Getting the Data Right: Ignorance or Ideology? Dr. Mario Marazzi-Santiago Executive Director Puerto Rico Institute of Statistics

Transcription

1 Getting the Data Right: Ignorance or Ideology? Dr. Mario Marazzi-Santiago Executive Director Puerto Rico Institute of Statistics

2 Brief outline I. Migration II. CRS report of Nov and the Cost of Living III. Geographic Practice Cost Index

3 I. Migration

4 Second Great Migration appears to have begun Ø Net air passenger departures out of Puerto Rico have reached an all-time record Ø 90 thousand more passengers left Puerto Rico than arrived during FY Source: U.S. Bureau of Transportation Statistics, Air Carrier Statistics, Form 41 Traffic, T-100 Segment, All Carriers

5 Vázquez-Calzada (1968) First Great Migration ( ): Over half a million people migrated on net, equivalent to 33 thousand per year Peak of the First Great Migration ( ): 237 thousand people migrated on net, equivalent to 47 thousand per year Beginning of 2 nd Great Migration ( ): 263 thousand air passenger departures on net, equivalent to 53 thousand per year

6 Second Great Migration appears to have begun Ø Net air passenger departures out of Puerto Rico have reached an all-time record Ø 90 thousand more passengers left Puerto Rico than arrived during FY Source: U.S. Bureau of Transportation Statistics, Air Carrier Statistics, Form 41 Traffic, T-100 Segment, All Carriers

7 Some Implications More Puerto Rico patients will receive health care in the U.S. under the cost structure that exists there. Less doctors in Puerto Rico available for providing health care in Puerto Rico. Less (More) taxpayers in Puerto Rico (U.S.) to fund health care and pay debts. More Puerto Rico voters in the U.S.

8 II. CRS report of Nov and the Cost of Living

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10 CRS Report of November 2015 Uses experimental (non-official) research from the U.S. Bureau of Economic Analysis (BEA) to suggest that Puerto Rico cost-ofliving is ranked last amongst all 50 states. Uses this information to conclude that $1 in Puerto Rico has greater purchasing power (i.e., can buy more goods and services) than the same $1 in the states.

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12 BEA research paper of Nov Sources of data: U.S. Consumer Price Index (CPI): Not a single price observation from Puerto Rico is used in producing the U.S. CPI. Rent statistics from U.S. Census Bureau: The U.S. Census Bureau gathers data on housing rents through the Puerto Rico Community Survey.

13 BEA research paper of Nov Recognizes Hawaii and Alaska (but not Puerto Rico) are geographic outliers. Notes that the model severely under-predicts the price level for Honolulu by as much as 20 percent! In order to try to explain this anomaly, the BEA researcher is forced to argue: It could be argued that other consumption characteristics of Hawaii that are likely to raise price levels are not being captured. For example, the higher cost of shipping is important in raising gas prices.

14 Some Implications Even when incomplete data exists, federal researchers will include Puerto Rico in their analysis just to see what the results look like. CRS has very low publication standard: it will include experimental non-official incomplete data to support its conclusions. Puerto Rico needs an army of data scientists to combat this sort of information manipulation on a massive scale.

15 Cost of Living in San Juan, PR MSA In comparison with the average cost-of-living in the United States Overall: 13% higher Grocery prices: 24% higher Housing: 1% less Utilities: 72% higher Health care: 46% less San Juan, PR MSA is ranked 39 in terms of its costof-living, out of a total 306 similar metropolitan areas Source: Cost of Living Index, Center for Community and Economic Research, 2015Q3

16 May 27, 2016 Ø San Juan, PR MSA is expected to be formally included in the Cost of Living Index (COLI) publication of the Center for Community and Economic Research. Ø For the first time ever, the data for San Juan, PR MSA will be published next to the data for other major metropolitan areas in the United States.

17 III. Geographic Practice Cost Index (GPCI)

18 Background Ø In 2012, CMS stopped using properly controlled housing rent statistics prepared by HUD as a proxy for physician s rent in the GPCI. Ø In its place, it began using its own uncontrolled rent statistics which introduced a Public Housing Prevalence Bias that artificially lowers Puerto Rico s GPCI by 4%.

19 Median Gross Rent Public Housing Prevalence Bias $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 Puerto Rico $0 0% 5% 10% 15% Percent of Renters Who Live in Public Housing Source: ACS/PRCS, Census Bureau, year estimates (vertical axis). Residents Characteristics Report, HUD, May 31, 2015, and ACS/PRCS, Census Bureau year estimates (horizontal axis).

20 Update Ø Institute study formally sent to CMS this year. Ø CMS has recognized that there is some merit to the Public Housing Prevalence Bias. Ø But, they have decided to wait until 2017 to see if they are going to do anything about it. Ø In the mean time, Puerto Rico residents continue to pay the same 2.9% of their payroll taxes to fund Medicare.

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