Tuesday, September 29

Correlation vs. causation and hockey

Here's a good example of mixing up correlation and causation, for those sports fans who happen to be econ geeks. Our profs in empirical courses always harp on this kind of stuff.

I have the third overall pick from this year's NHL draft, Matt Duchene, in my hockey pool. So I was looking for analysis about how he might perform this season when I came across a posting on Mile High Hockey tackling the question of whether Duchene could benefit from another year of junior hockey before turning pro. The blogger does this by analyzing how other high draft picks faired in their rookie year, making this conclusion:
"Granted, this is an extremely small sample size, but the argument can be made here that the statistical output of the rookie season for these high draftees wasn't enhanced by an extra season in juniors. The 4 who made the leap averaged .53 points a game. The 6 who didn't? .43 PPG."
But there's an important oversight. Sure, there seems to be a negative correlation between playing an extra year of junior and output during one's rookie NHL season. But it's quite likely that the reason these players were sent back to junior for another year was because they were less skilled to start with. There's nothing to indicate that the extra year of junior made these players worse than they would have been had they jumped straight to the NHL.

Sunday, September 27

STV too complicated for strategic voting

Single transferrable vote (or STV for short) is too complicated for people to figure out how to vote strategically under, a paper by an economist at the University of Montreal and three French economists suggests.

The voting system puts multiple seats in a single riding and has voters rank their candidates in order of preference, with portions of each vote getting transferred between candidates. It was soundly defeated for the second time by B.C. voters in the 2009 election.

One of the arguments proponents of STV used was that it eliminates any incentive for strategic voting -- that is, there is no reason for people to vote for a candidate other than the one they truly want to win. But game theory shows people can still get better outcomes by voting strategically with STV.

Strange bedfellows?

When people hear I'm interested in both economics and journalism, they tend to be puzzled, thinking the two are unrelated. So when I saw an article about the relationship between an economic think tank I interned at (the Fraser Institute) and a newspaper I interned at (the Vancouver Sun), I was surprised and intrigued. Online B.C. news site The Tyee ran what I thought was a pretty fair article about the two organizations.

It's interesting to note the high rate of citations of the Fraser Institute in the Sun relative to other newspapers, but I think the proximity explanation is a likely one. The Fraser Institute's head office is in Vancouver, which is where most of their employees are (including their two English-language media relations people), so it's natural that there'd be more communication between the Institute and the Sun.

Also interesting were the comments on the article, which seem to indicate that Tyee readers do not think very highly of either of my former employers.

Saturday, September 26

Monopolies and Air Miles

I was at the LCBO earlier today to buy some beer, and it struck me as strange that they participate in Air Miles. Air Miles, for those who don't know, is a customer loyalty program; they give you rewards if you buy enough stuff.

But the LCBO has a virtual monopoly over booze sales in Ontario, so it seems very strange that they would be part of a customer loyalty program. My understanding is that the point of these programs is to differentiate companies from their competitors in hopes customers will keep coming back. So gas stations, for example, usually sell almost identical products at almost identical prices, so a customer loyalty program would make sense because it gives customers a reason to patronize your station instead of the one across the street.

But it's not like there is lots of choice over where to buy booze in Ontario. If I want booze, I'm going to go to the LCBO whether or not they have a customer loyalty program. It makes me wonder what the LCBO's logic was in joining Air Miles.

Life or death economics

The health authority in Hamilton has come up with a formula to determine who gets a flu vaccine and who doesn't in the event of a shortage during a pandemic.

Health care workers, police and firefighters get vaccinated first. If there's enough left, people who caught the flu at work get it. If there is still some left over, people who care for children get next dibs. Then children and "young people" themselves. Finally, if there is still some left over, people who are most likely to survive their particular flu strain get vaccinated. Otherwise, you'll be out of luck.

According to the article in the Hamilton Spectator, the formula was developed by "front-line staff, doctors, ethicists, lawyers, human rights experts and the hospital's board."

Interestingly, it appears no economists were consulted.

Friday, September 25

Ethics of returning classified documents

I found a McMaster student union executive's folder in the desk in my econometrics class this afternoon. I know it belonged to the executive becuase I opened the folder and his business card was in the front. When I opened it, I noticed a letter about a student union personnel matter that was obviously supposed to be confidential.

Without thinking about it much, I returned the folder to the executive's office after my class. But when I mentioned the folder to a friend of mine who works at the McMaster student newspaper, he said the newspaper had been trying to find out details on the issue in the letter, and noted the folder would have been a great story if I held onto it.

But as a journalist myself, did I do the right thing returning the documents?

My first post!

I've decided to jump into blogging. Facebook and Twitter just don't allow enough space to let me share all my thoughts. I make no promises on how often I'll update -- we'll play it by ear.