Friday, September 28, 2018

Are American corporate profits really so high?

The debate among economists on corporate profits rages on.  Are they real up relative to wages or not. The first link it Tyler Cowen on the same, and the 2nd link is a search of the subject on Marginal Revolution.


Are American corporate profits really so high?

More on the same.

What does Spain Tell Us about Crime

I vacationed in Spain recently. People warned us of the crime so I looked a could of stats. Spain has a very low rate of crime. 

Spain's murder rate is second lowest in the EU, data shows

Spain Unemployment Rate is at 16.55%, compared to 16.38% last quarter and 18.63% last year.

The gap between the rich and poor of Spain has widened during the economic crisis, a new report on income inequality has confirmed. 

The causes of crime are not what most people think they are. It is not poverty nor relative poverty. I have a suspicion though that what causes crime causes relative poverty.

Alcohol abuse appears to me to cause crime and relative poverty.

Alchohol and Child Abuse

Maltreatment of girls and adolescent pregnancy in the US  by Bill Gardner

The US National Academy of Sciences reports on US health in a global perspective and the news is bad. Citizens of peer nations live longer than Americans do, and the difference is growing, especially for women. The report notes nine health domains where the US falls short. I’m going to highlight two domains that are critical to child health: Injuries and Homicides and Adolescent pregnancy. These two domains are connected in a distressing way.

It interests me that Italy shows up as so low on the chart above. It makes me think that the biggest problem is alcoholism. The rate of alcoholism is very low in Italy. Interestingly Japan has one of the lowest overall rates of crime in the world where Italy is close to the middle of the pack of developed countries in crime but the rate of Maltreatment death is more than double in Japan what it is in Italy (at least on that chart).

(Here is a great post by Tyler Cowen on the subject of alcohol. ) So the question is what can we do to reduce the overuse of alcohol. It is important that we diagnose the problem correctly. I wonder if we have good studies on the relationship of alcohol use to abuse.

Middle Class Decline?

Many people are talking about a decline in the middle class. I think they are wrong. I think that the middle class is as solid as it has ever been. Median real wages have continued to rise, though slower than in 1950-1975, as have wages at the 20 percentile.

But what I agree has happened is NIMBY has driven up housing costs in the highest wage cities to an absurd degree, allowing owners of existing housing to capture most the rise in income in those cities.

Also at it's 1970's peak about 18% of USA workers worked in manufacturing and a little more than half of them were highly paid. Those jobs are almost all gone. But though highly paid, those where not great jobs, it was boring, hard work. So as sad as it is that they are gone the lower paying jobs that replaced them at least are not as hard. When I worked in restaurants we joked that the one good thing about a low wage job is you did not care so much if you lost the job but the environment was good.

If you took all the income gains to the top 20% above the gains of the rest and spread it over the rest of workers you would raise the bottom 20% by about 25%.  That would be great but not life changing.

My son took a job as an assistant plumber right out of high school within a few years he was doing great pay wise, so the skilled trades still doing quite well. He bought a very nice 2 bedroom condominium here for $44k. He lived with us 2 years and saved his money and added some college money that he got from my father and paid cash for the condo. Why is so cheap here in Gainesville FL to buy a nice condo, because they let people build sufficient housing unites here in Gainesville FL. See here

We could all live much better than folks in the 1970's and before if we lived more like they did. Here is a story about the poorest county in the USA the folks there live middle class similar how people used to live.


Lyman Stone on fertility:

It turns out, once they are out of school, most women have very similar fertility trajectories. Regardless of their degree, once women are out of school, their odds of having a kid ramp up to about 10 to 15% a year, and it remains there until they hit their 40s, when biological limitations become significant and fertility declines (negative figures here represent generational differences in prior fertility, not lost children). In other words, the measurable effect of education on birth rates is very small, and even such effect as does exist appears to be unrelated to the actual degree obtained and more related to whether or not a person is enrolled at any level.


The fertility rate for non-enrolled women is vastly higher in all cases. Now, it is possible that becoming pregnant induces some women to accelerate degree completion and then forestalls subsequent degree-seeking, possibly distorting these statistics. But it is at least as likely that women simply postpone childbearing until they have completed their education. The result of successfully following this “success sequence,” however, is that many of these women never have the kids they want to have. Indeed, economic research has recently shown that in the U.S. and U.K. at least, most women systematically overestimate their likelihood of working in a field that will require a degree and also overestimate the number of children they are likely to have. In other words, the gender norms surrounding higher education today both place enormous pressure on women to obtain higher degrees than they are likely to use, and in turn, the time spent pursuing those degrees reduces the odds that women have as many children as they want to have.

Two Surprising Results

Could be wrong but interesting even if they are wrong:
Data on 25 major [US] cities … 1900-1940 … municipal-level public health efforts that were viewed as critical in the fight against food- & water-borne diseases. … None … contributed substantially to the observed declines in total & infant mortality"
A tweet about that one.
1. For per capita prevention, the U.S. is a clear first in the world.  (I wonder, by the way, to what extent this contributes to higher health care costs in the United States, since preventive care also can drive doctor and hospital visits.)
2. The UK and France made a deliberate decision to switch away from public health to curative medicine, after the end of World War II, when they were building out their universal coverage systems.
3. The American history with public health programs is a pretty good one, with advances coming from the anti-smoking campaign, lower speed limits, anti-drunk driving initiatives, fluoridated water, and mandatory vaccination programs.
4. The British fare poorly on various public health metrics.
5. “The US system of public health fares rather well compared to other Western nations.”  On net, our population is not as anti-science as it may seem, at least not if we look at final policy results, as compared to some of our peer countries.

Saturday, September 8, 2018

Important Statistics and Frequently Wrong Perceptions

I plan to periodically update this post as I see more in formation.

I recently read the the following:

55% of Democrats think Russia "tampered with vote tallies to get Donald Trump elected." (page 163) and 59% of Republicans believe that "millions of illegal votes were cast in the election." (page 161)
Here is some information on Democrats and Republicans perception of each other. 

Which got me thing about people's beliefs verse some of the most measurable statistics.

Global Poverty Is on the Decline, But Almost No One Believes It
Did you know that, in the past 30 years, the percentage of people in the world who live in extreme poverty has decreased by more than half? If you said no—if you thought the number had gone up; that more people, not less, live in extreme poverty—you aren’t alone. According to a recent Barna Group survey, done in partnership with Compassion International and the new book Hope Rising by Dr. Scott Todd, more than eight in 10 Americans (84%) are unaware global poverty has reduced so drastically. More than two-thirds (67%) say they thought global poverty was on the rise over the past three decades.

Global Poverty has dropped by 50% but,  Ask most people about global poverty, and chances are that they’ll say it is unchanged or getting worse. A survey released late last year found that 92 per cent of Americans believe the share of the world population in extreme poverty has either increased or stayed the same over the last two decades. 

Americans generally overestimate, to a significant degree, the percentage of the U.S. population that is either black or Hispanic. According to the U.S. Census Bureau, 12.3% of the U.S. population is black, and 12.5% is Hispanic. Gallup Poll results from March 26-28, however, show that slightly less than one in 10 Americans can accurately identify that the population of either blacks or Hispanics in this country falls between 10% and 14%. The typical American estimates the percentages of blacks and Hispanics in this country to be more than twice as high as they actually are.
On average, Americans say that 33% of the U.S. population is black. In fact, a majority of Americans (56%) estimate that the percentage of blacks in this country stands at 30% or higher. As many as 17% of Americans say the percentage of blacks is 50% or greater. Only 7% accurately state that the percentage of blacks falls between 10% and 14% of the entire population.

People say that the rich should pay more taxes but when asked what the top marginal tax rate should be they say 30%.   The top tax rate in 2018 is 37%.

More on that here:

What is the maximum percentage of a person’s income that should go to taxes – that is, all taxes, state, federal, and local?” The mean percentage for 2009 was 15.6 percent, up slightly from 14.7 percent in 2007. A plurality of those polled, 42 percent, felt that the maximum income tax rate should be between 10 and 19 percent. In 2007, a whopping 47 percent of those polled said that the maximum income tax rate should be between 10 and 19 percent.

And from here:

The two most commonly cited sources of crime statistics in the U.S. both show a substantial decline in the violent crime rate since it peaked in the early 1990s. One is an annual report by the FBI of serious crimes reported to police in approximately 18,000 jurisdictions around the country. The other is an annual survey of more than 90,000 households conducted by the Bureau of Justice Statistics, which asks Americans ages 12 and older whether they were victims of crime, regardless of whether they reported those crimes to the police.

Public perceptions about crime in the U.S. often don’t align with the data. Opinion surveys regularly find that Americans believe crime is up nationally, even when the data show it is down. In 17 Gallup surveys conducted since 1993, at least six-in-ten Americans said there was more crime in the U.S. compared with the year before, despite the generally downward trend in national violent and property crime rates during much of that period.
This is an enormous gap between what the average person believes and reality:
The American public estimates on average that 23% of Americans are gay or lesbian, little changed from Americans' 25% estimate in 2011, and only slightly higher than separate 2002 estimates of the gay and lesbian population. These estimates are many times higher than the 3.8% of the adult population who identified themselves as lesbian, gay, bisexual or transgender in Gallup Daily tracking in the first four months of this year.

For these below I don't have poll data to show we are off but I think we are:

On Abortion people seem to not understand how much it fell. See here.
As for abortion, pregnant women—married or single—are less likely to obtain an abortion than they were before the Roe v Wade decision. That decline also reflects the declining stigma around unwed childbearing and a drop in unintended pregnancy. Since at least the early 1980s, a rising share of births from nonmarital pregnancies are from pregnancies that were intentional; today, half of births from nonmarital pregnancies are intended.

Modality of Monogamy

Figure 1: Men’s Reported Lifetime Number of Opposite-Sex Partnersmen.jpg

Figure 2: Women’s Reported Number of Lifetime Opposite-Sex Partners



More on that here and here, and yes many of your high school and college friends were lying.

I just saw this one on twitter. Evidently women think women are murdered more than men but in reality men are murdered much more than women.

The vast majority of immigrants in the U.S. are in the country legally – but fewer than half of Americans know that’s the case. 

Everybody Always Thinks Inflation Is Higher Than It Really Is

Prices for U.S. consumers rose by just 1.4 percent over the past year, according to the consumer price index numbers released this morning. In other words, inflation is very low.

St. Louis Fed
If this comes as a surprise, don't be surprised. In study after study, in country after country, economists have found that consumers overestimate inflation.
    Also from the same article:
But gas accounts for only 5 percent of the average household's budget, while groceries make up 9 percent.

Corporate profits...

Asked what do you think the average profit margin is, the average USAer says30%. In reality it's about 8%.

Hispanic immigrants:

"But now look at the negative stereotypes on the right. 62 percent (!!) of whites stereotyped Latinos as being "mostly illegal immigrants"! (Which of course is not even remotely close to the truth.)"  Economist Noah Smith
          Best estimates are less that 25%

Crazy Tweet:

Wow, this totally wrong tweet got 187K likes and 64K retweets!

It is so wrong that it is actually funny.
How are retirees doing:
Ok, America: The results are in. To recap, the question asked current retirees to describe how well they are managing financially. 51% of you thought that 30% or more described their financial situation as "Finding it hard to get by."
The real answer: 6%.

Public opinion:
A good thread on the subject of Public opinion here
People in every country are happier than people think: In every single country, the average estimate of happiness is far lower than actual reported happiness. Every single country!

Women POTUS:
Seventy-four percent of respondents claimed they’re comfortable with a woman president. But only 33 percent believe their neighbors are, and a middling 57 percent said their spouse or immediate family are.

What Republicans and Democrats believe about each other:

Republicans believe that only half of Democrats are “proud to be American.” Actually, 8 out of 10 are. 
Republicans also believe that only 3 in 10 Democrats oppose open borders. Actually, 7 in 10 do. 
Democrats believe that only half of Republicans favor "properly controlled" immigration. Actually, 8 out of 10 do.  
Democrats also believe that only half of Republicans believe that racism still exists. Actually, 8 out of 10 do.

Poll: Americans underestimate how many people pay zero income taxes

The poll gave respondents four options -- 39 percent said that only 11 percent of Americans pay zero or negative income tax, and 31 percent said that only 27 percent pay zero or negative income tax. Only 21 percent got it right -- right now, around 45 percent pay no federal income tax.

Here is a chart of people guesses about school spending verses reality:

Here is a chart of a religion poll:

Here is quote from Russ Roberts. Keeping mind these are college students.

I look at economics, economics data. The public perception, say--my favorite example of this would be what percentage of the public earns the minimum, of the workforce, earns the minimum wage or less?

When I would survey journalists, the median answer would be 20%. Pretty consistently by the way. The actual answer at the time was about 2%. And that's way off, by people who are supposed to be educated. These aren't arts critics by the way.
 What actions do people think will reduce Global Warming.

 It's not just USAers:
Britons overstate the proportion of Muslims in their country by a factor of four, according to a new survey by Ipsos Mori that reveals public understanding of the numbers behind the daily news in 14 countries.


The actual percentage of Muslims in the UK is 5%, but those surveyed by Ipsos Mori said they thought it was 21%.


But each country has its blind spots. Germans think teen pregnancy is 35 times worse than it is (0.4% of girls aged 15-19 give birth each year there). South Koreans believe their life expectancy is 89 (it’s actually 80) and Spain is the only country to underestimate its youth unemployment rate, which stands at a pretty extreme 56%.

More Funding for the NHS (in the UK)

"If you asked if people agree “The NHS needs reform more than it needs extra money” then people agree by 43% to 23%. However, if you ask if people agree with the opposite statement, that “The NHS needs extra money more than it needs reform”, then people also agree, by 53% to 20%"om/archiebland/status/1161197265555509248?s=20


Article Contends Healthcare could be 80 to 90% Cheaper Based on Direct labor Costs

I found this very interesting:
80 to 90% off
Yes, that’s my best guess. I do the analysis by considering a particular medical service, finding out roughly how much a person providing it gets paid per year, and dividing by how long it takes to do to get the direct labor cost; finding out the cost of the equipment used and amortizing it; and adding in an estimate of the overhead (cost of the building and a reasonable level of administrative work). I’m reasonably skilled at this sort of analysis as a consequence of having run small businesses.Estimates may vary, but everyone seems to agree that heath care is way more expensive than what you’d expect based on this sort of analysis. No one seems to know why; or, put a different way, where the money all goes. Everyone who has studied the problem agrees that it’s highly mysterious. It’s clear that administrative costs are needlessly much higher in health care than elsewhere, but that’s probably not the only source of the discrepancy.

Thursday, September 6, 2018

Robin Hanson's Call for Unbelievers to Adopt a Religion

People with religious beliefs, and associated behavior, consistently tend to have better lives. It seems that religious folks tend to be happier, live longer, smoke less, exercise more, earn more, get and stay married more, commit less crime, use less illegal drugs, have more social connections, donate and volunteer more, and have more kids. Yes, the correlation between religion and these good things is in part because good people tend to become more religious, but it is probably also in part because religions people tend to become better. So if you want to become good in these ways, an obvious strategy is to become more religious, which is helped by having more religious beliefs.

More data:

Depression is the leading cause of illness and disability in adolescence. Many studies show a correlation between religiosity and mental health, yet the question remains whether the relationship is causal. We exploit within-school variation in adolescents’ peers to deal with selection into religiosity. We find robust effects of religiosity on depression that are stronger for the most depressed. These effects are not driven by the school social context; depression spreads among close friends rather than through broader peer groups that affect religiosity. Exploration of mechanisms suggests that religiosity buffers against stressors in ways that school activities and friendships do not.

 …a one standard deviation increase in religiosity decreases the probability of being depressed by 11 percent.  By comparison, increasing mother’s education from no high school degree to a high school degree or more only decreases the probability of being depressed by about 5 percent.

Wondering Why People Voted for Trump

This is an old article but I am continually draw back to it. If you are wondering why people voted for Trump a good place to start is asking them.

Here is the only article that I have seen that asks: 
What Do Donald Trump Voters Actually Want?

I understand that is not the end of it because people lie and sometimes do not know themselves well enough to know why (see: Elephant-Brain, Matt 6:5, Jeremiah 17:9), but asking is a good place to start.

Wednesday, September 5, 2018

Misunderstanding The PPACA

Do Obamacare’s Left-Wing Critics Actually Understand It?

Few Democrats seem to appreciate it but the PPACA moved the USA reasonably close the systems in German, France and The Netherlands.

Also Democrats should play around with different incomes on the The premium subsidies are pretty high. They should be happier than they are about the program as it is and stop asking for single payer. While single payer works reasonably well in Canada at the time being cost are still rising and could at some point cause some large dead weight losses.

Admittedly starting in 2019 the penalty for not having insurance is eliminated and that may or may not doom the program. Well will have to see.

BTW it seems top me that healthcare is a mess all over the world with Singapore being the best. See below:

80 to 90% off
Yes, that’s my best guess. I do the analysis by considering a particular medical service, finding out roughly how much a person providing it gets paid per year, and dividing by how long it takes to do to get the direct labor cost; finding out the cost of the equipment used and amortizing it; and adding in an estimate of the overhead (cost of the building and a reasonable level of administrative work). I’m reasonably skilled at this sort of analysis as a consequence of having run small businesses.
Estimates may vary, but everyone seems to agree that heath care is way more expensive than what you’d expect based on this sort of analysis. No one seems to know why; or, put a different way, where the money all goes. Everyone who has studied the problem agrees that it’s highly mysterious. It’s clear that administrative costs are needlessly much higher in health care than elsewhere, but that’s probably not the only source of the discrepancy."