ATTENTION: Szasz Prize Change of Venue

2005-09-16 Thread Bryan Caplan

I was just notified that the Szasz Prize ceremony has been moved from
the Cato Institute in D.C. to the Harper Library at the GMU Law School
in Arlington.

The day and time remain the same: September 21, 6 PM.

--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com   [EMAIL PROTECTED]  http://econlog.econlib.org

   [M]uch of the advice from the parenting experts is flapdoodle.
But surely the advice is grounded in research on children's
development?  Yes, from the many useless studies that show
a correlation between the behavior of parents and the
behavior of their biological children and conclude that
parenting shapes the child, as if there were no such thing as
heredity.
--Steven Pinker, *The Blank Slate*


Szasz prize

2005-08-24 Thread Bryan Caplan

I must gleefully report that I am one of the winners of the 2005 Thomas
S. Szasz Award for Outstanding Contributions to the Cause of Civil
Liberties, largely for my article The Economics of Szasz: Preferences,
Constraints, and Mental Illness. The other prize-winner is
individualist feminist Joan Kennedy Taylor.

There will be an award ceremony at the Cato Institute on September 21,
6:00-7:30 P.M. The event is open to the public, and a lot of my friends
will be coming - probably including some of your favorite bloggers. If
you live in the D.C. area, it would be great chance to meet in person.

Hope to see you there!
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com   [EMAIL PROTECTED]  http://econlog.econlib.org

   [M]uch of the advice from the parenting experts is flapdoodle.
But surely the advice is grounded in research on children's
development?  Yes, from the many useless studies that show
a correlation between the behavior of parents and the
behavior of their biological children and conclude that
parenting shapes the child, as if there were no such thing as
heredity.
--Steven Pinker, *The Blank Slate*


Re: Dickens on the Laffer Curve

2005-04-23 Thread Bryan Caplan
Peter C. McCluskey wrote:
Mancur Olson claims in his book Power and Prosperity that the
marginal income tax rate was effectively zero. The effective taxes
were near 100% of what a typical worker in any given position could
produce, but workers producing more than expected kept all the
unexpected wealth. That created stronger incentives on each person to
work hard than in the west, strong incentives to prevent others from
working hard, and some incentives for each industry to deceive the
system about what a typical worker can produce. There were few
problems with the total amount of economic activity under Stalin. The
problems were with the goals which that activity satisfied.
Much as I admire Olson, this is crazy.  Collectivization didn't just
costlessly move resources from agriculture to industry/military
production.  There was an enormous deadweight cost in reduced production
*per farmer*.  Not to mention massive destruction of human capital -
i.e. death.  He has a slightly better case for industry - Stalin did
firmly back unequal pay.  But a 0% marginal tax rate cuts against
everything I've ever read about Soviet economics under Stalin.
--
--
 Peter McCluskey | Everyone complains about the laws of
physics, but no www.bayesianinvestor.com| one does anything about
them. - from Schild's Ladder
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
 http://www.bcaplan.com   [EMAIL PROTECTED]  http://econlog.econlib.org
  Isolated among strange influences, Lavinia was fond of wild
  and grandiose day-dreams and singular occupations; nor was
  her leisure much taken up by household cares in a home from
  which all standards of order and cleanliness had long since
  disappeared.
  --H.P. Lovecraft, The Dunwich Horror


Re: Dickens on the Laffer Curve

2005-04-22 Thread Bryan Caplan
Yes.  It suffers a bit from the historians' If you don't have a
document, it didn't happen bias, but it's good.
Anton Sherwood wrote:
Speaking of Communism, is The Black Book worth having?
I saw several copies yesterday at a secondhand store in San Leandro,
marked about $8 if memory serves.
--
Anton Sherwood, http://www.ogre.nu/
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com   [EMAIL PROTECTED]  http://econlog.econlib.org
   [M]uch of the advice from the parenting experts is flapdoodle.
But surely the advice is grounded in research on children's
development?  Yes, from the many useless studies that show
a correlation between the behavior of parents and the
behavior of their biological children and conclude that
parenting shapes the child, as if there were no such thing as
heredity.
--Steven Pinker, *The Blank Slate*


Dickens on the Laffer Curve

2005-04-21 Thread Bryan Caplan
I think Bill accidentally sent this to me privately instead of the list.
Subject:
Re: Laffer Curve
From:
William Dickens [EMAIL PROTECTED]
Date:
Wed, 20 Apr 2005 16:31:33 -0400
To:
[EMAIL PROTECTED]
I'll bite.  I completely agree with Bill in the short-term.  Higher
taxes raise revenue.  But I also have a sneaking suspicion that
higher
tax rates in the long run may hurt growth so much that the present
value
of taxes would be higher if rates were lower.
And I have a sneaking suspicion that more equitable distributions of
income lead to less social conflict and rent seeking and lead to higher
growth. Unlike you I can point to some theoretical and empirical studies
that back my suspicion up (though I wouldn't bet my life on it being
true).  My point is that any of us can have sneaking suspicions. Dueling
sneaking suspicions aren't going to bring us any closer to agreement.
  Just talking to people
who grew up in Scandinavia, they frequently tell me that high taxes
had
no effect on the older generation.  But (combined with the welfare
state) they raised a generation of shiftless, no-ambition slackers.
If
the U.S. had Swedish-level taxes during the 80's, I suspect it would
have been a far less entrepreneurial and innovative economy in the
90's.
Two thoughts. First, the empirical studies on the effects of
distribution of income on growth suggest no such effect. But I have no
idea how robust those results are and wouldn't be at all surprised if
they allowed for some range of results if properly done.  Personally I
have little doubt that the various forms of welfare (not progressive
taxation) do tend to destroy initiative among some parts of the
population. I've had too much personal experience with smart, talented
people getting caught up in welfare programs and not going anywhere not
to suspect that this is a serious draw back of such programs. That's why
I very much like to tightly time limit any generous welfare program.
However, I have to admit that I don't know that there just aren't
slackers in the world (some talented and bright) who would find parents,
friends or some other less desirable way to support themselves if there
weren't welfare programs. I don't know of any cross national study of
long term welfare participation (OECD might have some aggregate study of
this). The European Community Household Panel could be combined with the
GSOP and the PSID or SIPP to good end to do such a study. Any graduate
students out there looking for a thesis topic?
- - Bill Dickens
William T. Dickens
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036
Phone: (202) 797-6113
FAX: (202) 797-6181
E-MAIL: [EMAIL PROTECTED]
AOL IM: wtdickens
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com   [EMAIL PROTECTED]  http://econlog.econlib.org
   [M]uch of the advice from the parenting experts is flapdoodle.
But surely the advice is grounded in research on children's
development?  Yes, from the many useless studies that show
a correlation between the behavior of parents and the
behavior of their biological children and conclude that
parenting shapes the child, as if there were no such thing as
heredity.
--Steven Pinker, *The Blank Slate*


Re: Laffer Curve

2005-04-20 Thread Bryan Caplan
 There are lots of reasonable objections
to raising taxes. You can decide that you don't think that tax
revenue is put to good uses. You can believe that ethically taxation
is theft.  But there is no reasonable argument (at least none that
I've seen) that tax increases in any range we've seen in this country
don't raise revenue. - - Bill Dickens
I'll bite.  I completely agree with Bill in the short-term.  Higher
taxes raise revenue.  But I also have a sneaking suspicion that higher
tax rates in the long run may hurt growth so much that the present value
of taxes would be higher if rates were lower.  Just talking to people
who grew up in Scandinavia, they frequently tell me that high taxes had
no effect on the older generation.  But (combined with the welfare
state) they raised a generation of shiftless, no-ambition slackers.  If
the U.S. had Swedish-level taxes during the 80's, I suspect it would
have been a far less entrepreneurial and innovative economy in the 90's.
Econometric evidence?  As far as I know, there's none either way, and
for obvious reasons.  But it makes sense to me.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com   [EMAIL PROTECTED]  http://econlog.econlib.org
   [M]uch of the advice from the parenting experts is flapdoodle.
But surely the advice is grounded in research on children's
development?  Yes, from the many useless studies that show
a correlation between the behavior of parents and the
behavior of their biological children and conclude that
parenting shapes the child, as if there were no such thing as
heredity.
--Steven Pinker, *The Blank Slate*


blogging

2005-03-11 Thread Bryan Caplan
FYI: I'm going to be a regular blogger on Econlib
http://econlog.econlib.org/ for at least a year.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   [M]uch of the advice from the parenting experts is flapdoodle.
But surely the advice is grounded in research on children's
development?  Yes, from the many useless studies that show
a correlation between the behavior of parents and the
behavior of their biological children and conclude that
parenting shapes the child, as if there were no such thing as
heredity.
--Steven Pinker, *The Blank Slate*


blogging

2005-01-18 Thread Bryan Caplan
For the next month, I am going to be guest blogging at Econlog, the
Liberty Fund website's blog.  Expect to see me post three times per
week.  The URL is:
http://econlog.econlib.org
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   But we must deplore and, so far as possible, overcome the evils of
habitual newspaper reading.  These evils are, chiefly, three: first,
the waste of much time and mental energy in reading unimportant news
and opinions, and premature, untrue, or imperfect accounts of
important matters; second, the awakening of prejudices and the
enkindling of passions through the partisan bias or commercial greed
of newspaper managers; third, the loading of the mind with cheap
literature and the development of an aversion for books and
sustained thought.
  --Delos Wilcox, The American Newspaper (1900)


guess the correlation

2004-12-16 Thread Bryan Caplan
I've calculated the correlation coefficient between per-capita state
income and the percent of the vote Kerry got.  Guesses?  I'll post the
answer in an hour.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   But we must deplore and, so far as possible, overcome the evils of
habitual newspaper reading.  These evils are, chiefly, three: first,
the waste of much time and mental energy in reading unimportant news
and opinions, and premature, untrue, or imperfect accounts of
important matters; second, the awakening of prejudices and the
enkindling of passions through the partisan bias or commercial greed
of newspaper managers; third, the loading of the mind with cheap
literature and the development of an aversion for books and
sustained thought.
  --Delos Wilcox, The American Newspaper (1900)


the answer is...

2004-12-16 Thread Bryan Caplan
The correlation between per-capita state income and Kerry vote
percentage is +.70.  That makes Bill by far the most accurate of our
guessers.  If you do a bivariate regression, every +$1000 of per cap
income is associated with +1.48 percentage points of Kerry share.
Scatter plot with regression line is attached.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   But we must deplore and, so far as possible, overcome the evils of
habitual newspaper reading.  These evils are, chiefly, three: first,
the waste of much time and mental energy in reading unimportant news
and opinions, and premature, untrue, or imperfect accounts of
important matters; second, the awakening of prejudices and the
enkindling of passions through the partisan bias or commercial greed
of newspaper managers; third, the loading of the mind with cheap
literature and the development of an aversion for books and
sustained thought.
  --Delos Wilcox, The American Newspaper (1900)
inline: kervote.jpg

personal finances survey

2004-11-12 Thread Bryan Caplan
There is a press release about high school students' low scores on this
survey of personal finances, but I'm impressed by how well they did.
Unlike beliefs about the economy, at least the modal answer on this
survey is usually right!
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   But we must deplore and, so far as possible, overcome the evils of
habitual newspaper reading.  These evils are, chiefly, three: first,
the waste of much time and mental energy in reading unimportant news
and opinions, and premature, untrue, or imperfect accounts of
important matters; second, the awakening of prejudices and the
enkindling of passions through the partisan bias or commercial greed
of newspaper managers; third, the loading of the mind with cheap
literature and the development of an aversion for books and
sustained thought.
  --Delos Wilcox, The American Newspaper (1900)


more on personal finances

2004-11-12 Thread Bryan Caplan
The modal answer (given four choices) was right on the 31 substantive
questions 74% of the time.  The first or second most common answer was
right 97% of the time.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   But we must deplore and, so far as possible, overcome the evils of
habitual newspaper reading.  These evils are, chiefly, three: first,
the waste of much time and mental energy in reading unimportant news
and opinions, and premature, untrue, or imperfect accounts of
important matters; second, the awakening of prejudices and the
enkindling of passions through the partisan bias or commercial greed
of newspaper managers; third, the loading of the mind with cheap
literature and the development of an aversion for books and
sustained thought.
  --Delos Wilcox, The American Newspaper (1900)


Re: personal finances survey

2004-11-12 Thread Bryan Caplan
Robert A. Book wrote:
What's up with question 32?  52% male and 52% female?
I think you have to look at the second column of numbers, the ones not
in bold.  Those add up, though I am confused about the first column.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   But we must deplore and, so far as possible, overcome the evils of
habitual newspaper reading.  These evils are, chiefly, three: first,
the waste of much time and mental energy in reading unimportant news
and opinions, and premature, untrue, or imperfect accounts of
important matters; second, the awakening of prejudices and the
enkindling of passions through the partisan bias or commercial greed
of newspaper managers; third, the loading of the mind with cheap
literature and the development of an aversion for books and
sustained thought.
  --Delos Wilcox, The American Newspaper (1900)


piece debunking growth-education link

2004-08-16 Thread Bryan Caplan
Tyler Cowen at www.marginalrevolution.com alerted me to the following
very interesting piece debunking the supposed causal connection between
education and growth:
http://www.spiked-online.com/Printable/000CA640.htm
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   I hope this has taught you kids a lesson: kids never learn.
   --Chief Wiggum, *The Simpsons*


Re: Siberia and Canada

2004-04-08 Thread Bryan Caplan
Can any Canada experts weigh in?  That includes all Canadians.  Eric?

fabio guillermo rojas wrote:

Yes - evidence: the population of Canada is highly clustered around the
border. I have hunch they would bolt the second the border was opened.
Fabio

On Thu, 8 Apr 2004, Bryan Caplan wrote:


Question: If there were free migration between the U.S. and Canada,
would Canada lose a lot of population to California, Florida, and other
more desirable locations?
Prof. Bryan Caplan



--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   I hope this has taught you kids a lesson: kids never learn.

   --Chief Wiggum, *The Simpsons*


new paper

2004-03-11 Thread Bryan Caplan
My new paper on the economics of mental illness, entitled The Economics
of Szasz can now be downloaded from my webpage at:
http://www.gmu.edu/departments/economics/bcaplan/szaszjhe.doc
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   I hope this has taught you kids a lesson: kids never learn.

   --Chief Wiggum, *The Simpsons*


farm subsidies

2004-02-26 Thread Bryan Caplan
I vaguely remember an earlier debate about farm subsidies and public
opinion.  A new study just came out finding that farm subsidies are
equally popular in farm and non-farm states:
A striking finding is that the public in farm states was not
significantly different in their attitudes about farm subsidies. The
poll included an oversample of the 17 states that receive the largest
amounts of farm subsidies, excluding the metropolitan areas of
California, Illinois and Texas.
For more details:

http://www.pipa.org/OnlineReports/Economics/FarmPress_01_04.pdf
http://www.pipa.org/OnlineReports/Economics/FarmQnnaire_01_04.pdf
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   I hope this has taught you kids a lesson: kids never learn.

   --Chief Wiggum, *The Simpsons*


divided government

2004-02-24 Thread Bryan Caplan
Many smart libertarians I've talked to lately have embraced the view
that divided government (especially Dem president and Rep Congress)
yields the least un-libertarian outcome.  Are they right, and if so,
what's the theoretical explanation?
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   I hope this has taught you kids a lesson: kids never learn.

   --Chief Wiggum, *The Simpsons*


Excite Poll

2004-02-11 Thread Bryan Caplan
I'm not the least surprised by these results:

http://poll.excite.com/poll/home.jsp?cat_id=1
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   I hope this has taught you kids a lesson: kids never learn.

   --Chief Wiggum, *The Simpsons*


Women Don't Ask

2004-01-28 Thread Bryan Caplan
I just read the well-reviewed *Women Don't Ask* by Babcock and
Laschever.  Main thesis: Women should bargain harder.
It is frankly kind of silly.  The whole book makes it sound like
aggressive bargaining is a strictly dominant strategy, so women will
definitely be better off if they do more of it.  It never considers the
obvious possibility that women will price themselves out of a job.  Nor
does it explore the interesting possibility that one reason female
employees are doing so well in spite of obvious child-related drawbacks
is precisely that employers know that they are less likely to demand
more money.
The book also tries to get women to bargain more aggressively in
relationships.  I think this is another case where feminist norms are
likely to function as a price control - some women will get a better
deal, but a lot of others will be unable to get married because their
standards are too high.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   I hope this has taught you kids a lesson: kids never learn.

   --Chief Wiggum, *The Simpsons*


Re: Oscar Political Business Cycle

2004-01-04 Thread Bryan Caplan
But this wouldn't explain the clustering of *plausible prize-winners* (many of which 
are not big grossers) around Xmas.

- Original Message -
From: William Dickens [EMAIL PROTECTED]
Date: Saturday, January 3, 2004 9:55 am
Subject: Re: Oscar Political Business Cycle

 I thought the explanation for the grouping of releases around
 holidays was that that was when the box office was biggest.  Why
 release movies at any other time? If you have a movie that isn't
 that great  you release it at another time when the competition
 won't be as strong for first run box office.
 - - Bill Dickens

 William T. Dickens
 The Brookings Institution
 1775 Massachusetts Avenue, NW
 Washington, DC 20036
 Phone: (202) 797-6113
 FAX: (202) 797-6181
 E-MAIL: [EMAIL PROTECTED]
 AOL IM: wtdickens

  Bryan Caplan [EMAIL PROTECTED] 12/31/03 02:07AM 
 The Political Business Cycle story has not fared well empirically
 in recent years (though Kevin Grier has done interesting work on
 Mexico's PBC).  But it seems overwhelming in the Oscars.  It seems
 like roughly half of the big nominees get released in December.
 What gives?  Is there any way to explain this other than Academy
 voters' amnesia?

 I guess there is a small intertemporal benefit - if you could win
 Best Picture of 2004 with a January 2004 release, or Best Picture
 of 2003 with a December 2003 release, the present value of the
 latter prize would presumably be higher.  But can that one year's
 interest (presumably adjusted for a lower probability of winning
 due to tighter deadlines) explain the December lump?





Me at the AEAs

2004-01-02 Thread Bryan Caplan
Shameless self-promotion: I'll be subbing in for none other than Gary Becker this 
Saturday at the AEA
meetings in San Diego.  It will be at the 10:15 1/3 session on Competition chaired 
by Andrei Shleifer.  Hope to see you there.  Topic: Systematically Biased Beliefs 
About Cultural Competition, co-authored with Tyler Cowen.

--Bryan


Oscar Political Business Cycle

2004-01-02 Thread Bryan Caplan
The Political Business Cycle story has not fared well empirically in recent years 
(though Kevin Grier has done interesting work on Mexico's PBC).  But it seems 
overwhelming in the Oscars.  It seems like roughly half of the big nominees get 
released in December.  What gives?  Is there any way to explain this other than 
Academy voters' amnesia?

I guess there is a small intertemporal benefit - if you could win Best Picture of 2004 
with a January 2004 release, or Best Picture of 2003 with a December 2003 release, the 
present value of the latter prize would presumably be higher.  But can that one year's 
interest (presumably adjusted for a lower probability of winning due to tighter 
deadlines) explain the December lump?


Re: Economist IQ?

2003-12-15 Thread Bryan Caplan
Do you have a cite for that, Zach?

[EMAIL PROTECTED] wrote:
A far cry from perfect, but if you use the GRE as a test of intelligence, economics PhD students are the fourth most intelligent behind physicists, mathematicians, and computer scientists - according to the ETS in 2002.  Mean scores for engineering (in some forms) are not much lower - but anthropology, archaeology, history, political science, theology, sociology, and communications are all fields with significantly lower scores.

I suspect intuitively, due to a number of reasons - mostly the analytical nature of the field and the mathematical rigor - that economists are significantly more intelligent than PhDs in many other fields.  But probably not all fields, and maybe not even most.

- Zac Gochenour
[EMAIL PROTECTED]
- Original Message -
From: Stephen Miller [EMAIL PROTECTED]
Date: Monday, December 15, 2003 10:40 am
Subject: Economist IQ?

I doubt anyone has hard data on this, but I'm wondering what
people on this
list would guess is the average IQ of Ph.D. economists?  Would it
be much
different from the average IQ of Ph.D.s in general?




--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
   I hope this has taught you kids a lesson: kids never learn.

   --Chief Wiggum, *The Simpsons*


Re: Real wages constant since 1964?!

2003-12-04 Thread Bryan Caplan
Really?  Every undergraduate class I can remember listed the failure to
adjust for quality as one of the main problems with the CPI.  And I
don't think they just said it was inadequate.
William Dickens wrote:

This is completely wrong. The CPI-u is, and the CPI-x was, adjusted
for

quality changes (see http://www.bls.gov/cpi/home.htm ). The CPI-X
doesn't exist anymore.
So what price statistic wasn't adjusted for quality changes?


They all are. No one (who knew what he was talking about) has ever
claimed that they are not adjusted. The common claim is that the
adjustments (which are quite complex and differ across different types
of goods) are inadequate. - - Bill
William T. Dickens
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036
Phone: (202) 797-6113
FAX: (202) 797-6181
E-MAIL: [EMAIL PROTECTED]
AOL IM: wtdickens
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
Infancy conforms to nobody: all conform to it, so that
 one babe commonly makes four or five out of the adults
 who prattle and play to it.
 --Ralph Waldo Emerson, Self-Reliance


Re: MVT and policy portfolios

2003-10-18 Thread Bryan Caplan
alypius skinner wrote:

Related to this is the question of whether there really is a median voter.
Let's take 10 issues--abortion, gun control, gay rights, trade policy, tax
rates, immigration, middle east policy, racial preferences, CO2/global
warming policy, and SDI/star wars missile defense.  What percentage of
the electorate is in the middle quintile (if we could quantify these issues)
on all 10?
The General Social Survey is online and has a lot of information on
public opinion, though not all of these exact topics.  At least on a
crude measure of do you want more/less/the same level of spending or
regulation, the median position is usually the same.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
 But being alone he had begun to conceive thoughts of
  his own unlike those of his brethren.
  --J.R.R. Tolkien, *The Silmarillion*


Re: HEAVEN'S DOOR AFTER A YEAR - George J. Borjas

2003-09-05 Thread Bryan Caplan
alypius skinner wrote:

Some reviewers also claimed that it was absurd to conclude, as I
do, that the net economic benefits from immigration are small,
probably less than $10 billion a year. This estimate comes from a
simple application of the widely used textbook model of a competitive
labor market. This is the same model that is typically used to
analyze the economic consequences of such government policies as
minimum wages and payroll taxes. The market for ideas provides what
is perhaps the most convincing argument in favor of my estimate. The
immigration area, after all, is highly contentious. If it were that
simple to show that the gains from immigration are huge, there is an
audience ready and willing to buy such numbers. My estimates are so
absurd that not a single academic study has concluded that they are
higher-and some studies have concluded that they are lower.
Talking this over with Alex Tabarrok, Borjas' $10 B number probably
fails to count immigrants' pay increases as a net social gain.  But for
the most part they should be.  Moving from Mexico to the U.S. actually
raises worker productivity, so the pay gain is not a transfer to the
worker from someone else, but a straight increase in surplus.  If we
figure that immigrants would have made between 10 and 50% of their U.S.
income at home, then 50-90% of their U.S. wages should be counted as a
welfare gain.
So suppose we have 10 M more immigrants than we would have under Borjas'
regime.  Their wage doubles from half the U.S. minimum wage in Mexico to
the U.S. minimum wage.  That's a net gain of $5000 per immigrant per
year, or $50 B per year.
This is analogous in IO to an increase in productive efficiency, which
are typically of a much larger magnitude than increases in allocative
efficiency.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
Infancy conforms to nobody: all conform to it, so that
 one babe commonly makes four or five out of the adults
 who prattle and play to it.
 --Ralph Waldo Emerson, Self-Reliance


list changes

2003-08-06 Thread Bryan Caplan
As I announced earlier, the GMU listserv system is changing.  Starting 
August 15th,

[EMAIL PROTECTED]

will be renamed:

[EMAIL PROTECTED]

Yes, I know the longer name sucks, but what can you do?
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
Infancy conforms to nobody: all conform to it, so that
 one babe commonly makes four or five out of the adults
 who prattle and play to it.
 --Ralph Waldo Emerson, Self-Reliance





Re: Greider

2003-07-22 Thread Bryan Caplan
Robert A. Book wrote:
Greider also has interesting material on the Democrats' connection to 
the SL industry.  I'd never heard about any of this, but he seems to 
have his facts straight on this point.

Wrong hasn't been so much fun in years!
--


Bryan, if he's wrong about the material you know a lot about, what
makes you think he has his facts straight on the subjects you know
less about?
Shouldn't his obvious errors on cost/benefit, risk analysis, and
corporate accountability reduce the prior probability (to you) that
he's right on anything?
Good question.  Sure, errors in one area raise the probability of errors 
in other areas.  But he's a journalist.  I expect him to be weak on 
analytics.  The 5 W's of who-what-when-where-why are what he's trained 
to get right.


--Robert Book





--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
Infancy conforms to nobody: all conform to it, so that
 one babe commonly makes four or five out of the adults
 who prattle and play to it.
 --Ralph Waldo Emerson, Self-Reliance




[Fwd: A story of the Fed in Wonderland as Greenspan puts emphasis ongr owth - Economic View by Anatole Kaletsky]

2003-06-24 Thread Bryan Caplan
 the rule was winners and losers, all must have
  prizes.
 
  When US economic recovery becomes self-sustaining, Greenspan will
  suddenly blow the whistle - and the losers will be the Bigger Fools
  still holding long bonds.
 
 
 
 
 
 
 
 
 
 
 

 
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--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
Infancy conforms to nobody: all conform to it, so that
 one babe commonly makes four or five out of the adults
 who prattle and play to it.
 --Ralph Waldo Emerson, Self-Reliance




Re: Health insurance for kids

2003-06-18 Thread Bryan Caplan
Jeffrey Rous wrote:
 When I was in grad school, my wife's health insurance policy through
 work allowed an employee to add a spouse for $1000 per year (I cannot
 remember the exact numbers, but these are close) or add a spouse and
 children for $2000 per year. And it didn't matter whether you had 1
 child or 10.

 Since she worked for UNC, I figured it was a political decision.
I'm pretty sure that it's not.  My wife's private insurance works the 
same way.  Unless regulations make the private sector copy the public 
sector.

 How can this be rational?

At least for male employees, it's plausible that those with more 
children are both older and therefore more experienced, and more 
responsible/stable holding age constant.  A guy with five kids is going 
to be very concerned about remaining employed.

 -Jeffrey Rous




--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
  The game of just supposing
   Is the sweetest game I know...
   And if the things we dream about
   Don't happen to be so,
   That's just an unimportant technicality.
   Jerome Kern and Oscar Hammerstein, *Showboat*




Kolko 40 Years Later

2003-06-18 Thread Bryan Caplan
 strongly 
suspect is accurate, like his revisionist account of the hysteria 
surrounding Upton Sinclair's *The Jungle*.  But overall, it has all of 
the flaws you would expect in a work of economic history by an 
economically semi-literate socialist.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  The game of just supposing
   Is the sweetest game I know...
   And if the things we dream about
   Don't happen to be so,
   That's just an unimportant technicality.
   Jerome Kern and Oscar Hammerstein, *Showboat*




Re: Charity

2003-06-05 Thread Bryan Caplan
Jason DeBacker wrote:

And the answer is:

- People really dont care about helping someone else, but 
are ashamed to admit that.
How could it be anything else?

--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
  The game of just supposing
   Is the sweetest game I know...
   And if the things we dream about
   Don't happen to be so,
   That's just an unimportant technicality.
   Jerome Kern and Oscar Hammerstein, *Showboat*





The Vote-Cost of Scandal

2003-06-03 Thread Bryan Caplan
The Lewinsky scandal, according to most public opinion scholars, 
actually increased Clinton's popularity.  But even after Lewinsky, 
politicians have continued to resign or drop out of races in the face of 
similar scandals, and of course they did it for a long time before. 
What is going on?

1.  The usual rules do not apply to Clinton - the public will punish 
other politicians for comparable actions.
2.  Politicians systematically overestimate voters' reactions.
3.  Public opinion has changed.  Pre-Clinton, scandals mattered.  Now 
they don't.  Politicians are still learning about this regime change.
--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  The game of just supposing
   Is the sweetest game I know...
   And if the things we dream about
   Don't happen to be so,
   That's just an unimportant technicality.
   Jerome Kern and Oscar Hammerstein, *Showboat*




Re: The Vote-Cost of Scandal

2003-06-03 Thread Bryan Caplan
Steve Miller wrote:

 Maybe what angers voters is not the scandal, but hypocrisy.  Someone who is
 perceived as liberal on social issues is less of a hypocrite for having an
 affair than is someone who runs on a family values platform.

Gary Hart was a liberal in good standing, but he is the textbook case of
a politician ruined by a scandal.  Clinton is probably a bigger
hypocrite given his effort to co-opt the family values stuff.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
 
 But being alone he had begun to conceive thoughts of
  his own unlike those of his brethren.

  --J.R.R. Tolkien, *The Silmarillion*



Re: Personal vs. Political Culture: The Other Box

2003-05-31 Thread Bryan Caplan
fabio guillermo rojas wrote:
 Now Pete Boettke asked me if there are any peoples with the
 opposite combination: bad personal culture, good political culture.
 The best Prof. Bryan Caplan


 Note that insistence on free markets, limited gov't, democracy, etc.
 is a pretty recent phenomena - so one should find few examples of
 *any* group that has good political culture. Fabio
Absolutely speaking, sure.  But e.g. the U.S. and U.K. have been 
*relatively* more sympathetic to these ideas for centuries.



--
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]
  It is a talent of the weak to persuade themselves that they
   suffer for something when they suffer from something; that
   they are showing the way when they are running away; that
   they see the light when they feel the heat; that they are
   chosen when they are shunned.
 Eric Hoffer, *The Passionate State of Mind*



Re: Cost benefit analysis

2003-02-13 Thread Bryan Caplan
If I were teaching intermediate micro, I think I would begin by asking
students why they consume less of x when its price rises.  Presumably
most would say that they would switch to other products.  Then I would
ask them to consider a world with only ONE good.  Obviously with only
one good, price does not work via substitution.  Why then does
consumption decline in the latter case?  Because higher prices make you
poorer, making you tend to buy less overall.  Then I'd explain that as
the number of goods rises, the latter income effect tends to matter less
and less.

I probably wouldn't go through the whole textbook discussion (unless the
students were largely going to grad school), but I think the point is
worth half a class.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: trend grading policies

2003-01-30 Thread Bryan Caplan
[EMAIL PROTECTED] wrote:

I hope the particular economics course, industrial organization, is
 of the second type. If so, trend grading would be worthwhile. By trend
 grading I mean weighting assignments late in the semester heavier
 or bumping up grades if students are improving. Furthermore, my
 unsupported assertion is that all classes that are both worthwhile and
 interesting are of the second type.
 
 Patrick McCann
 
 p.s. this is less of an attempt to change the policy than to defend the
 policies of other professors who were criticized so harshly.

This is a good point.  But it can be handled by giving the midterm less
weight to begin with.  You have an argument for giving a midterm a lower
weight, but not a variable weight.  And I do give the midterm lower
weight.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Bubblemania

2003-01-24 Thread Bryan Caplan
William Dickens wrote:
 
 I have to agree with Alex Bryan. Here is a graph of the SP 500
 
 http://finance.yahoo.com/q?s=^SPXd=ct=5yl=onz=bq=l
 
 About a third of the drop occurred before 9/11, a third occurred immediately after 
9/11, and the other 2/3rds occurred in the first half of last year.  Why 4/3rds? 
Because most of the drop after 9/11 was recovered over the next few months. But this 
is silly anyway.

That's a good point about the post-9/11 recovery.  But I still suspect
the indirect consequences of 9/11 played a role.  From the graph, it
looks like the post 9/11 recovery coincided with the surprisingly easy
victory over the Taliban.  And it's plausible that part of the
subsequent decline stems from the growing realization that further
military action would continue after the Taliban's defeat.

 1) I challenge anyone to explain what 9/11 told us that we didn't already know that 
would explain something on the order of a 40% drop in the rational valuation of the 
US capital stock!
 
 2) For that matter, what combination of events could have provided information that 
would lead one to conclude that the PV of future income streams would be 40% lower in 
July of last year than it was thought to be in July of 2000? It was a bubble. 
Financial markets aren't fully efficient. Live with it. 

This is a straw man.  I was arguing that the size of the bubble is being
over-stated, and the importance of standard unforeseeable random shocks
understated.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: News Coverage and bad economics

2003-01-10 Thread Bryan Caplan
Please take these discussions of personalities off-list.  Thanks!
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: EU

2002-11-13 Thread Bryan Caplan
William Sjostrom wrote:
 
 I don't know the evidence on the point, but you are proposing the expected
 utility model with risk neutrality.  

No, that's not it.  I'm not saying people maximize expected earnings. 
The functional form I'm proposing is the much weaker one that they
prefer higher expected earnings to lower expected earnings.

The variance of gamble 1 is p(1-p)X^2,
 which means that the variance is low for low and high values of p, and high
 for middle values of p.  So if p is low, as p is increased, both the mean
 and variance rise.  From my brief foray into the finance literature (I sat
 on a Ph.D. committee in finance a few years back), my recollection is that
 risk neutrality works badly.
 Bill Sjostrom
 
 +
 William Sjostrom
 Senior Lecturer
 Department of Economics
 National University of Ireland, Cork
 Cork, Ireland
 
 +353-21-490-2091 (work)
 +353-21-427-3920 (fax)
 +353-21-463-4056 (home)
 [EMAIL PROTECTED]
 [EMAIL PROTECTED]
 www.ucc.ie/~sjostrom/
 
 - Original Message -
 From: Bryan Caplan [EMAIL PROTECTED]
 To: [EMAIL PROTECTED]; [EMAIL PROTECTED]
 Sent: Monday, November 11, 2002 8:35 PM
 Subject: EU
 
  It's well-known that expected utility theory has a lot of problems.  A
  number of alternative theories of choice under uncertainty haven't
  worked out too well either.
 
  Has anyone ever proposed a bare-bones theory of choice under
  uncertainty, basically saying only that all else equal, you become more
  likely to choose an option as it's expected value increases (without
  saying how much)?  Suppose, for example, that you get to choose between
  two gambles:
 
  Gamble 1: $X with probability p.
 
  Gamble 2: $Y with probability q.
 
  Indicate preference with  or , and probability as P(.).
 
  My bare bones theory says:
 
  1. P(12) increases in p.
  2. P(12) decreases in q.
  3. P(12) increases in X.
  4. P(12) decreases in Y.
 
  and nothing more specific.
 
  Is this inconsistent with any experimental evidence?
  --
  Prof. Bryan Caplan
 Department of Economics  George Mason University
  http://www.bcaplan.com  [EMAIL PROTECTED]
 
He wrote a letter, but did not post it because he felt that no one
 would have understood what he wanted to say, and besides it was not
 necessary that anyone but himself should understand it.
 Leo Tolstoy, *The Cossacks*
 
 
 

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Self-assesment vs. Rationality

2002-11-11 Thread Bryan Caplan
Fred Foldvary wrote:

 It seems to me that the concept of rationality makes sense when it is
 applied to human action, but it is not meaningful when applied to beliefs.
 Action is rational or not, based on the actor's knowledge.

This whole idea is forty years out of date.  Economists have been
theorizing about and testing the rationality of beliefs for years.

 When people have false beliefs, why is this not just bad data? 

It's possible.  But that's an empirical claim: All false beliefs can be
explained by bad data or lack of data.  And this claim is often
falsified.  One person can have bad data indicating that they are a
better driver than average, even though they aren't.  But how could 80%
of people have bad data that all points in this direction?

 Clearly,
 emotions play a major role both in our beliefs and in our ends.  Vanity may
 make one think one is smarter, more beautiful, and more humane than one
 really is.  Again, why not just label these false?  

Because vanity isn't data.  In fact, if you know you are vain then
rationally speaking you should adjust your beliefs in a more self-
critical direction to compensate.

 If false beliefs are
 irrational, then almost everything we do is irrational, and there is no
 economics.  

No one says false beliefs are always irrational.  The claim is that some
false beliefs are irrational - essentially the beliefs that are false
not from lack of data, but because the available data has been
improperly processed.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Self-assesment vs. Rationality

2002-11-11 Thread Bryan Caplan
[EMAIL PROTECTED] wrote:
 
 In a message dated 11/10/02 8:41:23 PM, [EMAIL PROTECTED] writes:
 
  There is a difference between ignorance and irrationality - that is the
 central point of this literature
 really.  
 
 Yes.  Somewhere along the line someone--either the most ardents adherents or
 the most disingenuous opponents--has defined rational expectations as
 meaning that people are perfect prognosticators, omnicient not only about
 past conditions, but about  future conditons as well.  Under the definition
 nobody has rational expectations.

This is pure caricature.  RE does not say that people are perfect or
omniscient.  It just says that they are right on average, that their
over-estimates balance out their under-estimates.

RE is often empirically false, but not in the trivial way you're saying.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Self-assessment vs. Rationality

2002-11-11 Thread Bryan Caplan
William Dickens wrote:

 Rational expectations does require
 that ones forecast have minimum variance and not just that it is
 unbiased. 

In defense of Eric, he didn't say anything false.  He said RE is
consistent with high variance.  It is, as long as that high variance is
also the minimum variance you can get with available info.


 Ummm...not quite.  Rational expectations just means that a person's
 expectations are unbiased.  There can be high variance, but the
 variance
 is around a true mean.
 
 Check Sargent's short piece on rational expectations for a primer:
 http://www.econlib.org/library/Enc/RationalExpectations.html
 
 Eric Crampton

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




EU

2002-11-11 Thread Bryan Caplan
It's well-known that expected utility theory has a lot of problems.  A
number of alternative theories of choice under uncertainty haven't
worked out too well either.

Has anyone ever proposed a bare-bones theory of choice under
uncertainty, basically saying only that all else equal, you become more
likely to choose an option as it's expected value increases (without
saying how much)?  Suppose, for example, that you get to choose between
two gambles:

Gamble 1: $X with probability p.

Gamble 2: $Y with probability q.

Indicate preference with  or , and probability as P(.).

My bare bones theory says:

1. P(12) increases in p.
2. P(12) decreases in q.
3. P(12) increases in X.
4. P(12) decreases in Y.

and nothing more specific. 

Is this inconsistent with any experimental evidence?
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Self-assesment vs. Rationality

2002-11-11 Thread Bryan Caplan
Fred Foldvary wrote:

 They have been theorizing and testing about cognition, but it is not clear
 why it is labelled rationality.

Their usage is consistent with any dictionary.

  ...  In fact, if you know you are vain then
  rationally speaking you should adjust your beliefs in a more self-
  critical direction to compensate.
 
 But many persons do not realize the extent of their vanity, and thus they
 suffer from bad data.  

And what about the people who DO realize the extent of their vanity, but
don't adjust their beliefs?  Are they irrational or not?

  ... essentially the beliefs that are false
  not from lack of data, but because the available data has been
  improperly processed.
 
 What does improperly processed mean?

Failing to follow Bayesian rules of inference, for starters.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Return to Education and IV

2002-11-04 Thread Bryan Caplan
Robin Hanson wrote:

 Now maybe you accept this, and think yourself part of, or advisor to, an
 elite empowered to make ordinary people do things that are good for them,
 whether they like it or not.  

I think that what Bill might say is that even though people under-invest
in their own education, they are in fact quite willing to vote for
education spending.  He might even suggest that qua voters, people
recognize and adjust for their failings as consumers.  Akerlof and
Dickens make a similar argument about retirement savings in *An
Economist's Book of Tales*.

 But here's the
 crucial question:  how sure are you that you and your fellow advisors, and
 the elites you advise, are substantially less irrational in this process of
 making ordinary people do things that are good for them?  Can't elite
 advisors be irrational too?   

I think Bill would say that he's pretty sure.  He's seen the data,
crunched the numbers, read the literature, etc.  If you feel comfortable
failing people on their exams, why shouldn't you feel comfortable giving
them a failing grade on their decision-making outside of the classroom?

But perhaps I'm making Bill sound a little too much like me!
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Return to Education and IV

2002-10-29 Thread Bryan Caplan
I have a lot to say in response to Bill on this topic.  In fact, I was
too fascinated with the topic to sleep well last night.  I'm going to
begin by answering a few specific points, then give one longer post.

William Dickens wrote:
 
 If the decision is literally a no-brainer, then failing to consider
 alternatives is rational.
 
 ??!!! Not if they make the wrong choice! OK, I suppose you are going to argue 
that all the people who didn't have a clue what the return to continuing their 
education was are the ones for whom it was a no brainer and the ones who were about 
to drop out all answered my questions correctly. I can't prove that wrong but do you 
really believe that was what was going on?

I doubt that the marginal students were more accurate on *average*
returns.  But I strongly suspect that the marginal students would have
been more pessimistic about *their own* returns.  The students who drop
out are precisely the ones who say and think I don't know if I'm really
getting much out of college.  That thought rarely occurs to stronger
students.

 The only evidence I have on this (my survey of Berkeley undergrads taking 
intermediate macro) suggests that they over estimate the percentage return as well. 
However, I don't think people act on this information. It is my strong impression 
that people tremendously overweight their current feelings of happiness or 
unhappiness about being in school so that on net people don't get as much schooling 
as they should if they were truly utility maximizes.

So what is the behavioral deviation you're talking about?  It doesn't
seem to be a judgmental bias problem - that cuts in the opposite
direction.  Is it a self-control problem?  I think you're conflating
behavioral anomalies with high discount rates and/or high disutility of
school.  The latter two are perfectly consistent with utility
maximization.

 - - Bill
 
 William T. Dickens
 The Brookings Institution
 1775 Massachusetts Avenue, NW
 Washington, DC 20036
 Phone: (202) 797-6113
 FAX: (202) 797-6181
 E-MAIL: [EMAIL PROTECTED]
 AOL IM: wtdickens

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Return to Education and IV

2002-10-29 Thread Bryan Caplan
William Dickens wrote:
 
 I see Bill already answered my question.
 
 Not the way you think. See my response to yours.
 
 I should also add that the social costs of tuition are much higher than
 the private costs for public universities, making it even more likely
 that the social return is quite low.
 
 I happen to believe the public good argument for education, but even if I didn't, 
you know as well as I do that you can't attribute the entire cost of the university 
to its educational product. A big chunk is paying for research. Take that out and I 
doubt the costs would be so high. After all, no reason why a college education would 
have to cost that much more than HS unless you want all Profs to be researchers.  - - 
1.  Budget/students is an overestimate.  Much less clear that
unsubsidized tuition is an overestimate.  So what cost are you willing
to assign to teaching?  In-state tuition?  Out of state tuition?  If
students would have lived at home otherwise, you should also count room
and board, minus parental grocery savings.

2.  You can think of a lot of research as consumption for faculty.  If
you have to give them that consumption to make them teach, then you
should count the costs of research when you calculate the return to
education.  There is a bit of a granularity problem (one more student
may not require any more research), but if you encourage 1% more kids to
go to college, you're going to have to pay for roughly 1% more research.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Return to Education and IV

2002-10-28 Thread Bryan Caplan
A belated reply to Bill.

William Dickens wrote:

 Note its the _parents_ in your story who are groaning, not the kids.
 OK, I'll admit that the no idea was based on what I know it was like
 when I was going to college in the 70s. However, it is still my
 impression after 13 years of teaching college that the vast majority of
 college students not only have never done a present value computation
 about their decision to go to school, but have never seriously
 considered the alternative of not going to school - - what they could
 do, how much they could make, what their lives would be like etc.

If the decision is literally a no-brainer, then failing to consider
alternatives is rational.  Marginal students frequently weigh continuing
vs. dropping out (just like they weigh attending vs. not attending!).

 Are you thinking only of economics majors? Business and economics
 majors (some) think this way. Do you think the average lit major is?
 Psych? Pol. Sci?

Yes.  In fact, right after a lit major tells you his major, he
frequently comments on his low expected earnings.  I'm a lit major. 
Not much money in that, but I like it.
 
 Standard economic model assumes that most of the costs are forgone
 earnings. Mom and Dad paying for school should be small potatoes (since
 you can always go to a state school at low cost). My impression is that
 this factor ways in people's decisions way out of proportion to its
 economic value.

Maybe back in the '70's.  Now in-state tuition is significant.  At Mason
it's $4400.  If you add in housing (as you should if you would have
lived at home otherwise), it's up to about $10,000.  About the annual
pay of a minimum wage job before taxes.

 But more
 to the point, I doubt that parents are making any sort of intertemporal
 comparison in paying for kids school. How many do you think have thought
 Well, if I invest the money I'm paying for the kids school in corporate
 AAAs at 6.5% his income from my bequest will be $XX, in 20XX whereas
 if I pay for his school it will be... No way. What they think is
 better to teach a man to fish than to buy him fish... or something
 like that and they fork over the bucks to  U. Not the economic model
 at all.  

I grant that few open Excel and punch in the numbers.  You could improve
their decision-making by teaching them to do so.  But if college grads
earned only 10% more than non-college grads, parents would be a lot less
quick to parrot old cliches about fishing.

Incidentally, most of your arguments (here and later in this discussion)
suggest that people over-estimate the return to education.  Is that your
real view?

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Return to Education and IV

2002-10-28 Thread Bryan Caplan
Eric Crampton wrote:
 
 On Fri, 25 Oct 2002, William Dickens wrote:
 
  continue schooling largely under weights the future benefits. Nearly
  everyone should get more schooling than they do. This is only one of

I see Bill already answered my question.  Blunt reaction: Come on!  If
you really think most students are failing to considering foregone
earnings, and these are the big cost of school, then the problem goes in
the other direction.

I should also add that the social costs of tuition are much higher than
the private costs for public universities, making it even more likely
that the social return is quite low.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Return to Education and IV

2002-10-18 Thread Bryan Caplan
William Dickens wrote:
 
 But controling for IQ isn't warranted if years of schooling is
 endogenous. Kevin Lang has written extensively about these issues. - -

Could you enlighten us?

 Bill
 
 William T. Dickens
 The Brookings Institution
 1775 Massachusetts Avenue, NW
 Washington, DC 20036
 Phone: (202) 797-6113
 FAX: (202) 797-6181
 E-MAIL: [EMAIL PROTECTED]
 AOL IM: wtdickens
  [EMAIL PROTECTED] 10/17/02 19:46 PM 
 Alex T Tabarrok wrote:
 
  Bryan's question, however, can be rephrased as not how do you explain
  the data (low ability bias and high discount rate bias) but why is it
  that ability bias appears low?
 
 Ability bias isn't really low.  Using the NLSY data, for example,
 controlling for AFQT scores reduces the naive estimate of the return to
 education from 12.6% to 7.5%.  Ability bias *after* controlling for
 intelligence might be low, though.
 
  In other words aren't there good grounds
  for thinking that ability bias is large?  And if so how is it that
 this
  doesn't show up in the data?
 
  Alex
 
  --
  Alexander Tabarrok
  Department of Economics, MSN 1D3
  George Mason University
  Fairfax, VA, 22030
  Tel. 703-993-2314
 
  and
 
  Director of Research
  The Independent Institute
  100 Swan Way
  Oakland, CA, 94621
  Tel. 510-632-1366
 
 --
 Prof. Bryan Caplan
Department of Economics  George Mason University
 http://www.bcaplan.com  [EMAIL PROTECTED]
 
   He wrote a letter, but did not post it because he felt that no one
would have understood what he wanted to say, and besides it was not
necessary that anyone but himself should understand it.
Leo Tolstoy, *The Cossacks*

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Return to Education and IV

2002-10-17 Thread Bryan Caplan
William Dickens wrote:
 
 As I remember the standard neo-classical answer to this is that the main
 source of endogenaity isn't ability bias but discount rate bias - - that
 people with below average discount rates get more schooling.  

I hadn't thought of that (or heard it).  Is there actually any evidence
on discount rates and educational attainment?  We both know there is a
lot of evidence on ability (IQ) and educational attainment.

High estimated returns to education are usually claimed to be evidence
of credit market imperfections.  It seems that the welfare implications
are quite different if the real problem is high discount rates.

 So if the
 question you want to know is the effect of attending high school vs.
 only going through the 11th grade for the average person the return
 appears lower if you don't take into account that the average discount
 rate of people who drop out at 11 is much higher than the average
 discount rate of those who finish high school.
 - - Bill Dickens
 
 William T. Dickens
 The Brookings Institution
 1775 Massachusetts Avenue, NW
 Washington, DC 20036
 Phone: (202) 797-6113
 FAX: (202) 797-6181
 E-MAIL: [EMAIL PROTECTED]
 AOL IM: wtdickens
 
  [EMAIL PROTECTED] 10/16/02 02:13PM 
 I've occasionally heard that instrumental variables (IV) estimators of
 the return to education yield markedly higher estimates than OLS.  Is
 this true?  And how can this make any intuitive sense?  If IV is
 correcting for endogeneity, you would expect things to go the other
 way.
 Why?  With a medical treatment, you would expect endogeneity to
 understate the benefit, because sicker people are more likely to
 voluntarily seek treatment.  But with education, you would expect
 endogeneity to overstate the benefit, because able people are more
 likely to voluntarily enroll.
 --
 Prof. Bryan Caplan
Department of Economics  George Mason University
 http://www.bcaplan.com  [EMAIL PROTECTED]
 
   He wrote a letter, but did not post it because he felt that no one
would have understood what he wanted to say, and besides it was not
 
necessary that anyone but himself should understand it.
Leo Tolstoy, *The Cossacks*

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Return to Education and IV

2002-10-17 Thread Bryan Caplan
Rodney F Weiher wrote:
 
 Just a note on discount rates.  The late sociologist Ed Banfield had an entire
 theory of poverty, education, crime, and in general, class distinction based
 not on income but on discount rates, e.g. higher rates, less education, more
 crime, lower-class behavior.

Yes, it is a great book that I cite in my recent working paper with
Scott Beaulier.

 It was very intuitive in terms of a lot of observed behavior but I don't
 believe he explained well how how you empirically measure individual discount
 rates
 
 Seems the name of the book was The Unheavenly City. He was influential early
 on in the Nixon administration.
 
 Rodney Weiher
 
 Bryan Caplan wrote:
 
  William Dickens wrote:
  
   As I remember the standard neo-classical answer to this is that the main
   source of endogenaity isn't ability bias but discount rate bias - - that
   people with below average discount rates get more schooling.
 
  I hadn't thought of that (or heard it).  Is there actually any evidence
  on discount rates and educational attainment?  We both know there is a
  lot of evidence on ability (IQ) and educational attainment.
 
  High estimated returns to education are usually claimed to be evidence
  of credit market imperfections.  It seems that the welfare implications
  are quite different if the real problem is high discount rates.
 
   So if the
   question you want to know is the effect of attending high school vs.
   only going through the 11th grade for the average person the return
   appears lower if you don't take into account that the average discount
   rate of people who drop out at 11 is much higher than the average
   discount rate of those who finish high school.
   - - Bill Dickens
  
   William T. Dickens
   The Brookings Institution
   1775 Massachusetts Avenue, NW
   Washington, DC 20036
   Phone: (202) 797-6113
   FAX: (202) 797-6181
   E-MAIL: [EMAIL PROTECTED]
   AOL IM: wtdickens
  
[EMAIL PROTECTED] 10/16/02 02:13PM 
   I've occasionally heard that instrumental variables (IV) estimators of
   the return to education yield markedly higher estimates than OLS.  Is
   this true?  And how can this make any intuitive sense?  If IV is
   correcting for endogeneity, you would expect things to go the other
   way.
   Why?  With a medical treatment, you would expect endogeneity to
   understate the benefit, because sicker people are more likely to
   voluntarily seek treatment.  But with education, you would expect
   endogeneity to overstate the benefit, because able people are more
   likely to voluntarily enroll.
   --
   Prof. Bryan Caplan
  Department of Economics  George Mason University
   http://www.bcaplan.com  [EMAIL PROTECTED]
  
 He wrote a letter, but did not post it because he felt that no one
  would have understood what he wanted to say, and besides it was not
  
  necessary that anyone but himself should understand it.
  Leo Tolstoy, *The Cossacks*
 
  --
  Prof. Bryan Caplan
 Department of Economics  George Mason University
  http://www.bcaplan.com  [EMAIL PROTECTED]
 
He wrote a letter, but did not post it because he felt that no one
 would have understood what he wanted to say, and besides it was not
 necessary that anyone but himself should understand it.
 Leo Tolstoy, *The Cossacks*

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Return to Education and IV

2002-10-17 Thread Bryan Caplan
Alex T Tabarrok wrote:

 Bryan's question, however, can be rephrased as not how do you explain
 the data (low ability bias and high discount rate bias) but why is it
 that ability bias appears low?  

Ability bias isn't really low.  Using the NLSY data, for example,
controlling for AFQT scores reduces the naive estimate of the return to
education from 12.6% to 7.5%.  Ability bias *after* controlling for
intelligence might be low, though.

 In other words aren't there good grounds
 for thinking that ability bias is large?  And if so how is it that this
 doesn't show up in the data?
 
 Alex
 
 --
 Alexander Tabarrok
 Department of Economics, MSN 1D3
 George Mason University
 Fairfax, VA, 22030
 Tel. 703-993-2314
 
 and
 
 Director of Research
 The Independent Institute
 100 Swan Way
 Oakland, CA, 94621
 Tel. 510-632-1366

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Unions and Bankruptcy

2002-10-11 Thread Bryan Caplan

I didn't know the answer to this.  Does anyone else?
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*
---BeginMessage---

Hello Bryan,
  Has anyone compared whether or not highly unionized firms are more
likely to go bankrupt?
Jim




---End Message---


Re: Nobels

2002-10-10 Thread Bryan Caplan

Princeton econ really has 0.  Kahneman is in the psych department, and
Nash is a senior research mathematician.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Webpage Update

2002-10-03 Thread Bryan Caplan

Shameless self-promotion: I've updated my Academic Economics webpage to
include my new paper with Scott Beaulier, Behavioral Economics and
Perverse Effects of the Welfare State.  Check it out at:

http://www.gmu.edu/departments/economics/bcaplan/econ.html
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




shameless self-promotion

2002-09-20 Thread Bryan Caplan

I'm very pleased to tell you that there is a nice comment on my Economic
Journal piece, Systematically Biased Beliefs, in the July issue of the
Royal Economic Society Newsletter.  Though they get my name wrong
(George Caplan?!) I still can't complain.  

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Why does tenure exist?

2002-09-18 Thread Bryan Caplan

William Dickens wrote:
 
 Obviously the supply side of the academic labor market values this and is willing to 
forgo some money compensation to get it. Evidently the cost of producing this amenity 
for academic employers is generally less than the value to the employees so there are 
very few schools that don't promise tenure. You might ask why people value tenure so 
much or why it is cheap for schools to provide it, but again I don't think that is 
too surprising. Academics value their freedom and tenure guarantees a reasonable 
minimum income if you decide to think unconventional thoughts for a while or pursue a 
high risk long term project. 

I have a lot of doubts about this functionalist account of tenure.  We
generally see that civil servants have a lot of job security, and their
jobs don't have a lot of creativity associated with them.  Does the
near-impossibility of firing high school teachers have anything to do
with their creative freedom?

While the factors you cite may have some marginal importance, I think
the main reason is that people who run non-profits usually want to avoid
rocking the boat rather than excel.  If they tried to improve faculty
incentives, they would suffer a lot of headaches without getting a big
raise.  Government subsidies and private charity give universities the
cushion they need to avoid being put out of competition by
performance-oriented for-profits.


-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




[Fwd: FW: SLOGAN SHORTAGE SHOCKER]

2002-09-09 Thread Bryan Caplan

This is too funny not to share.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*
---BeginMessage---
Title: BOROWITZ report.com








Bryan:



I liked this column. You might want to post it on your humor page.




Paul





Paul H. Rubin
Department of Economics and School of Law
 Emory University
Atlanta,
 GA 30322-2240
Voice: 404-727-6365

Fax 630-604-9609
Email: [EMAIL PROTECTED]
http://www.emory.edu/COLLEGE/ECON/Rubi.htm


Darwinian Politics: The Evolutionary Origin of Freedom,
Rutgers Series in Human Evolution, Rutgers University Press, 2002
http://www.amazon.com/exec/obidos/ASIN/0813530962/qid=1023721671/sr=12-11/002-4193036-2531267



-Original Message-
From: Borowitzreport.com
[mailto:[EMAIL PROTECTED]] 
Sent: Thursday, August 15, 2002
8:54 PM
To: [EMAIL PROTECTED]
Subject: SLOGAN SHORTAGE SHOCKER






 
  
  
  
   

August 16, 2002

   
  
  
  
 
 
  
  
   









   
   





 
  
  
   

Breaking News

   
  
  
  
 
 
  
  
   


NATION FACING SHORTAGE OF
ECONOMIC SLOGANS

Americas Slogan
Reserves Nearly Depleted, White House Warns

Americas supply of
meaningless economic slogans, such as Corporate
Responsibility and Small Investors Retirement
Security, has been drained almost dry in the past few weeks as
President Bush made a series of banal speeches in the hopes of talking
up the flagging economy.

That is the message from senior
White House aides, who say that Americas slogan reserves were
taxed to the breaking point this week at the Presidents Economic
Forum at Baylor University.

People seem to think that
meaningless economic slogans are a renewable resource, one Bush
aide said. That is simply not the case.

As the stock markets went into a
free-fall this summer, President Bush was forced to make a series of
meaningless cheerleading speeches in front of slogan-bedecked
backgrounds, a decision that may have triggered the nations
current slogan shortage.

Senior aides have been scrambling
to develop new slogans, but much of their handiwork is instantly
consigned to the dustbin, such as the recently rejected idea of
President Bush delivering a speech in front of the slogan, Will
Work For Food.

We had high hopes for that
one, but the focus groups hated it, one aide said.

For his part, President Bush
acknowledged the slogan shortage in a speech last night in Austin,
where he spoke in front of a background adorned with the words,
Seeking New Sources of Slogans.

Coming up with a plan for
an economic recovery will be hard, Mr. Bush told his audience.
Coming up with a name for that plan will be even harder.
The Borowitz Report
Waste Someone's Time: Forward to
a Friend.
To
unsubscribe to this e-mail list click
here

   
  
  
  
 






   
   









   
  
  
  
 











---End Message---


Re: Median Voter and Sampling

2002-08-28 Thread Bryan Caplan

fabio guillermo rojas wrote:

 I think that applications of MVT are very, very sloppy. Four
 criticisms:
 
 1. You seem to assume that policy responds quite well to public
 opinion. You assume that if opinion shifts, policy will quickly follow.
 I believe that policy is very sticky with respect to public
 opinion. To make it econo-talk, I think policy is not very
 elastic with respect to changes in the median voter.

Elasticity and stickiness are different concepts.  But in any case,
there is little evidence that policy preferences shift rapidly.  When
they do markedly shift, we usually see that politicians change a lot by
the next election.  Very often the existing politician preemptively
changes his position to avoid giving his opponents' the opportunity to
attack him for being out of touch.

 2. Institutions are designed to prevent policy from being overly
 sensitive to public opinion. Ie, we don't have elections every
 day. We create rules that allow policy makers to resist
 every whim of opinion. Examples: rules for changing the constitution,
 judicial dependence on precedents, etc. In a sense, institutions
 play the role that contracts do in the labor market - set
 practices over some time period (ie, you've bought labor
 at price X and the employee can't leave just because the price
 is now more than X).

Sure, there is a little of this.  But again, I doubt this matters much. 
The Supreme Court held off New Deal legislation a little bit for a
couple of years, but after 4 years it caved in completely.

In theory, I don't deny that this could matter.  In practice, though, I
see little evidence.  Again, if you can't name the unpopular policies,
what reason do we have to think that institutional constraints are
binding?  They mostly constrain us from doing stuff that the median
voter doesn't want anyway.

 3. When people (ahem, Mr. B.C.) say look - puzzle - people want
 X but we get Y - the poll that measures opinion is probably
 a random sample of adults, or maybe voters. But as I've argued
 before, this might not be the relevant group. Maybe it's
 party activists, or party-rank and file. Policies may have
 select audiences and there is no puzzle until you show that
 the relevant audience does in fact strongly oppose a policy.

Curiouser and curiouser.  Re-read this point.  Out of context, it sounds
like a *defense* of the MVT!  You seem to be saying There is no puzzle
for the MVT if the electorate is not the relevant group politicians must
appeal to.  Fine.  I am saying that There is no puzzle if existing
politician match the median preference.  Also true.  In other words,
you seem to be giving the MVT an extra line of defense.

Since I don't think that's your intent, I need clarification.  

 4. Cognitive limitations: I'm no expert, but my hunch is that
 many people are only willing to get worked up over a small
 # of issues - taxes, abortion, immigration, defense... and
 the dedicated might add their favorites like gun control
 or affirmative action. Therefore, it's no risk to screw
 the voter on an issue as long as you don't do it on certain
 big issues. Therefore it's easy to get a list of dozens
 of issues and find a descrepancy - what's so puzzling about
 that?

My point, again, is that there are few such discrepancies!  It's NOT
easy to make a list of issues and find deviations.

I will agree that it is safer for politicians to deviate from the MVT on
small issues that few people care about.  But this does not mean that
big deviations on small issues are frequent.  So far, there is still a
scarcity of examples.  It is also worth mentioning that under $1 B is
spent on campaign contributions, suggesting that special interests
haven't been able to buy much of value.

Of course, if the median voter is *indifferent* on an issue, all
observed policies satisfy the MVT.

 So my beef isn't the MVT per se, but the knee jerk use of it.

Knee jerk use is appropriate in this case.  The theoretical objections
are weak, and the empirical evidence in favor is strong.

 Fabio

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: how to eliminate unemployement

2002-08-27 Thread Bryan Caplan

Kevin Carson wrote:
 
 For an occupant, the incentive to build on one's own land would be the same
 as always.  Since there would be no restriction on the right of the actual
 occupier of a piece of land to charge a price before quitting it

Does quitting have to mean selling full title?  It sounds like it
rules out leaving but renting to the next occupant.  The upshot is that
only people who can afford to buy property outright in full can use it.
Capital markets can partly solve that problem, but a big problem
remains. Or do I misunderstand your remarks about slum occupants taking
over their buildings, etc?

, it would
 be possible to recoup the value of  improvements.  The only difference would
 be, that one could not fence off land he was not occupying or using himself,
 and charge others for access to it.
 
 From: Bryan Caplan [EMAIL PROTECTED]
 What about the effect of this on the incentive to develop and build in
 the first place?  Not to mention the incentive to relocate?
 
 A nice way to eliminate unearned benefits is to eliminate the
 existence of benefits.
 
 --
  Prof. Bryan Caplan
 Department of Economics  George Mason University
  http://www.bcaplan.com  [EMAIL PROTECTED]
 
He wrote a letter, but did not post it because he felt that no one
 would have understood what he wanted to say, and besides it was not
 necessary that anyone but himself should understand it.
 Leo Tolstoy, *The Cossacks*
 
 _
 Send and receive Hotmail on your mobile device: http://mobile.msn.com

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Median Voter vs. The Sub-optimal Equilibria

2002-08-26 Thread Bryan Caplan

fabio guillermo rojas wrote:
 
  screwed-up institution.  The outcome of democracy depends on the
  overall rationality of public opinion, but whatever outcome you get can
  be equally enjoyed by the rational and irrational alike.
 
 My question isn't about the quality of policy, but the difference
 between what the institution produces and what the median voter
 wants. It's easy for me to believe that voters are irrational,
 but it's harder for me to believe that every policy closely
 matches the MV.

Why?  What are the biggest unpopular policies that persist?

 Let me elaborate my question: isn't is possible than when voters
 put faith in some set of rules for generating policy that the
 outputs may be far from the MV? Fabio

If I understand you, my paper talked about this too.  If voters put an
irrationally high level of trust in their leaders, this might give their
leaders the slack to pursue their own agenda.  The doctrine of papal
infallibility is the extreme case - if your clientele considers you
infallible, you obviously have a lot of slack!  But it is plausible to
see this as a special case of the MV.  The only twist is that the median
voter implicitly says My preference is whatever his preference is,
within some limits.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Median Voter vs. The Sub-optimal Equilibria

2002-08-26 Thread Bryan Caplan

Fred Foldvary wrote:
 
 --- Bryan D Caplan [EMAIL PROTECTED] wrote:
  The outcome of democracy depends on the
  overall rationality of public opinion, but whatever outcome you get can
  be equally enjoyed by the rational and irrational alike.
 
 Does this not depend on the structure and method of voting?
 
 For example, would not the demand revelation method remedy the problem?
 It makes those who change the outcome pay the social cost.

If I remember correctly, demand revelation mechanisms are useless if the
probability of decisiveness is low and voters get some direct utility
from expressive voting or holding irrational beliefs.  

Thus, suppose I get a $10 direct expressive benefit from voting for tons
of useless health care spending, and the probability of decisiveness is
1-in-a-million.  I don't see how any demand revelation mechanism is
going to help.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Interesting Survey

2002-08-26 Thread Bryan Caplan

Another fascinating study from the Kaiser Family Foundation:

http://www.kff.org/content/archive/1383/gender.pdf

I especially like the contrast between answers to question 3 and 4. 
Most people think changing gender roles are worse for most people, but
most people think these changes have benefited themselves!

There is a great section on behavioral changes to sexual harassment
laws.  People admit a surprisingly high degree of elasticity.

Question 19 reveals a large belief gap on the biological basis of gender
differences.  Most men still go with upbringing, but males are much more
willing to go with biology.

Questions 13 and 14 uncover a nice self-interest component in attitudes
to sexual harassment laws.  60% of males don't want stronger laws; 60%
of women do.  This nicely fits my simple theory of self-interest
effects: Namely, that they mostly appear on issues like smoking and
other things that get in your personal space.  It's not the dollar
value of the issue so much as its immediacy and intrusiveness.  
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Inter-racial Adoption

2002-08-26 Thread Bryan Caplan

In a post a while back, I maintained that restrictions on inter-racial
adoption seemed like a pretty clear violation of the Median Voter
theorem.  I found some data at:

http://www.kff.org/content/2001/3143/RacialBiracialToplines.pdf

Question 36 reveals that 79%+ respondents of ALL races say that race
should NOT be a factor.  Blacks are even less against inter-racial
adoption than other races - 84% say race should not be a factor.  (I'm
pretty sure that black leaders would poll very differently, though).

You could say people are too scared/ashamed to say what they really
think, but could that really flip 80% for to 51% against?  Highly
implausible.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: how to eliminate unemployement

2002-08-26 Thread Bryan Caplan

Kevin Carson wrote:

 I think the
 absentee ownership of land seriously exacerbates economic rent in urban
 areas.  If the tenants (not only apartment dwellers, but small business
 people) of slumlords, real estate speculators, etc., ceased to pay rent, and
 if vacant lots could be homesteaded by the first occupier, that would be a
 massive change for the better, even if occupants were able to draw unearned
 benefits from advantage of site.

What about the effect of this on the incentive to develop and build in
the first place?  Not to mention the incentive to relocate?  

A nice way to eliminate unearned benefits is to eliminate the
existence of benefits. 

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Median Voter vs. The Sub-optimal Equilibria

2002-08-26 Thread Bryan Caplan

Fred Foldvary wrote:
 
  Thus, suppose I get a $10 direct expressive benefit from voting for tons
  of useless health care spending, and the probability of decisiveness is
  1-in-a-million.  I don't see how any demand revelation mechanism is
  going to help.
  Prof. Bryan Caplan
 
 If someone states a value of $10 not because he wants the health care
 spending but because he enjoys stating that value, then it seems to me that
 the person is willing to pay that amount even if for that odd reason, and so
 his statement of value would be just as significant as one who actually
 values the health care.

No, the point is that might *really* get a $10 benefit from SAYING you
get a $1 M benefit.  If your probability of decisiveness is under
1-in-100,000, it would pay to do so.  But the social cost of this
behavior could drastically exceed the private benefit.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Median Voter and Sampling

2002-08-26 Thread Bryan Caplan

fabio guillermo rojas wrote:
 
  Any decent treatment of the MV states that it is the median *actual*
  voter who matters, not the median *potential* voter.  It's the Median
  VOTER theorem, not the Median CITIZEN theorem, or the Median SENTIENT
  BEING theorem.
 
 I still think this is true but still misleading. Consider how American
 politicians succeed - first, they must fund raise and win the favor
 of party big wigs; then they must must survive a round of primaries;
 then they must survive the general election. We have at least three
 successive rounds of MVT. This suggests that policies are probably
 tailored to one of these three audiences. Thus, I find that arguments
 of the form survey X says people hate policy Y really miss the point.
 For there to be a real puzzle, you have to show how policy Y is not
 preferred by party activists, primary voters and general voters.
 Ie, you have to understand how institutions partition voters
 into specific groups.

There are several levels of puzzlement.

Puzzle #1: The median voter disapproves of existing policy.
Puzzle #2: The median voter, primary voters, and party activists ALL
disapprove of existing policy.

I don't think there are many good examples of #1.  There are even fewer
good examples of #2.  Can you think of any?

So what are you getting at?  Since there is a series of elections, each
with a different median voter, the MVT doesn't actually predict that the
median general voter gets his way?  Or what?
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Environmental and economic effects of Speed Limits

2002-08-20 Thread Bryan Caplan

Eric Crampton wrote:

 They offer a program encouraging people to fight traffic tickets.  Members
 who challenge their speeding tickets in court and lose are compensated for
 the cost of their ticket by the Association.  While one might expect
 adverse selection to bankrupt the organization (or to make them change
 their policy), it's still going strong

I suppose they don't pay the higher insurance premiums - probably 80-90%
of the full amount you pay for a traffic offense.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Public support for farm subsidies

2002-07-31 Thread Bryan Caplan

[EMAIL PROTECTED] wrote:

Yet I cannot imagine that in any national poll that asked
 simply, do you support higher ag subsidies that Americans, even typically
 subsidy-sympathetical statist-liberals, would in any large percentage say
 yes.

Standard questions ask higher spending, lower spending, or about
the same.  I bet you would get at least 40% saying about the same and
probably 25% saying higher, making the status quo the median voter
outcome.  You can check your public opinion guesses about various kinds
of spending at:

http://www.icpsr.umich.edu/GSS/

Click S for spending.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Public Opinion On Spending

2002-07-31 Thread Bryan Caplan

Those who think the public's wishes are being grossly defied will find
support in this general question (1996):

758. Here are some things the government might do for the economy.
Circle one number for each action to
show whether you are in favor of it or against it. 

C. Cuts in government spending. 

Strongly in favor of1258
In favor of 1290*
Neither in favor nor against393
Against 146
Strongly against54

[Medians indicated with *]

BUT - what if you ask about the three biggest areas of the budget -
defense, pensions, and health?

759. Listed below are various areas of government spending. Please
indicate whether you would like to see
more or less government spending in each area. Remember that if you say
much more, it might require a
tax increase to pay for it. 

E. The military and defense. (1996)

Spend much more 61
Spend more  211
Spend the same as now   585*
Spend less  315
Spend much less 106

F. Retirement benefits.  (1996)

Spend much more 166
Spend more  474*
Spend the same as now   496
Spend less  99
Spend much less 26

B. Health. (1996)

Spend much more 229
Spend more  634*
Spend the same as now   329
Spend less  65
Spend much less 20

In other words, all of the main items in the budget are popular and
indeed if anything the public wants them to be larger. (Presumably views
about defense spending have become much more pro-military lately). 
Support for spending cuts is largely predicated on delusional views of
what the budget looks like to begin with - such as the popular views
that foreign aid and welfare are the two biggest categories.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Public support for farm subsidies

2002-07-31 Thread Bryan Caplan

Bryan Caplan wrote:
 You can check your public opinion guesses about various kinds
 of spending at:
 
 http://www.icpsr.umich.edu/GSS/
 
 Click S for spending.

But first click Subject on the left-hand menu!  Sorry.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Public Opinion On Spending

2002-07-31 Thread Bryan Caplan

fabio guillermo rojas wrote:
 
  In other words, all of the main items in the budget are popular and
  indeed if anything the public wants them to be larger. (Presumably views
 
 Question: could public opinion be endogenous? Ie, maybe there might
 be some status quo bias? Would people before the New Deal or the Great
 Society have approved of specific programs before they existed?
 
 Isn't it folk wisdom that many gov't programs start with promises
 they'll stay small (income tax, social security, medicaid) but once
 they exist, they become popular?

This is highly plausible to me.  I would certainly expect initial
support to be lower, leading to initially smaller programs.  Once the
programs exist, people come to want larger programs, and politicians
respond accordingly.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Silent Takeover

2002-07-29 Thread Bryan Caplan

Kevin Carson wrote:
 
 From: Bryan Caplan [EMAIL PROTECTED]
 
 First, the roads and airports are already here, so there would not be
 much of a decentralizing effect of cutting off subsidies and eminent
 domain now.
 
 But because of the effect of subsidies in distorting the market price link
 between quantity supplied and quantity demanded, the system will always tend
 to be overwhelmed with demand beyond its capacity.  

You're conflating subsidies with lack of congestion pricing.  They're
separate issues.

 If you take away the sugar tit, and build or expand airports and highways
 only on land that is willingly sold, with building and maintenance costs
 obtained entirely from weight-based user fees, the costs of shipping will
 continue to rise dramatically, and the system will continue to become  more
 congested until it reaches the breaking point.  Ongoing maintenance costs
 are an important issue in their own right, BTW--the highway beds weren't
 designed to handle the abuse caused  by 18-wheelers.

I agree that lack of user fees is a problem.  But what lack of user fees
and concentration have to do with each other remains mysterious.

 Second, at least part of the subsidies have been to sustain small
 communities that can't carry their own weight.  That was one of the main
 pro-airline regulation arguments - cross-subsidizing small unviable
 airports with monopoly pricing in big cities.
 
 How small a community are we talking about here?  Economists who specialize
 in issues of economy of scale--Walter Adams and Barry Stein, for
 example--argue that production in large-scale manufacturing industry takes
 place at many times peak economy of scale.  

This is the standard argument of fervent antitrusters, but it does not
strike me as remotely convincing.  There are all sorts of fixed costs -
harder to measure but just as real - that their estimates ignore.  And
intuitively, why would firms keep expanding well beyond their efficient
scale?  If you want to blame legal persecution of smaller firms, you
would have an internally consistent story, though it is hard to see what
this persecution consists in.

 But there's no inherent
 barrier to such a diversified local economy that couldn't be solved by
 intensive education in (the 1970s version of) Karl Hess, Colin Ward, and the
 *Appropriate Technology Sourcebook*.

I'd say they're just crackpots.  

 1.  What Tucker calls the money monopoly in fact leads to a much
 higher rate of monetary growth than free banking would.
 
 But how much *availability*, to what groups, and at what interest cost?

Banking, historically weighed down with draconian pro-smallness
regulations (branch banking laws) seems like a particularly bad example
for you.  

In any case, what do you think banks are doing now?  No bank is big
enough to have much effect on depositor or borrower interest rates. 
They lend to people who can repay at interest rates that adjust for
default, etc.  Why would small banks be any different?  
 
 But at least as important is the ongoing restriction of
 access to land, by enforcing absenee landlord rights over tenants and over
 unoccupied land.  It is by this ongoing restriction of access that occupier
 and user has to pay a monopoly price to the landlord.

How is vacant land different from vacant rental cars?  Are we paying a
monopoly price for rental cars?  Owning stuff you aren't currently using
is ubiquitous, and getting rid of it would be a disaster.

 3.  Tariffs, as I said, are globally deconcentrating.  Without them,
 inefficient national industries would be driven out of business by the
 world's best.
 
 Historically, though, tariffs also first helped to build up concentrated
 industry on a national scale *within* this country.  

Fine.  That's the way a lot of pro-smallness regulation works.  But this
is just the flip side of my original point about globalization: Yes, it
is increasing concentration in *some sense of the word*, and yes, this
increased concentration is a good thing.

 First Britain, then the
 U.S., industrialized under the protection of tariffs, and then adopted free
 trade as an ideology when it was safe to do so.

So would U.S. and U.K. have been worse off if they had never had
tariffs?  Or what?

 During the 1990's, we were able to see the California military high-tech
 sector switch significantly into civilian production.  The latter may
 have been less concentrated in some ways, but it is not a clear call
 either, even in the areas where copyright doesn't matter.
 
 Nevertheless, the high tech industry is the collective beneficiary of past
 state capitalism or military Keynesianism, and its ability to make such
 strategic changes is heavily influenced by a privileged position resulting
 from previous state aid to accumulation.

Hard to see how previous government contracts improve your ability to
make strategy changes.  The reality looked quite different - tough years
for defense firms.

 I've heard this whole story many

[Fwd: availability]

2002-07-24 Thread Bryan Caplan

I've previously given Kuran and Sunstein's Stanford Law Review piece on
available cascades an enthusiastic recommendation.  If you remember
the idea, you'll like the attached joke.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*
---BeginMessage---

Bryan and Timur--On availability cascades, see below (the last 
sentence is the funniest):


 
CNN Program Schedule ยป

 
Wolf Blitzer Reports:
 
Is the number of abducted girls increasing or
 
is it a media phenomenon? We ask America's
 
Most Wanted host John Walsh.


---End Message---


The Public Believes in Mean Reversion

2002-07-23 Thread Bryan Caplan

A kind of funny result from Excite's informal poll: 48% surveyed think
that the Dow will rise over the next month, vs. 32% who think it will
fall.

http://poll.excite.com/poll/results.jsp?cat_id=1
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




take-in/eat out

2002-07-22 Thread Bryan Caplan

Is it just me, or does the discount for take-out dining seem way too
low?  You avoid paying a tip, yes.  But you save the restaurant the cost
of waiters, tables, space, etc.  You might say that space is not really
scarce except at peak times, but still, most dining is down during those
peak times, no?

The same goes for mail order vs. brick-and-mortar stores.  The Internet
crash makes it seem like mail order can't afford to discount 40% below
brick-and-mortar.  But why not?  It sure seems like a website must be
vastly cheaper to run than a physical store, especially when one website
can do the work of thousands of local stores.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: from whence, belief? Better society comparisons

2002-07-22 Thread Bryan Caplan

I think this topic is getting too far afield for armchair.  Take it off
the list, if you please. :-)
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Republican Reversal

2002-07-22 Thread Bryan Caplan

Kevin Carson wrote:
 
 Voter attitudes generally reflect a conventional wisdom that is shaped by
 the corporate media and statist educational system.  A whole series of
 buzzwords comes to mind--ideological hegemony, the sociology of knowledge,
 reproduction of human capital--but they all boil down to the fact that a
 fairly centralized cultural apparatus is effective at creating the kinds of
 public opinion the existing system of power needs to survive.

Once again, why do you focus on the centralized cultural apparatus? 
Would decentralizing things really do much to change people's political
views?  There used to be many more newspapers in the 1930s, for
example.  But then you just had thousands of newspapers arguing for
intervention instead of ten or twenty.  What's the difference?

 Concerning the real issues involved in our politics, and the contending
 groups that are actually represented in the state's decision-making, I'd say
 Thomas Ferguson and William Domhoff were closer to the mark than the
 interest group pluralists are.

I'd say it's closest to the mark to say that most voters genuinely but
stupidly want government to do what it actually does.  The interest
groups just take care of the details.  

 From: Fred Foldvary [EMAIL PROTECTED]
 Reply-To: [EMAIL PROTECTED]
 To: [EMAIL PROTECTED]
 Subject: Re: Republican Reversal
 Date: Tue, 16 Jul 2002 17:31:43 -0700 (PDT)
 
   These are all good comments on the Republican reversal.  Thus, I take it
   that the list agrees that democracy works pretty well in reflecting the
   wishes of the voters.
   Alex
 
 I don't agree.  What about the large literature on voter ignorance and rent
 seeking?  Does the typical American agree, for example, that it is good
 policy to spend billions on farm subsidies, or are they just ignorant and
 apathetic?
 
 Fred Foldvary
 
 =
 [EMAIL PROTECTED]
 
 __
 Do You Yahoo!?
 Yahoo! Autos - Get free new car price quotes
 http://autos.yahoo.com
 
 _
 MSN Photos is the easiest way to share and print your photos:
 http://photos.msn.com/support/worldwide.aspx

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Why do people pick stocks?

2002-07-15 Thread Bryan Caplan

William Dickens wrote:

 Discount brokers can really beat a .2% annual fee with no loads on
 either end?
 
 For sure. Most brokerage houses don't have any fees other than fees for trading. 
Even if you have a round-trip cost of $100 for $10,000 worth of stock (you can do 
much better than this - - $14 is not out of the question) if you hold it for 20 years 
you are way ahead of a .2% annual fee. 

For $10,000 worth of a single stock?  Or $10,000 of any desired bundle
of widely-held stocks?

But again, according to my sources the actual difference in performance between 
holding yourself and holding in the lowest cost mutual fund is a lot more than .2% 
per year.
 - - Bill Dickens

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Index mutual funds

2002-07-15 Thread Bryan Caplan

William Dickens wrote:

  Not that much. Assuming constant variance and correlation the variance fraction 
of the possible reduction you can get is inversely proportional to the number of 
stocks you hold (you get half the reduction relative to holding one stock by holding 
2 90% by holding 10 etc). If correlation isn't constant then you should be able to do 
better than that by choosing less correlated stocks.

Right, but if you want to reduce the SD of your return, you've got to
square those numbers - you need 100 stocks to get the SD down by 90%. 
And isn't that the measure of risk most people vaguely have in mind?

In any case, I'd like to thank Bill for the only useful investment
information I've learned since the JEL piece on international
diversification.

So Bill, if you had to guess, roughly what expected return reduction
would you get from (a) standard stock-picking and active trading, (b)
managed mutual funds, (c) index funds, and (d) buy and hold with
discount brokers?  I would still guess that (c) closes 90% of the
distance between (a) and (d), but I'd like to hear your guesstimate.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: Silent Takeover

2002-07-15 Thread Bryan Caplan

Kevin Carson wrote:

 I would argue that the rise of transnational corporations is a bad thing
 because they are products of state capitalism.  Giant corporations, from the
 late 19th century on, have been statist institutions, and the plutocrats
 associated with them have been rent-seekers.  Do away with state capitalist
 subsidies, legal privilege, and other forms of intervention in the free
 market, and the giant corporations would cease to exist, for the most part.

Frankly, this strikes me as quite unlikely.  There are lots of big
government policies that encourage firms to be smaller than they would
be in a free market.  Double taxation of corporate income is the most
obvious.  Antitrust laws tend to be used against large market leaders. 
A lot of regulations only kick in if you have more than 50 or 100
employees.

And once you are talking multinational corporations, there are other
government policies discouraging cross-national integration. 
Protectionism, most obviously, tends to preserve the firms in each
nation that aren't efficient enough to compete with the world's market
leaders.

You're right that there are some government policies pushing in the
other way (any time regulations impose a fixed cost, firms' minimum
efficient scale mathematically shifts to the right), but on balance I
think you're wrong.  Under laissez-faire, big corporations would be
bigger than they are now.  But to quote Seinfeld, Not that there's
anything wrong with that.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




children and cooperation

2002-07-11 Thread Bryan Caplan

Why are adults so much more cooperative than children?  A contrarian
might dispute this, but I'd say it's pretty obvious.  Kids resort to
violence very quickly, adults very slowly.  Kids go out of their way to
hurt other kids' feelings; adults try to avoid saying anything that
might get back to someone they don't like.  Kids steal stuff from other
kids much more readily than adults would.  Etc.

A few explanations:

1.  Adults have a much higher absolute IQ than kids (i.e., kids' IQs are
age-adjusted, adults' IQs are not), so they are smart enough to
recognize the indirect effects of their behavior.

2.  Adults have lower time preference than kids.

3.  Adults have had more time to learn about indirect consequences.

4.  Adults are just less spiteful.

5.  Adults face harsher punishment.

6.  The child and adult worlds are in two very different coordination
equilibria.  Notice how drastically the 12th-grade high school culture
differs from the 1st-year college culture.

Other ideas?   
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: children and cooperation

2002-07-11 Thread Bryan Caplan

fabio guillermo rojas wrote:
 
 I'm sure that all of what you says applies to some degree (lower
 IQ, less punishment, etc), but it really comes down to
 biological development. Child brains simply aren't developed
 enough to (a) remember past behavior correctly, (b) connect behavior
 to punishment, (c) calculate risks. 

But children in fact do all of the above.  They do them to a lesser and
worse extent, but that is a different matter.  

In any case, all of the deficiencies in children's brains you point out
more or less sound like extensions of their low absolute IQ.

 So when a child has a desire,
 they simply don't have the biological capacity to think about consequences
 very well.

Biological capacity?  Or biological inclination?

 I'd also add that maybe children become socialized well by misbehaving.
 It's a weird idea, but it's a common observation that children are always
 pushing the boundary. For example, children will test the keep
 your hands to yourself rule by moving their finger very close to your
 face and say I'm not touching you! Although it's annoying, this
 behavior will teach kids (via punishment) that people don't
 want to be touched and they need some personal space as well. Without
 the misbehavior, they never really learn the improtance of personal
 space. I'm sure that much of the unspoken rules of personal interaction
 are learned in this fashion (misbehavior-punishment cycles).

So this is basically my time to learn story, I guess?

 Fabio

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




double vs. single entry

2002-06-27 Thread Bryan Caplan

What exactly is the advantage of double-entry accounting over
single-entry accounting?
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




Re: double vs. single entry

2002-06-27 Thread Bryan Caplan

fabio guillermo rojas wrote:
 
 Double entry means that you have one column for money going out
 of an account and one column for money going into an account. Thus,
 it very easy to keep track of cash inflow and outflow (just add up
 the columns). With single entry, there is more error because you
 mistakenly count a debit as a credit. The advantage is huge
 when you have to do things by hand. It also helps you track errors
 more quickly. 

What's wrong with negative numbers?!

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He wrote a letter, but did not post it because he felt that no one 
   would have understood what he wanted to say, and besides it was not 
   necessary that anyone but himself should understand it. 
   Leo Tolstoy, *The Cossacks*




shameless self-promotion

2002-06-13 Thread Bryan Caplan

I just updated my cv.  I'm particularly pleased with my recent piece in
the Economic Journal.

http://www.gmu.edu/departments/economics/bcaplan/cv.htm
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  Smerdyakov suddenly raised his eyes and smiled.  'Why I smile 
   you must understand, if you are a clever man,' he seemed to say. 
   Fyodor Dostoyevsky, *The Brothers Karamozov*




Re: re : securities analysis

2002-04-05 Thread Bryan Caplan

William Dickens wrote:

 However, as I recall, the increase in expected returns that one gets by following 
such a strategy are measured in basis points, not percentage points as some advocates 
of this approach would suggest.

So Bill, are you willing to stick your neck out regarding the January
effect?  Thaler says average ROR in January is 3.5%, versus an average
of .5% for all other months.  Is this another case of basis points being
exagerated into percentage points?
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  Smerdyakov suddenly raised his eyes and smiled.  'Why I smile 
   you must understand, if you are a clever man,' he seemed to say. 
   Fyodor Dostoyevsky, *The Brothers Karamozov*



Re: re : securities analysis

2002-04-05 Thread Bryan Caplan

William Dickens wrote:

  This possibility was made all too clear to me when I took a $20,000 short 
position in Amazon.com - - a year too early.  

Why didn't you take a series of smaller short positions instead?  You
could have held a $1000 short position for twenty times as long, no?

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  Smerdyakov suddenly raised his eyes and smiled.  'Why I smile 
   you must understand, if you are a clever man,' he seemed to say. 
   Fyodor Dostoyevsky, *The Brothers Karamozov*



Panic Room

2002-04-04 Thread Bryan Caplan

David Fincher's new movie *Panic Room* may be the finest artistic
expression of game theory around.  Beautiful illustrations of commitment
problems, subgame perfection, focal points, backwards induction...  And
its pure entertainment.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  Smerdyakov suddenly raised his eyes and smiled.  'Why I smile 
   you must understand, if you are a clever man,' he seemed to say. 
   Fyodor Dostoyevsky, *The Brothers Karamozov*



Median Voter and Welfare

2002-02-06 Thread Bryan Caplan

Surveys consistently find welfare spending to be one of the least
popular major activities of government.  The 1996 welfare reform
probably changed this a bit, but I bet the basic pattern is still
there.  It seems like this is one area where government does more than
the median voter wants.

But: When you probe voter preferences a little further, it seems to me
that you find something quite different, and this gem of a question from
the National Survey of Public Knowledge of Welfare Reform and the
Federal Budget (http://www.kff.org/content/archive/1001/welftbl.html)
shows.

Table 19: The Principal Goal Of Welfare Reform 

Views of American Adults By Political Affiliation 

Total   Dem.Rep.
Get people off welfare, but only if we can get
them decent jobs by providing job training and
education   63% 66% 60%

Get people off welfare even if it means they27% 22% 33%
have to take a low-paying job

Get people off welfare regardless of the6%  7%  5%
consequences
  
Provide people on welfare with more money so2%  5%  2%
that they have a higher standard of living
   
Other (vol.)2%  1%  1%



In other words, most Americans are unwilling to accept the only feasible
way of drastically scaling back the system, which is expecting welfare
recipients to take low-paying jobs.  Frankly, this hesitance boggles my
mind - if former welfare recipients shouldn't take low-paying jobs, who
should?  In any case, this strongly suggests to me that the lack of
radical change is basically what the median voter wants.  They only
support radical reforms conditional on things that are sure to never
happen.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He was thinking that Prince Andrei was in error and did not see the
   true light, and that he, Pierre, ought to come to his aid, to 
   enlighten and uplift him.  But no sooner had he thought out what he 
   should say and how to say it than he foresaw that Prince Andrei, 
   with one word, a single argument, would discredit all his teachings, 
   and he was afraid to begin, afraid to expose to possible ridicule 
   what he cherished and held sacred. 
   Leo Tolstoy, *War and Peace*



Life Expectancy and Immigration

2002-01-25 Thread Bryan Caplan

Life expectancy varies widely between countries.  When someone moves to
a new country, what best predicts their lifespan?  Country of origin? 
Or country of destination?
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He was thinking that Prince Andrei was in error and did not see the
   true light, and that he, Pierre, ought to come to his aid, to 
   enlighten and uplift him.  But no sooner had he thought out what he 
   should say and how to say it than he foresaw that Prince Andrei, 
   with one word, a single argument, would discredit all his teachings, 
   and he was afraid to begin, afraid to expose to possible ridicule 
   what he cherished and held sacred. 
   Leo Tolstoy, *War and Peace*



Re: Life Expectancy and Immigration

2002-01-25 Thread Bryan Caplan

Gray, Lynn wrote:
 
 It would seem to depend on the age of the person at the time of the move.

Maybe so, maybe not.  We can imagine that if a 70-year-old person from
Congo shows up in the U.S., they can immediately tap into the wonders of
the U.S. medical system, nutrition, etc.  Do you know of any data?  

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He was thinking that Prince Andrei was in error and did not see the
   true light, and that he, Pierre, ought to come to his aid, to 
   enlighten and uplift him.  But no sooner had he thought out what he 
   should say and how to say it than he foresaw that Prince Andrei, 
   with one word, a single argument, would discredit all his teachings, 
   and he was afraid to begin, afraid to expose to possible ridicule 
   what he cherished and held sacred. 
   Leo Tolstoy, *War and Peace*



[Fwd: Photographers]

2002-01-24 Thread Bryan Caplan

From Mark Steckbeck:
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He was thinking that Prince Andrei was in error and did not see the
   true light, and that he, Pierre, ought to come to his aid, to 
   enlighten and uplift him.  But no sooner had he thought out what he 
   should say and how to say it than he foresaw that Prince Andrei, 
   with one word, a single argument, would discredit all his teachings, 
   and he was afraid to begin, afraid to expose to possible ridicule 
   what he cherished and held sacred. 
   Leo Tolstoy, *War and Peace*
---BeginMessage---

Bryan,
I am not at home where I have access to my email account related to the
Armchair list. Can you post this for me.

Thanks,
Mark


Alex's question does not pertain to individuals taking film from their
own personal cameras to be developed. What his question pertains to is the
hiring of a professional photographer who, for example, comes to your
business (or home) to photograph scenes for an annual report (or a family
portrait). It is customary for photographers to provide you with a set
number of copies of specific prints and to retain the negatives.
Alex poses two questions: Is a two-part tariff efficient and, if not, 2)
why doesn't entry into the market change it.
First, I presume that the two-part pricing scheme is efficient from a
price discrimination point of view. There is little probability that the
median consumer of photography services will purchase reprints from existing
negatives. Those who do obviously have a more inelastic demand curve. (I
once did a shoot for the Metropolitan Washington, DC Baptist Church. I
provided them with however many copies they requested and kept the
negatives. Only one person contacted me later for reprints and, considering
the desperation in her voice, I believe I could easily have charged her say
$20 or $30 per reprint).
Second, I do know of photographers who will sell the rights to the
negatives (i.e., their rights, property rights to negatives belong the the
photographer) but they are generally either newcomers to the profession or
failing photographers with high time preferences relative to better
photographers (i.e., they need cash now). I presume therefore, that either
Alex's search costs are too high to find one of them, or his demand for
quality precludes him from considering hiring their services. Similarly,
anyone seeking to purchase rights to the negatives signals to a prospective
photographer their expected future demand curve for reprints.

Mark Steckbeck   


---End Message---


Re: Photographers

2002-01-23 Thread Bryan Caplan

And of course normal developers always include the negatives.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He was thinking that Prince Andrei was in error and did not see the
   true light, and that he, Pierre, ought to come to his aid, to 
   enlighten and uplift him.  But no sooner had he thought out what he 
   should say and how to say it than he foresaw that Prince Andrei, 
   with one word, a single argument, would discredit all his teachings, 
   and he was afraid to begin, afraid to expose to possible ridicule 
   what he cherished and held sacred. 
   Leo Tolstoy, *War and Peace*



Re: Photographers

2002-01-23 Thread Bryan Caplan

Alex Tabarrok wrote:
 
 Sure, if you take your own pictures you get the negatives.  But if you
 hire a profesional photographer for say a wedding or if you have a
 portrait done they are insistent on keeping the negatives.

What's wrong with a simple adverse selection story here?  The only
people who try to buy the negatives from you are precisely the people
who would be willing to pay a lot for extra copies.
-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He was thinking that Prince Andrei was in error and did not see the
   true light, and that he, Pierre, ought to come to his aid, to 
   enlighten and uplift him.  But no sooner had he thought out what he 
   should say and how to say it than he foresaw that Prince Andrei, 
   with one word, a single argument, would discredit all his teachings, 
   and he was afraid to begin, afraid to expose to possible ridicule 
   what he cherished and held sacred. 
   Leo Tolstoy, *War and Peace*



Re: The Median Voter Theorem and Adoption Law

2002-01-08 Thread Bryan Caplan

Fred Foldvary wrote:
 
 --- Bryan Caplan [EMAIL PROTECTED] wrote:
 
  I'm highly dissatisfied with interest group explanations.  Simple
  reason: Most of the policies traditionally blamed on interest groups are
  in fact *popular*.  Adoption laws seem like a case where existing
  policies are not popular, though perhaps I'm wrong on that count.
 
 Cato's Policy Analysis 420 (Dec 12, 2001) studied voter initiatives and
 found that tax-and-expediture limitations passed by voters are more
 restrictive than such legislation by representatives, and they cause
 per-capita state spending to decrease.  At least in this respect, the
 interests of the voters do not seem to coincide with the legislation by the
 reps.

There is a huge and probably higher quality academic literature on this
point.  John Matsusaka for example finds that the effect of initiatives
is pro-government before 1950 and anti-government after, or something to
that effect.

 Also, it does not seem to me that if they knew about it, most voters would
 approve of agriculture subsidies and price supports.  Why would the median
 voter want a higher price for sugar and subsidies for the owners of sugar
 beet farms?

When I was a kid I remember my mom explaining why farm programs were a
good idea while she was buying produce.  I haven't seen polls on this
exact point, but I strongly suspect a majority wants what we have. 
Why?  They're interventionists across the board, why would they be any
different here?

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He was thinking that Prince Andrei was in error and did not see the
   true light, and that he, Pierre, ought to come to his aid, to 
   enlighten and uplift him.  But no sooner had he thought out what he 
   should say and how to say it than he foresaw that Prince Andrei, 
   with one word, a single argument, would discredit all his teachings, 
   and he was afraid to begin, afraid to expose to possible ridicule 
   what he cherished and held sacred. 
   Leo Tolstoy, *War and Peace*



Re: The Median Voter Theorem and Adoption Law

2002-01-08 Thread Bryan Caplan

fabio guillermo rojas wrote:

 I still think you are missing the point. By itself, politicians could
 influence adoption laws and practices. But there are costs imposed by
 many things: the ability of adoption workers to wage a political
 campaign for the status quo, the mobilization of allies, the opportunities
 lost while fighting adoption laws and the fact that not a single
 major electoral victory as ever been won over adoption law.
 
 It's as simple as this: people don't vote over adoption law. If someone
 tried to campaign on it, I bet they'd get trumped by somebody campaiging
 over issues that are proven vote getters.

But politicians spend a lot of energy working on issues that no one has
ever lost an election on.  To take one tiny example, both Bush and Gore
made a loud point about their support for the Community Reinvestment
Act.  Who votes on that?  The logic, I presume, is that positions on a
lot of little issues add up.  And it isn't the absolute size of the
issue, but the size relative to the effort that counts.

-- 
Prof. Bryan Caplan
   Department of Economics  George Mason University
http://www.bcaplan.com  [EMAIL PROTECTED]

  He was thinking that Prince Andrei was in error and did not see the
   true light, and that he, Pierre, ought to come to his aid, to 
   enlighten and uplift him.  But no sooner had he thought out what he 
   should say and how to say it than he foresaw that Prince Andrei, 
   with one word, a single argument, would discredit all his teachings, 
   and he was afraid to begin, afraid to expose to possible ridicule 
   what he cherished and held sacred. 
   Leo Tolstoy, *War and Peace*



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