Environmental Economics

I can't help it ... one political post*

I'm finding this poll aggregation stuff fascinating, aren't you (The Rise of the Poll Quants)?

So what exactly do these guys do? Basically, they take polls, aggregate the results, and make predictions. They each do it somewhat differently. Silver factors in state polls and national polls, along with other indicators, like monthly job numbers. Wang focuses on state polls exclusively. Linzer’s model looks at historical factors several months before the election but, as voting draws nearer, weights polls more heavily.

At the heart of all their models, though, are the state polls. That makes sense because, thanks to the Electoral College system, it’s the state outcomes that matter. It’s possible to win the national vote and still end up as the head of a cable-television channel rather than the leader of the free world. But also, as Wang explains, it’s easier for pollsters to find representative samples in a particular state. Figuring out which way Arizona or even Florida might go isn’t as tough as sizing up a country as big and diverse as the United States. ...

But the forecasters don’t just look at one state poll. While most news organizations trot out the latest, freshest poll and discuss it in isolation, these guys plug it into their models. One poll might be an outlier; a whole bunch of polls are likely to get closer to the truth. Or so the idea goes. Wang uses all the state polls, but gives more weight to those that survey likely voters, as opposed to those who are just registered to vote. Silver has his own special sauce that he doesn’t entirely divulge.

Both Wang and Linzer find it annoying that individual polls are hyped to make it seem as if the race is closer than it is, or to create the illusion that Romney and Obama are trading the lead from day to day. They’re not. According to the state polls, when taken together, the race has been fairly stable for weeks, and Obama has remained well ahead and, going into Election Day, is a strong favorite. ...

While it may not seem likely, poll aggregation is a threat to the supremacy of the punditocracy. In the past week, you could sense that some high-profile media types were being made slightly uncomfortable by the bespectacled quants, with their confusing mathematical models and zippy computer programs. The New York Times columnist David Brooks said pollsters who offered projections were citizens of “sillyland.”

Maybe, but the recent track record in sillyland is awfully solid. In the 2008 presidential election, Silver correctly predicted 49 of 50 states. Wang was off by only one electoral vote. Meanwhile, as Silver writes in his book, numerous pundits confidently predicted a John McCain victory based on little more than intestinal twinges.

Anything that makes David Brooks look silly and shuts up CNN, Fox and MSNBC is OK with me.

*And I didn't send it to my Facebook feed ... you're welcome!

What am I missing in the whole health care mandate debate?

I'm a simple man.  And by simple I mean I seek the simplest solution to complex problems.  At times that means I miss the nuance and detail that is really at the heart of many complex problems, but that doesn't stop me from offering simple analysis.

So here's my economist take on the national health insurance, health care mandate, Obamacare, socialism...whatever...debate....

It's all about the risk pooling. 

Insurance markets work when non-systemic risks are pooled across a population.  Let's use car insurance as an example.  For the most part, the probability of me getting in an accident is independent of the probability of you getting in an accident unless you happen to be driving next to me at 75 mph while I eat a Whopper with one hand and check my Facebook status with the other.  By pooling the independent risks, insurance companies can offer relatively low priced insurance against one or the other of us getting in an accident.  So states require (mandate) that in order to drive, you must have insurance, thereby reducing the external costs of my bad habits on you.  If you don't have insurance, you aren't supposed to drive and if you are caught driving without insurance you face stiff penalties.  The result: Users of the product that causes the risk (driving) have insurance--most of the time.  You can choose not to buy insurance and not drive.

So what about healthcare?  Shouldn't it work the same way?  In theory, yes.  Users of health care could be required to buy insurance against catastrophic outcomes.  By pooling the risks across large populations, the individual cost of health care will be lower than the expected cost to you if you bore the full risk of your own health.  Risk pooling reduces costs and protects againsts catastrophic outcomes.  And, just as with car insurance, if you choose not to buy health insurance, you lose the right to consume healthca...oh, wait. 

Human decency has to be factored in.

In the absence of health insurance, individuals can still not be denied health care (at least emergency care, which is expensive).  So what happens when an individual chooses to forego health insurance?  The cost of the uninsured care, guaranteed by human decency, gets rolled into the premium of those already insured.  In other words, health care costs rise.  Further, if individuals know that health care will be provided regardless of the willingness or ability to pay or willingness or ability to be insured, there is a perverse incentive to underconsume health insurance and further reduce the size of the risk pool in the insurance market (we call that moral hazard). 

So what are the possible solutions?

1. Rely on people to 'do the right thing.'  But each person's definition of right might be different.  While I think it is right to participate in the insurance market, others might think it is right to take advantage of the rules of the game. And as we know, economic incentives are powerful things.
2. Have the government act as the insurer of last resort.  This is the model we currently have.  The government offers subsidized insurance for those who are unable to afford health insurance (medicare/medicaid) and then acts as the insurer of last resort for the unisured.  The result: the cost of providing insurance to the uninsured and underinsured are passed on to the insured through higher taxes and higher insurance premia.
3. Mandate that everyone buy health insurance and play by the same rules, and penalize those who opt out.  The results 'should' be more efficiently priced insurance premia for those already insured, reduce costs of providing health care to those unable to afford insurance, and a less morally hazardous (I made that up) risk pool.

So what am I missing?

Let me have it.

And it was still hot

My Sendak tribute title came a day too early. From the NY Times news alert email:

Maurice Sendak, Author of ‘Where the Wild Things Are,’ Dies at 83

Maurice Sendak, widely considered the most important children’s book artist of the 20th century, who wrenched the picture book out of the safe, sanitized world of the nursery and plunged it into the dark, terrifying and hauntingly beautiful recesses of the human psyche, died on Tuesday in Danbury, Conn. He was 83 and lived in Ridgefield, Conn.

The cause was complications from a recent stroke, said Michael di Capua, his longtime editor.

Roundly praised, intermittently censored and occasionally eaten, Mr. Sendak’s books were essential ingredients of childhood for the generation born after 1960 or thereabouts, and in turn for their children. He was known in particular for more than a dozen picture books he wrote and illustrated himself, most famously “Where the Wild Things Are,” which was simultaneously genre-breaking and career-making when it was published by Harper & Row in 1963.

My oldest daughter would always touch the page to see for herself when I read "And it was still hot."

Haven't had a personal sports update in a while

With insincere apologies to those offended by off-topic, unrelated posts, yesterday the Official Oldest Daughter of Env-Econ's (a 15 y.o. sophomore varsity softball pitcher) threw a one-hitter in the Columbus area sectional tournament while helping herself at the plate with a solo homerun in the 6th.  Here's the box score:

------------------------------------------------------------------------------

Dublin Jerome (12-11)	001	001	0	—	2	6	1
Briggs (18-3)	000	000	0	—	0	1	4

Haab and Kendall; Estep and Morro. HR: Haab (DJ) 6th, none on.

-----------------------------------------------------------------------------

At the beginning of the season, OODEE set three team goals for the year: 1) beat both of the local rival high schools, 2) finish the season at .500 or better (last year the team was 2-18), and 3) advance past the first round of the sectional tournament.  Goal 1 was sort of accomplished--2 wins against rival high school A and a rain shortened, 3-inning, 2-0 suspended game against rival school B.  With yesterday's win over the Columbus City League champion Briggs, goals 2 and 3 were accomplished. 

Next up, the number 6 team in the state--who they lost to 4-3 earlier in the season.

If you watch this video closely you'll see me singing background vocals towards the end*

Via No Depression:

Athens, GA:  Some of the greatest songs were written to give voice to anxiety, despair and unwanted change.  “After it’s Gone”, a new single just released by Patterson Hood and the Downtown 13, was inspired by the threat of a Walmart in the heart of the downtown that nurtured the band’s career.  Hood, singer, writer and guitarist for the band Drive-By Truckers assembled The Downtown 13, a musical collective made up of some of Athens, Georgia's finest musicians to celebrate Athens, GA's beauty and vibrant musical heritage and to protest a developer's proposed building of a massive mixed use development in downtown Athens, anchored by a 94,000 sq. foot Walmart.

*Not really, I volunteered, but I guess they thought I was too busy as Patterson Hood's guitar tech.

Stranger than fiction

Tim calls me out as I'm turning the same age as Jamie Moyer next month. Little does he know that I have a Jamie Moyer story.

1991: I'm in Kentucky visiting family and go to a Louisville Redbirds AAA game. Jamie Moyer is pitching during one of those years when everyone thought he was washed up. From Wikipedia:

Moyer was released as a free agent after the 1990 season and was signed by the St. Louis Cardinals. He made seven starts for the Cardinals in 1991 before being sent to the minor leagues on May 24, and was released on October 14.

I meet my friend's little brother, who played baseball at Notre Dame and in the minors, and we sit behind third base. He is sitting next to Moyer's spouse, Digger Phelps' daughter. After the game I wait around and meet Moyer and tell him good luck (thinking this it for the poor guy). As he is walking off I say to my friend's brother, "I should have gotten his autograph." He says, "well, why don't you." I say "OK! and holler 'Jamie'!". He is kind enough to autograph my brand new Redbirds cap which my puppy Wilma chewed on very soon after.

Jamie Moyer has been one of my top 10 favorite players, and only non-Brave, since then (time for a list):

1. Hank Aaron (saw #700, learned about racism from his bio with Furman Bisher)
2. Phil Neikro (saw his no-hitter)
3. Dale Murphy (I can't believe he got stuck on 398 HRs)
4. Tom Glavine (chicks dig the long ball)
5. John Smoltz (saw his 100th save)
6. Ron Gant (stiff as a board at the plate)
7. Greg Maddux (chicks dig the long ball)
8. Chipper Jones (he grew on me)
9. Ralph Garr (beep, beep)
10. Jamie Moyer (autographed my cap)

 

Feel free to ignore this post instead of reading it and complaining about it being off-topic

Bear with me as I continue to try to deal with this.

From the inbox:

Greetings from Centre!

We have been chosen to play in the NCAA playoffs this Saturday, November 19th.  We will be hosting this game against Hampton Sydney at 12:00pm at Farris Stadium on Joe McDaniel Field.  This is the first time that Centre Football has played in a post-season game since 1921.  We are thrilled for our players, our institution, but most importantly for all Centre Football alumni - those who trained, prepared, and fought for the opportunity to represent Centre in their pursuit of a National Championship!  We cannot help but remember those men in 1955 that had a bid to the Tangerine Bowl, the 1986 team that lost their chance on a technicality, the 1989 team that defeated the No.1 team in their region, the 2001 team that was edged out in the pool C bids, the 2003 team that shared the SCAC Championship title, and the 2009 team in their last regular season game that saw the playoffs slip from their grasp.  This privilege to play in the NCAA playoffs goes out to you - the Centre football player!   Our hope is that you - our football alumni, can vicariously live through this team as we pursue a NCAA Championship! Be assured those ideals and virtuous play that sustained your passion to win will be evident in us as we represent the long-standing tradition of the “Gold and White”!

Also, don't forget the 1984 team that won the CAC championship but was, supposedly, 5th in the South when only four teams from each region went to the playoffs.

Here is a video:

Centre College Athletics: Football

I could not be more excited:

For the first time in school history, the Centre College football team will appear in the NCAA Division III Football Tournament after earning an at-large bid Sunday, Nov. 13.

The Colonels will host Hampden-Sydney College in a first round game at Farris Stadium in Danville, Ky. Kick-off is set for 12 p.m. Saturday, Nov. 19.

Centre finished the regular season 8-1 overall and 5-1 in the Southern Collegiate Athletic Conference (SCAC), which was good for second place behind only Trinity University.

Hampden-Sydney, 8-2 overall this year and 5-1 in the Old Dominion Athletic Conference (ODAC), earned the league's automatic bid by winning its conference championship.

This might cause me to punt on writing my second paper for the SEA meetings.

Where I'll be this weekend

I'm on the road to the Oldham County High School Class of 1981 reunion. Tonight is the homecoming football game against Fern Creek High School (a city school). Tomorrow night is the dinner.

I have brand new bifocals and brand new 38" waist pants, so I should certainly cut a dashing figure on the dance floor.

And, by the way, that is a Colonel (pronounced "ker-nel"), to the right.

I respect Paul Krugman's right to express his opinion. I wish he would return the favor.

Paul Krugman writes:

Is it just me, or are the 9/11 commemorations oddly subdued?

Actually, I don’t think it’s me, and it’s not really that odd.

What happened after 9/11 — and I think even people on the right know this, whether they admit it or not — was deeply shameful. Te atrocity should have been a unifying event, but instead it became a wedge issue. Fake heroes like Bernie Kerik, Rudy Giuliani, and, yes, George W. Bush raced to cash in on the horror. And then the attack was used to justify an unrelated war the neocons wanted to fight, for all the wrong reasons.

A lot of other people behaved badly. How many of our professional pundits — people who should have understood very well what was happening — took the easy way out, turning a blind eye to the corruption and lending their support to the hijacking of the atrocity?

The memory of 9/11 has been irrevocably poisoned; it has become an occasion for shame. And in its heart, the nation knows it.

I’m not going to allow comments on this post, for obvious reasons.

I think Krugman is underestimating the ability of the nation to separate the atrocity from the politics that followed.  Unfortunately, Krugman himself is no longer able to separate his own disgust for anything done by someone who labels themself conservative from objective analysis of a situation.  I'm assuming fron the tone of this post that Krugman feels that a liberal president would have somehow avoided a war? 

Regardless, I have no problem with Krugman using his forum to question the response, or to question the motives behind the responses.  I do, however, have a problem with Krugman hiding behind an off switch when he expresses an opinion that he know will evoke an emotional response.  Does he have the right to do so? Sure. Is it cowardly? I'll leave that for others to decide.

I will allow comments on this post.  For obvious reasons.