Jaywalking in Guatemala

Posted on September 13, 2017 by Jonathan Andreas — Leave a comment

As a visitor to Guatemala, I’ve often heard cautions from Guatemalans to be extra careful crossing the road because cars have the right of way and might run me over. Although cars give very little regard to pedestrian safety, there don’t seem to be any laws against jaywalking. Pedestrians jaywalk across any street or highway anywhere at their own risk because cars clearly have the right of way. In the US, it is illegal to jaywalk, but it is also illegal (more or less) for cars to run over pedestrians, so whenever a pedestrian does wander into a street, cars tend to try to give them the right of way.

On my first visit to Guatemala in the early 1990s, I was waiting for a bus along a two-lane highway in a small town that lined the highway with small businesses on the shoulders of both sides of the highway which were bustling with pedestrians. At one point I heard a semi-truck blaring on its air-horn and I looked up to see an old indigenous man slowly walking across the highway in the middle of the small town. The semi was barreling down the highway towards the old man who seemed oblivious to the traffic as if he were deaf. The truck kept blaring its horn as it barreled straight towards the man without slowing. As it approached, it didn’t swerve an inch and it ran right into the man, tossing his shattered body into the air like a flailing rag doll.

As his body flopped down on the gravel along the side of the road, the truck stopped blaring its horn, but it just kept driving down the road as if nothing had happened. Nobody chased after the truck and no police ever showed up. It was the only time I’ve seen someone die right in front of my eyes.

A small group of bystanders immediately gathered around the dead man on the side of the road and a short time later someone came with a pickup truck and they loaded up his body and drove him away. Someone told me that rural people died frequently in accidents like that because they weren’t used to seeing much traffic and the traffic that they did encounter in their rural areas couldn’t drive much faster than walking speed anyway because the dirt roads are so badly potholed.

When they encounter the new, smoothly-paved highways where cars drive at ungodly speeds, they are as unprepared for how to react as a deer caught in headlights and sometimes drivers give them less respect than they would a deer. After all, an impact with a full-grown deer weighs 200 pounds and will dent a vehicle worse than a thin, little indigenous person, and we all expect that people will get out of our way whereas it is harder to know what to expect from deer.

The unfamiliarity with the highway among the rural indigenous has caused collisions with urban Guatemalans who are unfamiliar with traditional rural norms where vehicles drive slowly and get out of the way of the pedestrians.

Posted in Development, Public Finance

Trickle-up economics

Posted on August 10, 2017 by Jonathan Andreas — 1 Comment

Supply-side economics is often derided as trickle-down economics. It is the idea that we should reduce taxes on the wealthy who will then use their increased disposable income to grow the economy so fast that it will benefit everyone. That isn’t what Thomas Piketty, Emmanuel Saez and Gabriel Zucman have found. The actual pattern is pretty much the reverse. The middle class (and the median) has had higher income growth when the income of the poor was growing faster than the income of the rich as you can see in this graph from NYT writer David Leonhardt.

When the poor had high income growth, everyone had high income growth. Even most of the rich had higher income growth than the average income growth in 2014, so the rising tide really did lift all boats.

More recently, the poor have actually been getting poorer and the rich have been getting a lot richer as the leave the rest of the population in the dust. The economy for most Americans has been fairly stagnant. This is a more crucial issue than another round of tax cuts for the wealthy.

Posted in Medianism, Public Finance

Median vs. mean life expectancy

Posted on June 12, 2017 by Jonathan Andreas — 12 Comments

Life expectancy is the mean number of years someone is expected to live if conditions would remain the same in the future as they are in the current year. But because life expectancy is slightly skewed to the left, David Spiegelhalter calculated that median life expectancy is about three years longer than the mean. That means that most people should expect to live longer than their life expectancy as it is usually calculated.

It’s well-known how misleading it can be to use average (mean) as a summary measure of income: …a few very rich people can hopelessly distort the mean. So median (the value halfway along the distribution) income is generally used, and this might fairly be described as the income of an average person, rather than the average income.

But, like everyone else dealing with actuarial statistics, I use life expectancy (the mean number of future years) to communicate someone’s survival prospects. And yet, just as for income, it is also a poor measure due to the skewness of the distribution of survival.

This can be clearly shown by looking at the life tables published by the Office for National Statistics (ONS) …[with] the expected number of deaths at each age out of 100,000 births, assuming the current mortality rates continue. The density plots for women and men are shown below, using the life tables for 2010-2012. The distributions have a small peak for babies dying in the first year of life, and then a long left-tail for early deaths, and then a sharp peak and a rapid fall up to age 100. The ‘compression’ of mortality is clear.

Numbers of women expected to die at each age, out of 100,000 born, assuming mortality rates stay the same as 2010-2012. The expectation is 83, median 86, the most likely value (mode) is 90.

Numbers of men expected to die at each age, out of 100,000 born, assuming mortality rates stay the same as 2010-2012. The expectation is 79, median 82, the most likely value (mode) is 86.

Left-skewed distributions are rather unusual, but have similar issues as any skew distribution – the mean, median and mode can be very different. For these survival distributions it is perhaps remarkable how far the mode is from the mean: for girls born now, even assuming there are no more increases in survival, their most likely age to die is 90, seven years more than the mean on 83. For little baby boys the mode is 86, again seven years more than the mean of 79. And even the median is 3 years more than the mean. That’s why I now believe that ‘life expectancy’ is misleading.

In the comments, Nick Ergodos* opines that:

I think the median beats the mean at every level and for all practical purposes, not only for estimating life expectancy or income. For large sample sizes (or if you repeat the experiment many times) the median approaches the mean anyway so nothing is lost by replacing the mean by the median everywhere. We use the average routinely for historical reasons only, not really for any rational reasons.

I don’t agree with Nick that the median always beats the mean, but it certainly does for income. The best statistic depends upon how it is used and there is no use where mean income is better (unless you are using the mean of log income which produces results that are a rough approximation of the median anyhow). For life expectancy, both measures have different advantages. The median is more realistic for most people (obviously) who have already survived past youthful mortality and gives a better picture of how many years of life they have left. But as a measure of social wellbeing, I’m fine with using mean life expectancy because it gives more weight to the tragedy of youth mortality than median life expectancy does. Most of the increase in (mean) life expectancy over the past two centuries has been due to a reduction in youth mortality and median life expectancy wouldn’t reflect that incredible gain in human wellbeing.

The difference between why mean life expectancy is OK and mean income isn’t OK for measuring welfare (utility) is that a mean assumes constant marginal utility. It is more reasonable to assume that each year of life gives about the same amount of utility than to assume that every dollar of income gives exactly the same amount of utility. That is the philosophical reason why I use standard (mean) life expectancy for calculating MELI rather than median life expectancy. The other reason is practical. As I discovered at the IARIW conference in Korea, it is hard enough to get economists interested in using median income and it would be a harder sell to get them to also switch to median life expectancy. Fortunately, the ordinary way of calculating life expectancy is just fine as a measure of wellbeing even though it isn’t as good for estimating how long you have left to live.

Of course there is only a three year gap between the two measures today, so there isn’t a large difference, but in the late 19th century, the gap was ten years because child mortality was much bigger. And median life expectancy is better for retirement planning. People tend to underestimate their lifespans (especially women) and this may be part of why people do not save enough money for retirement. This is understandable when mean life expectancy underestimates life expectancy for most people and it is THE ubiquitous measure of lifespan. Even the Social Security Administration uses the wrong measure for its retirement planning longevity calculator and if anything, longevity has tended to increase over time (until the crisis of the last three years in the USA), so the period life expectancy has consistently underestimated actual cohort life expectancy for almost two centuries. And if you really want to predict your individual life expectancy, you can get a much better prediction by including risk factors. People who earn more than the median income live a lot longer than poorer people in the US. Other strong predictors include more education, being female, and health and family histories. Life insurance corporations have spent a lot of money on proprietary models that predict how long you will live, but unfortunately most of their research is secret.

*For the wonkish, Nick Ergodos further explains his theory in a published paper that makes a more limited claim about the virtues of the median. It focuses on expected value and argues that the median probability of a gain (or loss) should be used (and is used my most people) for deciding whether or not to make a series of bets rather than the probability-weighted mean (which is the expected value). It is an intriguing theory, but I don’t think it is completely specified for the domain where it works versus where it doesn’t.

Posted in Health, Medianism

The ethics behind Trump’s main money man

Posted on April 9, 2017 by Jonathan Andreas — Leave a comment

Jane Mayer at the New Yorker has a profile of Robert Mercer, the reclusive Billionaire who probably invested more money in getting Trump elected than any other American (and we don’t know how much Putin spent). He not only directly funded Trump, but he established Breitbart and other alt-right institutions which provided Trump with fanatical early support as well as a data analytics firm called Cambridge Analytica which worked on behalf of Trump and groups like Citizens United and the Council for National Policy. Mercer and his daughter even got Trump to shake up his campaign and hire Mercer’s associates from organizations that Mercer had been funding including Steve Bannon as CEO, Kellyanne Conway as manager, and David Bossie as deputy manager. One of Mercer’s former colleagues, Nick Patterson, said, “In my view, Trump wouldn’t be President if not for Bob [Mercer].”

David Magerman, a senior employee of Mercer at Renaissance told the Wall Street Journal that

Mercer wants the U.S. government to be “shrunk down to the size of a pinhead.” …Magerman told me, “Bob believes that human beings have no inherent value other than how much money they make. A cat has value, he’s said, because it provides pleasure to humans. But if someone is on welfare they have negative value. If he earns a thousand times more than a schoolteacher, then he’s a thousand times more valuable.” Magerman added, “He thinks society is upside down—that government helps the weak people get strong, and makes the strong people weak by taking their money away, through taxes.” …Another former high-level Renaissance employee said, “Bob thinks the less government the better. He’s happy if people don’t trust the government. And if the President’s a bozo? He’s fine with that. He wants it to all fall down.”

This quote demonstrates that Mercer is a believer in mmutilitarianism. This is also the ethical system that economists (and many in business) typically use, but they usually don’t take it to its logical conclusions like Mercer does in the above quote does because that is so abhorrent to the rest of society. It is the ethical system that underlies cost-benefit analysis and the use of GDP as a measure of welfare which are very useful despite their flaws. And most economists don’t apply their mmutilitarian ethical logic to such an extreme as Mercer does and argue that the elderly and the poor should simply die rather than receive Medicaid and Social Security because they aren’t worth the cost of the programs.

Mmutilitarian ethics aren’t always this abhorrent. Most economists use a more judicious form of mmutilitarianism to argue in favor of environmental protections that Mercer opposes based on the logic of cost-benefit analysis too, but I don’t have time to write about why there is an apparent contradiction in the ethics of mmutilitarian cost-benefit analysis tonight.

Posted in Medianism, Pence2018, Public Finance

Eradicating diseases through individual efforts only works when there is no poverty

Posted on March 24, 2017 by Jonathan Andreas — Leave a comment

There are many diseases that have been basically eradicated from rich countries because they are easy to cure with modern medicine, but they persist in poor nations for the lack of money for basic treatments. For example, I’ll be taking students to Guatemala next semester and the CDC recommends getting the typhoid vaccine for travelers to rural parts of Guatemala. It is really cheap to treat typhoid with antibiotics and prevent it with sanitation, and that is why typhoid was basically eradicated in the USA decades ago, but it keeps getting reintroduced every year by travelers who pick it up in poor countries.

If every country were rich, Typhoid would probably be eradicated already because it only lives in human hosts. As would cholera, leprosy, hookworm, dracunculiasis and many other parasites and diseases that middle-class people can easily afford to cure. In a world where everyone has a middle-class income, many infectious diseases would have been eradicated by the ordinary efforts of middle-class individuals to avoid the disease. These diseases have only survived due to reservoirs of poverty where they have found refuge. Without poverty there would be no need for a decades-long Global Polio Eradication campaign. Middle class people would have eradicated it on their own initiative.

Middle-class society eradicated the bedbug mostly through individual efforts. It disappeared from large swathes of the world for decades, but it survived in places of poverty where it became resistant to insecticides and now it has bounced back into the beds of hotels of every income level around the world. If everywhere had had a middle-class income during the insecticide era, the bedbug would be extinct today, and probably head lice too. Middle-class areas are so good at eliminating malaria, I’d bet that it would have been eradicated long ago too if everywhere were middle class. What other diseases would have been inadvertently eradicated by individual actions if everyone in the world had been middle class?

Posted in Development, Health

Will individuals or their employers own their genetic code?

Posted on March 14, 2017 by Jonathan Andreas — Leave a comment

A property right is the right to exclude others’ access to something. It is the right to infringe on others’ freedom. These rights are socially determined and vary greatly across different societies. For example, do you think you should own the property right to your own genetic information or do you think your employer owns it? A new bill, HR 1313, would give your employer a partial property right over your genetic code. Employees who violate that right would have to pay an annual fine sort of like the fine you would pay for trespassing on someone else’s lawn. Right now you own your own genetic information and if an employer would want to see it, they would have to pay you to transfer some of the intellectual property rights. Employers would love to know the genetic code of their employees because it could help them determine who to get rid of. Employers want the most productive people and anyone who is at a heightened genetic risk of a major disease would not only reduce productivity by missing work, but by bringing down morale too. Furthermore, because of America’s unique employer-centric health insurance system, employers have to pay higher insurance costs if their employees are sicker than average and that gives them an extra incentive to do genetic screening.

The fact that this is even being discussed–let alone voted on–shows how far political power has moved away from the median worker towards the owners of capital as inequality has risen. Gattaca, here we come. Julia Belluz has more details.

Posted in Health, Public Finance

Money can’t buy you love, but can it buy you life?

Posted on March 12, 2017 by Jonathan Andreas — 2 Comments

Raj Chetty et al. published a study of the correlation of class and life expectancy that got a lot of press, but I hadn’t actually looked at the original publication until this week. Here is the correlation between life expectancy and class: