Saturday, June 12, 2010

12 Ways the Sex Trade Has Changed the Internet

From PC World: "The sex industry is behind many innovations that today's Netizens can't live without, as well as some nasty bits we wish had never existed, including:

1. Online Payment Systems.  The next time you buy something at Amazon or another online retailer, marveling at the ease and security of e-commerce, don't just thank Jeff Bezos, thank Richard Gordon. In the mid-1990s Gordon founded Electronic Card Systems, which pioneered credit card transactions for a wide range of disreputable sites, according to the New York Times.

2. Streaming Content.  Before or YouTube started filling the Internet with streaming video, X-rated sites were pumping out videos of adult stars doing what comes naturally (or not), over and over and over.

3. 3G Mobile Services. Pocket porn is the new frontier. Just as adult content helped push the propagation of cable and DSL connections, mobile porn will undoubtedly arouse demand for high-speed 3G data services."

It's not all good though, we can thank curse the porn industry for spam, malware and pop-ups, read the whole list here.
HT: Juandos

New Research on College Teaching Evaluations

Greg Mankiw links to this article in the Journal of Polit Economy "Does Professor Quality Matter? Evidence from Random Assignment of Students to Professors" (available here), following are some excerpts:

"In primary and secondary education, measures of teacher quality are often based on contemporaneous student performance on standardized achievement tests. In the post-secondary environment, scores on student evaluations of professors are typically used to measure teaching quality. We possess unique data [10,534 students who attended U.S. Air Force Academy from the fall of 2000 through the spring of 2007] that allow us to construct a third measure of teacher quality that captures student performance differences in mandatory follow-on classes that are part of an established course sequence. We compare metrics that capture these three different notions of instructional quality and present evidence that professors who excel at promoting contemporaneous student achievement teach in ways that improve their student evaluations but harm the follow-on achievement of their students in more advanced classes.

Results show that there are statistically significant and sizable differences in student achievement across introductory course professors in both contemporaneous and follow-on course achievement.  However, our results indicate that professors who excel at promoting contemporaneous student achievement, on average, harm the subsequent performance of their students in more advanced classes. Academic rank, teaching experience, and terminal degree status of professors are negatively correlated with contemporaneous value added, but positively correlated with follow-on course value-added. Hence, students of less experienced instructors who do not possess a Ph.D. perform significantly better in the contemporaneous course, but perform worse in the follow-on related curriculum.

That is, students appear to reward higher grades in the introductory course, but punish professors who increase deep learning (introductory course professor value-added in follow-on courses). Since many U.S. colleges and universities use student evaluations as a measurement of teaching quality for academic promotion and tenure decisions, this latter finding draws into question the value and accuracy of this practice. Our findings raise concerns about the use of either contemporaneous value-added or student evaluations as signals of teaching quality."

MP: One interpretation of this might be that students reward "easy" professors with higher teaching evaluations and punish "hard" or "demanding" professors with lower teaching evaluations while taking classes in college.  But when they're sitting (and sweatin') for the CPA exam a few years later, their ex-post teaching evaluations would likely be reversed, and they would experience delayed appreciation for their "hard" accounting professors and delayed regret for their "easy" accounting professors. 

The Sexist SAT Test is Rigged Against Girls

Did you know that the College Board's SAT test is a sexist, pro-boy, anti-girl test that is intentionally rigged to favor girls because:

1. It's got “masculine-themed" questions that increase boys’ scores relative to girls.

2.  The absolute worst test format for females (resulting in low scores) is the multiple choice format. Thus, the College Board has rigged the SAT in favor of boys by formatting almost all the questions in the format that they know will lower girls’ scores the most.

3. It's got a "sexist guessing penalty" that favors risk-taking boys over rule-following, obedient girls. 

4. The sexist time limit lowers girls' test scores. 

I'm NOT making this up, read more here.

Update: Thanks to KipEsquire in the comments for pointing out that the College Board's Board of Trustees is headed by a woman, and has slightly more women (16 members) than men (15 members). 

Where Can I Fly for $400?

Cool website: At Kayak, you can enter your airport and approximate travel dates, and specify the maximum amount you want to spend, and you'll see a map of destinations within your budget. You can also specify your desired activities (golf, beach, gambling, etc.), spoken languages, and average temperature.  Here are the results for travelling from Washington DC in Fall 2010 on a budget of $400 -you can get as far away as Colombia, Panama, Costa Rica, Jamaica, Puerto Rico, etc. 

Friday, June 11, 2010

Record High North Dakota Oil Production in April

North Dakota continued to set more new records in April for monthly oil production (data here), see previous CD post here.  The following are new, all-time record highs set in April:

Daily Oil Production: 284,348 barrels in April; 2.53% increase from March, 44.56% increase from April 2009, 100% increase from February 2008.

Wells Producing:  4,576; 1.4% increase from March, 14.7% increase from April last year.

Daily Oil Per Well: 62 barrels, 26.53% increase from April 2009. 

Markets in Everything: Breast Milk on The Internet

"Talk about milking it for all it’s worth.  A 26-year-old nursing mom from England who discovered that she had more than enough breast milk for her baby started bottling and selling the excess over the Internet. She now has 10 regular customers who pay her 15 pounds (about $23) for one-half cup of breast milk, according to the Daily Mail."

Consumer Confidence Highest Since Jan. 2008

The University of Michigan Consumer Confidence Index reached a 29-month high in June of 75.5, an increase of almost two full points from 73.6 in May, and the highest reading since January 2008 of 78.4 in the second month of the recession.  The recovery in consumer confidence through June is consistent with the pattern of consumer confidence levels following the recessions of 1980, 1981-1982, and 1990-1991.  See Bloomberg report here.

Huge Gender Disparities: Prisoners and Deaths

In 2006, 93.1% of U.S. prisoners were male vs. 6.9% female (data here), meaning that there were 1,350 men in prison for every 100 women (see chart above).  Interestingly, that is almost exactly the same gender distribution for occupational deaths in the U.S. for 2008 - 92.7% male vs. 7.3% female (see chart below, data here).  Another fact is that 90% of motorcycle fatalities in 2005 were males (see chart below, source). 

I think it's safe to say that there are huge gender disparities in criminal tendencies and risk-taking behaviors.

Q: Should gender equity be a goal here?

Retail Sales Fell in May by -1.6%, Helped by -7% Drop in Gas Prices; 7th Straight Pos. Annual Gain

Gas prices fall in May by 7%
Retail gas prices fell in May by -7% (see top chart above, data here), leading to a -3.3% decline in consumer spending at gasoline stations in May.  The -8% decline in gas prices from $2.94 in early May to $2.73 per gallon at the end of the month was the largest monthly decline in gas prices since a -20% drop in December 2008.  The -7% drop in gas prices and corresponding savings at the pump for consumers was part of the reason for the -1.6% decline in retail sales in May, compared to April, based on data in today's release from the Commerce Department.

On an annual basis, consumer spending was up by 6.9% in May, marking the seventh straight month of positive annual increases starting in November of last year, following 14 straight months of year-to-year declines from September 2008 to October 2009 (see middle chart above).  As both the middle chart (annual percent change in sales) and bottom chart (retail sales in dollars) indicate, there is a lot of "noise" or monthly variations in retail sales, so the -1.6% drop in May should be considered with that in mind, especially given the largest monthly decrease in gas prices in 17 months. 

But here's how it's getting reported by AP in a story titled "Unexpected decline in retail sales fans recovery fears": "Retail sales plunged in May by the largest amount in eight months as consumers slashed spending on everything from cars to clothing. The big drop raises new worries about the durability [and strength] of the economic recovery." 

The AP report does briefly mention gas prices: "Gasoline stations sales were down 3.3 percent, a drop that reflected in part lower gasoline pump prices during the month."  But they fail to mention that it was the largest monthly decline in gas prices since 2008, and that lower gas prices and lower spending at gas stations is a POSITIVE factor for consumers, not NEGATIVE. 

Finally, auto sales increased by 3.74% in May according to the BEA (data here), at least in terms of unit sales, so it's interesting that the Census retail sales report is showing a -1.7% decline in May spending on motor vehicles (of course, it could be higher unit sales for lower priced cars?).

Update: Now an even more recent AP story this morning reports that "Consumer sentiment strongest since January 2008." 

In my opinion, any "worries about the durability and strength of the economy recovery" might make a good headline or news story, but are unwarranted and unsupported by the data.  

New Update from First Trust: "It’s important to focus on “core” retail sales, which excludes autos, building materials, and gas. These sales increased 0.1% in May. That’s right, increased, bringing the total gain over the past year to 4.5% and with May an annualized 3.1% above the first quarter average."

Thursday, June 10, 2010

The Two Americas: Private vs. Public Workers

According to this report from the BLS released yesterday, state and local governments spent an average of $39.81 per hour in March 2010 to compensate public-sector employees ($26.25 in wages and $13.56 for benefits). Total employer compensation costs for private industry workers averaged $27.73 per hour ($19.58 for wages and $8.15 for benefits), see chart above. 

Bottom Line: Government employees are compensated 44% more on average per hour than private-sector employees, with 34.1% higher monetary wages and 66.4% more in benefits.  On an annual basis, government workers make almost $80,000 on average with benefits (assuming a 40-hour week for 50 weeks), $24,000 more per year thatn the  average private-sector worker ($55,460 annual compensation). 

And one of the biggest differences between private and public employees is the "retirement" portion of benefits.  Government workers are paid $3.16 in retirement benefits for each hour worked, and almost 90% of these retirement benefits are in the form of "defined benefits" and the other 10% are for "defined contribution."  In contrast, private sector employees receive only $0.96 in retirement benefits for each hour worked, and more than 57% of this coverage is for "defined contribution" and less than 43% for "defined benefits." 

The fact that retirement benefits for public workers are more than three times as generous as those paid to private sector workers, and the fact that almost all pension programs for government workers are "defined benefits," helps explains why the fastest growing group of millionaires is..... government workers.

Most Disgusting Part of Oil Spill: Demon Ethanol

"The most disgusting aspect of the blowout in the Gulf of Mexico isn't the video images of oil-soaked birds or the incessant blather from pundits about what BP or the Obama administration should be doing to stem the flow of oil. Instead, it's the ugly spectacle of the corn-ethanol scammers doing all they can to capitalize on the disaster so that they can justify an expansion of the longest-running robbery of taxpayers in U.S. history.

The blowout of BP's Macondo well has given the corn-ethanol industry yet another opportunity to push its fuel adulterant on the American consumer. And unfortunately, the Obama administration appears ready and willing to foist yet more of the corrosive, environmentally destructive, low-heat-energy fuel on motorists."

Read more here of Robert Bryce's article in

Colonoscopy: $9,000 in the U.S.; $350 in Costa Rica

Video segment about a retired Detroit meteorologist, with a high deductible for his health insurance, who turned to medical tourism in Costa Rica for a common procedure. Quotes for a routine colonoscopy in the U.S. were as high as $9,000 (and as low as $2,000), but only $350 in Costa Rica.

Scottish IQ Test Supports Larry Summers

I prepared the chart above for an article AEI's Christina Sommers is working on.  The graph displays the IQ test results from the article "Population Sex Differences in IQ at Age 11: The Scottish Mental Survey 1932," based on "80,000+ children—almost everyone born in Scotland in 1921—tested at age 11 in 1932."

Main conclusion of the article: "There were no significant mean differences in cognitive test scores between boys and girls, but there was a highly significant difference in their standard deviations ( P < .001). Boys were over-represented at the low and high extremes of cognitive ability."

As the chart shows, boys outnumbered girls both for: a) IQ scores below 95 and b) IQ scores above 115.  Further, the share of boys increased going out towards both ends of the distribution, so that boys represented 57.7% of the highest IQ scores of 140 (136 boys for every 100 girls) and 58.6% of the lowest IQ scores of 60 (142 boys for every 100 girls). 

The authors speculate that their findings might "explain such cognitive outcomes as the slight excess of men achieving first class university degrees, and the excess of males with learning difficulties.

This evidence also supports what former Harvard President Larry Summers said (and for which he was fired):

"It does appear that on many, many different human attributes- height, weight, propensity for criminality, overall IQ, mathematical ability, scientific ability - there is relatively clear evidence that whatever the difference in means - which can be debated - there is a difference in the standard deviation, and variability of a male and a female population."


The SAT Math Test: It's Rigged to Favor Boys?

From an email I received yesterday:

"Regarding the sexist Tierney article in the New York Times (featured Tuesday on CD), there's lots of evidence showing that a much larger part of boys' test scores is due to tricks. Studies show males take more risks than females, and the SAT rewards taking a risk by guessing when you don't know the answer. Thus, the SAT is rigged to favor boys this way because it rewards riskier test-takers and boys are more riskier than girls. Girls' unwillingness to risk getting a penalty for a wrong guess has been shown to significantly reduce their scores (Gender Bias in College Admissions Tests, Research by FairTest (January 14, 2009).

And of course the test favoritism shows when students actually try to apply their knowledge. That's why boys who get the same test scores perform worse than girls in college. For example, a 1995 University of CA, Berkeley study found that females with identical academic indexes as males earned higher grades in every subject including math and physical sciences. The report concluded that schools should add 140 points to the women's index because the SATs underpredicted their ability.

The SAT is rigged in many ways to favor boys. For example, the ETS did a study that found that girls' SAT scores improved dramatically when the time limit was removed but boys’ scores remained about the same. Since when the time pressure is removed, girls perform much better, the test is obviously testing things other than actual knowledge. This can be changed and the College Board is aware if it, but they have refused to make this minor change that would dramatically improve girls' scores in comparison to boys' scores. Thus, the people in charge of the test knowingly do things that favor boys."


Wednesday, June 09, 2010

Don't Believe the Double-Dippers

From Cato's Alan Reynolds in Thursday's WSJ:

"Using statistical trickery to convert a weak job market into an imminent recession has become a bipartisan political strategy. Robert Reich and other big government Democrats play the "double dip" card to peddle more deficit spending on refundable tax credits and transfer payments. Conservative Republicans often become double-dippy for very different reasons—to argue (quite plausibly) that hundreds of billions in "stimulus spending" has proven counterproductive so far, contributed to the debt, and will eventually lead to higher taxes.

Those who want to know what is going on must sift through all of this bipartisan gloom to distinguish between: 1) agenda-driven dire warnings and 2) the boring reality of a sluggish recovery being partially paralyzed by ominous threats of punitive taxes and onerous regulation."

NBA Gets an A+ For Diversity From An Institute That Gets An F for Diversity of Its Top Management

The chart above is based on data from the "The 2010 Racial and Gender Report Card: National Basketball Association," released today by the University of Central Florida's Institute for Diversity and Ethics in Sports.  The overall grade this year for the NBA was an A for "Race" (same as last year), with a grade of A+ for the sub-category "NBA Players." 

According to a news article titled "NBA gets an 'A' for diversity" from ESPN, "The NBA still leads the way in sports diversity."

Compared to the overall population, whites, Hispanics and Asians are significantly underrepresented in the NBA by margins that aren't even close, e.g. whites are 75% of the population but only 18% of the NBA players, and the same huge disparities exist for Hispanics and Asians.  For all three groups, their numbers in the NBA would have to increase between 4-5 times for their representation in the NBA to be proportional to the general population. On the other hand, blacks are overrepresented by more than a factor of six compared to their share of the general population.  

Q: Just wondering, if this outcome gets a score of A+ for diversity, what would a score of F would look like?? 

In case you're wondering who's in charge of the Institute of Diversity and Ethics at UCF, it's run by two white guys who are listed as the organization's top administrators (see photo below).  What grade do they give their own organization, especially for the category of "Top Management" (one of the categories they use for the NBA)?  Would that be an F for being 100% white male?

8 Reasons College Tuition Is Next Bubble to Burst

Reason #1: Tuition has been increasing at double triple the rate of inflation.

"On average, college tuition has increased at around 8 percent per year, which means the cost of college doubles every nine years. Because colleges know that students will simply borrow more money to cover tuition increases, colleges have been relying on steady tuition hikes to solve all of their money problems. If this continues a college degree will soon cost as much as a house."

Read more here.

MP: Actually, tuition has been been increasing annually (7.88%) at more than three times the rate of inflation (2.37%) since 1978, see chart above.  The article points out that "unlike the housing bubble, in which foreclosure and bankruptcy allowed people to have a fresh start, the college tuition bubble will haunt young people for life unless bankruptcy laws change" (since student loans are not dischargeable in bankruptcy). 

OIL: It's a Blessing, Not An Addiction and It's The Single Most Flexible Substance Ever Discovered

"Of course there are problems created by oil, as the Deepwater Horizon calamity so heartbreakingly demonstrates. But most things of great value come with downsides. There are 40,000 traffic fatalities in the United States each year, but no rational person suggests doing away with cars, trucks, and highways. Airplanes sometimes crash and boats sometimes sink, but air and sea travel are not derided as “addictions’’ we need to break. Deaths due to hospital infections, medication errors, or unnecessary surgery number in the scores of thousands annually, but who would recommend an end to medical care?

There is no denying the drawbacks associated with oil, but its advantages are equally undeniable. American wealth, progress, and autonomy — the most dynamic and productive economy in history — would be impossible without it. What we have isn’t an addiction, but a blessing."

~Jeff Jacoby, "Oil Fuels Better Lives"

NY Fed Model: No Chance of Double-Dip in 2011

On Monday, the New York Federal Reserve updated its "Probability of U.S. Recession Predicted by Treasury Spread" with treasury yield data through May 2010, and the Fed's recession probability forecast through May 2011 (see top chart above). The NY Fed's model uses the spread between the yields on 10-year Treasury notes (3.42% in May) and 3-month Treasury bills (0.16% in May) to calculate the probability of a U.S. recession up to twelve months ahead (see details here).

The Fed's model (data here) shows that the recession probability peaked during the October 2007 to April 2008 period at around 35-40%, and has been declining since then in almost every month. For May 2010, the recession probability is only 0.17% (about 1/6 of 1%) and by a year from now in May of next year the recession probability is even lower, at only 0.12%.

According to the NY Fed Treasury Spread model, the recession ended sometime in middle of 2009, and the chances of a double-dip recession through May of 2011 are essentially zero.

The Evolution of the Cell Phone: 1985 to Today

HT: Nick Schulz

Help Wanted: 400,000 Truck Drivers

NEW YORK ( -- "Can't find a job? Maybe it's time to take your search on the road. The U.S. trucking industry will need to hire about 200,000 drivers by the end of this year, and will need to add another 200,000 by the end of 2011, according to the state of logistics report from the Council of Supply Chain Management Professionals."

HT: Lyle Meier

Another Tax Lesson from Pro Boxing

In April I had a post about "How Kennedy Tax Cuts Changed Pro Boxing," which generated a lively discussion about taxes with more than 60 comments.  Now there's a new story about professional boxing, with some important lessons about taxes.  From the New York Post:

The first boxing event at the new Yankee Stadium last Saturday was a "major success" according to Yankees Chief Operating Officer Lonn Trost, but that doesn't mean boxing will become a regular feature of the Stadium.

Availability of Yankee Stadium is an issue, but not nearly as big an issue as taxes. According to Trost, the tax on a fighter's purse is significantly higher for non-residents of New York than it is in other states, which would make it difficult to bring a match like the proposed superfight between Floyd Mayweather, Jr., and Manny Pacquiao to Yankee Stadium.

"Cotto and Foreman could come here for the first fight because the boxers felt they wouldn't be overtaxed because they're residents," Trost said. "We'd love to do Mayweather-Pacquiao, but I believe both of them are non-residents and the tax could be as much as 13 percent on the purse, where the tax out in Vegas is zero. That's a big difference."

Here's some excellent commentary from Jonathan Tobin, "High Taxes Drive Away Industries … and Boxers":

"While liberal advocates for higher taxes routinely claim they are doing so to help ordinary New Yorkers, they ought to consider that in making it unattractive for fighters to perform here, they are actually robbing the people from the South Bronx and elsewhere in the city who work in the many jobs created every night Yankee Stadium is open. The failure to bring more such exhibitions to the city illustrates the simple truth that, once again, liberal economics has scored a technical knockout on the economic well-being of working-class New Yorkers."

MP: As I pointed out previously in the last post, there are a few basic tax lessons here: 1) If you tax something, you get less of it, and 2) if you cut tax rates, you might get more tax revenues.

HT: Carlo DiPietro

Tuesday, June 08, 2010

What Illinois Can Learn from Texas About Wal-Mart

After opening its first Chicago store on the city's west side in 2006, Wal-Mart has unsuccessfuly attempted to open a second store on Chicago's south side in one of two locations - Pullman and Chathman - which would bring groceries, clothing, retail merchandise, and jobs to a part of the city that is desperate for all of those.  What's standing in the way of economic development, life, hope and jobs for the south side neighborhoods of Chicago?  Organized labor and their political Democratic enablers. 

A recent study reportedly shows that the west side Chicago Wal-Mart created about 300 jobs, but contibuted to a job loss of about 300 from businesses on the west side that closed after Wal-Mart opened in 2006.  But the Chicago Sun-Times presents some pretty devastating criticism in an editoral titled "Anti-Wal-Mart study just doesn't add up":

"Too bad the researchers didn't count the jobs at the new businesses that opened after Wal-Mart's arrival on the West Side. There are roughly 22, according to the local alderman, Emma Mitts, including Menards, Food 4 Less, Aldi, two bank branches, CVS and Burlington Coat Factory. That information wasn't available, the researchers say.

Too bad they also didn't factor in other reasons, unrelated to Wal-Mart, nearby businesses closed. Nor did they compare West Side business closure rates with rates in other similar communities. Again, that information wasn't available. Without this key data, this research is only a starting point -- and nothing close to a definite statement about Wal-Mart's economic impact."

It's worth noting that those lost [approximately 300] jobs paid low wages, an average of $9.02 an hour in 2008, according to the study. That compares with the Chicago Wal-Mart's reported full-time average wage of $11.77."

MP: Even if there was no net gain in jobs from the Chicago Wal-Mart, the cost savings to area shoppers could have been significant from having access to Wal-Mart - an estimated $2,500 annual savings per household in 2006 according to this study.  Additionaly, the state of Illinois experienced significant job losses in general in the three years following the opening of the Chicago Wal-Mart in 2006 (see chart above).  In fact, the number of jobs in Illinois was the same in January of this year as in January of 100, so it's hard to blame Illinois's (and presumably Chicago's) stagnant economy on Wal-Mart.    

And it could certainly be correlation and not causality, but it's interesting to note that one of the states that has seen the most robust job growth over the last decade or more - Texas (see chart above) - has also been one of the states where Wal-Mart has expanded the most, suggesting that more Wal-Mart stores can be consistent with more, not fewer, jobs.  Especially in "right-to-work" states like Texas, where organized labor has less political clout to stop new Wal-Marts, like they do in Illinois.   

See this Dallas News article about Wal-Mart in Texas, where it employs 144,470 workers and had $35 billion of sales in 2009 - to put that amount in perspective, it's more than the Gross State Product of entire states like Vermont, Wyoming, North Dakota, Montana, Alaska, or South Dakota.

Intrade Election Odds > 90%

1. Carley Fiorina: 96%

2. Meg Whitman: 90.1%

3. Sharron Angle: 92.9%

Larry Summers Redux and "Fulfilling the Potential of Women in Science Through Social Engineering"

From John Tierney's column in yesterday's NY Times "Daring to Discuss Women in Science":

"[Former Harvard President Larry Summers] acknowledged that there were many talented female scientists and discussed ways to eliminate the social barriers they faced. Yet even if all these social factors were eliminated, he hypothesized, the science faculty composition at an elite school like Harvard might still be skewed by a biological factor: the greater variability observed among men in intelligence test scores and various traits. Men and women might, on average, have equal mathematical ability, but there could still be disproportionately more men with very low or very high scores.

These extremes often don’t matter much because relatively few people are involved, leaving the bulk of men and women clustered around the middle. But a tenured physicist at a leading university, Dr. Summers suggested, might well need skills and traits found in only one person in 10,000: the top 0.01 percent of the population, a tiny group that would presumably include more men because it’s at the extreme right tail of the distribution curve."

MP: What Summers actually said was: "It does appear that on many, many different human attributes- height, weight, propensity for criminality, overall IQ, mathematical ability, scientific ability - there is relatively clear evidence that whatever the difference in means - which can be debated - there is a difference in the standard deviation, and variability of a male and a female population."

Actually, there is persistent statistical evidence both that: a) boys outperform girls on the SAT math test (there is a difference in means), and b) there is significant "right tail disparity" on the SAT math test, i.e. boys are overrepresented for math scores on the high end (there is a difference in variability).  

The top graph above (data here) shows the persistent male-female SAT math test gap over time.  The 35-point gap in math test scores in 2009 (average score of 534 for boys and 499 for girls) is basically unchanged from the 36-point test score gaps in 1973 (525 vs. 489) and 1974 (524 vs. 488).  In other words, the male-female SAT math score gap has persisted for decades for a large sample size of more than 30 million American high school students who have taken the SAT since 1972. 

The bottom graph shows the "right tail disparity" for the 2009 math SAT test (data here).   For example, for perfect scores on the math SAT of 800, males (6,928) outnumbered females (3,124) by a ratio of 2.22 to 1. That is, 69% of test-takers who got perfect math scores were males vs. 31% of perfect scores by females. Or we could also say that there were 222 high school boys who got perfect SAT math scores for every 100 high school girls.

The graph further shows that boys outperformed girls at all 23 math test scores between 580-800 (10 point intervals, with male-female ratios above 1.0), and then for math test scores between 200 points and 570, girls outnumbered boys (male-female ratio below 1.0). Adjusting for the fact that 107,000 more girls (n=818,760) than boys (n=711,368) took the SAT in 2009 makes this evidence even stronger, since 0.974% of boys scored 800 on the SAT math test (6,928 out of 711,368) vs. 0.386% of girls (3,124 out of 818,760), for a ratio of 2.52 to 1 in favor of boys for perfect math test scores of 800, even greater than the 2:22 to 1 ratio for unadjusted scores.

Bottom Line: Based on math SAT scores, boys score significantly higher on average compared to girls by 30+ points, this gender gap in favor of boys is persistent over four decades, boys are significantly overrepresented for math test scores on the high end, and boys outnumber girls by a ratio of more than 2:1 for perfect 800 scores. 

Tierney also discusses new pending, federal legislation called “Fulfilling the potential of women in academic science and engineering,” which  if passed would empower the White House science adviser to oversee regular “workshops to enhance gender equity, and increase awareness of gender bias.”  Given the huge gender differences in the math SAT (both in mean and variance), isn't it possible that men are overrepresented in science and engineering because they have greater aptitude in those areas? If that's the case, no amount of federal legislation, short of mandated quotas, will result in the perfect gender parity outcomes that the gender activists seem determined to achieve.

Maybe the legislation should more accurately be called "Fulfilling the potential of women in academic science and through social engineering?

The Bullish Case for U.S. Economy, U.S. Equities

BlackRock Vice-Chairman Bob Doll in today's WSJ:

"There is no question that we face formidable, long-term structural problems that make U.S. stocks less attractive for many investors. But I believe that the spirit of innovation and entrepreneurship that has defined America in past crises will prevail again and propel our markets forward. As such, overweight positions in U.S. equities are more than warranted.

Though housing is weak and debt and deficit levels are rising, compared to the rest of the world the U.S. is in reasonably good shape. Our economic fundamentals are sound: Manufacturing levels are up and interest rates and inflation are low. The broader economy's recovery is also finally translating into meaningful employment improvements—recent employment reports show increases in average hourly earnings and hours worked—and I believe this trend will continue.

When the markets faltered in 2008 and revenue growth stalled, U.S. companies moved decisively to cut costs—unlike their European and Japanese counterparts. Now that recovery has taken hold, businesses are replenishing inventories and rehiring, corporations are expanding exports, and American consumers are responding better than most expected.
Potential risks—trade complications, escalating credit contagion, overly aggressive financial regulation, and tax increases—clearly remain. But for the moment, our nation seems poised to remain a City Upon a Hill."

The Left Flunks Economics 101

From today's WSJ: "Are You Smarter Than a Fifth Grader? Liberals and Democrats do badly on questions of basic economics."

The questions were:

1) Restrictions on housing development make housing less affordable (unenlightened answer: disagree).

2) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree).

3) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree).

4) Rent control leads to housing shortages (unenlightened answer: disagree).

5) A company with the largest market share is a monopoly (unenlightened answer: agree).

6) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree).

7) Free trade leads to unemployment (unenlightened answer: agree).

8) Minimum wage laws raise unemployment (unenlightened answer: disagree).

How did the six ideological groups do overall? From best to worst, average number of incorrect responses (out of 8):

Very conservative: 1.30 out of 8
Libertarian: 1.38
Conservative: 1.67
Moderate: 3.67
Liberal: 4.69
Progressive/very liberal: 5.26

HT: Matt B, The Plaid Pundit

Monday, June 07, 2010

Interesting Fact of the Day

"Among the 19 students who got a perfect score on the ACT science test in the past two decades, 18 were boys."

~John Tierney in today's NY Times

Q: Does that mean that Larry Summers can get his job back as president of Harvard University? After all, according to Tierney, Dr. Summers merely suggested that a tenured physicist or mathematicians at a top university "might well need skills and traits found in only one person in 10,000: the top 0.01% of the population, a tiny group that would presumably include more men because it’s at the extreme right tail of the distribution curve." 

In other words, if male professors greatly outnumber female professors in the math or physics department at Harvard or Yale, it might be because boys outnumber girls by 18:1 for perfect scores on the ACT science exam.  Stated differently, why should we expect perfect gender equity in the math or physics departments at Harvard or Yale, when boys get almost 95% of the perfect scores on the ACT science exam?   

Economic Freedom = 20 Years of Life Expectancy

Life expectancy is almost 20 years longer (79.12 year) in countries with the most economic freedom (Hong Kong, Singapore, New Zealand, Chile, Switzerland, U.S.) than the life expectancy (59.4 years) in those countries with the least economic freedom (Zimbabwe, Myanmar, Angola, Chad, Congo), according to the Economic Freedom of the World 2009 Report from Cato.

Harvard Study: Pork Crowds Out Private Activity

From a study by three Harvard Business School professors titled "Do Powerful Politicians Cause Corporate Downsizing?":

"We show that becoming a powerful Senate or House committee chair results in a significant increase in federal funds flowing to the ascending chairman’s state. Thus, a congressman’s ascension to a powerful committee chair creates a positive shock to his or her state’s share of federal funds that is virtually independent of the state’s economic conditions.

We focus specifically on the 232 instances over the last 42 years where the senator or representative of a particular state ascends to the chairmanship of a powerful congressional committee. During the year that follows the appointment, the state experiences an increase of 40-50 percent in their share of federal earmark spending, and a 9-10 percent increase in total state-level government transfers. The funding increase persists throughout the chair’s tenure and is gradually reversed upon his departure. Because these spending shocks are sufficiently numerous, are spread out across time and different locations, and are economically meaningful, they provide us with significant power to examine the impact of fiscal policy on the private sector."

MP: Wouldn't you think that those increases in federal earmark spending and state-level government transfers would have overwhelmingly positive effects on state economies? Not necessarily, which is why the answer to the question in the paper's title is YES

"We find that fiscal spending shocks appear to significantly dampen corporate sector investment activity. Specifically, we find statistically and economically significant evidence that firms respond to government spending shocks by: i) reducing investments in new capital, ii) reducing investments in R&D, and iii) paying out more to shareholders in the face of this reduced investment opportunity set. Further, we find that when the spending shocks reverse (through a relinquishing of chairmanship), most all of these behaviors reverse. Finally, we also find some evidence that firms scale back their employment, and experience a decline in sales growth.  Our findings demonstrate that new considerations may limit the stimulative capabilities of government spending."

Manheim Used Vehicle Index At Record High

From today's report from Manheim Consulting:

"Wholesale used vehicle prices rose again in May. The Manheim Used Vehicle Value Index for May was a record 121.0, which represented a 10.9% increase from a year ago (see chart above). May's strength was driven, in large part, by vehicles in the lower and middle price tiers, but prices for late-model vehicles also remained strong as they were helped by low levels of new vehicle inventory."

From a previous Manheim Consulting report:

"Some analysts have suggested that the rapid rise in wholesale used vehicle pricing is a precursor to an improvement in new vehicle sales and may even point to a recovery in the overall economy."

MP: The Manheim Used Vehicle Index has now risen for six straight months, has risen every month since January 2009 except for one (October 2009).  From close to an all-time low of 98 in December 2008, the index is now at the highest-ever level in the history of the gauge of wholesale used vehicle prices going back to 1995.  It's one more V-shaped indicator of an economic rebound.

The Higher Education Bubble: It's About to Burst

The Housing Bubble:
The Higher Education Bubble:

The top chart above shows the housing bubble in the U.S., using monthly median new home prices (Census data here) and the monthly Consumer Price Index (CPI, data here), back to 1978, where both series are adjusted to equal a value of 100 in January 1978.  The bottom chart illustrates a much, much bigger bubble than the real estate bubble - the "higher education bubble" - based on an annual comparison of the CPI, median new home prices and the CPI for "College Tuition and Fees" (data here).  Note that the housing bubble resulted from about a 4-time increase in home prices between 1978 and 2006, and college tuition has now increased by more than twice that amount since 1978 - it's gone up by more than a factor of ten times.  The college tuition bubble makes the housing price bubble seem pretty lame by comparison. 

According to Glenn Reynolds, writing in the Washington Examiner, "Higher education's bubble is about to burst":

"It's a story of an industry that may sound familiar.  The buyers think what they're buying will appreciate in value, making them rich in the future. The product grows more and more elaborate, and more and more expensive, but the expense is offset by cheap credit provided by sellers eager to encourage buyers to buy.

Buyers see that everyone else is taking on mounds of debt, and so are more comfortable when they do so themselves; besides, for a generation, the value of what they're buying has gone up steadily. What could go wrong? Everything continues smoothly until, at some point, it doesn't.

Yes, this sounds like the housing bubble, but I'm afraid it's also sounding a lot like a still-inflating higher education bubble. And despite (or because of) the fact that my day job involves higher education, I think it's better for us to face up to what's going on before the bubble bursts messily."

Read more here.

Sunday, June 06, 2010

"The Lottery" Film

Click arrow above to watch the trailer, and from yesterday's WSJ, an interview with the 27-year-old filmmaker, "Storming the School Barricades": A new documentary that could change the national debate about public education."

BP, The Tax Man and The LA Fishermen; BP Has Paid 18,000 Claims So Far, Promises to Continue

LA TIMES - "BP's request for tax records poses a problem for some residents of fishing communities in southeastern Louisiana — the nonconformists who haven't kept records or reported their cash income (like marina-owner Michael Turgeau pictured above who is usually paid in cash, "Man, I wish I'd done a better job of record-keeping."). The first step for a commercial fisherman or coastal business seeking compensation for losses suffered in the oil spill seems simple enough: Submit copies of a commercial fishing license, proof of residence and tax statements.

But the request for tax records poses a serious challenge to some residents of close-knit fishing communities on the swampy edges of southeastern Louisiana, which for generations have harbored self-reliant nonconformists who don't pay much heed to everyday rules and regulations. In other words, they often get paid in cash — and don't always report it.

BP officials said that more than 25,000 claims had been submitted and that more than 12,000 payments totaling about $36 million had been sent to people facing financial ruin."

Update from AP on claims paid by BP: An official for BP says the oil giant has paid 18,000 claims along the Gulf Coast totaling more than $48 million. Darryl Willis is the BP vice president overseeing the claims process. He said Sunday in Florida's Escambia County that the company has received 37,000 claims so far. He says the unpaid claims are still being processed and that none have been denied. He says "we'll pay until we're done paying."

Inside Look At Bernard Madoff's Life Behind Bars

"From the day Bernard Lawrence Madoff, prisoner No. 61727-054, arrived at the softer of Butner, North Carolina's two medium-security facilities in handcuffs and shackles, his over-the-collar hair shorn close, his rich man’s paunch diminished, he was a celebrity, even if his admirers were now murderers and sex offenders.

Yet even in this crowd, Madoff stands out. Every inmate remembers the day he arrived. “It was like the president was visiting,” a visitor to Butner that day told me. News helicopters buzzed overhead, and the administration locked down part of the prison, confining some inmates to their units, while an aging con man with high blood pressure shuffled through processing, where other inmates fitted him for a uniform and offered a brief orientation: “Man, chill out and go with the flow, ” was the advice of one former drug dealer.

Quickly, the flow came to Madoff. From the moment he alighted, he had “groupies,” according to several inmates."

("F*** my victims," Madoff is reported to have said to fellow prisoners.)

Read more the New York Magazine's profile of Bernard Madoff's new life behind bars. 

HT: Steve Bartin

Cuba Has Shortages of Just About Everything.... Except Condoms. Cubans Get Creative w/Condoms

Boats are illegal in Cuba (I wonder why?), so Cuban fisherman use condoms as floats. 
"On this island of shortages and scarcities, the latex condom has uses that stretch far beyond the bedroom. At baseball games, rock concerts and other entertainment events, Cubans blow them up and bat them around the crowd like beach balls. When parents can’t afford birthday party balloons or can’t find them, they unfurl a few “Vigor” brand prophylactics and start puffing. The latex is so strong and supple that kids can even draw faces on them.

The Cuban government sells the Chinesemade rubbers three-for-a-penny at pharmacies and snack bars, cheap enough for anyone to afford. The island has shortages of just about everything else though, thanks to five decades of US sanctions and a ruinous state-run economy. It should come as no surprise, then, that enterprising Cubans have found all sorts of recreational and industrial applications for their condoms that have nothing to do with birth control."

Including being used for fishing (see photo above), read more here.

Advances in Sportsmanship and Self-Esteem?

From Canada's NATIONAL POST:
In yet another nod to the protection of fledgling self-esteem, a Canadian children’s soccer league in Ottawa has introduced a rule that says any team that wins a game by more than five points will lose by default. The league has 3,000 children enrolled ranging in age from four to 18 years old.

One father, Bruce Cappon, called the rule ludicrous: “I couldn’t find anywhere in the world, even in a communist country, where that rule is enforced.  Everybody wants a close game, nobody wants blowouts, but we don’t want to go by those farcical rules that they come up with. Heaven forbid when these kids get into the real world. They won’t be prepared to deal with the competition out there.”
HT: J-Walk Blog