Posts from — June 2010

“When it comes to illegal drug use among young adults, white people are more likely to break the law than black people,” writes Kate McGovern. “But until recently, black drug offenders were far more likely to pay for it with jail time.”

The odds that a black person between 18 and 25 years old has ever used an illegal drug is 1 in 1.97 (51%). This is compared to 1 in 1.64 (61%) for a white person of the same age.

According to a report by Monitoring the Future cited by McGovern, “black 12th graders have been less likely to use drugs than white 12th graders for almost four decades, dating back to the ‘70s. Black college students are also less likely than their white peers to use drugs.”

The figure below illustrates trends in annual illicit drug use in Grades 8, 10 and 12:

According to the study:

First, for nearly all drugs, licit and illicit, African-American students in 12th grade reported lifetime, annual, 30-day, and daily prevalence rates that are lower—sometimes dramatically lower—than those for White or Hispanic 12th graders.

Second, use rates for most drugs are generally lower for African-American students in 8th and 10th grades, as well; therefore, the low usage rates in 12th grade are almost certainly not due to differential dropout rates.

The two figures below illustrate marijuana and cocaine trends of 12 graders by race. Black students have the lowest consumption rates.

The next two figures illustrate alcohol and cigarette prevalence rates by race:

The next two figures show inhalants and LSD prevalence rates by race. Again, blacks use the least:

While white people are more likely to be drug users, black people are more likely to go to prison on drug-related charges.  McGovern explains:

Overall, the period from 1980 to 2005 saw an 1,100% increase in the number of people behind bars on drug charges—a disproportionate number of them black. Odds are, a greater focus on prevention and treatment, rather than incarceration, is the socially responsible approach to curbing drug abuse among users and dealers of all backgrounds. But while the race to jail drug offenders is still on strong, at least police and prosecutors are now starting to recognize that the larger face of America’s drug problem is white, not black.

Now I wonder if these “drug charges” are charges for the distribution or possession of drugs. I also wonder how income plays a factor here.

Are white people living in a black neighborhood more likely to share the same drug consumption patterns as their black neighbors? Is the same true for blacks living in a white neighborhood?

Do predominately white, rural areas with high drug consumption rates have less police that arrest offenders? Do inner city, black neighborhoods have more police to arrest offenders?

I’m sure racism is in place somewhere, but I’m equally sure there is much more to the picture than is first evident.

McGovern does note a shift in incarceration rates:

Black people are still more often arrested for drug violations than white people—but these numbers do demonstrate a shift. A new report by The Sentencing Project, released in 2009, found that while the overall number of people jailed for drug offenses had remained fairly stable, the number of black Americans in state prisons for these offenses had declined 21.6% between 1999 and 2005. The number of whites behind bars for drugs shot up over 42% during the same period.

The racial makeup of federal prisoners is shifting less dramatically, but a subtle movement is occurring there too. Between 1999 and 2005, the overall federal prison population for drug offenses increased by about a third, but the increase of black inmates by percentage was actually smaller than that of whites: 31.2% compared to 34.9%.

Olaf Storbeck, in addition to your beloved Free Market Mojo, has taken issue with Kartik Athreya’s open letter to the blog-reading public, titled “Economics is Hard: Don’t Let Bloggers Tell You Otherwise”. For readers joining us in progress, Dr. Athreya, an economist at the Federal Reserve Bank of Richmond, wrote his open letter to, essentially, attack the validity of econ blogs aimed at the general public (including blogs written by both economists and non-economists). The reaction from the economics blogosphere (“econoblogosphere?) has not been favorable. Storbeck’s analysis calls into question the soundness of Athreya’ s economic logic:

Athreya’s arguments reveal a very uneconomic way of thinking.  In a sense he wants that only professional academic macroeconomists talk about macroeconomics. This comes close of urging to end the division of labour within the economic profession.  However, the idea that specialisation is welfare enhancing is one of the oldest insights of the dismal science.

Specialization generally increases quantity and quality. It is very sensible that some guys in the profession focus on developing sophisticated economic theories and models while others try to translate their findings for the general public. Of course these translators need to be able to understand what the researchers are saying. But it is no precondition that they are able to do the stuff themselves.

Storbeck has also collected a few particularly hard-hitting opinions from around the econ blogosphere. My personal favorite comes from Tyler Cowen at Marginal Revolution:

Putting aside agreement and ideology, and just focusing on how one understands an issue, I’ll take my favorite non-Ph.d. bloggers over most professional economists, six out of seven days a week.  Not to estimate a coefficient, but to judge public policy, thereby integrating and evaluating broad bodies of knowledge?  It’s not even close.

Cowen’s opinion is certainly one to take seriously. He holds a PhD in Economics from Harvard University, where he was mentored by 2005 Nobel Prize-winning economist Thomas Schelling; and he is now the chair of the Mercatus Center at George Mason University. Dr. Cowen is the blogger that has, so far, best summarized the issue. Economics blogging is not about furthering the economics profession, its purpose is to integrate economic thinking into the daily thought processes of citizens, thereby leading to a more well-informed populace that is not left to blindly follow those in authority – which is, perhaps, exactly what Dr. Athreya is afraid of.

However, results from Latin America interactions show that the positive impact of natural resources in this region is significantly smaller than in the rest of the world.

That’s from a new UNDP paper by José Pineda and Francisco Rodríguez on natural resources and human development.

The Supreme Court has once again ruled that the 2nd Amendment does, in fact, apply to individuals. But the right to keep and bear arms far predates the 2nd Amendment, it is a right that every individual has been born with since the dawn of time.

All rights (right to property, right to privacy, etc.) emanate from one central right: the right of an individual to his own life. Your life is yours and yours alone. From this basic precept, other rights emanate. The right to property logically proceeds from the right to life, as anything you produce requires a sacrifice of your time (i.e. a portion of your life). So, if you possess the right to your life, you possess the right to your property, as that property emanates from your life.

Another natural emanation of the right to life is the right to defend that life. This is so fundamental a concept it warrants no explanation. In our modern world, guns are a fact of life. Nearly every law enforcement agent possesses one, as do many criminals. To acknowledge the right to defend one’s life, but to deny that person the right to own a gun, is no different from asking a man to read while blindfolded.This is of particular importance since the biggest threat to human life has always come from governments. Every large-scale loss of life has been a result of government action.

For U.S. citizens to pay, through taxes, for government agents to possess firearms, yet have no right to possess firearms themselves is a tragic absurdity.

What is the relationship between immigration and crime? Brian Bell, Stephen Machin and Francesco Fasani have published a new paper “to carefully appraise whether the populist view that immigrants cause crime is borne out by rigorous evidence.”

We consider possible crime effects from two large waves of immigration that recently occurred in the UK. The first of these was the late 1990s/early 2000s wave of asylum seekers, and the second the large inflow of workers from EU accession countries that took place from 2004. A simple economics of crime model, when dovetailed with facts about the relative labour market position of these migrant groups, suggests net returns to criminal activity are likely to be very different for the two waves. In fact, we show that the first wave led to a small rise in property crime, whilst the second wave had no such impact. There was no observable effect on violent crime for either wave. Nor were immigrant arrest rates different to natives. Evidence from victimization data also suggests that the changes in crime rates during the immigrant waves cannot be ascribed to crimes against immigrants. Overall, our findings suggest that focusing on the limited labour market opportunities of asylum seekers could have beneficial effects on crime rates.

Ken Catalino has a funny, albeit excessively descriptive, cartoon depicting American’s current attitudes toward their politicians:

From my inbox:

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. ‘Since you are all such good customers,’ he said, ‘I’m going to reduce the cost of your daily beer by $20. ‘Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes, so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so -

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

‘I only got a dollar out of the $20,’declared the sixth man. He pointed to the tenth man,’ but he got $10!’

‘Yeah, that’s right,’ exclaimed the fifth man. ‘I only saved a dollar, too. It’s unfair that he got ten times more than I!’

‘That’s true!!’ shouted the seventh man. ‘Why should he get $10 back when I got only two? The wealthy get all the breaks!’

‘Wait a minute,’ yelled the first four men in unison. ‘We didn’t get anything at all. The system exploits the poor!’

The nine men surrounded the tenth and beat him up. The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

Jennifer Doleac and Luke C.D. Stein have conducted an experiment that advertised iPods from black and white sellers.

Black sellers received less offers at lower prices, “doing better in markets with competition amongst buyers and worse in high-crime markets.” They ultimately find evidence of both statistical and taste-based discrimination.

Here are the advertising photographs used in the experiament:

Doleac and Stein conclude:

In this paper, we present strong evidence that black sellers suffer worse market outcomes than their white counterparts in the environment we consider. In particular, their advertisements receive 13% fewer responses, and 17% fewer offers. These effects are strongest in the Northeast, and are similar in magnitude to those associated with a seller’s display of a wrist tattoo. Conditional on receiving at least one offer, a black seller’s average offer is approximately $1.87 lower than a white seller’s, with an even greater difference in the highest offers: the best offer received by a black seller is typically $3.56 lower. These represent gaps of 2.2% and 3.8%, respectively, below white sellers’ offers.

I found it especially interesting that buyer discrimination rates varied across the country. What is all the more intriguing is that black sellers faced the greatest disadvantage in the Northeast, where they received 32 percent fewer offers than white sellers. In the Midwest the gap was 23 percent and in the South the gap was 15 percent. In the West, black and white sellers received about equal offers.

Download the full paper here.

Rape, murder, apostasy, armed robbery and drug trafficking are all punishable by death under Saudi Arabia’s strict Islamic law. In extreme cases, the convict is executed and his body crucified in public.

From an AFP article on the 16th beheading this year in Saudi Arabia.

Surprised?