Grinch

As nice as Seuss's Grinch story is, we can't forget that it's the story told by the victorious Whos a century after the event. And so I told Ira the real story over Christmas. He prefers my version. And so I thought I'd share it with you as well. It's not in Seussean verse; maybe someday.

Recall that in The Lorax, insecure and ill-defined property rights, combined with a rather stupid Onceler and with a Lorax who cared more about grandstanding than about saving the trees, produced an outcome that none of the protagonists would have chosen. If the Onceler weren't an idiot, he'd have scaled back his capital investments to be commensurate with the stock of Truffala trees available. If the Lorax weren't a moralizing jerk, he'd have pointed out to the Onceler that re-planting trees as he went would let him get a return from his physical plant for a much longer period. And if property rights had been secure, either the Lorax could have sued the Onceler for stealing trees or have subsidized a faster replanting rate. 

And so we can see that the Grinch story is a problem of insecure property rights as well: does the Grinch have the right to peace and quiet, or do the Whos down in Whoville have the right to make as much noise as they like? In a Coasean world, it wouldn't matter as they could bargain to a solution. This could even hold in a world of poorly-defined property rights. If the Grinch really valued peace and quiet more than the Whos enjoyed making noise, and nobody knew which party had rights, the Grinch could still be sensible and pay them to stop even if he thought he had the right to peace and quiet. But only if he thought his rights would then be enforced; Seuss doesn't really like letting his characters find the efficient solution anyway*. And so in How the Grinch Stole Christmas, the Grinch isn't able to convince the Whos to stop making noise despite their most likely having come to his nuisance. 

In my version, the Grinch leaves the big noisy city and, after a tedious search, finds the perfect place for his studies: he homesteads a mountain overlooking an empty valley. There, he's able to read and write without interruption. Until the Whos show up and start building a town. The Grinch welcomes them, and tells them how much they'll love the peace and quiet of the place, hoping that they'll take the hint. After the noisy construction finishes, they have a raucous party in celebration. And then another for every holiday after, from Arbor Day to Xylophone Appreciation Day. But the biggest party they saved for Christmas. The Grinch pleaded with them; he was there first, surely they could try to keep the noise down. But they wouldn't. In desperation, he tried to steal Christmas, thinking that might stop them. But it didn't. So he gave up. He returned all their toys and dined with them before packing up his things and going off to find a new quiet place to live. He was there first, and by rights they should have compensated him for his loss, but enforcing the claim was more difficult than just leaving. And so he finally did the efficient thing and left. 

I tell it with a bit more embellishment, but you can fill in your own details.

* In The Zax, the North and South-Going Zaxes surely could have played leap-frog to solve their conundrum; instead, they just stood there until the city grew around them. By contrast, in The Sneetches, Sylvester McMonkey McBean is an entrepreneurial hero who profits by the prejudice of the Sneetches with Stars Upon Thars and the lame mopiness of Those Who Had None Upon Thars - the latter of which ought just to have had their own frankfurter roasts. A pox, or a McMonkey McBean, on both houses.

Update: In Lorax, it's possible to get complete forest decimation as being optimal from the Onceler's point of view, if the Truffala trees grow slowly relative to discount rates. But clearly he erred here given the massive capital investments and his intentions of biggering and biggering and biggering even as he chopped down the last tree. And so I expect decimation here was based on idiocy rather than rational calculation.

Death penalty

I used to hold the position that the death penalty was wrong, despite that it likely deterred around eight murders per execution, on the basis that the State ought not have that right. I suppose if the likely deterrent effect were really large, I'd be pluralist enough for the utilitarian side to beat the libertarian side. But not at that deterrent rate.

Wolfers and Donohue had previously shown much of the empirics on the death penalty are fragile.

The latest from Manski and Pepper (HT: Chris Blattman) shows the results more fragile than I'd thought: you can pretty much choose your conclusion through appropriate choice of identifying assumptions.

...we study the identifying power of relatively weak assumptions restricting variation in treatment response across places and time.  The results are findings of partial identification that bound the deterrent effect of capital punishment.  By successively adding stronger identifying assumptions, we seek to make transparent how assumptions shape inference.  We perform empirical analysis using state-level data in the United States in 1975 and 1977.  Under the weakest restrictions, there is substantial ambiguity: we cannot rule out the possibility that having a death penalty statute substantially increases or decreases homicide.  This ambiguity is reduced when we impose stronger assumptions, but inferences are sensitive to the maintained restrictions.  Combining the data with some assumptions implies that the death penalty increases homicide, but other assumptions imply that the death penalty deters it.

And so I revise: the death penalty is wrong, and it also likely has little measurable deterrent effect. There may still be a deterrent effect; we just can't show one given available data.

Update: Chris Auld has a nice intuitive explanation of the paper's results.

Counting Lewd's utility

It's currently legal in New Zealand to post online racy pictures of your ex. The Law Commission recommends changing that:

The commission also recommends the exemption for personal or domestic information should not apply if the collection or disclosure of the information would be highly offensive.

The change would deal with situations such as when a person posts naked photographs of their ex-partner online without consent.

Privacy Commissioner Marie Shroff welcomed the report. "It will put, for the first time, the careless, the predatory and the criminal on notice," she said. "There will be consequences if you misuse our information."

I'm not particularly opposed to the law change. But I'm near certain that the Law Commission won't have weighed the benefit provided to voyeurs of the current legal framework. David Friedman argues, persuasively, I think, that we have to count all the benefits in the utilitarian calculus lest we wind up assuming our conclusion:

If instead of treating all benefits to everyone equally we first sort people into the deserving and the undeserving, the just and the unjust, the criminals and the victims, we are simply assuming our conclusions. Benefits to bad people don't count, so rules against bad people are automatically efficient. We cannot deduce moral conclusions from economics if we start the economics by assuming the moral conclusion.

It wouldn't surprise me if the utilitarian calculus found the law change to be efficient. Presumably, if the taking of private photographs has benefits for the couples involved, willingness to have such photos taken would depend on the likelihood of future dissemination. Further, some couples that would do better to split up may stay together, inefficiently, because of the hostage problem posed by the photographs' existence. It's entirely plausible that the losses to voyeurs are smaller than these gains. But I rather doubt that anybody's sought to measure either side.