Required listening

Econtalk's latest: sports economist Roger Noll.

Perhaps no other field of application demonstrates the unique and powerful perspective of the economic way of thinking than does sports economics.

Spectacular places, a travel bucket list

From The Cool Hunter.net

When you don't go to the polls this November . . .

Gene Healy writing at Reason.com reminds us why not to support the political party.

Stats without baselines

I was listening to NPR this morning and near the end of Marketplace Morning Report came a common error seen and heard all too often: statistics that seemingly impart deep meaning but in fact are meaningless because we lack a reference point from which to judge them.

The specific occurrence in this case was a brief comment on Allstate Insurance's latest release of its annual report, "Allstate America's Best Drivers Report". The two snippets were that Philadelphia drivers were 64% more likely to be in a collision than the average driver nationally and that the safest drivers are in Sioux Falls, South Dakota where drivers on average go 14 years between collisions. The actual official report is here.

Besides the problems with how each statement is worded as compared to what those statistics are actually saying (I may have the quotes wrong as well), there is the bigger concern, for me at least, that we really don't know if those numbers are in any way significant. To know that we'd need to know more about the full data set including the actual averages and dispersion. We'd also probably like to know how volatile these statistics are year after year and how they were computed. But we don't know any of that from the report; so all we are left with are the impressions they make at first glance, which are highly subject to personal bias and incorrect interpretation. We'd also like to know if the statistics are adjusted for factors such as miles driven and conditions like weather (they are not).

But thinking about both numbers together we can cobble together a little logic to help know that they are probably not significant numbers. It would be highly unlikely that drivers in Sioux Falls or any other city are that different any other American city. At 14 years between collisions, collisions seem pretty rare. Rare events can be easily distorted by slight adjustments in contributing factors including random factors. A 64% increase over average is therefore probably not statistically significant. For those in the City of Brotherly Love, I say, drive on.

Robin Hanson on voting advice

Robin Hanson has a very interesting post up on his advice on voting. Read the whole thing here.

I'd like to focus on one piece and the counter-intuitive implication:

The thing you probably know best is your own life. So a good simple strategy is to vote “retrospectively,” i.e., for incumbents if your live goes well, and against them if your life goes badly. The more voters who do this, the stronger incentives incumbents have to make most lives go well.

For life quality extremes this advice is clear, but what if your life is near the middle? What should be the cutoff between a good and bad life? One simple reference is how you expected your life to go when incumbents were elected – reelect them if your life has gone better than expected.

The result of this strategy would be for a lot of voters to reject their preferred candidate when that candidate was the incumbent and for a lot of others to vote to re-elect the opposition. The expectation for many is that one's own candidate will right all wrongs and bring near utopia while the opposition will be the one to finally turn the lights out on America. Both extreme positions are obviously wrong in retrospect for many of the reasons Robin describes in the post along with the general truth that there isn't that much change a president, et al. can effect and there isn't much difference between most candidates in most elections.

Is New Orleans an infant baby?

Why is it essential that we know if a tropical storm or hurricane in the Gulf of Mexico is in any way threatening The Big Easy? A casual observer would come to believe New Orleans is the only major city on the Gulf outside of Florida. The news reports make it clear that this must be the major concern regarding weather in that region. I've even come to expect the familiar refrain, ". . . hurricane XYZ, which is projected to enter the Gulf of Mexico threatening the Gulf Coast region including New Orleans". NPR is but one source setting this standard, but it is common to the other national news outlets in all media. No mention is made in particular of Houston despite it being over five times as populated or Mobile, AL, which is about a third as big. Once a trajectory is inevitably set for one of these or many other locations and only then, will we hear that community as part of the standard report.

Of course, it is because of Katrina, and of course, that doesn't make any sense. Look back to the title of the post. Is New Orleans a helpless invalid lying in wait for tragedy to befall it? Is this a commentary on our collective doubt that New Orleans as a community has corrected past mistakes and vulnerabilities? Does it say something about our general doubt in the ability of government at many levels to solve problems and learn lessons? I include in that the possibility that government may have encouraged bad decisions in rebuilding and repopulating New Orleans after Katrina.

Getting political compromise through a new election format

It is commonly said that we live in an atypically divisive era in politics characterized by extreme partisanship and bitter, hostile stalemates. I have my doubts about how atypical this era really is or how bad the consequences really are from it. George Will seems to agree (specifically around the 13 minute mark).

But let's assume too little compromise is a colossal impediment to competent and effective (and desirable) government. What might be a solution? Perhaps a change in how the ruling elite come into power. One not too well fleshed out idea is as follows below. Think about it from a game theoretic perspective with the idea that we are trying to get reliably constructive political compromise between the two major parties. A key assumption is that the public strongly prefers compromise. I'll make the further ridiculous assumption that only the two major parties versions of the same party (Republicans and Democrats) are in contention for election (i.e., I'll ignore all independent parties just like the media does).

Every five years the party out of office makes a decision. It can either:

1. Choose to hold the presidency for certain for two years followed by the opposing party holding office for certain for the next three years, or
2. Choose to have an election with the winner holding the presidency for five years.

Here is my theory on why this brings about compromise. For the party in office in years three, four, and five, being too uncompromising allows the opposing party to choose an election which the opposing party is most likely to win. If that party during it's five-year reign is too uncompromising, an election is sure to follow along with another flip in who holds government. It seems to me that the equilibrium is a revolving two-year, three-year rotation kept alive by the party in power working hard to sell the public on how constructively compromising they are. Of course this is oversimplifying and of course this would just lead to bad politics on steroids as the uncertainty was removed for the political class. My belief is that these guys fighting is a lot better for government than these guys getting along. But I think it is a fun thought exercise, nonetheless.