Tuesday, October 28, 2014

Biology, Progressives, and Social Policy

Most of the reason that so many social problems and inequities remain a mystery today is simple: nobody wants to look at biology. Biology implies that these problems and inequities are, to a degree, "natural" and "incurable". Progressives, in particular, despise the idea that biology matters because it both steps on egalitarian sensibilities and implies social engineering really can only work up to a point.

Actually, there was a time when the progressive movement embraced biology. This was also a time when political correctness and egalitarianism were much smaller influences on the progressive movement, which was really more about effective social engineering. So, the progressive movement embraced eugenics.

The thing about eugenics is that it is seen as racist and classist today. But, in early 20th century America, "racism" and "classism" weren't thrown around so casually. The progressive movement was really not any more sensitive to political correctness than anyone else. So, the progressive movement, for once, endorsed the only type of social engineering that would actually work, at least based on the science of the time: eugenics. 

Something funny happened after that. Scientists began to discover the role that social environment plays on human behavior. Genetic determinism was all of the sudden no longer justified by science.

Progressives rejoiced because this made social engineering and improving society much easier and much easier for the public to swallow. So, we get the war on poverty, "broken window" theories, midnight basketball, etc. There was one problem: they didn't work.

You see, progressives kept up well with the science until some time in the 1990s. It was then that scientists began to note that the prior decades had gone too far in denouncing genetic determinism. Instead of replacing it with a mixed, complete view of human nature, environmental determinism had replaced genetic determinism.

Yet, scientific research showed, overwhelmingly, that nature did in fact matter quite a bit. Progressives, for the first time, refused to acknowledge the new scientific evidence and instead engaged in name calling. Thinks like "racist" and "sexist" come to mind.

Why does this matter?

Because progressives may finally come to their senses. It really is bad to have a class of social engineers obsessing over funding expensive and ineffective programs. But, it is probably worse to have these same social engineers deciding who gets to have kids and who doesn't.

The problem is that the second group of social engineers are on much sounder ground in terms of science. This is the exact dilemna pointed out by libertarians like Charles Murray. Murray, like me, sees eugenics as both a practical and moral mistake. Yet, the science behind it is actually pretty accurate.

The concern is that this will be abused to advocate eugenics. This, in my opinion, is a real problem.

But, recognizing the role of biology can help a lot of social problems make more sense. Men, for instance, are overrepresented among both the most intelligent and least intelligent members of society. This may help explain why men are dramatically over represented in both corporate boardrooms and prisons. 

Sound research in biology can, and has, been abused. But, that does not mean suppressing it in favor of more politically but not scientifically correct conclusions is a good idea.

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.

Tuesday, May 27, 2014

Some Quick Things

1.) Thomas Picketty seems to have made some data errors in his popular book (not too different from Rogoff and Reinhart). Also, the long term trends in wealth inequality seem to be much more complicated than is often suggested.

2.) The VHA, as it turns out, has had a "secret list" to make it's long waiting times not seem so long. Interestingly, many advocates of single payer saw the VHA as a good model for the entire national health care system. Although, it is important to note that the VHA's problems are hardly new. Yet another reason not to support nationalized health care.

3.) A recent meta analysis of studies on the link between saturated fat and heart disease found: 

"Current evidence does not clearly support cardiovascular guidelines that encourage high consumption of polyunsaturated fatty acids and low consumption of total saturated fats."

I've long suspected that saturated fat is not as bad as most people believe. This seems to support that view. This is also a good reason to be skeptical of bans and taxes on food deemed to be "unhealthy", as it is often unclear.

4.) I often speak favorably on the concept of cost sharing in health care on this blog. Aaron Carroll provides a different point of view. I'll be the first to admit that cost sharing has its downsides, and that there are times when more cost sharing is not desirable. Still, overall, I think there is too little cost sharing in our system instead of too much.

5.) Textbook example of regulatory capture with Pepsico lobbying for a crackdown on "counterfeit hummus". (HT to Mark Perry)