A Cold Compress for Status Fever

In the August 30 New York Times, Cornell economist Robert Frank writes about The Great Gatsby and happiness research. Frank worries a lot more about status-seeking than I think is warranted by the evidence. And I see this topic has caught fire on the blogowebs. So, here's a few points that I make in a piece on positional competition I wrote that is coming out later this month in the Australian Center for Independent Studies' Policy magazine. 
In his books, Frank provides evolutionary arguments about why you should expect us to be status obsessed. I don't deny that we are motivated by status. The evolutionary logic makes sense. But I do deny that the status-seeking game is globally zero-sum. Frank overestimates the importance of evidence from non-human primate deference-dominance hierarchies and, as far as I can tell, pretty much ignores the profound effects the unique human cultural capacity has on the pursuit of status. These are:
Culturally mediated variability. Like other built-in behavioral dispositions, the expression of status-seeking will be mediated by cultural norms. I eat with a knife and fork, and I don't feel like I need to ask a young lady's parents if I can have a sexual relationship with her. In other places, you eat with your hands, and you'll be killed if you don't get dad's permission. Like chimps, we all eat, and young males will seek to have sex with young females. Unlike chimps, these behavioral patterns are strongly culturally shaped, and can be very different from group to group. Status-seeking is no different. Wealth probably correlates fairly strongly with status in most human populations. But humans confer status on each other for many reasons–for being a good athlete, for being funny, for being a good leader, for being smart, for being a charismatic performer, for having an impressive skill, for being spiritually profound–and most of the reasons status is conferred have nothing to do with command of material resources.
Status as payment. Crudely, the point of a cultural capacity is to gain an advantage for yourself and your offspring by accumulating and transmitting adaptive information and abilities in cultural (fast) rather than biological (slow) time. But everybody has an incentive to free-ride–to receive valuable information and skills, but never invest in gaining them for transmission. One way to solve the free-rider problem is to subsidize the acquisition of excellence by freely conferring praise, prestige, status, and fame on those who go through the trouble to learn something useful. In this case, the conferral of status is part of a profound positive-sum exchange–it is what makes the benefits of human culture possible. Positional status competition on any given dimension is zero-sum. There can only be one best jazz guitarist in Tucson. But the motivation to be the best flows from the status-benefits of being the best. And the status-benefits for cultural creatures are not based primarily in dominance-based access to scarce resources, as in other primate status hierarchies, but are freely granted by other cultural creatures as an incentive and reward. Winning on a particular status dimension creates a kind of positional externality for those who didn't win. But if the benefits of status competition do not usually outweigh the costs, then we wouldn't be disposed to so happily heap praise and status on bravura performers, and we would therefore get few bravura performances. Indeed, we would likely have no culture at all.
I wrote a long post on this a while back. Check it out. And I encourage everyone interested in all the hullabaloo about relative position to read the paper I discuss there by  Joe Henrich and Franscisco Gil-White: “The Evolution of Prestige: freely conferred status as a mechanism for enhancing the benefits of cultural transmission.” (Evolution and Human Behavior, 22, 1-32).
The multidimensionality of status. Cultural mediation plus status-as-payment not only enables but encourages specialization in the pursuit of status. I find it truly weird how people like Brad DeLong, who are themselves high status individuals for reasons almost totally unrelated to income, fixate on income and wealth as if it is the preeminent dimension of status, and as if we have no choice but to care about it. 
I think if most people thought hard about it, they would find that they have jumped from one dimension of positional competition to another, looking for a race in which they can place, if not outright win. I know that's the case for me. A little autobiography… I was for a very short time a musical theater major in college. I quit pretty quickly because, although I absolutely loved singing, I realized I wasn't good enough to rate high in the musical theater game. So I concentrated on my art major. I thought I was good enough, but found I wasn't motivated enough to seriously compete on the art scene. So I took a big chance and moved into philosophy. I found that I was really pretty good at that, but, again, found that I wasn't motivated to compete according to the rules of academia. Now I'm working on a career as a public intellectual, because I'm highly motivated, and I think my prospects are decent. In a few years, I might find myself disappointed in my inability to get far in this field (stiff competition!), and shift to something I might have a better chance of succeeding at. Now, I know I would like to make a lot more money, since there a lot of things I would like to be able to buy, but I have simply never related the size of my income, or my net worth, to my  sense of status. It has been pretty much irrelevant to what I care about status-wise. I don't think I'm that different from many or most people. I think that there are lots of pastors, PTA presidents, police chiefs, local scenesters, small town newspaper editors, and competitive Scrabble champions who are pretty pleased with their high relative standing within the circle they care about. Back where I come from, a single blue ribbon for a strawberry rhubarb pie at the State Fair could carry a small-town lady for years.
The “cultural fragmentation” of liberal market societies that allows everybody to be relatively high status on some dimension or other is an immense egalitarian triumph. The other way markets are leveling, through equalization of quality all along the price range for various kinds of consumer goods, makes material status-signaling more difficult, which does indeed bid up the price for certain kinds of positional goods, like houses in Manhattan, or spots at Harvard. But this is a problem only if you are determined to compete in that status race. If you are so determined, and you're having a hard time of it, that's your problem. You are not suffering from inequality; you are suffering from your preferences, and, within fairly broad limits, our preferences are under our control. I certainly don't mind if you choose not to opt out of a positional competition you are losing. But I do mind if you expect to be subsidized for your choice. 

23 thoughts on “A Cold Compress for Status Fever”

  1. The second argument being that there is neither a) anything resembling meaningful data that isn’t corrupted by selection bias and b) any remotely satisfying causal argument for why schooling systems with near-identical pedagogical techniques would have different results outside of that selection bias.
    Private schools overwhelmingly teach students with vast statistical advantages compared to their public counterparts. That is the beginning, middle and end of explaining the difference, and for that reason vouchers will not work.

  2. For a longer form of my argument, you could look here:
    Selection bias is not some noise to be removed from the signal. It is the signal. Poor kids do badly in school, rich kids do well, private schools overwhelmingly teach rich kids. I’m sorry that this is true, but it is true; voucher proponents confuse cause for effect.

      1. The second and third footnote on the first point grant all of Freddie’s argument; am I misreading that?
        The best they can argue is that some IV-statistical dark arts can produce “including estimates from Colombia based on lottery selection of scholarships that could be used private schools”, but that is incredibly limited is both scope and time and place. They certainly aren’t actual controlled tests.
        Jumping to the third world doesn’t preclude Freddie’s point – It is true in non-first world the services the government provides in education are terrible, but the same is true of sewage. One would expect the marginal effect of peer-selection (Freddie’s point) to be significantly great in global-poverty areas.

  3. The state took education away from the church doubtless with similar goals in mind i.e. the correct (?)socialization of children. However we should not that the firms for screening purposes would either likely insist on a common core curriculum or state administer test to provide a basic indication of competence even in a mixed educational system. The final point I would make is that learning largely reflects ambition of the parents and the student and therefore its not that the private sector does a better job of educating but rather that the transaction costs it imposes attracts only those most interested in learning.

  4. My mother tried to start a secular private school (elementary-through-junior high) and was thwarted by a coalition of local politicians, teachers and, amazingly, local parents. The bureaucrats and teachers union threw one absurd obstacle after another in her path. They simply weren’t ever going to let her get her school started, despite her extensive teaching experience, her ambitious curriculum (which would have included economics classes!), the fact that she had secured adequate capital to hire teachers and lease to a lovely building with great big windows and a logical layout. Parents were told that the existence of the school would hurt the public schools, which they assumed would lose their best students and possibly even their better teachers. My mother received threatening mail and phone calls. I was quite young at the time (first or second grade), but I remember that this was an emotionally crushing experience for her. She and her business partner finally gave up because the demands of political committees, which involved things like changing the sinks in the bathrooms and adding doors in between classrooms, were prohibitively expensive or not allowed by the owner of the property. This was back in the early 1980s, but she still trembles with rage when the subject comes up.

  5. It the owner or board of a major football club said “we have a great idea: we will take over the running of the code, appointing the umpires and setting the rules” everyone would laugh or wonder what they were on. Having a participating club run the entire sport is an obviously stupid way to run a sport. The conflict of interest is patent and glaring.
    Apparently, however, it is great way to educate children.
    Actually, clearly it is not. The problem is not merely public provision in a monopoly/dominant provider sense (though that is a problem). The real problem is the profound conflict of interest involved in the main provider setting and enforcing the rules.
    That is a problem if you want high quality outcomes. If, however, you want to control the socialisation of children, then the “conflict of interest” is no conflict at all: it is precisely what you want. Haven’t read the paper yet, but it seems likely to be spot on to me.

  6. Really, the only two sentences you need to read from the paper are these:
    “First, to all other disciplines, as well as common sense, it is obvious that education, of which schooling is one element, is a process of the socialization of youth and their preparation for their economic but also their social and political roles as adults.
    [and from earlier]
    “But this bias against choice is not an actual mystery, just an unnecessary disciplinary puzzle created by the economists’ narrow framing of the outputs of education.”
    The rest is of interest to economists, but those focused on schooling would probably get more out of history. In particular, historical accounts of the clashes between coercive assimilationist public-schooling forces and immigrants / periphery-dwellers / religious dissenters / etc. Not my area, but I hear Eugene Weber’s Peasants Into Frenchmen is one classic text in this area.

  7. Actually, vouchers or bursaries are a good idea. But one idea which nobody seems to take into consideration is a school ranking system. If we rank the high schools according to SAT scores, international baccalaureate (I-Bac) or GCE A level results, performance in sports, math olympiad or any other specialisation, and publicise these rankings, the demand for the better schools will increase. Schools will also compete for ranking and increase their methods and efficiency in order to obtain better scores. They will also adopt selection criteria for students by either implementing a test,based on the score of which they will choose to accept or reject applicants or selecting from the score of a state/nationwide test. Students, then have to compete for good schools, and will study harder in order to meet entry requirements. Parents will now hound both the school and their children in order to maximise their child’s results. This improves student performance, school quality etc because it incentivises strong student performance and competitive testing where schools have to set highly selective tests in order to identify desirable students.
    Or, have a statewide exam and publish all the students’ results in the newspaper. There will be considerable pressure on students not to screw up. It would be incredibly embarrassing if the whole state knew of you as the dumbest guy in the state.

  8. Having the state involved in the brain-washing (‘education’) of children is a crime against humanity.

    1. Not to mention property owners are forced to pay (money is taken through extortion) by the county) their local government schools even if they choose not to use them. I personally chose to home-school but I am forced to pay annually for local public schools and the area Vo-Tech.

  9. I used to be very gung-ho about vouchers and privatization of education. Then starting about when I read Freakonomics I decided that it probably wouldn’t give much better results education-wise, just as with medicine. It would, however, result in more pleasant places to force kids to spend a huge chunk of time.
    One problem voucher plans will have to deal with is parents trying to avoid schools with poor kids. We saw this problem earlier with integration, white flight and bussing and even today with many zoning laws.
    On a final unrelated note: whenever I try to use the search bar for this blog, it brings me to Will’s twitter page. I don’t care about twitter, I just want to search.

  10. Will, the idea that private provision of education is never worse than public provision is far from settled. In fact, the first three results on Google for “private public school effectiveness” all suggested the opposite. Since Google is more likely to provide an unbiased sample of the literature, I’m going to go with that conclusion.
    The third paper on Google
    was interesting because they found that independent but publicly funded schools (I read that as charter schools) beat standard public schools.
    In the anecdotal evidence department: There’s a private high school across the street, and the kids I’ve talked to don’t seem to like it much. Quote: “The teachers are bitches.”

  11. Stuart, It has mysteriously disappeared. I swear I didn’t do anything. It’s still in my email, so here it is….
    Stuart Buck (unregistered) wrote:
    any remotely satisfying causal argument for why schooling systems with near-identical pedagogical techniques would have different results outside of that selection bias.
    Freddie and I have discussed this point several times before, but nothing I say ever seems to sink in:
    A. There is lots of evidence of perverse selection bias as to private schools as a whole. For example, Derek Neal and Jeffrey Grogger recently found [http://muse.jhu.edu/demo/brookings-wharton_papers_on_urban_affairs/v2000/2000.1grogger.pdf] that “there is evidence of NEGATIVE SELECTION into Catholic schools. Relative to their public-school counterparts, urban whites who attend these schools appear to possess unmeasured traits that inhibit attainment.” They add this footnote: “Evidence of negative selection is common in this literature. Coleman and Hoffer (1987), Evans and Schwab (1995), and Neal (1997) all report evidence of negative selection into Catholic schools. A common hypothesis concerning this result is that some parents send their children to Catholic schools seeking a remedy for existing problems with discipline and motivation.”
    B. No remotely satisfying reason that private schools might do a better job? Here are several possibilities:
    1. Potential for stricter discipline.
    2. Potential to hire better teachers and/or not to get stuck with bad teachers who have tenure thanks to a union contract. (See, e.g., http://www.tntp.org/files/TNTPPressRelease.pdf ).
    3. Potential to be more responsive to parents.
    4. Because of 3, potential to inspire more parental involvement, both on an individual and community level. This is a factor that Coleman and Hoffer identified in their famous book on why urban Catholic schools were superior, at least as of the 1980s.
    5. Potential to be able to use a more effective and rigorous curriculum (e.g., Singapore math) without being quashed by state bureaucrats who haven’t approved the purchase of that curriculum, or by the many interest groups that get involved in the curriculum selection process.
    6. Potential to impose increased academic demands more generally. In looking at the famous HSB data, Coleman and Hoffer (pp. 44-45) found that the “most striking difference between public and private school curricula is the much greater likelihood of academic program placement in the private schools.” (Nearly 50% of Catholic students were in specialized “academic” programs, while only 3.3% of public school students were in such programs; most public school students were in “comprehensive” or more general programs.)
    7. Potential to drastically reduce dropout rates. See, e.g., Sander 2001, p. 23. Similarly, Coleman and Hoffer found that the black dropout rate in public high schools was 17.2%, while the black dropout rate in Catholic high schools was a mere 4.6%. (p. 127). They also point out that this is not what you would expect, given that Catholic high schools also had substantially higher achievement gains for black students. Normally, you would think that a more academically demanding high school could easily have a higher dropout rate, not a rate that is nearly 4 times lower. (Coleman and Hoffer have a very lengthy passage in which they try to test for selection effects here.)

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