Follow-up on the persistence of poverty

After coming across my post on his book The Persistence of Poverty, Professor Karelis wrote me a note. I'm including it here for those who might not revisit that post.

Thanks for blogging my book on poverty. I couldn't figure out how to comment on your post so am trying this route. There has been empirical work supporting my theory. Here is one reference, from October 2010 journal Frontiers in Neuroscience. Experimental subjects were (as I predicted, without knowing about the lab work) risk loving when they started in pain and were confronted with the choice of remaining in their original state and taking a bet that would either alleviate their pain by a certain amount or make it worse by that amount. I have to say I consider that pretty obvious and unsurprising, and as I argued in my book it has only escaped economists because the accidents of intellectual history caused them to pose the question in a misleading way. 

Regards, Charles

I agree with Karelis that the idea that those in painful situations might become more risk-loving rather than risk-averse is not surprising. You don't need to have lived in poverty to understand the impulse. Anyone who has taken a few bad beats at the poker or blackjack table and then started pressing has launched themselves off of the optimal risk-reward curve in a fit of emotion.

At Marginal Revolution, Alex Tabarrok points to a study (abstract) that also attempts to explain why the poor engage in economically self-destructive behavior. The abstract:

Poor individuals often engage in behaviors, such as excessive borrowing, that reinforce the conditions of poverty. Some explanations for these behaviors focus on personality traits of the poor. Others emphasize environmental factors such as housing or financial access. We instead consider how certain behaviors stem simply from having less. We suggest that scarcity changes how people allocate attention: It leads them to engage more deeply in some problems while neglecting others. Across several experiments, we show that scarcity leads to attentional shifts that can help to explain behaviors such as overborrowing. We discuss how this mechanism might also explain other puzzles of poverty.

The study's approach to poverty reminds me of the theory that we all have a finite amount of discipline to expend each day, and after it's gone, we turn into self-indulgent pleasure-seekers. Anyone who has collapsed on their sofa after a brutally long day at work and popped a beer and watched an hour of Sportscenter or Here Comes Honey Boo Boo instead of going for a workout can attest to the explanatory power of this idea.

I rely on Tabarrok's summary since the study's findings are behind a paywall.

SMS argue that immediate problems draw people’s attention and as people use cognitive resources to solve these problems they have fewer resources left over to solve or even notice other problems. In essence, it’s easier for the rich than the poor to follow the Eisenhower rule–”Don’t let the urgent overcome the important”–because the poor face many more urgent tasks. My car needed a brake job the other day – despite this being a relatively large expense I was able to cover it without a second’s thought. Compared to a poorer person I benefited from my wealth twice, once by being able to cover the expense and again by not having to devote cognitive resources to solving the problem.

Both this study and Karelis' work reframe the behavior of the poor in a way that is still logical instead of pinning it on the personalities of those in poverty. That's important, and as Tabarrok notes, we must be especially vigilant to guard against fundamental attribution error in analyzing the behavior of those in poverty.

We are closer to creating our robot overlords

This demonstration video of a robot hand is amazing. It can do things like throw and catch objects and tie knots. It can even twirl a pen. Twirl a pen! I remember the pride of mastering that skill when I was just a nerd on the high school debate team. I was fine with computers beating us at chess, but not pen twirling. Is nothing sacred?

I'm half horrified that we're moved one step closer to creating the T1000, but also somewhat intrigued by the idea that the next gen Roomba will actually move about my apartment dusting and wiping. It's quite possible that before Arnold became a terrifying robot warrior, he was a useful, housekeeper.

Friends don't let friends watch TV with motion smoothing

Via Kottke, so this feels extra redundant, but it's an issue I feel strongly about so I'm reposting this link as a form of public service message. Stu Maschwitz walks you through why so many modern TVs make beautiful movies look like they were shot on a home camcorder (every TV manufacturer has its own name for the feature, but they're all doing motion smoothing).

It's a shame that Pioneer got out of the TV-making business. Their Kuro plasma TVs were widely agreed to be some of the greatest TVs ever made, with unbelievably dark blacks. My TV is a Pioneer Kuro Elite from many years back, and it still blows away the TVs I see in stores today.

They weren't cheap, but considering how many hours the average American spends in front of the TV set, the cost can be amortized across a massive base of enjoyment.

Optimal NBA team strategy

Is there a way to measure the optimal NBA roster construction and playing strategy? Nima Shaahinfar has proposed one of the more convincing arguments that there is.

Shaahinfar did regressions and looked at the standard deviation of specific statistical categories (e.g. assists or rebounds) among the players on a team. Then he looked at what type of standard deviation produced the highest offensive efficiencies (so it's rate-adjusted).

What Shaahinfar found was that the job of initiating the offense should be limited to a few players, with the role of each narrowly defined, but that three point shooting should be more evenly distributed among the team. The mid-range jumpshot should be a last resort behind getting a shot at the rim or shooting the three-pointer, a philosophy often dubbed "3 or key".

My research, interpreted here with regard to half-court offense, makes two primary arguments: (1) teams should take more threes and evenly distribute them among the players in each lineup (e.g. teams should spread the floor with multiple shooters) and (2) the role of initiating the offense should be narrowly defined, limited to few players.

Ultimately, the evidence is compelling that teams should follow one overarching principle for maximizing offensive efficiency: narrowly focus the role of initiating the offense where they can create the greatest advantage and threat to score (whether at the rim off penetration or through the post), and surround that facilitator/ball-handler with capable three-point shooters with the athleticism to rebound as well as attack and finish strong at the rim with the space created through ball movement.  

In a presentation given at the NCSSORS (that stands for the Northern California Symposium on Statistics and Operations Research in Sports. I'm not sure what's more wonderous: that something like that exists or the awfulness of the name and acronym), Shaahinfar went further to note that teams perform better when rebounding is a job everyone takes seriously, as opposed to shooting and passing.

Based on all this, Shaahinfar proposes an ideal roster.

The ideal lineup might include one, two if possible, of the best possible facilitators, who can defend, rebound, and hit the three well (or some combination of those skills if all three are not possible) and surround him/them with high-character, high-effort unselfish athletes whose strengths include defending, shooting the three reliably and consistently, and the athleticism and skill to rebound well and, with space created through ball movement, get the ball to the rim to finish or get to the line.  

Shaahinfar holds the dribble drive motion offense to be the closest to the ideal prescribed by his analysis.

Based on this, one can see how the San Antonio Spurs have been so successful for so long, and why players like James Harden and Manu Ginobili are so rare and precious, not to mention the obvious example of LeBron James. Look at the Heat roster this year and it seems close to an ideal, with three point shooters Ray Allen, Shane Battier, James Jones, Mike Miller, and and Rashard Lewis surrounding offense initiators like James, Wade, and Chalmers. The Heat lead the NBA in 3 point shooting % right now at 43.2%. The only thing standing between them and the NBA title this year is health.

SAD FOOTNOTE: Meanwhile, as applied to my hometown Chicago Bulls, one can see why this season will be a long and ugly one. Gone are three point shooters Kyle Korver and CJ Watson and staunch defenders Omer Asik and Ronnie Brewer. In their effort to go cheap, the Bulls now have a roster without a single player who is shooting 3-pointers above 37.5%. Last year's Bulls second team was the best in the NBA: Watson, Brewer, Korver, Gibson, Asik dominated the opposition. As good as it was last year, that's how bad it is this year. If Tom Thibodeau can shape a winner from this assemblage, he deserves all the honors headed his way. This Bulls roster will struggle hard to put the ball in the basket.

Recall the Bulls championship teams of old. It helped, of course, to have a Jordan and Pippen, but a key to many of those teams were the three point shooters who could make teams pay for doubling Jordan: John Paxson, Craig Hodges, B.J. Armstrong, Trent Tucker, Toni Kukoc, Jud Buechler, and Steve Kerr, to name the most prominent. The first three Bulls championship teams didn't attempt a ton of 3-point shots (424, 454, and 669 for those 91, 92, and 93 championship teams), but as Jordan and Pippen grew older and relied less on their pure athleticism, they began to alter their offensive attack to be more efficient, and that meant incorporating the 3-point shot in greater volume. The 96, 97, and 98 championship teams attempted 1,349, 1,403, and 962 3-pointers.