Category: Regulation
Posted by: Admin
Example of "bold" regulation of new financial products.....
"For example, before 1996, certain initial public offerings of stocks were subject to merit review in certain states, where the state decided if a security is a "bad" investment and thus not appropriate to be offered to its citizens. In fact, this is exactly what happened to Apple Computer when it first went public in 1980. Massachusetts prohibited the offering of Apple shares because they were "too risky," and Apple did not even bother to offer its shares in Illinois due to strict state laws on new issues. What if federal bureaucrats had had the power to impose their judgment on a "risky" financial product (such as an IPO) on a nationwide scale, or every state followed Massachusetts' lead?"
From Marginal Revolution
"For example, before 1996, certain initial public offerings of stocks were subject to merit review in certain states, where the state decided if a security is a "bad" investment and thus not appropriate to be offered to its citizens. In fact, this is exactly what happened to Apple Computer when it first went public in 1980. Massachusetts prohibited the offering of Apple shares because they were "too risky," and Apple did not even bother to offer its shares in Illinois due to strict state laws on new issues. What if federal bureaucrats had had the power to impose their judgment on a "risky" financial product (such as an IPO) on a nationwide scale, or every state followed Massachusetts' lead?"
From Marginal Revolution
Category: Regulation
Posted by: Admin
Give the authors their due.... they do call their study "the association" between TV watching in childhood and educational attainment. The most recent of popular horror stories about watching TV and not achieving at school continues the long tradition of failing to resist the temptation to link correlation with causation.
The authors even posit some hypotheses for the association they find (and its a highly highly sound association, statistically significant, with a strong research design, plenty of longtitudinal data and other robust features) but it is not these hypotheses they test.
They find an association - a strong one. The media and others (one assumes ? perhaps unfairly) then translate this to statements such as "you are more likely to.... [add in current fashion statement]".
Apart from this leap which is attractive but not forgivable, there is no counterveiling mention of the benefits of watching TV - Result?
(1) we know no more about the net benefits of children watching TV than we did before and (2) we may mistakenly think we have found a causal link which is non existant.
A useful question is this. Given that experienced researchers know from bitter experience that the chances of these kinds of mis interprtation of the word "association" and their study findings are very high, why do they persist? Better one would think to spend time devising tests for the causal hypotheses themselves.
The authors even posit some hypotheses for the association they find (and its a highly highly sound association, statistically significant, with a strong research design, plenty of longtitudinal data and other robust features) but it is not these hypotheses they test.
They find an association - a strong one. The media and others (one assumes ? perhaps unfairly) then translate this to statements such as "you are more likely to.... [add in current fashion statement]".
Apart from this leap which is attractive but not forgivable, there is no counterveiling mention of the benefits of watching TV - Result?
(1) we know no more about the net benefits of children watching TV than we did before and (2) we may mistakenly think we have found a causal link which is non existant.
A useful question is this. Given that experienced researchers know from bitter experience that the chances of these kinds of mis interprtation of the word "association" and their study findings are very high, why do they persist? Better one would think to spend time devising tests for the causal hypotheses themselves.
