Sunday 29 April 2012

Ceteris paribus

From Wiki:

A ceteris paribus assumption is often fundamental to the predictive purpose of scientific inquiry. In order to formulate scientific laws, it is usually necessary to rule out factors which interfere with examining a specific causal relationship.

Under scientific experiments, the ceteris paribus assumption is realized when a scientist controls for all of the independent variables other than the one under study, so that the effect of a single independent variable on the dependent variable can be isolated. By holding all the other relevant factors constant, a scientist is able to focus on the unique effects of a given factor in a complex causal situation.


So, for example, if we want to find out whether treacle is more viscous than water, we take two identical containers, and fill one with treacle and the other one to the same depth with water; at the same temperature and height above sea level etc; we place an identical object on the surface of each liquid; release them at the same time; and then we compare how long it takes each object to reach the bottom of the container.

If you fill one container 50cm deep and the other one 100 cm deep; if you drop a ball-bearing into one liquid and a flip-flop into the other; or if you carry out the water experiment in the International Space Station high up in orbit and the treacle experiment at sea level, then the result will be meaningless.

Which brings us to the time worn KLN at comment 18 here:

Why should Mr X in a 2/3 bed house with reasonable size garden, growing his own veg to survive, pay more than his neighbour, a family of 4 all working adults, in a 3/4 bed on a slightly smaller plot of land?

The 'dependent variable' in this case is each household's LVT bill. The questioner keeps two variables constant - the fact that both plots are in the same geographical area and both are being used for residential/hobby purposes - and makes the reasonable assumption that the real 'independent variable' is the plot size (see footnote), so why does he change at least four other variables as well?
* Household size
* Number of working adults
* Number of bedrooms
* The use to which the garden is being put

These are irrelevant and the only way to do a fair comparison, and thus obtain a meaningful answer, is to keep these constant. I gave the following examples:

* "Why should Mr X in a 2/3 bed house with reasonable size garden, growing his own veg to survive, pay more than his neighbour, Mr Y in a 2/3 bed on a slightly smaller plot of land next door, growing slightly less of his own veg to survive?"
Answer: because Mr X occupies more land.

* "Why should a family of 4 working adults in a 3/4 bed house with reasonable size garden, pay more than their neighbours, another family of 4 working adults, in a 3/4 bed on a slightly smaller plot of land?"
Answer: because the first household occupies more land.

* "Is it fair that Mr X in a 2/3 bed house with reasonable size garden, growing his own veg to survive, pays exactly the same as his neighbours, a family of 4 all working adults, in an identical 2/3 bed on the same sized plot of land?"
Answer: yes, because both households are occupying the same amount of land.

You can then make up your own comparisons, remembering always that only one factor may be varied, and then you decide on which plot the LVT would be higher and ask yourself whether this seems reasonable: perhaps Mr X's neighbour is a farmer with a 2/3 bed house with a hundred acres of land, who grows so much veg that he has a huge surplus that he can sell at a profit to buy other things, for example. Who would pay more LVT and would this be reasonable?

Footnote: Actually, it is planning permission which is the independent variable - if Mr X would love to extend his house to 3/4 bedrooms, sacrificing part of his large garden in the process, but planning laws prevent him doing so, then it is quite possible that the LVT bill on the smaller plot with more generous planning permission would be higher, but let's gloss over that.

6 comments:

A K Haart said...

For me this is a good way of looking at the issue, but I can't see ceteris paribus ever making it as a tool of political discourse. Unfortunately.

Electro-Kevin said...

AK - ceteris paribus may not do it for some but clitoris pubis definitely does it for me.

Sarton Bander said...

Can someone describe the negative externaility that is being employed? Which KLN presumably thinks should be taxed to fund the state.

Mark Wadsworth said...

AKH, but you are proper scientist, this is presumably second nature to you.

EK, fair play, but not really a relevant comparison.

SB, those ghastly exploiters of their own labour and the resulting capital? "LVT is a tax on living!" the Homeys shout, "Tax incomes instead!" because of course earning an income is entirely unnecessary to support intelligent life, being able to enjoy land rent is far more fundamental.

Sarton Bander said...

Of course excluding others from land (and benefiting from it) is in no way an externality.

Mark Wadsworth said...

SB, you're not up to speed with Homey thinking:

1. I own a house and land and this places no burden on anybody so there's no reason why I should pay tax on that benefit (or to compensate others for the burden).

2. If you want to own land and build something near me, that should be discouraged because it places a burden on me.