Quotulatiousness

March 24, 2014

Interpersonal communication in Shakespeare, or “Juliet and Her Nurse”

Filed under: Humour, Media — Tags: , , — Nicholas @ 08:40

Emma Pierson does a bit of statistical analysis of some of Shakespeare’s plays and discovers that some of the play names are rather misleading, at least in terms of romantic dialogue:

More than 400 years after Shakespeare wrote it, we can now say that Romeo and Juliet has the wrong name. Perhaps the play should be called Juliet and Her Nurse, which isn’t nearly as sexy, or Romeo and Benvolio, which has a whole different connotation.

I discovered this by writing a computer program to count how many lines each pair of characters in Romeo and Juliet spoke to each other,1 with the expectation that the lovers in the greatest love story of all time would speak more than any other pair. I wanted Romeo and Juliet to end up together — if they couldn’t in the play, at least they could in my analysis — but the math paid no heed to my desires. Juliet speaks more to her nurse than she does to Romeo; Romeo speaks more to Benvolio than he does to Juliet. Romeo gets a larger share of attention from his friends (Benvolio and Mercutio) and even his enemies (Tybalt) than he does from Juliet; Juliet gets a larger share of attention from her nurse and her mother than she does from Romeo. The two appear together in only five scenes out of 25. We all knew that this wasn’t a play predicated on deep interactions between the two protagonists, but still.

I’m blaming Romeo for this lack of communication. Juliet speaks 155 lines to him, and he speaks only 101 to her. His reticence toward Juliet is particularly inexcusable when you consider that Romeo spends more time talking than anyone else in the play. (He spends only one-sixth of his time in conversation with the supposed love of his life.) One might be tempted to blame this on the nature of the plot; of course the lovers have no chance to converse, kept apart as they are by the loathing of their families! But when I analyzed the script of a modern adaptation of Romeo and Juliet — West Side Story — I found that Tony and Maria interacted more in the script than did any other pair.

All this got me thinking: Do any of Shakespeare’s lovers actually, you know, talk to each other? If Romeo and Juliet don’t, what hope do the rest of them have?

Update, 28 March: Chateau Heartiste says that this study shows that pick-up artists and “game” practitioners are right and also proves that “Everything important you need to know about men and women you can find in the works of Shakespeare”.

March 20, 2014

Today in misunderstood income inequality stats…

Filed under: Britain, Economics, Media — Tags: , , — Nicholas @ 08:20

Tim Worstall pokes fun at a recent Oxfam report that claims that Britain’s five richest families own more than the bottom 20% of the population:

I read this and thought, “well, yes, this is obvious and what the hell’s it got to do with increasing inequality?” Of course Gerald Grosvenor (aka Duke of Westminster) has more wealth than the bottom 10 per cent of the country put together. It’s obvious that the top five families will have more than 20 per cent of all Britons. Do they think we all just got off the turnip truck or something?

They’ve also managed to entirely screw up the statistic they devised themselves by missing the point that if you’ve no debts and a £10 note then you’ve got more wealth than the bottom 10 or 20 per cent of the population has in aggregate. The bottom levels of our society have negative wealth.

[…]

Given what we classify as wealth, the poor have no assets at all. Property, financial assets (stocks, bonds etc), private sector pension plans, these are all pretty obviously wealth.

But then the state pension is also wealth: it’s a promise of a future stream of income. That is indeed wealth just as much as a share certificate or private pension is. But we don’t count that state pension as wealth in these sorts of calculations.

The right to live in a council house at a subsidised rent of the rest of your life is wealth, but that’s not counted either. Hell, the fact that we live in a country with a welfare system is a form of wealth — but we still don’t count that.

Doing this has been called (not by me, originally anyway) committing Worstall’s Fallacy. Failing to take account of the things we already do to correct a problem in arguing that more must be done to correct said problem. We already redistribute wealth by taxing the rich to provide pensions, housing, free education (only until 18 these days) and so on to people who could not otherwise afford them. But when bemoaning the amount of inequality that clearly cries out for more redistribution, we fail to note how much we’re already doing.

So Oxfam are improperly accounting for wealth and they’ve also missed the point that, given the existence of possible negative wealth, then of course one person or another in the UK will have more wealth than the entire lowest swathe.

February 23, 2014

David Friedman looks at the “missing heat is going into the deep ocean” claim

Filed under: Environment — Tags: , — Nicholas @ 10:20

David Friedman is an economist, so of course he doesn’t claim to be a climate scientist. He can, however, do math and examine numerical evidence … which doesn’t seem to support the most recent explanation for the pause in global warming:

One claim I have repeatedly seen in online arguments about global warming is that it has not really paused, because the “missing heat” has gone into the ocean. Before asking whether that claim is true, it is worth first asking how anyone could know it is true. A simple calculation suggests that the answer is one couldn’t. As follows …

Part of the claim, which I assume is true, is that from 90% to 95% of global heat goes into the ocean, which implies that the heat capacity of the ocean is 10 to 20 times that of the rest of the system. If so, and if the pause in surface and atmosphere temperatures was due to heat for some reason going into the ocean instead, that should have warmed the ocean by 1/10 to 1/20th of the amount by which the rest of the system didn’t warm.

The global temperature trend in the IPCC projections is about .03°C/year. If surface and atmospheric temperature has been flat for 17 years, that would put it about .5° below trend. If the explanation is the heat going into the ocean, the average temperature of the ocean should have risen as a result above its trend by between .025° and .05°.

Would anyone like to claim that we have data on ocean temperature accurate enough to show a change that small? If not, then the claim is at this point not an observed fact, which is how it is routinely reported, but a conjecture, a way of explaining away the failure of past models to correctly predict current data.

January 6, 2014

Police killed in line of duty – the good news and the not-so-good news

Filed under: Law, USA — Tags: , , , — Nicholas @ 10:32

The good news is that in the United States, the number of police officers killed in the performance of their duties dropped to a level last seen in 1959. The bad news is that the number of people killed by the police didn’t drop:

The go-to phrase deployed by police officers, district attorneys and other law enforcement-related entities to justify the use of excessive force or firing dozens of bullets into a single suspect is “the officer(s) feared for his/her safety.” There is no doubt being a police officer can be dangerous. But is it as dangerous as this oft-deployed justification makes it appear?

    The annual report from the nonprofit National Law Enforcement Officers Memorial Fund also found that deaths in the line of duty generally fell by 8 percent and were the fewest since 1959.

    According to the report, 111 federal, state, local, tribal and territorial officers were killed in the line of duty nationwide this past year, compared to 121 in 2012.

    Forty-six officers were killed in traffic related accidents, and 33 were killed by firearms. The number of firearms deaths fell 33 percent in 2013 and was the lowest since 1887.

This statistical evidence suggests being a cop is safer than its been since the days of Sheriff Andy Griffith. Back in 2007, the FBI put the number of justifiable homicides committed by officers in the line of duty at 391. That count only includes homicides that occurred during the commission of a felony. This total doesn’t include justifiable homicides committed by police officers against people not committing felonies and also doesn’t include homicides found to be not justifiable. But still, this severe undercount far outpaces the number of cops killed by civilians.

We should expect the number to always skew in favor of the police. After all, they are fighting crime and will run into dangerous criminals who may respond violently. But to continually claim that officers “fear for their safety” is to ignore the statistical evidence that says being a cop is the safest it’s been in years — and in more than a century when it comes to firearms-related deaths.

December 14, 2013

Canada edges ahead of the US in economic freedoms

Filed under: Cancon, Economics, Liberty, USA — Tags: , , , , , — Nicholas @ 13:12

Last week, the Fraser Institute published Economic Freedom of North America 2013 which illustrates the relative changes in economic freedom among US states and Canadian provinces:

Click to go to the full document

Click to go to the full document

Reason‘s J.D. Tuccille says of the report, “Canadian Provinces Suck Slightly Less Than U.S. States at Economic Freedom”:

For readers of Reason, Fraser’s definition of economic freedom is unlikely to be controversial. Fundamentally, the report says, “Individuals have economic freedom when (a) property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and (b) they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others.”

The report includes two rankings of economic freedom — one just comparing state and provincial policies, and the other incorporating the effects of national legal systems and property rights protections. Since people are subject to all aspects of the environment in which they operate, and not just locally decided rules and regulations, it’s that “world-adjusted all-government” score that matters most, and it has a big effect — especially since “gaps have widened between the scores of Canada and the United States in these areas.” The result is is that:

    [I]n the world-adjusted index the top two jurisdictions are Canadian, with Alberta in first place and Saskatchewan in second. In fact, four of the top seven jurisdictions are Canadian, with the province of Newfoundland & Labrador in sixth and British Columbia in seventh. Delaware, in third spot, is the highest ranked US state, followed by Texas and Nevada. Nonetheless, Canadian jurisdictions, Prince Edward Island and Nova Scotia, still land in the bottom two spots, just behind New Mexico at 58th and West Virginia at 57th.

Before you assume that the nice folks at Fraser are gloating, or that you should pack your bags for a northern relocation, the authors caution that things aren’t necessarily getting better north of the border. Instead, “their economic freedom is declining more slowly than in the US states.”

December 10, 2013

Origins of the “infographic” plague

Filed under: Books, Media — Tags: , , , — Nicholas @ 09:28

As Tim Harford says, “So it’s HIS fault”:

In the 1930s, Austrian sociologist, philosopher and curator Otto Neurath and his wife Marie pioneered ISOTYPE — the International System Of TYpographic Picture Education, a new visual language for capturing quantitative information in pictograms, sparking the golden age of infographics in print.

The Transformer: Principles of Making Isotype Charts is the first English-language volume to capture the story of Isotype, an essential foundation for our modern visual language dominated by pictograms in everything from bathroom signage to computer interfaces to GOOD’s acclaimed Transparencies.

Isotype1

The real cherry on top is a previously unpublished essay by Marie Neurath, who was very much on par with Otto as Isotype’s co-inventor, written a year before her death in 1986 and telling the story of how she carried on the Isotype legacy after Otto’s death in 1946.

Isotype2

December 6, 2013

Mismeasuring inequality

Filed under: Economics, USA — Tags: , , — Nicholas @ 15:20

Tim Worstall on a Wall Street Journal article which asks “how do we measure inequality”. Tim says “not that way, idiots” (although I might have imagined the “idiots” part):

The title of the piece is “How do you measure ‘inequality’?” to which a very good response is “Not that way”. For although all the numbers there are exact and accurate (well, as much as any economic statistic is such) the whole statement is entirely misleading. For the numbers that are being used for the USA are calculated on an entirely different basis to the way that the numbers for the other countries are. So much so that in this instance we have Wikipedia being more accurate than either the WSJ or the CIA itself. Which, while amusing, isn’t quite the world I think we’d all like to have.

Here’s what the problem is. Conceptually we can measure inequality in a number of different ways and this particular one, the Gini, looks at the spread of incomes across the society. OK, no need for the details of how we calculate it except for one. We again, conceptually, have two different incomes that can be measured.

So, the guy pulling down $1 million a year dealing bonds on Wall Street. Does he really have an income of $1 million a year? Or is it more true to say that he gets $600,000 a year after the Feds, NY State and NYC have all dipped their hands into his paycheck? And the guy at the other end, making $15,000 a year as a greeter at WalMart. Is he really making $15,000? Or should we add in the EITC, the State EITC (if there is one), Section 8 housing vouchers, Medicaid and all the rest to what he’s earning? He might be consuming as if he’s getting $25 k a year, even though his market income is only $15k.

What we actually do is we calculate both of these. The first is called the Gini at market incomes, the second the Gini after taxes and benefits. There’s nothing either right or wrong about either measure: they just are what they are. However, we do have to be clear about which we are using in any circumstance and similarly, very clear about not comparing inequality in one country by one measure with inequality in another by the other measure. Yet, sadly, that is exactly what is being done here.

December 4, 2013

Apple iPhone pricing in different markets

Filed under: Economics, Technology — Tags: , , , — Nicholas @ 08:06

In Forbes, Tim Worstall explains a misunderstanding of Ricardo’s Iron Law of One Price on the part of the Guardian:

This is a fun little bit of data calculation and visualisation. It’s a database and then mapping of the global price list for Apple’s iPhone 5s. And there are two interesting ways of using it. The first is simply to look at how prices differ around the world:

iPhone price mapYou can do this in USD or GBP as you wish. And this can be used to explore the violations of Ricardo’s Iron Law of One Price. Which is where David Ricardo insisted that the prices of traded goods would inevitably move to being equal all over the world. Well, equal minus the transport costs of getting them around the world. And transport costs for an iPhone are trivial: it would be amazing if Apple were paying more than a couple of dollars to airfreight one to anywhere at all. So, we would expect prices to be the same everywhere: but they obviously are not.

[…]

However, when The Guardian reports on this something appears to go wrong. Not their fault I suppose, it’s about economics and lefties never really do get that subject. But here:

    Similar to the way the Economist tracks the cost of the ubiquitous McDonalds burger across countries, nations and states, Mobile Unlocked tracked the price of the iPhone 5S across 47 countries in native currencies with native sales tax, and then converted those prices into US dollars (USD) or British pounds (GBP).

No … the Big Mac Index operates entirely and exactly the other way around. We need to make the distinction between traded goods and non-traded goods. The Iron Law only works on traded goods. What we’re trying to find out with PPP calculations is what are the price differentials of non-traded goods? Which is why the Big Mac is used. It is (supposedly at least) exactly the same all over the world. It is also made almost entirely from local produce bought at the local price in local markets. US Big Macs use American beef, Argentine ones Argentine and so on. So we get to see the impact of local prices on the same product worldwide. That’s what we’re actually attempting with that Big Mac Index. The Economist then goes on to compare the prices of this non-traded good with exchange rates and attempt to work out whether the exchange rates are correct or not.

This is entirely different from using the price of a traded good to measure local price variations. For what we’re going to be measuring here is what interventions there are into stopping the Iron Law working, not what local price levels are.

November 28, 2013

What’s the real US unemployment rate?

Filed under: Economics, Government, USA — Tags: , — Nicholas @ 11:44

Statistics can be very helpful tools in analysis, but the quality of analysis will depend on the accuracy of the statistics. In the US, the organization responsible for compiling the unemployment numbers is the Bureau of Labor Statistics (BLS). They actually compile several different categories of unemployment data, only one of which is commonly used by the media: the U-3 unemployment rate. Wendy McElroy explains why this may be a very misleading number:

The Bureau of Labor Statistics (BLS) compiles the United States’ unemployment statistics every month. It looks at six categories of different data, that are called U-1 to U-6. U-3 counts how many people were unemployed but were actively looking for work during the past month; this is the official unemployment rate that is broadcast by the media. By contrast, U-6 counts the unemployed and underemployed who are excluded from the U-3 data. For example, U-6 classifies people who have unsuccessfully looked for a job in the last year as “not participating in the labor force” rather than as unemployed. U-6 also includes part-time workers who need more employment in order to live, but the number of these workers is dwarfed by the number of long-term unemployed. (“Long-term employment” is defined as lasting 27 weeks or more).

The data included in the categories increase as the numbers ascend; the categories are defined as follows:

  • U-3 Total unemployed, as a percent of the civilian labor force
  • U-4 Total unemployed plus discouraged workers
  • U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force
  • U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons

What is America’s real unemployment rate? According to U-3 for October 2013, 11.3 million people were officially unemployed. BLS adds that 91,541,000 working age people did not participate in the labor force. If these numbers are added together, there are 102 million working age Americans who are either unemployed or not in the labor force for reasons that are not clear; for example, they could be retired. The non-working population represents 37.2% of working age people.

(Note: it is not known how the federal furlough of employees during the October shutdown affected the data, if at all. The furloughed employees seem to have been counted as both unemployed and working because they eventually received full payment for the time off.)

The unemployment rate reflected by the last four categories of BLS data break down as follows:

  • U-3 = 7.3%
  • U-4 = 7.8%
  • U-5 = 8.6%
  • U-6 = 13.8%

The American media used the U-3 numbers and reported the unemployment rate for October to be 7.3%, which is about 1/2 of the more realistic U-6 total. The media also glossed over U-3 figures that were alarming. For example, the official rate for teen unemployment (16 to 19 years old) stood at 22.2%; black unemployment is 13.1%

November 23, 2013

Houston – sex trafficking capital of the world (says Dallas newspaper)

Filed under: Law, Media — Tags: , , , — Nicholas @ 09:17

According to a Dallas newspaper, Houston is the focal point of a vast sex trafficking operation:

Check out this obvious crap — unbelievable to any thinking person — in the November 22 Dallas Morning News.

The Texas Senator and Representative that the paper apparently very credulously and obediently took notes from contend that there are 300,000 sex trafficking cases prosecuted every year — “in Houston alone.”

Here’s the quote from the Dallas Morning News editorial:

    Editorial: Cracking down on sex traffickers

    Two Texas Republicans, Sen. John Cornyn and Rep. Ted Poe of the Houston area, are co-sponsoring a bill that would impose stiff penalties on these adult victimizers of up to life in prison. The Justice for Victims of Trafficking Act, which has bipartisan support in both houses, would supplement an existing law that focuses primarily on punishing sex-trafficking organizations abroad.

    Poe and Cornyn estimate that one-quarter of U.S. sex-trafficking victims have Texas roots. Poe says our state’s proximity to Mexico and high immigrant population give the state a particularly high profile. In Houston alone, about 300,000 sex trafficking cases are prosecuted each year.

Do they work butt-drunk at this paper?

300,000? Do you realize how many people that is?

[…]

Of course, Houston’s population is only 2.161 million. So, throw in my fantasy guestimate of at least 200,000 uncaught and unpunished people guilty of sex trafficking on top of the 300,000 supposedly documented. This suggests that a vast segment of Houston’s population — at least 15 percent and maybe 25 percent — is engaged in the business of sex trafficking.

Math is hard.

November 19, 2013

Making Granny pay … full fare

Filed under: Business, Cancon, Economics — Tags: , , , , , — Nicholas @ 17:43

In Maclean’s, a look at the feel-good but economically silly reasons for senior discounts:

The seniors discount has long been justified as a way to recognize the constraints faced by pensioners stuck on fixed incomes, and as a modest token of appreciation for a lifetime spent paying taxes and contributing to society. And for those truly in need, who would quibble? But with half a million Baby Boomers — a group not known for frugality or lack of financial resources — turning 65 every year for the next few decades, the seniors discount is in for much greater scrutiny.

[…]

There was a time when the seniors discount made a lot more sense. In the mid-1970s, nearly 30 per cent of all seniors were considered poor, as defined by Statistics Canada’s low-income cut-off. But today, this has fallen to a mere 5.2 per cent. The impact of this turnaround is hard to overstate. Seniors once faced the highest rates of poverty in Canada; now they enjoy the lowest level of any age group: The poverty rate among seniors is almost half that of working-age Canadians.

Thanks to a solid system of government support programs, the very poorest seniors receive more income in retirement than they did when they were of working age. The near-elimination of seniors’ poverty is widely considered to be Canada’s greatest social policy triumph of the past half-century.

This tremendous improvement in seniors’ financial security has dramatically changed the distribution of income across age categories, as well. In 1976, median income for senior households was 41 per cent of the national average. Today, it’s 67 per cent. Over the same period, median income for families where the oldest member is aged 25-34 has fallen in both absolute and relative terms.

Then there’s the vast wealth generated for the Boomer generation by the housing and stock markets (only some of which was lost during the great recession). The stock of wealth in housing, pensions and financial assets held by the average senior family is nearly double that of working-age households. Accounting for the financial benefits of home ownership and rising house values, Statistics Canada calculates the true net annual income of retired households rises to 87 per cent of a working-age household’s income. In other words, non-working seniors are making almost as much as folks in their prime earning years, but without all the expenses and stressors that go with a job, children at home, or middle age. Not only that, the current crop of seniors enjoys historically high rates of pension coverage. The much-publicized erosion of private-sector pensions will hit younger generations who are currently far from retirement.

November 10, 2013

Growth forecasts continue to over-estimate Canada’s actual economic progress

Filed under: Cancon, Economics — Tags: , , , , — Nicholas @ 12:12

In Maclean’s, Debbie Downer Colin Campbell takes a survey of the state of Canada’s economy:

A key qualification for landing a job at the Bank of Canada, it seems, is an unfailing sense of optimism. In 2009, the bank forecast the economy would grow 3.3 per cent in 2011. It grew 2.5 per cent. In 2011, it said the economy would grow 2.9 per cent in 2013. It will likely be just 1.6 per cent. Now it says the economy will grow 2.3 per cent next year. How likely is that? The bank has consistently viewed the economy through rose-coloured glasses in recent years, perhaps believing its low-interest-rate policy will eventually bear fruit. Rates have been held at one per cent for three years now. But the economy seems only to be getting worse.

It grew 0.3 per cent in August, Statistics Canada said last week — mostly attributed to a familiar crutch, the oil business. Elsewhere, things aren’t looking up. A new TD Bank report said corporate Canada is “in a slump,” with profits down 16 per cent from their post-recession peak in 2011. Some observers point out that Canada is still doing better than Europe and Japan. But so are most countries that aren’t in a recession, from South Africa and New Zealand to Equatorial Guinea and Guatemala. After breezing through the recession, Canada is back to old habits: hoping its fortunes (i.e., exports) will rise along with America’s comeback. But the U.S., too, is back in a rut. Last week, the Federal Reserve said it would continue with its $85-billion-a-month bond-buying stimulus program.

With the economy sputtering, Ottawa has meanwhile remained preoccupied with fiscal restraint and balancing the budget within two years. So, with neither low interest rates nor government spending providing a boost, the outcome seems predictable: Official growth forecasts will look nice, but will keep missing the mark.

October 29, 2013

Poverty in America

Filed under: Economics, USA — Tags: , , , — Nicholas @ 10:40

Zero Hedge recently went on a tear about “soaring poverty in America”, compiling a list of 29 items which “proved” the case. Tim Worstall indulges in a bit of fisking over the mythical claims:

    2. New numbers have just been released, and they show that the number of public school students in this country that are homeless is at an all-time record high. It is hard to believe, but right now 1.2 million students that attend public schools in America are homeless.

No, I’m afraid not. In fact, this isn’t possible in the slightest. The numbers for homelessness are here.

    In January 2012, 633,782 people were homeless on a single night in the United States. Most (62 percent) were homeless as individuals and 38 percent were homeless as persons in families.

At any one time we have 630,000 homeless people. We cannot therefore have twice that number of children alone being homeless at any one time. This is not one of the mathematical possibilities that this universe offers us.

What is actually being said in the original number is that over the course of a a year 1.2 million children will suffer one or more incidents of homelessness. We can still think that this is appalling, that it shouldn’t happen and that we ought to be doing more about it. But it is not true that “right now 1.2 million students that attend public schools are homeless”.

    3. When I was growing up, it seemed like almost everyone was from a middle class home. But now that has all changed. One recent study discovered that nearly half of all public students in the United States come from low income homes.

Well, if you grow up in a middle class area then of course those you grow up with are likely to be middle class. But that nearly half of students coming from low income homes is indeed true. But it’s extremely uninteresting that it is. Here’s the definition of low income they are using:

    To be crystal clear, the researchers were not analyzing poverty rates per se. Rather, they tracked at the percentage of children in each state who received free or reduced school lunches, which are only available to students whose families earn below 185 percent of the poverty line. For a family of four, that amounted to about $41,000 in 2011.

As it happens, median household income is around two times that federal poverty line. So, 185% of the federal poverty line is going to be pretty close to the median household income. Median household income being the amount that 50% of households get more than and 50% get less than. So, yes, we would pretty much expect that 50% of children are coming from low income families. Because it’s only in Lake Woebegon that all the children are above average. This is a statistical artifact of the measure they are using as low income, nothing else.

And, of course, the traditional mis-measurement of poverty in the US compared to pretty much every other western country:

    6. According to the U.S. Census Bureau, approximately one out of every six Americans is now living in poverty. The number of Americans living in poverty is now at a level not seen since the 1960s.

No, this is not true, as I’ve pointed out in these pages many a time. Many, many, many, many times in fact.

The 15% in poverty measure is the number of people who would be in poverty if we didn’t help them by giving them money, food, housing and health care. It is not the number living in poverty. It is the number in poverty before we help them out of poverty. And as to the comparison with the 1960s, in the 1960s it really was the number in poverty after we helped, now it’s the number before we help.

As to why this is when we calculate the number below the poverty line we look only at cash incomes. This includes any actual money that people might be given to alleviate their poverty. In 1960s America pretty much the only poverty alleviation that was done was to give money to poor people (“welfare”). Today we give very little money directly. But we spend a vastly greater amount in giving people things. Medicaid, Section 8 housing vouchers, SNAP (or food stamps). We also give aid to the low paid through the tax system, with the EITC. However, we do not count all of those things, nor the EITC through the tax system, in our calculation of the number below the poverty line. So, since the 1960s the US measure of poverty has changed. From being one of people who are indeed living in poverty after whatever help they get to one of the number of people who would be in poverty before any help that they get.

When we correct for this the US poverty rate is significantly lower now than it was in the 60s. One estimate is that it is about half the 60s number.

October 21, 2013

Nate Silver on Chinese economic data

Filed under: China, Economics — Tags: — Nicholas @ 08:37

The Wall Street Journal‘s China Real Time Report has an interview with celebrity statistician Nate Silver:

Can you apply good data analysis to poor data, for example, in China?

People in the United States and the United Kingdom overestimate the quality of economic data. Even if people are above board, it is simply hard to estimate something like the American economy.

With China, you would have even more difficulty. I think the general lesson is that by looking at a broader consensus of indicators, you do well than just looking at one indicator or one sector.

It is problematic to think about “how do you measure Chinese growth”. One way [is to look at] more public facing measures — by looking, for example, at the amount of light output emanating from China.

I flew through Beijing [on the way to Hong Kong] — there was less physical brightness coming from Beijing than you would have seen from a comparable American city or European city.

A true cynic might suggest that the lights were dimmed by the pervasive air pollution in Beijing…

October 16, 2013

US wages and personal mobility

Filed under: Economics, USA — Tags: , , , , — Nicholas @ 08:07

Coyote Blog looks at the widely touted flattening of income growth in the United States and wonders how much mobility (people moving from one state to another) might play a part in the overall picture:

All of this is a long introduction to some thinking I have been doing on all the “Average is Over” discussion talking about the flattening of growth in median wages. I begin with this chart:

Click to see full-sized image

Click to see full-sized image

There is a lot of interstate migration going on. And much of it seems to be out of what I think of as higher cost states like CA, IL, and NY and into lower cost states like AZ, TX, FL, and NC. One of the facts of life about the CPI and other inflation adjustments of income numbers is that the US essentially maintains one average CPI. Further, median income numbers and poverty numbers tend to assume one single average cost of living number. But everyone understands that the income required to maintain lifestyle X on the east side of Manhattan is very different than the income required to maintain lifestyle X in Dallas or Knoxville or Jackson, MS.

Could it be that even with a flat average median wage, that demographic shifts to lower cost-of-living states actually result in individuals being better off and living better?

For some items one buys, of course, there is no improvement by moving. For example, my guess is that an iPhone with a monthly service plan costs about the same anywhere you go in the US. But if you take something like housing, the differences can be enormous.

Let’s compare San Francisco and Houston. At first glance, San Francisco seems far wealthier. The median income in San Francisco is $78,840 while the median income in Houston in $55,910. Moving from a median wage job in San Francisco to a media wage job in Houston seems to represent a huge step down. If you and a bunch of your friends made this move, the US median income number would drop. It would look like people were worse off.

But something else happens when you take this nominal pay cut to move to Houston. You also can suddenly afford a much nicer, larger house, even at the lower nominal pay. In San Francisco, your admittedly higher nominal pay would only afford you the ability to buy only 14% of the homes on the market. And the median home, which you could not afford, has only about 1000 square feet of space. In Houston, on the other hand, your lower nominal pay would allow you to buy 56% of the homes. And that median home, which you can now afford, will have on average 1858 square feet of space.

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