Wednesday, July 15, 2009
This is the future of health care?
Via Republicans via Drudge.
If reality is only half as complicated as this?
Labels: economics, political economy, politics
"He uses statistics as a drunken man uses lamp-posts... for support rather than illumination." - Andrew Lang (1844-1912)
Labels: econometrics, funny, statistics
Friday, July 10, 2009
NEA grants as political patronage?
This report provides data on the amount of grant money doled out by the NEA for 2009.
I grabbed the data and mixed with the percentage of the vote received by President Obama at the state level. The first take is looking at total state level grants related to a dummy variable that takes a value of one if the state was 50% or more for Obama:
. reg totstate obamab if firstobs&!missing(obama),r
Linear regression Number of obs = 51
F( 1, 49) = 5.07
Prob > F = 0.0289
R-squared = 0.0851
Root MSE = 9.7e+05
------------------------------------------------------------------------------
| Robust
totstate | Coef. Std. Err. t P>|t| [95% Conf. Interval]
-------------+----------------------------------------------------------------
obamab | 581481.5 258233.4 2.25 0.029 62542.04 1100421
_cons | 275000 58516.78 4.70 0.000 157406.1 392593.9
The simple difference in means test suggests that states that went for Obama received about $600,000 more in NEA grants than states that did not go for Obama. States that did not vote for Obama get only $275,000 on average.
Okay - but maybe the states that went for Obama are larger and therefore they applied for and received more grants, thereby increasing their average.
Here is a simple difference in means test looking at the number of grants per state:
. reg numgrants obamab if firstobs&!missing(obama),r
Linear regression Number of obs = 51
F( 1, 49) = 5.11
Prob > F = 0.0283
R-squared = 0.0852
Root MSE = 22.524
------------------------------------------------------------------------------
| Robust
numgrants | Coef. Std. Err. t P>|t| [95% Conf. Interval]
-------------+----------------------------------------------------------------
obamab | 13.49537 5.972905 2.26 0.028 1.492368 25.49837
_cons | 5.208333 .9332125 5.58 0.000 3.332973 7.083694
------------------------------------------------------------------------------
States that did not go for Obama received approximately 5 grants and those that went for Obama got approximately 18 (13+5) grants. These grants are the outcome of applications and decisions - so the reduced form estimates here do not answer the question of whether the grants are patronage or not. It might be the case that the states that didn't vote for Obama also don't apply for NEA grants, and those states that did vote for Obama have more culture in general and apply for more grants. There are many on the left who would argue that this is the case
Unfortunately, we don't have data on the number of grants applied for - that is where the real test of this hypothesis could be obtained.
Nevertheless, we can look at potential form of patronage - average dollars per grant awarded. If the hypothesis is true then one would expect that the average size of the grants awarded to Obama voting states would be larger than in those states that did not vote for Obama.
Here is a difference in means test looking at the amount of the average grant:
. reg avegrant obamab if firstobs&!missing(obama),r
Linear regression Number of obs = 51
F( 1, 49) = 0.03
Prob > F = 0.8581
R-squared = 0.0007
Root MSE = 15244
------------------------------------------------------------------------------
| Robust
avegrant | Coef. Std. Err. t P>|t| [95% Conf. Interval]
-------------+----------------------------------------------------------------
obamab | -768.6525 4276.216 -0.18 0.858 -9362.03 7824.725
_cons | 48762.31 3109.118 15.68 0.000 42514.3 55010.31
Here we see that there is no statistically significant difference in the average grant size awarded in Obama-voting states and that in non-Obama-voting states. This might be evidence against the grants-as-patronage but is not guaranteed. It might be that the average grant size is not where the patronage manifests itself.
I did this in the 10 minutes or less time limit I impose upon myself for these little exercises. It will be an interesting masters thesis (or dissertation) that looks deeper into these patterns to determine if political patronage explains the variation across states - as has been shown to be the case with Lincoln, FDR, and other presidents.
Stata v9 data set
Labels: economics, politics, presidential politics
On how to predict SSN from birth date and birth place information. The real irony is that the US government implemented a program requiring newborn babies to apply for a social security number with the birth certificate. This was intended to reduce fraud in assigning social security numbers. Unfortunately, all the babies born, say, in Concord, North Carolina, on a given Tuesday will have very similar social security numbers. Using publicly available data on social security numbers on those who have died, it turns out that with a basic two-variable regression model the 9 digit SSN can be obtained in less than 1000 guesses, often in less than 100 guesses.
Not so good.
Predicting Social Security numbers from public data
Alessandro Acquisti and Ralph Gross
Abstract
Information about an individual's place and date of birth can be exploited to predict his or her Social Security number (SSN). Using only publicly available information, we observed a correlation between individuals' SSNs and their birth data and found that for younger cohorts the correlation allows statistical inference of private SSNs. The inferences are made possible by the public availability of the Social Security Administration's Death Master File and the widespread accessibility of personal information from multiple sources, such as data brokers or profiles on social networking sites. Our results highlight the unexpected privacy consequences of the complex interactions among multiple data sources in modern information economies and quantify privacy risks associated with information revelation in public forums.
Paper here
Labels: identity theft, security, statistics
I recently returned from a ten day visit to Germany, my first visit to mainland Europe. The first six days were spent in the Moselle River valley between Bern-castle and Urtzig. We stayed in a pleasant hotel in Zeltingen having rented a car for the ten days. Here are the notes I took on my iPhone:
Overall, I loved my time in Germany and will definitely want to go back. The food is rather compatible with the US menu and the people are very friendly and the sights are amazing. The driving is not bad - on the A-class roads you stay right and ALWAYS pass on the left but you have to watch your rear-view mirror and stay out of the way.
The wine served in the Moselle valley is generally dry (which is not the way Riesling is supposed to taste) but the beer is excellent.
Labels: culture, europe, germany, travel
Patently obvious statement of the day
From this story about the cost of attending California State University schools this coming year:
The cost to attend California State University this fall could rise by 30 percent compared with the year just ended, an increase experts said could drive students out of school.Yes, Virginia, demand curves are downward sloping, even for Cal State schools.
Labels: economics, higher education
Thursday, July 09, 2009
Craig,
Congratulations on being elected Vice President for the NAASE Executive Committee until 2010.
NAASE is the North American Association of Sports Economists.
Labels: economics, sports, sports economics
Wednesday, June 24, 2009
Video taken with my new iPhone 3GS.
The dings in the background come and go because I don't have my seat belt on. The next iteration of seatbelt warnings should recognize that the car isn't moving and therefore it shouldn't complain that I am not wearing my seatbelt.
I thought it amazing as I watched the frontloader doing its job through the window while sitting in the Bank of America. The driver came and went with such regularity and in such quick time this economist couldn't help but to be once again amazed at the amount of dirt that was being moved by one guy and a machine and how many men had been "put out of work" by the frontloader.
It is tempting to think that those who were put out of work by the machine should now be favored by putting the machine aside and allowing the shovels and human sweat to come in its stead. While that would create jobs it would also be a disaster in terms of trying to facilitate recovery and growth.
Why?
Because the men who were displaced by the machine didn't just sit around and sulk about it. They figured out that there were a lot of other jobs than shoveling dirt and moving it from one place to another. Some of these other jobs already existed but many others did not. The new jobs associated with new products and services, that is what defines economic growth. How then, it is reasonable to assume that if individuals who are "unemployed" and somehow become employed on government projects will somehow directly lead to growth?
Even those who are unemployed are only unemployed because wages are somehow not adjusting downward and therefore the individual who might be willing to work for, say, $6 per hour is not able to get a job because the prevailing wage rate is, say, $10 and the quantity of labor demanded is artificially low. How does the government's intervention in the form of hiring a bunch of labor supposed to fix this? The demand for labor might increase in the short run but it is not sustainable and the government's competition for labor essentially crowds out the private sector's demand. In a static world that might not be important, although one could have a philosophical debate in which I would still argue for private sector employment, but in a dynamic system which is what the world actually is, the crowding out by the government programs/stimulus, whatever, stiffles economic growth.
Benefit of parking the frontloader: 20 jobs hired by the government (seen by many)
Cost of parking the frontloader: 20 much more exciting jobs might not be forthcoming (unseen by most). As Friedrick Bastiat pointed out some three hundred years ago, people notice the seen and ignore the unseen, yet in economics it is the unseen which is often the most important variable.
Labels: bailout, funny, sellout
Tuesday, June 23, 2009
Ask for the moon be happy if you get a Krystal?
For those outside of the South, a Krystal is basically a White Castle hamburger (More here). That little saying is popoular around the neck of the woods in which I grew up.
The quip came to mind after reading a story from Sports Business Journal concerning the attendance/viewership of the WPS (Womens Professional Soccer) League:
Women's Professional Soccer is meeting attendance expectations and exceeding ratings expectations in its inaugural season, Commissioner Tonya Antonucci said.
At the midpoint of its season, the league is averaging 5,361 fans a game through 35 matches and averaging 32,000 households over 12 weekly telecasts on Fox Soccer Channel.
Labels: soccer, sports, sports economics
Sporting News Today reports via Variety that the production of Moneyball, the story of how the Oakland A's used statistical analysis to discover undervalued players in the big leagues and put together a competitive team on a shoestring budget. This is a shame as the movie might be an interesting lesson in how private agents utilize information in unpredictable ways to serve their best interests, in this case with the positive spillover that A's fans were able to root for a winning team.
Another long-rumored Pitt project, Atlas Shrugged, seems to go through slightly different trials but with the same result. A potentially powerful movie for individualism goes by the wayside.
Suddenly the head of Columbia Pictures is like the rest of us: She's having a hard time seeing Moneyball as a movie directed by Steven Soderbergh and starring Brad Pitt as A's general manager Billy Beane.
Variety reported that late last week Amy Pascal placed the movie that was supposed to begin production Monday in Phoenix in "limited turnaround," giving Soderbergh the chance to get another studio to pick it up. Pascal, who had supported the project initially, was uncomfortable with a rewrite of the script by Soderbergh, and apparently ended Columbia's backing, Variety reported.
If a new financier doesn't emerge, Columbia could try to replace Soderbergh, hoping Pitt doesn't bail, or Pascal and Soderbergh could try and get back on the same page. If neither of those options works, then Pascal could just let the project die.
Labels: culture, media, sports
Sunday, June 21, 2009
Test post from me new iPhone 3Gs
Tuesday, June 16, 2009
Demand curves are downward sloping
Some politicians refuse to acknowledge that demand curves are downward sloping. This refusal has led government to propose and enact any number of bad policies. However strong our econometric models are in showing that, indeed, it seems that demand curves are downward sloping, sometimes a picture is more powerful.
From this week's Business Week:
So, as interest rates increase (the price), the number of mortgage applications (the quantity) declines. In other words, the law of demand seems to hold without all the econometric baggage to get in the way.
Labels: econometrics, economics, housing market
It ain't over until the Big G says it's over
Some banks are paying back $68 billion in TARP funds. Some in the media have suggested that this is evidence that the worst is over and that the unwinding of the great bailout has begun, nay, it may already be over.
Let's put the $68 billion in perspective. From this week's Business Week:
Labels: bailout, economics, sellout
Is it all in the exchange rate?
Considerable hand-wringing is happening concerning the recent rise in gasoline prices. Of course, we went through this last summer, so the media have plenty of "push print" stories they can run concerning the issue. Unfortunately, that means that most of the media stories are wrong or at best wrongly-directed.
Most stories focus on demand side issues, e.g., gas guzzling SUVs are causing the demand for gasoline to be higher than it otherwise would be and this imposes negative externalities on others. Most stories focus on supply side issues, e.g., drilling at home, refinery capacity, lack of a backstop technology. Yet, one thing that very few in the media discuss in the context of what we in the United States pay for gasoline and crude oil is the exchange rate.
Most people don't follow the exchange rate on a given day, after all, the vast majority of daily consumer-level transactions occur in U.S. dollars. Yet, we buy much crude oil on the world market in which the exchange rate actually matters.
This week's Business Week has this telling picture:
Game over.
Labels: economics, exchange rates, oil
Sunday, June 14, 2009
Odd business hours
Labels: funny
Thursday, June 11, 2009
This is a pretty good take on how the bailouts are economically suspect (although in the short run politically expedient):
More here
Labels: bailouts, economics, funny, political economy
Wednesday, June 10, 2009
How about a cool $1.5 billion raised by individuals, the candidates themselves, and other political committees in the last presidential election? Now that the federal government has broken the three trillion dollars per year spending level, is it any surprise that there is so much money being spent on trying to scramble to the top of the pile to be President?
How to get money out of politics? Get politics out of money. What I mean by that is that if there was less spending coming out of Washington there would be less of a draw for the lobbyists and those who want to spend my money as they see fit.
More here from the Federal Election Commission
Labels: economics, political economy, politics
Monday, June 08, 2009
As consumer credit spending falls, the disposable income dedicated to purchasing goods and services *created today* must fall, ceteris paribus. As spending on today's goods and services falls, this will signal to producers to, guess what, produce less (at least at current prices). This, in turn, might lead to a technical "depression" although not the bread-line type of depression we experienced in the 1930s.
Labels: bailout, gdp, recession
I am sure the Today show got permission for this, right?
Visit msnbc.com for Breaking News, World News, and News about the Economy
Labels: funny, presidential politics
Labels: funny, sports, sports economics
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Recent Posts
- This is the future of health care?
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- NEA grants as political patronage?
- Fascinating paper
- Observations on Germany
- Patently obvious statement of the day
- From my in box today
- Unpatriotic frontloader
- Ask for the moon be happy if you get a Krystal?
- Moneyball in trouble?
- Test post
- Demand curves are downward sloping
- It ain't over until the Big G says it's over
- Is it all in the exchange rate?
- Odd business hours
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- Watch consumer credit...
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