Author Archives: jamesz

Homecoming Queen still on top

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For all the nerds and geeks who cursed the popular people at high school but comforted themselves with the thought that future success would be theirs… Steven Levitt has bad news:

…each extra close friend in high school is associated with earnings that are 2 percent higher later in life after controlling for other factors. While not a huge effect, it does suggest that either that a) the same factors that make you popular in high school help you in a job setting, or b) that high-school friends can do you favors later in life that will earn you higher wages.

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Do we get what we pay for in healthcare?

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I said earlier that we might not always want to trust the people with the best track record when we go off the beaten path. Sometimes the tools that work in one environment aren’t the best to use when the environment changes and what we really need are experts in developing tools.

A related post on OB points to another reason why trusting track records isn’t always best.

Call it the best-kept secret in Massachusetts medicine: Health insurance companies pay a handful of hospitals far more for the same work even when there is no evidence that the higher-priced care produces healthier patients.

We might naively use this as evidence that less prestigious hospitals actually offer better care. However, another possible interpretation is that the toughest cases go to the most prestigious hospitals and, despite the higher standard of care, they end up with a higher mortality rate. Continue Reading →

Should we trust the forecasters?

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I’ve been flicking back over some posts by Robin Hanson at Overcoming Bias and came across this one about judging the reliability of macroeconomists’ advice:

It turns out that many macro economists frequently forecast future macro events. Furthermore, many places keep standardized track records of such forecasts, records that can be compared for accuracy; we can compare the accuracy of such folks!
. . .
Alas, it turns out that there is almost no overlap between the macro-economists who are considered the most prestigious and those who even publish forecasts.

I can understand wanting to rely on the economist with the best track record for ordinary forecasting, but is there a difference in the current climate? Continue Reading →

Where’s the issue?

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One of the two key proposals of the job summit is to institute a nine day fortnight for manufacturing workers. Presumably the idea is to increase the flexibility of working hours and thus increase the number of people in employment.

The obvious question is, ‘what is the market failure here?’ Employers and employees are free to choose their working hours. Employers may employ more people for fewer hours if they so wish, yet they seem not to. Why then would we force people to work fewer hours? Continue Reading →

Wellington City Council are not welfare maximisers

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The Wellington City Council seems pretty keen to tear up Manners Mall and turn it into a bus route. As any good local body would they’ve had a round of consultation which resulted in 74% of the 722 submitters opposing the plan and 20% in favour.

You may think that would give the council pause for thought. However, they commissioned a survery of 500 constituents which suggested that 68% supported the plan. They are now using that survey to suggest that the submissions form a biased view of what the electorate wants. How can we make sense of this data and which number should we prefer? Continue Reading →