The incident of the dog in the night-time

The Department of Justice’s report on the Ferguson Police Department is full of eye-catching numbers that reveal a culture plagued by significant racism. Statistically significant. For instance, nearly ninety per cent of the people who prompted a “use of force” by the F.P.D. were black. Even among such skewed percentages, there are some standouts. Among cases in which a suspect was bitten by an attack dog and the suspect’s race was recorded, what percentage were black?
 
A hundred per cent.
 
There is little nuance in the incidents described in the report; the police simply sicced their dogs on unarmed black males. According to the F.P.D’s own guidelines, handlers should not release the hounds “if a lower level of force could reasonably be expected to control the suspect or allow for the apprehension.” But the report reveals that the F.P.D. is quick to set loose its trained attack dogs—often on black children.
 

The damning DOJ report on Ferguson is a great example of data as an objective racism detector. This might be an example of dogs revealing the racism of their owners.

A 2011 study published in the journal Animal Cognition found that even expertly trained dogs and the most professional handlers cannot evade what is called the Clever Hans effect. In tests, dogs trained to detect explosives and drugs were sent, with their handlers, into a series of rooms to find non-existent contraband. In one room, there was a decoy that had been scented with sausage; in another, there was an unscented decoy accompanied by a sign telling the handler, falsely, that it smelled of contraband; a control room had no decoys. The investigators found, overall, that “human more than dog influences affected alert locations”: the meat decoy attracted more false alarms than anything in the control room, but the decoy with the sign prompted nearly twice as many false alerts as the one with the tempting scent. In other words, the dogs found their handlers’ unconscious cues significantly more compelling than the sausage. Trained animals, it turns out, are arguably better at reading our cues than we are at suppressing them.
 

Remember, there are no racist dogs, only racist owners.

California's water shortage

The recent report that California has just one year's worth of water left has made the rounds. Alex Tabarrok has a good primer or overview on the situation.

California has plenty of water…just not enough to satisfy every possible use of water that people can imagine when the price is close to zero. As David Zetland points out in an excellent interview with Russ Roberts, people in San Diego county use around 150 gallons of water a day. Meanwhile in Sydney Australia, with a roughly comparable climate and standard of living, people use about half that amount. Trust me, no one in Sydney is going thirsty.
 
So how much are people in San Diego paying for their daily use of 150 gallons of water? About 78 cents. As Matt Kahn puts it:
 
Where in the Constitution does it say that the people of California have the right to pay .5 cents per gallon of water?
 
Water is such a small share of most people’s budgets that it could double in price and the effect on income would still be low. Moreover, we don’t even have to increase the price of water for residential or industrial uses. As The Economist points out:
 
Agriculture accounts for 80% of water consumption in California, for example, but only 2% of economic activity.
 
What that means is that if agriculture used 12.5% less water we could increase the amount available for every residential and industrial use by 50%–grow those lawns, fill those swimming pools, manufacture those chips!–and the cost would be minimal even if we simply shut down 12.5% of all farms.
 

Water should cost more, and a few farms should shut down. Sounds sensible.

Wage inequality

A novelist, academic and CEO might have very similar intellect and skill levels, but their income could differ by factors of thousands - and, as Will points out, academics' working conditions are deteriorating. Why the difference?

The conventional neoclassical answer is that wages equal marginal product, and that CEOs have a higher marginal product than others. This is a just-so story which glosses over a lot.

For one thing, what matters is that one's product be monetizable and appropriable. The great writer or musician creates an enormous amount of consumer surplus, but she cannot capture this for herself. Quite the opposite; as Gillian Welch sang*, she is under pressure to give away her work. Similarly, if you believe human capital theory, academics - at least the better ones - create billions of pounds of value. But they don't see much of it. By contrast, the CEO's output is more monetizable.

On marginal product and incomes. Five reasons are offered for why the CEO makes so much more, it's worth a read.

I link to this post because a lot of folks in tech have the same misconception about the money-making potential of their app or business as people have about wages, that they simply equal marginal productivity. If only life were so simple.

The paradox of choice

From an AMA with Barry Schwartz, author of The Paradox of Choice and Practical Wisdom: The Right Way to Do the Right Thing:

Those are some really interesting talks. I'm curious though - do you believe that the most successful and affluent people in our society tend to be not much happier (or even less happy?) than poorer people? It sounds like you believe that an increase in material wealth can easily lead to a confusing overabundance of choices. I'd think, though, in a capitalist society the richest citizens eventually reach a point where their wealth opens pretty much any door for them, and the abundance of available choices becomes liberating and gratifying to the ego (basically if you desire it, you can have it). I can't imagine, say, Donald Trump or Jay-Z getting upset over having too many choices. Admittedly this level of wealth and influence is unattainable for most, but I think the fantasy of one day getting there is something that drives a lot of people... 

The data say that increased material wealth has only a marginal positive effect on happiness, at least above subsistence. Below subsistence, material improvements make a huge difference. The thing about the megarich, I think, is that they have a bevy of assistants to make many choices for them, or to reduce the options to a few. Plus, if they make a mistake, it's no big deal. Just buy the Ferrari and let the Maserati sit idle in your garage. I think Donald Trump and Jay-Z are bad models to build a theory on.

Wise words to live by, not just when it comes to modeling choice, but most anything: Donald Trump and Jay-Z are bad models to build a theory on.