by Richard Belzer

in Regulatory Economics

Today's Wall Street Journal includes an editorial arguing that high taxes cause people to move, and low taxes help determine where they go. What caught our eye was they reported data showing that it is more expensive to move from a high-tax city with declining population (Philadelphia and Los Angeles are given as examples) to cities in low-tax states with increasing population (Nashville, Dallas, Austin and Las Vegas are given as examples).

The Journal says "the eight states without an income tax are stealing talent from other states." Do differences in the cost of moving by direction of the move provide supporting evidence of this hypothesis? More...

3 Jan 2008

Where to Have a Cardiac Arrest?
Answer: not in the hospital

by Richard Belzer

in Regulatory Science, Information Quality, People & Institutions

New York Times reporter Denise Grady previews a research report due to be published in today's New England Journal of Medicine that says many hospitals do not respond quickly enough to cardiac arrest. Leslie Saxon, who wrote an accompanying editorial, delivered the money quote: “You’re better off having your arrest at Nordstrom, where I’m standing right now, because there are 15 people around me.” More...

31 Dec 2007

Immigration Economics and the Wall Street Journal:
A marriage with irreconcilable differences

by Richard Belzer

in Regulatory Economics

Policy debates about illegal immigration almost always can be illuminated by careful data collection and analysis. Sometimes, data are nice but aren't necessary because elementary economic theory is sufficient to predict the direction (if not the magnitude) of effects. Today, the Wall Street Journal editorializes that new "data tell a very different story" than the picture emerging from "[t]alk radio hosts, cable newscasters and Presidential hopefuls." We're not sure which of these claims the Journal is seeking to refute, but we can show that it has failed to achieve its objective. More...

5 Dec 2007

Why Is Blood In Short Supply?
Anecdotal evidence of highly precautionary (but discretionary) donation policies

by Richard Belzer

in Regulatory Science, Regulatory Economics, Regulatory Policy

Recently Neutral Source managing editor Richard Belzer attempted to donate blood, but was declined. Although the story is anecdotal and not empirical, it suggests good reasons why this particular blood bank seems to always be in short supply. More...

24 Nov 2007

How Not to Save Money on Gasoline
Spending money to save money

by Richard Belzer

in Regulatory Economics

Gasoline prices exceed $3 per gallon almost everywhere in the U.S. In some isolated locations, retail prices now exceed $4 per gallon. The Los Angeles Times relates how some people take seeming irrational steps to "save money." More...

6 Nov 2007

The Economics of Cell-Phone Jammers:
A case study in government misallocation of property rights

by Richard Belzer

in Regulatory Economics, Regulatory Policy

New York Times reporter Matt Richtel seems to have set off a pandemic news stories and commentaries with his profile of "otherwise respectable people" who use jamming devices to illegally obstruct the cell phone conversations of people nearby. Based on groundswell of support that appears to have formed for jammers, this looks like a problem worthy of a small amount of economic analysis

As it happens, there are simple market-based solutions. The real problem is that the federal government has preempted them by disallowing market forces to work. One thing should be clear: jammers have appeared on the market because there is considerable consumer demand for them. That means there used to be a "market failure," and this market failure will persists as long the federal government insists on sustaining it. More...

4 Sep 2007

Trouble in the Carbon Offset Market:
Double-counting and other econ 101 errors

by Richard Belzer

in Regulatory Economics

We've posted several times on "carbon neutrality" -- how it's defined, how environmentalists are split between CO2 Puritans and Pragmatists, and further ramifications of their conflict centering on the nascent market carbon offsets (see here and here). Supporters say buying offsets is an effective and justifiable way to compensate for CO2 emissions. Opponents liken carbon offsets to the indulgences sold by the pre-Reformation Roman Catholic Church.

Los Angeles Times staff writer Alan Zarembo examines two specific aspects of the controversy:

1. Do offsets purchase new reductions in greenhouse gas emissions, or do they merely transfer wealth from buyer to seller>
2. Do sellers claim credit for more than the amount of greenhouse gas reductions they actually achieve?

16 Aug 2007

The Continuing Battle Between CO2 Puritans and Pragmatists, Part 2:
Carbon offsets come under increasing scrutiny

by Richard Belzer

in Regulatory Economics, Regulatory Policy

The battle between CO2 Puritans and CO2 Pragmatists continues. More...

29 Jul 2007

Differential Pricing of College Education:
Charging more for certain majors

by Richard Belzer

in Regulatory Economics

It is an anomaly of the higher education market that there are widespread differences in price both across and within colleges and universities, but historically a student's choice of major has not been a pricing criterion. Universities are beginning to experiment with differential pricing, though apparently with considerable apprehension. More...

23 Jul 2007

Peer Reviewers as 'Gatekeepers':
Barry Gewen of the New York Times Book Review

by Richard Belzer

in Peer Review

Scholarly peer review is a quality control exercise in which a journal editor decides which competing scientific papers should be published in the limited number of pages available. The number of scholarly journals has increased, in part, to accommodate the much greater (and rising) number of scholarly manuscripts that meet a broadly accepted minimum quality standard for publication. In science, publication is essential for having one's research taken seriously.

But some peer review activities are motivated by other considerations. Colloquy, the quarterly review published for alumni of Harvard's Graduate School of Arts and Sciences, has published a cover article on Barry Gewen, a GSAS alumnus (history of American civilization, 1972) who is a preview editor for the New York Times Book Review. For 17 years, he has decided which books in foreign policy, history, economics and current events are sent out for review. He describes his job as bing a "cultural gatekeeper." More...

30 Jun 2007

JetBlue, Again:
Did its "customer bill of rights" provide any real value to its customers?

by Richard Belzer

in Regulatory Policy

JetBlue is back in the news. On Wednesday, JetBlue flight 62 was scheduled to leave Ft. Lauderdale, Florida at 2:30 pm and arrive at New York's JFK Airport at or before 5:20 pm. It actually arrived Thursday at 3:21 pm -- almost 25 hours later.

In February 2007, JetBlue suffered its "worst operational week" trying to fly during an ice storm that paralyzed the Northeast. Other airlines canceled their operations. There was a flurry of interest (now dissipated) in Congress to legislate a "customer bill of rights' (CBOR) for airline passengers. JetBlue announced its own CBOR almost immediately after the ice storm.

What difference did JetBlue's CBOR make to its customers? More...

16 May 2007

Journal Peer Review and Objectivity:
Corroboration of the problem from scientists themselves

by Richard Belzer

in Peer Review

We've posted on the "rebuttable presumption" of objectivity that the Office of Management and Budget wrote into its government-wide guidelines for information quality and peer review. The core of the problem is that scholarly journals do not use objectivity (as OMB has defined it) as a criterion for acceptance, or as a performance standard for peer reviewers. That means peer review is a poorly targeted (and perhaps completely unguided) way to ensure that federal agencies disseminate information that satisfies the objectivity criterion.

Other scientists are chiming in, with interesting perspectives on various underlying problems in journal peer review. A number of reforms have been suggested and are worth examining. Note that the list of identified problems does not include objectivity as OMB defined the term. Last year we noted that Nature is trying an "open peer review" model, one that uses blogging technology. We have not yet found an analysis of how it has performed.
More...

14 May 2007

Socially Motivated Mutual Funds:
Are costs and benefits transparent to investors?

by Richard Belzer

in Regulatory Economics, Information Quality

Jeff Brown in the Washington Post business section discusses "socially responsible" investing, the practice of restricting the domain of one's portfolio to support various causes. Brown provides estimates of how much return on investment soc ially responsible investors sacrifice to pursue their social goals.

Brown's article is remarkable because it is one of few to acknowledge that the imposition of political or social constraints generally leads to lower returns. Investors with strong political or social values can choose to accept lower returns. The problem is mutual funds that promote social causes often imply in their advertising that their returns are just as good as mutual funds that do not impose such restrictions. In other words, they imply there is either no opportunity cost to "socially responsible" investing, or the opportunity cost is minor.

Brown provides some data that put these opportunity costs in perspective. His data, which he attributes to Morningstar, suggest that the opportunity costs of socially motivated investing can be very large. And it's not clear what benefits investors actually get in the process. More...