Levitt's response to the Freakonomics abortion-cut-crime theory fiasco

Levitt's response to the Freakonomics abortion-cut-crime theory fiasco: Levitt blogs:

Everything in Freakonomics is wrong!

Or at least that is the impression you might get if you read this article in today’s Wall Street Journal.

I will post a longer blog entry once I have had time to fully digest the working paper by Foote and Goetz which is the basis for the article.

For now, I will say just a few things:

1) It is not at all clear from the WSJ article is that Foote and Goetz are talking about only one of the five different pieces of evidence we put forth in our paper. They have no criticisms of the other four approaches, all of which point to the same conclusion.

2) There was a coding error that led the final table of my paper with John Donohue on legalized abortion to have specifications that did not match what we said we did in the text. (We’re still trying to figure out where we went wrong on this.) This is personally quite embarrassing because I pride myself on being careful with data. Still, that embarrassment aside, when you run the specifications we meant to run, you still find big, negative effects of abortion on arrests (although smaller in magnitude than what we report). The good news is that the story we put forth in the paper is not materially changed by the coding error.

3) Only when you make other changes to the specification that Foote and Goetz think are appropriate, do the results weaken further and in some cases disappear. The part of the paper that Foote and Goetz focus on is one that is incredibly demanding of the data. For those of you who are technically minded, our results survive if you include state*age interactions, year*age interactions, and state*year interactions. (We can include all these interactions because we have arrest data by state and single year of age.) Given how imperfect the abortion data are, I think most economists would be shocked that our results stand up to removing all of this variation, not that when you go even further in terms of demands on the data things get very weak.

Again, as I said, I will post again on this subject once I have had a chance to carefully study the details of what they have done, and after I have been able to go back to the raw data and understand why the results change when one does what Foote and Goetz do.

5 COMMENTS » Posted by Steven D. Levitt @ 2:46 pm on Monday, November 28, 2005 in General

In contrast, economist John R. Lott, a longtime critic of Levitt's theory who came in for a half page of ad hominem abuse in Freakonomics, is feeling better than Levitt is today. He blogged:

Christopher L. Foote and Christopher F. Goetz's paper can be found here. Personally, I think calling this a "programming oversight" is being much too nice. More importantly everyone who works with panel data knows that you use fixed effects.

My own work concentrated on murder rates, but I also included fixed effects. Donohue and Levitt never provided us with all their data or their regressions and would never answer any questions that we had so I just assumed that they had included fixed effects from the beginning. It would have been nice if they had provided us with this same information years ago.

Financial economist and blogger Mahalanobis (Michael Stastny) writes:

Levitt's response is on his website (see here) where he notes

The part of the paper that Foote and Goetz focus on is one that is incredibly demanding of the data. For those of you who are technically minded, our results survive if you include state*age interactions, year*age interactions, and state*year interactions.

3 interaction variables are necessary to get the right sign and significance? I think that is very technically demanding. In my experience, interaction variables are kitchen sink type regressors that induce severe multicollinearity and give spurious results. It's like an economist saying his results only appear after doing 3-stage least squares. I have to think something's not really there if you can't normalize the data somehow and show in a simple graph that the pattern is there (in this case, say, by showing the change in arrest rates for abortion and non-abortion states for the relevant age cohort).

I'm partial to the opposite theory, that abortion would, if anything, increase the proportion of evil-doers: abortion is more common among forward-thinking moms who would be good moms, less common among bad moms who view life as a series of random events that happen to them.

Right. The reason that in his theory of American crime trends, Levitt cites European studies claiming that women who have abortions would make less organized mothers than the ones who went ahead and had their children is because the American studies of who gets an abortion came to the opposite conclusion.

This undermines Levitt's only argument these days about about how abortion would cut cime. (now that Levitt has hushed up his earlier racial eugenic/eucultural argument that because more blacks get abortions and more blacks commit murders, more abortions should mean fewer murders). These Americans studies were pointed out to Levitt by CCNY economist Ted Joyce in his response to Levitt & Donohue in the Journal of Human Resources, which was entitled "Did Legalized Abortion Lower Crime?" Joyce summed up two reason why Levitt's theory didn't work. The second was:

"Second, analysts, I being one, have tended to overestimate the selection effects associated with abortion. A careful examination of studies of pregnancy resolution reveals that women who abort are at lower risk of having children with criminal propensities than women of similar age, race and marital status who instead carried to term. For instance, in an early study of teens in Ventura County, California between 1972 and 1974, researchers demonstrated that pregnant teens with better grades, more completed schooling, and not on public assistance were much more likely to abort than their poorer, less academically oriented counterparts (Leibowitz, Eisen, and Chow 1986).

"Studies based on data from the National Health and Social Life Survey (NHSLS) and the National Longitudinal Survey of Youth (NLSY) make the same point (Michael 2000; Hotz, McElroy, and Sanders 1999). Indeed, Hotz, McElroy, and Sanders (1999) found that teens who abort are similar along observed characteristics to teens that were never pregnant, both of whom differ significantly from pregnant teens that spontaneously abort or carry to term.

"Nor is favorable selection limited to teens. Unmarried women that abort have more completed schooling and higher AFQT [the military's IQ test for applicants for enlistment] scores than their counterparts that carry the pregnancy to term (Powell-Griner and Trent 1987; Currie, Nixon, and Cole 1995).

"In sum, legalized abortion has improved the lives of many women by allowing them to avoid an unwanted birth. I found little evidence to suggest, however, that the legalization of abortion had an appreciable effect on the criminality of subsequent cohorts."

My earlier response to thelatest Freakonomics fiasco is here.

All my blog postings on the controversy can be found at http://www.iSteve.com/abortion.htm

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My published articles are archived at iSteve.com -- Steve Sailer