Thursday, April 11, 2013

Does MIT educate people or sort them?

When my wife got sick she e-mailed her TA to ask for notes from the lecture she was about to miss.

The TA's response: "I can't because it would provide an unfair advantage over the other students."

It's hard to understand what he means if you enter a class thinking the point is to learn the material. Isn't the TA's job to provide the students with material, , like notes and practice problems, to help the them learn? If he has them, shouldn't he give them out so students can be better prepared for the tests?

But when you understand that the class isn't about learning then everything falls into place. The tests aren't supposed to measure how much of the material you understand, they are supposed to measure how smart you are. Giving out good notes or practice problems might help students learn the material, but it would make the assessments test how much you practiced those practice problems and how much times you reviewed the notes, which weakens the value of the exam as a sorting device.

NRA recommends mandating firearms at football games

In response to a recent epidemic of fights between drunk fans at NFL football games, the NRA has proposed mandating that all ticket-holders over the age of 18 bring a firearm to the game. Spokesman Wayne LaPierre noted that "the only thing that stops a violent drunk fan is another drunk fan with a gun."

Economists at the CATO Institute quickly filed a press release in support of the plan. They note that "to stop violence on the field the league threatens fines and 15-yard penalties--to stop violence off the field it should also use incentives." The theory, known as the deterrence approach to crime, is based on the work of Gary Becker, a Nobel prize winning economist. Freakonomist Steven Levitt, an expert on the theory, noted that "it makes sense but sometimes drunk people do stupid, irrational shit."

NFL Commissioner Roger Goodell stated that he would "consider the policy on it's merits" without dismissing it out of hand. "It is counterintuitive--giving thousands of drunk, angry men weapons, packing them like sardines, and hoping that violence decreases, but it just might work."

A spokesman for the NAACP complained that the policy could price many African-American fans out of seats at the stadium: "Tickets often cost over $100, and now you will have to invest $100 or more on a handgun just to get in the door!" Together with 50 other minority-rights group the NAACP has proposed building the price of a handgun rental into the price of the tickets in order to ensure that "when a massacre goes down the victims are as diverse as the country that allowed it to happen."

Medical School: Cost Analysis

Getting an M.D. is expensive. The median student graduates with over $100,000k in debt and many student have so "little" debt because their parents paid for part of the cost. The median black student, who tends to have lower income parents, graduates with $184k in debt.

So its not surprising reporters are spreading the word with cost analyses of medical school. Bloomberg has the best such story that I have come across.

As a reminder, cost analysis is an alternative to cost-benefit analysis that ignores the benefits of a choice. The approach helps to simplify analysis, at the cost of leading to conclusion that are complete bullshit in almost all cases.

Saturday, April 6, 2013

Do only rich people have $3 million IRAs?

Obama's new tax plan is supposed to target IRAs worth over $3 million in order to hit the rich where it hurts. I like soaking the rich as much as the next guy but $3 million sounds a bit low, like it hit a substantial share of the middle class as collateral damage?

California is known for its generous pensions so it seems like a good place to start looking for pensions worth $3 million. Retired California teachers average $51,000 in pension income and probably around $20,000 in social security income. That pension is equivalent to about a $2 million IRA. If two teachers were married, each pulling in $51,000 pensions and $25,000 in social security income that would be the same as having a $3.6 million IRA. California is a high income state, and the pensions are generous there even relative to the cost of living, but these are pensions for teachers, not exactly the best paid profession in the middle class. If a family of teachers has over $3 million in their IRA (or pension equivalent) then I think its safe to say a large safe of the country should/could have $3 million IRAs.

So $3 million does not seem like an unreasonable amount to put away in your IRA. Many upper middle class people who save 15% of their income for retirement will end up with something like that amount when they retire. The damage to the middle class would be compounded if the $3 million cap is not indexed to inflation, as seems likely.

Thursday, April 4, 2013

Should taxpayers pay for book at Catholic schools?

Valerie Strauss makes a case against funding Catholic hospitals and schools. I think the argument is that

(1) it is impossible to separate the religious aspect of Catholic schools from the educational aspect, the state-approved non-religious textbooks have the flavor of both

(2) more importantly, non-Catholic schools have a weak union that accepts lower pay. By channeling funds to Catholic schools we will, in the long run, undermine the leverage teacher's unions have to extort higher wages and benefits

What I like about the analysis is that while it's not a traditional cost analysis it does successfully avoid any mention of the students. In general, when you're considering spending more money on schools, there are going to be (some) benefits for students. In the case of textbooks those benefits are small but if you acknowledge them you open the door to the idea that the other side has good points too.

To make a compelling case against the "corporatization" of education it's important to ignore how it is helping students. If your audience starts to think about poor Haitian kids going home unable to do homework because they can't afford $100 math textbooks it may feel terrible about sticking it to the kids. And as soon as people focus on the kids you've lost the argument.

Monday, April 1, 2013

The right to do what you want with your body

For many people it is obvious that when you want to have a procedure to remove a fetus from your body in order to destroy a life, you can because you control you body.

But if you want to have surgery to remove a kidney from your body in order to save a life, you can't because you aren't allowed to decide what to do with your body.

I guess it has something to do with the fact that the kidney is "part of you" and belongs inside you whereas the fetus is another person that does not. But if you're going to acknowledge that the fetus isn't part of you, then aren't you acknowledging that it isn't part of your body?

Is the purpose of Medicaid to save lives?

DailyKos has a story reporting that expanding Medicaid would save 12,000 lives. It is a good benefit analysis. It's not clear over what timeframe 12,000 lives would be saved. Over the next year? Ten years? (It is probably ten years.) It completely ignores the cost of the program, but my estimate is about $10,000 in taxes per family.

Are you willing to pay $10,000 to save those people's lives? How many people will die because they have to cut back on medical care, gym memberships, more expensive but healthier foods, and are more stressed because of lower incomes after paying an extra $1,000/year in taxes?

The point is that the purpose of Medicaid isn't to save lives. If all we cared about was saving lives we wouldn't ban kidney donations and we would ban cigarettes, heavily tax soda, mandate more exercise for kids in school, all of which are policies being advocated that most people oppose. We care about how our food tastes and personal liberty and spending our money on things aside from health care (or taxes that pay for health care).

Calculations: 0.0001 deaths averted per enrollee from Finklestein et al. on the Oregon experiment => 12 million people enrolled at a cost of about $5,000 in taxes per person plus $600 in excess burden = $780 billion over 10 years. $780 billion / 313 million * 4 people per family = $9968 per family.

"Gay marriage will lead to fraud"

Sue Everhart makes a compelling case that gay marriage could result in a wave of immigration and insurance fraud.

Anyone could just "marry" a friend and the friend would become eligible for a temporary permanent resident card and health insurance benefits. (That is not a typo: the permanent resident card expires in two years but is renewable.)

In fact it sounds like such a good idea, you have to wonder why people aren't already doing it. If fact, you could commit  immigration and insurance fraud without even getting married! We should probably just eliminate insurance and immigration to eliminate the potential for fraud.