"Excising" taxes from the Heritage Foundation's Economic Freedom Index
My friend Charles is fond of a certain graph that shows a negative correlation between Economic Freedom, as defined by the Heritage Foundation, and Gini index scores, which measure inequality. The argument that accompanies the graph is that free market neoliberal policies, the effects of which are ostensibly measure by the freedom index, correlate positively with equality. I wonder if Charles is unconsciously choosing which correlations to see meaning in, while ignoring other stronger correlations that don't comport with his worldview. However, there is a correlation there that is relatively unlikely to be mere coincidence. Before I go further, I merely want to propose that in general, one correlation of Gini scores should be balanced against other correlations that are similar or greater in their explanatory power. Here is the graph that he cites: A modest but visible correlation. Ok, say I, there may be something going on with these two variables. I've reproduced his grap