Monthly Archives: June 2011

The value of inheritances

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Megan McArdle talks through issues of inheritance in the United States:

I don’t see by what right people should be allowed to order living people how to dispose of their stuff after they’re beyond caring.  I think people should be allowed to make generous gifts while they’re still alive, without gift tax. (Though I think the recipients of those gifts should have to pay income tax on it; I don’t understand why we’d want to tax income people get by working, but not income people get by being born.  Being born is about the most tax-inelastic thing you can think of.)  But once people are dead, then I can make a pretty compelling case that in a modern economy where extended families are not a major economic unit, there’s little justice case for inheritance…

Inheritance not only hands people valuable income in return for something we don’t really want to further reward–being born lucky–but also, in doing so, it entrenches the least attractive feature of our economy: the fact that people who are born to affluent parents are much more likely to themselves be affluent than children born to the less well-heeled.  Lack of economic mobility is generally regarded as a bad thing that we should combat.
Yet so many of our institutions, from the geographic organization of our schools, to the financial distribution of our inheritances, reinforce it.  Some of those things are not going away (we should not, and will not, order affluent people to move into poor school districts, or shut down research universities for conferring unfair advantages on the mostly affluent students who have the ability to gain admission).  But what are the social benefits that inheritance conveys to offset its drawbacks?  I think they have to be pretty large to justify letting dead people order us to perpetuate the economic status quo.

So I can make a moral case for a 100% estate tax.

McArdle then goes on to talk through specific situations where inheritances might make sense and suggests in the end that she is wary of putting this into practice because it is unclear how it would turn out.

I think her earlier points are of more interest as Americans talk about meritocracy but inheritances seem to go against this ideal. From the beginning, Americans have had the populist idea that class doesn’t matter in the same way that it did in England. We argue that there should be mobility between classes (presumably this also means people can go down), not more rigid classes where money is passed down for decades. But we have a less flexible system than we imagine – some people can move up but the numbers are relatively low. This is exacerbated when we look at disparities in wealth between different groups: wealth is not then just about passing along hard-earned benefits to future generations but rather about reinforcing the large existing wealth inequalities that hamper American society.

I would be interested in seeing more data regarding what Americans mean when they say they want their children to have a better life: does this come from actions during their lifetime, like by promoting education or particular values like hard work, or from an inheritance that is passed along in a will?

Illinois redistricting also about capturing suburban voters

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Much of the press about redistricting in Illinois has highlighted how Democrats plan to increase their seats. But the Daily Herald offers an additional insight by suggesting that the redistricting is really about capturing suburban voters:

But even as political analysts poring over the new boundaries provide slightly different takes, one thing is certain: the suburbs, which saw booming growth over the last decade, were the prime meat in the proverbial fattened calf — filleted to produce congressional districts that would help assure a Democratic majority in the state’s delegation over the next 10 years…

“There’s been a shift in power,” Northern Illinois University professor Richard Greene said. “Because of the population shift, the Democratic core and the inner manufacturing suburbs are losing strength, as the outer-edge suburban communities are gaining substantially in strength.”

Democrats, political consultant Kitty Kurth said, want to continue to capitalize on their base — the largely Democratic voting bloc of Chicago, some of which has moved to the suburbs in recent years.

The new map appears to do just that, in some cases through odd-shaped districts that often start in solidly Democratic Chicago and extend into the suburbs through long, gnarled fingers. That essentially extends Democratic Chicago districts into traditionally Republican suburban ones, but not by so much as to put any Democratic majority at risk.

Traditionally, some of the suburban areas, particularly DuPage County, have been solidly Republican strongholds. While these figures are already changing somewhat, this redistricting might help push  these state offices further away from Republicans.

The article also goes on to note how the second Hispanic district in the state could be located in the southwest suburbs “centered around Aurora and Joliet.”

Such a move to control suburban votes would go along with commentary that suggests suburban voters are critical for national political outcomes.

Claim of social desirability bias in immigration polls

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Social desirability bias is the idea that people responding to surveys or other forms of data collection will say the socially correct answer rather than what they really think. A sociologist argues that this is the case for immigration polls:

A Gallup survey taken last year found 45 percent believe immigration should be decreased, compared to 17 percent saying it should be increased and 34 percent saying it should be kept at present levels. But should such figures be taken at face value? University of California, Berkeley, sociologist Alexander Janus argues not. Using a polling technique designed to uncover hidden bias, he concluded about 61 percent of Americans support a cutoff of immigration. Janus, who published his findings in the journal Social Science Quarterly, argues that “social desirability pressures” lead many on the left to lie about their true feelings on immigration — even when asked in an anonymous poll. In an interview, he discussed the survey he conducted in late 2005 and early 2006:

THE SURVEY: “The survey participants were first split into two similar groups. Individuals in one of the groups were presented with three concepts — ‘The federal government increasing assistance to the poor,’ ‘Professional athletes making millions of dollars per year,’ and ‘Large corporations polluting the environment’ — and asked how many of the three they opposed. Individuals in the second group were given the same three items as individuals in the first group, plus an immigration item: ‘Cutting off immigration to the United States.’ They were asked how many of the four they opposed. The difference in the average number of items named between the two groups can be attributed to opposition to the immigration item. The list experiment is superior to traditional questioning techniques in the sense that survey participants are never required to reveal to the interviewer their true attitudes or feelings.”…

I estimated that about 6 in 10 college graduates and more than 6 in 10 liberals hide their opposition to immigration when asked directly, using traditional survey measures.”

This sounds like an interesting technique because as he mentions, the respondents never have to say exactly which ideas they are opposed to.

In the long run for immigration policy, does it matter that much for liberals if people are secretly against immigration if they are willing to support it publicly? Of course, it could influence individual or small group interactions and how willing people are to participate in rallies and public events. But if people are still willing to vote in a socially desirable way, is this good enough?

I wonder if there are other numbers out there that are influenced by social desirability bias…

Barbie needs a “green dream home”

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The socialization process that children go through includes messages and ideas that they get from the toys that they play with. So if we want future adults to live in greener homes, then perhaps it will be Barbie who leads the way:

With an exciting new career in architecture, Barbie naturally needs stylish new digs which is why Mattel has teamed up with the American Institute of Architects (AIA) to launch the Architect Barbie Dream House Design Competition…

And here are Barbie’s guidelines, in her own words:

My Dream House should reflect the best sustainable design principles and also be a stylish space that I can live in comfortably. A sleek, smart home office is important for any doll…

I love to entertain so I need living and dining areas that are open and connected allowing for mingling and easy entertaining from one room to the other…

And the list of guidelines goes on.

This is an interesting list: it starts with “sustainable design principles” but then the rest of the list expands on the concept of “stylish space.” So Barbie might want a greener home but this home is still going to have to be pretty large to accommodate all of her stuff. The home may be designed a little better but it still sounds like it will be an ode to consumption since she is a “fashionista,” has at least three cars, and needs a big yard. Can Barbie live in a greener McMansion (not that architects could call it that)?

It would be interesting to see what type of architects would openly submit designs for this.

Can’t we build greener McMansions?

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This is a story that comes up from time to time: people who live in larger homes, sometimes called “McMansions,” should pay some sort of penalty as they consume more. Here is this very suggestion from an Australian academic:

People who want to build energy-guzzling McMansion-style homes should pay more taxes, an academic says.

And taxes should also be used to make owning multiple plasma TVs prohibitive, says Melbourne University construction expert Dr Robert Crawford.

Rapidly increasing suburban house sizes, more reliance on cars and a rise in demand for consumer goods had wiped out many of the benefits of building energy-efficient homes, he said yesterday…

“Indirectly through the price of materials and things like that, if you make it more expensive in some way to build larger houses then that might encourage people not to do it,” he told the Herald Sun.

Such a move would be similar to other incentives that governments offer regarding certain activities.

But I have wondered in recent years why there aren’t more builders who are trying to make these large homes greener. They could benefit from this as one of the big knocks on McMansions is that they are symbols of excessive consumption. So why not earn some points back by making them more environmentally-friendly? I assume there are things that could be done that might cost some money but could also fight back against this image. In the long run, it may just be “greenwashing” but building homes that most people consider “McMansions” because they contribute to environmental problems is a losing cause. Additionally, this might expand their markets to people who are looking for greener homes. What reasonable American homebuyer with money today wouldn’t want a larger AND greener home? And for critics of McMansions, what if they were quite green – is the larger issue the presumed unnecessarily large size or the home or suburban sprawl or something else?

Of course, we could also have a larger national conversation about greener standards for buildings. But we would know how this conversation might play out…

Sociology quiz turns 19 year old into local hero

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A 19 year old Canadian college student illustrates the dramatic effect a sociology quiz can have on one’s life:

Nanaimo’s Derrick Kalicum just had to stop when he saw an elderly lady trapped in her car…

The 70-year-old woman was in a Toyota Matrix that was struck by a reddish-maroon vehicle at the intersection of Wakesiah Avenue and Second Street around 12:42 p.m. The car that hit the Matrix backed away and then fled the scene…

He didn’t hesitate to stop and he credits [Vancouver Island University] for teaching him about the “bystander affect.”

“That’s something I was quizzed on the day before in my sociology class,” he said…

“I have to thank my sociology professor for explaining the bystander affect to me. I really think people should stop and help,” he said.

A little knowledge can go a long way. And they say a sociology degree isn’t worth much…

It is too bad that he wasn’t asked if he would have stopped to help this woman if he hadn’t learned about the bystander effect.

Quick Review: Spousonomics

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I picked up Spousonomics recently after reading some reviews earlier this year. Here are some thoughts about this book that has the intriguing subtitle “Using Economics to Master Love, Marriage and Dirty Dishes”:

1. The book uses economic principles to illustrate common problems in marriage. The bulk of each chapter is made up of case studies, usually three per chapter, where we read about how couples were using economic principles without knowing it.

2. I’m not sure what this book aspires to be: a primer in basic economic principles? A marriage book? Based on the front cover blurb from Elizabeth Gilbert (of Eat, Pray, Love fame) and the heavy emphasis on case studies, it reads more like a marriage advice book, just from the perspective of economics. On the other hand, the authors, both journalists, begin each chapter by explaining economic concepts and seem interested in sharing these ideas with a broader public. With some more information (more on this in a moment), this could be an interesting introductory text using a context that many adults are familiar with (not so much for high school and college students). If I had to choose, I would argue the book is more of a marriage book dressed up with economics. Even so, I imagine there is a decent-sized market for texts about marriage.

a. Here is the justification early in the book for why economics can help marriages:

We believe in economics because it doesn’t discriminate between the sexes, between who’s “right” and who’s “wrong,” who communicates better and who talks worse. It doesn’t talk down to you or attempt to psychoanalyze. It doesn’t care who won the last fight or whose turn it is to control the remote. Instead, it offers dispassionate, logical solutions to what can often seem like thorny, illogical, and highly emotional domestic disputes.

3. Several things grated on me throughout the text:

a. The authors say they talked to a number of economists but they quote relatively few economists. Perhaps I am reading this too much like an academic but why not utilize more information form the experts?

b. The authors cite economic studies but often only cite one or two to illustrate a point. There is a lot more complexity to some of these concepts that one or two study (which can often be complex themselves).

c. The authors talk about how they collected data by interviewing couples and conducting a survey. However, they continually refer the survey as the “Exhaustive, Ground Breaking, and Very Expensive Marriage Survey.” This may be interesting the first time but not every time they talk about the survey results. Additionally, most of the case studies they present in the book seem to be middle- or upper-class couples that deal with middle- and upper-class problems of balancing work and family ambition, kids who are in too many activities, etc.

d. The writing style can be quite informal – I know this is aimed at a mass audience but I wonder how much of this comes from the authors themselves or from editors who suggested that they needed to find “their voice.”

4. So has anyone written a similar mass-market book utilizing sociological concepts? This would be a classic example of an attempt to use an everyday phenomenon to teach about a particular discipline.

Overall, some of the case studies are interesting (there are a lot of examples in here and this would make it easier for people to identify with something) and the idea that economic principles can help us understand our relationships is intriguing. But some of the recurring smaller issues kept me from being impressed and in the long run, I wonder if this isn’t just another book dispensing marital tips.

Dunbar’s number: 150 friends is our limit

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It seems like it is pretty easy to collect hundreds of friends on Facebook. Between people we know from years of schools plus jobs plus other activities, the number can increase quickly. But having a large number of online “friends” goes against Dunbar’s number:

Most of Dunbar’s research has focused on why the GORE-TEX model was a success. That model is based on the idea that human beings can hold only about 150 meaningful relationships in their heads. Dunbar has researched the idea so deeply, the number 150 has been dubbed “Dunbar’s Number.”

Ironically, the term was coined on Facebook, where 150 friends may seem like precious few…

Dunbar has found 150 to be the sweet spot for hunter-gatherer societies all over the world. From the Bushmen of Southern Africa to Native American tribes, a typical community is about 150 people. Amish and Hutterite communities — even most military companies around the world — seem to follow the same rule.

The reason 150 is the optimal number for a community comes from our primate ancestors, Dunbar says. In smaller groups, primates could work together to solve problems and evade predators. Today, 150 seems to be the number at which our brains just max out on memory.

Dunbar goes on to suggest that larger organizations then have to find ways to create smaller groups where people can still maintain connections with others.

I’ve thought for a while that Facebook should move away from saying that all people you are connected to are “friends.” This indicates a closeness that I suspect doesn’t really exist in many of these online relationships. They are probably more like “acquaintances” or “people you have interacted with.” But, imagine what would happen if someone you thought was a friend marks you an acquaintance or vice versa. Additionally, by calling everyone a friend, you are suggesting that you are open to a broader set of relationships and Facebook is interested in bringing more people together. If we wanted to get more sociological, we might call these “strong” and “weak” ties but this seems fairly impersonal.

Figures from a few years ago suggested that people had an average of 120 Facebook friends. This still seems like a lot even as sociological research from 2006 (read the full study here) suggests that Americans have fewer confidants and less contact with existing confidants:

In 1985, the average American had three people in whom to confide matters that were important to them, says a study in today’s American Sociological Review. In 2004, that number dropped to two, and one in four had no close confidants at all…

The percentage of people who confide only in family increased from 57% to 80%, and the number who depend totally on a spouse is up from 5% to 9%, the study found. “If something happens to that spouse or partner, you may have lost your safety net,” Smith-Lovin says.

Here are two tentative hypotheses regarding this data:

1. Younger Facebook users are more likely to have higher numbers of friends. This seems to be driven by being students in high school and college where it is common to friend lots of people across a broad swath of classroom, social activity, and living situations.

2. Older Facebook users are more uncomfortable with the term “friends” to describe online relationships. Of course, as the younger generation ages and is used to such terms, the term will become more normal.

How a long commute harms you

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The Infrastructurist has a round-up of recent studies that show the negative effects of long commutes: higher rates of divorce plus “low happiness, high stress levels, and loneliness; they even makes us physically unhealthy.”

As they note, enough Americans seem willing to make the trade-off between a better house for a long commute. Is this because people simply don’t know or think about the social costs of long commutes? If not, what sort of organization would or could make this more known?

Foreclosure as legal remedy

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Digtriad.com reports about a Florida couple who foreclosed on a bank (yes, you read that right):

It started five months ago when Bank of America filed foreclosure papers on the home of a couple, who didn’t owe a dime on their home.

The couple said they paid cash for the house.

The case went to court and the homeowners were able to prove they didn’t owe Bank of America anything on the house. In fact, it was proven that the couple never even had a mortgage bill to pay.

Not surprisingly, homeowner Maurenn Nyergers ran up some costly legal bills defending herself against Bank of America’s egregious mistake, and the judge quite reasonably ordered BoA to pay Nyergers’ legal fees.  This is where things got interesting:

After more than 5 months of the judge’s ruling, the bank still hadn’t paid the legal fees, and the homeowner’s attorney did exactly what the bank tried to do to the homeowners. He seized the bank’s assets.

Additional coverage (and pictures) at the Daily Mail.

Lots of news and blog commentators are talking about this story with phrases like “sweet justice” and “very satisfying”, but I think several other lessons can be drawn from this story.

1.  Foreclosure is a very powerful legal remedy.  Cash can disappear, cars and boats can move, but land and buildings (generally) stay put.  Nothing gets an owner’s attention like the prospect of losing their real estate.  It’s amazing how fast BoA paid up once they realized a local branch was threatened.

2.  Foreclosure is open to everyone.  “Equal justice under law” is sadly an ideal not always present in the real world.  Nonetheless, this story illustrates how anyone owed money can use it to get paid.  “The system” does sometimes work!

3.  “An ounce of prevention is worth a pound of cure.”  Consider all of the opportunities BoA had for this to be a non-issue:

  • They could have double-checked their paperwork to see if a mortgage existed before filing a lawsuit.
  • They could have double-checked their paperwork after filing their lawsuit.
  • They could have settled quietly with the homeowner after they realized their error instead of forcing a court to rule against them.
  • They could have paid their bill quickly to avoid further embarrassing publicity.

Instead, of course, BoA has created a national news story that makes it look disorganized, bullying, and a deadbeat.