coffee grounds

I encourage "that clicking sound"

In a really good discussion of how technology has altered historical research David Turner writes

My only complaint, and I don't know if this is a complaint to be aimed at the camera manufacturers or the historians, is that I wish that there wasn't such a loud clicking sound when cameras take photos.

He's right that most digital camera users at the archives could eliminate that clicking sound. Digital compact cameras have the clicking sound merely to replicate the aural experience of a "real camera". Digital SLRs (and film SLRs, though how many people do archival photography with film?!) have to make that clicking sound. It's the sound of the shutter opening and closing to expose the sensor (or film) to light.

My most popular post on this blog has been Amateur Digitization for Historians, and I would now add one further variable to that discussion about digital compacts versus SLRs in the archives.

By way of background most archives don't allow flash (protecting the documents and protecting you from flash glare on glossy paper obscuring your images), and some archives don't allow copy stands, tripods and other stabilizing equipment. So a big concern in the archives is taking sharp photographs in low light holding your camera by hand.

Digital compacts typically use very high f-stop values which means your typical photo from a digital compact is sharper across the whole image with a wide depth of field. The foreground, center and background are all close to being in focus. But a high f-stop is not great in lower light (even room light), so many digital compact photos from archives without flash come out slightly blurry.

By contrast a digital SLR allows much lower f-stops than compacts. Now, with a lower f-stop your depth of field is reduced, but this doesn't matter as much in typical archival situations. Most parts of the paper are the same distance from the lens. SLRs also allow the user to set a very high ISO. This means you can compensate for the lack of light. Whereas a high ISO on film used to give you a very grainy image, digital SLRs give a much greater range of usable ISO values.

So, the short version of my advice is that if you can't use a stabilizing device, consider using an SLR for archival photography. You will lose many fewer photographs to being blurry than with a digital compact.

Another non-trivial advantage of the digital SLR is that it is much quicker. On a digital compact I find I can take about 400 photos an hour in the archives (mindlessly flipping from page to page). With a digital SLR I have taken over 1000 photos in an hour.

I think Turner's right that laptops, digital photography, and digitization of text are making fundamental changes to the practice of being an historian. My senior thesis advisor told me in the mid-1990s that how we do history hadn't changed much since Ranke or Beatrice and Sidney Webb (who wrote a great book about social and historical research). People looked at documents with their own eyes, and took notes. Then they analyzed and wrote about what they'd seen. Distance was a barrier to archival research. To be sure, the writing became quicker with the introduction of word processors in the 1980s, and computerized archival and library catalogs meant searching for sources was easier. But the process of primary historical research with old documents has been transformed in the last decade. Distance is less of a barrier to historical research, and the productivity of historians will increase tremendously as we take fuller advantage of the new technologies.

But now they can create a variable for overly_sensitive and dont_understand

This story is a doozy for academics (chronicle of higher ed version, sub required). Two business school professors sent a fake email to 6300 professors purporting to be from a prospective PhD student, with different versions of the email asking for an appointment now (today) or later (a week away). Different versions of the email also varied the apparent race and gender of the student.

Deception in the name of research. It's been done before and will be done again. A really important question is whether the impact on the deceived is outweighed by the scientific benefit of obtaining possibly better estimates of what people think and do. It's all very well for an historian to say "Involving colleagues, or any human beings, in a study without their knowledge and their prior consent is unethical," because historians rarely face this issue. Historians who use social science research so often delegate the dirty business of data collection to people long before us.

I happen to think that this kind of field experiment (it's not really survey research as some people think) is necessary. In the first instance there's the research done by sociologists and economists about racial and gender discrimination in housing and labor markets. You can't do this without deception, and there is to me a clear greater good in knowing the extent of discrimination in society.

But a more abstract and important question is how does measurement affect behavior? People say different things in surveys than they subconsciously reveal in laboratory experiments. But even in laboratory experiments people know they are being studied, and it's quite likely there's some kind of impact on their behavior in that setting. So field experiments where people don't know they're being studied, and might be [nearly] harmlessly manipulated are necessary to work out how people respond in different situations. Research involving deception has inherent risks, but that's a reason to monitor it closely and make sure the consequences for the deceived participants are low, not to never do it.

Why Whanau Ora should be evaluated

If the key idea behind Whanau Ora—that social service agencies should work more closely together—was so good, it would have worked the first time. And therein lies the problem. The idea that social service agencies should work more closely together is not an innovation in social services, but a recurring staple of reform.

Of course every generation of policy makers and social service workers has to discover this for themselves, and dress up the resulting discovery in a local context. Hence the name Whanau Ora. Every decade in the twentieth century some government or social service agency in the western world was "discovering" that health, education, criminal justice, and housing problems and solutions were intertwined, and that a solution was for institutions and professionals to talk to each other, and work a little better together. Things were maybe more integrated in the nineteenth century when "charity visitors" were untrained, well-meaning middle class men and women visiting the homes of the poor to see what they could do to help. Someone could usefully write an article pointing out the long recurring history of this new idea, and make it compulsory reading for social policy analysts.

Social services became less integrated with professional training and specialization in the late nineteenth and first half of the twentieth century. The 1920s and 1930s saw lots of calls for integrated services as the first large generation of social work professionals examined their field. It was this impulse that gave New Zealand milk in schools and health camps for sick children. Same idea, different time period. And certainly not unique to New Zealand.

While you can't really question the sincerity of the ideals and ideas behind the policy the fact that we've had this laudable impulse to integrate social service before and it didn't solve all our social problems then means we need to be skeptical of the idea that Whanau Ora will work that much better than the services already in place. That's not to say that Whanua Ora will fail, just that people who are not trying to sell you a political policy should assume any government initiative is no better than what it's replacing until proven otherwise.

Whanau Ora will very likely look great in the first year or so. Positive stories of families helped and crises averted and multi-cultural harmony unfolding will be easy to uncover. Were one to do an evaluation of the old and the shiny new services, the shiny new services would look good. Social service workers, like everyone else, often throw themselves into the new thing enthusiastically. The real question is how do things compare in year 3, when this is no longer the exciting new programme that the government is supporting? I am pretty sure we'll never find out the answer to that question. There is also a near certainty that something bad will happen in at least one family receiving Whanau Ora support, and this will look bad for Whanau Ora in the Sunday newpapers. That's unfortunate too, because no social services eliminate all the nasty things that happen in families. The important question is what minimizes nasty stuff at an acceptable cost.

Calling for integrated services and a holistic focus on families is easy. Getting it to work in practice and show that it's worth the upheaval in what we currently do is more difficult. The flipside of enthusiasm for new projects and new ways of doing things is that some people doing a totally OK job of working with families in need don't like having their routines disrupted. There are lots of possible models of integrating services. The idea has recurred so often in the past hundred years that the evidence for integration is, of course, mixed. Sometimes it works OK, sometimes not so much. The specifics of the policy and practice matter. This iteration of an old idea will be different again in how it works. So it's entirely possible that moving to new service models is bad in the short-term. The point is, we don't know. We won't know unless we try and find out.

What we do know is that how the families respond is critical. One thing that's hard to do in social services is blind evaluations. People know if they are getting the new service. It's not like drugs or surgery where you can trick people into thinking they're getting treated. Since the response of families to social interventions makes a huge difference to the effectiveness of those interventions, perhaps some good will come of this. In that sense pretending to do something new in social services every few years is not a waste of time or a forgetting of knowledge, but a necessary part of making the people being served feel someone cares. But you still should find out that the reorganization didn't make things worse, or cost a whole lot more.

Good ideas and the thrill of the new are not the same as good outcomes. If the good idea of integrated social service delivery was that good we wouldn't have a century long international record of people calling it a new idea. It is a good idea, but it's an old idea whose time has come, and will come again, and again. Print this out and come back to me in twenty years, and we'll probably be onto the next integrated social service initiative.

If the New Zealand government is really committed to redesigning the way it delivers it billions of dollars worth of social services it should implement Whanau Ora in a limited way and see that it works. But that is not often the New Zealand way. There is an assumption that new programmes just work, and that it is inequitable to deny people the benefits of the unproven new thing. It makes for good politics in the short term because it looks like the government is doing something innovative to improve people's lives. But it makes for bad policy in the long-term because we don't know what really worked.

A tutorial (discussion section) attendance policy that worked (for me)

Tutorials (discussion sections, but referred to as tutorials throughout because it's shorter) are an important part of university education. Done well, students come away knowing and understanding a topic. Also, students make friends in this form of class. This is a non-trivial benefit. Done badly, they are excruciating in their silence and stupidity, and make a Catholic mass seem short. I refer here to discussions in the humanities and social sciences rather than focused problem-set oriented classes in sciences. The format is often that students have read some documents, perhaps a whole book (at graduate level), or some articles or chapters at undergraduate level. Questions about the readings are posed, and discussion is meant to ensue. But that discussion doesn't always happen in practice.

Done well the students get a great deal of benefit from preparing for the tutorial, and then add to that with their peers' contributions and different perspectives. A large part of the success of a good tutorial comes from a critical mass of prepared students who show up. The question is how to motivate good preparation and high attendance, while also respecting that university students are young adults who can make their own good or bad choices about whether to show up or not.

There are many models for how to motivate preparation and attendance. But I was not satisfied with policies I'd used previously. For example, many of my colleagues in New Zealand have a policy of requiring attendance at 8/11 tutorials during a semester. Missing more than 3 tutorials means that students have not met "mandatory course requirements," and are not permitted to complete the class. It's not uncommon in American colleges for 5-20% of the class grade to be for "participation and attendance."

What I tried this year in my second year (sophomore) social history class was the following policy for motivating preparation and attendance. It worked well.

1. There were 10 tutorial sessions in the (12 week) semester, and a final week of student presentations in lecture and tutorial time.
2. Five of the 10 tutorials (labeled "starred" tutorials) and the week of presentations had penalties for non-attendance
3. Attendance was recorded at the starred tutorials by students submitting at least half a page of notes on the week's readings (1-3 journal articles or chapters, 30-60 pages of reading)
4. Non-attendance was penalized with the following deductions from the final mark
• 1st missed tutorial/presentation: 4%
• 2nd missed tutorial/presentation: 8%
• 3rd missed tutorial/presentation: 16%
• 4th missed tutorial/presentation: 32% (highly likely fail)
• 5th and subsequent missed tutorial/presentation: 64% (definite fail)
5. Students were encouraged to be responsible about letting me know if they could not make a tutorial for a legitimate reason (sickness, other university event clashing), and that if they handed in their notes they would not have marks deducted.

It looks way more complicated than it really was. Since it was a policy that differed from the standard ones in our department (and cognate departments in the humanities and social sciences) there were some questions about it. But the students understood it without any problems.

With this policy, 27 of a class of 31 did not lose any marks. In other words, 90% of the class attended (or demonstrated their preparation if sick or otherwise legitimately absent) for all the tutorials they were responsible for coming to. One student lost 4% and another 8%. Two students failed after missing 4 tutorials.

So, the policy had a very beneficial impact on student attendance. Most students prepared for class by taking more notes than required, and class discussions went very well as a result.

The policy seemed to work well for the following inter-related reasons

• I eliminated the common "mandatory course requirement" of (x-3) out of x tutorials that just permits absences from 3 tutorials. These absences are often concentrated around the deadlines for other classes, and especially at the end of semester. Students are busy and they reasonably prioritize things that are graded, or are fun. Wishing they loved learning more, and exhorting them to do so, just leads to disappointment.


• The sharp break in the "mandatory course requirements" approach between the penalties for missing 3 and missing 4 tutorials is unfair, and not well designed to motivate consistent preparation and attendance.


• The severe level of the penalties for frequent absences got students' attention, as it meant failing


• The policy did not require me to grade participation per se. The burden on me in implementing the scheme was minimal (less than 5 minutes per class to scan the notes that were submitted and record who didn't submit notes).


• A realistically small level of notes submitted for attendance (half page) was meant to achieve two goals




• It was meant to be, and was, seen as a realistic amount for students to achieve.
  
• I also encouraged the students to try and be concise in their note-taking, developing the skills of summarizing an article in a few lines -- that sometimes less is better for them. It was much nicer being able to tell students that they had somewhat over-prepared and discuss how they could do less work (but more effective!) next time.
  


• I did not try to compel perfect attendance, but designated some tutorials as more important than others. 6 weeks in which attendance was rewarded seemed to strike the right balance between encouraging work on this class, and recognizing that there can't be something due every week. The "starred" tutorials were mostly in alternating weeks.


• In the alternate weeks I ran practical workshops to help students with their research for the class. These were sometimes structured (worksheets on various aspects of the research), and sometimes an open computer lab. Clearly, not every class would need computer labs. The general idea was to do a more practical session where the success of the session did not rely as much on student preparation or attendance.


• In practice (this being the winter of the swine flu) I was understanding of student absences, when notes were submitted. Students seemed to view the policy as reasonable. The policy did the work of motivating students to prepare. I did not have to exhort students to do the reading and prepare for class because there was an objective penalty for not doing it. This freed up my emotional energy for more important things in the class.

The policy seemed to have a positive effect on classroom relationships, as well as motivating preparation and attendance. The awful tutorials where people attend without having done the reading, and the discussion proceeds slowly until the instructor realizes students haven't done the reading. The instructor then gets cranky at the students for not preparing for the class, and the relationship between students and instructor suffers.

All in all this was a low-workload way of motivating student preparation and attendance, and it seemed to improve student outcomes. By making the penalties for not preparing and attending explicit I respected students' abilities to make their own decisions about their time. Attendance was not compulsory, but it was valued.

By penalizing non-attendance and preparation rather than grading participation and attendance I did not have to grade students' contributions to discussion. This meant the discussion atmosphere was relaxed, because students who attended had prepared, but knew they weren't being evaluated for what they said and did once in class.

The details of the policy would vary in other classes, but the key features I would replicate are

• Preparation and attendance at about half the tutorials was valued


• Other tutorials were less dependent on student preparation/attendance


• Attendance was measured by a reasonable amount of non-graded work that nearly every student was able to regularly exceed


• Penalties for non-preparation and attendance were small at first 'miss', but increasing.

Finally, I must gratefully acknowledge my colleague, Alexander Maxwell, who suggested aspects of this to me, but disagrees with some of my adaptations.

Hearing placebo

The study widely reported this week that new antidepressants were no better than placebo led the media to find people who would say on TV that they believed their antidepressants were working.

Well, of course ... on the one hand that's precisely the placebo effect in action. If you believe the pill is making you better, you get a little better. On the other hand, it's also variation in the population. Some people do benefit from the antidepressant more than the placebo. Just because the treatment is no more effective than placebo on average doesn't mean there aren't people who benefit more from the treatment. The trouble is that it's a little hard to identify who those people are, since you can't be taking both antidepressants and placebos at the same time.

International arbitrage in Christmas ornaments

At the current exchange rate, some Canadians could be doing very well by driving to the U.S. (we bought this at a Michaels store), importing these into Canada, and selling them a little below $3.49.

Possible explanations for this arbitrage opportunity include
(1) the packets were printed a couple of years ago when the Canadian dollar was worth less
(2) cheap Christmas tree angels attract higher tariffs or taxes in Canada
(3) there is higher demand (or less supply) of cheap Christmas tree angels in Canada, allowing the seller to charge a higher price.

Follow the money

In an otherwise good article on why the United States does not have a single payer health care system, and why it might be a good thing there is this paragraph:

There’s only one catch. Most Americans just don’t believe it can be done. The health care crisis may turn out to be more of a problem of ideology than economics.

and then this one:

Much of the resistance to a single-payer system appears to stem from a lack of confidence in the nation’s ability to make positive change ... Changing the minds of so many millions of people isn’t done overnight. But sooner or later, persuading people to do something that’s in their own economic interest ought to succeed.

which manages to make it sound like the major stumbling block to health care reform is a lack of public support for the idea. This is just not the case. Amongst the general public there is relatively high support for the idea of a single payer health care system, though support naturally fluctuates with the details and the way the question is phrased.

The major stumbling block to reforming health care in the United States is that there are two large groups with a huge vested interest in aspects of the current system: insurance companies and physicians. For better or worse there are a lot of people employed by insurance companies in administrative, management, marketing etc ... roles who quite understandably like their current job, are well paid for it, and don't want the government and the public to combine to up end their life.

Another reason health care costs and expenditures are high in the United States is that, relative to other professional groups, physicians are very well paid. Now, some of my best friends are doctors ... so it is impolitic of me to suggest too strongly that they are earning too much, but on average they are. No doubt most of them do a fine job for the money, but it does contribute to how much Americans pay to live, on average, shorter lives than in most Western countries. Perhaps Americans live well enough in their slightly shorter lives that they still come out ahead all things considered. Perhaps.

In any case, the point remains, there are people who do very well by the current system. They would be silly to want to change it too much. Not unreasonably they use the American political system and media to sow enough confusion about the benefits of a big change in health care funding that the public appears to lack confidence in the change, at the same time as they lack confidence in the current system. Hence the continued piecemeal reforms to American health care. The people who know that, in the long term, a single payer health care system would be better (on average) for Americans are economists and academics, and have neither a large financial incentive to change the system, nor the organized politics and media resources to counter the voices of insurance companies and physicians.

Shopping your ideas

Earlier this week the New Jersey Supreme Court ruled that there was no governmental purpose in denying same-sex couples the benefits of marriage, and that the state had six months to remedy this. Gay marriage, per se, did not have to be one of the remedies, civil unions would also do.

In passing I'll note that this ruling has attracted much less public attention than previous rulings in Massachusetts and Vermont, which might suggest that American politics is heading towards some kind of compromise on this.

While there has been less debate about the decision you don't have to look hard to find [mostly Republican and right-leaning] people criticizing the courts for making this decision. It's telling that the conservative response is to criticize the venue of the decision—the courts— and not (entirely) the decision itself. It's fair to say that until very recently conservative parties in Anglo-American democracies saw the courts as the bulwark of tradition and order against populist change.

It's striking that in America there is a populist right that sees the judiciary and the common law as anti-democratic and revolutionary. Historically conservatives saw the courts as a bulwark against populist democratic change. There are traces of this attitude in Australasia, Canada and Britain, but it's less pronounced because social movements have not used the courts to try and achieve social change quite as much. Perhaps that is for the better, since changes are achieved with democratic support, but I suspect that it reflects rationally different choices in political strategy contingent on legislative and judicial structure.

Now, I'm no lawyer, but one of the defining characteristics of Anglo-American government is that laws are made both by the legislative/executive branches (statue law), and by judges interpreting the law in cases (common law). In almost every setting groups seeking social change use both mechanisms to try and affect change. This is such an established, bipartisan part of our broad political heritage that current critiques of it by people opposed to gay marriage are, I suspect, largely disengenuous.

For the sake of argument, wandering away from the issue at hand, look at the movement for the 8 hour day. Unions campaigned for this at three levels

• Trying to achieve it through contracts with individual employers
  
• Multi-employer contract negotiations (particularly the Australian and New Zealand arbitration systems
  
• Legislative restrictions on working hours.
  

The 8 hour day was not achieved in any country in one go; it was achieved incrementally through success in different legal venues. Same with most other social changes one cares to look at.

Venue shopping by political and social movements is an inherent part of the Anglo-American political and legal structure. If some groups really do feel those rules of the "game" are unfair and should be changed, that's a problem, but I'm inclined to guess that for now they're being disengenuous and will happily shop their own ideas round whatever sympathetic legislature or court they feel will take them.

That 70s show

This sentence in the New York Times:

And in a month in which Republicans have sought to discredit Democratic challengers as advocates of big spending and high taxes, 52 percent of respondents said that Democrats would make the right decisions on how to spend taxpayers' money, while 29 percent said Republicans would.

prompt another round of my perennial thought that if only ordinary voters knew enough history they'd know that cliche of Democrats as deficit-spending wastrels is not historically accurate in the long run. I'd say, and this is a hypothesis, that this perception of Democrats really only dates from the 1970s.

The emphasis here is on deficit spending. Like the various Labo[u]r parties around the world, it's a fair characterization that liberal, social democratic, populist leaning parties spend a little more than right-leaning parties do. But deficit spending? Not so much. Go back to the 1930s and you see Labour and Democratic parties spending more to get out of the Depression, but given the circumstances, perhaps not deficit spending enough. It took the deficit financed World War II to get most of the western countries out of the depression and back to full employment. War, of course, is a perennial historical justification for deficits. If you win. If you're borrowing good money to fund a war gone wrong, that becomes unpopular.

Like Vietnam. This, I would guess, was the beginning of the perception that Democrats were weak on national security, and couldn't control the budget. The two are related -- I'm not sure that that gets enough attention. Then you have the oil crises of the 1970s, and the Australasian and British Labour parties, the Canadian Liberals, and the Democrats were all in power during at least one of the oil shocks of the 1970s. That was when government deficits became a problem for western countries, and the Labour/Liberal/Democratic parties were all, unfortunately, for them left standing when the music oil stopped. Would conservative parties have done any better at adjusting government spending in the midst of the oil crisis? I don't know.

Going back to the Great Depression suggests an answer. In Britain and Australia where the Labour parties held the finance ministry at the start of the Depression "responsible" balanced budgeting was the order of the day, and it saddled both parties with responsibility for the Depression that the Republicans, and the New Zealand Reform (conservative) party also experienced. The somewhat unfair perception that left voters with, was that the conservative governments were responsible for most of the misery of the Depression. Somewhat unfair, because it reinforced stereotypes that were already out there that conservative governments were less likely to spend on the poor.

Conservative governments would probably also have run up large deficits during the oil shocks (and did, later in the 1970s in Australia and New Zealand). But conservatives running budget deficits doesn't reinforce stereotypes already out there, while it does for liberals.

Drink up in school. It pays.

Kids who binge drink in high school are more social, and get better paid early in their careers. There is no real moral to this story, since it's driven by "unobserved heterogeneity." Kids who are more social drink more, and do better early in their careers for that reason. If you're shy anyway it probably doesn't pay to drink more in high school, unless by going to the parties you improve your social skills.

We estimate the relationship between 10th grade binge drinking in 1990 and labor market outcomes in 2000 among National Educational Longitudinal Survey respondents. For females, adolescent drinking and adult wages are unrelated, and negative employment effects disappear once academic achievement is held constant. For males, negative employment effects and, more strikingly, positive wage effects persist after controlling for achievement as well as background characteristics, educational attainment, and adult binge drinking and family and job characteristics. Accounting for illegal drug use and other problem behaviors in 10th grade eliminates the unemployment effect, but strengthens the wage effect. As the latter is not explicable by the health, income or social capital justifications that are often used for frequently observed positive correlations between adult alcohol use and earnings, we conjecture that binge drinking conveys unobserved social skills that are rewarded by employers.

Paying not to go to the gym

All those anecdotal stories about people who sign up for gym memberships and then don't go. The plural of anecdote sometimes is data:

How do consumers choose from a menu of contracts? We analyze a novel dataset from three U.S. health clubs with information on both the contractual choice and the day-to-day attendance decisions of 7,752 members over three years. The observed consumer behavior is difficult to reconcile with standard preferences and beliefs. First, members who choose a contract with a flat monthly fee of over $70 attend on average 4.3 times per month. They pay a price per expected visit of more than $17, even though they could pay $10 per visit using a 10-visit pass. On average, these users forgo savings of $600 during their membership. Second, consumers who choose a monthly contract are 17 percent more likely to stay enrolled beyond one year than users committing for a year. This is surprising because monthly members pay higher fees for the option to cancel each month. We also document cancellation delays and attendance expectations, among other findings. Leading explanations for our findings are overconfidence about future self-control or about future efficiency. Overconfident agents overestimate attendance as well as the cancellation probability of automatically renewed contracts. Our results suggest that making inferences from observed contract choice under the rational expectation hypothesis can lead to biases in the estimation of consumer preferences.

Trade

The debate about trade recently has interested me. Democrats are still fighting about that! I guess that's my naive impression coming from New Zealand where the political orthodoxy is that further liberalization of world trade will be a great, great thing [if it ever happens]. It's easy for that to be the political orthodoxy 15-20 years after the wrenching adjustment period.

I guess that's why they call the subject political economy. The American political system gives so much more scope for the potential losers in trade liberalization to try and stop the process.

But before I ramble on too long ... work calls ... the question I always want to ask American opponents of trade liberalization is this: Why should the individual states trade with each other? If Michigan is suffering because car manufacturing is migrating to Tennessee and South Carolina, why shouldn't Michigan be able to place tariffs on Saturns and BMWs so that Peninsula-dwellers will buy a Detroit-made car? The logic of this is precisely the same logic that opponents of international trade are using.

Discuss amongst yourselves ...

Articles from my past

Publications are a little like purchases on the credit card—payment and pleasure are quite separate.

My article on economic evaluations of community mental health care—jointly with two fine colleagues, Jackie Cumming and Kathy Nelson—came out in Medical Care Research & Review today. As best as I can understand the terms of the copyright do not allow me to post a copy on my own website, but do allow me to say that I can email you a copy if you're interested. In such a manner they protect their subscription revenues. 41 pages. Not to put you off. Some may find a cure for insomnia in what I offer.

Not to sound old or wise before my time, but a little reflection here on the value of persistence for academics. You might not have the time now to get that paper done, but never let the motivation to get it published die entirely. Just because it is a couple of years since you worked on something, doesn't mean you can't pick it up and take it somewhere. I think this particularly applies to people who have nearly-publishable things while nearing dissertation completion (this is a reminder probably more to myself than it is to any actual readers I have). The dissertation needs the most attention, but tell yourself that you will publish the other stuff later. Unless someone is likely to scoop you, or there's a debate that cries out for your input, you can probably put the non-dissertation manuscript in the filing cabinet until next year.

I started work on this paper in November 1997, it went through several iterations in-house, we first shipped it out for review in April 2000, sent it to MCRR in early 2001, and then shepherded it through a revise and resubmit, updating the paper to reflect changes in the literature since initial submission, and final acceptance.

Working with co-authors has real benefits, but at various times the paper fell off everyone's metaphorical desk, with the more pressing tasks of dissertations and exams and reports due to people who actually pay good money for my co-authors' advice on health care.

I thought that once the paper was done I might be able to have a ritual dumping of some of the files associated with it (literature reviews generate lots of photocopied articles lying round your desk) but I flatter myself with the thought that a reader may write me with clarification on some trivial point. So perhaps I should keep them for a while ...

More little tips

Tyler Cowen has another interesting (link-rich) post on tipping.

Economic illiteracy in City Pages

From City Pages:

Although technically a subsidized agricultural commodity, unlike other crops sugar has historically earned its keep. The U.S. sugar program currently operates at no cost to taxpayers thanks to a system of loans, domestic quotas, and import restrictions.

Well, I suppose that makes it OK then! No cost to taxpayers on the federal budget. But plenty of inefficiency in the sugar beet market besides.

(Also noted on Minnesota Politics)

The New World conceit

America is uniquely screwed up about class. So are the other new world countries

As I write this I'm coding occupations from a database of the complete 1880 census of the United States. Mechanically, what I'm doing is looking at 80 character descriptions of people's jobs, and giving them 5 digit codes in an Access database. In the end this will allow anyone who cares (and is not a genealogist) to make some sense of the 550,000 different responses 37 million Americans (the other 13 million were under the age of 10, and thus ineligible to answer, or neglected to give a response) gave to the basic request for the "Profession, occupation, or trade of each person, male or female."

Right about now I am working my way through assorted odds and sods who work on the railroad, thinking about whether someone who describes their job as "tends station" is like a "station master" and kind of a manager, or whether "tends station" is more of a subordinate clerical position. And what about someone who "works at railroad station." What do they do? If they were the station master, surely they would say that? Probably "works at railroad station" means the man (this is 1880) does general duties at the station; perhaps selling tickets, unloading freight, calling the arrival and departure of trains. In the end, some of the actual meaning of the job is lost to history.

I mention this to dispel any lingering notions that historical demography and economic history are glamorous profession, but also to make the point by example that while clarity may be elusive the distinctions do matter. There was a substantial difference in pay and status between the station master and the grunt who unloaded goods or shoveled coal. Needless to say, being the President of the railroad was even more prestigious.

(At the risk of losing my readers in this digression, there were lots of small railroad companies in 19th century America, many of which were incorporated, so being president of a railroad could mean being president of a 6 mile transfer line, or being James J. Hill and holding sway over the plains and northwest. More of the former than the latter.)

Class is a slippery subject, and I have considerable sympathy for the New York Times endeavor to say something about class in America in their Class Matters series. They're not the only ones; the LA Times examined risk and inequality for families back in October 2004, and the Wall Street Journal looked at inter-generational income mobility in a May/June 2005 series (but for that you'll need a subscription, sorry).

The Times series gets the most criticism, because it was more ambitious, and because it's the New York Times. Paper of record, liberal elite and all that.

They cop it from all over the place --none of the people commenting on the series had much love for it after the obligatory "glad someone's looking at this" comment. Two of the more substantial criticisms come from Chris Lehmann in the Boston Phoenix, and Jack Schafer in Slate.

Lehmann's take is that:

Social class is at the core of the Times’ institutional identity, which prevents the paper from offering the sort of dispassionate, critically searching discussion the subject demands.

Anyone who has ever read the catalog of heiresses marrying scions (Yes. Still. In 2005), and doctors marrying lawyers (a more recent development) that is the Times' Weddings and Celebrations section will know the ring of truth in this charge.

Schafer's criticism is rambling, and all over the map (but then so is his target). He makes an advance on the argument that class is really moot these days, because most everyone has more and better material possessions than people did back in the day, which he defines as the 1960s.

Then he says relying on surveys that exclude immigrants--who have high relatively high inter-generational mobility--"places a cloud" over the "whole project. Really? When only 11% of the country is foreign born I'd say that places a cloud over, ummmm, 11% of the project. But whatever. What's 89% of the population when you have an axe to grind?

Then he says that because choices and circumstances differ (1) between individuals and families at a point in time, and (2) for one person over time, you can't make sense of class at all:

Lives are in such flux over any two points in time—one ages, marries, divorces, spawns, changes jobs, gets sick, gets sicker, gets well, moves to a new climate, etc.—that it's maddeningly complex to determine whether one's stock is up or down .... No consumer price index, academic data, and statistical tool known to man can crack these nuts.

That's true, people's lives are up and down, but there are ways to account for these individual variations in circumstances.

Finally, Schafer lights upon the idea that journalists in New York are particularly envious of the people they report on. The whole series, he suggests, is really an expression of journalists own status anxiety:

Journalists are notoriously sensitive to matters of class and status, especially a New York journalist with a $125,000 salary that might make him an object of envy to a reporter living in Lansing, Mich., but that stigmatizes him as a knuckle-dragging proletarian on his home turf .... If they're blue about class in America, you can't blame them.

This is the admonition to look at an author's perspective motivation gone amok, beyond parody. Nobody can write about class because we're all so invested in our part of the class structure.

Now you can see the continuing appeal of Tocqueville . It's the foreign observer, mixing easily with the locals, traveling the country, who can see the people and their social relations as they really are. Something to aspire to.

But what I've seen, as a foreigner from another new world country, is that American ambivalence about the existence of class relations is not unique. It's unique in its particular forms—the usual things that can be used to explain why American social history is not the same as Canadian/Australian/New Zealand social history: race and religion—are relevant here too. But the national myth—or delusion—that class does not exist here persists.

Tocqueville observed about America in a section entitled "Influence of Democracy on Manners Properly so Called" that

In democracies servants are not only equal among themselves, but it may be said that they are, in some sort, the equals of their masters

When Tocqueville spoke of "manners" he didn't mean how you hold your knife and fork (<joke>and just as well for Americans whose incompetent use of these instruments is the disgrace of the civilized world</joke>), but rather of the way in which people of different economic circumstances conversed and interacted.

His observation that these interactions were less formal and more equal than in Britain was echoed in the Antipodes. In Australia and New Zealand it was said that:

'Jack's as good as his master' here, and even better in some cases

This rather echoes Tocqueville's observations from earlier in the century about the United States.

Contemporary [19th century] observers attributed this equality of interaction to the economic mobility in the new world, and one man one vote elections. If men could advance rapidly and far from humble origins (inter-generational mobility) and humble starts (career advancement) then servants might soon be masters. Moreover, in the voting booth servants and masters spoke with the same weight.

There was, of course, inequality in the new world. But these new world countries came of age with the justifiable belief that there was more economic mobility and political equality than in Europe. Comparing at least Britain and the United States we know this was true. Contemporary observers were not wrong. The national myths of the classless society was grounded in something real. It was always likely a bit of an exaggeration, but it expressed some reality, and reflected an important ideal.

In the last century two things have changed (just two? not really. two things that are relevant). We know the United States has become less economically mobile, (it's probably true for Australia and New Zealand too) compared to its past and to European countries; and old world Europe has become more politically equal.

The exceptionalism of the relationship between rich and poor, between the new world and the old, reflects an historical ideal, rather than a current reality. The myths of the new world classless societies attributed mobility and easy social relations to the character of immigrants and the bountiful opportunities of abundant land.

We tend to forget that economic mobility in a society does not spring just from the good character of its population and [what appears to be] free land. Policy, government policy, is important too.

Universal male suffrage created a constituency for policy that distributed benefits to many white men. When land appeared free it was easy to distribute benefits to the relatively poor without taking from the wealthy. That is a harder trick to play when land is no longer free, abundant or very useful. Policy that promotes economic mobility may advance the interests of many at the expense of some others. But governments that want to stay in office have to wonder about balancing the votes they will lose when they take and tax, with the votes they will win when they spend and distribute.

That's a harder trick to pull off. Getting the right balance between government intervention to ensure opportunity, and government interventions that do too much to ensure outcomes is not straightforward.

We should not kid ourselves in the New World that because we have a history of high economic mobility, and because we idealize mobility, that class does not exist and does not matter. Because class has many dimensions—measurable and not—we will never really understand it. But that does not mean that class doesn't exist. The belief that a history of opportunity and an ideal of mobility persists into the present is the conceit of the new world.

Fun and games with taxes

It's better to choose rich relatives than lottery numbers nowadays.

The House recently passed a bill that would do away with the estate tax. I don't particularly have anything against the rich, but inherited assets are income, and an efficient tax system should tax income broadly at low rates. An estate or inheritance tax is part of that. Rising inequality, and growing immobility over generations, is also something an estate tax can address.

The politics of getting rid of the estate tax are weird, since the Republicans have managed to convince many people that they may stand to inherit millions in the future, or could pass on millions to their heirs. Most people don't inherit or dispose of any such amount.

Most people have a better chance of winning a small amount in the lottery than they do of inheriting substantial estates. Yet if you win something in the lottery you'll be taxed on that. The Republicans still think that is income. I would hope the Democratic party might be able to exploit this kind of gap between Republican rhetoric and the reality of Republican subservience to wealthy donors, but I haven't seen the Democrats do so yet.

By the by, one of the reasons we don't see any major athletic events held in the United States (like the Golden League) is that the American government will tax the million dollar winnings. European governmnts won't.

Of course, Europeans also watch athletics in a way Americans don't ...

Health care "costs"

This USA Today snapshot (via Washington Monthly) reminds me of a perennial bugbear -- the imprecise use of "costs," "prices," and "expenditure" when reporting on health care.

"Costs" often refer to how much is spent to produce something.

Prices are how much something exchanges for in the market.

If markets are competitive, and the goods and services being produced don't require very large fixed machinery or highly specific knowledge, and consumers know something about what they're buying, then prices and costs will be roughly equal.

See the problem? Health care does often require large fixed machinery or capital (hospitals and associated equipment), specialized training of labor (4 years college, 4 years medical school, 4 years residency anyone?), and patients/consumers don't know what ails and cures them as well as the doctors and nurses.

Expenditure typically refers to the total amount of money spent on something; that is it combines volume and price information.

As it happens prices, costs and expenditures for health care are all rising in the United States. What we hear most often are actually "health care spending" or "health care expenditure" numbers. In the press these are typically reported as "rising health care costs," even though some of the increase is driven by a people consuming more health care (in the aggregate).

This observation begs another question. If we are buying more health care despite rising prices within health care, what's happening to the price of health care relative to other goods? (The numbers are out there, but I'm writing this quickly ...)

(1) If health care prices are rising less quickly than the prices of other goods, then it's not hard to explain why we're spending relatively more on health care. It just looks cheaper compared to other things we could spend our money on.

(2) If health care prices are rising more quickly than other prices, but we're still buying more of it, this points to a couple of things.
(i)The first is that as incomes rise, people are choosing to allocate it in different ways. More simply, people would prefer to have a little extra health (however you measure that) than more possessions. This makes some sort of sense. In modern America you can buy an amazing and exhausting variety of goods to satisfy your desires, but there's a limit to how many goods you can take pleasure in. Trying to live a little better and longer might be more appealing than buying more furniture, or whatever ...
(ii) "Health care" is not the same product it used to be. Specifically, there are treatments available that never used to be. The availability of these choices makes people choose to spend their money on what we generically call "health care" when in the past they wouldn't have. For example, choosing to get mental health care now is a whole lot more enjoyable than it was in the 1950s ...
(iii) People are purchasing health care to offset the effects of other choices they have made. Specifically the choice to work long hours, to drive most everywhere rather than walk, and eat generally unhealthy food.

In short, spending 1/7 of the national income on health care, and rising, is not, in itself, a problem.

(and when I say people "choose" to work 10 hour days and drive everywhere I know that their choices are constrained by "social convention"/"oppressive managers" and the available transport options etc etc ...)

Taxing value

Ezra Klein and others discuss the idea of a Value Added Tax (VAT) and dedicating its revenue to health care.

I don't understand the liberal opposition, in principle, to a VAT (also known as GST for goods and services tax in Canada, Australia and New Zealand). A VAT at a moderate level (say 10%) with few exemptions is an efficient part of a well-designed tax system. It is ideally complemented with a relatively uncomplicated income tax, and taxes on inherited wealth and capital gains. And I do mean "few exemptions" -- in New Zealand they exempt house sales and financial services because these are the products its difficult to calculate the value added on. Food is not. If you are concerned with progressivity and making sure poor people don't starve bumping benefits up a little is the way to go.

I do understand the liberal hesitancy to get involved with how a VAT might be implemented by current Republican administrations. They are unlikely to get the details right.

I also think it would be politically wise for people to separate their discussion of reforming the tax system from what the revenues go to. In general I think the idea of dedicating taxes to specific purposes is something that needs to pass a high hurdle to be considered. It confuses the technical and distributional questions of raising revenue with the question of whether the expenditure is worthwhile.

For example, the proposed reductions in Twin Cities bus service come from dedicating motor vehicle sales tax revenue to the transit system. It probably seemed like a good idea at the time--make drivers pay for transit--but it also sets up completely the wrong incentives in the sense that if enough people drive less the revenue to transit goes down as the need goes up.

A VAT for health care wouldn't have quite the same perverse linkages, but it would conflate tax reform and publicly funded health care in a way that doesn't need to be done.

It's bad for your health, he said

Bradford Plumer makes a point that few journalists ever acknowledge:

Health care costs, of course, aren't rising because of some insidious inflation mechanism that's making all our favorite treatments magically become more expensive. Nor are they really rising because we're aging as a population—that's a part of it, but only a small part. No, health care costs are rising primarily because new and new treatments are coming to the market, and people are choosing to spend a lot of money on them.

America spends 14% of its income on health care; much of the rest of the world spends about 9%. Yet, "we" (you? I suppose I'm here now, and getting American health care) don't appear to get much extra health. Tho' health is hard to measure. Americans certainly get more choice about what kind of health care they receive. I'd say that's over-rated, but what would I know, I [will tempt fate with this sentence] rarely go to the doctor anyway.

You could argue America is a rich country, and who cares what it spends its trillions on. But the problem is, what if the decision to spend those trillions is being made by the wrong people in the wrong way? That is why total national expenditure on health care is going up. Many of these new treatments are wonderful, in the sense that they don't kill you, but it's not always clear that they are wonderful enough to justify their price.

Don't save all the babies!

Who could be against screening babies for rare diseases?

I am. Sometimes. And this proposal has all the hallmarks of money ill-spent. Even the people lobbying for the tests acknowledge they are "extremely rare." Spending lots of money testing for "extremely rare" conditions is often, if not always, a fools errand.

Everyone wants to avoid these rare, horrible conditions. But it's likely that the money would be better spent on ensuring adequate care for lower income women and children, rather than extra-special care for already well-cared for children.

Aging workers

Regular readers of this blog will have noticed that since, oh, mid-November my commentary on U.S. politics has been a little sparser. This has something to do with the results of the election ...

In any case, the whole Social Security debate has my attention, but I feel there's not much I can really say. Great program. Don't let President Bush lie his way to screwing it up. Brad DeLong and Josh Marshall provide excellent coverage of the economics and politics of the debate.

Now, one thing that everyone agrees on is that, yes, there will be a lot of people retiring in the future, and the ratio of workers to retirees will be dropping. What I haven't seen a lot of discussion of, is projections that maybe, just maybe, older people will of their own accord, decide to keep working.

I'm not exactly up on the fine details of Social Security, since I am (1) a long way from retirement and (2) not paying anything towards it as I'm on an exchange visa, but my understanding is that the rules of the program make it pretty advantageous to retire as soon as you are eligible.

That said, once the number of retirees starts to rise substantially there will be some pretty tight labor markets in particular sectors. Immigration will not fill all those vacancies in positions, unless U.S. immigration law changes quite a bit. Thus, for some potential retirees in some occupations, it may actually be quite worthwhile to keep working, even with the Social Security incentives to retire right away.

It seems to me that making the retirement age more flexible, and encouraging people who can to delay retirement, should be one of the easier fixes in making any minor adjustments to Social Security that keep it solvent. Like the atheism and the foreign accent, this opinion will likely keep me out of any public office in this country, as retractions like Howard Dean's show.

Cost shifting

Bradford Plumer and Glenn Reynolds discuss de-institutionalization of people with mental illness. It's the topic du jour in New York, after a homeless, mentally ill person, caused major damage to a subway.

De-institutionalization, and its follow on, caring for chronic mental illness in the community, have been shown to be no worse, on average, for people with mental illness.

But there's the rub. On average. There are still people who will benefit, themselves, from the more sustained, intensive care that hospitals provide. In other words, decision makers (policy and medical) have to be aware of where a patient fits in the distribution. Some people are sicker, and need more care. Others do well in the community.

And for people with mental illness. That's also a key part of the findings. Totally unsurprisingly, the burden of caring for people with mental illness has not been transferred from hospital nurse to community nurse, but also to unpaid family members, friends and neighbours. Few, few studies evaluate those costs; and few evaluate the total social costs of different arrangements for caring for people with mental illness.

On balance, de-institutionalization of people with mental illness was a good idea, but that doesn't mean the implementation of the policy was without flaws.

All of the foregoing is a shameless plug for my forthcoming article in Medical Care Research & Review on economic evaluations of community mental health care.

Markets in classes

When I took Economics 101 with Jerry Mushin in 1993 there were 900 students distributed over 3 lectures. To get into your assigned lecture you had to have a colour-coded sticker.

Rather than bother with swapping stickers between students Jerry encouraged students unhappy with their lecture time to trade stickers, and reminded us that if you had to pay for the colour you wanted that was just economics in action.

That, I suppose, is the difference between law school and the economics department.

Happiness and wealth are [nearly] uncorrelated

Tyler Cowen shows why New Zealand is not getting rich quickly, but is a nice place to live.

Discipline

Brad DeLong has interesting thoughts on how economists can productively speak to each other in a common language, while historians ... become trapped in a cage of group think. (I paraphrase of course).

Much to ponder.

Textbook economics

Henry at Crooked Timber asks "Why are textbooks so expensive", and gives an answer which even at this early hour of the day seems odd to me: "It’s not so expensive because there’s low demand - every graduate student in international relations has to read it."

Ummm ... if there was low demand, for any given supply curve, the market clearing price would surely be lower. The explanation probably has to do with demand being inelastic, owing to there being no substitutes for the good in question. Not to mention that sometimes the suppliers (authors) can screw with the demand curve by assigning the book in their own courses, or getting their friends to do so. That kind of interaction is definitely not covered in the perfect competition models you get in stage 1 textbooks.

UPDATE obviously early in the day for me ... Commenters point out that (1) there are high fixed costs in book publishing (true), and (2) that there is high demand which should take us along the [discontinuous] supply curve to a point where the average and marginal costs are lower.

I think inelastic demand and agency problems (professors assigning textbooks) still play a role.

Sample size

PolySigh

The study compares all 67,777 (!) respondents to the 2003-04 study to all 44,877 respondents in 1999-2000.

I guess working with complete transcriptions of 8 historical censuses alters your perspective on what a large sample size is ...

Don't cry for me Argentina. Or is that America

When I was in college most macroeconomics classes passed a point when discussing the consequences of government budget deficits where they said "of course, this only applies to small open economies like New Zealand, Australia, the Netherlands, Sweden, Denmark, Argentina, Norway, Chile ..."

These projected consequences included some painful combination of (1) a dramatic rise in real interest rates to underpin foreign exchange inflows, (2) a sharp fall in the value of the currency meaning that foreign goods and services were much more expensive, (3) painful cuts in government services to service the debt, (4) migration of skilled labor to economies where the real worth of their wages was higher etc, etc ...

America as a large closed economy whose currency now underpins world exchange was assumed to have much more room for error. Unfortunately, as Brad DeLong points out we've made the errors, and we've come to the end of the room.

American economic conversations might start sounding a lot like New Zealand eocnomic conversations circa 1991, or Australian conversations circa 1983 ... It ain't pretty folks, and it was all totally avoidable.