andrew_gelman_stats andrew_gelman_stats-2011 andrew_gelman_stats-2011-922 knowledge-graph by maker-knowledge-mining
Source: html
Introduction: Joseph Delaney quotes Frances Woolley: In other words, the reason we care about inequality is that it reduces the happiness achievable from a given amount of income. How much depends upon the happiness/income relationship. Does the marginal utility of income fall rapidly? Or is the happiness from the 100,000th dollar almost as great as the happiness from the 100th? Delaney goes on to discuss the marginal utility of income, but I have a different point to make. Woolley is a professor of economics. Economists seem to rely heavily on a sort of folk psychology, a relic of the 1920s-1950s in which people calculate utilities (or act as if they are doing so) in order to make decisions. A central tenet of economics is that inference or policy recommendation be derived from first principles from this folk-psychology model. This just seems silly to me, as if astronomers justified all their calculations with an underlying appeal to Aristotle’s mechanics. Or maybe the better analogy
sentIndex sentText sentNum sentScore
1 Joseph Delaney quotes Frances Woolley: In other words, the reason we care about inequality is that it reduces the happiness achievable from a given amount of income. [sent-1, score-0.278]
2 Or is the happiness from the 100,000th dollar almost as great as the happiness from the 100th? [sent-4, score-0.36]
3 Delaney goes on to discuss the marginal utility of income, but I have a different point to make. [sent-5, score-0.506]
4 Economists seem to rely heavily on a sort of folk psychology, a relic of the 1920s-1950s in which people calculate utilities (or act as if they are doing so) in order to make decisions. [sent-7, score-0.221]
5 A central tenet of economics is that inference or policy recommendation be derived from first principles from this folk-psychology model. [sent-8, score-0.305]
6 Or maybe the better analogy is the Stalinist era in which everything had to be connected to Marxist principles (followed, perhaps, by an equationful explanation of how the world can be interpreted as if Marxism were valid). [sent-10, score-0.33]
7 I can understand this from a historical perspective—this sort of insistence on microfoundations is a tradition in economics—but from the outside it looks a bit silly. [sent-11, score-0.184]
8 OK, now back to the Woolley quote, which reminds me a bit of another economics professor, Greg Mankiw, when he wrote about taxation as a moral issue, implying that that the state only has a right to tax things that are “unjustly wrestled from someone else. [sent-12, score-0.416]
9 Similarly, Woolley connects beliefs about inequality to attitudes about a utility function. [sent-14, score-0.494]
10 Inequality is macro, and it’s real (in the sense of being directly measurable), and utility is micro and doesn’t exist. [sent-16, score-0.348]
11 To return to the physics analogy, suppose someone said (correctly) that to understand solid structures, you need to understand electrons. [sent-17, score-0.156]
12 Solid structures exist and can be observed; electrons are more hypothetical. [sent-18, score-0.243]
13 The difference is that electrons are not merely hypothetical, they are also a fundamental part of a model that has been tested and applied a million times. [sent-19, score-0.144]
14 In contrast, “utility,” like “the life force,” is a sometimes-useful construct but it’s based on an intuitive notion of psychology that we have no particular reason to trust (any more than we trust the various principles of folk physics, folk biology, and so forth). [sent-20, score-0.669]
15 Economists, though, are so used to requiring their microfoundations that I don’t think they reflect enough on how silly this can sometimes be. [sent-21, score-0.184]
16 I have a feeling that right now that various bankrupt governments have more pressing concerns than the (hypothetical) marginal utility of someone’s 100,000th dollar! [sent-23, score-0.576]
17 I do think there can be good reasons for opposing tax increases (starting with the feeling that the money, if taken, will be spent in some wasteful or distasteful manner), but I think here the irritation is coming more from the sense of powerlessness—these bozos are taking my money! [sent-24, score-0.429]
18 To put it another way, I think economists might benefit from acting a bit more like the stereotype—as accountants who carefully keep track of the dollars and cents—and consider the psychological modeling as an interesting sidebar rather than a foundation to their analysis. [sent-26, score-0.472]
19 And that’s what’s particularly bugging me right now, the idea that we should be using 75-year-old psychology as a foundation for modern economics. [sent-32, score-0.288]
20 Rather than making the usual analogy of a house with a foundation of sand, I prefer to think of it as a house that could stand on its own, with an unnecessary sand foundation introduced below, a foundation that makes the house itself that much less stable! [sent-33, score-1.266]
wordName wordTfidf (topN-words)
[('utility', 0.348), ('woolley', 0.316), ('foundation', 0.205), ('marginal', 0.158), ('tax', 0.15), ('folk', 0.149), ('principles', 0.146), ('inequality', 0.146), ('electrons', 0.144), ('marxism', 0.144), ('happiness', 0.132), ('sand', 0.125), ('economists', 0.123), ('microfoundations', 0.119), ('analogy', 0.112), ('taxation', 0.111), ('delaney', 0.109), ('house', 0.109), ('structures', 0.099), ('dollar', 0.096), ('income', 0.096), ('making', 0.087), ('economics', 0.087), ('money', 0.086), ('solid', 0.085), ('hypothetical', 0.085), ('psychology', 0.083), ('accountants', 0.072), ('bozos', 0.072), ('distasteful', 0.072), ('equationful', 0.072), ('relic', 0.072), ('sidebar', 0.072), ('stalinist', 0.072), ('tenet', 0.072), ('physics', 0.071), ('trust', 0.071), ('feeling', 0.07), ('unjustly', 0.068), ('wrestled', 0.068), ('actor', 0.068), ('aristotle', 0.068), ('astronomers', 0.068), ('marxist', 0.068), ('wasteful', 0.065), ('insistence', 0.065), ('cents', 0.065), ('freudianism', 0.065), ('measurable', 0.065), ('silly', 0.065)]
simIndex simValue blogId blogTitle
same-blog 1 0.99999964 922 andrew gelman stats-2011-09-24-Economists don’t think like accountants—but maybe they should
Introduction: Joseph Delaney quotes Frances Woolley: In other words, the reason we care about inequality is that it reduces the happiness achievable from a given amount of income. How much depends upon the happiness/income relationship. Does the marginal utility of income fall rapidly? Or is the happiness from the 100,000th dollar almost as great as the happiness from the 100th? Delaney goes on to discuss the marginal utility of income, but I have a different point to make. Woolley is a professor of economics. Economists seem to rely heavily on a sort of folk psychology, a relic of the 1920s-1950s in which people calculate utilities (or act as if they are doing so) in order to make decisions. A central tenet of economics is that inference or policy recommendation be derived from first principles from this folk-psychology model. This just seems silly to me, as if astronomers justified all their calculations with an underlying appeal to Aristotle’s mechanics. Or maybe the better analogy
2 0.4710733 1200 andrew gelman stats-2012-03-06-Some economists are skeptical about microfoundations
Introduction: A few months ago, I wrote : Economists seem to rely heavily on a sort of folk psychology, a relic of the 1920s-1950s in which people calculate utilities (or act as if they are doing so) in order to make decisions. A central tenet of economics is that inference or policy recommendation be derived from first principles from this folk-psychology model. This just seems silly to me, as if astronomers justified all their calculations with an underlying appeal to Aristotle’s mechanics. Or maybe the better analogy is the Stalinist era in which everything had to be connected to Marxist principles (followed, perhaps, by an equationful explanation of how the world can be interpreted as if Marxism were valid). Mark Thoma and Paul Krugman seem to agree with me on this one (as does my Barnard colleague Rajiv Sethi ). They don’t go so far as to identify utility etc as folk psychology, but maybe that will come next. P.S. Perhaps this will clarify: In a typical economics research pap
3 0.24781604 366 andrew gelman stats-2010-10-24-Mankiw tax update
Introduction: I was going through the blog and noticed this note on an article by Mankiw and Weinzierl who implied that the state only has a right to tax things that are “unjustly wrestled from someone else.” This didn’t make much sense to me–whether it’s the sales tax, the income tax, or whatever, I see taxes as a way to raise money, not as a form of punishment. At the time, I conjectured this was a general difference in attitude between political scientists and economists, but in retrospect I realize I’m dealing with n=1 in each case. See here for further discussion of taxing “justly acquired endowments.” The only reason I’m bringing this all up now is that I think it is relevant to our recent discussion here and here of Mankiw’s work incentives. Mankiw objected to paying a higher marginal tax rate, and I think part of this is that he sees taxes as a form of punishment, and since he came by his income honestly he doesn’t think it’s fair to have to pay taxes on it. My perspective i
4 0.21343817 1204 andrew gelman stats-2012-03-08-The politics of economic and statistical models
Introduction: Following up on our recent discussion of the problems of considering utility theory as a foundation for economic analysis (which in turn was a reprise of this post from last September), somebody named Mark pointed me to a 2007 article by Luigino Bruni and Robert Sugden, “The road not taken: How psychology was removed from economics, and how it might be brought back,” which begins: This article explores parallels between the debate prompted by Pareto’s reformulation of choice theory at the beginning of the twentieth century and current controversies about the status of behavioural economics. Before Pareto’s reformulation, neoclassical economics was based on theoretical and experimental psychology, as behavioural economics now is. Current discovered preference defences of rational-choice theory echo arguments made by Pareto. Both treat economics as a separate science of rational choice, independent of psychology. Both confront two fundamental problems: to find a defensible defi
5 0.19771859 98 andrew gelman stats-2010-06-19-Further thoughts on happiness and life satisfaction research
Introduction: As part of my continuing research project with Grazia and Roberto, I’ve been reading papers on happiness and life satisfaction research. I’ll share with you my thoughts on some of the published work in this area. Alberto Alesina,, Rafael Di Tella, and Robert MacCulloch published a paper in 2004 called “Inequality and happiness: are Europeans and Americans different?”: We study the effect of the level of inequality in society on individual well-being using a total of 123,668 answers to a survey question about “happiness.” We find that individuals have a lower tendency to report themselves happy when inequality is high, even after controlling for individual income, a large set of personal characteristics, and year and country (or, in the case of the US, state) dummies. The effect, however, is more precisely defined statistically in Europe than in the US. In addition, we find striking differences across groups. In Europe, the poor and those on the left of the political spectru
6 0.19763328 2261 andrew gelman stats-2014-03-23-Greg Mankiw’s utility function
8 0.19152386 1510 andrew gelman stats-2012-09-25-Incoherence of Bayesian data analysis
9 0.18615705 338 andrew gelman stats-2010-10-12-Update on Mankiw’s work incentives
11 0.14119726 2312 andrew gelman stats-2014-04-29-Ken Rice presents a unifying approach to statistical inference and hypothesis testing
12 0.13727555 1145 andrew gelman stats-2012-01-30-A tax on inequality, or a tax to keep inequality at the current level?
13 0.13378242 486 andrew gelman stats-2010-12-26-Age and happiness: The pattern isn’t as clear as you might think
14 0.12911667 1042 andrew gelman stats-2011-12-05-Timing is everything!
15 0.12830545 1280 andrew gelman stats-2012-04-24-Non-Bayesian analysis of Bayesian agents?
17 0.12155223 495 andrew gelman stats-2010-12-31-“Threshold earners” and economic inequality
18 0.11565013 809 andrew gelman stats-2011-07-19-“One of the easiest ways to differentiate an economist from almost anyone else in society”
20 0.11138473 2195 andrew gelman stats-2014-02-02-Microfoundations of macroeconomics
topicId topicWeight
[(0, 0.199), (1, -0.039), (2, 0.026), (3, 0.059), (4, -0.088), (5, -0.039), (6, 0.018), (7, 0.004), (8, 0.061), (9, 0.075), (10, -0.114), (11, 0.006), (12, -0.067), (13, 0.075), (14, -0.012), (15, -0.055), (16, 0.073), (17, 0.042), (18, -0.076), (19, 0.028), (20, 0.151), (21, -0.029), (22, 0.038), (23, 0.053), (24, -0.094), (25, -0.021), (26, 0.052), (27, -0.031), (28, -0.049), (29, -0.049), (30, -0.036), (31, 0.008), (32, 0.009), (33, -0.058), (34, 0.055), (35, -0.004), (36, 0.049), (37, -0.049), (38, -0.053), (39, 0.053), (40, -0.011), (41, 0.011), (42, 0.004), (43, -0.022), (44, -0.02), (45, -0.034), (46, 0.043), (47, -0.043), (48, 0.067), (49, 0.048)]
simIndex simValue blogId blogTitle
same-blog 1 0.95146924 922 andrew gelman stats-2011-09-24-Economists don’t think like accountants—but maybe they should
Introduction: Joseph Delaney quotes Frances Woolley: In other words, the reason we care about inequality is that it reduces the happiness achievable from a given amount of income. How much depends upon the happiness/income relationship. Does the marginal utility of income fall rapidly? Or is the happiness from the 100,000th dollar almost as great as the happiness from the 100th? Delaney goes on to discuss the marginal utility of income, but I have a different point to make. Woolley is a professor of economics. Economists seem to rely heavily on a sort of folk psychology, a relic of the 1920s-1950s in which people calculate utilities (or act as if they are doing so) in order to make decisions. A central tenet of economics is that inference or policy recommendation be derived from first principles from this folk-psychology model. This just seems silly to me, as if astronomers justified all their calculations with an underlying appeal to Aristotle’s mechanics. Or maybe the better analogy
Introduction: Given Grandma Mankiw’s hypothetical distaste for Sonia Sotomayor’s spending habits (recall that Grandma “would have been shocked and appalled” by the judge’s lack of savings), I expect she (the grandmother) would be even more irritated by the success of Sotomayor’s recent book: Now that Sotomayor has a ton of money coming in, in addition to a well-paying job and pension for life, that would almost seem to validate Sotomayor’s foolish, foolish decision to enjoy herself in middle age rather than sock hundreds of thousands of dollars into a retirement account she likely would never touch during her lifetime. One interesting thing about this example is that Mankiw apparently holds within himself a descriptive and normative view of economics. Descriptively, he models people as “spenders” or “savers.” But, normatively, he seems to attribute higher values to the “savers.” (He also seems to be confused about the relation between saving to intertemporal preference (see my long p
3 0.84048331 366 andrew gelman stats-2010-10-24-Mankiw tax update
Introduction: I was going through the blog and noticed this note on an article by Mankiw and Weinzierl who implied that the state only has a right to tax things that are “unjustly wrestled from someone else.” This didn’t make much sense to me–whether it’s the sales tax, the income tax, or whatever, I see taxes as a way to raise money, not as a form of punishment. At the time, I conjectured this was a general difference in attitude between political scientists and economists, but in retrospect I realize I’m dealing with n=1 in each case. See here for further discussion of taxing “justly acquired endowments.” The only reason I’m bringing this all up now is that I think it is relevant to our recent discussion here and here of Mankiw’s work incentives. Mankiw objected to paying a higher marginal tax rate, and I think part of this is that he sees taxes as a form of punishment, and since he came by his income honestly he doesn’t think it’s fair to have to pay taxes on it. My perspective i
4 0.81004161 630 andrew gelman stats-2011-03-27-What is an economic “conspiracy theory”?
Introduction: Reviewing a research article by Michael Spence and Sandile Hlatshwayo about globalization (a paper with the sobering message that “higher-paying jobs [are] likely to follow low-paying jobs in leaving US,” Tyler Cowen writes : It is also a useful corrective to the political conspiracy theories of changes in the income distribution. . . Being not-so-blissfully ignorant of macroeconomics, I can focus on the political question, namely these conspiracy theories. I’m not quite sure what Cowen is referring to here–he neglects to provide a link to the conspiracy theories–but I’m guessing he’s referring to the famous graph by Piketty and Saez showing how very high-end incomes (top 1% or 0.1%) have, since the 1970s, risen much more dramatically in the U.S. than in other countries, along with claims by Paul Krugman and others that much of this difference can be explained by political changes in the U.S. In particular, top tax rates in the U.S. have declined since the 1970s and the p
5 0.79992759 338 andrew gelman stats-2010-10-12-Update on Mankiw’s work incentives
Introduction: Tyler Cowen links to a blog by Greg Mankiw with further details on his argument that his anticipated 90% marginal tax rate will reduce his work level. Having already given my thoughts on Mankiw’s column, I merely have a few things to add/emphasize. 1. Cowen frames the arguments in terms of the “status” of George Bush, Greg Mankiw, Barack Obama, and their proposed policies. I hadn’t thought of the arguments as being about status, but I think I see what Cowen is saying. By being a well-known economist and having a column in the New York Times, Mankiw is trading some of his status for political advocacy (just as Krugman does, from the opposite direction). If Mankiw didn’t have the pre-existing status, I doubt this particular column would’ve made it into the newspaper. (Again, ditto with many of Krugman’s columns.) So it makes sense that arguments about the substance of Mankiw’s remarks will get tied into disputes about his status. 2. Neither Cowen nor Mankiw address
6 0.77720684 2261 andrew gelman stats-2014-03-23-Greg Mankiw’s utility function
7 0.76743048 1145 andrew gelman stats-2012-01-30-A tax on inequality, or a tax to keep inequality at the current level?
9 0.76370227 1037 andrew gelman stats-2011-12-01-Lamentably common misunderstanding of meritocracy
10 0.72663796 495 andrew gelman stats-2010-12-31-“Threshold earners” and economic inequality
11 0.72395319 311 andrew gelman stats-2010-10-02-Where do our taxes go?
12 0.7195431 1204 andrew gelman stats-2012-03-08-The politics of economic and statistical models
14 0.70980161 1378 andrew gelman stats-2012-06-13-Economists . . .
15 0.70223808 1200 andrew gelman stats-2012-03-06-Some economists are skeptical about microfoundations
16 0.69576585 1696 andrew gelman stats-2013-01-29-The latest in economics exceptionalism
17 0.67250717 191 andrew gelman stats-2010-08-08-Angry about the soda tax
18 0.66831118 98 andrew gelman stats-2010-06-19-Further thoughts on happiness and life satisfaction research
19 0.66586274 1105 andrew gelman stats-2012-01-08-Econ debate about prices at a fancy restaurant
20 0.64845985 711 andrew gelman stats-2011-05-14-Steven Rhoads’s book, “The Economist’s View of the World”
topicId topicWeight
[(2, 0.028), (13, 0.011), (15, 0.028), (16, 0.089), (21, 0.022), (24, 0.107), (27, 0.015), (45, 0.013), (57, 0.016), (66, 0.094), (72, 0.012), (74, 0.021), (76, 0.094), (82, 0.025), (99, 0.261)]
simIndex simValue blogId blogTitle
same-blog 1 0.95419836 922 andrew gelman stats-2011-09-24-Economists don’t think like accountants—but maybe they should
Introduction: Joseph Delaney quotes Frances Woolley: In other words, the reason we care about inequality is that it reduces the happiness achievable from a given amount of income. How much depends upon the happiness/income relationship. Does the marginal utility of income fall rapidly? Or is the happiness from the 100,000th dollar almost as great as the happiness from the 100th? Delaney goes on to discuss the marginal utility of income, but I have a different point to make. Woolley is a professor of economics. Economists seem to rely heavily on a sort of folk psychology, a relic of the 1920s-1950s in which people calculate utilities (or act as if they are doing so) in order to make decisions. A central tenet of economics is that inference or policy recommendation be derived from first principles from this folk-psychology model. This just seems silly to me, as if astronomers justified all their calculations with an underlying appeal to Aristotle’s mechanics. Or maybe the better analogy
2 0.93734413 536 andrew gelman stats-2011-01-24-Trends in partisanship by state
Introduction: Matthew Yglesias discusses how West Virginia used to be a Democratic state but is now solidly Republican. I thought it would be helpful to expand this to look at trends since 1948 (rather than just 1988) and all 50 states (rather than just one). This would represent a bit of work, except that I already did it a couple years ago, so here it is (right-click on the image to see the whole thing): I cheated a bit to get reasonable-looking groupings, for example putting Indiana in the Border South rather than Midwest, and putting Alaska in Mountain West and Hawaii in West Coast. Also, it would help to distinguish states by color (to be able to disentangle New Jersey and Delaware, for example) but we didn’t do this because the book is mostly black and white. In any case, the picture makes it clear that there have been strong regional trends all over during the past sixty years. P.S. My graph comes from Red State Blue State so no 2008 data, but 2008 was pretty much a shift
3 0.93448943 1850 andrew gelman stats-2013-05-10-The recursion of pop-econ
Introduction: Dave Berri posted the following at the Freakonomics blog: The “best” picture of 2012 was Argo. At least that’s the film that won the Oscar for best picture. According to the Oscars, the decision to give this award to Argo was made by the nearly 6,000 voting members of the Academy of Motion Picture Arts and Sciences. . . . In other words, this choice is made by the “experts.” There is, though, another group that we could have listened to on Sunday night. That group would be the people who actually spend money to go to the movies. . . . According to that group, Marvel’s the Avengers was the “best” picture in 2012. With domestic revenues in excess of $600 million, this filmed earned nearly $200 million more than any other picture. And when we look at world-wide revenues, this film brought in more than $1.5 billion. . . . Despite what seems like a clear endorsement by the customers of this industry, the Avengers was ignored by the Oscars. Perhaps this is just because I am an econo
4 0.92667979 1835 andrew gelman stats-2013-05-02-7 ways to separate errors from statistics
Introduction: Betsey Stevenson and Justin Wolfers have been inspired by the recent Reinhardt and Rogoff debacle to list “six ways to separate lies from statistics” in economics research: 1. “Focus on how robust a finding is, meaning that different ways of looking at the evidence point to the same conclusion.” 2. Don’t confuse statistical with practical significance. 3. “Be wary of scholars using high-powered statistical techniques as a bludgeon to silence critics who are not specialists.” 4. “Don’t fall into the trap of thinking about an empirical finding as ‘right’ or ‘wrong.’ At best, data provide an imperfect guide.” 5. “Don’t mistake correlation for causation.” 6. “Always ask ‘so what?’” I like all these points, especially #4, which I think doesn’t get said enough. As I wrote a few months ago, high-profile social science research aims for proof, not for understanding—and that’s a problem. My addition to the list If you compare my title above to that of Stevenson
Introduction: Sandeep Baliga writes : [In a recent study , Gilles Duranton and Matthew Turner write:] For interstate highways in metropolitan areas we [Duranton and Turner] find that VKT (vehicle kilometers traveled) increases one for one with interstate highways, confirming the fundamental law of highway congestion.’ Provision of public transit also simply leads to the people taking public transport being replaced by drivers on the road. Therefore: These findings suggest that both road capacity expansions and extensions to public transit are not appropriate policies with which to combat traffic congestion. This leaves congestion pricing as the main candidate tool to curb traffic congestion. To which I reply: Sure, if your goal is to curb traffic congestion . But what sort of goal is that? Thinking like a microeconomist, my policy goal is to increase people’s utility. Sure, traffic congestion is annoying, but there must be some advantages to driving on that crowded road or pe
6 0.92499971 1200 andrew gelman stats-2012-03-06-Some economists are skeptical about microfoundations
7 0.92459679 1271 andrew gelman stats-2012-04-20-Education could use some systematic evaluation
8 0.92433071 982 andrew gelman stats-2011-10-30-“There’s at least as much as an 80 percent chance . . .”
9 0.92335171 1010 andrew gelman stats-2011-11-14-“Free energy” and economic resources
10 0.92293376 32 andrew gelman stats-2010-05-14-Causal inference in economics
11 0.91894627 1192 andrew gelman stats-2012-03-02-These people totally don’t know what Chance magazine is all about
12 0.91840136 814 andrew gelman stats-2011-07-21-The powerful consumer?
13 0.91785806 204 andrew gelman stats-2010-08-12-Sloppily-written slam on moderately celebrated writers is amusing nonetheless
14 0.91776407 257 andrew gelman stats-2010-09-04-Question about standard range for social science correlations
15 0.91770124 283 andrew gelman stats-2010-09-17-Vote Buying: Evidence from a List Experiment in Lebanon
17 0.91678417 1551 andrew gelman stats-2012-10-28-A convenience sample and selected treatments
18 0.91656363 680 andrew gelman stats-2011-04-26-My talk at Berkeley on Wednesday
19 0.91506875 1351 andrew gelman stats-2012-05-29-A Ph.D. thesis is not really a marathon
20 0.91481513 1818 andrew gelman stats-2013-04-22-Goal: Rules for Turing chess