Education

Price Ceilings

by on February 27, 2015 at 7:25 am in Economics, Education | Permalink

This week we released two new sections of our principles of economics class, price ceilings and trade. Most textbooks discuss how price ceilings create shortages and deadweight loss. Modern Principles delves much deeper to explain how price controls impede the operation of the price system creating economic discoordination and a misallocation of resources.

The introductory video is short but it covers a lot of economics.

That is the new Robert D. Putnam book and it focuses on the widening opportunity gap among America’s young.  Much of the work is narrative and case studies, starting with Port Clinton, Ohio but not stopping there.  Any Putnam book is an event, and this one is the natural sequel to Charles Murray’s Coming Apart.  The writing and the underlying intelligence are of an extremely high quality.

One significant theme is that upward mobility results from a mingling of the upper and lower income classes, and such mingling is more scarce than in the immediate postwar era.  You can think of it as case study evidence for the cross-sectional statistical regularities stressed by Chetty et.al.  Contra Chetty, however, Putnam believes that declines in socioeconomic mobility will start to show up in the data as current generations age.

The book’s problem is finding a new note to strike.  Putnam stresses this is a story of social forces rather than personal villains, but, for all the merits of his text, he identifies no new culprits or solutions.  Inequality of opportunity seems to have more to do with parents than schools, but how to control parents?  This book does not flirt with the so-called Neoreaction.  Putnam favors increased access to contraception, professional coaching of poor parents, prison sentencing reform and more emphasis on rehabilitation, eliminating fees for school extracurricular activities, mentoring programs, and greater investment in vocational education; contra Krugman he gives a lot of evidence for skills mismatch (pp.232-233).  More generally, he asks for federalist solutions and lots of experimentation.  Maybe those are good paths to go, but the reader feels (once again) that matters will get worse before they get better.  There is very little on either political economy or the evolution of technology.

Do read this book, but by the end Putnam himself seems to come away deflated from dealing with some of America’s toughest problems.

The wisdom that is Japanese

by on February 25, 2015 at 2:27 pm in Education, Religion | Permalink

Funerals are being held for ROBOTIC dogs in Japan because owners believe they have souls…

It is a funeral like any other in Japan. Except that those being honoured are robot dogs, lined up on the altar, each wearing a tag to show where they came from and which family they belonged to.

The devices are ‘AIBOs’, the world’s first home-use entertainment robot equipped with Artificial Intelligence (AI) and capable of developing its own personality.

And don’t forget this:

The only source of genuine parts are ‘dead’ robots, who become donors for organ transplantation, but only once the proper respects have been paid.

There is more here, with video, via Claire Hill.

Here’s a stunning graph from the New York Fed’s Liberty Street Blog:

What it shows is that default rates on student debt decrease with higher balances or, to put it the other way, the students with the highest default rates are the ones with the least debt.

I wouldn’t have predicted that but here are some possible explanations. First, dropouts have less debt and also less income. But while the debt rises proportionally with years of education the income rises in less than proportion. As I said in Launching, students who drop out after 2 years get less than half of the gains from completing a four-year degree (the sheepskin effect). Thus the 40% or so of students who dropout see their debt rise faster than their income so burdens are higher and default rates increases.

Although the debt to income ratio story is plausible it’s still surprising how many students default with low amounts of debt. Raymond, a commentator at the Liberty Street Blog, offers some additional hypotheses:

I work in financial aid at a large public community college. We pulled data on our defaulters and we found over 60% started with remedial coursework and borrowed their first and second terms. About 80% of the total data population suspended soon after the second term – thus the low amounts. Many were not students just out of high school, they were independent adults. Putting this altogether with the many years I’ve been in financial aid speaking with students I’ve come to a conclusion. 99% of the time when I have a student that has been suspended asking for loans and I mention private or alternative loans they immediately say they don’t have good credit. Bad credit seems to correlate with bad academics. Many seem concerned more with paying bills than paying education. Sometimes they are just out of jail and no one will hire them. Their probation requires they work or get a job which the later is nearly impossible. Other times we have people so deep in the hole in debt already that the student loans was a way to buy more time. The word is out if you have bad credit and are desperate for funds just go to a community college where tuition is low and borrow the maximum. We noticed in our data pull many students graduated from high school or received their GED up to 10 years ago or more! Want the defaults to go down – stop lending to students that have a significant number of remedial courses their 1st and 2nd terms at a college where tuition is already low.

That is the newly published volume 16 of The Collected Works of F.A. Hayek, edited by Sandra J. Peart.  Of course this is splendid from beginning to end, including Peart’s introduction, the letters, Hayek’s commentary, and assorted documents, and the book even contains three very nice poems written by Harriet Taylor.

Is Hayek here blaming Taylor for moving Mill in a collectivist direction?  Is that the Straussian reading of this book and the reason why Hayek did it?

If there were a phrase for “one step above and beyond self-recommending,” this volume would get it.

Ironically, given all the concerns about robots destroying jobs, Mr Tsuda said one of the main constraints on the market’s growth was a shortage of human engineers.

“To use robots — not just to make them — you need quite a level of engineering,” he said. “If anything, for us and the market as a whole, growth is held back by the number of engineers who can do that.”

From Robin Harding at the FT, there is more here.

Here is one account:

Nobel Laureate Amartya Sen, today withdrew his candidature for a second term as Nalanda University chancellor. He blamed this on the Government’s delay in approving his candidature. He also alleged that the Government is using its political might to “interfere in academic matters“. He was helped by fellow “liberals” on Twitter, in playing the victim of political vendetta.

Here is Sen’s full letter of protest.  Here is the matter trending on Twitter.  Many of the opinions expressed are rather strong.

The Department of Economics at the University of Chicago announces the first annual Summer Institute on Field Experiments for scholars, to be held the summer of 2015 at the Saieh Hall for Economics. The Summer Institute will train the brightest young researchers to partner with key stakeholders in government, industry, and the not-for-profit sector to solve the unique problems faced in society through applying economic theory and rigorous field experiment methods.

Organized by John List, there is more information here, a post by Steve Levitt on the Institute here.  Many of you should consider applying.

The disappointment of the professors?

by on February 16, 2015 at 12:40 pm in Education, Web/Tech | Permalink

The huge personal disappointment—and it puzzled me for a long time—was that junior professors did not, by and large, give us work I wanted to print. I knew their professional work was good. These were brilliant thinkers and writers. Yet the problems I encountered, I hasten to say, were absolutely not those of academic stereotype—not esotericism, specialization, jargon, the “inability” to address a nonacademic audience. The embarrassing truth was rather the opposite. When these brilliant people contemplated writing for the “public,” it seemed they merrily left difficulty at home, leapt into colloquial language with both feet, added unnatural (and frankly unfunny) jokes, talked about TV, took on a tone chummy and unctuous. They dumbed down, in short—even with the most innocent intentions. The public, even the “general reader,” seemed to mean someone less adept, ingenious, and critical than themselves. Writing for the public awakened the slang of mass media. The public signified fun, frothy, friendly. And it is certainly true that even in many supposedly “intellectual” but debased outlets of the mass culture, talking down to readers in a colorless fashion-magazine argot is such second nature that any alternative seems out of place.

That is from Mark Greif, an editor and founder of n+1.  He says actually that graduate students do much better than the junior professors.

For the pointer I thank Claire Morgan.

I believe it is very bad, although I do not have data.  I believe that if a 46-year-old, with an excellent vita and newly minted Ph.D in hand, applied for academic economics jobs at the top fifty research universities, the individual would receive very few “bites.”  Unless of course he or she managed to cover up his or her age.  (I am very pleased with the openness of my own university, I will add in passing.)

Perhaps there are not many examples of this kind of age discrimination (do you know of any?).  In part that is because older individuals are so discouraged from going down that path in the first place.  Furthermore it is likely harder for older individuals to go down that path.  In addition to life-cycle considerations, there may be age discrimination at the stage of graduate admissions.

I rarely hear complaints about age discrimination in academia, though I often hear complaints about gender and race discrimination.  I believe all of these phenomena are real (and unfortunate), and I wonder what exactly this discrepancy indicates.  If anything, I suspect age discrimination is far more extreme, at least when it comes to the final stage of the process, namely the actual interview and hiring decisions.

Is age discrimination less of a concern because “older people as a class” face fewer, other general handicaps than do women or African-Americans?  Or is there some other reason for this difference in worry?

I believe also that older, newly minted doctoral candidates bring useful differences in perspective, as can women and ethnic minorities, due to their differing life experiences.

Here is an article about age discrimination in academia, although I find the cited evidence inconclusive.  Here is an interesting short piece from someone who is arguably the victim of age discrimination in academia.

Even for similarly-aged candidates, is there a bias in academic hiring to prefer “potential” over a solid/good but perhaps not fully inspiring track record?  I believe so.  This is related to the causes of age discrimination, which are not always about age per se.

I found very interesting the new book by Joseph Coleman, Unfinished Work: The Struggle to Build an Aging American Workforce, which deals with some related issues though not primarily in the academic context.

That is the title of a short essay by Gary Davis, here is the essay in toto:

Teaching is commonly associated with instruction, yet in evolution, immunology, and neuroscience, instructional theories are largely defunct.

We propose a co-immunity theory of teaching, where attempts by a teacher to alter student neuronal structure to accommodate cultural ideas and practices is sort of a reverse to the function of the immune system, which exists to preserve the physical self, while teaching episodes are designed to alter the mental self.

This is a theory of teaching that is based on the inter-subjective relationship between teacher and learner. This theory posits that teaching does not, as is commonly assumed, take place via instruction from teacher to students, but rather through a process of selection in the learner’s brain, stimulated by materials and activities utilized by the teacher. In this theory, the mechanism that drives the selection process in learners’ brains is co-regulated emotional signaling between teacher and learner. From this perspective, the power of formative assessment is that it intrinsically carries with it emotional aspects for both learner and teacher, in that it provides a feedback relationship between them both, and so, according to the Greenspan & Shanker theory of cognitive symbolic development, promotes cognitive development.

That is from the Journal of Brief Ideas, a new and worthy web site, and for the pointer to the site I thank Michelle Dawson.

The petroleum sector is about 21% of gdp and half of exports.  It’s not just that prices are down, rather quantities produced have been declining throughout the oughties.  (That is the less well known angle here.)  Currently Norwegian oil production is at about half of its 2000 level, and the sector is now bracing for 40,000 job cuts.

Here is from a recent internal economists’ critique of the country:

The group has documented how Norwegian politicians all too often have approved major investment projects that benefit far too few people, are poorly managed and plagued by huge budget overruns. Costs in general are way out of line in Norway, according to the group, while schools are mediocre, university students take too much time to earn degrees and mainland businesses outside the oil sector lack enough prestige to help Norway diversify its oil-based economy. The group mostly blamed the decline in productivity, though, on systemic inefficiencies and too much emphasis on local interests at the expense of the nation.

Is this entirely reassuring?:

Prime Minister Erna Solberg recently spoke of the need to invest in areas where people actually live…

After you adjust for wage differences, it costs 60% more to build a road in Norway than in Sweden.

There is this too:

“Approximately 600,000 Norwegians … who should be part of the labor force are outside the labor force, because of welfare, pension issues,” says Siv Jensen, the finance minister.

The country has largely deindustrialized, oil of course aside.  And there is a fair amount of debt-financed consumption.

The country has falling and below average PISA scores by OECD standards.

Not everyone admires Norway’s immigration policy, and there is periodic talk of banning begging in the country.  It seems there are only about 1000 beggars — mostly Roma — in a country of about five million, so you can take that as a sign they are not very good at processing discord.  Far-right populist views do not seem to be going away.

For sure, Norway will be fine.  Did I mention per capita income is over $100,000 a year and they have no current problems which show up in actual life?  Hey, the “over” in “overrated” has to come from somewhere!  The country also has the world’s largest sovereign wealth fund and owns about one percent of global stocks.  Still, the idea of a rentier economy makes me nervous.  When most people don’t “have to” do that well, often cultural erosion sets in.

They’ve made a new film : “Here’s a beautiful video of Iceland and Norway, time-lapsed and tilt-shifted to show the hustle, the bustle, and the beautiful splendor of Scandinavia from a more toy-like perspective. Called The Little Nordics, it was filmed by Dutch design team Damp Design. Happy Friday!”

Sorry Magnus, Karl —  I know you guys are still underrated.  It’s not for nothing that I used to call it “the Norwegian century.”

Addendum: Here is my earlier post on whether Sweden is an economically overrated country.  At least it is cheaper to build a road there.

No, not your own.  Here is one view:

The main effect of reading Hamlet a 100 times was, counter-intuitively, that it lost its sense of cliche. “To be or not to be” is the Stairway to Heaven of theatre; it settles over the crowd like a slightly funky blanket knitted by a favorite aunt. Eventually, if you read Hamlet often enough, every soliloquy takes on that same familiarity. And so “To be or not to be” resumes its natural place in the play, as just another speech. Which renders its power and its beauty of a piece with the rest of the work.

That reader is Stephen Marche, the link is here, interesting throughout.  Can you guess which is his other pick?

By the way, I believe that to do this you need to own many copies of the work (can you figure out why?), and indeed Marche owns at least ten copies of Hamlet.

Montgomery, Alabama bleg

by on February 11, 2015 at 1:09 pm in Education, Food and Drink, Travel | Permalink

Natasha and I will be there too, not just Birmingham, your suggestions would be most appreciated, thanks!

Here is the second rose video which goes deeper into the meaning and operation of the invisible hand. One warning, however, don’t watch this video while drinking!

All MRUniversity videos are free to use in the classroom. To that end, we have put together a short guide for teachers that suggests some ideas for using the rose videos in class and how one might continue to deepen the lessons.