Wanted – Bad Research

April 22, 2013
Posted by Jay Livingston

I’m not a research director.  But if I were, I hope I wouldn’t write questions that are obviously designed to bias the results.*  And if I did ask such questions, I wouldn’t boast about it in the newspaper, especially if my stacking of the deck got barely a majority to give the answer I wanted. 

But then, I’m not Michael Saltsman, research director for the Employment Policies Institute, whose letter to the Record (formerly known as The Bergen Record) was published today.

Regarding "Most favor minimum wage hike" (Page L-7, April 18):

The recent Rutgers-Eagleton poll finding that 76 percent of New Jerseyans support a minimum wage increase only proves that incomplete poll questions yield misleading results.

My organization commissioned ORC International to conduct a similar poll regarding an increase in the minimum wage. When respondents were informed of the unintended consequences of minimum wage hikes — particularly how such hikes make it more difficult for the least-skilled to find work— 70 percent support flipped to 56 percent opposition. [emphasis added]

This consequence isn't a hypothetical: Fully 85 percent of the most credible economic studies from the past two decades indicate a loss of job opportunities following a wage hike.

Michael Saltsman
Washington, D.C. , April 18

As for the facts on the effects of an increase in the minimum wage, Saltsman’s literature review is on a par with his questionnaire construction.  Apparently he missed John Schmitt’s CEPR article from two months ago (here).    The title pretty much sums it up:

Why Does the Minimum Wage Have No Discernible Effect on Employment?

Schmitt includes this graph of minimum-wage effects from a meta-analysis.

Hristos Doucouliagos and T. D. Stanley (2009) conducted a meta-study of 64 minimum-wage studies published between 1972 and 2007 measuring the impact of minimum wages on teenage employment in the United States. When they graphed every employment estimate contained in these studies (over 1,000 in total), weighing each estimate by its statistical precision, they found that the most precise estimates were heavily clustered at or near zero employment effects.

Schmitt offers several guesses as to why employers don’t cut jobs when the minimum wage rises – maybe they raise prices, or accept a lower profit margin, or reduce the wages of better-paid employees; or maybe the increased minimum wage brings more customers, and so on.**

But regardless of the findings on minimum wage, Saltsman’s letter carries a more important if depressing message.  We try to teach our students to design good research.  We tell them that good research skills might help them get jobs.  Yet here is an example of a research-director job that depends on designing bad surveys and doing bad research. 
                                                           
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*In his methods course, my colleague Chris Donoghue uses a made-up abortion item for teaching items that introduce bias:
“Every year in the US, over a million babies are killed by abortion. Do you agree that laws should make it more difficult to get an abortion?”

** Brad Plumer at WaPo’s WonkBlog has more on this, including a fuller discussion of Schmitt’s paper (here).

Ulysses in LaLa Land

April 17, 2013
Posted by Jay Livingston

A non-sociological post. 
I’ve never been all that good at resisting the obvious.

From today’s New York Times:

The indictment also named Molly Bloom, who made headlines in 2011 for her role in arranging clandestine games for high-rollers, including Tobey Maguire, Leonardo DiCaprio, Matt Damon and Ben Affleck.

And then he asked me if he could get into the game yes and would Matt be there yes and Ben with himself so pumped up and proud yes yes and Leo too all blond and often staying in with only king seven yes and he took out his checkbook and asked with his eyes if this would be enough for the buy-in yes and it was a wondrous number with lots of zeros yes yes yes

Underground Demography

April 16, 2013
Posted by Jay Livingston
Cross-posted at Sociological Images


The magic of demographic knowledge is a memorable moment in John Sayles’s 1984 movie “Brother From Another Planet.”   On the A train, a young man shows an elaborate card trick to the title alien, who looks like an African American but seems to have no understanding of the trick.  So the magician offers another.

                                                                               

From 59th St. to 125th St. is one stop on the express.  But as the movie shows, that short ride covers a large demographic change, and it’s not just racial.  The New Yorker has posted interactive graphics (here) showing the median income of the census tracts surrounding subway stations.* 

Take the A train one stop  – from the southern border of Central Park to a few blocks above its northern border – and see median income drop by $100,000. 

Many other lines travel the extremes of economic inequality.  My line is the 2. 

In the early morning commute, I see blue collar workers in their hoodies or rough jackets and steel-toe boots next to well-dressed people reading The Wall Street Journal.  They didn’t get on at the same stop.  The people who live in and work in the Wall Street census tract, which includes Park Place, are not on the train.  Here’s what their housing looks like.

And here is Franklin St., Brooklyn.

The subway demographic trick is not limited to New York. Here’s a time-lapse video of the Red Line of Chicago’s CTA.

Time-Lapse of the CTA Red Line: a 2-hour trip in 1 minute from WBEZ on Vimeo.

(If the video does not play, you can see it here.)

Despite the social class segregation in housing, in cities like New York and Chicago, people of vastly different economic circumstances are likely to share the same subway car, at least for a few stops. 

Yet I don’t get a sense of strong resentment or even envy among the have-nots (though I wish I had systematic data on this).  These cities are also where the rich are more likely to be liberal and in favor of redistributionist policies.  As Andrew Gelman has shown, the wealthy in rich states are far more liberal than the wealthy in poor states.  That may be partly because in rich states, the wealthy live in the large cities.  How strong would that effect be if we used Upstate New York, Downstate Illinois, Massachusetts outside Rte. 128, and so on?

Or to quote James Carville’s famous line about Pennsylvania: “Philadelphia in the east, Pittsburgh in the west, and Alabama in between.”

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HT: Jenn Lena for the link.

Bitcoin - "A Currency Without an Army*

April 15, 2013
Posted by Jay Livingston

I must be missing something in Paul Krugman’s dismissal of bitcoins (today’s NYT column here).  Krugman says that unlike gold and paper money, the value of bitcoins does not rest on some intrinsic usefulness or upon the power of a state. 

Bitcoins, however, derive their value, if any, purely from self-fulfilling prophecy, the belief that other people will accept them as payment.

Then a few paragraphs later, he approvingly quotes Paul Samuelson saying that money is a “social contrivance.”  What makes paper, silver, or gold worth something is “the expectation that other people would accept them as payment.”

So bitcoin and metals and paper all depend on socially constructed definitions.  But then how is bitcoin different from more traditional kinds of money? 

Or does Krugman mean that because the free-floating bitcoin is untethered to precious metals or governments, those definitions are less stable and that the bitcoin’s value is more susceptible to the mood swings of the public? (FWIW, the price of gold has fallen 13% since Thursday.)

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*The subject line of this post is a variant of what has often been said of Yiddish – a language without an army