popular logistics

Professor Robert Frank, Economic Scene: When to Violate the Top Two Commandments of Antigovernment Crusaders, The New York Times, March 15, 2007:
Robert H. Frank, an economist at Cornell, says that when asked to identify their two most important principles, “most antigovernment crusaders pick (1) public spending shall be kept to an absolute minimum and (2) the state shall not transfer income from rich to poor.” (And many, if pressed, are willing to tolerate just a bit of wealth transfer, as long as it’s from the bottom and middle to the top, where - let’s face it - they’re a better class of people, and they deserve it. But I’m interrupting Professor Frank; excuse me).

Frank says that “[t]he problem is that many compellingly advantageous public policies cannot be enacted without violating the two commandments.

Regulations that limit auto emissions are a case in point. Because these regulations increase car prices, legislators in most jurisdictions exempt older vehicles to avoid imposing unacceptable costs on the mostly low-income motorists who drive them. Yet the cost to society of this exemption far outweigh its benefit for the poor.

Frank, relying on a RAND study, says that making the whole “fleet” compliant with air-quality rules, only by altering the new cars, is very expensive - because the new cars are new, and newly designed, and the old ones are exempt. It would be cheaper , he contends, to impose a small tax on high-income motorists in oder to provide vouchers to low-income motorists so that they could purchase newer, air-quality compliant (and presumably more fuel-efficient) cars.

Our irrationality, says Frank, extends to health care - we’ve set up a system which delivers worse outcomes “at substantially higher cost” than single-payer systems. And our ideoligical concerns - don’t redistribute, the government ought to be small - actually get in the way of keeping everything cheaper for everyone.

Malcolm Gladwell, in his New Yorker piece last February - Million-Dollar Murray

Gladwell makes the case that we have the bell curve, the “normal” curve, framing all the data sets we look at:

Fifteen years ago, after the Rodney King beating, the Los Angeles Police Department was in crisis. It was accused of racial insensitivity and ill discipline and violence, and the assumption was that those problems had spread broadly throughout the rank and file. In the language of statisticians, it was thought that L.A.P.D.’s troubles had a “normal” distribution—that if you graphed them the result would look like a bell curve, with a small number of officers at one end of the curve, a small number at the other end, and the bulk of the problem situated in the middle. The bell-curve assumption has become so much a part of our mental architecture that we tend to use it to organize experience automatically.

He goes on to apply the same examination to other data sets - a population of the homeless in Colorado - and the L.A.P.D.’s costly effort to “catch” people who’d paid their mechanics to circumvent the emission equipment. Problem is that it turns out that this waqs being done by a relatively small number of drivers and a very small number of repair shops (some of whom may have derived their primary competitive advantage from their willingness to break the law).

The Gladwell piece made a big impression on me when I read it last year; both these pieces are worth reading - if only to remind us that whatever problem we’re working on, the devil doesn’t want you to pay attention to the details. I think both of these are worth reading - and I’m going to try to see what else Frank’s written that might interest Popular Logistics readers.

Gladwell maintains a website at www.malcolmgladwell.com , where most, if not all of his New Yorker pieces are available. Frank, whose book “The Economic Naturalist” is due out this sprig, has a site at www.robert-h-frank.com