Why Good Schools And Poorly Performing Schools Stay That Way: Reprint of January 2010 Blog Post

A reprint of my January 25, 2010 blog post, "Why Good Schools And Poorly Performing Schools Stay That Way."

Monday, January 25, 2010

Why Good Schools And Poorly Performing Schools Stay That Way: Survivorship, Selection, Retention And Filtering Bias

Posted By Milton Recht

I am in favor of more information about schools, teachers and student educational performance because I believe there is not enough accountability by school systems for the educational performance of students and because I believe desirable outcomes should be measured to allow for corrective feedback at all levels of the organization, including school, teacher and student.

I would think that parents and educators would want information that measured performance and also allowed for corrective actions. Too much information or the wrong set of information is not helpful.

It is individual teacher and individual student level longitudinal (over time) information, which is almost never forthcoming in any disclosure by school systems, that best measures a student's and a teacher's performance. Has the teacher been able to improve the student's performance over the year? Yes, good school for that student: No, bad school for that student.

A large data set of information maybe interesting for conversational topics but is costly both to the parents and the schools, in the sense that both must expend effort in learning which data is useful information for improving student performance and which data is extraneous information.

The problem with aggregated non-specific student and non-specific teacher information is that over any time period the students and the teachers change and comparisons of increasing or decreasing test scores are made against two different groups. This year's graduating students with teacher group A are compared to last year's graduates with teacher group B, for example, without knowing if comparison of the two groups is valid.

There are indications in educational performance data that there is selection and filtering bias, which interferes with the usefulness of the information for parent decision-making. For example, schools with high scores tend to demand a commitment to more schoolwork than lower performing schools and also over other student interests. Do parents and children who want more schoolwork move into these school areas and produce higher test scores or do the schools and teachers. Whether better performing schools, in the sense of higher student scores, attract better achieving students or produce better achieving students is often ambiguous from most studies of performance. Do good students make schools look better on tests or do good schools make students look better on tests?

There are also indications that schools signal which students they want to enroll, which students they want to keep, and which students' families they want to move to another school area. In the US, it is sometimes as simple as whether the school highlights the winning science fair participants or the football team, but often the signals are much more subtle and less obvious. There is a survivability bias. Good schools may look better than other schools because they are better at enrolling, separating and retaining the higher performing students, and the poorer performing students move away from the school. Educational studies almost never control for survivorship bias.

Any educational information to be useful to parents has to allow them to choose a school that would benefit THEIR child. The current state of educational information about schools does not offer information to anyone that allows changes to be made to a school to improve its performance for any fixed student body. Yes, school scores can be improved but it is often by selecting a better performing group of students for testing and not by actually improving student performance. If it were easy to make improvement changes or if people really knew, what changes to make to improve schools, student outcomes at all schools, even poor performing schools, would be improved a long time ago.

The data is unreliable for recommending changes to schools to improve student outcomes and that is why student performance is deteriorating in many schools. It is also why every recommendation that has come out of previous data studies has failed to produce the desired results of significantly improving student test score outcomes.

I posted an almost identical comment on Core economics blog, "What has transparency ever done for us?" by Joshua Gans.

15 Percent Ethanol Gasoline (E15) Has Greater Vehicle And Engine Use Limitations Than 10 Percent Ethanol Gasoline (E10): E15 Gets Fewer MPG Than E10: Recent Study Questions Global Warming Benefit Of Ethanol Fuel

From U.S. Department of Energy, Office of Energy Efficiency, www.fueleconomy.gov, the official U.S. goverment source for fuel economy, "Ethanol:"

Ethanol

Ethanol is a renewable, domestically produced alcohol fuel made from plant material, such as corn, sugar cane, or grasses. Using ethanol can reduce oil dependence and greenhouse gas (GHG) emissions. Ethanol fuel use in the U.S. has increased dramatically from about 1.7 billion gallons in 2001 to about 12.6 billion in 2020.

E10 and E15
Label required on pumps that dispense E15. Label reads as follows: ATTENTION. E15, up to 15% ethanol. Use only in (1) 2001 and newer passenger vehicles (2) flex-fuel vehicles. Don't use in other vehicles, boats or gasoline-powered equipment. It may cause damage and is prohibited by Federal law. E10 and E15 are blends of ethanol and gasoline. The number after the "E" indicates the percentage of ethanol by volume.

Most of the gasoline sold in the U.S. contains up to 10% ethanol—the amount varies by region. All automakers approve blends up to E10 in their gasoline vehicles.

As of 2011, EPA began allowing the use of E15 in model year 2001 and newer gasoline vehicles. Pumps dispensing E15 must be labeled (see example). A vehicle's owner manual may indicate the maximum ethanol content recommended for it by the automaker.

Ethanol contains about one-third less energy than gasoline. So, vehicles will typically go 3% to 4% fewer miles per gallon on E10 and 4% to 5% fewer on E15 than on 100% gasoline.
[Footnotes omitted.] [Emphasis added.]

Recent Study Finds Ethanol More Cartbon Intensive Than Plain Gasoline

From Reuters, "U.S. corn-based ethanol worse for the climate than gasoline, study finds" By Leah Douglas, February 14, 2022, 5:12 PM EST, Last Updated 2 months ago:

Feb 14 (Reuters) - Corn-based ethanol, which for years has been mixed in huge quantities into gasoline sold at U.S. pumps, is likely a much bigger contributor to global warming than straight gasoline, according to a study published Monday.

The study [Environmental outcomes of the US Renewable Fuel Standard], published in the Proceedings of the National Academy of Sciences, contradicts previous research commissioned by the U.S. Department of Agriculture (USDA) showing ethanol and other biofuels to be relatively green. *** “Corn ethanol is not a climate-friendly fuel,” said Dr. Tyler Lark, assistant scientist at University of Wisconsin-Madison Center for Sustainability and the Global Environment and lead author of the study.

The research, which was funded in part by the National Wildlife Federation and U.S. Department of Energy, found that ethanol is likely at least 24% more carbon-intensive than gasoline due to emissions resulting from land use changes to grow corn, along with processing and combustion.
[Emphasis added.]

Geoff Cooper, president and CEO of the Renewable Fuels Association, the ethanol trade lobby, called the study "completely fictional and erroneous," arguing the authors used "worst-case assumptions [and] cherry-picked data."

Under the U.S. Renewable Fuel Standard (RFS), a law enacted in 2005, the nation's oil refiners are required to mix some 15 billion gallons of corn-based ethanol into the nation's gasoline annually. The policy was intended to reduce emissions, support farmers, and cut U.S. dependence on energy imports.

As a result of the mandate, corn cultivation grew 8.7% and expanded into 6.9 million additional acres of land between 2008 and 2016, the study found. That led to widespread changes in land use, including the tilling of cropland that would otherwise have been retired or enrolled in conservation programs and the planting of existing cropland with more corn, the study found.

Tilling fields releases carbon stored in soil, while other farming activities, like applying nitrogen fertilizers, also produce emissions.

A 2019 study from the USDA, which has been broadly cited by the biofuel industry, found that ethanol’s carbon intensity was 39% lower than gasoline, in part because of carbon sequestration associated with planting new cropland.

But that research underestimated the emissions impact of land conversion, Lark said.

Medicare For All Is Not Really Healthcare For All: Reprint

Reprint of my Wednesday, March 27, 2019, blog post, "Medicare For All Is Not Really Healthcare For All:"

A common, widespread misconception among politicians, the media and the public is that the path to cheaper and more available healthcare requires changes to medical insurance, such as Medicare for All or Obamacare.

Broadening healthcare insurance through subsidies or a government takeover increases demand for medical services without increasing the supply of those services. Excess demand leads to higher prices, limited affordability, and limited availability of health services. Using government subsidies (tax dollars) to lower the visible, consumer payment part of healthcare does not lower the underlying actual cost of medical services and results in continually higher amounts of needed subsidies and higher government budgets (and taxes) to meet the existing and increasing demand for medical care, in part due to a growing and aging population. In the end, the reality will be less medical care availability and not more as originally intended, as government budgets will become insufficient to pay for the needed medical care of the general public.

Medical Insurance Industry
The insurance industry does not provide healthcare and it is not an employer of doctors, nurses, etc. It does not compete in the medical care industry. Medical insurance is a reimbursement mechanism to consumers for their medical costs. It is like collision auto insurance that reimburses a car owner for the repair of damage to a car body, or home fire insurance to pay for repairing fire damage to a house.

No rational person would think that government involvement in collision insurance or fire insurance would lower the purchase price of a car or a home. Yet, with medicine, politicians expect that government involvement in health insurance will lower the cost of seeing a doctor or staying in a hospital. The reality is that the more government is involved in healthcare and healthcare insurance, the more expensive and unavailable it becomes. The private sector, in a profit motive, competitive marketplace, is much better than government in quickly delivering quality goods and services to almost all consumers, while driving costs and prices lower than laws, regulations and government providers can. Government is good at hiding the true cost of consumer services and consumer goods through tax benefits and subsidies, but government is not as good as the competitive marketplace at providing cheaper services through efficiency, productivity and innovation.

For the health insurance industry to continue to exist, the total yearly revenue from health insurance premiums must exceed the total yearly payout to consumers for medical claims. If total insurance premium payments were below total insurance claim payouts, insurance companies would go bankrupt and leave unpaid claims. The way to lower insurance premiums is to lower the total real cost of provided healthcare through healthcare industry competition, efficiency, productivity and innovation.

Healthcare Costs
The problem with healthcare costs is that the medical care industry, not the health insurance industry, is non-competitive and is not striving to increase productivity through innovation and efficiency. The healthcare industry is on the low end of industry productivity improvements in the US, along with education and construction. As long as healthcare productivity is below average and less than the other sectors of the economy, it costs will increase faster than inflation and faster than average growth in income and wealth. The numerous government barriers, medical industry restrictions and anti-competitive behavior to the entry of new doctors, medical providers, trained immigrant doctors, new hospitals and out-patient surgery facilities, limit the number of competitive medical providers and keeps healthcare services prices artificially high.

In the case of government run medical services, when the yearly budget is exceeded or the money runs out, the services and subsidies stop. For Medicare for All to be able to pay the annual medical costs for all eligible individuals, its total annual budget cannot be lower than the total actual yearly medical usage costs of all those covered under Medicare for All. Doctors and hospitals that currently accept the existing Medicare do so because they are cross-subsidized by the higher payments by the individuals (mostly under 65) covered by private insurance and not Medicare. Once Medicare for All goes into effect, those that are paying higher amounts than Medicare will cease to exist and the current existing fee structure of Medicare will have to be higher under Medicare for All.

To control costs and avoid going over its yearly budget, government will have to limit the availability and usage of healthcare services through limiting the availability of technology, doctor appointments and surgeries. Wait times will increase to see doctors, to have medical tests and surgery performed. Purchase and use of newer and existing technologies will be delayed or not purchased in sufficient numbers to meet demand without excessive delays.

Medicare for All will give you insurance coverage, but it will very quickly result in delays in receiving care, delays in replacing outdated technologies and under-funding in medical infrastructure. The inability to obtain needed quality medical care in a timely manner, is in reality equivalent to having no medical coverage, or at best inferior medical care. Medicare for All will quickly evolve and give you health insurance without access to timely, needed healthcare and without access to the best technology and treatments.

Added March 31, 2019:
Also see my April 24, 2018, blog post, "Expensive Medicine: My Posted Comment To WSJ Opinion, 'English Literature Isn’t Brain Surgery: Why is American medicine so expensive?' And An Addendum"

Price Controls Are Costly And Ineffective: St. Louis Fed Article

Excerpt from the Federal Reserve Bank of St. Louis, "Why Price Controls Should Stay in the History Books" by Christopher J Neely, March 24, 2022:

This article reexamines price controls, discussing their history, operation and disadvantages, and economists’ views on the policy. It explains why most economists believe broad price controls to be costly and ineffective in most situations.***Price controls are government regulations on wages or prices or their rates of change. Governments can impose such regulations on a broad range of goods and services or, more commonly, on a market for a single good. Governments can either control the rise of prices with price ceilings, such as rent controls, or put a floor under prices with policies such as the minimum wage.***The History of Price Controls
***The U.S. government last used broad controls in a series of schemes from 1971-74 following the withdrawal of the dollar from the gold standard. Many developing countries control the prices of staples, sometimes combining price controls with subsidies.

The Impact of Price Controls
Let’s consider the impact of price ceilings. High prices have two economic functions:

• They allocate scarce goods and services to buyers who are most willing and able to pay for them.
• They signal that a good is valued and that producers can profit by increasing the quantity supplied.

That is, prices allocate scarce resources on both the consumption and production sides. Price controls distort those signals.*** Costs of Price Controls
Price controls have costs whose severity depends on the broadness of the control and the degree to which it changes the price from the free-market price. The costs include the following:

• A government bureaucracy and law enforcement must be funded to enforce the controls.
• Goods and services are allocated inefficiently, both in consumption and production.
• Competition shifts from production to political markets as firms attempt to influence price-setting decisions.
• Widespread evasion of price controls promotes disrespect for the law.
• Suppressed inflation appears when temporary controls are relaxed.

***How Do People and Firms Evade Wage and Price Controls?
When a price ceiling prohibits a desired transaction, the buyer and seller will often evade the price ceiling by transacting in a closely related but unregulated product or by trading illegally in black markets. Similarly, sellers might change a good slightly to prevent it from being subject to the same price limit. The economist Hugh Rockoff notes that the price of clothing has been particularly difficult to control because an article of clothing can be upgraded easily to a higher-priced category by adding inexpensive decoration or reduced in quality by substituting cheaper materials.

The historian Jennifer Klein has documented that the current dependence of the U.S. health care system on employer-provided insurance is a relic of the evasion of wage controls during World War II. During that conflict, defense industries wanted to hire more workers but could not legally raise wages. To make their jobs more attractive, some employers began offering health insurance as a legal fringe benefit.

Price controls prompt greater behavioral changes in the long run. Consider how firms might respond to a higher minimum wage that increases the cost of entry-level labor. In the short run, employers might raise prices and economize on labor. Firms will tend to raise prices, even in a competitive market, because producers must pay higher wages to their employees. People will consume less of the higher-priced products that use entry-level labor intensively. In the longer run, employers will install more capable machines, such as dishwashers or automated cooking machines, to reduce the quantity of entry-level labor they use.

What Do Economists Think about Price Controls?
Economists generally oppose most price controls, believing that they produce costly shortages and gluts. The Chicago Booth School regularly surveys prominent economists on questions of interest, including price controls. Most economists do not believe that 1970s-style price controls could successfully limit U.S. inflation over a 12-month horizon, and many of those economists cite high costs of controls.*** Conclusion
Price controls have had a very long but not very successful history. Although economists accept that there are certain limited circumstances in which price controls can improve outcomes, economic theory and analysis of history show that broad price controls would be costly and of limited effectiveness. Appropriate fiscal and monetary policies can reduce inflation without the costs imposed by price controls.

[Footnotes and Charts Omitted.]