been quoting Trump's continued high approval ratings among Republicans without doing much to correct for that the people most disgusted by Trump will have stopped identifying as Republicans.

John Holbein points to this piece, which tries to put some bounds on the effects. Just conditioning on stated past voting record won't do it where recall bias matters and where folks might not want to remember having supported something that's now kinda ugly. So they try to adjust for 'missing' partisans of the President's party relative to a baseline measure. The key figure is below, followed by the authors' discussion.

In the lower panel of Figure 2 [pictured above], we plot observed partisan approval rates, the bounds on the compositionally-corrected partisan approval rate, and 95 percent confidence intervals for the upper and lower bound during the first 163 days of each presidential term.23 The marker is the observed partisan approval rate, the first capped line extending out from the marker are the bounds, and the second set of capped lines are the 95 percent confidence intervals on the lower and upper bounds.

Trump’s observed partisan approval rates are very low compared to the same period during Obama’s first term, but are roughly comparable to Obama’s second term. More relevant for our analysis is how the bounds evolve over time. The lower bound on the compositionally-corrected partisan approval rate is quite low during Trump’s presidency. In 14 of the 23 weeks, the lower bound is below 0.8. With only one exception, the lower bound on Trump’s compositionally-corrected partisan approval rate is lower than the lower bound from the analogous poll during Obama’s second term. The observed partisan approval rate is partially an artifact of missing respondents who would have previously reported Republican partisanship. While President Trump’s observed partisan approval rate has received much attention, the data are also consistent with the possibility that his partisan approval rate is quite low relative to recent presidential history.

I'm surprised the lower bound of the adjusted interval is as high as it is. 

Morning roundup

A few of the worthies as I close out the browser tabs before Chrome eats every last bit of my system's resources:

• Thomas Lumley's travel guide for Auckland visitors for a statistical computing conference may be useful beyond that conference's attendees.
• The Washington State Institute for Public Policy's evaluation of boot camps suggests that they're very effective. I had previously thought there was a typo in their tally: they had a negative cost listed for the things, which had me thinking they had a spreadsheet error. But it's correct - confirmed by email. Boot camps are cheaper than other juvenile detention facilities in Washington State, and so they're of negative cost relative to the counterfactual. And they also seem effective: 100% chance of providing net benefits. 
• Vlad Tarko's take on apparent deregulatory trends: you can reconcile survey measures of declining regulatory burden with other data on increased staffing and budgets for regulatory agencies in a model in which competing regulators offer the regulated opportunities to select the one that sucks least. He says regulatory capitalism is a better term than neoliberalism for the current state of play. 
• Where the state is weak, others can be strong. In Nigeria, churches are building what look like private cities. Attention Charter Cities fans. 
• Great piece by Andrew Sullivan on tribalism in American democracy. I don't share his optimism about Trump yet being able to come around to solve all this, but the diagnosis in the first three quarters of the piece seems right. 

And hopefully on closing Chrome, there will no longer be a long lag between moving the mouse and seeing the cursor move. It's really annoying. 

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.

The languages of Omecron Perseii 7 and Omecron Persii 9

Since none of us can really affect political outcomes, it's generally irrational to pay too much attention to politics. On that measure, men are far less rational than women - or at least by the studies of political knowledge I've come across (two examples), and my own work on New Zealand.

This general finding is supported by a very different kind of method. Schwatz et al trawled through 700,000,000 words, phrases and topics provided by 75,000 Facebook volunteers. The authors were interested in personality differences and language. But the gender difference in propensity to talk about politics was stark. Here are the word clouds, sorted by gender. I apologise for the curse words.

At least in this Facebook sample, women talk disproportionately about relationships and feelings; men disproportionately curse, talk about sports and video games, and talk politics.

If we look at the topic clusters, women's focused on family and feelings (emotions, cute things, happiness, friendship, family/friendship); men's were politics, sport, war, video games, economics-politics, and cursing. Or at least that's my summary of each of the topic clouds. Within the central core, government shows up on the men's side; nothing policy-related shows up on the women's side. Or, at least, these are the words that are most *distinctively* associated with each gender. If somebody on Facebook is talking about the economy, tax, budget, the government, freedom, democracy, rights, or liberty, it's likely to be a guy - at least in this sample.

HT: Max Roser

Stories that are probably linked...

The latest General Social Survey has Kiwis pretty happy:

• The majority of New Zealanders rated their overall life satisfaction and sense of purpose highly in 2014.
• Just over 8 in 10 people reported high levels of overall life satisfaction and almost 9 in 10 felt a sense of purpose in the things they did. 
• Some population groups had lower levels of both overall life satisfaction and sense of purpose: sole parents, unemployed people, and people with no qualifications. 
• Other population groups had notably lower levels of overall life satisfaction but their sense of purpose ratings were still similar to other groups’ – people who didn’t live in families, had incomes of $30,000 and under, needed an extra bedroom in their home, or identified as Māori or Pacific peoples.
• Age differences had a strong effect on the different well-being rates reported by different population groups.

The data tables are interesting, but would be more interesting if we had by-respondent data.

For example, those outside the labour force had greater happiness than those working and those on the highest incomes were less likely to report "overall life satisfaction" scores of 10, the highest, than were those earning $30-70k in household income. And higher degrees are associated with far less life satisfaction and sense of purpose than having no qualifications at all. I expect retirees are affecting all those results. But we'd need some regressions to show it.

Meanwhile, John Key's National Party is polling well north of 50% support. Generalised happiness and life satisfaction is good for incumbents. Even the unemployed report a median "overall life satisfaction" score only one point below those in employment.

Theories about Conspiracy theories

Four nationally representative survey samples collected in 2006, 2010, and 2011 indicate that over half of the American population consistently endorse some kind of conspiratorial narrative about a current political event or phenomenon and that these attitudes are predicted by supernatural, paranormal, and Manichean sentiments. These findings suggest that conspiracism is not only an important element in American political culture, but also is expressive of some latent and powerful organizing principles behind American mass opinion.

So say J. Eric Oliver and Thomas Wood in the AJPS, in an article I missed when it came out last October.

Read this table and weep.

TABLE 1 Percentage of Americans Agreeing with Various Conspiracy Theories, 2011
Conspiratorial Narrative	Heard Before?	Strongly Agree	Agree	Neither	Disagree	Strongly Disagree
The U.S. invasion of Iraq was not part of a campaign to fight terrorism, but was driven by oil companies and Jews in the U.S. and Israel (Iraq War)	44	6	13	33	22	27
Certain U.S. government officials planned the attacks of September 11, 2001, because they wanted the United States to go to war in the Middle East (Truther)	67	7	12	22	18	41
President Barack Obama was not really born in the United States and does not have an authentic Hawaiian birth certificate (Birther)	94	11	13	24	14	38
The current financial crisis was secretly orchestrated by a small group of Wall Street bankers to extend the power of the Federal Reserve and further their control of the world’s economy (Financial Crisis)	47	8	17	38	20	17
Vapor trails left by aircraft are actually chemical agents deliberately sprayed in a clandestine program directed by government officials (Chem Trails)	17	4	5	28	21	42
Billionaire George Soros is behind a hidden plot to destabilize the American government, take control of the media, and put the world under his control (Soros)	31	9	10	44	16	21
The U.S. government is mandating the switch to compact fluorescent light bulbs because such lights make people more obedient and easier to control (CFLB)	17	4	7	24	24	41
Note: N = 1,935 cases.
Source: Modules of the 2011 Cooperative Congressional Election Surveys.

Table 3 is even worse: 27% believe we're in End Times; 33% believe in ESP.

All that's left is figuring out how to do away with Manichean dualism and superstition; education seems to be the strongest preventative measure, along with having political knowledge.

Or maybe that's just what they want us to believe.

Really, all the voting boxes are rigged and that the Illuminati are not only making sure your vote won't count but also keeping track of how you vote? Haven't you noticed that the chemtrail planes are concentrated in areas where your preferred party's support is undercounted because of the Illuminati? Think about it. Voting's dangerous. Chemtrails.

 

Market segmentation: candidate beauty edition

Low-information voters are more likely to vote on candidate looks alone; higher information voters add in other information.

There's a lot of randomness involved in party leader selection, or at least with regard to candidate attractiveness. But we can say that, at the margin, a party that cares about winning and that relies more heavily on low-information voters ought to lean towards more attractive candidates at the margin.

I'd written a few years ago:

In equilibrium if we've a thick market of potential candidates, I can't see how this generates any particular inefficiency. Sure, it gives an additional dimension over which parties need to optimize in candidate selection, but in sufficiently thick markets, the tradeoff in moving from the slightly less attractive to the slightly more attractive candidate won't be that large. The only problem is if you've got thin markets such that the quality gap on other margins is large as you move up the beauty scale. But that too should be a disequilibrium phenomenon. They've said that politics is show business for ugly people. Well, if the returns to beauty start ramping up in political markets relative to other markets, more beautiful people start selecting into politics rather than other endeavours. Hamermesh found that the beautiful select into professions where beauty is rewarded; why should this be any different?

Will Hayward at Auckland Uni put NZ candidate photos up for an audience of American raters, none of whom could be expected to know anything about the candidates' parties or positions.

The findings? Based only on photos, Laila Harré was seen as most competent, trustworthy, and attractive. Jamie Whyte was second from the bottom on attractiveness, with Hone stuck in last place.

We probably can't draw much from it. But it does seem to matter at the margin for low-information voters.

Note that, by photos, the competence ranking was Harré, Key, Peters, Whyte, Cunliffe, Flavell, Norman, Harawira, Turei, Craig, Turia. Expect that low information voters may well be assessing candidate competence on similar basis. At least some of these rank orderings seem out to me.

Democracy in Decline

Professor James Allan will be discussing his book, Democracy in Decline, at the University of Canterbury on Wednesday, 14 May. Here's the blurb; you can register for the event at the link.

The New Zealand Initiative invites you to the launch of James Allan's new book Democracy in Decline. Professor Allan will speak at public events in Wellington, Auckland and Christchurch on 12, 13 and 14 May.

Democracy in Decline charts how democracy is being diluted and restricted in five of the world's oldest democracies – the United States, Canada, the United Kingdom, Australia, and New Zealand. James Allan targets four main, interconnected causes of decline – judicial activism, the transformation and growth of international law, the development of supranational organisations, and the presence of undemocratic elites.

He presents a convincing argument that the same trends are occurring whether the country has a constitutional bill of rights (United States and Canada), a statutory bill of rights (the United Kingdom and New Zealand), or no bill of rights at all (Australia).

Identifying tactics used by lawyers, judges, and international bureaucrats to deny that any decline has occurred, Allan looks ahead to further deterioration caused by attacks on free speech, intolerant worldviews, internationalisation through treaties and conventions, and illegal immigration. Social and political decisions, Allan argues, must be based on counting every adult in a nation state as equal.

Professors Allan's lecture will be of interest to anyone concerned with majority rule and fairness in numbers.

About the speaker:

James Allan is the Garrick Professor of Law at the University of Queensland. He is a native born Canadian who practised law at a large firm in Toronto and then at the Bar in London before moving to teach law in Hong Kong, New Zealand and then Australia.

Allan has published widely in the areas of constitutional law, legal philosophy and bill of rights scepticism. He also writes regularly for weeklies and monthlies including being a regular contributor to The Australian, The Spectator Australia, and Quadrant. He was elected to the Mont Pelerin Society in 2011.

Allan worked in the Faculty of Law, University of Otago for 11 years, from 1993 to 2004. During that time he was a regular contributor to the National Business Review.

The event at Canterbury is being facilitated by our excellent Economics & Finance Student Society.

I will be attending and plan on harassing James a little.

While I entirely side with him in favour of individual choice over elite choice in our personal lives, I'm more sceptical about it when it comes to "undemocratic elites" versus the median voter. Sure, "undemocratic elites" want a lot of silly things, and we're far more likely to describe elite-preferred things that diverge from median-voter-preferred things in those kinds of terms when those things are particularly silly. But the median voter wants a lot of silly things too - we could (nay, should! must!) equivalently talk about the perils of undue deference to the hooples. Can we really be sure we don't do harm by strengthening the already strong ties between voter preferences and policy outcomes? Mightn't there be some optimal level of elitism? Or structures - like the ones we have now - that allow for elite veto of particularly pernicious populist policy?

How'd they reckon this?

Americans surveyed in 2011 substantially overestimated the proportion of Americans identifying as homosexual. Where most estimates reckon about 3.5% of the population are homosexual, Americans surveyed thought that somewhere between 20-25% of the population are gay or lesbian.

Some candidate hypotheses for the overestimation:

1. Availability bias where observations of people you know carry less weight than observations from TV shows or movies: if people take pop culture as more representative of average reality than their own personal circumstances, and if homosexual characters are over-represented on TV, then this could do it. 
1. In that case, we would expect overestimation particularly among lower-IQ cohorts. 
2. This alone shouldn't account for it: how many popular TV series other than Modern Family have at least 20% gay characters?
2. Availability estimation of proportions where individuals of different characteristics are more or less likely to have friends or acquaintances who are gay. This would predict dispersion of estimates but shouldn't affect estimates of the population mean unless it's combined with downward bias in the number of people you know. If you're asked "What proportion of the population is gay or lesbian", and you think about how many homosexuals you know, and you then underestimate the number of heterosexuals you know, you'd bias upwards your estimate. I still can't see how that gets you to a 6-times overestimate.
3. Ideology doesn't give clear-cut predictions, or at least not to me. You could build a story where social conservatives' fear of the 'gay agenda' is driven by their overestimation of that group's proportion in the population, or you could build an equally plausible story where social conservatives' dismissal of gay rights is founded on that the needs of a tiny proportion of the population should not drive changes in the definition of institutions that have persisted for thousands of years.

I'm putting most weight on #1. Gallup provided some population cross-tabs that can help:

Everyone overestimates, substantially. It's so far out of whack with reality that you wonder whether it's just a wonky survey. But the numbers are apparently consistent with the overestimates in a similar 2001 survey. 

Smarter and richer people, and men, have far more accurate estimates - this isn't out of line with fairly standard findings on other kinds of knowledge. Older cohorts were more accurate. 

Republicans, conservatives, and social conservatives were more accurate, which is inconsistent with the ideological hypothesis that "gay terror" would lead to overestimating the proportion of homosexuals in the population. And while "we shouldn't change everything for a small minority" would be consistent with social conservatives having a lower estimate than social liberals, which is true, it is not consistent with social conservatives still overestimating the population proportion more than five times over. 

Intriguingly, while social liberals more greatly overestimate population proportions, those favouring bans on gay and lesbian relations overestimate population proportions relative to those believing that gay and lesbian relations should be legal. This is likely (hopefully) an artefact of very small proportions of the population believing that gay and lesbian relations (not marriage, but relations) should not be legal. 

The data seems to give weak support to my candidate hypothesis #1, though it is completely indistinguishable from a dozen potential alternative hypotheses about intelligence, education, and accuracy in estimating things. It would be interesting to partial out the effects of education, age, gender, income, partisanship and ideology; alas, they give cross-tabs instead of regression coefficients.

Suppose that you favour gay rights, as I do. Would accurate perceptions of population proportions tend to increase or decrease support for gay rights? The estimate among those favouring same-sex marriage is just a titch higher than that among those opposing it, but at the same time college grads and postgrads have a smaller degree of overestimation and, I would expect, are more likely to support same-sex marriage. Only the partial derivative of the overestimate on the likelihood of supporting same-sex marriage in a probit would tell for sure.

Update: Chris Auld very helpfully points to work suggesting that correcting for under-reporting could roughly double the number. The sample in the paper is not representative, so we shouldn't extrapolate from their reported levels, but the magnitude of under-reporting is plausible. But even if under-reporting got us all the way to 10% in the full sample (7% seems more likely), that's still miles away from 20%.

These 32 hours have 20 falsifiable forecasts

Phillip Metaxas and Andrew Leigh sat through 32 hours of Australian talking-head TV.* In all that talking, they were able to find only 20 falsifiable forecasts from Australian pundits. The rest were so qualified that they were unfalsifiable.

They suggest that talk show hosts demand falsifiable predictions:

A nice start would be for Insiders host Barrie Cassidy to insist on ‘falsifiable predictions’ in his final segment, rather than the current ‘observations or predictions’ from the pundits. While such an innovation would be helpful, assessing whether a prediction has proven true or false is likely to provoke objections from the pundits involved. As Gardner (2010) notes, when predictions go awry, pundits often invoke an array of excuses to exonerate themselves. Such excuses include the ‘I was almost right’ defence, and the ‘wait and see’ defence. In our analysis, had David Marr and Lenore Taylor been incorrect about public opinion changing on the mining tax, they could easily have invoked the ‘wait and see’ option to defend themselves. 

For this reason, we advocate a Tetlock-style experiment involving Australia’s leading political pundits. Such an experiment substantially removes the ability of pundits to invoke the common defence mechanisms when their predictions go astray. An appropriate study would require our pundits to make falsifiable predictions about the political world in the future. Predictions could cover a range of topics such as the party likely to win the next federal election, the next leaders of each party, and the passage of key legislation. There would be a sufficient number of questions to ensure that lucky hits do not skew the results. We need more evidence than our analysis could provide to properly separate flukes from prescience. Furthermore, an anonymous survey like Tetlock’s would help determine whether our pundits as a group are worth the airtime they are afforded. An open survey could also give us the ability to rank our political pundits based on their predictive powers.

I'd love to see a talk show partner up with one of the betting markets to refine the opposing pundits' claims into a single falsifiable test prior to the show. Launch the contract at the start of the show, unless it's a contract that already exists, like "Who will win the next election", then have them argue about the appropriate price for the contract while the audience submits bids and asks. Let the ticker move over the course of the show, then insist that both of them put, say, $1000 on it at the conclusion of the debate if their argued price differs from the market price.

This would be really easy for things like "Who will win the next election?" or "Will Julia Gillard lead Labor into the next election?". And it isn't that much harder for combinatorials like "Labor would win more (less) seats under Gillard than under Rudd".

There would be nothing banning such things in Australia or New Zealand. There are political betting markets in both places, even if Senator Xenophon keeps trying to ban them in Oz. The constraint seems more likely to be that viewers aren't really all that interested in getting falsifiable predictions and accurate odds. Theatre and that cherished fantasies never ever be shown to be wrong - that's where it's at.


* Ok, they read transcripts.

The value of outreach

I enjoyed the CBC's radio show, The Invisible Hand. Rather than take a Freakonomics-style "wow, isn't this counterintuitive" take, they instead simply presented standard economic theory as it is understood by professional academic economists.

• Episode 1 covered price gouging, with a nice contribution from Mike Munger. (audio)
• Episode 2 takes on value theory. In the event of a zombie apocalypse, chickens rise in value relative to gold (as the Lannisters may yet discover when winter comes). (audio)
• Episode 3 explains why profit isn't a bad word and shows that rather a few capitalists - people who make their living from investments - look rather more like our parents and grandparents than like Mr Scrooge. (audio)
• Episode 4 covers love, marriage and economics. (audio)
• Episode 5 explains moral hazard and insurance. (audio)
• Episode 6, on sweatshops, includes Ben Powell along with a former sweatshop worker. (audio)
• Episode 7 demonstrates that David Suzuki knows absolutely nothing about economics: we have ways of dealing with externalities. (audio)
• Episode 8 explains a bit of macroeconomics: the old Paradox of Thrift. (audio)
• Episode 9 walks through one of my favourite topics: perverse incentives (see the masthead). Frances Woolley helps out. (audio)
• And Episode 10 explores some of the behavioural economics literature. (audio)
• [Update: the audio at the CBC link isn't working, but the (audio) link should take you to the podcast version. Thanks to Wobbly in the comments!]

Worthwhile Canadian Initiative's Stephen Gordon provided academic assistance for the project.

The CBC more typically airs standard economic fallacies as fact, or at least it did back when I was in the country, so this was really rather nice.

What reaction did they get? Here's the show's producer Matthew Lazin-Ryder. Start listening at the 14 minute mark. At 15:55 he talks about his "honest to goodness depression" about the show's being criticized for being "brazen right-wing propaganda". He says [transcription errors mine]:

We wanted to make a show that had a completely different perspective from the things most people hear. And our probably naive anticipation was that people would take it in that way. We didn't honestly expect the angry backlash that we got. ... Our agenda was to present how mainstream economists think about things. 

He also tweeted: 

"Lightning Rod For Hatemail" was the working title for the series. RT @danieloong: A show like that'd be a lightning rod for hate mail.
— The Invisible Hand (@CBCTheHand) April 12, 2013

There is a body of things that economists know about the economy. Sure there's stuff we argue about, but especially in microeconomics, we kinda know what's going on. And the basic set of things about which economists agree diverges wildly from how the public thinks the economy works. The profession attaches perhaps too high of reward for deriving the results of some model when you change a plus to a comma in a utility function when the first order welfare gains are in just getting the voting public to appreciate principles-level economics.

I get irritated when bog-standard economics is cast as having a "right wing" agenda. Mainstream economics helps you figure out what works and what doesn't work for achieving any particular end and the trade-offs that are involved. If you want a fair bit of redistribution, that's entirely consistent with mainstream economics so long as you set up the transfers appropriately; heck, it drops out of most models where you assume diminishing marginal utility of income.* But bog-standard mainstream economics in Canada says a lot of unpalatable things: ditch supply management to reduce milk prices; get rid of barriers to both interprovincial trade and labour mobility; get rid of all the zany exemptions in the GST and adopt New Zealand's version instead.

Imagine a genie gave you a button. If you push the button, every voter in the country thoroughly and intuitively understands principles-level economics. At the same time, the most recent n issues of every academic journal in economics disappear along with all knowledge of their results: we would need to re-invent or rediscover every one of them, with some chance of never finding them at all. Up to what value of n do you leap to push the button? 5 years' worth? More?

Imagine a world where the physicists and engineers spent most of their time figuring out how to get internal combustion engines from 20 to 22 percent efficiency but where, outside of the lab, everyone else is riding horses because they think engines are evil and witchcraft and tools of capitalist oppression. Maybe it's not quite that bad in economics, but it isn't far from it.**

Update: Brennan McDonald suggests, or at least this is what I draw from his comment, that there may be little potential trade-off between high-powered theorem building and public conversion efforts since the public broadly isn't truth-seeking. In that he echoes Patri Friedman's complaint about folk activism. But we are all part of the equilibrium, and I do think that we could use to move a bit at the margin.

* But be careful! Cowen points out that utilitarian theories may be less egalitarian than you'd like. I asked a couple years ago about appropriate egalitarian policy when we start opening up the margins:

Pity the borderline Asperger's investment banker who, despite his financial success, seems at a bit of a disadvantage in dating. Reddit posted the 1600 word email that the would-be suitor sent to the woman who dumped him after the first date; it's since shown up all kinds of places. But folks snickering at it seem an awful lot like a rich one-percenter laughing at a pleading email from a starving man.

If I can play armchair psychiatrist, the same Asperger tendencies that helped this poor guy in investment banking have killed him in dating.

If you're an egalitarian, what is appropriate policy? Is this guy better or worse off than the poor musician who dates easily? With whom would you rather trade places, taking both their positions and their characteristics? If we redistribute income because the investment banker's last dollar is worth less to him than it would be to the poor musician, think too about the marginal utility of the musician's last date relative to the banker's.

 And should we compensate the beauty-challenged?

** See, for example:

• Caplan on systematically biased beliefs
• Me on economic thinking in NZ

Shame and voting

I'll be talking this coming weekend with the fine Australian libertarian community about public choice problems with voting; I'll also be in a panel discussion on nanny state issues.

Voting's been something of a longstanding problem in public choice. On purely instrumental accounts, where people vote to make it slightly more likely that their preferred policies are enacted, it's hard to explain voting at existing levels of turnout. The infinitessimal probability of casting the decisive vote wipes out any potential utility difference that could attach to the different candidates' likely policies. And so we look to intrinsic accounts of voting where people derive utility from the act of voting itself.

But even those intrinsic accounts have problems. If people vote out of civic duty, and if there are myriad things people could do instead to demonstrate their dutifulness, why vote instead of spending the same amount of time donating blood or helping at a homeless shelter? You'd get the intrinsic benefits of doing something dutiful while also potentially doing something useful. If people vote because team or group affiliation make them feel good, or if whatever motivates people to get to the polling booth doesn't also motivate them to put time and effort into their choice, then there's no reason to believe that there's any connection between the median voter's choice and desirable outcomes. We have rather a fair bit of evidence that voters do not seem to know very much.

So why do people vote? Stefano DellaVigna, John List and Ulrike Malmendier say it's to avoid the pain of having either to lie or to admit to others that you didn't bother voting. In a rather nice field experiment, they varied payment to survey respondents, varied the up-front estimate of the time cost of the survey and varied how much longer they said it would take voters to complete the survey relative to non-voters. As they had voting records that told them which respondents had in fact voted, they could use the design in combination with differential response and lying rates by voters and non-voters to elicit the disutility of having to talk about having voted. In a year without a Presidential election, that value was estimated at $10-$15: being asked about whether you voted, when you hadn't voted, cost the non-voter $10-$15; the figure would presumably rise in a Presidential election as more people would ask.

The Wall Street Journal quotes Malmendier:

The study has implications for campaigns’ get-out-the-vote efforts, which often involve enlisting people to ask individuals whether they voted, Ms. Malmendier said. “They ask friends and neighbors to ask if you plan to vote. They will ask you and then call you on Election Day… Our paper is saying we should not forget that people get a ‘disutility’ from that. They really don’t like it. Even if they’re voters, they really don’t like being asked.”

Ah, but that cost is what makes it work if the disutility comes either from saying you won't vote or from fearing that they'll know you didn't. Campaigns are acting rationally and probably reasonably expect that their supporters won't vote for the other guy out of spite after a GOTV call.

Political parties aren't subject to the US national "do not call" registry; it's perhaps worth re-thinking that exemption.

HT: WSJ via Politix