Medicare Advantage – the Private Option

June 29, 2014
Posted by Jay Livingston

Healthcare stubbornly refuses to conform to conventional economic models, particularly the idea that competing private firms are more effective than government.  Medicare Advantage may be the latest example of privatization not working out the way it’s supposed to.

Medicare Advantage is part of George W. Bush’s  Medicare Modernization Act (MMA) of 2003.  Medicare, the original,  is a single-payer system; the government pays doctors. Medicare Advantage is the private option – the government pays money to insurance companies, who in turn sell insurance plans for seniors. 

The theory behind this privatization of Medicare was that it would bring more insurance companies into the market, and the competition among those companies would result in better and cheaper medical coverage.  Opponents of the MMA saw it as yet another instance of the Bush administration giving away money to business. 

Did the Medicare Advantage subsidies bring better results? We don’t have a randomized control study, but a provision of the MMA allows for a sort of natural experiment.  Counties in areas with a population of 250,000 or more got subsidies that were 10.5% greater than counties in areas under 250,000.  Three Wharton professors* compared the outcomes. 

One of the results comes right out of the Econ textbook: where subsidies were higher, more firms followed the money and entered the marketplace. They also enrolled more people.

The first key takeaway is that a firm’s decision to enter a market is highly responsive to how much the government pays. When the government pays more for private health insurance through Medicare, more insurers compete to offer that coverage.

But the important question is whether the money that brought companies into the marketplace went to cheaper and better medical care.  And if not, where did the money go?

Our findings indicate that we see more insurers enter and we see more people enroll, and we see more advertising expenditures. But we actually don’t see much better quality when you pay plans more. The question then naturally rises, “Where does the money seem to go?” And in a final empirical analysis, we try to see how much of it ripples through to profits of health insurers. And we see that a quite significant share of it does. [emphasis added].

This is not really surprising. For-profit firms want to make a profit. In theory (classical economic theory), they should make that profit by providing a better product. Unfortunately, that’s not what happened.

A second takeaway is that, at least given the many quality measures that we can look at, we don’t find a ton of evidence that paying plans substantially more leads to much better quality. . . .  We didn’t see a big improvement in quality. And we’re talking about billions of dollars in additional government spending as a result of this somewhat higher reimbursement in the places with a population of 250,000 or more.

Under Obamacare, reimbursements to Medicare Advantage will shrink. Reimbursments to Medicare Advantage have been 14% higher than those in the traditional Medicare, and Obama care aims to reduce that difference. Obama opponents have run scare ads, and of course the insurance companies have lobbied heavily against the reductions.  But according to the Wharton study, the reductions will have little impact on seniors.

there are a number of changes that will take effect over the next several years as a result of the Affordable Care Act, better known as Obamacare. Chief among them is a reduction in the generosity of reimbursement of Medicare Advantage plans… our evidence suggests that the costs of those reimbursement cuts for consumers might not be so great after all..

---------------------------------

*Mark Duggan, Amanda Starc, and Boris Vabson, NBER paper “Who Benefits when the Government Pays More? Pass-Through in the Medicare Advantage.” The interview with Duggan is here. 

Soccer and Status Politics

June 27, 2014
Posted by Jay Livingston

Ann Coulter nails it in her column on soccer.  Not the part about the rising interest in soccer signalling America’s  moral decay. That’s just her usual attempt to be provocative.  What Coulter gets right is that soccer is part of the cultural divide.  The question she raises is much bigger than whether soccer is an inferior sport to baseball or football. It’s “Whose country is this anyway?”

Though she doesn’t say so explicitly, Coulter frames soccer is a matter of status politics – the struggle for recognition, respect, and prestige among different groups. She sees the soccer demographic as is a coalition of White liberals and immigrants of the past generation or two. The anti-soccer side comprises what Sarah Palin called “the real America” – non-urban, White, Protestant, nativist, Republican.  That’s Coulter’s side, and she’s worried that in the long run, her side will lose.

We’ve seen this match-up before. In the late 19th and early 20th centuries, Prohibition provided a vehicle for “real Americans” to assert the virtue and predominance of their way of life over that of the immigrant, non-Protestant groups. The opposition to Obamacare (and just about any Obama policy) had pretty much the same roster.  (See an earlier post here.) In both cases, these groups felt a threat to their position of privilege.  The anti-Obama crowd is explicit about this sense of loss and threat. America is “our” country, “they” have taken it away, and we are going to take it back.  (See my “Repo Men” post from three years ago.)

Coulter is absolutely open about her nativism and Xenophobia – none of this “America is a nation of immigrants” nonsense. Or as she says, “I promise you: No American whose great-grandfather was born here is watching soccer.”  And one of the bullet points in her argument that soccer is a sign of moral decay is

• It's foreign.

Followed by

• Soccer is like the metric system, which liberals also adore because it's European.

(The metric system is simpler and more logical. But it’s used in all those foreign countries, and it’s used universally in science – two reasons for conservatives like Coulter to give it the red card.)

Maybe liberals do like soccer because it’s European, or more accurately international.  But it’s equally true that conservatives fear things because they are foreign.  They demand that the rest of the world become American.  In 2006, John Tierney, a conservative/libertarian writing for the Times, said (here), “Instead of us copying the rest of the world, the rest of the world could learn from us. Maybe they love soccer because they haven’t been given better alternatives.” *

To see what else the soccer soccer coalition liked, I went to Google correlates and entered “world cup.” Unfortunately, data for the current World Cup are not in, so most of the queries are from 2010.  The map looks like what you would expect – the states where people Googled “World Cup” were the Northeast corridor and California. What’s more puzzling is that many of the highest correlates were for movies – Oscar nominees like “Avatar” and “The Hurt Locker,” but also movies liberals like – “Vicki Cristina Barcelona,” “Inception,” and “Eat, Pray, Love.” All these had correlation coefficients with “World Cup” of 0.87 or higher. Here are the results for “World Cup” and “Oscars 2010.”

The other highly correlated cluster of terms had a different theme:

• hanukkah 2010 (0.8989)
• passover 2010 (0.8972)
• yom kippur 2010 (0.8950)
• chanukah 2010 (0.8874)

Here are the graphics:

This does not necessarily mean that people who Googled “passover 2010" also Googled “World Cup.” It means only that in states where people Googled “passover 2010" people also Googled “world cup.” In New York and California, for example, it might have been Jews looking for information about Passover and while Hispanics Googled “World Cup.”

Soccer, Jews, and moral decay.  This combination reminded me of something Coulter said in a 2007 interview with Donny Deutsch, who happens to be Jewish (the full transcript is here):

COULTER: Well, OK, take the Republican National Convention. People were happy. They're Christian. They're tolerant. They defend America, they — DEUTSCH: Christian — so we should be Christian? It would be better if we were all Christian? COULTER: Yes. DEUTSCH: We should all be Christian? COULTER: Yes. Would you like to come to church with me, Donny? . . . . . COULTER: No, we think — we just want Jews to be perfected, as they say. DEUTSCH: Wow, you didn't really say that, did you? . . . . . . DEUTSCH: Ann said she wanted to explain her last comment. So I'm going to give her a chance. So you don't think that was offensive? COULTER: No. I'm sorry. It is not intended to be. I don't think you should take it that way, but that is what Christians consider themselves: perfected Jews.

Coulter didn’t mention soccer at the time, but perhaps that is yet another sign of the how Jews are imperfect compared to Christians – they live in places where soccer is popular, places where small-town and suburban WASP conservatives are not so dominant. For Coulter, that’s not just imperfect, that’s moral decay.


----------------------
*In 2012, Marco Rubio, addressing the Republican convention, used nearly identical language – the same know-nothing arrogance – in speaking about Democratic proposals like Obamacare: “These are ideas that threaten to make America more like the rest of the world instead of making the rest of the world more like America.”

We Still Don’t Call It Football, But . . .

June 26, 2014
Posted by Jay Livingston

How American is soccer now as a spectator sport? My totally unscientific indicator is the front page of New York tabloids.  And today, they both had the US-Germany World Cup match.

The inset in the Daily News picture is a letter written by coach Jurgen Klinsmann for workers to give to their employers:  World Cup as excused absence. 

(Someone ought to remind Coach Klinsmann that this is the US, not Europe. Employers here don’t even have to give workers a day off for childbirth.)

Eight years ago, the World Cup was not front page news, perhaps because team USA went 0-2 in the first round. In 2010, soccer made it to the front page of the Post, when the US was knocked out of the tournament by Ghana.

It’s still one of my favorite captions.  But if the US loses today, I doubt that we’ll see this kind of ironic humor.

And Then There Were Two

June 19, 2014
Posted by Jay Livingston

Horace Silver died yesterday. He was 85.

Great musicians have an unmistakable sound. Horace’s chord voicings were distinctive. Even if you hear him comping behind a horn solo, you know it’s Horace.

Horace and his music rarely reached beyond the jazz audience. Some jazzers complained that Steely Dan stole the opening vamp from “Song for My Father” for their “Rikki Don’t Lose That Number.” But as someone else said, you can’t copyright one and five.  Norah Jones, who learned and played jazz as a teenager, used to sing “Peace” in her concerts. “This is a Horace Silver tune,” she says quickly after the first chord on one live recording, and I wonder, how many people in that audience knew who Horace is.  She sings and plays the song beautifully.  Outside of that, I know of no crossovers.

Horace is known less for his piano soloing, though that too is unmistakable, than for the groups he led. So many great players have stints with the Horace Silver quintet early in their careers – Hank Mobley, Joe Henderson, Donald Byrd, Art Farmer, et al.

But he will be most remembered for his writing.  I started thinking of his compositions that I know – know well enough to play and have them be recognizable. It started with “The Preacher,” which I first heard when I was thirteen or so on a four-trombone Kai Winding record. “Opus de Funk,” “Strollin',” “Nica’s Dream,” . . . .  and the hits just kept on coming. My Real Book app has eleven Horace tunes, and that leaves out quite a few.  His best known is probably “Song for My Father.” My own list of favorites includes, for idiosyncratic reasons, lesser known tunes like “Cool Eyes” and “The St. Vitus Dance.”

Dan Okrent tweets that with Horace’s death, of the musicians from the Great Day in Harlem photo, only two remain: Benny Golson and Sonny Rollins. 

(Horace is at the left, Golson at the top of the steps, Sonny Rolllins just to the right behind Marian McPartland and Mary Lou Williams.)

These were the musical heroes of my youth, and it’s strange to see them gradually disappear. Others in the photo are from a slightly earlier era – musicians whose names and sound were familiar, but I had no idea what they looked like.  One night, probably in 1994 when a documentary film had given the Art Kane photo some popularity, I was walking up Amsterdam Ave. and saw the great pianist Tommy Flanagan looking in the window of a neighborhood store. Inside was the photo. I stopped, and we talked briefly. Tommy would point to the faces of those who had already passed on.  “That’s Buck Clayton. There’s Red Allen.”

And now, that’s Horace Silver.

Take Up the Rich Man’s Burden

June 17, 2014
Posted by Jay Livingston

Pity the wealthy. How their burden has increased. At least that’s what Mark Perry would have us believe. The income tax burden, he says in the title of this chart that he tweeted today, has become “more progressive.”

It certainly looks as though the rich man’s burden has increased.  Perry is careful not to say that “taxes” have become more progressive. That would mean that rates have increased more on the wealthy than on others. Instead he says that the “burden” has become more progressive. 

The burden might have become more progressive, but did tax rates on the wealthy increase? No.

Except for the period from 1990 to 1993, tax rates fell or were level.

Why then did the burden increase?  Since it’s unlikely that the wealthy were voluntarily kicking extra bucks into the IRS coffers, there’s only one explanation: the wealthy were getting an increasing share of income. This possibility seems not to have occurred to Perry.

It has occurred to Piketty and Saez, who have been providing us with information on the income shares of those at the top.  Here is a chart of the top 10%.

From 1985 to 2010, their share of income increased from roughly 34% to 47% – a 38% increase. Their tax burden rose by only 29%. 

And the 1%.

Their income share increased from 12% to 20% – a 67% increase. Their share of the tax burden increased by only 45%.

According to the bio at the American Enterprise Institute website, “Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan's Flint campus.”

A scholar. Is this what passes for scholarly work at the AEI? I am not an economist or a finance expert. But even I know enough to see that the chart and its title are deliberately misleading. 

(And with apologies to Kipling)
.

Take up the rich man’s burden, and shower him with praise,
For at the AEI, this style of economics pays.

The Shabbos Goy – Solidarity or Shanda

June 14, 2014
Posted by Jay Livingston

The shabbos goy used to annoy me. I don’t mean the goy himself; I never met one. I mean the whole concept.  The Bible says, “Ye shall kindle no fire throughout your habitations upon the sabbath day” (Exodus 35:3). The shabbos goy was the person Jews hired to light their ovens on the Sabbath so they could still cook without technically violating the commandment. Strictly observant Jews extend the fire-kindling prohibition to anything that might start an electric current – turning on the lights, or pushing an elevator button.  Somewhere today, no doubt, a shabbos goy has gone into an Orthodox home, turned on the TV, and tuned it to ESPN for the World Cup.

This legalistic ploy allows Jews to keep the letter of the law while violating its spirit, and I always found it embarrassing. Is this what we want others to see in how Jews practice their religion?  A shanda fur die goyim. It’s sort of like getting around “Thou shalt not kill” by hiring a hit-man goy.  The purpose of the commandment, I thought, is to make everyday life more difficult so that Jews would spend their time worshiping God. Instead, they hire a shabbos goy so they can have their sabbath cake and bake it too.

It wasn’t just the hypocrisy that bothered me. It was the tone that accompanied it – at worst a smug satisfaction, more typically an amiable chuckle – as though there were virtue in putting one over on God.

How unsociological of me. How could I not have remembered Durkheim? Religion – its rituals and rules – is not about suffering or self-denial or carrying out God’s wishes; it’s about group solidarity. The point of the laws is to draw the boundary lines of the group. Like the funny clothes and hair styles, these laws separate Us from Them. These are our laws. They define who we are. It doesn’t matter so much that we believers have also evolved ways to circumvent them.

What reminded me of this was an article in the Atlantic (here) by Dominic Pettman.  (“Dominic, Dominic,” I can hear my grandmother rolling the name around in her head – “interrogating” it, as we might now say - and finally asking point blank: “Is he Jewish?”  I don’t know, Grandma.)  Pettman lives in a building with a shabbos elevator. It is programmed to stop at every floor so that the strictly Orthodox don’t have to push a button. Of course, if you live on a high floor, all those stops take forever.  Jews must suffer. Sometimes.

Pettman chides me for my accusations of hypocrisy.  “Certainly we cannot pretend to know if God is angered by the conceit of the Shabbos elevator, or if He chuckles at the elaborate nature of the solution.” True. Maybe God is totally cool with the shabbos goy, and I am wrong to think that the Jews who hire him are hypocrites. More important, the hypocrisy in this case is sociologically irrelevant.

For the Durkheimian angle, Pettman digs out a copy of a 2003 book by folkorist Alan Dundes, The Shabbat Elevator and Other Sabbath Subterfuges. I’m not sure I agree with all of Dundes’s ideas, for example the one about the “Jewish character” being “culturally and historically drawn to ingenuous workarounds.” Dundes takes the Durkheimian idea to places beyond where I would go. Solidarity, he says, comes not just from the special rules but also from the communal subterfuges for avoiding them and the collective rationalizations for this avoidance.  I disagree, on the basis of no evidence, probably because I would still be embarrassed to think that these “counter customs” (as Dundes calls them) are essential to Jewish solidarity* rather than merely incidental. 

----------------
* I should add that I myself have never felt much solidarity with the Orthodox community.

Unintended Insights

June 12, 2014
Posted by Jay Livingston

Sometimes it’s hard to be a conservative, supporting a status quo that’s not working, at least not for large numbers of people.

Brad Wilcox’s latest defense-of-marriage op-ed, “One way to end violence against women? Married dads” (here), carried the seeds of its own destruction (or at least deconstruction).  It’s not just that Wilcox failed to control for things like age, social class, and time trend. The trouble was that while the article was, on its surface, a sermon on how marriage makes women safer, the subtext was a damning critique of the gender status quo. Wilcox did not make that critique explicit, nor did he intend the article to be a feminist document. Just the opposite: “So, women: if you’re the product of a good marriage, and feel safer as a consequence, lift a glass to dear old dad this Sunday.”

But by pointing out the relative safety of married women, Wilcox was also calling attention to the dangers faced every day by unmarried women. The karaoke track Wilcox wanted was “Stand By Your Man” – clear support for the benefits of marriage. But what he wound up singing was “Stand By Your Man . . . Or Else.”

This focus on threat was not accidental. The op-ed begins with the UC Santa Barbara shootings and the “millions of girls and women [who] have been abused, assaulted, or raped by men, and even more females fear that they will be subject to such an attack.” You could hardly blame his critics for homing in on the “Or Else.”

Wilcox moved on to laud “some other men [who] are more likely to protect women, directly and indirectly, from the threat of male violence: married biological fathers.” [Emphasis in the original.] It’s almost as though in response to Sandy Hook or other school shootings he had written an op-ed extolling the safety of home schooling.  It may be true, but “Home school your child . . . or else” ignores the way most parents think about the problem and its possible solutions.

It’s risky to point out dangers and then tell people to seek individual solutions. Urging those on the short end of the stick to keep holding on to it may work, but it may also lead them to the sociological insight that the problems are in the system. In the early years of this blog (here) I used “Stand By Your Man” as an example. National Review had put it among “the  50 greatest conservative rock songs.”*  Yet despite the song’s ostensible support for the status quo, it is also telling women what a crummy deal marriage is for them. Imagine a Saudi version that began the same way – “Sometimes it’s hard to be a woman” – and went on to list problems like jealous co-wives, no driving, no going outside alone or clothed in anything but a black tent, and so on.The resounding refrain of “Stand by your man” might ring a bit hollow.

------------
* The song is not rock; it’s pure country. If you are unfamiliar with this Tammy Wynette classic, you can hear and see her lip-sync it here.

Down These Mean Median Streets

June 11, 2014
Posted by Jay Livingston

For a quick illustration of the difference between mean and median, I often use the example of income. I choose a plausible average (mean) for the classroom population and review the math. “If Bill Gates walks into the room,” I say, “the average income is now in the billions. The median hasn’t has hardly moved, but the mean has gone way up.” So has the Gini coefficient.

Here’s a more realistic and global illustration – the net worth of people in the wealthier countries.  The US ranks fourth in average worth – $301,000 per person . . .

. . . but the median is far lower – $45,000, 19th out of the twenty nations shown.  (The graph is from Credit Suisse via CNN )

The US is a wealthy nation compared with others, but  “average” Americans, in the way that term is generally understood, are poorer than their counterparts in other countries.

But as with so many things, most Americans are unaware of how life is lived in other countries.  In our ignorance and arrogance, we just know that, although things may not be perfect here, they are in all respects better than anywhere else.  As Sen. Marco Rubio put it at the 2012 Republican convention, speaking about Democratic proposals on things like inequality and health care, “These are ideas that threaten to make America more like the rest of the world instead of making the rest of the world more like America.”

The key word, of course, is “threaten.”  Affordable health care for all,  a higher median net worth – are these a threat? Only in America – or, more accurately, Republican America.

Marriage and Protection from Violence

June 10, 2014
Posted by Jay Livingston

This was the original headline in the Post Everything op-ed by Bradley Wilcox and Robin Fretwell Wilson.

Apparently, many outraged readers pointed out the  “blame the victim” assumption in the headline. Or as Erin Gloria Ryan, at Jezebel translated it,  “Violence Against Women Will End When You Sluts Get Married.”

Others pointed out that the data did not support that claim.  Wilcox, the lead author, tweeted.

The new headline wasn’t much better.

Offensive terms like “baby daddy” have been removed, but the idea is the same. And while Wilcox didn’t write those headlines, they do represent his thesis: marriage as protection.

And, most fundamentally, for the girls and women in their lives, married fathers provide direct protection by watching out for the physical welfare of their wives and daughters, and indirect protection by increasing the odds they live in safe homes and are not exposed to men likely to pose a threat. So, women: if you’re the product of a good marriage, and feel safer as a consequence, lift a glass to dear old dad this Sunday.

Philip Cohen (here)  has looked at the data, which clearly shows the trend Wilcox has been wringing his hands about for a long time: marriage in the US is on the decline. Wilcox would predict that the fall in marriage rates would result in huge increases in violence against wives and girlfriends.

But it hasn’t.  In this same period, the data show, “intimate partner violence” has also declined.  (Cohen’s analysis requires a bit of statistical sophistication, but his discussion makes the data clear, and his post is well worth reading.)

There are ecological-fallacy problems in the data, as Cohen acknowledges. But such problems have not prevented Wilcox from drawing shaky conclusions about the broad benefits of marriage.  Philip even provides a parody version of Wilcox’s strategy, though Cohen uses the data to draw the opposite conclusions about marriage.

We had reason to believe marriage was harmful, on average . . . as if marriage feeds off itself in a violence loop. . . . The bottom line is that intimate partner violence is much less common in years when marriage is more rare.

Cohen is kidding.  Sort of.  Underlying the traditional marriage – the one Wilcox takes as the ideal – is a power imbalance.  For Wilcox, that’s a good thing. As he says, husband/fathers provide “protection,” both direct and indirect.

But the marriage-as-protection trope reminded me of something Philip Slater wrote forty years ago:

In relation to women, men have taken the stance assumed by the warrior-aristocrat toward the peasant: “If you feed me, I will protect you.” Before long, of course, every protection contract becomes a protection racket: “Give me what I want and I will protect you against me.

Goffman and Veritas

June 9, 2014
Posted by Jay Livingston

Slate ran an article  by L.V. Anderson decrying the tendency of Ivy League graduates to be vague about their educational credentials.  Asked where they went to school, they say, “New Haven,” or “Boston,” or “New Jersey.”

If . . . you refuse to tell someone you went to Harvard, that reflects poorly on you – it implies that, on some level, you buy into the overblown mythos of Harvard and the presumption of Ivy League superiority.

Anderson’s course of study, wherever it was, must not have included even a paragraph of Goffman. One of the basic ideas of Presentation of Self is that people seek to control the impressions others make of them, and they do this by controlling the information others get. It’s not about what mythos Ivy Leaguers buy into. It’s about the mythos others have bought.

Ivy Leaguers have a very good notion, usually based on experience, of the impression that “Harvard” or “Yale” creates in others’ minds.  Alyssa Metzger in the Chronicle  sets the record straight.

When I would visit my former local bar in Philly . . . a reply of “In Boston” usually led to them returning to their beers with an “Oh cool … my friend’s sister goes to BU” . . .  If I said, “At Harvard,” it tended to lead to them turning on their stools to face me, wide-eyed, with an “Oh wow … you must be really smart.” I wasn’t Allyssa, I was SMART PERSON (TM)— more object than person.

Who wants to be seen as an exemplar of a stereotype? And stereotype we do, even those of us who should know better.  A few years ago (here) I reported a conversation from my playground days. I had gotten to know another playground dad (weekdays at the playground, the dad sample is a very small n). Brad was a Juilliard grad who was eking out a living as a conductor with a regional orchestra – five concerts a year. 

One day we were sitting on the bench, and Brad asked me where I’d gotten my Ph.D. I guess we’d never talked much about higher education. Harvard, I told him. “I didn’t know that,” he said, surprised, “and I’ve known you all this time.” “Don’t be impressed,” I said. “But I am,” he said. From his voice and the look on his face, I could see that he meant it. I wanted to convince him not to be. “Oh Brad,” I said, my voice rising in mock awe, “You went to Juilliard?! You must be this really great and talented musician. Juilliard – wow!” Or something like that. He laughed. “See what I mean?” I asked. “Yes,” he said. Then a pause. “But I’m still impressed.”

Harvard grads don’t want to lie. So they tell the veritas, just not the whole veritas. Yalies may shade the veritas in order to present themselves in the lux that best fits the situation.  But, as Goffman pointed out, that’s what we all do all the time.

The Belmont – No Place Like Place?

June 7, 2014
Posted before post time by Jay Livingston

At Freakonomics Steven Levitt argues for making “a place bet on California Chrome” mostly because the odds to win will be so low.

When California Chrome won the Preakness, a $2 bet to win returned $3. A $2 bet to place also returned $3! . . . You can’t know with certainty what the place payout will be ahead of time because it depends on what other horse finishes in the top two, but if you watch the allocation of money in the place pool you can get a pretty good idea. Sometimes crazy things happen. When Big Brown won the Preakness, he paid $2.40 to win, $2.60 to place, and $2.40 to show!

Levitt is right when he says that the place payout depends on which other horse finishes in the top two. But he’s wrong when he says that you can get a pretty good idea by watching the place pool. The Tote board at the track does show how much money is bet on each horse to win, to place, and to show.  The place payout is determined by taking all the losing bets and dividing them up among people who bet on the winner and those who bet on the place horse.

The reason Big Brown paid more to place than to win was that horse who finished second, Macho Again, at 40-1 was the second longest shot in the race.  That meant more money in the place pool to be divided (all the money bet on the other ten horses) and fewer people that it would be divided among  So if you are betting a heavy favorite to place, you not only have to watch the place pool bets, but you also have to pray that the horses with big money bet on them finish no better than third.

Levitt’s best bet is Commanding Curve to win. The odds will be attractive. A dollar on California Chrome, if he wins, will get you fifty cents; if you bet him to place, you might win only a dime. The morning line on Commanding Curve is 15-1, but I expect it will by lower by post time. Commanding Curve closed six lengths on California Chrome in the final furlong of the Derby, an indication that he might have the stamina for the added quarter-mile of the Belmont.  Commanding Curve also skipped the Preakness, giving him an extra two weeks of rest.

My own long shot is Wicked Strong, another possible closer. The morning line is 6-1, but I predict it will be higher. He had some bad racing luck in the Derby and still got fourth.

Finally, I cannot do a post on horse racing without reiterating my pet peeve about the incorrect use of “track record” that has become so widespread (see my earlier post here).  In racing, where the term originates, it does not refer to a horse’s past performances. It refers to the record time at that track for a given distance. People don’t have track records, tracks do. The Belmont stakes is a mile and a half.  The fastest time for that distance at Belmont – the track record – is 2:24.  That’s way fast, and here’s what it looked like.

In a sport where the difference between win and place is usually a fraction of a second, Secretariat is four or five seconds ahead of the rest.

UPDATE: Both Levitt and I were wrong. The winner was Tonalist at 8-1, a horse who had raced only four times and only once against top horses, though he won that one (a grade-2 stakes). The place horse was an even longer shot, Commissioner at 20-1.

Game, Set, Match.com

June 5, 2014
Posted by Jay Livingston

Usually, you want to match up with someone at about your level, or a little higher.  The trouble is that many people overestimate their own level.  Maybe that’s especially true of men.

One summer many years ago at the tennis courts, a guy I didn’t know  came over and asked me if I’d like to play. I hadn’t arranged a game with anyone, but I didn’t want to wind up playing some patzer. 
“Are you any good?” I asked. He paused.
“Well, I’m not Jimmy Connors,” he said (I told this was many years ago), “but neither are you.” 

In chess and other games, serious players have ratings. Give a roomful of possible partners, they can sort through the ratings and find a match with someone at roughly the same level.  It’s called assortative mating, though that term usually refers to the other kind of mating, not chess.  It’s the basis of the conflict in this poignant scene from “Louie.” (The scene was also played on a recent  “Fresh Air” interview with Louis C.K.)

Vanessa is not a ten, neither is Louie.  According to principles of assortative mating, the tens will wind up with other tens, the nines with nines, and so on down the attractiveness scale. One problem in the “Louie” scene is that Louie seems to have an inflated view of his own attractiveness.  He’s aiming higher than Vanessa.  That’s typical.  So is the importance that Louie, the man, places on physical attractiveness. This excerpt begins with Louie telling Vanessa that she’s a really beautiful . . . . He can’t bring himself to say “girl”; he was probably going to say “person”  or worse, “human being.” In any case, he’s obviously not saying what he thinks.

Or as Dan Ariely and colleagues concluded from their study of HotOrNot members (here)*

[Men] were significantly more influenced by the consensus physical attractiveness of their potential dates than females were. [Men also] were less affected by how attractive they themselves were . . .  In making date choices, males are less influenced by their own rated attractiveness than females are.

Another dating site, OK Cupid, found a similar pattern when they looked at data about who gets messages (here).**  They asked their customers to rate profile photos of the opposite sex on a scale of 0 to 5. They then tracked the number of messages for people at each level of attractiveness.  The graph below shows what women thought and what they did – that is, how attractive they found men, and who they sent messages to.

Men who were rated 0 or 1 got fewer messages than their proportion in the population.  That figures. But even men who were only moderately attractive got more than their share. Generally, the fewer men at a level of attractiveness, the fewer total messages women sent. The male 4s, for example, constituted only 2% of the population, and they got only 4% of all the messages. The Vanessas on OK Cupid are not sending a lot of inquiries to guys who look like George Clooney.

But look at the men.

Men are more generous in their estimates of beauty than are women. But they also ignore the Vanessas of the world (or at least the world of OK Cupid) and flock after the more attractive women, even though there are fewer of those women.  Only 15% of the women were rated as a 4, but they received about 26% of the messages.  Women rated 5 received messages triple their proportion in the population. 

What about those with so-so looks?  Women rated as 2s received only about 10% of the messages sent by men. But men at that same level received 25% of the messages women sent.  The women seem more realistic.

Vanessa too has no illusions about her own attractiveness. She refers to herself as “a fat girl,” and when Louie, trying to be kind, says, “You’re not fat,” she says: “You know what the meanest thing is you can say to a fat girl? [pause] ‘You’re not fat.’”*** But it’s only when she challenges Louie’s view of his own attractiveness that their relationship starts to change.

Y’know if you were standing over there looking at us, you know what you’d see? What? That we totally match. We’re actually a great couple together.

She doesn’t explain what she means by “totally match.” It could be their interests or ideas or personalities, but the imaginary stranger looking at them from over there couldn’t know about any of that. What that generalized other could see is that they are at roughly the same place on the assortative mating attractiveness scale.

--------------------------------
* Ariely discusses this research in his book The Upside of Irrationality.

** OK Cupid was founded by Harvard math graduates. On the Website’s blog, they would post graphs like these – big data that could be very useful for the site’s members. A few years ago, they sold out to Match.com, and the data analyses ended.

*** This occurs early in the clip, at about 0:25. The entire 7and a half minutes is worth watching.

Tide and Time

June 4, 2014
Posted by Jay Livingston

Survey questions, even those that seem simple and straightforward, can be tricky and yield incorrect answers.  Social desirability can skew the answers to questions about what you would do – “Would you vote for a woman for president. . . .?” and even factual questions about what you did do.  “Don’t ask, ‘How many books did you read last year?’‘ said the professor in my undergraduate methods course. “Ask ‘Did you read a book last week?’” There’s no shame in having been too busy to read a book in a seven-day period. Besides, people’s recall will be more accurate.  Or will it? Is even a week’s time enough to distort memory?

Leif Nelson (Berkeley, Business School) asked shoppers, “Did you buy laundry detergent the last time you went to the store?” Forty-two percent said yes.

Nelson doesn’t question the 42% figure. He’s interested in something else:  the “false consensus effect” – the tendency to think that others are more like us than they really are.

So he asks, “What percentage of shoppers do you think will buy laundry detergent?” and he also asks “Did you buy laundry detergent.” Sure enough, those who said they bought detergent give higher estimates of detergent buying by others. (Nelson’s blog post, with other interesting findings, is here.)

But did 42% of those shoppers really buy detergent last time they were in the store? Andrew Gelman is “stunned” and skeptical. So am I.

The average family does 7-8 washes a week. Let’s round that up to 10.  They typically do serious shopping once a week with a few other quick express-lane trips during the week.  This 50 oz. jug of Tide will do 32 loads – three week’s of washing.

That means only 33% of customers should have said yes.  And that 33% is a very high estimate since most families buy in bulk, especially with items like detergent. Tide also comes in 100-oz. and 150-oz. jugs.

If you prefer powder, how about this 10-lb. box of Cheer? It’s good for 120 loads. 

A family should need to buy this one in only one out of 12 trips. Even at double the average washing, that’s six weeks of detergent. The true proportion of shoppers buying detergent should be well below 20%.

Why then do people think they buy detergent so much more frequently?  I’m puzzled.  Maybe if washing clothes is part of the daily routine, something you’re always doing, buying detergent seems like part of the weekly shopping trip. Still, if we can’t rely on people’s answers about whether they bought detergent, what does that mean for other seemingly innocuous survey questions?