Supreme Court Nominations and "The Nuclear Option"

   President Trump is on track to appoint his third Supreme Court Justice this term, the most in a single term since President Nixon. In the current nomination process of Judge Amy Coney Barrett, the Republican Senate Majority has 53 members. This is more than enough to pass the current threshold of 50 votes with Vice President Pence to break the tie. However, this was not always the case. Prior to Justice Gorsuch's nomination, 60 votes were required for a Supreme Court Justice to be nominated. However, due to the inability to get Gorsuch nominated successfully under this rule, Senate Majority Leader Mitch McConnell invoked the so-called "Nuclear Option", lowering the threshold to the current rule, 51 or 50 plus Vice President. 

  It's pretty clear why McConnell changed the rule but did changing the rule really make sense? Based on Buchanan's A Generalized Economic Theory of Constitutions, nothing really changed in the average confirmation process. The external cost and decision-making cost curves have not shifted, yet the rule changed anyway. This moves away from the assumed optimum at 60 votes to this point of higher expected costs at 50 votes. While this short-run solution increases Republican's utility and decreases their personal decision-making costs, in the future the rule will also apply to them, resulting in higher-than-necessary external costs. However, given the fact that the Supreme Court has lifelong appointments, this payoff may actually outweigh the long-run higher costs, given that the rules may change in the future due to the Supreme Court's power of judicial review.

Rational Abstention and Irrational Lawn Signs

 If you drive around Charlottesville during election season, you'll see a bevy of political campaign lawn signs posted in the yards of city residents. Forty years ago, this might not have been the case -- according to one study, use of lawn signs quadrupled between 1984 and 2012. According to the Washington Post, this is because campaign managers like to feel as if they're making an impact, and political candidates like to feel like they're winning. Regardless of this small consumption externality of an ego boost, how much do lawn signs actually increase your chance of winning an election?

Again via the Washington post, the positive impact of lawn signs is negligible -- an average increase of 1.7 percentage points, with a standard error of 0.7 percentage points. How much money do campaigns waste every year on a purchasing practice that is probably only impactful in extremely close races?

There's another possible impact of lawn signs that campaign managers may have failed to consider. Lawn signs give people the impression that everyone's voting -- in a town like Charlottesville, they even give the impression that everyone's voting for the same candidate. This could easily leave voters with the impression that (a) this is not a close election, and (b) there is a large portion of the population voting. Both of these factors will decrease p, the probability that an individual's vote will be the deciding vote in the election, thereby decreasing the expected value of voting and decreasing the chance they'll take the time to vote at all. From the perspective of the campaign manager, if this effect is larger than the increase of votes from distributing lawn signs, distributing lawn signs could actually hurt your candidate's chances of winning. The more lawn signs you post, the more you increase the chance that someone will participate in rational abstention come election time.

“I Voted” Stickers are Expressions…and Nudges.

     I love “I voted” stickers. Placing the sticker on my shirt gives me a sense of pride and fills me with patriotism. It also shows others that I voted, allowing me to express to others (who I see on the day I vote) that I think voting is important. And this feel great! But it also does something that is a bit more interesting: it silently nudges the people I see to vote too.

    We encounter nudges throughout our day, but no experience is as visceral as the coffee shop tipping situation with Square, which I encountered yesterday. The barista turned the Square screen around and there it is: 10%, 15%, 20%, or no tip. I had just bought a large pumpkin spice latte (in season, of course), and was faced with this horrifying moment. It was just a coffee, no need to tip, right? But, the screen makes it seem that not tipping is a “bad look”; what if the people behind me see that I didn’t tip? The nudge helps to “coax” people into tipping more often than they normally would without this tipping mechanism. As Amanda Ventresca of Café Grumpy in Manhattan notes, “Square puts [tipping] in their face as an option, and although we’re not necessarily busier, tips have gone up.” “Square says that 45 to 50% of all transactions on its systems involve a tip.”

    The “I voted” sticker functions in a similar way. “It's social pressure, not economics, that motivates the marginal, or on-the-fence, voter.” Thus, I see the “I voted” sticker as having a dual function: 1) allowing me to express to others that I voted and 2) pressuring others into voting themselves. Assuming that the people who might be influenced by the “I voted” stickers won’t simply go buy these stickers like Professor Coppock but actually go to vote in order to obtain the sticker, then the nudge might just work. The “I voted” sticker is not only a component of my expressive utility from voting, but also a social pressure tool that attempts to persuade others to vote through perceived ostracization if they refrain from doing so. And as Stefano DellaVigna, an economics professor at the University of California Berkeley and author of "Voting to Tell Others” shows, “the potential public shame of not voting is enough to boost voter participation by 2 to 3 percentage points.” The nudge works again.

Changes in Education: COVID-19

In Chapter 6 of The Calculus of Consent, Buchanan and Tullock wrote that rational individuals may choose the government to be in charge of their children's education, since parents may "not educate their own children sufficiently" themselves (page 75). Most American families are accustomed to having the option of public education available to them. However, due to the coronavirus pandemic, many parents do not feel safe sending their kids back to in-person school. A recent article in The Atlantic predicted parents "fleeing" from schools — maybe forever.

For parents debating whether keep their children home from school this year, they will likely incur some decision-making costs. Buchanan and Tullock explained that if two or more people are required to agree on a single decision, the time and effort required to reach consensus is introduced into the expected costs equation. As an increasing function, the more people who must agree before action is taken, the larger the decision-making costs will become as a result. If two parents and their children decide on a rule of unanimous consent for their family, decision-making costs will be higher than for parents who do not take into account their children's preferences. For a single parent who makes the decision alone, he or she will not have to spend any time or energy recruiting others to the winning side.

That parent will still worry about the effects of either homeschooling or returning to school on their child, however, no matter the ultimate decision. Right now, The Atlantic reports a common thread among all American families: “Parents are terrified of failing their children.”

Why Rank Choice is the Best Choice

In class, I was very excited to talk about Rank Choice Voting, as I have used RCV in past state elections. While we talked about why RCV came to be in Maine, I thought an interesting anecdote on its impact was when RCV was used was in the 2018 midterms for 2nd House District. After the first round of voting Poliquin held a plurality, but not a majority. As lower candidates were eliminated during the runoff, Golden won after securing the majority. This election is a good example of why the voting rules matter. Under the traditional plurality voting system, Poliquin would have been the winner. However, because RCV requires a candidate to get a true majority through runoffs, Jared Golden was declared the winner. Changes in the voting rules can totally alter the results of an election!

One key benefit of introducing RCV is that it allows voters to vote their conscious rather than strategically vote. With runoffs, people are able to vote for the candidate they prefer, as opposed to in a plurality system where people are strategic with their vote. For example the thousands of Maine voters who voted 3rd party were able to do some without fear of "throwing away their vote." As a result, there is better preference revelation. An additional benefit not discussed by Mueller, but which I think is important, is that it allows third parties to run candidates in order to influence a majority party without shifting election results. For example, in the 2018 Midterm race, the Green party could run a candidate in hopes of shifting the Democrat Party to the left without fear that votes cast for them would help Republicans. 

I'm excited to see how RCV plays out in the election in November and look forward to other states adopting innovative voting systems to improve efficiency. 

Fitting into Tiebout's model

As I have begun searching for jobs after graduation, I have started to plan for where I would like to live. I called my buddy from Sterling the other day to gather information about each of the regions up in Northern Virginia and it got me thinking about Public Choice.

The research I have been putting into deciding where to live reminds me of Charles Tiebout's A Pure Theory of Local Expenditures. Right now, my situation allows me to fulfill all of the assumptions we covered when considering where to live. I have perfect mobility (I can move my things anywhere at the end of this year), I have near-perfect information (because of the internet), I have a large choice set of neighborhoods, there are lots of job openings for college graduates, and there seem to be no externalities between neighborhoods.

Based on the article referenced earlier, the communities are fighting over consumer voters (myself included) with all kinds of public goods. When the communities are left alone to provide public goods to the consumer voters, they attempt to outperform one another until everyone's ideals are satisfied. Also, the communities will get a sense of what their consumer voters desire by observing the success of surrounding communities. Whether my interests lie in tasty restaurants, outdoor public arts spaces, access to public transportation, or public parks, I will move to the community that provides me with the highest level of utility given my budget constraint. 

What is the Opportunity Cost of my Time?

Last week I signed up for an online education program known as “Masterclass.” They launched a short promotion offering a 1-year subscription for $1 for all college students (normally it costs $180 for full access). They offer courses on a variety of topics, but I am primarily interested in their classes on filmmaking and storytelling. Clearly, I have downward-sloping demand, as I do not value the courses at $180/yr, but I do at $1/yr.

If I was rational, I would purchase it when my E[MB] > MC. I am only willing to pay up to ~ $50, which implies that my E[MB] is ~ $50. The courses are several hours each. If my E[MB] is less than $50, and I spend ~20 hours on Masterclass this year, that implies that I value that time at $2.50 an hour. Great! My E[MB] > MC, but this is slightly concerning. If I chose to spend my time on Masterclass, does that really mean the opportunity cost of my time is only $2.50 an hour?? 

Not exactly. I could probably find work somewhere to earn more than $2.50/hr, but I value the classes at: E[MB] + UTILITY (i.e. enjoyment & investment in my human capital). Just like we learned about voting, I do not merely consume Masterclass for because its E[MB] > MC. That would suggest I have desperately low opportunity cost of my time. I also derive utility from Masterclass, and since I am now writing about it in a blog post, it seems I’m also getting some expressive value from my consumption! Like voting, the E[MB] alone doesn’t fully explain my consumption, I also factor in utility and expression.