Social Security cost-of-living adjustments and the Consumer Price Index

OASDI benefits are indexed for inflation to protect beneficiaries from the loss of purchasing power implied by inflation. In the absence of such indexing, the purchasing power of Social Security benefits would be eroded as rising prices raise the cost of living. By statute, cost-of-living adjustments (COLAs) for Social Security benefits are calculated using the Bureau of Labor Statistics (BLS) Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Some argue that this index does not accurately reflect the inflation experienced by the elderly population and should be changed to an elderly-specific price index such as the Experimental Consumer Price Index for Americans 62 Years of Age and Older, often referred to as the Consumer Price Index for the Elderly (CPI-E). Others argue that the measure of inflation underlying the COLA is technically biased, causing it to overestimate changes in the cost of living. This argument implies that current COLAs tend to increase, rather than merely maintain, the purchasing power of benefits over time. Potential bias in the CPI as a cost-of-living index arises from a number of sources, including incomplete accounting for the ability of consumers to substitute goods or change purchasing outlets in response to relative price changes. The BLS has constructed a new index called the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) that better accounts for those consumer adjustments. Price indexes are not true cost-of-living indexes, but approximations of cost-of-living indexes (COLI). The Bureau of Labor Statistics (2006a) explains the difference between the two: As it pertains to the CPI, the COLI for the current month is based on the answer to the following question: "What is the cost, at this month ' market prices, of achieving the standard of living actually attained in the base period?" This cost is a hypothetical expenditure-the lowest expenditure level necessary at this month's prices to achieve the base-period's living standard.... Unfortunately, because the cost of achieving a living standard cannot be observed directly, in operational terms, a COLI can only be approximated. Although the CPI cannot be said to equal a cost-of-living index, the concept of the COLI provides the CPI's measurement objective and the standard by which we define any bias in the CPI. While all versions of the CPI only approximate the actual changes in the cost of living, the CPI-E has several additional technical limitations. First, the CPI-E may better account for the goods and services typically purchased by the elderly, but the expenditure weights for the elderly are the only difference between the CPI-E and CPI-W. These weights are based on a much smaller sample than the other two indices, making it less precise. Second, the CPI-E does not account for differences in retail outlets frequented by the aged population or the prices they pay. Finally, the purchasing population measured in the CPI-E is not necessarily identical to the Social Security beneficiary population, where more than one-fifth of OASDI beneficiaries are under age 62. Likewise, over one-fifth of persons aged 62 or older are not beneficiaries, but they are included in the CPI-E population. Finally, changes in the index used to calculate COLAs directly affect the amount of benefits paid, and as a result, projected solvency of the Social Security program. A switch to the CPI-E for the December 2006 COLA (received in January 2007) would have resulted in an average monthly benefit OASDI benefits are indexed for inflation to protect beneficiaries from the loss of purchasing power implied by inflation. In the absence of such indexing, the purchasing power of Social Security benefits would be eroded as rising prices raise the cost of living. By statute, cost-of-living adjustments (COLAs) for Social Security benefits are calculated using the Bureau of Labor Statistics (BLS) Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Some argue that this index does not accurately reflect the inflation experienced by the elderly population and should be changed to an elderly-specific price index such as the Experimental Consumer Price Index for Americans 62 Years of Age and Older, often referred to as the Consumer Price Index for the Elderly (CPI-E). Others argue that the measure of inflation underlying the COLA is technically biased, causing it to overestimate changes in the cost of living. This argument implies that current COLAs tend to increase, rather than merely maintain, the purchasing power of benefits over time. Potential bias in the CPI as a cost-of-living index arises from a number of sources, including incomplete accounting for the ability of consumers to substitute goods or change purchasing outlets in response to relative price changes. The BLS has constructed a new index called the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) that better accounts for those consumer adjustments. Price indexes are not true cost-of-living indexes, but approximations of cost-of-living indexes (COLI). The Bureau of Labor Statistics (2006a) explains the difference between the two: As it pertains to the CPI, the COLI for the current month is based on the answer to the following question: "What is the cost, at this month ' market prices, of achieving the standard of living actually attained in the base period?" This cost is a hypothetical expenditure-the lowest expenditure level necessary at this month's prices to achieve the base-period's living standard.... Unfortunately, because the cost of achieving a living standard cannot be observed directly, in operational terms, a COLI can only be approximated. Although the CPI cannot be said to equal a cost-of-living index, the concept of the COLI provides the CPI's measurement objective and the standard by which we define any bias in the CPI. While all versions of the CPI only approximate the actual changes in the cost of living, the CPI-E has several additional technical limitations. First, the CPI-E may better account for the goods and services typically purchased by the elderly, but the expenditure weights for the elderly are the only difference between the CPI-E and CPI-W. These weights are based on a much smaller sample than the other two indices, making it less precise. Second, the CPI-E does not account for differences in retail outlets frequented by the aged population or the prices they pay. Finally, the purchasing population measured in the CPI-E is not necessarily identical to the Social Security beneficiary population, where more than one-fifth of OASDI beneficiaries are under age 62. Likewise, over one-fifth of persons aged 62 or older are not beneficiaries, but they are included in the CPI-E population. Finally, changes in the index used to calculate COLAs directly affect the amount of benefits paid, and as a result, projected solvency of the Social Security program. A switch to the CPI-E for the December 2006 COLA (received in January 2007) would have resulted in an average monthly benefit $0.90 higher than that received. If the December 2006 COLA had been adjusted by the Chained CPI-U instead, the average monthly benefit would have been $4.70 less than with current indexing. Any changes to the COLA that would cause faster growth in individual benefits would make the projected date of insolvency sooner, while slower growth would delay insolvency. Hobijn and Lagakos (2003) estimated that switching to the CPI-E for COLAs would move projected insolvency sooner by 3-5 years. A projection by SSA's Office of the Chief Actuary estimated that annual COLAs based on the Chained C-CPI-U beginning in 2006 would delay the date of OASDI insolvency by 4 years.     

Does the truth come out in the writing? Scan as a lie detection tool

We tested the accuracy of Scientific Content Analysis (SCAN), a verbal lie detection tool that is used world-wide by federal law enforcement and military agencies. Sixty-one participants were requested to write down the truth, an outright lie or a concealment lie about activities they had just completed. The statements were coded with SCAN and with another verbal lie detection tool, Reality Monitoring (RM). RM discriminated significantly between truth tellers and outright liars and between truth tellers and concealment liars, whereas SCAN did not discriminate between truth tellers and either kind of liar. Implications of the findings for the suitability of SCAN as a lie detection tool are discussed.     

问责制药巨头

在丈夫自杀之后，年轻的寡妇吉姆开始追究跨国制药巨头——辉瑞（Pfizer）公司的责任。因为她认为正是它的疏忽，导致丈夫之死。她的努力促成一项具有里程碑式的裁定，有可能因此改变法制进程。     

Self-control, Victimization, and their Influence on Risky Lifestyles: A Longitudinal Analysis Using Panel Data

This research expands past investigations into the influence of low self-control as a risk factor for criminal victimization. Specifically, we consider two questions: (1) whether low self-control at one point in time can predict future victimization, and (2) whether victims alter lifestyle choices (like their own delinquency and contact with delinquent peers) in response to their earlier victimization. We answered these questions using three waves of adolescent panel data from the evaluation of the Gang Resistance Education and Training program. Our results support the predictions of self-control theory, showing that low self-control measured at an earlier time is associated with later victimization, even after controlling for past victimization, delinquency, social bonds, and delinquent peer contact. Likewise, self-control appears to influence the relationship between earlier victimization and later lifestyles.

Suicide with associated acts of arson: two cases from Colorado

We report on two cases of suicide in which the victims started fires before their deaths. In one case the victim died of a single self-inflicted gunshot wound to the head after setting several fires in his residence. In the second case the victim hung himself after setting several fires in his residence and an adjoining building. In both cases, the victim's position was not near the origin of the fires suggesting that the arson was not a failsafe device to the primary mechanism of suicide. Neither victim showed a significant percentage of carboxyhemoglobin, or thermal damage from the fires. Both cases are remarkable in that, had the fire caused more damage to the remains and dwellings, a finding of suicide may not have been reached. We discuss similar aspects between the two reported cases and discuss differences observed with similar events such as complex suicide, suicide by self-immolation, and concealed homicide by burning. Similar cases should be reported to broaden our understanding of these complex events.     

An Empirical Test of the Behaviour Analysis Interview

The present experiment is the first empirical test of the Behaviour Analysis Interview (BAI), an interview technique developed by F. E. Inbau, J. E. Reid, J. P. Buckley, & B. C. Jayne (2001) designed to evoke different verbal and non-verbal responses from liars and truth-tellers. Inbau et al. expect liars to be less helpful than truth-tellers in investigations and to exhibit more nervous behaviours. Just the opposite predictions, however, follow from the deception literature, which notes that liars take their credibility less for granted and are therefore more aware of their responses and their impact on others. This suggests that liars' answers should be more helpful than truth-tellers' answers, and liars' non-verbal responses should appear more relaxed than truth-tellers' non-verbal responses. In the present experiment, 40 participants (undergraduate students) lied or told the truth about an event during a BAI interview. The interviews were coded according to Inbau et al.'s guidelines. The results showed that, compared to liars, truth-tellers (a) were more naive and evasive when explaining the purpose of the interview, and (b) were less likely to name someone who they felt certain did not commit the crime. Truth-tellers also exhibited more nervous behaviours. The results were consistent with the predictions of the deception literature, and directly opposed to the predictions of BAI.