maketheworldworkbetter

Statistically informed ideas on how to make the world work better.

Idea: How to stop sleazy media companies from screwing us on our bills

One of my co-workers has been complaining a lot recently that Bell, the internet/TV provider, has been intentionally messing up her bill for 3 months in a row. Everyone I know has at least one story like this, of being really screwed by some phone or TV company. It’s not that she’s being targeted, it’s that companies like this know they can wear consumers down if they make enough “errors.” Eventually, we don’t have time to fight, and if we don’t pay up, our credit rating suffers. So we give in. The company doesn’t even have to try to screw us individually – they can just build an imperfect system that tends to make errors in their favor.

Well, I have a permanent solution to this problem. The only leverage these companies have over us is our credit rating. But many people who have these problems have perfectly fine credit – like me, or my co-worker. If we chose not to pay our bills it wouldn’t reflect a risk of defaulting on a mortgage, our car payments, or a credit card. It would just reflect the fact that the phone company is awful and gave usa faulty bill.

Credit scores are generated by companies that have developed algorithms to predict the chances that someone will default on a payment. There is competition among consumer credit rating agencies to have the best prediction. Banks and used car salesmen need to know this risk so they can offer appropriate credit. So anyone who comes up with a better prediction algorithm could corner the market for credit scores.

Enter my idea: Non-payment of a cell phone bill of $500 – even though your normal bill is $45 and you regularly pay every other bill – is NOT a sign of any risk that you will default on anything else. It is a sign that the phone company screwed you. So, a more accurate credit score would not penalize people for not paying such bills. A credit score that took this into account could outperform other credit scores and become the industry standard. And at that point, the evil media companies would have no leverage to force us to pay, except to go to court. Going to court is expensive and difficult, and they would usually be at risk of losing. So they would be forced to stop screwing us if they want to be paid!

Note that consumers who refused to pay all their bills would still have worse credit scores. It’s just specific non-payment of one bill that would contribute nothing (or next-to-nothing) to the score. Obviously, a good algorithm would have a sliding scale (a continuous measure) for credit score decrement based on how aberrant the bill was, how often you didn’t pay (relative to other people), and so forth. So the system couldn’t really be abused by consumers in the other direction either. The effect would just be to shift the balance of power in a dispute to midway between the consumer and the company. The company can refuse service, the consumer can refuse payment, but there’s no strong external force limiting the consumer.

Unfortunately, this idea takes an entrepreneur to implement, someone to develop the new credit score and start up a company to sell it (or integrate it into existing companies’ algorithms). While I’m confident I could improve on the existing algorithms, I have other statistical questions that occupy my time, and I’m no businessman. So someone else will have to do this…

A strong, immediate impact of the demographic transition on human evolution?

This blog post is different than most others. I had a Eureka moment in the shower, and I just need to write the idea down so I don’t forget it, and to share it with potential collaborators so we can maybe develop it into a paper if it hasn’t been done already by someone else (a quick search in Google Scholar suggests no).

Over the last 150 years, many human societies have undergone what is known as the demographic transition, first dramatically reducing mortality rates and subsequently reducing fertility rates. In simple terms, your great-great-grandma had 15 kids and 3 lived. You will have one or two, and they will live. What is the impact of this change on human evolution? I think it could be profound, and here is why:

Read the rest of this entry »

XKCD on small risks

As always, xkcd comes through at the right moment. In support of my last post, here is why we shouldn’t worry too much about taking a baby out of a car seat for a few seconds while driving, or other miniscule risks:

 

Increased Risk

The irrationality of modern child safety

Soren in his car seat

Soren in his car seat

Like most new parents, I devote a fair amount of thought to keeping my baby safe, but at the same time want to know when I can cut corners to reduce my stress level without increasing the risk too much. For example, the other day we were driving back to Quebec from Boston, trying to make it to the kennel to pick up the dog before it closed at 5:30. It was our first trip with Soren. Of course, traveling with a baby is more complicated than as a couple, and we got to a point where it was pretty close whether or not we could make it back. And then Soren pooped, and needed to feed…

Our dilemma, then, was whether Ju-hong would attempt to deal with one or both of these things while the car was moving (illegal of course) or whether we pulled over and risked all the inconvenience of not making it back in time to pick up the dog: an extra day’s charges, an extra hour of driving to get the dog the next day (with Soren in tow, of course), lost work time, feeling bad for the kennel owners, etc. In the end we stopped, and made it back a bit late but still got the dog.

Most parents would say stopping was the safe thing to do. Conventional wisdom says that letting a kid in a car without proper restraint is tantamount to murder. But most parents and conventional wisdom are wrong in this case, as were we. Read the rest of this entry »

Idea: How to solve Quebec’s budget problems: stop giving me money!

The logo for the Quebec government program that sends me money I don't need.

The logo for the Quebec government program that sends me money I don’t need.

Like so much of the rest of the developed world, Quebec has been going through a budget crisis recently. The supposedly left-wing government has threatened draconian cuts to health research, unemployment benefits, and a host of other popular programs. There never seems to be enough in the coffers.

Like much of Europe, Quebec has an extensive social welfare state. Free health care. $7/day subsidized public day care. A parental leave program that gives parents 1 year of paid leave (~60% of salary) per child. Incredible benefits to save for a child’s education. Heavily subsidized higher education. Generous unemployment benefits and an employment insurance program. Etc.

So why is a left-wing government cutting such things? That’s a subject for another post, but it’s clear that the cuts are politically unpopular, and that there is therefore some budget reality apparent to those in power that is not apparent to the average citizen. These are not the sort of folks likely to buy into all the austerity hype that was so popular elsewhere until recently.

The cuts proposed are not just unpopular, they are for the most part very bad ideas. For example, the government originally proposed cutting $10 million from medical research, or 30% of a $33 million budget. But research is a long-term investment – cutting so drastically would have stopped many projects in progress and made Quebec a much less attractive place for foreign researchers (like me) to come to. It’s like trying to save fuel by cutting the gas to an airplane engine in mid-flight… (The government eventually pulled back, under pressure.)

More importantly, what can the government do to solve the budget problem? The answer here is surprisingly simple: stop giving me money! Amidst all these budget crises in the news, my wife and I recently received a series of checks for about $800 from the Quebec government as child assistance payments, because we have a new son. The leaflet explained that everyone with a child gets such a payment, and that they are between $651 (for richer people) and $2319 (for poorer people) per year. And it’s tax-free.

I think child assistance payments are a great idea. They can (maybe) encourage people to have more children, which is good in developed countries with low birth rates. They also help defray the costs of raising a child and show a societal solidarity with families. I just don’t think child assistance payments for my family are a good investment of the government’s money.

My wife and I are both professionals with comfortable salaries. Our decision to have a child or not (or to have more children or not) is not affected in the smallest way by receiving $800 from the government. Maybe we’ll use it to get an even fancier stroller. Is this really what Quebec taxpayers should be paying for?

Of course, I’m not just talking about my family. I’m talking about all the families like mine. Anyone with a family income over $80,000 has absolutely zero need of government assistance to raise their kids, and the government gets very little benefit from payments to these families.  As I’ve argued elsewhere, $1 is worth much more to a poor person than to a rich person; following this principle, the $800 we’ve received could do a lot more good helping a poor family, or reinvested elsewhere in the budget.

More generally, my wife and I make too much money and are taxed too little. The Quebec tax brackets are 16% up to ~$40,000, then 20% up to about $80,000, then 24% after that. This is on top of federal taxes of 15-29% depending on income. This all seems high compared to the US, especially with 13.5% sales tax, and it is. But the social benefits here are incredible, and worth it. I don’t have to pay for health insurance, and I don’t have to worry about not having health care, to name just the most prominent.

Our current salaries – modest compared to doctors, lawyers, business people, and many other professsionals – nonetheless give us an excellent quality of life. All we could want in a home. Plenty to save for retirement or a rainy day. Plenty to eat well. Plenty to travel to see family abroad, or to vacation overseas. Whatever stresses we may have in life, money is not one of them. Of course we could always find a way to use more, but our quality of life would be essentially untouched if we gave $10,000 more per year to the government in taxes. Instead, the government is sending us checks.

So, my proposal to fix Quebec’s budgets: stop all child assistance payments to the richest 30% of families, and similarly cut back drastically on other benefits for the rich and upper middle class. Less retirement benefits, less pay during parental leave, less unemployment insurance benefits. All of these things could be capped at the amount that would be received by a family with an $80,000 income, for example. And then raise our taxes.

I don’t argue this because I feel we have to always soak the rich. I argue this because this extra money could be used so much better to strengthen great government programs. It’s not just a question of giving money to the poor (though I’d be all for increasing the child assistance payments to the poorest families); it’s a question of smart investment in society. Medical research is the example I know best, of course. Funding medical research attracts educated, foreign professionals like myself. We then set up shop here, and we hire people to work in our labs using money we obtain from research grants. At any given moment, I am supporting about 5-8 students or employees in my lab, and I’m young and just getting started. These people will then go out and spend their salaries, and there is a multiplier effect. And we generate the results of the research, which is (we hope) of great use to society. Some discoveries by researchers like me become patented and create business opportunities, creating more jobs.

So, Quebec can tax me more and hire more people like me, or it can let me keep my money and put it into a savings account, or (if I were a completely different person) buy an Audi, a pool, and a vacation home in Miami. Most of the things a rich person could do with extra money have relatively modest benefits for the Quebec economy; not so for money invested in society, or given to those with modest incomes.

No, I’m not about to donate my extra salary to the government. But it seems silly to talk of a budget crisis when the simple solution is to cut government support to the better off, and to tax them more heavily. This doesn’t have to be exorbitant – there is probably some truth to the idea that higher taxes can slow growth – but a moderate hike could go a long way.

Idea: Limit government surveillance by granting warrants for algorithms, not people

NSA

All the controversy surrounding the surveillance of phone logs and internet use by the US National Security Agency (NSA) shows that it is very difficult to simultaneously make full use of technology to catch potential terrorist threats and to protect the civil liberties of individual citizens. Most of the debate has been polarized: The US government is or is not justified in doing what it’s done. But there is an innovative compromise position no one is discussing, one that (mostly) gives the best of both worlds.

Read the rest of this entry »

The costs of too much choice: How the science of evolutionary development justifies Obamacare

One of the more difficult and technical fields one could choose to study is Evo-Devo, or the evolution of development. Briefly, it is the field that studies how genetic programs determine the developmental process, how these programs evolve, and how the types of programs available constrain the directions evolution can take. For example, if humans were to evolve wings (an essential impossibility for many reasons), Evo-Devo lets us make the clear inference that we would not evolve them as sprouting from our shoulders like angels, but rather as modifications of our arms. Why? Because in all tetrapods (i.e., eptiles, amphibians, birds, and mammals) there is a developmental program to produce four limbs. Limbs can be lost (snakes, whales) and modified for flight (bats, birds), but they cannot be added.

One of the key insights to emerge from Evo-Devo is that developmental programs are highly organized. They have evolved ways to facilitate future evolution, called evolvability. They achieve this using mechanisms known as gene regulatory networks, compartmentalization, and canalization. While the details of these mechanisms are beyond the scope of this post, they have in common that they are ways to facilitate long-term evolution at the cost of flexibility. That is, they standardize the developmental process to give consistent results, but limit the forms that can be arrived at. Again, tetrapod limbs are a good example: if tetrapod limbs were not the result of a fairly standardized genetic module, we would be able to evolve them anywhere any time – the nose could become a hand, we could evolve rows of wings up and down our backs, etc. However, the  result would be chaos. It would be too easy for a minor mutation to mess up development, too easy for the final form to depend too heavily on what gene combinations one has (image if parents regularly “accidentally” gave birth to children with 6 or 10 limbs, just because of  how their genes got combined…), and too hard to control the evolution of limbs as the environment changed and a specific sort of form became necessary. In other words, we gave up flexibility for stability and predictability.

How does all this relate to Obamacare?  Read the rest of this entry »

Phil Garrity on the human costs of perfect analysis

Partners-In-Health logo

The Partners-In-Health logo

I often write here about some of the hard-nosed reasons to be wary of trying to measure things that are not easily measurable – risks of bias, misaligned incentives, and missing important information that is harder to quantify. But, as a follow-up to my last piece, I came across an excellent essay by Phil Garrity, who works as a Monitoring-Evaluation-Quality (MEQ) program assistant at Partners in Health. His job is to try to measure hard-to-measure things, and he makes an excellent case for a soft-nosed risk of trying to measure everything: that we lose a bit of our humanity. This is particularly poignant if you know that he’s a young guy who’s just returning to work after a fight with bone cancer. He has given me permission to post the essay, which is below:

Read the rest of this entry »

Optimized charitable giving, evidence-based medicine, and the risk of thinking we can measure everything

GiveWell logo, taken from there website.

The GiveWell logo, taken from their website.

I read an interesting blog post this morning on Wonkblog about how some people are getting jobs on Wall Street in order to save the world: the idea is to make as much money as quickly as possible, live on next to nothing, and then use the saved money to save the world more efficiently than one could by joining the Peace Corps or becoming a doctor.

The post discussed a website/organization called GiveWell that takes a very hard-nosed, analytical approach to how we should most efficiently use our charitable dollars to do good in the world. The ballet or the symphony is nice, but by buying bed nets to prevent malaria you could be saving children’s lives for very little money, so guess which GiveWell recommends you to donate to? They choose a small number of top charities among a large number they review, and they are very careful not to make claims that the non-top charities are not useful, only that there is very good evidence that the top charities are useful. I am truly impressed with the thoughtfulness of the approach and the quality of the research they seem to have done.

But – and there’s always a but – it struck me that there is a limit to this approach to charitable giving, and it is strikingly similar to a limitation of evidence-based medicine that I’ve been bumping into recently. Read the rest of this entry »

Plummeting marriage rates in Quebec

In my previous post I mentioned that marriage rates are very low here in Quebec. I just came across this surprising statistic: In a recent study of 354 women giving birth here at the hospital in Sherbrooke, only 28 (8%) were married! (The 95% confidence interval is 5% to 11%, so random sampling does not explain the low rate. It’s less clear how well it could be generalized to Quebec as a whole – the sample is likely not perfectly representative, though it’s hard to know if marriage rates are higher or lower than would be expected generally.)

Statistics for current marriage rates are tricky: do we include people in their 60s who married when cultural norms were different? Do we look only at new marriages, and risk failing to capture people who are just delaying marriage but will eventually marry?

In this sense, the 8% statistic is particularly telling because it shows just how few people here consider marriage a prerequisite for a family. In the US, about 59% of births occur to married parents, or 7.5 times more than here in Quebec. The dramatic shift away from marriage here becomes even more clear considering that there are fewer single (i.e. unpartnered) mothers in Quebec than in the US (I’m making an educated guess here due to more poverty in the US). The vast majority of people looking to start a family here see marriage as irrelevant.

Ironically, of all the places I’ve lived, Quebec has the strongest family values. All of society is structured to give parents lots of time with their kids and to help them raise kids. This can be formal and legal: For example, public day care costs $7 per day, everyone gets lots of vacation time, and education savings plans are fantastic. More importantly, it’s also cultural. I’ve seen many instances of employers encouraging employees to take time off to be with their families under circumstances where that would be rare in other countries, and there are certain times of the week where no one participates in organized activities (e.g. sports) because everyone is with their families. My challenge to conservatives in America is thus to explain how Quebec can have such strong family values if marriage is essential for family values…

Follow

Get every new post delivered to your Inbox.

Join 238 other followers