Ear Rational Thoughts

E.R.

ER care is but a tiny portion of the U.S. health care pie: less than 3 percent. The claim that unnecessary visits are clogging the emergency care system is also untrue: Just 12 percent of ER visits are not urgent. People also tend to think ER visits cost far more than primary care, but even this is disputable. In fact, the marginal cost of treating less acute patients in the ER is lower than paying off-hours primary care doctors, as ERs are already open 24/7 to handle life-threatening emergencies. And while we're at it, let's dispel one other myth: Despite the belief that the uninsured and undocumented flood ERs, most emergency room patients are insured U.S. citizens.

Overall, our ERs are working about as they ought to be.

That's from this article in Slate, a surprising source for information like this.

Budgetary Precedents

Once they adopt this precedent, they can increase spending on whatever they want, in unlimited amounts, while claiming deficit neutrality. Future Medicare spending is so high that you can always come up with cuts, as long as they [are] deferred.

That's Arnold Kling referring to the CBO scoring for the current health care proposal. As long as you pass a bill that includes future cuts in Medicare spending - which may then be overridden in future Congressional sessions - you can get the CBO to score it with any amount of deficit reduction you want, from neutral all the way to $1.30e11/year. It's something to keep in mind when you hear the President speak about the budgetary implications of this - or any - law.

Information Regulation

Arnold Kling

In this information age, the Progressives may be as threatened with irrelevancy as the industrial labor unions that they romanticize about. I think even most progressives recognize that it would be crazy to put a central control point or regulator in charge of all Internet content. Well, the economy as a whole shares the same complexity and dynamism as the Internet--indeed, the economy is in some sense merging with the Internet. So a highly-regulated economy is just not where trends are suggesting we should go.

His point is presumably that things like health care and the financial sector require specialized, diffuse information that is comparable to the content on the internet. No one would ever think we could regulate internet content effectively, yet many people believe this is a slam-dunk task for the government.

Unemployment Insurance

David Henderson:

[E]xtensions of emergency unemployment insurance benefits appeared to have raised the measured unemployment rate, relative to levels recorded in past downturns, by encouraging some who have lost their jobs to remain in the labor force. If that effect were large -- some estimates suggested it could account for 1 percentage point or more of the increase in the unemployment rate during this recession -- then the reported unemployment rate might be overstating the amount of slack in resource utilization relative to past periods of high unemployment.

I don't doubt this. I have at least one friend whose wife lost her job about 6 months ago and she is currently collecting unemployment benefits. To help make ends meet, the husband got a 2nd job (at a grocery store, a job the wife is easily qualified for) because if the wife went back to work, it wouldn't pay for itself with the loss of her unemployment benefits.

It seems strange, but in a world of two income families, this thing is bound to be quite common.

Update: David has a follow-up

NCAA Basketball Tournament Picks 2009-10 (final)

Earlier I had posted some preliminary work on the NCAA basketball tournament. With the season completed and brackets out, I decided to rerun my analysis.

You will find the full list of every game played here.

You will find the full list of rankings using this method here.

You will find the full matrix of probabilities for all 63 teams (I didn't do the play-in winner) in .xls format here.

Here is the top-10:

KansasKentuckyDukeWisconsinKansas StateTexasSyracuse MinnesotaBrigham YoungOhio State

1 Kansas50.051.451.958.958.459.059.158.560.159.8

2 Kentucky48.650.050.760.759.860.760.159.162.461.7

3 Duke48.149.350.060.859.960.660.058.962.861.5

4 Wisconsin41.139.339.250.050.150.750.751.351.752.0

5 Kansas State41.640.240.149.950.050.650.851.351.652.2

6 Texas41.039.339.449.349.450.050.150.550.851.4

7 Syracuse40.939.940.049.349.249.950.050.650.851.1

8 Minnesota41.540.941.148.748.749.549.450.049.850.4

9 Brigham Young39.937.637.248.348.449.249.250.250.050.5

10 Ohio State40.238.338.548.047.848.648.949.649.550.0

Let the bracket filling begin.

Are women better drivers than men?

Eric Morris at the Freakonomics blog daringly asks the question:

Despite comprising half the population, women drivers are unquestionably involved in many fewer accidents than men are. In fact, it isn’t even close.

... The problem is that ... men drive lots more than women do. The American Time Use Survey shows that adult men average about 60 minutes a day behind the wheel, while women average around 40. The National Household Transportation Survey reports that in 2001 men averaged 16,749 miles driven per year, and women 10,174. Given that they drive so much less, it’s not particularly surprising that women are involved in fewer accidents and pay lower premiums.

... Research (gated) by Guohua Li, Susan P. Baker, Jean A. Langlois and Gabor D. Kelen showed that, as of the mid-1990s, women drivers were involved in about 5.7 accidents per million miles driven. Men, on the other hand, were involved in about 5.1. Women were thus 12 percent more likely to be in crashes per mile driven.

... If we move to the next level of severity, fatal accidents, we find quite a different picture. Li et al. found that male drivers are 80 percent more likely to be in a fatal accident than women on a per mile basis. Massie et al. confirmed this, finding men are 55 percent more likely to be in fatal crashes.

This all rings very true to me. I've driven almost 1/3 of a million miles in the past decade and being near Boston I've seen a lot of bad drivers. My conclusion is that overall I get frustrated with women drivers more. But their annoyances tend to appear accidental, as if they're not really paying attention. Whereas when I'm annoyed with something men do, it usually has the appearance of being intentional. If I get cut off and in an instant the car has already moved on to cut off the next guy, it's usually a guy driving. If I get cutoff for no apparent reason other than that the driver didn't seem to know I was there, it's usually a women. All of this anecdotal evidence seems to align nicely with what Mr. Morris finds.

How Management Practices Differ

Bryan Caplan summarizes some new findings on how management practices differ across firms/countries:

The most interesting to me:

1. The richer the countries, the better the management.

2. Key exception: Multi-nationals are managed at First World levels almost everywhere.

3. Overall, corporations' separation of ownership and control looks like a non-problem, or even a plus. Firms run by founders - and family firms run by family CEOs (typically by primogeniture) - are well below average.

4. Government firms are the worst-managed of all.

For me, #3 is perhaps the most surprising/interesting

The Barbarism of the Government

Arnold Kling offers his thoughts on markets vs government:

...

3) Liberals are more confident about social science and technocratic expertise. Libertarians are more confident about decentralized trial-and-error learning.

4) ... To me, government is a mechanism that diffuses and dilutes accountability. If government does something wrong, does a bureaucrat get fired? Does an agency go out of business? Do legislators suffer financial losses?

If I shop for a coat, the store is accountable to me. If government decides on a policy, my affect on that policy is at best very indirect. Will my vote be determined by that policy, or by my feelings about the elected officials based on other factors? Even if I vote on the basis of a single policy, will others vote the same way? Will the elected officials understand what the voters want? etc.

5) I think that liberals see markets and government as representing different facets of human nature. The market is where we go to channel greed, aggression, and the desire to outwit and take advantage of others. The government is where we go to channel compassion, kindness, and community spirit. ... I tend to think of government as a particular form of charitable organization, one which is rendered corrupt and horribly inefficient by the fact that it obtains its funding via coercion rather than via voluntary donations.

6) I think that liberals view the market as a somewhat barbaric and unfair mechanism for allocating resources. They view government as a mechanism for restoring fairness and justice.

To a libertarian, the market mechanism is civilized. When people buy and sell in the market, they are making voluntary, mutually beneficial exchanges. In contrast, government is an arena where one side wins and the other side loses.

When I shop for a coat, if I do not like the way a coat fits or how it looks, or how much the seller wants me to pay, I do not buy that coat. I buy a different coat, perhaps in a different store. The shopping process leads to peaceful, mutually satisfying trade.

On the other hand, look at how the issue of health care reform is going to be resolved. It is like gang warfare, where the Democrats and Republicans are going to rumble, and at least one side is going to be very unhappy with the outcome. For me, it is the democratic process that is barbaric, and it is the market process that is comparatively peaceful and civilized.

His point #6 is well worth considering.

Who makes (or should make) our health care decisions?

I think Arnold Kling has found the reason most people prefer that other people (either health "insurance" companies or the government) pay for health care:

I think that what is implicit in his view is that we would rather outsource our rationing decisions than make them as individuals or families. Suppose that it is your aging parent who is offered the high-cost, low-benefit procedure and cannot afford it. Do you want to be under pressure to put up the money, or do you want the social norm to be that this decision is up to the managed-care provider?

How rich will we be?

Would you take this longbet?

The world per-capita GDP in the year 2000 was approximately $7,200. The world per-capita GDP (in year 2000 dollars) will exceed $13,000 in the year 2020, $31,000 in 2040, $130,000 in 2060, $1,000,000 in 2080, and $10,000,000 in 2100.

I would not take that bet - I think it's about right.

To do the math, that works out to increases of 3%/year from 2000-2020, 4.4% from 2020-2040, 7.4% from 2040-2060, 10.75% from 2060-2080 and 12.2% from 2080-2100.

For comparison, he claims we're at 3% today.

Overall I think that the first world has much to gain in the way of productivity (which is the long-term driver of income) from the use of technology, both silicon and bio. And I think these technologies tend to be Moore's law-type technologies, where improvements feedback and create new improvements.