A Good Idea at the Time

June 25, 2016
Posted by Jay Livingston

The pound was down 10% making anything imported to the UK more expensive. Global markets tumbled, including those in the UK. Some Leave supporters were ecstatic.

But some seemed to be having buyer’s remorse. Google searches for “What happens if we leave the EU?” and “What is the EU?” tripled. (WaPo) They seemed to be waking up the morning after wondering just what it was they had done the night before.

All I could think of was Steve McQueen’s famous line in “The Magnificent Seven.”  McQueen plays Vin, one of the seven gunslingers who come to the aid of Mexican peasants who are being constantly raided by a group of bandits led by Calvera. At one point, Calvera captures the seven. He cannot understand why they would sign on to help a bunch of Mexican peasants.

CALVERA: The thing I don’t understand is why a man like you took the job in the first place. . .  Tell me why. VIN: Fella I once knew in El Paso, one day he took all his clothes off and jumped in a mess of cactus. I asked him the same question, why? He said it seemed to be a good idea at the time.*

The vote to leave appears to be one of those impulsive decisions, the ones that seem like a good idea at the time. Many Leave voters – at least the ones who got a few seconds of airtime on American radio – were thinking in terms of personal complaints, not national policy. They reminded me of the woman I rented a flat from in London a decade ago. “There’s no Brits in London any more,” she said. and she was not happy about it.  

Voting often has a strong emotional component. The advantage of representative democracy over direct democracy is that we give the job of turning sentiments into actual policy to our representatives. Presumably, they have to think through more of the implications.**

I suppose what a democracy needs is a mechanism that allows people to express their political emotions and have it appear that those emotions have become policy while at the same time leaving real policy to those who will craft it more slowly and soberly.

The Leave vote does not automatically change the UK’s position. As a Financial Times post explains, the vote is technically a non-binding advisory. It’s possible that parliament will decide to act against the advisory. In any case, the process of leaving will take two years, and perhaps during that period, UK voters may rethink the Brexit,*** even it seemed like a good idea at the time.

As Calvera says to Vin in that same scene, “Only a crazy man makes the same mistake twice.”

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* The video clip is here . I didn’t embed it because the way McQueen delivers the line doesn’t capture the feeling I think is appropriate. He’s serious, almost somber. I would prefer him laugh it off and say in effect, “Yeah, I guess it was stupid, but what can you do?” I also think that “seemed like a good idea” sounds better than “seemed to be a good idea.”

** My knowledge of political thought is slender. But surely one or more of The Federalist Papers must have considered this problem – how to keep the passions of the majority from inflaming the process of running a government.

*** On “Planet Money,” the American hosts asked British economist Tim Harford, “Any chance for a do-over? Two out of three?” Said Harford, “I think it’s unlikely.”

Blame Canada Culture

June 23, 2016
Posted by Jay Livingston

Culture as a concept has always fascinated me –all those different groups with their different ways of thinking and reacting. But I’ve also grown skeptical of culture as an explanation for things we don’t like – especially when the explanation invokes the general culture for a problem that is more specific.

Here, for example, is Ramesh Ponnuru writing earlier this month at Bloomberg

Trump’s success in the presidential race so far reflects a cultural rot: It would once have been impossible for someone like him to win the nomination. But it also deepens that rot. If we elevate a man we know to be cruel, impulsive, insecure, vain and dishonest to the most powerful position in our country, that choice helps to define our own character and shape our expectations for one another. It also means that our political debate will be dumber, nastier and more content-free.

Is our culture in fact rotten? Ponnuru offers no evidence that it’s any more rotten than it was in the past. Instead, he offers this circular logic.

• Why is Trump winning in the primaries? Because of cultural rot.
• How do you know there’s cultural rot? Because Trump is winning. 

The other problem is that Ponnuru is blaming the entire culture for the actions of the Trump voters and supporters. At least I think he is. In much of the article he talks about “conservatives” who support Trump. But when he says “if we elevate . ..” and “our own character,” he seems to be casting a wider net. By “we” Ponnuru might mean conservatives or Republicans, but he never mentions  “conservative culture” or “Republican culture,” so I get the sense he means American culture.

But cultures don’t vote; people do. So political scientists rarely talk about cultural rot. Instead, they ask who are these people who support Trump — what age, gender, race, region, economic position, policy views, etc. But if, like Ponnuru, you are a conservative* and a Republican, you probably don’t want to say that a lot of the people who have been voting for your side all these years are morally rotten. And you don’t want to blame your party for those voters’ rotten choices. Instead, you’re like the parent whose kid is arrested and who says, “He’s a good kid, he just got swept up by the wrong crowd.” So you take a “Blame Canada” strategy and say that all these Trump voters got swept up by the cultural rot that is at large in the US.

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* Ponnuru focuses on another factor dear to conservatives – character. He cites JFK, Gingrich, and Bill Clinton for their infidelities. But supporting Trump is worse, he says, because “the public had no way of knowing about most of their vices before voting for them. (Nixon’s swearing on the Watergate tapes, while not the focus of public concern, was scandalous.)” Yes, that’s right. The worst character flaw Ponnuru can find in Nixon is his swearing.

Imagine There’s a $5 Discount. It’s Easy If You Try. . . .

June 21, 2016
Posted by Jay Livingston

Reading Robert H. Frank’s new book Luck and Success, I came across this allusion to the famous Kahneman and Tversky finding about “framing.”

It is common . . . for someone to be willing to drive across town to save $10 on a $20 clock radio, but unwilling to do so to save $10 on a $1,000 television set.

Is it common? Do we really have data on crosstown driving to save $10? The research that I assume Frank is alluding to is a 1981 study by Daniel Kahneman and Amos Tversky (pdf here). Here are the two scenarios that Kahneman and Tversky presented to their subjects.

A.  Imagine that you are about to purchase a jacket for $125 and a calculator for $15. The calculator salesman informs you that the calculator you wish to buy is on sale for $10 at the other branch of the store, located 20 minutes drive away. Would you make the trip to the other store? B. Imagine that you are about to purchase a calculator for $125 and a jacket for $15. The calculator salesman informs you that the calculator you wish to buy is on sale for $120 at the other branch of the store, located 20 minutes drive away. Would you make the trip to the other store?

The two are really the same: would you drive 20 minutes to save $5 on a calculator? But when the discount was on a $15 calculator, 68% of the subject said they would make the 20 minute trip. When the $5 savings applied to the $125 calculator, only 29% said they’d make the trip.

The study is famous even outside behavioral economics, and rightly so. It points up one of the many ways that we are not perfectly rational when we think about money. But whenever I read about this result, I wonder: how many of those people actually did drive to the other store? The answer of course is none. There was no actual store, no $125 calculator, no $15 jacket. The subjects were asked to “imagine.” They were thinking about an abstract calculator and an abstract 20-minute drive, not real ones.*

But if they really did want a jacket and a calculator, would 60 of the 90 people really have driven the 20 minutes to save $5 on a $15 calculator? One of the things we have long known in social research is that what people say they would do is not always what they actually will do. And even if these subjects were accurate about what they would do, their thinking might be including real-world factors beyond just the two in the Kahneman-Tversky abstract scenario (20 minutes, $5). Maybe they were thinking that they might be over by that other mall later in the week, or that if they didn’t buy the $15 calculator right now, they could always come back to this same store and get it.

It’s surprising that social scientists who cite this study take the “would do” response at face value, surprising because another well-known topic in behavioral economics is the discrepancy between what people say they will do and what they actually do. People say that they will start exercising regularly, or save more of their income, or start that diet on Monday. Then Monday comes, and everyone else at the table is having dessert, and well, you know how it is.

In the absence of data on behavior, I prefer to think that these results tell us not so much what people will do. They tell us what people think a rational person in that situation would do. What’s interesting then is that their ideas about abstract economic rationality are themselves not so rational.

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* I had the same reaction to another Kahneman study, the one involving “Linda,” an imaginary bank teller. (My post about that one, nearly four years ago, is here ). What I said of the Linda problem might also apply to the jacket-and-calculator problem: “It’s like some clever riddle or a joke – something with little relevance outside its own small universe. You’re never going to be having a real drink in a real bar and see, walking in through the door, an Irishman, a rabbi, and a panda.”

The Full Ferguson

June 17, 2016
Posted by Jay Livingston

FBI director, James Comey, didn’t call it “the Ferguson effect.” Instead, the recent rise in homicide rates was a “viral video effect” – a more accurately descriptive term for the same idea: that murder rates increased because the police were withdrawing from proactive policing.

The full sequence goes something like this:  Police kill unarmed Black person. Video goes viral. Groups like Black Lives Matter organize protests. Politicians fail to defend the police. Police decrease their presence in high-crime areas. More people in those areas commit murder.

Baltimore is a good example, as Peter Moskos has strongly argued on his blog Cop in the Hood. But many cities, even some with all the Ferguson elements, have not seen large increases in homicide.* Other factors – gang conflict, drugs, and the availability of guns – make a big difference, and these vary among cities. Chicago is not New York. Las Vegas is not Houston. All homicide is local.

There’s something else about the viral-video theory. It assumes that the crime is a game of cops and robbers (or cops and murderers), where the only important players are the bad guys and the cops. If the cops ease up, the bad guys start pulling the trigger more often. Or as Director Comey put it,

“There’s a perception that police are less likely to do the marginal additional policing that suppresses crime — the getting out of your car at 2 in the morning and saying to a group of guys, ‘Hey, what are you doing here?’”

This model of crime leaves out the other people in those high-crime neighborhoods. It sees them as spectators or bystanders or occasionally victims. But those people, the ones who are neither cops nor shooters, can play a crucial role in crime control. In some places, it is the residents of the neighborhood who can get the troublesome kids to move off the corner. But even when residents cannot exert any direct force on the bad guys, they can provide information or in other ways help the police. Or not.

This suggests a different kind of Ferguson effect. In the standard version, the community vents its anger at the cops, the cops then withdraw, and crime goes up. But the arrows of cause and effect can point in both directions.  Those viral videos of police killing unarmed Black people reduce the general level of trust. More important, those killings are often the unusually lethal tip of an iceberg of daily unpleasant interactions between police and civilians. That was certainly the case with the Ferguson police department with its massive use of traffic citations and other fines as a major source of revenue. Little wonder that a possibly justifiable shooting by a cop elicited a huge protest.

It’s not clear exactly how the Full Ferguson works. Criminologist Rich Rosenfeld (U of Missouri, St. Louis) speculates that where people don’t trust the police, they are more likely to settle scores themselves. (An NPR story featuring Rosenfeld’s ideas is here.) That may be true, but I wonder if it accounts for increases in killings between gang members or drug dealers. They weren’t going to call the cops anyway. Nor were people who have been drinking and get into an argument, and someone has a gun.

But maybe where that trust is absent, people don’t do what most of us would do when there’s trouble we cannot handle ourselves  –  dial 911. As in Director Comey’s version, the police are less a presence in those neighborhoods but not because they are afraid of being prosecuted for being too aggressive and not because they are being petulant about what some politician said, but because people there are not calling the cops.

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* New York, the city where I live, had all of the Ferguson-effect elements. The police killed an unarmed man. The crime they were arresting him for was selling “loosies” – individual cigarettes, fifty cents each. One of the cops put him in a choke hold. A video went viral Even knee-jerk police supporters found it hard to justify.  When the prosecutor could not get a grand jury to indict the copy, there were protests. The mayor did not voice support for the cops. The cops in turn do not want to do anything to support the mayor. In addition, the courts had recently put limits on aggressive policing tactics like stop-and-frisk. The number of such stops fell dramatically. Yet the number of murders in New York did not rise, nor did rates of other crimes.