Friday, February 28, 2014

Moral Dilemma: Irrational Preferences

From Stumbling On Happiness:

volunteers in one study were asked to submerge their hands in icy water (a common laboratory task that is quite painful but that causes no harm) while using an electronic rating scale to report their moment-to-moment discomfort. Every volunteer performed both a short trial and a long trial. On the short trial, the volunteers submerged their hand for sixty seconds in a water bath that was kept at a chilly fifty-seven degrees Fahrenheit. On the long trial, volunteers submerged their hand for ninety seconds in a water bath that was kept at a chilly fifty-seven degrees Fahrenheit for the first sixty seconds, then surreptitiously warmed to a not-quite-as-chilly fifty-nine degrees over the remaining thirty seconds. So the short trial consisted of sixty cold seconds, and the long trial consisted of the same sixty cold seconds with an additional thirty cool seconds...

... the volunteers' moment-to-moment reports revealed that they experienced equal discomfort for the first sixty seconds on both trials, but much more discomfort in the next thirty seconds if they kept their hand in the water (as they did on the long trial) than if they removed it (as they did on the short trial). On the other hand (sorry), when volunteers were later asked to remember their experience and say which trial had been more painful, they tended to say that the short trial had been more painful than the long one...

The fact that we often judge the pleasure of an experience by its ending can cause us to make some curious choices. For example, when the researchers who performed the cold-water study asked the volunteers which of the two trials they would prefer to repeat, 69 percent of the volunteers chose to repeat the long one - that is, the one that entailed an extra thirty seconds of pain.

Let's say that one of the people who did this experiment is forced to do one of these two trials again. He/she doesn't want to do either one, but they prefer the long one only because of this odd way our memory works. You are forced to choose one of the two for them. Which choice is the most ethical?

I don't know.

Saturday, February 22, 2014

Deficits matter when the President isn't who you voted for

I saw this graph on a Wonkblog post:

The post was trying to make a different point, but what I found the most interesting about that graph is looking at whether Republicans or Democrats are more concerned about the deficit. When Clinton was President, Republicans were more concerned. When Bush was President, that flipped. When Obama became President, it flipped again. What a strange coincidence!

Wednesday, February 19, 2014

CBO scores minimum wage increase

A popular Democratic proposal to raise the minimum wage to $10.10 an hour, championed by President Obama, could reduce total employment by 500,000 workers by the second half of 2016. But it would also lift 900,000 families out of poverty and increase the incomes of 16.5 million low-wage workers in an average week.
-- NYTimes

I've made this same complaint several times before, but seriously... why don't Democrats favor an expansion of the EITC instead? The EITC targets its help better and doesn't have the downside of (probably) decreasing employment.

The common argument for wanting to raise the minimum wage with a raise in the EITC, rather than just the EITC, is that the minimum wage reduces the amount of the EITC that benefits employers rather than employees:

Research by Berkeley economist Jesse Rothstein shows that roughly 27 cents on the dollar from the EITC is passed on to employers. So there's some leakage there.
-- link

But so what? After all, most economists expect minimum wage hikes to cut jobs because it increases the cost of employment for employers. This is obviously a bad thing, all else equal. When we point out that the EITC instead reduces the cost of employment, then by the same logic this will decrease unemployment. Why, exactly, is this an effect we should try to counteract?

If the minimum wage were the only possible tool for raising the incomes of the poor, then maybe I'd support the hike to $10.10 after weighing the pros and cons. I don't know. But it's not the only tool, and in comparison to the alternatives, I just don't support raising the minimum wage.

Monday, February 10, 2014

Most immigration-friendly countries

I thought the U.S. would be higher on these lists. From here, this is in annual in-flow and current residents as a percentage of the population: