Thursday, November 6, 2014

The Real News for Republicans in 2014 is in the Youth Vote

Republicans took the Senate and increased their majority in the House. Overall, excellent night for the Republicans. But, in the long term, the real news in the exit poll data, courtesy of the WaPo.

The real important numbers are in voting trends, not the absolute numbers. Midterms and presidential elections aren't anything close to apples to apples. To get a better idea of voting trends, you need to compare midterms to midterms. Luckily, we have something that is pretty close to a natural experiment.

Both 2010 and 2014 saw Republican midterm victories. In 2010, Republicans won by a 7% margin nationally. In 2014, that margin shrunk slightly to 5%. The composition of the 2014 Republican vote was similar but not identical to 2010. These differences are important.

First, Republicans made dramatic inroads among Asians, voting 17 points more Republican than in 2010. Asians are true "Natural Republicans". With high incomes, traditional values, and a strong work ethic, it should be a relief that Asians are finally coming back to Republicans.

Hispanics, on the other hand, are not natural Republicans. And, 2014 provides more evidence for that. While the nation voted 2 point less Republican in 2014 than in 2010, Hispanics voted 6 points less Republican. Hispanics are becoming less Republican.

The other good news for Democrats is that women, like Hispanics, voted 6 points more Republican in 2010 than in 2014 while there was no change in men. So, women and Hispanics are trending Republican.

Most other groups didn't show any significant change. The exception there might be the young. The young voted 2 points more Republican in 2014 while the nation as a whole voted 2 points less Republican. So, young people, as we discussed last time, are slowly moving back towards the center.

My hunch is that young white men are driving this shift. As the Pew chart in my last post showed, Mitt Romney did 19 points better among young white men than John Mccain. Nationally, Romney only improved 3 points on Mccain.

Tuesday, November 4, 2014

The Youth Vote

On the eve of the 2014 midterm election, I'd like to talk about the 2012 presidential election. In particular, I'd like to talk about voters who, largely, won't be voting in tonight's election: young voters. To the extent that young voters vote, they tend to vote in the more publicized presidential elections.

I was inspired to write this post after looking at some exit poll data. Pew research made this chart comparing the shift among young voters from the 2008 presidential election to the 2012 presidential election.

Overall, Obama fell from 66% of the young vote in 2008 to 60% in 2012, a 6% decline. Part of this is cyclical: Obama fell from 53% in 2008 among all voters to 51% in 2012. Still, there was a disproportionate fall among young voters. There are two more factors that probably play a role here:

1.) Young voters are probably more "elastic". That means that the youth vote is more subject to shift when national conditions change. So, if there is a national swing of 2%, one may expect a larger swing among young voters and a smaller swing among older voters because they are more "set in their ways".

2.) Obama won a disproportionately large number of young voters in 2008 because of unpopular Republican incumbents and his own personal charisma. The incumbent Republicans may have been especially off putting to younger voters while Obama's qualities resonated more with them and older voters.

One could also add Obama's turnout operation, but I'm not sure it was really that much stronger in 2008 than in 2012. In 2008, voters of the ages 18-29 made up 18% of all voters. In 2012, this group's share of the vote plummeted to... 19%. Turnout was lower overall, but, proportionally, the youth vote was not any worse than in 2008. The entire electorate, on the other hand, was.

Yet another factor that could play a role in the large shift in the youth vote would be the cohort that was 25 to 29 in 2008 was unusually liberal in 2008 but was no longer "youth" in 2012 since they entered their thirties. Part of this story fits. People in their 30s was the only age group that Obama in 2012 outperformed Obama in 2008. The reason for this isn't that Obama did a great job appealing to people in their 30s. Instead, the people in their late 20s in 2008 who Obama did appeal to simply turned 30 and didn't change their mind.

This explains the strong relative performance of Barack Obama among people in their 30s in 2012. But, that does not necessarily explain the change in the youth vote. If this was a major factor in Republican gains among the young, we would expect Republicans to do much better among the 18-24 group within the youth relative to the 25-29 group in 2012 relative to 2008. In fact, in both elections, both groups voted about the same. Obama won 66% of both groups in 2008 and 60% of both groups in 2012.

So, it doesn't seem that that explanation plays a large role in the vote shift. Perhaps more important is how different groups within the 18-29 cohort shifted. A topic I'll address next time.

Thursday, August 28, 2014

Are Doctors or Lawyers Richer?

Careers in medicine and law are known for high levels of educational credentials and high levels of income. But, which pays more?

The answer, as most people know, is doctors. Doctors, according to CNBC, are paid about $160,000 to $200,000 on average (depending on speciality) compared to to about $130,000 for lawyers. Stark difference indeed.

Not surprisingly, going into the medical field is more likely to get you rich than going into the legal field. 21% of doctors make the top "1%" of earners compared to 12% of lawyers.  Both fields are pretty wealthy, but doctors far outpace lawyers.

So, to answer the question posed in the title, doctors are clearly richer than lawyers. That truth, however, may mask a more complex reality.

Being a doctor may be a better path to being rich, but it may not be a better path to being super rich. That is to say, doctors are richer than lawyers, but rich doctors may not be richer than rich lawyers.

Luckily, we have data that can help shed some light on the differences between the rich doctors and rich lawyers. Bradley Heim, Adam Cole, and Jon Bakija did a study on the occupations of the "1%". Unfortunately, the data only reaches up to 2005, but, for the purposes of this analysis, that shouldn't be a major problem.

What does the data show?

Just as indicated earlier, doctors are more common than lawyers in the "1%". In 2005, doctors made up 15.7% of the richest 1% compared to only 8.4% for lawyers. But, the question I am asking here is whether or not doctors or lawyers that are already in this 1% make more.

The answer is: Lawyers. Rich lawyers make more than rich doctors. Some simple calculations show that both lawyers and doctors in the top 1% make less than the average income in the top 1% (because CEOs and Financiers make up a big portion of this group). But, doctors in the 1% make 78% of the average while lawyers in the 1% make 85% of the average. This means that rich doctors only make 92 cents on the dollar of what rich lawyers make. Not a huge difference, but quite significant.

The difference is even greater among the super rich: the top 0.1%. Doctors in the 0.1% make about 60% of the average income in 0.1% while lawyers in this group make about 73% of the average income. This means that, in the top 0.1%, doctors make 82 cents on the dollar of what lawyers make.

The conclusion?

Doctors are richer than lawyers, but rich lawyers are richer than rich doctors. If you're goal is a high 6 figure salary, medicine is a better choice for you. If you are obsessed with great riches, however, law might be a better choice than medicine. Of course, this is all relative. Both medicine and law are far less likely to bring great wealth than finance and corporate management.

Monday, July 28, 2014

Things to Come

I have been posting a bit more lightly as of late. I will, however, be picking up again in the coming months with some heavy topics and some topics the CC has historically stayed away from. Just a heads up.

Saturday, July 12, 2014

ACA and the Uninsured Rate

There's a lot of to do about the evidence that ACA has reduced the uninsured rate. They're right. I'm not fan of the law, but, from the beginning, I have believed that the ACA would be able to do one specific thing: reduce the share of people in the category "uninsured".

I also think there will be more uninsured than most ACA supporters claimed would be, but there should still be a significant reduction. Indeed, there already has been according to a number of measures.

Is this not a vindication of the ACA?

In my view, the answer is no. For one, being "insured" is not the same as having access to quality health care. I wrote a post a while back noting how public health coverage often doesn't offer the same quality as private health coverage.

Given that the Medicaid expansion is a big part of the fall in the uninsured and given that Medicaid patients receive worse access and lower quality than patients with private care, the fall in the uninsured may not mean as large an increase in health care access as one might believe. Given the changing nature of private insurance, it's possible that even the private coverage purchased on the exchange may offer worse access than pre ACA private insurance.

As I've said before, the major problems in the health care system are overregulation on the supply side and third party (and employer) dominance in the way we pay for it. ACA doesn't do anything to deregulate the supply side and actually worsens the third party dominance in payment.

The high uninsured rate was merely a symptom of these problems. Covering up the symptom by changing people's insurance status may make our system look statistically better, but it may not offer any real improvements in our health care system.

Saturday, June 28, 2014

College Majors, IQ, and Income

New post by Randy Olson on college majors, IQ, and gender. I encourage all readers to read the whole post, which is quite informative. I did leave a comment on his post to note what seems to be a mistake in the SAT to IQ conversions on the part of one of his sources. This mistake led to a systematic overestimation of average IQs in the various majors. Here is my comment:

"SAT to IQ conversion seems to be off. Here is a good site for SAT to IQ conversions:
The smartest major, physics and astronomy, have an average SAT score of 1270. This seems plausible. However, your source converts that 1270 to an IQ of 133.
As the source I provided above shows, the actual conversion of a 1270 SAT score to IQ should be 128-130 depending on the IQ test you use.
Because this post is about the relative IQs of majors, this doesn’t actually have any impact on your argument. But, it is important to note that it seems there was an error on the part of the source when converting SAT to IQ.
My suspicion is that it has something to do with how they handled selection bias. Of course, I could be wrong.
Overall, though, good post."

I'm interested in how this all relates to the expected income of the various majors. Luckily, Bryan Caplan has already provided some numbers on the wage premium of the various majors. I like Caplan's data because it controls for an important factor: pre existing ability bias. After this control, Caplan finds the wage premium by major to be:

Earnings Compared to H.S. Grads
Electrical engineering
Computer Science
Mechanical engineering
General business
Political science/gov't
Liberal arts
English language/lit.
Fine Arts
General Education

Note that this is not a comparison of the average expected income by major. Instead, this is a comparison of how much benefit (in terms of income) is derived from a given major.
Not surprisingly, engineering and computer science have the largest wage premiums. This is followed by economics, finance, and accounting. At the bottom of the list, we see english, fine arts, and general education. 
For once, the data seems to confirm conventional wisdom. STEM and business type degrees really do payoff a lot more than traditional liberal arts degrees.
Another piece of conventional wisdom is that the traditional liberals arts majors are just as smart or smarter than the STEM and business type majors despite the income differences. Here is the link to the SAT scores by major data. As noted above, the SAT to IQ conversion seems to be off, but that applies for all majors, so the relative order and differences between majors in terms of IQ should be correct. Of course, the SAT data should be correct too.
My reading of the chart is that, once again, conventional wisdom is confirmed. Liberal arts students are just as smart as STEM and business type majors. They just would rather study philosophy or english in college and make less money later on in life. At least, that is my theory.
This post was pretty off the cuff and written at 5 AM, so it is by no means organized or well written. But, if anything, I hope I at least exposed some readers to good data on majors, income, and IQ.

Friday, June 20, 2014

On the New Commonwealth Fund Report

The new Commonwealth Fund analysis of international health care systems is out and, not surprisingly, the USA ranks dead last out of 11 nations. Despite my contrarian nature, I'm not a defender of the USA health care system, but I do think that, relatively speaking, the USA gets a worse rap than it deserves. "Relatively speaking" is an important word. In an absolute sense, the system really is as bad as commonly believed. But, in a relative sense, other systems are vastly overestimated due to bad reasoning and, yes, zombies. It is also true that, as bad as the USA system is, even our system deserves a bit more credit than it gets at times. A few thoughts on the actual report:

1.) The study ranks the UK as being the best health care system of the 11 countries. This should be an immediate red flag that this analysis is more driven by an ideological preconceptions than a quest for an objective comparison. I could be wrong. But, the emphasis on "health care equity" certainly isn't helping their case. Neither is the fact that data on how long people in the UK have to wait for elective surgery (a measure that they probably wouldn't do all that well on) is missing from the study.

2.) Progressives are claiming this study as a slam dunk for their health care policy views. After all, the socialized UK system is on top and the USA system is at the bottom. But, a look at the in between rankings muddies up the picture. Switzerland, with a heavy reliance on private medicine and cost sharing (neither of which progressives are very big on), comes in at second place. Canada, with a single payer system, comes in at second to last, right above the USA.

3.) One of the biggest problems with these international health care system comparisons that supposedly "show" how bad the USA system is that they don't measure the best thing about the USA system: innovation. Yes, we spend a lot more money (more than we need to), and we don't get a ton of value. But, our decentralized system also offers more room for experimentation than the tighter models of Europe. The problem here is that the benefits from this innovation benefit the whole globe, so it doesn't show up in international comparisons of health care systems. Indeed, in some ways, these other health care systems that are supposedly so much better than ours "free ride" off of our innovation, and then brag about how they do so well with less money. Excellent (old) article on this by Tyler Cowen here.

I also plan on responding to TIE and Krugman about the idea of zombie arguments in the very near future. Stay tuned.