Republicans are Watching the Poles

It appears that workers in at least one industry will be benefiting from an income redistribution from the wealthy next month – strippers in Tampa Bay. According to The New York Times, club owners in that region are ramping up hiring in anticipation of a massive increase in demand for adult entertainment the weekend of the Republican National Convention.

It isn’t that surprising that when 50,000 convention goers get together, in a town that is well known for its adult entertainment industry, that the clubs will be hopping, but this group of partiers are projected to make this weekend particularly lucrative.

According to Angela Spencer at the Association of Club Executives, the trade association for strip clubs, when they compared spending by participants at the Democratic Convention in Denver with participants at the Republican convention in New York they found that Republicans spent three times as much as the Democrats -- $150 compared to $50.

Now The New York Times makes it pretty clear that these statistics were collected from an informal survey of strip club owners operating in those cities, so no one should take this as evidence that individual Republicans spend more in strip clubs than do Democrats.

And since the data is measured on a per-patron basis there is absolutely no evidence at all that total spending for adult entertainment at GOP conventions is higher than it is at Democrat conventions. In fact it could just as easily be lower depending on how many participants visited the clubs.

Add to that the observation that the Denver convention was in 2008 – an interesting year for strip clubs as women, liberated from their regular employment by the recession, joined the profession in droves – and we should all recognize that without knowing how clubs price services we really have nothing to say about Republican versus Democrat consumption of adult entertainment at conventions.

Many years ago, when I was still a student, a Toronto cab driver told me that when the economists come to town for conventions the sex workers all take the weekend off. I have been to enough of these meeting to know that isn’t exactly true (I remember one conference where a colleague joined us at the bar at the end of the evening proclaiming “I can’t believe how cheap a blow job is in this town!”).

And while I know that isn’t very good evidence of how economists behave -- just like this evidence on Republican strip club attendance -- it does make a good story later.

Abstinence Spending Deserves a Little Credit for the Decline in Teen Pregnancies

The one thing you can count on in social science research is this: Inquiry will continue until the preferred hypothesis has proven to be true. Proponents for abstinence only sex education are no doubt celebrating new evidence that, on the surface at least, supports their belief. Before funders put their research dollars away, however, they might want to read the fine print first.

This study, published in the Review of Economics of the Household, finds that an increase of 1% per capital in spending on state abstinence education programs has the power to reduce births by 15-17 year old women by 0.04 births per 1,000 suggesting that the program offers very good value to the taxpayer – for every $50,000 spent four births were avoided at net savings to the public of $15,652 per birth.

That sounds like a pretty convincing economic case for not teaching youth ways that they can control their fertility (or, for that matter, how to prevent disease). However that isn’t really this paper’s conclusion.

What this author is telling us is that sex education programs are a productive way to spend tax dollars. It does not tell us that spending those dollars on abstinence-only programs is more productive than spending them on other sex education programs.

We don’t know, for example, how many births might have been avoided for every $50,000 spent on programs that teach youths the variety of means available to prevent pregnancy and disease.

But that is not the only thing this paper doesn’t tell us.

To understand this, take a look at the graph below produced by the National Vital Statistics Report (June 20, 2012). It is obvious from this figure that the overwhelming majority of teen pregnancies are among women over the age of 17 and women who are either Black or Hispanic.



This research tells us nothing about the birth rate women over the age of 17 in response to abstinence program spending – just because it decreased pregnancies among younger girls does not imply that it hasn’t increased pregnancies among older girls – and even more concerning, it tells us the only population of younger girls impacted is white girls.

According to this evidence, there is no effect of abstinence program spending on the birth rates of Black or Hispanic girls who are between 15 and 17, and yet it is exactly these women who have seen their birth rates decline the fastest in recent years.

This not only calls into question the effectiveness of this program, but also the “net savings” figure above. That figure is only true if the average cost to the public of a teen pregnancy for a white girl is the same as the average cost to the public for all girls. If Black or Hispanic girls spend more time on public assistance following a teen birth, then that figure overstates the actual savings created by the program.

Birth rates for teen women have fallen dramatically in the United States over the past 20 years, with the majority of that change coming from declining birth rates among non-white women. If anything, this paper is proof that abstinence education can only explain a very small part of that trend and that policymakers need to keep looking for a solution.

I would like to offer a big thank you to Shoshana Grossbard who posted this article on her excellent Facebook page Economics of Love.

Reference:

Colin Cannonier, 2012. "State abstinence education programs and teen birth rates in the US," Review of Economics of the Household, Springer, vol. 10(1): pp 53-75.

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Would you like a side of Christianity with that, Sir?

Don’t you just hate it when people that you fundamentally disagree with say something that you know to be true? Back in March, Brian Brown, president of the National Organization For Marriage (NOM), said “Corporations should not take sides in a culture war that pits a company against the majority of the American people."

Corporations are units that exist for the purpose of generating profits so it is a difficult perspective to argue with – why publically take a position that alienates you from the majority of consumers?

This week Chick-fil-A took a stand; they came out and said that they oppose equal marriage rights. That is a surprising move in a time in which the majority of Americans are in favor of legal reform that allows same sex couples to marry. But before we rush to the conclusion that Chick-fil-A is a corporation that puts principles before profits, I would like to point out that just because the average American supports equal marriage rights does not mean that the average Chick-fil-A customer does as well.

I suspect that corporate bosses who decide to take sides on this particular “cultural war” know exactly who their customers are and where they stand on this issue.

Public opinion in the US is converging in favor of same-sex marriage in that the average US citizen now believes that marriage laws should be based on equality rather than a morality. A closer look at the data, however, tells us that public opinion is strongly diverging across racial, regional, religious and political divides.

For example, sociologist Dawn Michelle Baunach has looked at the change in attitudes towards same-sex marriage between 1988 and 2006 and found the following groups have been more willing to accept same sex marriage:

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Why We Marry

Here’s a question I have been struggling for years: Why do we marry? I am not confused about the desire to have a wedding – the pretty dress, standing before family and friends, the party – that part I get.  It’s the need to seek the government seal of approval of the marriage that challenges me.

New economic research comes up with a tidy theoretical argument for why we marry, but if you ask me the question the paper really answers is, “Why did our parents marry?”

The economic argument goes something like this. Marriage is efficient in the economic sense only when both people in the union can specialize in the area of production in which they have a comparative advantage. If person A earns more than person B, and A and B have children together then A should work outside the home and B should put her career aside to take care of children.

If, for some reason, B doesn’t want to spend years of her/ his life wiping runny noses and instead stays in the workforce, then the marriage is technically inefficient in that A and B are not maximizing the potential gains from the trade.

Inefficiency is bad. So in order to encourage the efficient allocation of household resources, A needs to promise B future compensation for the time he/she spends taking care of the family instead of earning an income.

Promises are nice, but contracts are better.

People marry because it makes that commitment to compensate the caregiver credible and, as a result, encourages marriages to be efficient in a way that a non-marital arrangements never could be.

We marry, according to this argument, because that is the arrangement that encourages the most efficient allocation of household resources.

This would have been a very convincing story thirty years ago and, in fact, I am not sure this is really any different than the explanation for marriage given by Gary Becker in his famous Treatise on the Family (published in 1981).

But the world has changed.

According to a recent poll by the Pew Center for Research, fewer Americans than ever before feel the institution of marriage is still relevant. Interestingly, 47% of the unmarried adults in that survey who felt that marriage was obsolete also expressed hope that one day they would be married themselves. Likewise, many already married adults--31 percent--expressed the opinion that marriage is no longer relevant.

I think the source of this apparent contradiction – that people want to be married but really don’t see the point – is that household production is no longer maximized when one person sacrifices their career to care for the family.

For many couples with children the best arrangement is for both to work on the waged labor market and then to use the income that labor generates to purchase all of the goods and services formally produced by women in the home.

Why do we still marry, despite the fact that the legal framework is no longer needed to ensure the efficient allocation of household resources?

I think Justin Wolfers and Betsy Stevenson said it best a few weeks ago in their “Economic Case for Same Sex Marriage”:

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