Monthly Archives: December 2011

More on millionaire’s taxes and mobility

New Jersey was a good subject for the study, Young said, because it has so many neighboring states with large cities near the state lines, making it possible to move without having to change jobs.

The millionaire tax produces about $1 billion in annual revenue for the state, Young said, while the amount of revenue lost to out-migration of millionaires is $16 million.

The new study comes just days after an economist working in the administration of Gov. Chris Christie (R) reported that the tax was responsible for the loss of 20,000 taxpayers and $2.5 billion in income. The report did not address whether the new revenue from the tax offset those losses.

More here. Turns out I blogged about this before (but not the Chris Christie study).

What can we learn from heritability studies?

The Journal of Economic Perspectives has released a special issue devoted to “neuroeconomics.” Northwestern University economist Charles Manski contributes a short piece in which he argues “research on heritability is fundamentally uninformative for policy analysis.” Manski notes that most heritability research boils down to “analysis of variance” and is (therefore?) useless for thinking about policy making.

At one extreme, suppose that the population is composed entirely of clones who face diverse environments. Then the variance of g is zero, implying that heritability is zero. At the other extreme, suppose that the population is composed of genetically diverse persons who share the same environment. Then the variance of e is zero, implying that heritability is one.

What does this have to do with policy analysis? Nothing. Policy analysis asks what would happen to outcomes if a conjectured intervention were to change persons’ environments in some manner. Heritability is uninformative about this.