Wednesday, July 23, 2014

Sex Offender

Rape is a crime.

Unfortunately, it's a crime unlike any other. Before I mansplain why, a brief review of hypothesis-testing errors.

First, a reminder of how to construct a null hypothesis. In the most basic form, start with a control group that receives no interventions, they're all business-as-usual. Then get yourself a treatment group, those subjects who are otherwise identical to the control group but for one change, the treatment of interest. Your null hypothesis should be that the treatment produces no effect. The aim of inquiry is to reject the null hypothesis.

This is where error comes in and why the results of hypothesis tests sound like they were written by a mental patient. We don't say "X causes Y", but rather something closer to "with 95% confidence, we reject the null hypothesis that X has no effect on Y". Similarly, we don't say "X doesn't cause Y", but rather "with 95% confidence, we cannot reject the null hypothesis that X has no effect on Y." The wordiness and the careful construction of the result statements are explicit nods to the limits of statistical inference. Hypothesis testing is still, for all its sophistication, a bit like rolling one of those fancy Dungeons and Dragons dice: every now and again, you roll a natural 20. In other words, sometimes we erroneously reject a true null hypothesis (Type I) or erroneously fail to reject a false null hypothesis (Type II). A type I error suggests that X causes Y even when it actually doesn't, and a type II error suggests that X doesn't cause Y even when it actually does.

What does this have to do with rape? Well, the null hypothesis is that X did not rape Y, and the job of the criminal justice system is to attempt to reject this null hypothesis. In the case of rape, this task is rife with epistemological confusion, at least for marginal cases. Consent, or at least a plebeian notion of consent, is murky, especially when one or more parties is intoxicated. Add to that the barbaric habits of victim-blaming and perpetrator-excusing (particularly when it comes to cases involving strong social class disparities) and it shouldn't be too surprising when conscientious folks want to work to rid the system of type II errors, ultimately with the aim of effectively deterring incident rates.

Hence the rise of sex offender registries. Hence the rise of minimum mandatory sentences. Hence the conflation of forcible rape with other sex offenses (such as consensual sex between people slightly on opposite sides of statutory bright lines or public nudity or snapchatting nudes). The purpose of all these measures is to raise the relative price of sexual deviancy in an effort to discourage the deviant behavior. It's plain vanilla ordinary law and economics, straight out of Becker or Epstein.

The costs, of course, are an increase in the incidence of type I errors, where kids end up permanently on sex offender registries. Thanks to typical precautionary heuristics, landing on one of those registries severely curtails someone's options. Offenders can't buy property in certain areas, there are lots of places that won't hire registrees, and forget registered fathers volunteering at school, or even picking their kids up from soccer practice.

Still, it's a matter of trade-offs. Maybe swapping one type of error for another is acceptable to the median voter. Maybe the concentrated costs and diffuse benefits of registries are good on net for communities. Maybe. Still, it's worth considering what institutional failures prevent rape from being handled the same basic way as, say, armed robbery. It is my impression that police aren't terribly inclined to say to a B&E victim "well, maybe you shouldn't have been flaunting your living room like that" or to an arson victim, "did you leave the house with a gasoline can in your garage this morning?"

Euvoluntary sexual encounters can be mutually felicitous. Coercive sexual encounters not so. In between are a wide galaxy of indeterminacy, and it seems reckless to assume that even a well-meaning legislature, far from the specifics of the thing can adequately anticipate the nature and details of such encounters, much less to accurately prescribe punishments that both fit the crime and are suitable to basic common-sense justice.

Much of the world (not just the US) has a nasty problem with how the crime of rape is handled. It seems an affront to justice to stymie progress by handicapping the evolution of the common law with restrictive ex ante legislative tinkering. Our euvoluntary future deserves better.

Tuesday, July 22, 2014

Who You Tryin' to Get Crazy with, Ese? Don't You Know I'm in Loco Parentis?

Rape is a crime.

The point of a criminal justice system is straight out of Adam Smith: specialization and exchange. Police and prosecutors are trained to detect crime and punish perpetrators.

Contrarily, university administration are trained in the fine art of scheduling classes, coordinating stubborn, egotistical faculty, contracting new construction, and assigning resident students to rooms. Nothing in that job description includes attempts at ersatz Sherlock Holmesing.

So while I share many of J. F. Sargent's concerns about how rape is measured and handled on campus, I'd rather ask whether or not the doctrine of in loco parentis is appropriate on college campuses. Is it consistent with common-sense jurisprudence to treat college students as children, as adults, or as something hazily in between?

In other words, what are the implied contractual terms of university attendance? Are these terms different for residential students?

In my stodgy fantasies, I imagine dorms as [crappy] apartments, where residents pay rent and utilities and have to abide by the terms of their lease or face eviction. Likewise, since dorm residents are also ordinary residents of the United States, they have to obey the laws of the Republic or face the same exact punishments as any other citizen. It is not for want of trying that I have difficulty imagining why a university campus should be a special jurisdictional zone.

Rape is a crime. Treat it like one.

But that's my own odd, idiosyncratic fantasies. None of my gauzy dreaming has any meaningful influence over what folks actually believe. If parents demand of university administrators that they act as interim guardians on the way to adult liberty, then I can hardly fault universities for paying heed—they know on which side of the bread rests the butter. So the puzzle then becomes one of institutional design. Sargent is absolutely correct in point #5: reporting campus rape is incentive-incompatible. What sort of durable institutional reforms might remedy this?

Some possibilities:
  1. End tuition subsidies. If the marginal student also happens to be the marginal rapist, perhaps he shouldn't be going to college in the first place.
  2. Same-sex only schools. Reduce the stigma against exclusively male (or female) colleges. Give students more options to sort according to their particular social preferences and aversions.
  3. Eliminate campus residence. Treat students the same as any other adult, let them rent apartments in the surrounding community. Let their taxes they pay support public order just like any other ordinary adult.
  4. Eliminate special police jurisdiction. The city police or the country sheriff shall have ordinary jurisdiction on campus, treating it just the same as any other neighborhood in town.
I'm sure that like me, you're either chuckling or shaking your head as you read these. None of these are practical options, mostly for political reasons. The unfortunate truth is that it'll probably boil down to an ugly slugfest between courageous student activists and trenchant administration. It'll take more Cracked articles to pry open the lid to this filthy crate.

And it'll probably take some court challenges too. I'd be inclined to advise college-aged women to skip the campus proceedings and go straight to the city police. If they cite jurisdiction, raise more of a stink with the media. The more that campus rapes get swept under the carpet, the greater the probability that more will occur. This is a standard result from game theory. Make a clamor—change minds, one thick skull at a time if need be. Pierce the self-indulgent illusion of college as some noble waystation on the Road to Adulthood. Expose the lies.

Yet for all that, it's somehow unsatisfying, unsettling even, to say "more talk" here. Unfortunately, this situation does not appear to lend itself well to an off-the-cuff engineered solution. At least not one that immediately occurs to me. The tacit terms of the university contract are not, it appears, particularly euvoluntary on closer inspection. Changing them will be met with opposition. Gird yourself accordingly.

Thursday, July 17, 2014

Kayfabe Rules Everything Around Me (K.R.E.A.M.)

The BLS estimated that Hurricane Katrina produced about 1.8 million evacuees.

Take you time with that link. Savor the tables, the figures, and the charts. Investigate the summary statistics. Here's one of the better ones: 16.4% of evacuees reported "less than HS" for education. You may not have a calculator handy, so let me multiply that for you. That's roughly 295,000 people who had to leave their homes because of a violent exogenous shock with not so much as a high school diploma to show for it.

And disease? Katrina was responsible for a West Nile outbreak.

How about labor force participation? Go back to the BLS link; look at Table 6. Victims of Katrina were involuntarily disemployed in 2005-2006, and with public assistance measures, by gum, they were a net burden on the welfare state.

And no one complained. Well, at least no one complained as roundly and vociferously as they are now about a group of children roughly the same size as a small-to-medium sized American town (Chico, CA has about 60,000 residents, for example). If the American public applied the same moral intuition-&-kayfabe to displaced residents of the Big Easy as they commit to a far smaller band of Central American refugees, each of the 1.8 million residents who chose to flee the terrible disaster of Katrina would have been forced to tie up their bindle and head straight back to the wards from whence they nearly drowned.

Thankfully, ordinary Americans aren't even close to being that cruelly obtuse. Indeed, communities recognized that people in need deserve if not commonplace charity, then at least the temperance to keep from violently preventing others from pursuing their charitable instincts.

Sadly, the nationalist zeal which appears to be the sole residual difference between today's Guatemalan children and yesteryear's Katrina survivors erodes my confidence in the accuracy of the following (deservedly famous) passage from Adam Smith:
Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connection with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man of speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened. The most frivolous disaster which could befall himself would occasion a more real disturbance. If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own. To prevent, therefore, this paltry misfortune to himself, would a man of humanity be willing to sacrifice the lives of a hundred millions of his brethren, provided he had never seen them? Human nature startles with horror at the thought, and the world, in its greatest depravity and corruption, never produced such a villain as could be capable of entertaining it. But what makes this difference? When our passive feelings are almost always so sordid and so selfish, how comes it that our active principles should often be so generous and so noble? When we are always so much more deeply affected by whatever concerns ourselves, than by whatever concerns other men; what is it which prompts the generous, upon all occasions, and the mean upon many, to sacrifice their own interests to the greater interests of others? It is not the soft power of humanity, it is not that feeble spark of benevolence which Nature has lighted up in the human heart, that is thus capable of counteracting the strongest impulses of self-love. It is a stronger power, a more forcible motive, which exerts itself upon such occasions. It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct.
The kayfabe over the non-euvoluntarity of refugee children tells me that many of my fellow citizens would indeed snore with the most profound security over the ruin of sixty thousands of human lives when indeed it would cost him far less than the value of his pinky-finger to allow his fellow countrymen to relive their great suffering.

I strain to explain such a clear and obvious abdication of conscience without at least three mutually-bound rhetorical parts. Nationalism is the soil tilled by the plough of partisan kayfabe into which the seed of non-euvoluntarity is sown. The weed that there grows is a poison thing that would send children to rack and ruin. This infamy corrodes the public character and shames a great and mighty nation.

Wednesday, July 16, 2014

Discount Rate Arbitrage: Migration Edition

My excellent friend and mentor Bryan Caplan takes George Borjas to task for some elementary errors in economic reasoning, reminding him that the profession had what we call the "marginal revolution" in the 19th century thanks to economists like W.S. Jevons, C. Menger, and L. Walras. In doing so, he raises an interesting question. Quoting Borjas:
The "breakeven" cost of migration given in the last row of Table 7.3 is around $140,000. In short, the entire present value [emphasis added SLW] of the global gains is wiped out even if the costs of migration were only half of what is typically reported in existing studies.
"Present value" is shorthand for the uncontroversial observation that holding money instead of spending it has an opportunity cost. All else equal, it's better to have a dollar today than to have a dollar tomorrow. That's one reason you have to pay lenders when you borrow money.

However, just like value, costs are personal and subjective, and that includes the costs of deferring consumption. I don't have a copy of his book yet, so I don't know if Borjas went to the trouble of re-estimating gains using heterogeneous discount rates, but it occurs to me that this could be a useful exercise.

Consider the possibility that migration is one way people match discount rate preferences. Even inside free-migration zones like the US, citizens tend to cluster according to relative profligacy and thrift. Indeed, that's most of Charles Murray's theme, and even if the R-squared doesn't quite approach 1 in the limit, it's not outrageous to claim that people do better when they can more easily associate with others of like mind. Hard-working people with the gumption to pack up and head for greener pastures display advantageous time preferences. Similarly, bucolic spendthrifts face much higher up-front migration costs and severely curtailed discounted future cash flows. If you la-la-la-la-la-la-live for today, the incentives to move to a high-productivity region are naturally much lower, regardless of the legal regime. The bugaboo of the immigrant coming to leech off the American welfare state is theoretically suspect, and empirically unsupported.

There's another wrinkle, though, an objection if you will. Suppose that under more liberal immigration policy, the wealthy nations do attract all these scrupulous, long-time-horizon folks. Wouldn't that rob their home countries of the opportunity to transmit time preferences? Isn't there something to the story that keeping up with the Joneses could include mimicking the prosaic savings behavior of the well-to-do? If prudent folks leave, to whom shall the imprudent look for guidance? It's easy to dismiss this objection as silly. After all, we don't force prudent people in the US to live on the wrong side of the tracks, but there's still an empirical question of how well time preferences can be transmitted and to what extent this transmission is effective and durable. I can think of ways to test efficacy in the lab, but the durability question is a harsh mistress. What are the actual components of folks' discount rates? How sensitive are they to treatment? How important is local knowledge? Lots of interesting questions there.

I'll also add that the $140k figure may conflate costs and transfers. When I move, I don't burn my house down. I sell it, so part of my loss is someone else's gain. It's erroneous to count private costs as social costs. We live in a world that grasps the simple concepts of double-entry accounting. Write-offs are a problem, sure, but one man's liability tends to be another man's asset. Focus on the Harberger Triangles and the Tullock Rectangles, yo. Migration restrictions are a political rent, and competition over rents tend to dissipate their value. Waste not, want not, you guys.

At any rate, migration may not be euvoluntary, but if we take seriously the possibility that matching discount rate preferences by geography is an undervalued benefit of migration policy, some minor revisions to Borjas's analysis should strengthen, rather than weaken the case for freer international migration policy.

Tuesday, July 15, 2014

Of the Subjectivity of Negative Externalities

 Twitter forces us all to be Straussians. Here, Reihan (euvoluntarily) encourages us to be petit linguists. What does the word "externality" mean?

A broad definition would include anything from a petty, expected nuisance like when my neighborhood maintenance service interrupts my early afternoon nap with their leaf blowers all the way to extremely serious offenses like an upstream tannery dumping waste chemicals straight into the river that empties into my favorite fishing hole. Under this definition, the "collateral damage" of war is an externality, and so is the jackass down the road who doesn't know how to turn his car stereo down on his way to work at 6am.

A narrower definition might snip off both of those tails. Hosting a 4th of July party, even when it bothers a curmudgeonly neighbor, is within the tacit bundle of property rights that typically attends conventional home ownership, so maybe that's not an economically relevant externality. And using the same term to describe kids murdered in drone raids is virulently offensive political euphemism—kayfabe run amok.

But even after you trim the distribution, I think you'll still find some reasonable disagreement over what properly counts as an externality. You see this in apartment complexes with explicit rules about noise. Loud music is okay, so long as it gets turned down after 10pm. You see it in the common law with what counts as criminal negligence or those actions that sort of straddle criminal and tort law.

So yes, negative externalities are in the eye of the beholder, but I urge you to refrain from taking full license with that. Eudaimonia includes the proper understanding of the many tacit rules of the game, and that includes neither being a jerk nor suffering one gladly. Subjectivity is not the same as chaos, it still respects convention, honor, and decency. Subjectivity can be consistent with virtuous thought and behavior.

Partisan Rancor Meets Simple Charity

Leering at me from an underlit recess at the end of the hall is the beetled brow of my hunched American ancestry, twinkles of anger and disappointment sprinkled atop a foundation of cold contempt. I have failed him. I have allowed my beloved country which he fumed, hewed, hacked, and slashed from its dusty wooden bones to descend into petty, fulminous bickering over clear, uncontroversial, basic humanitarian duties.

There are children on the southern border. Children without homes, children fleeing violence. Children that have braved perilous journeys of many hundreds of leagues, placing frail hopes on the slender reed that strangers in the north might breathe a puff of air into the rusty bellows of simple charity.

Perhaps these wayward sons and daughters should have done their homework first. Perhaps they should have realized that since they're apt to grow up and register with the Democratic Party, they're not welcome here by the opposing faction. Perhaps they should have realized that since they can't hold a job (ever?), they're a net drain on the already debt-ridden public fisc. Perhaps they should have been ever so slightly more diligent and discovered that the curable diseases they've brought with them have to be treated by doctors who could be more gainfully employed tending to people with the good sense to be born north of the Rio Grande.

Because our political equilibrium is so frail and our need for military might so urgent, we just can't possibly afford to let our fellow citizens exercise basic private charity. It is imperative that we send these children back to the chaos they went to great lengths to escape. The Republic could not stand otherwise.

Sweet Jumping Hotcakes, people. This is why we can't have nice things. Look, I get it, migration is not euvoluntary. In this case, we're neck deep in Locke's Venditio: these kids are the proverbial foundering ship at sea, in dire want of an anchor. You may or may not have an individual duty to assist, that's between you and your conscience. But to claim that you have the moral authority to stand between your fellow citizen and their moral imperative to help for reasons of partisan politics seems ...well... slightly monstrous, don't you think?

Examine your BATNA. Examine theirs. Exercise analytical sympathy. It's not that difficult. Recalculate your moral intuitions.

And then face the inevitable conclusion that if this is the best we have to offer refugee children, some of them under ten years old, then the prospects for meaningful immigration reform will be dashed on yon rocky shore until the median US constituent finds a better heuristic for the proper role of the sovereign.

Solon wept.

Monday, July 14, 2014

Of the Division of Tariffs

It is a consistent source of man's wonderment the many ways in which mutually felicitous exchange is made. Consider the curious case of the two-part tariff. A two-part tariff is when the customer pays a periodic fixed fee, often in exchange for lower piece-rates. Unless the firm is a protected monopoly, in which case the first part of the tariff (sometimes hidden in public expenditures) aids in the extraction of monopoly rents. Part of the recent dust-up between taxi organizations and ridesharing services have exposed something curious about the multi-part tariffs bound in livery.

The Dub-MOE and I hinted at some of the demands that Birmingham is mulling w.r.t. Uber, Lyft, Sidecar et al. Among them is a requirement for an extra $500k in liability coverage, borne by each driver.

The by-driver requirement specifically set my hackles up. I'm already alert to Yandle's Bootleggers & Baptists story, so I've a keen nose for mischief when it comes to pronunciations from professional taxi organizations, but the peculiar thing here is that while other aspects of taxicab livery could run like a protected (local) monopoly, it seems unusual that the insurance industry, itself highly protected via regulation should be complicit. In other words, why would taxicab companies not have full mutual insurance rather than piecemeal coverage?

Please recall that the purpose of insurance is to guard against idiosyncratic risk. For ordinary drivers, this means pooling with all other drivers of your type and based on many long years of ongoing statistical analysis, with careful retrospective studies of relevant characteristics, you protect your own private assets against adversity. But for taxi services? The residual claimant should be the one footing the insurance bill. The regulatory kayfabe I've been hearing from taxi associations are all aimed at protecting the interests of the customer, and I can't for the life of me understand why this should place an extra burden specifically on the drivers. In a suit, the firm would be named as primary litigant (Ken can correct me if I'm wrong here, I know he secretly reads EE, even if he'll deny it till he's blue in the face). So the histrionics about drivers getting extra coverage must have something else under it, otherwise it'd be transparent rent protection, and even Florida sugar cartels have more sense than that.

So is there a behavioral reason? Perhaps part of the point of lading drivers with their own insurance payments is for the "Peltzman Effect", in which risk abatement is greeted with marginally riskier behavior. The standard image for this can be found at Eric Crampton's blog Offsetting Behaviour—a steering wheel with a spike sticking out of it is one way to get drivers to compensate for all those wonderful airbags that surround and cushion them. Theoretically, if someone else is picking up the tab in case you get in a wreck with a passenger in the back, you'll be (again, marginally) more inclined to take a chance on a freshly-red light, or to text your sweetie behind the wheel, etc. But this is, of course, ultimately an empirical claim, and the subjects under study for the original Peltzman Effect literature weren't Uber drivers: they didn't have the countervailing effects of driver rating systems. Direct customer feedback can more easily match passengers' risk tolerance to the specific circumstances of the road on that particular day. It's a curious conceit to claim that there's a public interest in this small-scale negotiation, other than the safety of other drivers and pedestrians (beyond existing statutes against reckless endangerment, that is).

So what do you think? Is it reasonable to insist on additional two-part tariffs for Uber drivers or is the indemnity insurance already offered by the firm sufficient? Why or why not? How would you test the claim? Please show your work.