Re: The 'working poor' scam

From: Jim Blair (see_at_sig.com)
Date: 07/06/04 

Date: Tue, 6 Jul 2004 17:34:20 +0000 (UTC)

"sinister" <sinister@nospam.invalid> wrote:(quoting Paul Krugman)

>> >"But this report was based on what we may charitably call a strange
>> >procedure. Here's what Hubbard's report did: it tracked a group of
>> >individuals who paid income taxes in all ten years from 1979 to 1988, and
>> >compared their incomes not with each other but with those of the
>population
>> >at large.

>"Jim Blair" <see@sig.com> wrote:

He classified them according to income quintile, which is based on the
entire population. What sense would it make to compare them only with
each other? (My guess: if compared to each other, he would discover that
on average they did about average).

>> >The restriction to individuals who paid taxes in all years
>> >immediately introduced a strong bias toward including only the
>economically
>> >successful; only about half of families paid income taxes in all ten
>years.>

"Jim Blair" <see@sig.com> wrote:

That would be true IF Hubbard had done that, But he didn't.

>>
>> You copied this from Paul Krugman, who just made it up. To check on the
>> accuracy of PK's claims about how Hubbard collected his data, I emailed
>> Glen Hubbard. Krugman and Hubbard disagree about how Hubbard got the
>> data: Krugman said it is from people who PAID taxes in EACH YEAR from 1979
>> to 1988. But Hubbard says it is from IRS data on people who FILED a
>> return in both of the years 1978 AND 1988.

"sinister":
>
>It's still a biased estimator, though not as biased as under Krugman's
>claim.
>

I agree.

Krugman again:

>> >This bias toward the successful was apparent in the fact that by the end
>of
>> >the sample period the group contained very few poor people and a lot of
>> >affluent ones: indeed, only 7 percent of the sample were in the bottom
>> >quintile by the sample's end, while 28 percent were in the top quintile.

jeb:
>
>> And the study MUST be "biased" because the results differ from what you
>> KNOW to be the case: But how do you know what the result "should be"
>> before you have any data?
>
>No, under Krugman's claim the results are statistically biased: the
>expected values of the estimators aren't what the author(s) claim they are.

???? Read Krugman again. He says the study is biased because of the
RESULT. "Too many" of the low income people moved up in income quintile
during the decade. But how does he know how many of them "should have"
moved up so as to not have a biased study?

Krugman again:

>> >...The median age of
>> >those whom the study classified as being in the bottom quintile in 1979
>was
>> >only twenty-two."
>> >
>> >(from http://www.pkarchive.org/economy/therich.html )

So what "should be" the median age of the bottom income quintile?

"sinister":

>Zzzzzz....
>
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Relevant Pages

  • Re: The working poor scam
    ... > You copied this from Paul Krugman, ... > accuracy of PK's claims about how Hubbard collected his data, ... > Hubbard didn't claim this shows SOCIAL mobility, just INCOME mobility. ...
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  • Re: The working poor scam
    ... >>accuracy of PK's claims about how Hubbard collected his data, ... Krugman and Hubbard disagree about how Hubbard got the ... who missed PAYING income tax for any one year during the interval, ... Any study is likely to exclude some people. ...
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  • Re: The working poor scam
    ... >accuracy of PK's claims about how Hubbard collected his data, ... >Glen Hubbard. ... Krugman and Hubbard disagree about how Hubbard got the ...
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