There was a study (in Israel as I recall) a few years ago that looked at criminal judges and found that whether a criminal got a lenient sentence or harsh sentence correlated strongly with what time of day the accused appeared before the court. Appearances early in the day had a much higher incidence of lenient sentences, the later in the day the accused got sentenced, the harsher the sentence.
Now comes a study that finds similar unconscious bias in college admissions. The study looked at 9,323 admission interviews. Admissions officers interviewed an average of 4.5 persons per day to assess background qualifications. The study found that the interviewee's score predictably related to the score of the prior interviewee. On average if the score of the previous interviewee was .075% or more higher than the one before, then the score for the next interviewee would drop by an average of .075%.
Sunday, September 9, 2012
Friday, September 7, 2012
Hallmarks of false prophets
In my life I have come to realize for every possible opinion on any topic you can find someone convinced what they believe is what God wants.
To me that is a hallmark of someone who can't distinguish God from their own ego. The world is populated with Christians, Muslims, Jews, Hindu's, Buddhists and other smaller religions, and various subgroups within each major religion. In every religion with which I have some personal experience I have known believers who use their religious faith to build loving families and successful lives based on shared community. Equally, it seems, in every religion there are ideologues who foment discord and sometimes condone or even encourage violence.
It seems patently obvious to me there are many paths to God. Those who claim ownership of the only path to God, are usually seeking to profit from selling God.
It is also patently obvious from the evolution of human society that God gave us the brains we have to use our brain to chose how we live our lives. God wants us to chose respect and love. But we cannot make a choice when a particular outcome is forced on us. God can handle choosing the proper response to our bad choices. God doesn't deputize enforcers, those who claim to be deputized to judge the sins of others, who advocate methods to forcibly change behavior of others, are false prophets.
To me that is a hallmark of someone who can't distinguish God from their own ego. The world is populated with Christians, Muslims, Jews, Hindu's, Buddhists and other smaller religions, and various subgroups within each major religion. In every religion with which I have some personal experience I have known believers who use their religious faith to build loving families and successful lives based on shared community. Equally, it seems, in every religion there are ideologues who foment discord and sometimes condone or even encourage violence.
It seems patently obvious to me there are many paths to God. Those who claim ownership of the only path to God, are usually seeking to profit from selling God.
It is also patently obvious from the evolution of human society that God gave us the brains we have to use our brain to chose how we live our lives. God wants us to chose respect and love. But we cannot make a choice when a particular outcome is forced on us. God can handle choosing the proper response to our bad choices. God doesn't deputize enforcers, those who claim to be deputized to judge the sins of others, who advocate methods to forcibly change behavior of others, are false prophets.
Wednesday, September 5, 2012
On "expert" financial advice
This is a short summary of some points made in a Buttonwood column from the Economist 6/9/12, page 80. The column was sparked by a research paper "Why to people pay for useless advice? Implications of Gamblers and Hot-Hand fallacies in False-expert Setting" - Institute for the Study of Labor, May 2012
While there are some basic bits of financial advice that research has shown reliably improves portfolio performance, those bits of proven advice are few, and one only needs to be reminded of them from time to time. Not nearly often enough to generate enough fee's to make a living as a financial advisor. So a huge industry exists of financial advisor's churning out research to predict short term market trends - research that historically is most notable for its lack of predictive utility.
Studies have shown that financial guru's on average do no better than, and often worse than index funds. Sometimes a financial guru will have a couple really good years, but those years are usually followed by really bad years.
Why do people rely on financial advice when the data says it is often basically wasting money? Avoid responsibility for making mistakes? Not have to face the fact there is much that is random in the investing world? Not willing to accept that patience is more important to long term investment success than cleverness?
While there are some basic bits of financial advice that research has shown reliably improves portfolio performance, those bits of proven advice are few, and one only needs to be reminded of them from time to time. Not nearly often enough to generate enough fee's to make a living as a financial advisor. So a huge industry exists of financial advisor's churning out research to predict short term market trends - research that historically is most notable for its lack of predictive utility.
Studies have shown that financial guru's on average do no better than, and often worse than index funds. Sometimes a financial guru will have a couple really good years, but those years are usually followed by really bad years.
Why do people rely on financial advice when the data says it is often basically wasting money? Avoid responsibility for making mistakes? Not have to face the fact there is much that is random in the investing world? Not willing to accept that patience is more important to long term investment success than cleverness?
Monday, September 3, 2012
Red State / Blue State - Does Ideology matter?
In some respects the US is a great laboratory for testing ideology. 50 states all abiding by the same rules on the Federal level, but setting many of their own rules on the State level. Here is some data I would like to see - anyone willing to help?
The 5 most Red statesbased on historical voting patterns
Top three industries in the state economy
The 5 most blue states based on historical voting patterns
Top three industries in the State Economy
For each of these 10 states data on:
Lifespan -
Infant mortality -
Health care expense per capita -
Percentage without health insurance -
average income
percent below the Federal poverty line
Per student spending
elementary
college
Average School ranking
The 5 most Red statesbased on historical voting patterns
Top three industries in the state economy
The 5 most blue states based on historical voting patterns
Top three industries in the State Economy
For each of these 10 states data on:
Lifespan -
Infant mortality -
Health care expense per capita -
Percentage without health insurance -
average income
percent below the Federal poverty line
Per student spending
elementary
college
Average School ranking
Sunday, September 2, 2012
Policy Conundrum - Unemployment insurance
There are two sides of unemployment, Republicans always focus on one, Democrats always focus on the other.
Republicans always see deadbeats on the dole, people who really would rather get a check from the government than go to work. Democrats see victims of circumstance, people who, through no fault of their own are left without a means of support.
Both realities are true - sometimes. I've known people who build unemployment into their long term employment model, fashioning a life with big breaks from work where they draw unemployment, but I have also known people who were victims of circumstances beyond their control, who work hard to find another job and it just doesn't happen for long periods of time.
Why can't unemployment policy reflect the whole reality - weed out the vacationers while protecting the victims of circumstance?
What if all workers earn credits for unemployment as they work, so they bank a certain number of credits each month. Once they lose a job the number of weeks of full benefits is controlled by how many credits they have up to a maximum of - say 13 weeks. Then, if they are still unemployed they can still draw unemployment, at reduced rates, but they have to clock a certain number of hours per week volunteering for some non-profit? The lower their lifetime quota bank, the more hours they have to clock with non-profits. Leave them time to look for work, but get them out in the world, taking on responsibility.
Maybe entitle retiring workers to a repayment of some part of their remaining quota, to add a little extra incentive to work.
Republicans always see deadbeats on the dole, people who really would rather get a check from the government than go to work. Democrats see victims of circumstance, people who, through no fault of their own are left without a means of support.
Both realities are true - sometimes. I've known people who build unemployment into their long term employment model, fashioning a life with big breaks from work where they draw unemployment, but I have also known people who were victims of circumstances beyond their control, who work hard to find another job and it just doesn't happen for long periods of time.
Why can't unemployment policy reflect the whole reality - weed out the vacationers while protecting the victims of circumstance?
What if all workers earn credits for unemployment as they work, so they bank a certain number of credits each month. Once they lose a job the number of weeks of full benefits is controlled by how many credits they have up to a maximum of - say 13 weeks. Then, if they are still unemployed they can still draw unemployment, at reduced rates, but they have to clock a certain number of hours per week volunteering for some non-profit? The lower their lifetime quota bank, the more hours they have to clock with non-profits. Leave them time to look for work, but get them out in the world, taking on responsibility.
Maybe entitle retiring workers to a repayment of some part of their remaining quota, to add a little extra incentive to work.
Friday, August 31, 2012
What kind of Congress do we want
Question for Voters - after what happened the last 4 years are you OK with the Republican's basing their campaign on the notion Barack Obama didn't do the job, so now let us try?
Since the day Obama entered office the Republican's were explicitly saying they were not going to cooperate with anything Obama did so they could replace him when his 4 year term was up. Regularly some Republican Congressional bigwig was publicly stating as a reason they were not negotiating about a jobs bill, or a budget deadline, was to defeat Obama. They basically put the countries business on hold to focus on gaining political advantage.
Is this what you want in Government? Are you ready to teach future Congress's that is the path to power?
Since the day Obama entered office the Republican's were explicitly saying they were not going to cooperate with anything Obama did so they could replace him when his 4 year term was up. Regularly some Republican Congressional bigwig was publicly stating as a reason they were not negotiating about a jobs bill, or a budget deadline, was to defeat Obama. They basically put the countries business on hold to focus on gaining political advantage.
Is this what you want in Government? Are you ready to teach future Congress's that is the path to power?
Thursday, August 30, 2012
Income inequality - Interesting facts from a book review
The Economist of June 23, 2012 (p.84) reviewed the book "The Price of Inequality: How Today's Divided Society Endangers our Future" by Joseph Stiglitz.
We hear frequently from politicians what a wonderful country we are because in no other country do the poor have such opportunity to rise to success. The review begins by noting that while the American Dream may live on in Politics, as demonstrated by Barack Obama, it is much less evident in the rest of society. In Denmark 75% of those born in families from the 20% of poorest circumstances and in Britain 70% of lower class British residents rise out of their humble beginnings. In the US fewer than 60% manage to scramble up the ladder.
It is also far less common for people in the lowest 20% in the US to rise into the top 20% than it is in Denmark or Britain.
The richest 1% in the US gained 93% of the additional income created in 2010. But generally the public doesn't realize the extent to which the richest take the most in the US. A survey in 2011 found that most American's thought that the richest 20% of Americans had 60% of the wealth, when in fact the they have 85%. The average American thought the ideal was 30%.
Mr. Stiglitz argues this income inequality is a function of the richest shaping the law to their benefit. Mr Stiglitz ask that we imagine that the world allowed free movement of labor, but not Capital (the reverse of the current situation). Mr Stiglitz argues that countries would compete to attract workers with laws creating a fairer society.
The reviewer notes some weaknesses in Mr. Stiglitz's argument. The review notes:
1. That high income inequality has been the norm through much of human history, the period in the the developed world from 1950 to 1980 when western societies were much more equal was unusual.
2. That Spain and Ireland also went through property bubbles , and they are much more equal societies, so the housing collapse can't be pinned on income inequality, and
3. That Mr. Stiglitz's solutions assume a Congress much more responsible than the one that has characterized the last decades.
The review ends by noting that regardless of whether Mr. Stiglitz has the right answers, the question is crucial. Income inequality is bound to have negative social and political consequences.
We hear frequently from politicians what a wonderful country we are because in no other country do the poor have such opportunity to rise to success. The review begins by noting that while the American Dream may live on in Politics, as demonstrated by Barack Obama, it is much less evident in the rest of society. In Denmark 75% of those born in families from the 20% of poorest circumstances and in Britain 70% of lower class British residents rise out of their humble beginnings. In the US fewer than 60% manage to scramble up the ladder.
It is also far less common for people in the lowest 20% in the US to rise into the top 20% than it is in Denmark or Britain.
The richest 1% in the US gained 93% of the additional income created in 2010. But generally the public doesn't realize the extent to which the richest take the most in the US. A survey in 2011 found that most American's thought that the richest 20% of Americans had 60% of the wealth, when in fact the they have 85%. The average American thought the ideal was 30%.
Mr. Stiglitz argues this income inequality is a function of the richest shaping the law to their benefit. Mr Stiglitz ask that we imagine that the world allowed free movement of labor, but not Capital (the reverse of the current situation). Mr Stiglitz argues that countries would compete to attract workers with laws creating a fairer society.
The reviewer notes some weaknesses in Mr. Stiglitz's argument. The review notes:
1. That high income inequality has been the norm through much of human history, the period in the the developed world from 1950 to 1980 when western societies were much more equal was unusual.
2. That Spain and Ireland also went through property bubbles , and they are much more equal societies, so the housing collapse can't be pinned on income inequality, and
3. That Mr. Stiglitz's solutions assume a Congress much more responsible than the one that has characterized the last decades.
The review ends by noting that regardless of whether Mr. Stiglitz has the right answers, the question is crucial. Income inequality is bound to have negative social and political consequences.
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