Debate the data: are millionaires leaving New Jersey in large numbers?

A new report suggests some millionaires have left New Jersey:

New Jersey lost roughly 10,000 millionaire households, but those affluent families who remain still account for 7 percent of the whole state, the researchers said…

A high tax rate for top earners may have led to some migration out of the state, according to David Thompson, the lead researcher.

By losing those 10,000 millionaire households, the Garden State returns to third, where it was ranked from 2010 through 2012. Since the last report, Connecticut lost only 1,000 millionaire households, as it vaulted to the second spot, the group said.

And alternative interpretations:

“If millionaires were truly trying to flee NJ’s top income tax rate, we probably would have lost a lot more when the rates were higher,” Whiten said. “But during the 2000s NJ almost doubled the number of tax filers above $500K at a time when the tax rate was increased on them, twice.”Wealth has been reported leaving the Garden State before, however. In 2010, a Boston College team found that in a five-year period some $70 billion in total wealth left for other parts of the U.S.

Last year, a report by the Morristown-based Regent Atlantic wealth management firm released a report entitled “Exodus on the Parkway” that claimed so-called “tax migration” began in 2004, with the state’s passage of the “millionaire’s tax.” The report found that a couple with an income of $650,000 who moved to Pennsylvania would save some $21,000 per year in taxes, adding up to $1.65 million over 25 years, if invested. Most families with incomes of $500,000 per year or more were departing New Jersey for either the Keystone State or Florida, the Regent Atlantic authors added.

“The phenomena is there, that people are leaving – but people in New Jersey have high incomes,” said Joseph Seneca, professor of economics at the Edward Bloustein School of Planning and Public Policy at Rutgers University.

My interpretation: no one really knows whether 10,000 millionaire households leaving is a big number or not. If the true figure was 5,000, might those who oppose higher taxes still argue that taxes are pushing a large number to leave? And if the true number was 15,000, would this be enough evidence that taxes really are making a difference? Because this appears to be an ideologically laden debate, each side can look at the 10,000 figure and make a reasonable interpretation.

Here are two ways around the issue that both make use of comparisons. The first way would be to compare the New Jersey leavings over the years. Is the 10,000 figure more or less than years past? The second would involve comparing the leaving rate across states. This new report looks at millionaires per capita across states but why not compare the leaving rate per capita across states? Then, people in New Jersey could decide whether they are concerned with having similar or different rates compared to states with other policies.

Call for more comparative study of poor urban neighborhoods using new techniques

Urban sociologist Mario Small recently argued sociologists and others need to adopt some new approaches to studying poor urban neighborhoods:

Small, who is also dean of UChicago’s Division of the Social Sciences, studies urban neighborhoods and has studied the diversity of experiences for people living in poor neighborhoods in cities across the country.

Studying only a few neighborhoods extensively fails to capture important differences, he said in a talk, “Poverty and Organizational Density,” at a session Feb. 15 at the annual meeting of the American Association for the Advancement of Science in Chicago…

“The experience of poverty varies from city to city, influenced by neighborhood factors such as commercial activity, access to transportation and social services, and other facets of organizational density,” Small said.

He explained that new sources of information, ranging from open city data to detailed, high-resolution imagery from commercial mapping services, provide new opportunities to compare the experience of the poor among multiple cities, in turn pointing cities and service providers toward optimal decision-making about policies, investment, or other interventions.

One of these changes is driven by changes in technology, the ability to collect big data. This can help sociologists and others go beyond surveys and neighborhood observations. Robert Sampson does some of this in Great American City with the ability to map the social networks and neighborhood moves of residents from poorer neighborhoods. Big data will be enable us to go even further.

The second suggestion, however, is something that sociologists could have been doing for decades. Poor neighborhoods in certain cities tend to get the lion’s share of attention, places like Chicago, New York City, Boston, and Philadelphia. In contrast, poor neighborhoods in places like Dallas, Miami, Seattle, Denver, and Las Vegas get a lot less attention. Perhaps I should return to a presentation I made years ago at the Society for the Study of Social Problems about this very topic where I suggested some key factors that led to this lack of comparative study…

Failed interactive graphic comparing American houses to homes around the world

I was hoping for more when I saw this interactive graphic about homes around the world. Alas, this offers more style than substance. When you click on a country, you see a picture of one house, the average family income, the average household size, and an “odd” fact about the country. Indeed, I suspect this is more of a marketing ploy by the company sponsoring the graphic than anything else…

Here is what I would want to see if I could have my way:

1. Pictures of multiple “average” houses.

2. The average square footage of homes. Compared to other statistics available about countries around the world, it can be quite difficult to find good information on the average square footage of existing or new homes.

3. The average amenities of homes. Even if houses look different or are different sizes, this might be more interesting to a lot of people.

4. The average cost of homes or some measure of how much people in different countries pay for housing.

These four pieces of information would provide a lot better comparison to American homes.

It’s not just bad that murders are up in Chicago; it is also that murders are still falling in other major cities

While murders in Chicago are up in 2012, murders continue to fall in other big cities:

Jack Levin, a sociology and criminology professor at Boston’s Northeastern University, says it’s troubling that Chicago’s murder count is rising while it falls in other major cities. In 2010, Los Angeles had 297 murders, the lowest since 1967. New York homicides have been declining since 1990, when a record 2,245 fell in the nation’s largest city.

The rest of the article then discusses what might be done in Chicago.

However, why not put this in a more comparative perspective? In other words, just how unique is Chicago compared to other places? As an urban sociologist, this is an interesting if more broad question: are the major US cities more similar or more different? Putting it differently, what is so unique about Chicago that leads to the occurrence of more murders? Chicagoans themselves, and probably also residents of other major cities, may think their city is ultimately unique and not replicable elsewhere. Yes, major cities differ on a variety of factors but they also share some common characteristics such as social complexity, pockets of wealth and poverty, the strong presence of gangs, large (and occasionally problematic) police forces, and politicians who want to reduce the crime rate to make the city safer, protect kids, burnish the city’s image, and help promote economic growth. Is there anything Chicago could learn from elsewhere in order to reduce the murder rate?


It doesn’t matter which party is in charge when an economic crisis happens; they will be punished

As part of a piece looking at whether President Obama should have ever been compared to FDR, Megan McArdle suggests one of the cultural narratives of the Democratic Party doesn’t hold up: the Great Depression wasn’t a “Republican problem” because when looking at other countries, whichever party was in power at the start of the Depression was punished at the polls:

Yet even recognizing that FDR got tremendously lucky in his choice of election years does not cause McElvaine to question the Ur-Myth; instead, he segues into a complaint that Obama needs to be feistier, like FDR was.

Smart progressive Ezra Klein, however, offers what I think is the correct take:

The pat story behind FDR’s victory and the ensuing decades of mostly Democratic dominance is that the president got the policy right and the politics followed. Whatever you believe about FDR’s policies, a more international perspective will disabuse you of the notion that the golden age for the Democratic Party was an ideological triumph rather than an accident of history. As Larry Bartels, a political scientist at Vanderbilt University, has written, globally, the pattern is clear: Whichever party was in power when the Great Depression hit was booted out of office, and whichever party was in power when the global recovery took hold reaped huge political benefits.

“In the U.S.,” wrote Bartels, “voters replaced Republicans with Democrats and the economy improved. In Britain and Australia, voters replaced Labor governments with conservatives and the economy improved. In Sweden, voters replaced Conservatives with Liberals, then with Social Democrats, and the economy improved.

Of course, cultural narratives aren’t necessarily rooted in facts but rather in the story that a group or nation or other party wants to tell. Looking at data can help us figure out the veracity of a narrative. This sounds like a good example of using comparative data: by looking at other cases, one can see that what might seem to be a “common sense” observation based on the United States doesn’t necessarily hold up. What we would also want to do is to look at other economic crises, both in the United States and abroad, to see how the severity of the crisis, length of the crisis, relative standing of other countries, and other historical and social factors affect election outcomes after the economic crisis starts.

The takeaway for politicians and political parties? Beware of running for election if the economy took a dive while you or your people were in office.