According to Robert Rector in today's Wall Street Journal, "If converted to cash, current means-tested [anti-poverty] spending is five times to amount needed to eliminate all official poverty in the U.S." My attitude is, if this is true, then scrap the lot of it. Eliminate all federal housing subsidies, food stamps, etc. from root to branch, pool the revenue, and give every single American, from Bill gates on down, a refundable individual personal tax credit. We could gradually taper the refund based on income to avoid spikes in effective marginal tax rates.
Now, eliminating all of the support agencies which are the massive holes in this "leaky bucket" would undoubtedly crash the D.C. Metropolitan area housing market and help to end that region's insulation from the economic realities that affect everywhere else in America, but that is a good thing. A thriving, luxurious national capital that creates an insulated wealthy class feasting on government rent-seeking would have been anathema to the Founding Fathers. As far as I know, no American President, not even Ronald Reagan, has left Washington with fewer Bloomingdales and the like than when he arrived. That needs to change.
Wednesday, January 8, 2014
Tuesday, January 7, 2014
Government Funded - Church Provided Social Services Part 1
How people view the favorability of government financed church services will be one chapter of the dissertation I have been working on. In particular I want to understand the factors that cause people to support providing funds to churches as well as oppose the government providing funds to churches for social services.
What kinds of factors you ask? At present the broad categories under consideration are: religious beliefs, political beliefs, demographic characteristics and efficiency. Using the Religion and Public Life Surveys from the Pew Research Foundation I will explain each items included in each of the categories for those who are interested,
Religion - frequency of church attendance, frequency of interaction with church community, frequency of prayer, faith and/or ecclesial affiliation, etc.
Political - their party id, are they a registered voter, have they volunteered with political organizations, etc.
Demographic - age, gender, race, education level, marital status, and income. I know that income needs to be adjusted for purchasing power. 30,000 in San Francisco is not much but will stretch out like salt water taffy in Huntsville Alabama.
Efficiency - whether the person believes that churches can provide social services in a more efficient manner. Unfortunately for me this question is only included in the Religion and Public Life 2001 survey and the Baylor 2005 survey. Currently I am looking into some methods for imputing the value to the other samples.
There are a number of wrinkles I have considered. I'll provide an example, given that I have data on favorability for 2001, 2005, and 2008 I could use some spatial econometrics to understand how favorability as changed across different regions. This could be problematic because the question wording is not identical across years but I'm letting the ideas simmer.
There will be more to come over the next several months.
What kinds of factors you ask? At present the broad categories under consideration are: religious beliefs, political beliefs, demographic characteristics and efficiency. Using the Religion and Public Life Surveys from the Pew Research Foundation I will explain each items included in each of the categories for those who are interested,
Religion - frequency of church attendance, frequency of interaction with church community, frequency of prayer, faith and/or ecclesial affiliation, etc.
Political - their party id, are they a registered voter, have they volunteered with political organizations, etc.
Demographic - age, gender, race, education level, marital status, and income. I know that income needs to be adjusted for purchasing power. 30,000 in San Francisco is not much but will stretch out like salt water taffy in Huntsville Alabama.
Efficiency - whether the person believes that churches can provide social services in a more efficient manner. Unfortunately for me this question is only included in the Religion and Public Life 2001 survey and the Baylor 2005 survey. Currently I am looking into some methods for imputing the value to the other samples.
There are a number of wrinkles I have considered. I'll provide an example, given that I have data on favorability for 2001, 2005, and 2008 I could use some spatial econometrics to understand how favorability as changed across different regions. This could be problematic because the question wording is not identical across years but I'm letting the ideas simmer.
There will be more to come over the next several months.
Sunday, January 5, 2014
Better Feed Your kids Those Twinkies
Steven Hayward discusses one of the the most beautiful examples I've ever seen of the problem of confusing correlation with causation (note that he links to an earlier post of the same graph on io9.com).
Saturday, January 4, 2014
Two Quotes
In reading about the nature of faith I came across these two quotes.
and a substantially longer quote from GK Chesterton from his book Orthodoxy,
Nietzsche argues that the lunatic asylum reveals faith as a vacuous concept. Anyone can have faith in all sorts of things; but, that doesn't make it true. Chesterton points out that in lunatic asylums the faith people place is in themselves. What he goes on to show in Orthodoxy is that what we place our trust in God, Scripture, and Sacred Tradition ---not ourselves.
"A casual stroll through a lunatic asylum shows that faith does not prove anything." -Nietzsche
and a substantially longer quote from GK Chesterton from his book Orthodoxy,
"The publisher said of somebody, “That man will get on; he believes in himself.” And I remember that as I lifted my head to listen, my eye caught an omnibus on which was written “Hanwell.” I said to him, “Shall I tell you where the men are who believe most in themselves? For I can tell you. I know of men who believe in themselves more colossally than Napoleon or Caesar. I know where flames the fixed star of certainty and success. I can guide you to the thrones of the Super-men. The men who really believe in themselves are all in lunatic asylums.” He said mildly that there were a good many men after all who believed in themselves and who were not in lunatic asylums. “Yes, there are,” I retorted, “and you of all men ought to know them. That drunken poet from whom you would not take a dreary tragedy, he believed in himself. That elderly minister with an epic from whom you were hiding in a back room, he believed in himself. If you consulted your business experience instead of your ugly individualistic philosophy, you would know that believing in himself is one of the commonest signs of a rotter. Actors who can’t act believe in themselves; and debtors who won’t pay. It would be much truer to say that a man will certainly fail, because he believes in himself. Complete self-confidence is not merely a sin; complete self-confidence is a weakness. Believing utterly in one’s self is a hysterical and superstitious belief like believing in Joanna Southcote: the man who has it has ‘Hanwell’ written on his face as plain as it is written on that omnibus.” And to all this my friend the publisher made this very deep and effective reply, “Well, if a man is not to believe in himself, in what is he to believe?” After a long pause I replied, “I will go home and write a book in answer to that question.” This is the book that I have written in answer to it.""
Nietzsche argues that the lunatic asylum reveals faith as a vacuous concept. Anyone can have faith in all sorts of things; but, that doesn't make it true. Chesterton points out that in lunatic asylums the faith people place is in themselves. What he goes on to show in Orthodoxy is that what we place our trust in God, Scripture, and Sacred Tradition ---not ourselves.
Friday, January 3, 2014
Inklings and the Cigar Club
Florida State University students will soon return to a fresh semester. But, one consequence of being in Greenville, SC is that I will not be joining them and I won't be a regular at the "cigar club" each Friday afternoon.
The cigar club is a wonderful meeting between economics faculty and graduate students to discuss life, current economic events, recent research articles, current projects we are working on, and so much more. I looked forward to those meetings each week and the community we shared ---community is a marvelous privilege that sharpens the mind and emboldens the spirit.
In addition to the community that is present at those meetings I felt an attachment through time to previous communities of scholars. I felt our group was carrying forward the kinds of traditions embodied in groups like the Inklings at Oxford with C.S. Lewis, J.R.R. Tolkien, and other literary figures. They were friends who read and discussed their work over pints and pipes at one of the local pubs (mostly The Eagle and Child).
For most Friday's from now on my body will be in Greenville but heart will be at the cigar club in Tallahassee.
The cigar club is a wonderful meeting between economics faculty and graduate students to discuss life, current economic events, recent research articles, current projects we are working on, and so much more. I looked forward to those meetings each week and the community we shared ---community is a marvelous privilege that sharpens the mind and emboldens the spirit.
In addition to the community that is present at those meetings I felt an attachment through time to previous communities of scholars. I felt our group was carrying forward the kinds of traditions embodied in groups like the Inklings at Oxford with C.S. Lewis, J.R.R. Tolkien, and other literary figures. They were friends who read and discussed their work over pints and pipes at one of the local pubs (mostly The Eagle and Child).
For most Friday's from now on my body will be in Greenville but heart will be at the cigar club in Tallahassee.
Thursday, January 2, 2014
Gift Exchange and the Sabbath Part 2
Quick, before reading any further … What are you thankful for? List the top 5 things that come to mind.
Did salvation or God's great love crack the list? If not, please do not think I was setting you up for guilt. Instead, it was meant as an honest inventory of our thankfulness.
In Part 1 of this post I conjectured that contemplation can help Christians to recognize they are the recipients of a great gift. After contemplation the gift recipient responds with joy on the Sabbath and the liturgy acts as a gift returned to God. It is glorious to think that this beautiful gift exchange has occurred for two millennia and can occur with great purpose, meaning, and fruit the rest of our lives. I wish now to illuminate this set of statements with some background from economics.
In economics there has been a theory of "gift exchange" around for almost 30 years. Nobel Laureate George Akerlof asked the question about why some employers would pay wages above the going market rate. The classic example of this is that Henry Ford paid his workers a wage of $5 per hour when other similarly skilled workers earned about half of that. In fact, Henry Ford doubled the wages of his workers in 1914. As a side note, you commonly hear people contend that he did this so workers could afford the product.; however, this is unlikely. Akerlof conjectured that these above market clearing wages would occur to attract higher quality workers, reduce turnover, and increase the productivity of workers. And, for some employers it could stem from a sense of fairness.
Others also did theoretical work in this area but to keep things brief I will move on to the experimental work. Ernst Fehr is probably the best known experimental economist working in the area of "gift exchange". The set up is a simple framework I'll explain below.
Consider an employer and employee. The employer can choose a wage of {0,1,2,…,10} and the employee can choose an effort level of {0,1,2,…,10}. The exact payment each actor receives can be manipulated; but, one simple example would be that the employer receives profit= e - w and the worker receives a payment=w - e. In words, the employer benefits from the effort of the worker but must pay the worker. Meanwhile, the employee benefits from the wage but has an effort cost associated with working.
Suppose the timing is such that the employer sends some wage first, let's say, w = 8. What would the employee do? Well, according to standard game theoretic arguments the employee will choose e=0. Game theory would predict this because the employee's payment is reduced when choosing e > 0. In numbers 8 > 8 - e. This argument would still hold if they were playing the game for many (finite) periods due to the argument of backward induction. Therefore, the employer should know this and offer a w=0.
This might sound quite strange to some of our readers. In fact, when I suggested that game theory predicts e=0 you might have balked and cursed game theory in your heart. And, you might have done this because you believed nobody receiving w=8 would return the employer with e=0! In fact, you're right (on average). There have been numerous studies that demonstrate that people do *not* play the game according to game theoretic predictions. People are reciprocal and return great effort when they have been given a great wage. But, the perception must be that they received a great wage when the employer didn't have to give it to them.
Now I want to transition back to the starting place. Contemplation helps us to correctly see the gift. If we do not see the gift we will not feel compelled to return the gift.
Did salvation or God's great love crack the list? If not, please do not think I was setting you up for guilt. Instead, it was meant as an honest inventory of our thankfulness.
In Part 1 of this post I conjectured that contemplation can help Christians to recognize they are the recipients of a great gift. After contemplation the gift recipient responds with joy on the Sabbath and the liturgy acts as a gift returned to God. It is glorious to think that this beautiful gift exchange has occurred for two millennia and can occur with great purpose, meaning, and fruit the rest of our lives. I wish now to illuminate this set of statements with some background from economics.
In economics there has been a theory of "gift exchange" around for almost 30 years. Nobel Laureate George Akerlof asked the question about why some employers would pay wages above the going market rate. The classic example of this is that Henry Ford paid his workers a wage of $5 per hour when other similarly skilled workers earned about half of that. In fact, Henry Ford doubled the wages of his workers in 1914. As a side note, you commonly hear people contend that he did this so workers could afford the product.; however, this is unlikely. Akerlof conjectured that these above market clearing wages would occur to attract higher quality workers, reduce turnover, and increase the productivity of workers. And, for some employers it could stem from a sense of fairness.
Others also did theoretical work in this area but to keep things brief I will move on to the experimental work. Ernst Fehr is probably the best known experimental economist working in the area of "gift exchange". The set up is a simple framework I'll explain below.
Consider an employer and employee. The employer can choose a wage of {0,1,2,…,10} and the employee can choose an effort level of {0,1,2,…,10}. The exact payment each actor receives can be manipulated; but, one simple example would be that the employer receives profit= e - w and the worker receives a payment=w - e. In words, the employer benefits from the effort of the worker but must pay the worker. Meanwhile, the employee benefits from the wage but has an effort cost associated with working.
Suppose the timing is such that the employer sends some wage first, let's say, w = 8. What would the employee do? Well, according to standard game theoretic arguments the employee will choose e=0. Game theory would predict this because the employee's payment is reduced when choosing e > 0. In numbers 8 > 8 - e. This argument would still hold if they were playing the game for many (finite) periods due to the argument of backward induction. Therefore, the employer should know this and offer a w=0.
This might sound quite strange to some of our readers. In fact, when I suggested that game theory predicts e=0 you might have balked and cursed game theory in your heart. And, you might have done this because you believed nobody receiving w=8 would return the employer with e=0! In fact, you're right (on average). There have been numerous studies that demonstrate that people do *not* play the game according to game theoretic predictions. People are reciprocal and return great effort when they have been given a great wage. But, the perception must be that they received a great wage when the employer didn't have to give it to them.
Now I want to transition back to the starting place. Contemplation helps us to correctly see the gift. If we do not see the gift we will not feel compelled to return the gift.
Wednesday, January 1, 2014
My Dagobah
The Empire Strikes Back is a favorite movie of mine and like all great stories it harkens to experiences and characters that are relatable.
At present I write from Greenville, SC after almost a decade in Tallahassee, FL. While I am in Greenville the goal is to acquire knowledge and skills to advance my dissertation. That is what I have been doing most days. On one of these days I came to think of Greenville as a parallel to Dagobah. While Luke had learned about the force from Obi Wan and had some experience with his Jedi skill set he still needed a different kind of training. On Dagobah Yoda teaches Luke the mental side of the game.
In Greenville I must grapple with the nuances and details of a dissertation. I must concentrate, dig deep, and push through to improve my capabilities as a researcher. And, throughout the process I am thrilled to have the master (Mark) a Skype call away.
I've always said that training montages are much cooler and exciting in the movies than the grit and determination required in real life. Yet, I look out at 2014 and think this will be a wonderful new year. I hope it is for you too.
At present I write from Greenville, SC after almost a decade in Tallahassee, FL. While I am in Greenville the goal is to acquire knowledge and skills to advance my dissertation. That is what I have been doing most days. On one of these days I came to think of Greenville as a parallel to Dagobah. While Luke had learned about the force from Obi Wan and had some experience with his Jedi skill set he still needed a different kind of training. On Dagobah Yoda teaches Luke the mental side of the game.
In Greenville I must grapple with the nuances and details of a dissertation. I must concentrate, dig deep, and push through to improve my capabilities as a researcher. And, throughout the process I am thrilled to have the master (Mark) a Skype call away.
I've always said that training montages are much cooler and exciting in the movies than the grit and determination required in real life. Yet, I look out at 2014 and think this will be a wonderful new year. I hope it is for you too.
Subscribe to:
Posts (Atom)