December 30, 2005
Housing Affordability Confusion
From the NY Times yesterday, comes a surprisingly confused article arguing that home ownership has actually gotten less expensive over the last 20 years. Here's the article's upshot (and the part that contains the fishy reasoning):
Nationwide, a family earning the median income - the exact middle of all incomes - would have to spend 22 percent of its pretax pay this year on mortgage payments to buy the median-priced house, according to an analysis by Moody's Economy.com, a research company... it remains well below the levels of the early 1980's, when it topped 30 percent.
But median family incomes ain't what they used to be--and comparing family incomes over more than two decades is a case of comparing apples to oranges. To wit: family incomes today are much more likely to include two incomes (even two full-time incomes) than they were in the early '80s when many families were supported by a single primary breadwinner. So--to be overly simplistic with the data for a moment--22 percent of two incomes buys what 30 percent of just one income used to.
The good news here is that the share of women in the labor force has been steadily rising, as has the share of women working full time. Women are also steadily closing the pay gap with men. And because women earn more advanced degrees than men, there's reason to believe the gap may close or even eventually reverse. But the bad news is that families now commonly must employ both adults to make a grab for the brass ring of home ownership. Among other problems, that means substantially less wiggle room in family budgets because if one of the two wage earners falls on hard times, there's no one who can enter the workforce to help pick up the slack.
And there are at least two other glaring problems with the NY Times reasoning.
Family income is a lousy metric to begin with. Because more and more Americans are delaying marriage (the percentage of unmarried 30 to 34-year-olds has quadrupled since 1970), a smaller and smaller share of us are counted in the family income statistics. This means that the growing ranks of single Americans are facing homeownership with just one income at a time when two are needed.
The Times article also includes a nifty map depicting places where home ownership has gotten more affordable. The curious thing about the map though is that it doesn't appear to say what the writer thinks it does. According to the map, pretty much the entire states of Washington, Oregon, California, Nevada, Hawaii, Florida, New York, New Jersey, Delaware, and Maryland have gotten more expensive. So have the Chicago and Boston areas, along with much of Virginia. So even by the Times' rather lousy definition of affordability, a huge swath of the most populated parts of the country have actually gotten less affordable.
To cap it off, the article smirks that the hoi polloi don't really understand their own economic conditions:
In a nationwide New York Times/CBS News poll conducted this month, 75 percent of respondents said they thought most families in their community spent a larger share of their income on housing now than in the 1980's. Only 5 percent said the share was smaller.
The lesson for me is that--at least in this case--it's the people who are right and it's the data analysts who don't seem to understand the economy--or even what their data actually means.
UPDATE 1/3/06: Cleaned up some of the typos and atrocious grammar plaguing the first draft.
December 29, 2005
The Economist on Happiness
In the past couple of years, it's been interesting to observe a promising idea--that happiness should count as much as economic indicators--become almost mainstream. This week, for example, The Economist published a long, meandering article that examines the concepts of relative poverty and relative happiness. It compares two men--a doctor in Congo and a retired coal miner worker in Kentucky--who earn about the same amount of absolute income. The contrast proves to be a good set-up for some provocative questions:
What is the relationship between wealth and happiness? And what is the significance of relative poverty? Mr Banks makes $521 a month in a country where median male earnings are $3,400 a month. Dr Kabamba earns $600 a month in a country where most people grow their own food and hardly ever see a bank note. The two men's experiences could hardly be less similar. But which of the two would one expect to be happier?
Puzzlingly, though, the article doesn't fully explore this question. It does bring up some important factors, such as the complexities of measuring happiness across different cultures and geographies; the role of relative wealth and poverty; and the role of politics and geography (both Congo and Appalachia are known for mineral wealth and corrupt politics).
But it neglects the new wealth of research that has been released on the economics of in recent years--and one of the most consistent findings: that the correlation between financial wealth and well-being is relatively weak, especially as countries become wealthier (see this post). The US and Canada aren't doing too badly on the happiness scale, but neither are countries that have a far smaller GNP per capita.
As more large-scale studies of happiness are completed, perhaps The Economist will pay closer attention to why indicators of subjective well-being matter--not just as an interesting lifestyle comparison, but as tools that can be eventually used in public policy. For now, though, we'll have to be happy with seeing happiness make it into the news.
P.S. The article includes a discussion on the validity of the United States' poverty rate, suggesting that America overcounts the number of poor. For a healthy debate on the poverty rate as a measure, see this post.
As of January 1, minimum wages will rise to keep pace with inflation in both Washington and Oregon. Guaranteeing workers $7.63 and $7.50 per hour, respectively, the two Northwest states are the most generous in the nation. But is a rising minimum wage really a good thing?
The good ship Cascadia has another 227,000 passengers.
The US Census Bureau has issued population estimates for the states, which allow us to give an updated Cascadian population tally. As of July 1, 2005, the region – counting British Columbia, Idaho, Oregon, and Washington – had 15.6 million people. (Adding western Montana, southeast Alaska, and northwestern California pushes that figure up by another million or so, but running the county-by-county figures takes more time than I’ve got at the moment.)
The (four main jurisdictions of the) region added 227,000 inhabitants over the preceding 12 months. That's about the number that live in greater Olympia, Washinton. And it's a 1.5 percent increase, the largest since 1997.
The resurgence stemmed from rising domestic migration into the region. Natural increase (births minus deaths) remained stable at around 70,000 per year, as did international migration at around 50,000 per year. (International migration is hard to tally reliably at present. As the Census Bureau’s American Community Survey comes online, we’ll be able to track it better.)
The extra 227,000 Cascadians, especially the adult migrants, bring new resource consumption, pollution, and traffic as they arrive. But just to be unpredictable today, let me point out that they also bring new talents, productivity, and resources with them.
One dimension of in-migration that’s little noted is the way that growing populations allow more-rapid transformation of metropolitan areas. Cities that don’t have growing populations do not have many opportunities to build complete, compact communities, filling in their urban form. And compact communities can actually reduce resource consumption among their residents. It’s conceivable, in fact, that adding population--if it goes into the right kinds of smart-growth neighborhoods--might lead to such large per-person reductions in resource consumption that the aggregate total remains unchanged or even diminishes.
So migration brings big challenges (about which there’s more here) but it also brings opportunities.
December 28, 2005
Population Puzzler: Unwanted Pregnancies and Abortion Trends
Last week, the National Center for Health Statistics issued the results of a survey revealing that the share of American births that resulted from unwanted pregnancies increased from 9 percent in 1995 to 14 percent in 2002. (Seattle Times reports here.)
That’s bad news. It’s also puzzling.
It’s bad news because babies conceived by accident, when mothers do not want to have a child (or another child), tend to have what social scientists call “adverse outcomes,” as discussed here. They’re more likely to have bad prenatal care, die in infancy, fare poorly in school, and suffer violence at the hands of their caregivers.
It’s puzzling because so many reproductive trends have improved since 1995. Pregnancy rates overall have fallen, as shown in this chart for Oregon . . .
. . . especially among teens, as shown in these charts for Oregon . . .
. . . and Washington.
Birth rates overall have fallen. Access to emergency contraceptives has expanded dramatically, as has insurance coverage for prescription contraceptives.
All of these positive trends would make you expect that the share of births that result from unwanted pregnancies has also declined. But the opposite has happened, at least in the United States overall.
The trend is less contradictory within Cascadia. Washington has the best data on unwanted births over time, and they show hardly any change—or hardly any change that’s greater than the margin of error. At best, there's been a tiny decrease in unwanted births.
Still, you’d expect that drops in pregnancies and births would lead to equally dramatic declines in unwanted pregnancies. You’d think, in fact, that improving pregnancy prevention would show itself first and foremost in a declining share of pregnancies that are unwanted. Instead, everything is shrinking dramatically except the “unwanted” percentage!
What’s going on here?
I don’t know.
The Alan Guttmacher Institute (AGI) in New York is reportedly in the midst of an analysis of this puzzler, and I hope they’ll figure it out. In the meantime, let me underline my ignorance by explaining why the obvious answers are probably wrong or, at least, inadequate.
Pro-choice advocates argue that the survey results are a sure sign of deteriorating access to abortion services, which is plausible. In Idaho, Oregon, and Washington, the number of abortion providers is lower now than it was two decades ago. In 1981, there were more than 160 abortion providers in these states; by 2001, there were fewer than 100, according to AGI.
And the next chart, comparing the share of pregnancies ending in
abortion (excluding miscarriages) in British Columbia and
Washington, lends further plausibility to the theory. In British Columbia,
where abortion providers have not decreased in number to the same
degree, abortion has grown as a share of all pregnancies. In Washington, it's shrunk.
Harassment and intimidation from extremists explains some of the drop in abortion providers, but economic consolidation has also contributed. Abortion services have become a specialized medical subdiscipline, concentrated in the hands of fewer providers who are, in general, very good at what they do. First-trimester surgical abortion, therefore, may now be safer and less expensive, in inflation-adjusted terms, than ever before. Convenient, nearby access to safe abortion services does not extend to small-town residents in the inland parts of Cascadia, but most women who want an abortion can get one, by traveling to a city--the same place they have to go for many other surgical procedures.
Anti-abortion advocates have a different exlanation for the rise in unwanted births. They suggest that Americans are demonstrating, in the words of an official at the U.S. Conference of Catholic Bishops, a “pro-life shift.” American women may be exercising their freedom to choose by electing to have fewer abortions. This explanation also has some plausibility. Abortion rates are lower in more-conservative states such as Idaho than in more-liberal states such as Oregon and Washington. Maybe a cultural change is making the whole country more like Idaho. (And maybe the Washington-BC divergence in the chart above is explained not by changing access to abortion but by changing social values.)
Maybe, but I'm dubious. For one thing, British Columbia has the same anti-abortion movements, the same media influences, and the same medical technology (such as ultrasounds that make fetuses seem like babies sooner) as Washington. But abortion trends have diverged.
For another, if the United States were experiencing such a shift, the recent survey should have found not only that “unwanted” pregnancies but also that “mistimed” pregnancies were being carried to term more often. In fact, if a “pro-life shift” were the cause, one would expect a more dramatic increase in the share of births that resulted from merely mistimed (or “too soon”) pregnancies, rather than from pregnancies that were truly never wanted at all. Women who found themselves pregnant a few years before they intended to be (and were swayed by anti-abortion arguments) would almost certainly be the first to forgo abortions, not the smaller number of women who found themselves pregnant despite their wish never to have a child (again). Wouldn’t the easy cases by “shifted” before the hard ones?
The Center found no such shift.
Between the Center’s 1995 survey (careful, enormous pdf) and its 2002 survey (careful, even larger pdf), in subset after subset of American women (young, old, married, cohabiting, Hispanic, white, first-time mothers, third-time mothers, etc.), there’s a marked increased in the share of births that women report as having resulted from unwanted pregnancies. There’s no comparable change for births that result from the far-more-numerous mistimed pregnancies.
(Oh--and just to muddy the waters futher--the same reasoning also counters the suggestion that a paucity of abortion providers explains the rise in unwanted births. If barriers to getting abortions were the problem, it would presumably afflict the more-ambivalent mothers of "mistimed" births even more than it afflicted women with unwanted pregnancies.)
This unwanted-mistimed patter is so unusual that I wonder, did some wording change in the survey skew the response? (The survey report claims the wording was identical.) Did 9/11/2001 shift women’s attitude retroactively, making them less sanguine about childbearing, and less positive about their births? (Seems unlikely, given that the survey was taken many months later and that it covered a five year period.) Did the Center’s statisticians just make a mistake?
And even if there is some statistical fluke explaining this national survey, why isn’t the Washington state “unwanted” number (and it’s similarly static “mistimed” number) dropping with the pregnancy rate?
My own partly formed suspicion centers on the fewer than 10 percent of sexually active women (and their partners) who do not regularly use contraception and therefore account for about half of all mistimed and unwanted pregnancies. If everyone but them is getting better at prevention, their pregnancies may loom larger in national and state statistics. (There are flaws with this theory, too, but it’s the best I’ve got at the moment.)
Anyone else care to theorize?
December 27, 2005
The 400 volunteers in the Puget Sound Regional Council's "Traffic Choices" study have been paying virtual tolls since July. Devices mounted on their dashboards track where they travel and transmit the information to a central computer. Charges are deducted from prepaid "endowment accounts."
Those accounts are just play money. But if there's anything left in them when the experiment ends in February, participants get to keep it — in real dollars.
That's the carrot. They can save money by not driving as much, by choosing less-congested highways, or by staying off the road at rush hour.
As we’ve argued for years, paying-as-you-go for driving, rather than in occasional lump sums, ought to be a powerful incentive to economize on miles, trips, and fuel.
Here’s the puzzler:
[Study director Matthew] Kitchen says interim results indicate that, as a group, the study's 400 participants actually are driving a bit more than they did before the experiment started. But they're also paying a little less than they would have if the tolls had been in force when researchers first began monitoring their driving.
That could mean the volunteers are avoiding roads with the steepest tolls at times, even if it takes them out of their way, he says. "But we may find something very different when we do a more detailed analysis," he cautions.
What’s going on here? You put a by-the-mile price on driving and people do more of it? That’s unexpected!
Study results won’t be complete for months, of course, and these preliminary trends may be a seasonal fluke, a statistical error, or an effect of some unrelated factor such as a fuller employment.
But it could also be that drivers are much quicker to change roads than to change modes, or to reorganize their weekly travel plans. Stated that way, it’s less surprising. Past experience suggests that it takes some time for people to adjust where they go.
Still, by the time the study is done, I’ll have to rethink some assumptions if drivers haven’t reduced their total miles driven as well as their peak-hour trips on high-priced, congested roads.
December 23, 2005
A Gift for the Reindeer Too
A federal judge has halted snowmobile grooming in the recovery area for the Selkirk caribou--the only reindeer to still visit the continental United States. [Coverage in the Olympian and the Coeur d'Alene-area Daily Bee.] The ruling is dead right: snowmobiles are one of the primary threats to the Selkirk herd, which need undisturbed winter habitat. Snowmobiles are still allowed, even under the new injunction, but the absence of groomed tracks will substantially decrease their numbers.
Given that 1) the caribou are often considered the most endangered large mammal in North America; 2) pretty much everyone agrees that snowmobiling is inimical to their survival; and 3) their designated recovery area is a small and remote parcel of mountainous northeast Washington and northern Idaho, the only question I'm left wondering is: why is any snowmobiling at all allowed in their so-called "recovery area"?
And for readers taking note, this is the third good news post here today. Must be the season...
California Dreaming, on Such a Winter's Day...
Just a few days ago, I posted on a mileage-based car insurance program that recently made its debut in Japan -- and hoped that this could hasten the introduction of a similar system on this side of the Pacific.
Now, the LA Times reports on an announcement by California's insurance commissioner that he's planning to...
"...propose rules forcing auto insurers to set rates based on the driving records and miles driven by motorists, and to give less weight to where drivers live — a change that could affect the pocketbooks of 23 million California drivers.
The proposal was embraced by consumer and civil rights advocates who have long complained that city dwellers — especially in minority neighborhoods — pay higher rates than drivers with similar records who live in rural towns and suburbs." (Emphasis added.)
Seems like the US didn't have to wait for Japan's lead after all. Obviously, this is not yet a done deal. But it's still promising -- both because it could make the automotive insurance system fairer to people who don't drive much (notably women, the poor, and city-dwellers), and because it could give all drivers the opportunity to control their insurance costs by driving less.
A year-end piece of good news about the Northwest's successful push in 2005 for cleaner cars, via a note yesterday from the Oregon Environmental Council:
"This afternoon, Oregon’s Environmental Quality Commission adopted the clean car standards by temporary rule. By acting before the end of the year, EQC has alerted automakers that they must provide cleaner, more climate-friendly cars to Oregonians starting with model year 2009. These new cars will consume less fuel and produce less pollution. They’ll cost less to operate. And they’ll reduce our dependence on oil."
The one hitch is that the EQC needs to make the rule permanent within 180 days, or it will expire. See more at www.cleancarsoregon.org.
December 22, 2005
A Grizzly Discussion
A few days ago, I posted on Raincoast's buyout of guide-outfitter hunting rights in coastal BC. The upshot is that I questioned whether the buyout was the wisest possible use of conservation dollars and postulated that conservation investments can benefit from rigorous accounting. As blog posts are wont to do, it circulated around the web where it attracted a variety of feedback--thoughtful rebuttals and inquiries, incoherent ranting, and a fairly vicious attack penned by Chris Genovali, the executive director of Raincoast.
So in response to some of the criticisms--many of which were both thoughtful and thought-provoking--I've decided to post here a response to Genovali. I'm hoping today's post can serve as a useful contribution to a reasoned debate about an issue than many of us care about deeply--species protection. Here goes (gulp)...
I must confess that I’m baffled by the venom in your response. A plain reading of my article reveals that--far from being “an opportunistic hit piece”--it was a set of musings and questions about the merits of Raincoast’s buyouts and the larger question of which conservation strategies are most effective at protecting biodiversity. (I encourage readers to take a look at my original article and decide for themselves.)
As a lifelong advocate for wildlands and species protection I’m thrilled by much of what Raincoast has accomplished in BC. But I’m disappointed that Raincoast’s good work is marred by an inability to brook even mild questioning. It is, I believe, worth pointing out that the ecological implications of hunting, even big game hunting, are complex. Personally, I find the trophy hunting of predators abhorrent, but that alone doesn’t mean that, on the whole, it is bad for biodiversity. In fact, the totality of the ecosystem implications of hunting are far from clear and are a subject of ongoing debate among wildlife biologists.
My main objective with the article, a point that I fear may have been overlooked, was to suggest that conservation decisions can benefit from rigorous accounting practices. That is, we need to consider costs and benefits, leverage points, and opportunity costs. Conservationists may have additional ethical issues in mind—the rights of indigenous peoples, trails and access for users, and concerns about hunting, just to name a very few—but these issues ought to be treated separately from the essential question: how can we protect native biodiversity most effectively and efficiently?
In the original post on NEW’s Cascadia Scorecard Weblog, and in its re-publication on The Tyee, I invited information from readers that would prove to me the wisdom of Raincoast’s actions. Your article in response provides some (along with an unfortunate amount of embittered name calling).
For example, it’s clearly germane—as you pointed out—that Horejsi et al. concluded that coastal grizzly populations are depressed and that sport hunting is contributing to the decline. But I remain unclear about why it matters, from a purely conservation perspective, whether guide-outfitter hunting resembles a search and destroy mission. A good conservation accounting would demonstrate that guide-outfitter hunting is especially damaging to grizzly populations in a way that other activities are not—such as hunting by BC residents, clearcut logging, road-building, and even ecotourism. At the least, a solid case could perhaps be made that these other threats cannot be addressed with the resources at hand, and so guide-outfitter rights are the best available buy. I would like to hear that case and be convinced that the buyouts were directed primarily at conservation and not simply at alleviating a practice that some (myself included) find disturbing (that is, trophy hunting).
It’s also relevant that trophy hunting can have ecological implications that ripple beyond the individual animal killed, as Chris Darimont, the conservation biologist you cite, points out. This is a meaningful strike against trophy hunting and, while it is not the only consideration, it is precisely the sort of evidence that is worth weighing in the balance.
I admit, however, to being perplexed by carnivore expert Paul Paquet’s argument, which you quote at length. For one thing, I never suggested that the “only” way to conserve large carnivores is to allow trophy hunting. Instead, I pointed out that trophy hunting has perversely beneficial effects in some contexts. As another example, I was recently fortunate to visit the world’s leading cheetah conservation center in South Africa. While interviewing their staff biologists I was surprised to learn that a large contingent of experts who have devoted themselves to protecting cheetahs actually support trophy hunting—on the grounds that not hunting cheetahs is actually worse for the animals in the long run. They were willing to take a hard look at the conservation realities and conduct a genuine accounting of the costs and benefits of limited hunting. Perhaps Raincoast has conducted such an analysis. If so, sharing it would help me, and many others, to understand the rationale for your strategy.
Finally, the overall strategy seems confused. If the point of buying the guide-outfitter rights is truly to protect native biodiversity, then the payoff seems small for such an expensive investment. As I understand it, because the buyout includes only certain guide-outfitter rights (not the less expensive rights for BC residents) it prevents the killing of a fairly small number of grizzlies per year and, if I’m not mistaken, the kill rate has been even lower in recent years.
Still willing to be convinced,
Eric de Place