Hypothetical Bias

More busy work for engineering educators (and a Hypo-Bias link in the WSJ online)

Another good column from the WSJ's Numbers Guy (10/26) re-examines the numbers tossed about by those arguing the lagging U.S. competitiveness position with respect to engineering graduates relative to China and India:

In a report issued earlier this month, the National Academies called for the U.S. government and universities to strengthen scientific competitiveness, in part by creating tens of thousands of scholarships for scientists and engineers.

Among the pieces of supporting evidence marshaled by the Academies to make their case that U.S. technical education is falling behind: "Last year more than 600,000 engineers graduated from institutions of higher education in China. In India, the figure was 350,000. In America, it was about 70,000." That statistic was cited at a press conference about the report and appeared in a New York Times article, and subsequently in the Chicago Tribune and several smaller newspapers.

If those numbers look familiar, that may be because they're the same as numbers reported in Fortune magazine in July that I wrote in an August column appear to be inflated.

There is no incentive to correct these numbers, especially when you are using them to lobby the feds for goodies:

... the (Nat'l Acadamies) committee invited the public to respond on its Web site, and that "no one (including the major engineering discipline societies) has contacted us relative to the issues you raise either before or after the report was released."

Sarc: If anyone has an incentive to correct the inflated numbers, it be the major engineering discipline societies. Especially since subsidies for engineering education will only create more busy work for engineering educators.

And then this:

Many numbers in the immediate aftermath of a disaster prove to be ill-founded. For instance, several publications, including The Wall Street Journal and New York Times, reported estimates provided by the Red Cross and the Federal Emergency Management Agency that about 600,000 evacuees were being housed in hotel rooms, at a daily cost of $11 million per day. But last week, the New York Times reported that the Red Cross and FEMA were off by a factor of three: The correct numbers were 200,000 evacuees and $4 million a day. One possible reason for the error: officials were double-counting hotel occupants. (Thanks to Numbers Guy reader John Whitehead for bringing this to my attention.)

selection bias 101

The New York Times reports that a vice president of wal-mart has come up with an effective way to hold down health care costs:  hire young, healthy workers.

this should help their image problems.  things could only get worse if JibJab made a video of Big Box Mart.

continuing our hypo bias theme...

the latest gallup poll says that if a (hypothetical) presidential election were held today, president bush would lose to a generic democrat candidate by sixteen points (55 v 39).  (for context, fritz lost by roughly 19 points. and he promised to raise taxes.)

biased against hypo

My stepdad tells a story about how his grandfather would work on electric fixtures in the house.  He would put on leather-soled boots, climb on a wooden ladder, put one hand in his back pocket, and work on the fixture while it was hot.  Occasionally, the wires would cross and there would be a shower of sparks.  But, with leather boots, a wooden ladder, and the other hand in the back pocket (ensuring there was no path through his body), he was relatively safe (or so he claimed) as long as he didn’t do anything stupid.  This fits under the “Fine in theory but wouldn’t want to count on in practice” category.

Which, incidentally, is how I feel about contingent valuation, in general (John, as a believer in the market system, thinks debating this issue in public forum allows us to find the Truth).  The Raleigh News and Observer reports in “N.C. set to become Yankee dump” (October 23, 2005) that multiple refuse disposal companies are poised to open landfills that will receive waste from other states (notably, those of the North, and thus the pejorative “Yankee” – which touched off a firestorm (and here) in response, but I digress) .

It’s a great economic story --- interstate trade, comparative advantage, and yes, externalities --- that could be used in lots of different pedagogical contexts.  Here we have five communities likely to receive (or “be subjected to”, depending on your perspective) a landfill.  I wonder what kinds of valuations one would obtain from “How much would you be willing to pay to not have a landfill located in your county?”   And there is certainly some economic development benefit – would this be valued by the respondents?  It seems to me, certainly a hypo-neophyte, that this non-market valuation approach would have difficulty capturing the positive effects.

The Flemish Beerdrinker

Finally! Hypothetical Bias has been added to Ivan's Weblog ("the Flemish Beerdrinker"). Here is a sample post:

21/10/2005
Intelligent quote of the day

From Simon World:

Thought for the week: If the intelligent design crowd are right, why are we so badly designed? They could have at least included a cup-holder.

But as David comments, they did: it is called a hand.

One word comment: cromulent.