but look at this – I`d like your guys’ opinion of this FF calculator. Mine is here

Although the report – which is titled the fiscal benefits of marriage – does provide a fiscal and social cost of family breakdown, it does not quantify the fiscal benefits of marriage, despite its title, as they are lumped in with – and are no doubt pretty much equal to – the benefits of cohabiting couples – and more than 40 percent of couples aged under 44 are unmarried. But the report discusses decreasing marriage rates,implying that there is a social and economic cost because proportionally fewer people are getting married. But marriage rates are decreasing not just because of cohabitation, they are also decreasing because the parents of a third of this country’s children have no partner. And it is the sole parents in poverty and on benefits who are disproportionately adding to these fiscal costs.
more here

It appears to me that our debate now lies on whether we feel the trade-off between clarity and full descriptive accuracy was made appropriately.

Any discussion on the trade-off is normative in nature – unless we had some appropriate tools that we could agree on to analyse the issue I am not sure if we will every be able to “agree”.

My impression was that the report aimed to describe part of the policy Issue – and was clear about the fact that it was only part of the issue. I don’t think we can ask anything more from a report without loosing a substantial amount of clarity – either by making the document too long or confusing the results of the document.

Perhaps this depends on the audience. I just re-read the executive summary and it wasn’t until the third page of four that it was mentioned that the costs are gross rather than net. You may expect that an economist would mean it in this way, but if I read ‘costs of divorce’ in a newspaper I would presume they meant that divorce had a net cost to society.

If I viewed the report as an economic report then I might be OK assuming they were talking about costs the way an economist would. However, since it seems intended to be a policy discussion document, I’m not so sure that such an assumption is warranted.

Similarly, the estimates are “qualified by the need for further research and debate on the assumptions employed in this paper”. I would be fine with that in an economic paper, but I feel that a discussion paper should at least mention some of the obvious issues that also need to be considered in the policy debate, even in passing.

The way I read it, it seems like an analysis without context. Perhaps you think that it isn’t the job of the paper to provide a context. Yet, even in academic papers which are intended only for experts in the field, the context and limitations of the research are specified in the introduction.That’s why the lack of context feels like a deliberate omission to me.

Hmmm. I wouldn’t have a problem with that, except for the fact that after I read the report I felt that the scope of the report was blindingly clear. It is limited scope is consistently mentioned.

If the report had to build a case for the other factors (as for this factor it builds a case and then quantifies the elements) that are required to do a complete policy analysis is would be twice as long and would invariably be wrong as it would miss something.

The sort of document you seem to want does not exist in the consulting world – and I’m loathe to say that it may be a worse type of document than the reports consultants produce given its seeming refusal to admit its own limitations.

“I wouldn’t go that far. I’d say that people appear relatively happy with the cost of the externality being spread over all taxpayers. I don’t think it is internalised at all.”

Then we agree here – we were just shifting towards the viewpoint from separate angles. We should save discussion of institutions for a post or something 😛

I do think it’s a problem: it’s a problem of omission. I think that a report intended to influence public opinion on government policy should make its limitations clear. The report is very clear on what it says, but equally brief about what other factors might be relevant for the policy decision it seeks to influence.

i don’t have a problem with the substance of the report, only the framing.

“with that statement you were implying that the associated externality was not something we should worry about.”

I wouldn’t go that far. I’d say that people appear relatively happy with the cost of the externality being spread over all taxpayers. I don’t think it is internalised at all.

But if you were only discussing the report why would this matter – when the report explicitly stated it was only looking at one small part of the overall policy decision. The report admitted it was of limited scope – the value of the report came from the substantive analysis of this subsection of the relevant policy elements.

If you had framed your post in the positive, (eg as well as these costs, another important component for policy analysis would be these benefits) then your discussion would be fine. However, you called the lack of “benefit” discussion “concerning” – this implies that you characterised a problem with the report. However, I think the only way you could find the characterisation “concerning” is if you misunderstood the scope and purpose of the report. A factor I wished to clear up in the comments.

“Perhaps your estimation of how often they aren’t revealed differs from mine. I don’t think that that empirical issues can be decided by reference to possible causes of the difference”

I can buy that as a normative difference. However, if you accept that there can be a wedge between what government does and social preference you must admit that this statement:

“the decision to provide those welfare services indicates a willingness on the part of society to subsidise individual decisions which result in deprivation”

Is in itself incredibly normative – and as a result cannot be treated as proof that the externality is fully internalised in society. This matters, as it implies that analysis of this externality has value – when with that statement you were implying that the associated externality was not something we should worry about.

No, I criticised it in the comments. In my post I noted that the report doesn’t provide a complete picture of the policy decision. I did not take issue with the substantive analysis of the report anywhere.

“This imperfection in conjunction with Arrow’s impossibility theorem surely indicates that social preferences are often not revealed by the interests of government.”

I think those things imply that social preferences may not be revealed by the interests of government. Perhaps your estimation of how often they aren’t revealed differs from mine. I don’t think that that empirical issues can be decided by reference to possible causes of the difference.

Your post is based on the report – you criticise the fact that the report “leaves things out”, without actually touching on what the report is trying to cover. You link to the report, you discuss the report, I’m not even sure you mention the media release – as a result, it would have been hard for me to interpret this as a objection to the media release 🙂

“Are institutions not formed by the elected government? Do people not elect the government that they believe will most benefit them? Would you not then expect a correlation between peoples’ desires and the actions of the government? I don’t think that’s a normative judgement; it’s just following incentives.”

If institutions are formed by government, we have to ask how people get into power. Even if we started with a clean slate (such that there was no prior history dependence in institutions which derives the way they evolve – which is a HUGE assumption), if any subgroup is able to shape information in a way to sell their own point of view, then they gain the ability to form institutions in a way that it too their benefit – not societies.

The ability of groups to use information to put things in there favour, such as Labour has done with the concept of taxing and spending by misrepresenting costs and benefits (they stopped printing productivity measure for many public industries once they cam into power), is part of the description of reality – and it ensures that the choice of government will not always represent peoples underlying desires.

Also even if there was no information problem – a vote is a discrete thing that happens once every 3, 4, maybe even 5 years. People do not have the ability to reveal there preference in every issue – just some aggregate valuation of the issues avaliable at the time of the election. This imperfection in conjunction with Arrow’s impossibility theorem surely indicates that social preferences are often not revealed by the interests of government.

No, I don’t disagree with their judgments; I object to the misleading nature of their release. They represent the report as something it’s not.

“If people who control the political process have an interest in extra regulation, then they will provide mis-information in order to make this happen.”

Very likely true, but is there any evidence that it represents a real life situation?

“if you can’t even show that institutions are formed to turn peoples votes into the right political institutions how can you make that assumption”

Are institutions not formed by the elected government? Do people not elect the government that they believe will most benefit them? Would you not then expect a correlation between peoples’ desires and the actions of the government? I don’t think that’s a normative judgement; it’s just following incentives.