Thursday, 19 February 2004

State universities as an investment

Another thought on state subsidies for higher education: state support of higher education may be a rational investment by the state in it's own tax base. Insofar as students tend to stay in the state where they go to school, and insofar as people with degrees make (and spend) more money, a state university will increase the size of a state's tax base, whether through preventing "brain drain" of its own smart kids, or through "poaching" smart kids from out of state. Just as investing in a child's education may provide returns to the parents when the grateful child helps them financially in their old age, an educated population may be well a "private good" for the state itself.

Colorado controversy

John Cole is right to be disgusted by ex-Colorado coach Gary Barnett’s remarks about former CU player Katie Hnida, who was allegedly raped by one of her former teammates. Barnett said, apparently in response to an inquiry from a reporter as to the reason for Ms. Hnida’s departure from the team (and transfer to New Mexico) in 2000:

It was obvious Katie was not very good. She was awful. ... Katie was not only a girl, she was terrible. OK? There’s no other way to say it.

Not only does the comment show a lack of seriousness by Barnett, it also makes me question his abilities as a coach and leader. Good coaches don’t speak ill about their players in public; that’s close to the cardinal rule of coaching. What a dipshit, and good riddance.

More on this story in Friday’s New York Times.

Abort, retry, fail

Matt Stinson thinks Julian Sanchez’s argument by analogy on the term “unborn child” fails. Julian argues:

If you don’t share their view about the moral status of the fetus, that’s like calling a pile of bricks an “unbuilt house” or, for that matter, a blank screen an “unwritten blog post.” Let’s not give them this one.

On the other hand, Matt says:

I’m pro-life, though not stridently so, but would a pile of bricks, without human action, begin to form a house over a period of nine months, unless you smashed those bricks down with a sledgehammer, and would a blog post begin to appear on that blank screen unless you pressed the delete key repeatedly?

Luckily enough, however, Smokey the Bear may still call discarded lit cigarettes “potential forest fires.” Or something. Semantics was never my strong suit…

State universities as public goods

Will Baude is the latest to jump into the public universities argument (roughly between Jack Balkin and the Volokh conspirators); Will writes:

I don’t particularly have a problem with government involvement in the private education market—either through direct subsidy (which is probably unnecessary) or through regulating the likely capital market failure. In other words, government-guaranteed student loans are great; a “graduate tax” could accomplish the same thing.

I used to generally agree with Will on this point; however, I’ve come to think that government subsidies—like guaranteed student loans, Pell grants, and student loan interest credits—make public and private universities insensitive to price as a rationing mechanism. This leads to much of the same problem we see in the health care market: most consumers don’t discriminate on the basis of price, because they have no personal stake in the price of service. In the case of higher education, the problem is more subtle, as at least there are direct costs to the consumer—they just aren’t felt until after college, due to in-school deferments of loan interest and principal payments. Regardless, this allows universities to increase tuition and fees at rates well in excess of inflation.

The disconnect between price and demand also allows universities to use price as a “prestige” factor; although virtually nobody actually pays $40,000 a year to go to Harvard, the price premium makes it appear as if you’re getting a better education than you would paying $15,000 to go to Americana State University. (You probably do get a better education at Harvard, but I suspect the premium is not worth $100,000.)

There are good reasons to criticize public subsidies of state universities—particularly in a poor state like Mississippi—but public subsidy of colleges and universities in general bears considerable scrutiny as well.

Update: Will Baude responds:

One thing to think about—

The reason, in general, that American[a] State U has a tuition of 15,000 to Harvard's 40,000 has a lot to do with the subsidies that American State provides to its U. To be sure, some private colleges are cheaper than others, but lots of kids I knew did indeed take price (and their financial aid packages) into account when choosing between them. And the diversity of price in private universities is pretty small—I don't know whether that's due to a universal-ness of costs (I doubt it) or more likely because demand is fairly price-inelastic. While it's true that subsidies (and to a lesser degree, loans) encourage that elasticity, it's not actually clear that's bad. On the one hand, some kids go to Harvard who really should have gone to Miss. But on the other hand, some kids go to Miss who otherwise wouldn't have gone at all.

Just a thought.

My experience as an undergrad (granted, 5+ years ago) was that there was more price differentiation among private universities; I know the tuition at Rose-Hulman was significantly lower than that of Georgetown, and the price differential was more than could be justified on the basis of cost of living differences between D.C. and Indiana (not to mention that Rose-Hulman is a superior academic institution to Georgetown). There may be less differentiation among elite-tier private institutions like Chicago, Stanford, and the Ivys, however (some of that used to be due to now-illegal agreements among the Ivys to limit financial aid awards to exceptional students).

Now it is true that price does matter to some people, even with government subsidies (both to universities and students). On the other hand, I find it difficult to justify subsidizing a flagship public university like Ole Miss on the backs of working class people; that being said, Ole Miss may be something of an aberration in this regard, although I suspect a number of other colleges, like the University of Alabama, Auburn, and LSU, are similar “blue blood” state universities (to say nothing of elite-level state universities like UC-Berkeley and Michigan, which are far more selective).

Screw the t distribution

Alex Tabarrok endorses an econometrics text that makes two rather bold simplifying assumptions:

Stock and Watson use a “robust” estimator of standard errors right from the beginning. This means that they can dump an entire chapter on hetereoskedasticity and methods of “correcting” for hetereoskedasticity (these rarely worked in any case.)

They do not waste time discussing the difference between the t-distribution and the normal-distribution. Instead, they assume reasonably large datasets from the get-go and base their theorems on large-sample theory.

I can sort-of-see the value of always using heteroskedasticity-consistent standard errors (although I think it’s better to model the heteroskedasticity if you can), but dispensing with the t distribution seems to be a bridge too far. Large sample theory is nice, but (a) common econometrics software (e.g. Stata, LIMDEP, and R) uses the t distribution even into sample sizes in the 100s, so you need to discuss it anyway, and (b) there are plenty of theorems that can only be tested with small samples due to data limitations. Now, these may be less problematic in the large-n world that economists inhabit, but I’d have real trouble justifying such a text for a graduate seminar in political science methods (undergrads rarely get beyond bivariate regression).

Zippergate redux

Since John Kerry’s alleged “zipper problem” has been debunked, Andrew Sullivan notes that Sid Blumenthal (not to be confused with Atrios) thinks John Kerry should sue the Sun for libel. Funnily enough, Jeffrey Archer had much the same idea under similar circumstances, but it didn’t quite work out the way he planned…

Update: Conrad has thoughts in a similar vein. And thanks to Glenn Reynolds for the link!

Politicizing science

CalPundit and Steve Verdon are among those noting a report from the Union of Concerned Scientists over the Bush administration’s use and alleged abuse of science. Steve writes:

Personally I think the notion of impartiality is misleading. All scientists have their own views on the issues and particularly the area they are researching. ... Of course, the fact that scientists and researchers themselves have their own views and biases does not let the Bush Administration off the hook when it comes to possibly distorting science. However, it cannot be ignored that the Union of Concerned Scientists can also be said to have an agenda and that this agenda may be playing a role as well in this report when that agenda diverges from the agenda of the Bush Administration.

There’s not much to disagree with in either post, but something to bear in mind is that science is always politicized when it is used to make political decisions; there’s no way around it. For example, if a hypothetical study shows that tightening emissions standards will save 3000 lives a year, but cost consumers $100 billion per life saved, politics is going to decide which figure gets emphasized.

Update: More at the Dead Parrot Society.

Automatic for the People

Michael Jennings has uncovered a bit of a visual oxymoron over at TransportBlog.