Bloggers all the way down

27/06/2012 § 1 Comment

Posting will be light this week. We shifted house yesterday, and the NZAE conference is Wednesday through Friday. Ironically, I won’t be blogging so I can be on a blogger panel. Also appearing: Eric Crampton, Sam Richardson, Seamus Hogan, Matt Nolan, and James Zuccollo.

We were also originally going to use the work on the impacts of economics blogging by Berk Ozler as a bit of a touchstone — not sure where that idea has gone.

Anyway, we should all end up blogging about blogging about….


Science iz 4 QTs! lol!!!

26/06/2012 § 2 Comments

Education — particularly maths and science education — is a topic that will get me on my soapbox. And yes, I’m prone to the ‘they’re all doing it wrong!’ school of curmudgeonry. Nevertheless, I can still be surprised, because the stupid never sleeps.

It seems that the EU — like all the other governments — has decided We Need More Scientists. One solution is to have more women in science jobs. After all, women are more than half the species. They need to pull their weight in the sciences! Or something like that.

Somebody ginned up a publicity video to get girls interested. Yay! [smilely face]! Only, well, it’s more lipstick than lab coat. Cause, yeah, y’know, the women scientists I’ve known were all about the bling.

I can’t link you to the YouTube video, because it has now been made private. There is still shame in the world. Or, at least, bad press. So let me send you to Martha Gill’s blog for the full story and some snippets of the original video.

Here’s a thought: how about actually teaching them all the interesting things about maths and science while they still want to learn them? I know, that’s just crazy talk.

200 economists walk into a bar…

22/06/2012 § 2 Comments

…but called it a conference so they could expense the drinks.

The classical economists said the drunkenness was the fault of the bar owner, because his supply had created their demand.

The Keynesians were depressed, and argued that the bar should offer free drinks in order to stimulate their consumption.

The Austrians declared that those still standing clearly had better drinking techniques than those who had fallen over.

The behaviouralists observed that people were using an unknown heuristic to link ‘bars’ with ‘drinking’ (and that it required further research).

The libertarians independently decided the optimal approach was to internalise as many externalities as their budget constraints allowed.

And Ben Bernanke told those assembled that a punch bowl may have been appropriate in a sake bar, but he certainly couldn’t provide one in the current circumstances.

The New Zealand Association of Economists is meeting 27-29 June in Palmerston North. I hope to see you there. If not, please check out the conference website and the papers deposited there.

Virginia’s fight over higher education

22/06/2012 § 2 Comments

The resignation of the president of the University of Virginia has been making the news. She was only half-way through her term when she tendered her resignation, and politics and pressure from the governing board appear to have played a part.

For a wag’s view, click on over to Crooked Timber. Kieran Healy has written a new Declaration of Independence, expressing the board’s opinion of the president (you’ll recall that UVa was founded by Thomas Jefferson, who wrote the American colonies’ Declaration).

Expect to see more of this. First of all, boards and presidents don’t necessarily get along. The College of William and Mary (on the other side of Virginia) had a similar but not so rancorous or public episode a few years ago, when the board declined to renew President Nichol’s contract. His Wikipedia entry tactfully notes that Nichol had ‘the shortest tenure for a William & Mary president since the Civil War’.

Three disputes in higher education are creating turmoil, with President Sullivan an unlucky casualty:

  • who should pay?William and Mary reported in 2011 that ‘Over the last generation, state support for William & Mary’s operating budget has gone from over 43% to under 13%.’ Public funding of tertiary education in the US is declining. One push is shrinking state budgets, but there is also a sense that individuals benefit greatly from tertiary degrees. Therefore, they should bear the costs individually. New Zealand is also heading down this track, too.
  • what should students study? — There is a perennial argument that pits a broad liberal arts education against skills training for employment. I won’t re-hash the argument here. However, as student debt increases, the requirement to pay off the debt tends to push students into skills training. It also increases the pressure on universities to demonstrate value-for-money in the short term. They need to show that their graduates are relevant and employed. That pressure means universities need to be more responsive to short-term business trends (well, fads).
  • how should education be delivered? — This is apparently the reef on which President Sullivan foundered. Technology — that is, the internet — makes information search and transfer easy, cheaper, and faster. If education is transferring information, then the internet should make it cheaper, too. Universities are trying to figure this out. So now, we have MIT online courses and the joint project Coursera. But it isn’t as easy as posting lectures online and charging remote students to access them. The notion that education is lighting a fire, not filling a bucket*, applies here.

These are all disputes in progress, and they are bound up in larger social and political currents. They go to contested questions like, ‘what should society provide me, and what should I provide myself?’, and ‘if it is funded with public money, how much control should taxpayers have over recipients’ choices?’ The situation at UVa is a public struggle over the answers to those questions.

*Apparently, from Plutarch: ‘For the mind does not require filling like a bottle, but rather, like wood, it only requires kindling to create in it an impulse to think independently and an ardent desire for the truth.’

The eurocrisis is dead. Long live the eurocrisis!

20/06/2012 § 1 Comment

So, Greece.

They had the election, and the scary party didn’t win. Yay! Now we can all go back to…to what?

Just to recap:

Greece’s conservatives and socialists are edging towards a deal on a new government….

Who are these conservatives and socialists who saved Greece, Europe, and the world from Syriza, the radicals who would have torn up the existing bailout agreements and pushed for a better deal? Why, they are

arch rival parties which alternated in office from the fall of military rule in 1974 until last year, when Greece’s economic crisis forced them to share power in a short-lived national unity government.

Let’s say you’re the kind of person who thinks that the Greeks brought this all on themselves, that this is a sort of Greek tragedy in which moral laxity in Act I sets off a chain of events leading to punishment in Act III. They overspent, they didn’t pay their taxes, and now they can’t pay their debts. Who, exactly, was in charge in Act I? Actually, it seems that the same people who were in charge then just won the election. If the actors are still on stage, the play isn’t over. There’s still plenty of time for the gods to punish the mortals’ hubris.

Let’s say, alternatively, that you’re the kind of person who thinks this is structural. The euro is a monetary union without a fiscal union, so it has insufficient automatic stabilisers to contend with the regional economic heterogeneity in Europe. Money flowed into Greece when investors thought it was a safe as Germany. In fact, it wasn’t, and now those debts cannot be paid. Who, exactly, is going to negotiate the lower debt payments and/or higher inflation that might allow Greece to trade through? The same political parties who have been playing catch-up for the last couple of years?

There are now reports that the election may have shaken things loose a little. Creditors are signalling that they may be willing to renegotiate. Maybe the threat of competition — the success of Syriza — was enough to push the political duopoly towards a better equilibrium.

With that exception, the Greek election has merely moved us back to the status quo ante. As I recall, it wasn’t all that flash.

Good news for Christchurch renters

19/06/2012 § 1 Comment

Some good news out of Christchurch:

An investigation into overcrowding, homelessness and unsuitable living conditions in Christchurch has been kick-started by a government department.

There have been some dire stories coming out of Christchurch — families living in caravans and garages, people still using port-a-loos, rental inflation, etc. It hasn’t been clear how bad the problem is, since stories aren’t necessarily data.

Eric Crampton has some good thoughts on the issue, and not for the first time. The key is to overcome the supply-side constraint. That will take some novel solutions in a difficult situation. Of course, the whole raison d’etre of bureaucracy is routinisation — the opposite of novelty.

It’s not all good news, however.

This particular study won’t be easy to do. It sounds like they have one staffer looking into the problem:

A staff member was seconded into the role two weeks ago and would compile a report to help the department “identify the appropriate policy response”, a spokeswoman said.

Yikes! How much is this person going to be able to do?

Let’s think about the problem this way: there are primary data and secondary data. Primary data are new pieces of information that you go out and collect; secondary data are someone else’s information that you bend to your purpose. If you want to do something quickly, secondary data are the way to go. A big chunk of work is done, someone else has verified and tested the information, and you can point to other sources to buttress the validity of your arguments.

For example, one complaint is that the rent is too high. Eric’s idea of looking at the tenancy bond database is a good one — it’s been done before. Of course, once you have the data, there are all sorts of ways to torture them. It sounds like the biggest problems are concentrated, so simple averages may mask the extent of the problem for specific groups of people. Secondary data may be able to help understand this issue.

Other complaints, though, are about housing conditions. A study of the bond database doesn’t seem like it would help assess those complaints.

The key here is that the Christchurch situation is new and different. Primary data may be required to assess it. People with housing insecurity are difficult to study. How do you sample them? How do you contact them? What is the base population to whom they should be compared? What is ‘substandard’ housing given the earthquakes?

I look forward to the report, and I hope they choose a method that actually helps them understand the problems.

Standing in Harvard Square with leaflets and a big sign

15/06/2012 § 6 Comments

There was, floating around the Web recently, an analysis of the current economic risks. It had probabilities of each major economic area pulling through without collapse, 80% for the US, 70% for the EU, etc. The two points seemed to be that each area still had a good chance of being fine, but the probability that nothing would happen was fairly low.

What struck me was that the analysis treated the risks as independent. Of course, they aren’t. If the eurozone were to collapse, to whom would the US and China (and NZ) sell their exports? Those economies would suffer, too. The joint probabilities are key.

Dani Rodrik tells a story about what could happen, the joint probabilities presented in prose. Entitled ‘The End of the World as We Know It’, it is a tale of worry and woe that ends thus:

A remote scenario? Perhaps, but not remote enough.

I’ll leave you to follow the link.

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