4.20.2007

A Freakonomics Foul

We all enjoy a fad, but like binge drinking, the Cubs seasons and Aaron Sorkin shows, there's always that moment when you realize the fun has turned to funk.

This week, we hit that moment with Freakonomics.

For those unfamiliar -- i.e., space station occupants and Iranian government censors -- Freakonomics is the punny title dreamed up by two economists to describe their wacky ways of explaining and testing various economic theories. (i.e., drug dealers earn less than Mickey D's employees, but do it for other reasons).

The two young gents behind the Freak have become economic celebrities, a phrase that didn't exist three years ago. And I can only imagine the consternation that must bring to the hundreds of thousands of non-celebrity economists, most of whom prize themselves on public displays of brain wattage, seeing two jokers break out with goofy experiments while their papers on deadweight losses and wage externalities only feel the touch of a human hand when accidentally knocked over by co-eds getting their freak on in the stacks.

Enter Greg Mankiw. He's the opposite of a Freakonomic -- former Bush administration official, now returned to teaching at Harvard. He has a blog that gets some attention; his big issue has been agitating for gas taxes, but not forcefully enough to draw a bead of sweat from anyone who could make them happen.

And yet, this week Mankiw took a Freakonomics-style swing: He unveiled a new paper with a co-author that questions why we don't set taxes by a person's height.

Taller people, as several studies have shown, earn more money than shorter people. If taller people will always make more money, Mankiw & Co. argue, "a tall person making $75,000 should pay about $4,500 more in taxes than a short person making the same income."

"Alternatively, if policies such as a tax on height are rejected, then the standard utilitarian framework must in some way fail to capture our intuitive notions of distributive justice."

Translation: If you're not up for the Shaq tax, they contend, well then maybe we need to rethink the reasons behind the general idea of taxing the wealthy and sending the proceeds to the less well-off.

Most of this debate takes place several econo-dungeonmaster levels above my elfin brain. Other economists have chewed the idea over and found it not completely pointless.

But there's a whiff of something rotten here. For starters, the studies on height M&Co. rely on only tracked white men. If there's one out there showing similar stats for women and minorities, I haven't seen it; and I think advanced democracies have generally thrown out the "father knows best" approach to social science.

Another study they don't mention showed that the height-income effect only applies to a man's height at age 16; his height at 23 or 55 doesn't correlate with his earnings. (Those authors suggested growth hormones for the unduly short to ensure they don't fall behind in life. Who cited that study? One guess...)

And the whole approach leaves me cold. If his argument is so strong, why does Mankiw need to construct a prop-stick-and-box logic trap to "capture" his opponents? This is how sciences end up with labels like "dismal"; by using the best minds of a generation to reenact the strategies of Elmer Fudd.

1 comment:

Dan said...

The Socratic method is basically one long logic trap. Does that mean that Socrates "reenacted the strategies of Elmer Fudd?" Of course not.

By proposing this tax, Mankiw's forced his intellectual opponents to either accept a tax on height or reassess their own assumptions. I'd say this is an effective way of debating.