Stumbling and Mumbling

The curse of CSI

This line from the latest Case-Shiller house price report caught my eye:

Las Vegas and Miami share the dubious title of the weakest markets in January, reporting double-digit annual declines of 19.3%.

Now, what do Las Vegas and Miami have in common? Yup, they are locations for two of the three CSI franchises.
Even if we allow for the fact that prices in the third CSI area - New York - are holding up relatively well, the CSI effect seems big. Prices in the three CSI cities have fallen by an average of 14.8% in the last 12 months, compared to an average fall of 8.7% in the other 17 metropolitan areas covered by the Case-Shiller indices.
Coincidence? No. There's an obvious reason for this - the salience effect. CSI causes people to exaggerate the extent of violent crime in its cities, causing people, at the margin, to avoid them.
Granted,  the CSI effect doesn't seem significant in conventional statistical terms. Regressing annual price changes upon a CSI dummy (1 for Las Vegas, Miami and New York and zero for the other 17 cities) yields a p-value of 15.1%, against the null hypothesis of a zero effect. But remember:
1. Why should we be classical statisticians about this? If your Bayesian prior is that there is a CSI effect - as theory predicts - the evidence provides some corroboration.
2. Don't confuse statistical and economic (in)significance. As we've seen, the effect is economically significant - worth over $15,000 for a house priced at $250,000 this time last year.
3. CSI is not the only show affecting perceptions of crime and therefore prices. If we add a Numb3rs effect (giving LA a dummy value of 1 as well), then the p-value for a combined CSI+Numb3rs effect drops to 5.9% - significant at the 10% level, as they say. Papers have been published with less.
Pedants will moan that this is just a nonsensical excuse to carry a picture of Emily Procter. But what do they know?

Should we compensate the ugly?

Gonzalo Otalora wants good-looking people to pay more tax, to compensate ugly ones. Is he right?
Luck egalitarianism, as defended by Richard Arneson (pdf) says he is. This says  people should not be worse off than others because of brute bad luck, things they have no control over. And being born ugly is such bad luck. And it's costly. Even leaving aside the impact it has on one's social life, it's economically damaging. Ugly people do less well at school and earn less than good looking ones - so much so that some turn to crime (pdf).
So, why shouldn't ugly folk get compensation for such damaging involuntary advantages?
There are practical problems. Should the state hand out money to Rio Ferdinand and Wayne Rooney on account of their mingingness, only to take it back on account of their footballing talent? And beauty is a positive externality; do we want the state to encourage Emily Procter to try and drab herself down? Do we really want bureaucrats deciding who munts and who doesn't?  This isn't just intrusive and costly, but also - as Liz Anderson points out - humiliating. 
Then there's Nozick's famous self-ownership objection. Some things, he said, we should just let lie. Or there's Lang's "see-saw" (pdf) objection. If we compensate people for the brute bad luck of being ugly, we impose brute bad luck upon the good-looking - they suffer the bad luck of being good-looking in a society in which they get taxed. Shouldn't they get compensation from the ugly to compensate for this?
I confess, I'm not sure. But are the arguments for taxing the good-looking really obviously more absurd than those for taxing the rich?

England & broken windows

In bigging up the significance of Wednesday's game, the Times gives us an example of Bastiat's broken window fallacy:

Involvement in a significant [football] tournament sends the nation’s fervour soaring and that means open wallets on the high street. The British Retail Consortium estimates that last year’s World Cup boosted UK retail spending by more than £1 billion. In a grim summer with no involvement in Austria and Switzerland, more than half of this cash would remain unspent. At the very least, pubs, clubs, off-licences and the advertising and gambling industries would miss out on some £600,000 of spending.

What this misses is that the billion we spent last summer would almost certainly have been spent anyway.
Had we not bought beer on the high street to drink whilst watching games at home, we'd have gone down the pub instead. If we hadn't bet on the results, we'd have drank more. And  if we hadn't bought flat screen TVs to watch England, we'd have bought them to view Calleigh Duquesne anyway.
Indeed, it's possible that England's participation in the World Cup actually depressed economic activity, as people sloped off work to watch games, and went to Germany thus spending money there that they'd otherwise have spent here.
The only way in which England's participation in a major tournament can really boost economic activity - and this only in a Keynesian economy - is if it lifts people's spirits and depresses the savings ratio.
But there's little evidence that this happens. Yes, the savings ratio was high in the 1970s, as England failed to qualify for the 1974 and 1978 World Cups. But this probably had more to do with high inflation and economic volatility than with England's craptacularness.