@TBPInvictus:

The WSJ recently ran an editorial piece that perfectly exemplified two things:

  1. The (well-known) cognitive biases caused by the politics and intellectual dishonesty of its editorial board
  2. The peril of confusing correlation with causation, which BR has written about countless times*

In a piece titled The Red-State Path to Prosperity, Stephen Moore and Art Laffer argue that metropolitan migration nationwide is going from blue states to red states because “Workers and business owners are responding to clear economic incentives,” i.e. lower tax rates, less regulation, more employer-friendly. They state that:

Among the 10 fastest-growing metro areas last year were Raleigh, Austin, Las Vegas, Orlando, Charlotte, Phoenix, Houston, San Antonio and Dallas. All of these are in low-tax, business-friendly red states. Blue-state areas such as Cleveland, Detroit, Buffalo, Providence and Rochester were among the biggest population losers.

In an accompanying video, Mary Kissel opens the segment by stating: “So it turns out that tax rates do actually matter, according to the Census Bureau,” at which point she begins a conversation with the aforementioned Art Laffer about what he and Mr. Moore inferred from the data. (Census main page on migration is here.) The simple fact of the matter is that Census Bureau made no such claim; Ms. Kissel is distorting Census data and giving voice to it through the ideological lens of Mssrs. Moore and Laffer.

Now, before I proceed, let’s be clear on one point: It’s entirely possible that Mr. Moore and Mr. Laffer are on to something. Unfortunately, they offer up no evidence to support their thesis. (I’m assuming the migration to which they refer has actually occurred the way they describe it which, perhaps, could be a grievous error on my part.)

I’d note that Table 24 (Reason for Move of Movers 16 Years and Over, by Household Income in 2011, Labor Force Status, Major Occupation Group, Major Industry Group, and Type of Move (All Categories): 2011 to 2012) and Table 26 (Reason for Move of Movers 16 Years and Over, by Household Income in 2011, Labor Force Status, Major Occupation Group, Major Industry Group, and Type of Move (Collapsed Categories): 2011 to 2012) might have been of use to the authors, but they apparently weren’t aware of, or chose to ignore, actual data.

You see, with the data, we can find out why people have moved instead of simply guessing about it. Of course, in doing so, one runs the risk that the data don’t cooperate with your thesis, but that’s just me,  a guy from the reality based side of the political spectrum. If you want to see what happens on this side of the street, various data tables are here.

Now, in the spirit of the Wall St. Journal editorial board, and performing the same rigorous analysis used by Moore and Laffer, I hereby advance my own thesis as to the reason for the migration patterns cited in their editorial:

WEATHER.

Yes, weather.

As we can see immediately below, average temperatures in the net-gaining areas surpass those of the net-losing areas 100 percent of the time. Every net-gainer has a higher average temp than every net loser. Let’s have a look at the areas they cite (see block quote above). Gaining areas are on the left, losers on the right:

 

 

Tax rates? Regulation? Right-to-work? Balderdash. Gimme some temperate climate. Gimme lower energy bills.

As with the Journal, I have engaged in a perfect logical fallacy:

A occurs in correlation with B
Therefore, A causes B

A bit of evidence would have been nice. Without it, all they did was fill column inches.

I hope to look more closely at this issue – via the actual data – and see what’s going on. I’ll even make a phone call or two to Census, so I know I’ve got my facts straight.

 

 

UPDATE: Some comments and email make it clear that my sarcasm apparently did not come across in print. To restate my main point, merely showing correlation ≠ causation. Maybe weather is a factor — we don’t know, but merely looking at correlation

 

 

 

 

* Previously:
Causation & Correlation: Gasoline vs. Incumbency (October 15th, 2004)

Context, Causation, Correlation  (January 10th, 2012)

Hume, Causation & Science  (January 14th, 2012)

Category: Data Analysis, Financial Press, Media, Really, really bad calls, Taxes and Policy, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

24 Responses to “Say It With Me: Correlation ≠ Causation”

  1. flocktard says:

    The best reply to this new meme taken up by the wingnut press, including Laffer, Kudlow, Fox and the ever so god awful Betsey McCaughey of the Manhattan Institute, is that this is the equivalent of my assets tripling, and then telling myself I’m richer than Bill Gates.

    Most of these red states are impoverished swamps, and Texas’ fortunes, as always, will rise and fall with energy prices and production. The theme is utter nonsense.

  2. Poqit says:

    Those shrinking cities are also among the smallest in Blue states (if we somehow include Ohio as blue).

    Wake me when Boston, Chicago, NYC, SF, and LA lose population.

    • TrainStation says:

      Ok. Wake up.

      Chicago’s population today is less than what it was in 2000, which was less than what it was in 1980, which was less than it was in 1970, which was less than what it was in 1960, which was less than what it was in 1950.

      I wouldn’t be surprising if the other cities you mentioned have decreasing American born populations. Immigrants must be okay with higher taxes.

      • RaflW says:

        In every single year bar three in the past 32 years, the Chicago metropolitan area (MSA) population has increased. The most recent negative year? 1981. So try again, sir.
        Yes, the city of Chicago has lost population, but so have virtually all urban core areas, this having far more to do with family size than an urge to flee “blue” cities for “red.” For the past 14 years I lived in a 3 br, 1920′s era house in a prosperous south Minneapolis neighborhood. In the streetcar and larger nuclear family 1950s, i’d imagine that somewhere between 3 and 6, possibly more people lived in that house.
        But a funny thing happened – suburbs! Doesn’t mean people left metro Minneapolis. But they moved to split ranches with 2 or 3 car garages and all that jazz.

      • TrainStation says:

        “Yes, the city of Chicago has lost population, but so have virtually all urban core areas, this having more to do with family size than an urge to flee “blue” cities for “red”.”

        ?????

        Try rereading the link to the WSJ article. The city cores of the cities in question: Austin, Phoenix, Dallas, Raleigh, Las Vegas, Atlanta, Charlotte, San Antonio, Orlando, have all increased dramatically over the past 40 years. Some have doubled and tripled in size, and yes their suburbs also. You need to do better.

    • KevinM says:

      See:

      https://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&met_y=population&idim=state:25000&dl=en&hl=en&q=massachusetts%20population%20trends#!ctype=l&strail=false&bcs=d&nselm=h&met_y=population&scale_y=lin&ind_y=false&rdim=country&idim=state:25000:37000&ifdim=country&tstart=331704000000&tend=1341547200000&hl=en_US&dl=en&ind=false

      Which shows how people are distinguishing impoverished swamps from cultural centers. I made exactly the move implied. Reason one was weather, as Invictus might suspect. I also got tired of toll increases on a road paid off in the 1960s and 10k property taxes on a rundown shack.

  3. Frilton Miedman says:

    The names Art Laffer or Stephen Moore come with zero credibility, both have proven, repeatedly, that they only see what they want to see when it comes to data.

    Reminds me of Rick Perry boasting of the “Texas miracle” in lower unemployment via tax policy, while ignoring the fact that the wages those jobs pay are pathetic and they don’t include healthcare, leaving many of them still dependant on subsidy or food stamps. (as with Walmart employee’s)

    Art Laffer in particular is a broken record, playing the same trickle down song over and over for decades, despite it failing, and Clinton disproving his taxation theories on wealthy “job creators”, he insists on playing it, over and over and over.

    These guys are the “noise” of Nate Silver’s “The Signal and the Noise”.

  4. san_fran_sam says:

    I agree with you that their analysis is faulty. but there is more to migration than weather. Let me add some average temperatures for cities in California.

    San Francisco 57
    San Jose 57
    Los Angeles 66
    San Diego 64

    and those are the desirable places to live. and they were not on the in migration list. throw in the likes of

    Stockton 61
    Bakersfield 65
    Fresno 63

    nice weather but believe me those cities are the pits. and warmer weather in the winter may mean lower heating bills, but a hotter more humid summer means higher electric bills for the a/c

    so it seems to me to be a combination of jobs and weather. and what will attract jobs all else equal favorable business environments — low taxes, favorable labor laws (ie right to work, ie anti-union), favorable regulatory environments.

    but still a faulty analysis. thanks for listening.

  5. Petey Wheatstraw says:

    Friends of mine moved from Northern Virginia to Raleigh, NC, because the wife had a dream where Jesus told her to. I shit you not.

  6. Mike in Nola says:

    The biggest reason for the good times in Texas is Bernanke. His policies have resulted in a pumping of oil prices as all that liquidity looks for assets in which to invest. Despite the fact that Americans are using historically low amounts of gasoline, prices remain high. Oil companies are fat and happy. Conventional drilling and fracking are running wild and there are plenty of related jobs. But the Texans think it’s some special merit of theirs much like the bankers think they are making millions because they are so intelligent.

    Meanwhile, the state has a huge budget deficit that was papered over two years ago so Rick Perry would look good in the primaries. Schools are way underfunded and one of the courts has ruled that the state is obligated to fund them fully, I think it’s on the order of $3-5B. Plus, Texas once again leads in the percentage of residents with no health insurance. And there’s Medicaid; if the legislature had actually cut it to balance the budget last time, tens of thousands of people in nursing homes would have been turned out. But that wouldn’t have looked too good for Rick in the primaries. At some point taxes will have to go up.

  7. gms777 says:

    It’s not the weather that’s bringing people to the Raleigh area.

    It’s the basketball.

  8. heaterman says:

    Over simplification on all parts by all sides of the argument.
    Given that most businesses tend to make decisions based on things like the bottom line I would probably give more credence to the tax theory rather than climate. Adding the two together would definitely make a decision easier.

    Invictus: Perhaps it was not sufficiently clear that my “analysis” was tongue-in-cheek (though the data are real), unlike the Journal’s, which is supposed to be serious.

    • SteveRJohnson says:

      The WSJ’s red state theory of migration is corollary to the tired idea that the future of the country is in the bible- and sun belts. A quick census analysis of the past three elections by household income and education levels shows that not only are the most educated, wealthiest states almost entirely blue, but they are also largely northeastern, rust-belt, and Pacific northwest, and the trend is in favor of the Democrats (think Virginia and Colorado). As I explained to my gloating father in Bush II’s two victories, I’d rather be rich and smart than dumb, poor and right (in the election).

      In addition, the most expensive real estate markets in the country, driven by old supply and demand, are not, to the chagrin of Fox & Co., Dallas, Phoenix, etc. I am certain at some point the WSJ has crowned Charlotte queen of the new financial universe, which is well-reflected in the New York real estate market’s free-fall. Maybe the editorial board should heed Yogi Berra’s advice: “Nobody goes there anymore; it’s too crowded.”

  9. gman says:

    Many of the the high tax states like il, nj and ny are the big net subsidizers of the federal government. This creates permanent keynesian stimulus for most of states wjs adores. This allows for the “pro growth” tax rates. Well, the high infant mortality and poor education don’t cost much either.

  10. rd says:

    It’s not an accident that southern cities were small until air conditioning was developed for the mass-market, the CCC and PWA built dams for water supply and electricity, and public sanitation and other advances helped largely eradicate tropical diseases in the southern US.

    With the increased focus on water conservation, water demand is hardening in much of the South and Southwest so that drought will cause real hardship that could drive population decline.It will be interesting to see what the next couple of decades bring. Don’t be surprised if industry starts moving back north to fill empty plant sites with lots fo fresh water available.

  11. rct01 says:

    Energy bills can actually be much higher in places like Texas and Phoenix than northern areas because you have to run the AC non-stop about 5+ months a year. So you are not saving anything on energy bills moving to these places. Also, the average temps maybe higher, but places like TX and AZ have brutal almost uninhabitable summers that to me are worse than winters in the north. So energy savings and climate may not be reasons for the moves. Have you done your research with these claims???

    ~~~

    BR: Your reading comprehension skills are abysmal. You utterly missed the obvious sarcasm as a form of criticizing the OpEd.

  12. Thaomas says:

    You might investigate regulations affecting housing construction and the cost of housing. It’s likely to be more important than utility bills and may vary more than total taxation.

  13. BoKolis says:

    It’s a bit silly to list nine of the ten cities and say “Among the 10 fastest-growing metro areas…” It’s just as lazy easy for me speculate that the omitted metro area was tossed because it is in a “blue” state.

    How does Obama twice winning 8 of the 9 respective counties- including Houston, but not Phoenix- fit into the story?

    Another correlation: I can assuredly say that four of those five dying “loser” cities are {expletive deleted} dumps (Providence maybe not so much). Pittsburgh has reinvented itself but, Scranton, PA, perhaps too small (but cold enough) to be included, but so long and so far dead that a coal rivival and fracking birth (and a TV show?) hasn’t resuscitated it, certainly fits this profile. Minneapolis isn’t a dump, so what gives? Could it be that industry left them to choke on their own knowledge gap?

  14. Low Budget Dave says:

    Cleveland was built on manufacturing, Orlando and Vegas were built on tourism and service economy. As the entire country gradually changes from manufacturing to service economy, cities that were built around heavy industry will lose population.

    Once a city starts losing population, of course, the losses continue. Do they really pretend we could rebuild Detroit just by lowering the tax rates and letting companies pollute as much as they want? If that were the case, then every business in America would move to Alaska, North Dakota and Wyoming.

  15. Curious1 says:

    How did “poorer weather” places (you pick on Cleveland, Buffalo, etc.) get so many people living there in the first place? Are people’s preferences for weather changing, and prompting people to move? Or is the weather in these places worsening? If everything is staying the same… there is no weather arguement.

    Something we can all agree IS changing are the state/local fiscal situations across the country… and these things are not all changing in the same way. Some are getting structurally better, some are getting structurally worse.

    Maybe people completely ignore these things in deciding where to live or start a biz….. and maybe they dont. But you cant compare this kind of argument to a “weather” argument.

  16. victor says:

    Blue NY state is running adds all over touting their low taxes and bragging about 250,000 jobs created as a result, NewNewyork

  17. [...] up on my recent post on Correlation & Causation 101, I delved into various migratory and population estimate datasets at Census.gov. Fascinating stuff. [...]