A week of links

Links this week:

  1. The Lancet’s obesity predictions.
  2. Design things to be difficult. HT: Rory Sutherland
  3. Is there any known safe level of government funding?
  4. Increasing diversity by hiring groups, not individuals.
  5. Plenty of critiques of nudge-style interventions popping up, although they are rarely done well. Here’s another. And what is a nudge?
  6. A perspective on consumer genomics.
  7. Wealth heritability.
  8. Edging toward the right answer.
  9. Why it is so much easier to data crunch sport than economics.

And if you missed them, my posts this week:

  1. Tolstoy, behavioural scientist.
  2. The left and heritability.

Accepting heritability

At Stumbling and Mumbling, Chris Dillow writes:

[M]aybe some lefties do reject the heritability of IQ on ideological grounds. I want to make another point – that there’s no need for them to do so. You can accept that IQ (or ability generally) is heritable and still be a strong egalitarian.

I say this because of a simple principle: luck egalitarianism. This says that inequalities are unjust if they are due to circumstances beyond one’s control. If we grant that ability is inherited, then differences in ability are obviously a matter of luck. Insofar as these give rise to inequalities of income, a luck egalitarian can thus claim they are unjust.

That said, there is a sort of leftie who would be discombobulated by the heritability of ability. I’m thinking of that sort, like Tessa Jowell, who – in their optimism about the malleability of humankind – think that education can significantly reduce inequality.

But that leftism isn’t mine. I agree with Ed Smith that social mobility – even if it could be achieved – is an unattractive ideal. It’s no substitute for a just society.

Peter Singer made a related argument in A Darwinian Left: Politics, Evolution, and Cooperation, suggesting that the left needs to incorporate an updated understanding of the malleability of human nature into its framework – although Singer’s arguments focused on our tendency to cooperate.

Arnold Kling suggests the discombobulation of some on the left comes from the need to maintain a narrative:

In the three-axes model, progressives want to squeeze every issue into an oppressor-oppressed narrative. To suggest that ethnic groups differ in average income for reasons other than oppression would be to weaken that narrative. So even if from a policy perspective a belief in heritability is tolerable, from a narrative perspective a book like The Bell Curve represents a huge threat.

My sense is that this produces a great deal of cognitive dissonance on the left. I have many friends on the left, and I do not know a single one who would instinctively deny the heritability of intelligence. On the other hand, they have been instructed to regard Murray and Herrnstein as vile racists.

My own experience is that plenty of people are willing to argue whether behavioural traits are heritable. I sense Kling’s narrative story is part of the reason, but I also suggest that it comes from a general unwillingness of people to concede any points in a debate. (Does this “bias” have a name – or is this just a manifestation of confirmation bias or a desire to reduce cognitive dissonance?)

Take arguments about climate change. Many libertarians or conservatives fight at every step of the way – the earth is not warming, the warming is not caused by human activity, the warming will be mild, the warming will be beneficial – all this before they get to arguments about the costs and benefits of different policy responses. Yet, whether warming is occurring or harmful would not seem to be a core part of the libertarian philosophy. Debates about heritability have a similar character.

Wisdom from Tolstoy

I have just finished Leo Tolstoy’s War and Peace, and along the way marked a couple of passages.

The first two fit with the story that much behavioural science is formalisation of common sense. First, hindsight bias:

In historical works on the year 1812 French writers are very fond of saying that Napoleon felt the danger of extending his line, that he sought a battle and that his marshals advised him to stop at Smolensk, and of making similar statements to show that the danger of the campaign was even then understood. Russian authors are still fonder of telling us that from the commencement of the campaign a Scythian war plan was adopted to lure Napoleon into the depths of Russia, and this plan some of them attribute to Pfuel, others to a certain Frenchman, others to Toll, and others again to Alexander himself—pointing to notes, projects, and letters which contain hints of such a line of action. But all these hints at what happened, both from the French side and the Russian, are advanced only because they fit in with the event. Had that event not occurred these hints would have been forgotten, as we have forgotten the thousands and millions of hints and expectations to the contrary which were current then but have now been forgotten because the event falsified them. There are always so many conjectures as to the issue of any event that however it may end there will always be people to say: “I said then that it would be so,” quite forgetting that amid their innumerable conjectures many were to quite the contrary effect.

Next, confirmation bias:

But these were only suppositions, which seemed important to the younger men but not to Kutuzov. With his sixty years’ experience he knew what value to attach to rumors, knew how apt people who desire anything are to group all news so that it appears to confirm what they desire, and he knew how readily in such cases they omit all that makes for the contrary.

Tolstoy also knew something of statistics and selection bias:

One would have thought that under the almost incredibly wretched conditions the Russian soldiers were in at that time—lacking warm boots and sheepskin coats, without a roof over their heads, in the snow with eighteen degrees of frost, and without even full rations (the commissariat did not always keep up with the troops)—they would have presented a very sad and depressing spectacle.

On the contrary, the army had never under the best material conditions presented a more cheerful and animated aspect. This was because all who began to grow depressed or who lost strength were sifted out of the army day by day. All the physically or morally weak had long since been left behind and only the flower of the army—physically and mentally—remained.

And the value of medicine in those days:

He had what the doctors termed “bilious fever.” But despite the fact that the doctors treated him, bled him, and gave him medicines to drink, he recovered.

A week of links

Links this week (a slightly sparse list as I didn’t find much time to see what was out there):

  1. The number of never married in the US continues to grow. HT: Arnold Kling
  2. Moderate drinking is still good for you. Christopher Snowdon delves into the details.
  3. It’s no surprise that Uber and friends want to be regulated.
  4. There is plenty of signalling in years K-12.

And if you missed them, my posts this week:

  1. What makes a nation great? The population.
  2. If you want to be a global superpower, there is an easier way to get there than fiddling with your education settings.

Moving a nation from “Good to Great”

PwC report and associated press release claiming that Australia could “fall from the G20″ has triggered a round of media (e.g. here and here) questioning Australia’s role in the world.

There’s nothing new in the report to worry about. Under the PwC model, Australia drops out of the top 20 countries by GDP on PPP terms (down to 29th), but is still in the top 20 at market exchange rates in 2050. If you’re worried about international clout, the latter is more important. Plus, GDP per person stays high – it’s only because of the development of nations with large populations that the relative rankings change. Australia is, after all, not even in the top 50 countries by population.

Then there is the reality of what “dropping out the G20″ looks like. South Africa remains a member of the G20 despite ranking around 30th in GDP. And there are actually more than 20 countries involved as the European Union is one of the 20.

And why should we even care about G20 membership? Or who believes these sorts of projections anyhow?

But let’s suppose you want to make your nation great and maintain relative rankings in economic clout. How should you go about doing it?

In my last post, I pointed out that having educated intelligent populations is the key ingredient to a nation being “great”. And the PwC response reflects that to an extent, stating that we need to invest “in highly skilled workers and become the knowledge nation”.

However, I don’t expect any miracles (or possibly even change) from national pushes such as that. I have nothing against desires to increase STEM education or have the education system teach skills that might actually be useful, but the evidence that there is benefit from pushes such as this is scant.

What goes unsaid is the most effective approach to increasing economic clout – increasing population. As other large countries develop and close the gap on a per capita basis, increases in population are the simplest way to maintain the global ranking. If Australia could increase its population to 25 per cent above projected 2050 levels, it could be climbing the rankings.

As I mentioned in my last post, the composition of that population is important, so this is not a pure numbers game. But given the mass of educated and intelligent people from around the world who would like to come to countries like Australia, increasing population while maintaining (or even increasing) the human capital of the population is achievable.

So, that points us to the lever of immigration policy. Where do we start?

For one, Australia has a skilled migration program that forms the majority of its immigration intake, although numbers are controlled through measures such as “occupation ceilings”. Why we don’t allow everyone who meets a certain benchmark to enter astounds me. We could simply set some education and occupation benchmarks, and all who meet them can come.

Further, Australia has a few hundred thousand foreign students in our university system at any point. We could easily introduce a program where those who graduate with certain degrees or levels of achievement gain the right to stay. Another source of highly educated, intelligent people.

But what of those talented people who may not have had the same opportunities as those in developed countries? One option would be to introduce a series of IQ tests or some other similar standard. Everyone who meets that level can migrate and benefit from the Australian education system. This could provide a potential avenue to increase the humanitarian intake.

With that flood of educated, intelligent people, a country would gain the scale necessary to be among the largest global economies, while also maintaining a population base conducive to high levels of development.

This option, however, has time-limited availability. In another 20 to 30 years, many of the sources of potential immigrants will be highly developed themselves, so the queues to enter places like Australia could be much shorter. But for the moment, if you are worried about Australia (or any developed country) sliding into irrelevance, there is an easy, accessible solution waiting to be exploited.

“Good to Great” for nations

I am not convinced that Jim Collins’s management classic Good to Great: Why Some Companies Make the Leap…And Others Don’t has stood the test of time, despite the “384 million bytes of computer data” accumulated during the process of putting it together. That the first of the good to great companies named in the book is Fannie Mae, which became “the best capital markets player in the world at managing mortgage interest risk”, does not help the case.

However, my purpose in this post is not to criticise the book or the management strategy genre in general, as there is no shortage of other places where that has already been done well.

What I want to do is admit some sympathy for the good to great ingredients that Collins identifies, particularly the idea of “First Who….Then What”. And then I want to ask – is there a something in that concept for the wealth of nations?

The idea of “First Who….Then What” is that, to change your company from good to great, you need to get the right people on the bus. It is only when the right people are on board that you should decide where you want to drive it. And the key to that sentence is “right people”. It is not “your people” who are the most important part of the company – the “right people” are.

This approach means that strategy comes after hiring. In a company full of the right people, good answers will tend to emerge. Questions such as compensation are not as important as you’re not trying to motivate the right behaviours from the wrong people.

You could draw a similar argument with what might make a nation great. Those nations with high-IQ, educated populations tend to have higher levels of economic development. Although rich countries tend to have good political institutions and policies that are not completely crazy,  the direction of causation is population to institutions. If you have the “right” people in a nation, decent political frameworks tend to follow.

Of course, North Korea is the exception that proves the rule. But North Korea could become a classic case study in a few decades. Imagine if the dictatorship fell and North Korea came under a government similar to that in South Korea. How long would take for North Korea’s development to reflect that of its southern neighbour?

A week of links

Links this week:

  1. A few years old, but good – a story from a Blue Zone “where people forget to die”. HT: Razib Khan
  2. Another critique of modern dietary guidelines. Weight gain after a fecal transplant. And the US Government is about to drop warnings about cholesterol.
  3. Improving ‘Neoclassical man’ with a gaze heuristic.
  4. Bigger data sets are uncovering the genetic underpinnings of intelligence.
  5. A take on the Peter Principle.
  6. To what extent will new birth control options be another fertility shock?
  7. Yet more on lead and crime.
  8. Greg Clark on social mobility. And my review of his book.

And if you missed them, my posts this week:

  1. Will defaults lose their power in the digital age. Or, as put by Eric Crampton, Will nudges survive the Lucs Critique?
  2. I recommend using a story other than organ donation rates to support defaults.

Charts that don’t seem quite right – organ donation edition

Organ donation rates are an often used example of the power of defaults. Take the following passage by Dan Ariely, explaining this (also often used) chart from Johnson and Goldstein (2003) (ungated pdf):

One of my favorite graphs in all of social science is the following plot from an inspiring paper by Eric Johnson and Daniel Goldstein. This graph shows the percentage of people, across different European countries, who are willing to donate their organs after they pass away. When people see this plot and try to speculate about the cause for the differences between the countries that donate a lot (in blue) and the countries that donate little (in orange) they usually come up with “big” reasons such as religion, culture, etc.

But you will notice that pairs of similar countries have very different levels of organ donations. For example, take the following pairs of countries: Denmark and Sweden; the Netherlands and Belgium; Austria and Germany (and depending on your individual perspective France and the UK). These are countries that we usually think of as rather similar in terms of culture, religion, etc., yet their levels of organ donations are very different.

So, what could explain these differences? It turns out that it is the design of the form at the DMV. In countries where the form is set as “opt-in” (check this box if you want to participate in the organ donation program) people do not check the box and as a consequence they do not become a part of the program. In countries where the form is set as “opt-out” (check this box if you don’t want to participate in the organ donation program) people also do not check the box and are automatically enrolled in the program. In both cases large proportions of people simply adopt the default option.

Johnson and Goldstein (2003) Organ donation rates in Europe

But does this chart seem right given that story? 99.98 per cent fail to opt-out in Austria? 99.97 per cent in Hungary? It seems too many. And for Dan Ariely’s story, it is too many, because the process is not as described.

The hint is in the term “presumed consent” in chart description. There is actually no time where Austrians or Hungarians are presented with a form where they can simply change from the default. Instead, they are presumed to consent to organ donation. To change that presumption, they have to take steps such as contacting government authorities to submit forms stating they don’t want their organs removed. Most people probably don’t even think about it. I would feel uncomfortable calling it a “default” – and Johnson and Goldstein are clear that there are ethical questions with such “opt-out” arrangements.

So what does this mean in practice. Take the following from an Austrian government site:

In Austria, organs, parts of organs or tissue of potential donors may be removed if the person in question did not expressly refuse organ donation before their death.

In order to document such objections effectively, the Opting-out Registry of persons refusing organ donation was established. Apart from refusals documented in the Registry, also other forms of refusal of post-mortem organ donations are respected (e.g., a written explanation among the identification papers or an oral refusal witnessed by relatives).

The Opting-out Registry has primarily been designed for people living in Austria, and the Austrian social security number is used as the main identification tool. Persons who are staying in Austria for a short time only (for holidays, conferences, family visits) should preferably keep their written personal wishes regarding donations, among their identification papers (consent: I am willing to donate my organs; refusal: I do not want to donate my organs). Their wish is respected in the event of death. In addition, this person’s relatives are consulted.

You can download a form from that page to lodge a refusal in the registry.

The last sentence of the government text gives a hint to the process on the ground – the deceased’s relatives are consulted. The process effectively leaves the question of organ donation unaddressed until after death.

I expect consultation with relatives is part of the reason behind the much smaller differences in the outcome we care about – organ donation rates. Germany at 15.3 deceased donors per million people is not far from Austria’s 18.8 and Sweden’s 15.1. Spain, which has an opt-out arrangement, is far ahead of most countries at 33.8, but the United States, an opt-in country, is also ahead of most opt-out countries with a donation rate of 26.0.

Having said all this, a lot of interesting options for organ donation should be explored – active choice, preferential access to organs for previously registered donors, respecting the wishes of the deceased over the preferences of relatives, or payments of some kind. But the story behind this chart is not as neat as it seems. And a lesson – if you can, read the original paper.

The death of defaults?

Late last year I went to a presentation by Schlomo Benartzi on how people think differently when they are using a screen. The punchline was that many of the classic behavioural biases do not play out as expected in digital mediums. (Benartzi has a book on this topic, co-authored with Jonah Lehrer, coming out later this year.)

One example Benartzi gave involved defaults. The standard understanding is that defaults are powerful ways to influence behaviour – people will tend to stick to them. But Benartzi spoke of digital experiments with pre-populated checkboxes where people went out of their way to untick the box. The default backfired.

Why does this occur? I suggest a starting point should be our experience with defaults. Online retailers know the power of defaults, and regularly pre-populate checkboxes to join their mailing list or buy add-ons such as insurance. Generally, the default is a crap option. (Look at Dark Patterns for a pile of examples.) So what does someone with experience do? You scan every pre-populated checkbox to see whether you are being lumped with something you don’t want. If unsure, uncheck it.

As we are moving to a world where most interactions with government will be digital, will the power of defaults be lost? Will we untick the “register as an organ donor” or “save 3 per cent of you salary” boxes due to a newly acquired habit? And what other “nudges” will we resist when we learn that many nudgers don’t have our best interests at heart?

A week of links

Links this week:

  1. Each of us descends many times over from a great many sexual despots.
  2. In every generation, we forget how much poorer we used to be.
  3. Regression and other related non-experimental pattern-finding methods of this type can sound hyper-technical and very gee-whiz (“support vector machines” – cool!), and they can serve various useful purposes. … But they are simply not fit for the task of making reliable, non-obvious predictions for the effects of most contested policy interventions.
  4. Reinterpreting Stanley Milgram’s famous experiment.
  5. Endogenous preferences.
  6. Cognitive vs. behavioral in psychology, economics, and political science.