March Wisdom

March 18, 2011
Posted by Jay Livingston

I’m skeptical about the Wisdom of Crowds, at least when it comes to sports betting. I’ve blogged as much occasionally (the occasion usually being a big NFL game – see this post, for example).

Now Mark McClusky at Wired has taken up the fight in the arena of March Madness. The crowd whose wisdom he’s challenging is the ESPN online pool. Against them he pits “two top college basketball analysts.” Here’s a reduced spreadsheet with the large Crowd-Expert discrepancies highlighted. If you’re betting, it’s red for bad, green for good.

(Click on the chart for a larger view. The full spreadsheet is here.)

As McClusky notes, “most of the top seeds are highly inflated, especially Kansas.” Also, “Mountain West pair of San Diego State and Brigham Young are two of the best values out there.” He also said – and this article was posted Wednesday –

The single biggest gap between the two sets of picks? Utah State vs. Kansas State in the first round. According to the numbers, Utah State has a 57 percent likelihood of knocking off the higher-seeded Wildcats, but 73 percent of ESPN users have picked Kansas State.

Kansas State opened as 1 ½-point favorites. That line was bet up to 2. The Crowd was wise this time, both in their brackets and their bets. Kansas State 73, Utah State 68.

We’ll see how the rest of the tournament goes.

h/t Max

UPDATE, March 22: Never too late, the master of brackets Ted McCagg has finally posted his March Madness drawing (here).

Foul!

March 18, 2011
Posted by Jay Livingston

Philip Cohen says (though not in his Family Inequality blog) that of the players in the NCAA tournament, sociology majors have the highest average (game points, not grade point). He links to an article by Justin Peters in Slate about “student athletes.”

Sociology is nowhere near the most popular major on the floor. Business, Communications, Humanities, and Sports Science beat us out. Nevertheless, Peters delivers this bit of trash talk

Forty-two players study sociology, that tried-and-true slackers' major. While it’s possible that UCLA players are disproportionately drawn to the sociology department for the chance to study with famed Marxist theorist Perry Anderson, it's more likely that a shooting guard would choose it because, as one of the largest majors at UCLA, nobody will notice if you don't come to class.

Hey, ref, how ’bout a T for that?

Athletes do tend to cluster in certain majors. Which major it is depends on the school and the team. For UCLA hoops, it may be sociology, for Georgia Tech football, it’s business. But the reasons for these learning communities are not the ones Perry mentions. More likely, coaches direct their players to jock-friendly majors. Different coaches have different ideas about what a good major is (and perhaps different friends on the faculty).

(I blogged this a couple of years ago – here ,with a link to an interactive graphic which I think is still working.)

Tax Expenditures

March 16, 2011
Posted by Jay Livingston

“To spend is to tax.” Milton Friedman’s dictum means that spending and taxing eventually have to be in balance. No free lunch. If the government spends money on something, eventually the government has to pay for it, and the government gets its money from taxes.* This is the basis of Republicans shouting about deficits and trying to outdo one another on cutting spending.

At the individual level, people feel that government spending is like robbery. Because the government has to tax in order to spend, the government is taking money out of your pocket and spending it on someone else (the military, Medicare, etc.).

There are two ways to increase deficits – spending more or taxing less. So not to tax is also like spending. If the government leaves more money in my pocket by taxing me less, it has to make it up by taxing you more. Taxing me less has the same effect as spending more. They both take money out of your pocket. That’s why tax breaks are “tax expenditures.”

Which costs more – tax expenditures or spending?


The chart is from Senate Budget Committee testimony by Robert Greenstein of the Center on Budget and Policy Priorities.

The tax breaks cost us more than even our biggest of big-ticket items.

No surprise, tax breaks work mostly to the benefit of the wealthy. The mortgage deduction on a couple of million dollar homes (yes, second homes also get the tax break) costs the government more than the deduction on a $150,000 home (or the $0 deduction on a rental). The lower tax rate on money made in the stock market benefits people who own a lot of stock. Guess who that is.

(Click on the chart for a larger view.)

In the graph, the tax expenditure bar stands way above Medicare and Social Security. And those bars are 100 times larger than Head Start. So if you’re wondering who is taking money out of your pocket, drive through the nice neighborhoods and look at the big houses. Maybe even stop, knock on a door or two, and ask to see their Schedules A and D.

*The government can also borrow, but debts must be repaid. The government can print money, but the subsequent inflation is also a tax since it decreases the value of the money in your pocket.

Politics and Negative Results

March 15, 2011
Posted by Jay Livingston

Social scientists often end their reports and articles with suggestions for further research. Politicians, not so much. They want action. (Didn't Weber say something about this?)

There’s a government program for kids that is very popular among the low-income parents, but a recent large-scale government study shows that it produces no lasting educational benefits. What to do? If you’re a conservative, you get rid of it – all in the name of cutting costs of course. The program is Head Start, and funding for it is under heavy attack from the right.* (NYT story here).

Charter schools have a similar profile.. Low-income parents want them, but the broadest research shows that on average, compared with public schools, charters do no better and probably worse. Yet conservatives can’t fund enough of them.

Liberals may be almost as inconsistent, backing Head Start while opposing charters. I say “almost” because Head Start does produce some benefits. As the Times article reported,

Research on the program has shown that children who complete it do better socially and academically than children not enrolled in the program, and that they tend to have lower high school dropout rates. But the initial test score benefits tend to fade out by first grade.

So the “doesn’t work” mantra being repeated on the right is not quite accurate.

In both cases, what seems like a reasonable idea hasn’t worked out in practice. True, some charter schools and some Head Start programs do produce positive results. The trouble is that there’s no evidence of consistent, broad success. You’d think, especially if you are a social scientist, that the next step would be further research to figure out what the effective ones are doing that the ineffective ones are not (and vice versa). Maybe such research does exist, but if so, it’s not getting much press.

Instead, politicians to take a baby-with-the-bathwater approach. If a program fits with your ideology, fund it, no questions asked. If not, get rid of it.


* The first post on this blog (including an apt joke borrowed from Kieran Healy) was about the scant attention given to negative findings . I had not realized then that when the findings are in the interests of those with easy access to the media, the noise level can rise considerably.