Scholarships at Risk: The Mathematics of Merit Stipulations in Law School Financial Aid

I have posted the following article to my SSRN page —

Jim Chen, Scholarships at Risk: The Mathematics of Merit Stipulations in Law School Financial Aid, available for download at http://ssrn.com/abstract=2133018 or http://bit.ly/MeritStipulations:

Many law schools in the United States condition financial aid grants on the recipients’ maintenance of a certain grade point average. These merit stipulations require students to meet or exceed minimum academic standards in order to keep all or part of their financial aid. Law students should take merit stipulations into account when they decide whether to accept an offer of admission paired with a conditional grant of financial aid. By all accounts, they do not. Law schools should transparently disclose the likely effect of merit stipulations on their financial aid awards. By all accounts, law schools do no such thing. Absent external coercion, they are unlikely to change their current practices. In the absence of industry-wide standards counseling full disclosure of financial aid practices, this article will try to equip law school applicants with the mathematical tools to assess the real impact of merit stipulations on their financial well being.

This article first presents very simple models for discounting financial aid awards for the risk of failure to uphold a merit stipulation. It outlines a simple methodology for calculating the expected value of a financial aid award subject to a merit stipulation. The article also evaluates one extraordinary circumstance in which a law school has implicitly revealed its break-even point — the amount of aid that the school would award if it did not impose any merit stipulations.

Building upon those foundations, this article performs a comprehensive analysis of law school grades and merit stipulations as artifacts of the standard normal distribution. It performs three distinct tasks. This article defines standard scores and explains how law school grading is based on the relationship between the standard score of each student’s raw score and the mean and standard deviation of of the distribution as a whole. This article then describes the risk of failure to satisfy a merit stipulation in terms of the normal distribution’s cumulative distribution function. For those instances in which the risk of failure to satisfy a particular school’s merit stipulation is known, this article demonstrates how to use the inverse cumulative distribution function to estimate the mean and standard deviation of a school’s grade distribution. As a bonus, this final exercise provides an introduction to value-at-risk analysis, a leading tool for assessing risk in global capital markets.

Update: Paul Caron has kindly highlighted this article in the TaxProf Blog. Above the Law, JD Journal, Law School Expert, the Legal Skills Profs Blog, and the Clinton Law Firm Blog have also provided coverage.

Punt baby punt

The shocking conclusion to the 1972 Iron Bowl (Auburn 17, Alabama 16), better known by the name, Punt Bama Punt.

Readers who have patiently stayed with this forum through the years know that MoneyLaw loves sports metaphors. And why ever not? How many people do you know who not only can decipher the market participant exception to the dormant commerce clause but also can explain why the play action pass is the mirror image of the draw play?

In law as in football, punting is the most cowardly play. Gregg Easterbrook, who numbers among those colossal figures who stride both law and football (albeit by proxy through his judicially renowned brother), has long derided preposterous punts. Yet coaches call punts all the time. Unless the ball is inside the opponents' 30 or the game situation absolutely compels a different play, punting is football's default fourth down option.

The shocking — and totally bold — no-kicks-needed conclusion to the 2007 Fiesta Bowl: Boise State 36, Oklahoma 35.

We know why. Punting happens precisely because leaders coaches are cowards. They would rather lose meekly than boldly give their teams a chance to win. It's an obvious manifestation of prospect theory. Losing hurts worse than winning feels good. This is especially true when everyone blames the coach for a botched quick-out on fourth-and-6, but no one credits the coach if the play opens the door to an epic comeback. But they should. It takes real guts to call a hook-and-ladder, a halfback pass, and a Statute of Liberty on consecutive fail-and-lose plays.

To the rescue comes this item in America's newspaper of record. As a season of new academic beginnings and renewed gridiron combat looms before us, I commend it to MoneyLaw's readership. Enjoy.

Read the rest of this post . . . .

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From Adam Himmelsbach, Punting Less Can Be Rewarding, but Coaches Aren’t Risking Jobs on It, New York Times, August 19, 2012:

Although some statistics show there are often better options on fourth down, teams continue to punt, punt and then punt some more. But what if they did not? What if the punt was punted?

Last week, San Diego State Coach Rocky Long said he might consider going for first downs when his team faced fourth downs past midfield this year. His intentions rekindled a debate about the value of the punt, a play some think is a product of coaches’ conservatism and resistance to change.

“Coaches tend to be risk averse,” said Dr. Ben Alamar, a professor of sports management at Menlo College in Atherton, Calif., who has studied N.F.L. statistics. “People are typically uncomfortable moving away from the norms.”

David Romer, a professor of political economy at the University of California, Berkeley, published a paper in 2005 on the statistics of punting that has become the gospel for the antipunting faction. Romer, who analyzed data from N.F.L. games from 1998 to 2004, determined, among other things, that teams should not punt when facing fourth-and-4 yards or less, regardless of field position.

“Of course, there are times when punting is a good idea, . . . just not nearly as many as football coaches seem to think.”

Brian Burke, the publisher of advancednflstats.com, said teams should go for a first down when they faced fourth-and-1, or when it was fourth down from the opponent’s 35 to 40. Burke also said that he believed that teams should try to score a touchdown when facing fourth-and-goal from the 6 or closer, assuming a last-second field goal is not called for.

“If everyone agrees out of fear or ignorance to sort of play ultraconservative, nobody really has an advantage,” Burke said. “There’s no development, no evolution. Coaches have strategies that are generations behind where the sport really is. It’s going to take someone to stick their neck out.”

Coaches are hesitant to take the plunge because a string of failed fourth-down attempts could leave them vulnerable to criticism and affect their job security more than a conservative menu of punts ever could.

“From different eras, there was a mind-set that playing the field-possession game is a good thing, because it turned the ball to the other team 40 yards away and allows them to make a mistake,” the former Tennessee coach Phillip Fulmer said. “Coaches, by nature, are a little bit defensive in their thinking.”

According to Dr. Curt Lox, a professor of kinesiology and sports psychology at Southern Illinois-Edwardsville, the candidates best in position to experiment with a punt-free strategy are those who are so established and successful that they are almost immune to criticism of their strategy, or those who are unknown underdogs with nothing to lose.

Kevin Kelley, the head coach at Pulaski Academy in Little Rock, Ark., fit the second description when he was hired in 2003. That year, he came across a grainy VHS tape of a professor espousing the potential virtues of a punt-free lifestyle. Kelley was intrigued and has since become perhaps the most unorthodox coach in the nation.

His high school team does onside kicks after almost every score. It does not use a punt returner, because Kelley believes fumbles and penalties occur more often than strong returns. And it does not punt. Last season, the Bruins went 14-0 and won the Class 4A state title.

“It was easy to convince the players, because they grow up playing PlayStation and Madden and they don’t punt in those games, so they don’t want to punt in real games,” Kelley said. “The fans were a different story.”

When Kelley unveiled his aggressive offense, his tactics were questioned by Pulaski administrators and school board members. Once, when Pulaski defied its own logic and punted, it received a standing ovation from the home crowd.

“I remember turning around and saying, ‘You’re the only people in the history of football that stand and cheer for a punt,’ ” Kelley said. . . .

Kelley’s offense thrives because the possibilities are endless. Third-and-7 is not necessarily a passing down, and third-and-inches is not necessarily a running down.

“And God help the defense on first-and-10,” Kelley said, “because we can literally do anything.”

In recent years, Kelley has consulted with college and N.F.L. teams. He said one offensive coordinator for a team in the Big 12 Conference was enthralled by the idea of never punting, but the head coach was spooked by the risks. Then the offensive coordinator became a head coach, and he got cold feet, too.

Kelley has shared his philosophy with two A.F.C. coaches whose hesitancy outweighed their curiosity.

“These coaches are making millions of dollars, and if they lose close games doing it the traditional way, they’ll probably keep their jobs,” Kelley said.

Video bonus: Another shocking — and totally bold — no-kicks-needed conclusion, the Little Giants play that gave Michigan State a 34-31 overtime victory over Notre Dame in 2010.

South Africa investigating 'crimes against humanity' in Madagascar

South Africa has opened its first ever investigation into crimes against humanity. What is more, it is doing so on the basis of universal jurisdiction, in respect of a former head of state. The National Prosecuting Authority (NPA) has announced that it has opened the investigation in respect of abuses committed in Madagascar in 2009, with a view to prosecuting the country's ousted former President Marc Ravalomanana for his role in their commission. According to an NPA spokesperson:

Evidence has been brought to the attention of the Priority Crimes
Litigation Unit... and
there's reasonable suspicion that crimes against humanity may have been
committed.

The investigation was initiated under South Africa's Implementation of the Rome Statute of the International Criminal Court Act (the ICC Act). It will be 'managed and directed' by the NPA's Priority Crimes Litigation Unit (established to inter alia prosecute international crimes), but carried out by the Police's Directorate for Priority Crimes Investigation. As with the Zimbabwe Torture Docket, this case was instigated by civil society who submitted a docket to the NPA earlier this year. According to media reports at the time:

In the
Madagascar case, a group called the Association of the Martyrs of
Antananarivo Merrina Square and citizens of the State of Madagascar will
ask the NPA to investigate Ravalomanana – who lives in exile in SA –
for allegedly ordering the shooting of protesters at the presidential
palace in the Malagasy capital Antananarivo on February 7, 2009.

The group, represented by Cape
Town attorney David Erleigh, alleges that the shooting was a crime
against humanity as defined in the ICC Act and so SA authorities may,
and should, prosecute Ravalomanana.

The victims and relatives of
victims shot in the demonstration say 71 people were killed and 698
injured on February 7. They will present the NPA with sworn affidavits
from several of them, urging it to ensure that justice is done.

The investigation is in its early stages and much more work needs to be done, particularly in terms of proving the contextual elements of the crimes and (perhaps most difficult) establishing Ravalomanana is liable for the crimes under the doctrine of command responsibility. However, as the first investigation into international crimes by South Africa its significance is already well-established, regardless of the outcome. Furthermore, the response by the NPA will have a material effect on the prosecution of international crimes in South African generally, and the Zimbabwe Torture case in particular (should leave to appeal be granted in that case) in at least two ways:



First, the NPA's announcement makes it clear that the applicable standard for the opening of an investigation is whether there is 'reasonable suspicion' that crimes against humanity have been committed. The use of a 'reasonable suspicion' test as opposed to the Rome Statute's 'reasonable basis to believe' standard - which was endorsed by the High Court in the Zimbabwe Torture case - is regrettable, but it remains to be seen whether there is any practical difference between the two evidential standards. In any event, the NPA has accepted and applied a standard - which does not appear too onerous - which not only brings clarity to the issue, but also precludes the NPA from re-opening the issue on appeal in the Zimbabwe Torture case.



Second, by opening an investigation under section 4(3)(c) of the ICC Act - the 'universal jurisdiction' provision - the NPA has closed down many of the arguments it made in the Zimbabwe Torture case regarding both the legality and policy implications of UJ-based prosecutions. In fact, the only remaining issue to be clarified in terms of section 4(3)(c) is whether the presence of the 'suspect' in the territory of South Africa is required for an investigation to take place (notably, the NPA has made no distinction between their 'jurisdiction' to open an investigation and the jurisdiction of the South Africa courts over such crimes). This is not in issue in the current case as Mr Ravalomonana is currently in exile in South Africa, therefore section 4's requirement that the accused "after the commission of the crime, is present in the territory of the Republic" in order for a court to exercise jurisdiction is not an issue. Conversely, in the Zimbabwe case this 'presence' requirement is the issue - with the NPA and Police arguing it is a precondition for both opening an investigation and initiating a prosecution, while the applicants argue that 'presence' is only a requirement for the purposes of trial (i.e. to outlaw trials in absentia).

The narrowing down of the area of dispute in respect of section 4(3)(c) is to be welcomed. However there is a double-edged nature to the Madagascar investigation for the applicants in the Zimbabwe Torture case: the NPA might be providing cover for its arguments on appeal that section 4(3)(c) requires presence in order to investigate by showing that when the person in question was present (i.e. Marc Ravalamanana), they did in fact do so. Moreover, the opening of the Madagascar investigation also undercuts the argument by the applicants - which was strongly hinted at by Judge Fabricius in his decision - that the NPA was failing to take its duties under the ICC Act seriously. 



Finally, the 'politics' of the Madagascar case closely resemble the Zimbabwe Torture case - both relate to violence in the context of a political impasse which has subsequently been addressed through a SADC mediation process - with one key difference: while Zimbabwe's political impasse was 'resolved' through a power-sharing 'Global Political Agreement' involving both sides, Madagascar's was resolved (initially) through the exclusion of Mr Ravalomonana. In this regard the timing of the NPA's announcement is interesting, as it coincides with SADC-mediated 'unprecedented direct talks' between Ravalomanana and
his successor President Andry Rajoelina on a Seychelles island.