Education

“I’m always curious when I read this ‘good news’ that health costs are moderating, because my health care costs go up significantly each year, and I think that’s a common experience,” said Mark Rukavina, president of Community Health Advisors in Massachusetts.

Um…how much time with Megan McArdle or Arnold Kling would it take to set him straight?  The full story, of interest on other points too, is here.

I, Rose

by on February 9, 2015 at 7:25 am in Economics, Education, Film | Permalink

Valentine’s Day is this week and what better way to celebrate than to appreciate the economics of roses!

A rose isn’t just a symbol of love it’s a symbol of global cooperation coordinated by the invisible hand. In The Price System, the just released section of our principles of microeconomics course, we feature two rose videos (along with videos on the great economic problem, speculation, prediction markets and more). Here’s the first; I, Rose. Tomorrow, A Price is a Signal Wrapped up in an Incentive. Enjoy.

Yesterday a few of you asked me to run this poll.  Please leave your answers in the comments, I will report back.  I thank you all in advance for the wisdom of your responses.  And please restrict your answers to living people, or say anyone who has passed away in the last five years, so this should be about contemporaries, not Joan of Arc or Einstein.

Unions for Online Education

by on February 6, 2015 at 12:31 pm in Economics, Education | Permalink

The Washington Post reports on a new campaign by the Service Employees International Union, the 2nd largest and fastest growing union in the United States, to greatly raise the wages of university teaching adjuncts:

Now, a union that’s been rapidly organizing adjuncts around the country thinks that number [wages, AT] should quintuple. Last night, on a conference call with organizers across the country, the SEIU decided to extend the franchise with a similar aspirational benchmark: A “new minimum compensation standard” of $15,000. Per course. Including benefits.

…At the moment, the $15,000 number sounds even more outlandish than $15 did when fast food workers started asking for twice the federal minimum wage. But organizers argue that if you’re teaching a full load of three courses per semester, that comes out to $90,000 in total compensation per year — just the kind of upper-middle-class salary they think people with advanced degrees should be able to expect. (Most adjuncts teach part-time, which would put them at $50,000 or $75,000 per year.)

Mercatus Center graduate fellowship applications are at this link.

And if you are enrolled elsewhere: “The Adam Smith Fellowship is a one-year, competitive fellowship for graduate students attending PhD programs at any university, in a variety of fields, including economics, philosophy, political science, and sociology. The aim of this fellowship is to introduce students to key thinkers in political economy that they might not otherwise encounter in their graduate studies. Smith Fellows receive a stipend and spend three weekends during the academic year and one week during the summer participating in workshops and seminars on the Austrian, Virginia, and Bloomington schools of political economy.

It includes a quarterly stipend and travel and lodging to attend colloquia hosted by the Mercatus Center. It is a total award of up to $10,000 for the year. Acceptance into the fellowship program is dependent on acceptance into a PhD program at an accredited university. The deadline for applications is March 15, 2015.”

From Harvard’s Kennedy Center:

…see the related article “Addressing Vaccine Hesitancy,” by report co-chairs Barry R. Bloom of the Harvard School of Public Health, Edgar Marcuse of the University of Washington and Seth Mnookin of MIT.

The beginning of this misinformation problem, researchers say, dates back to 1998, when a now-discredited scientific paper was published in Britain linking vaccines to autism, a link that was proven entirely false and even labeled “fraudulent.” A number of activists and some celebrities have adopted prominent anti-vaccine positions, and media and entertainment outlets have provided a platform for some of their views.

Despite the importance of this issue, little research has been done on how newer forms of technology and communication, including social media or video-sharing sites, influence health decision-making. And there are basic questions about the effectiveness of traditional public health campaigns. One of the most important studies to date is a 2014 paper in the journal Pediatrics, “Effective Messages in Vaccine Promotion: A Randomized Trial.” The researchers — Brendan Nyhan of Dartmouth College, Jason Reifler of the University of Exeter, Sean Richey of Georgia State University and Gary L. Freed of the University of Michigan — analyzed the results of a Web-based national survey of nearly 1,800 parents. After asking respondents about their own family health situations and beliefs, researchers then tested common public health communications strategies to promote vaccination: “(1) correcting misinformation, (2) presenting information on disease risks, (3) using dramatic narratives, or (4) displaying visuals to make those risks more salient or accessible.”

The study’s findings include:

  • The data indicate that “pro-vaccine messages do not always work as intended and that the effectiveness of those messages may vary depending on parental attitudes toward vaccines.” In fact, there was “little evidence that messages emphasizing the risks of vaccine-preventable diseases were effective in promoting vaccination intent.”
  • Further, the data show that a “dramatic narrative about measles and images of sick children” actually ended up increasing misperceptions about MMR.
  • The study’s conclusion was unequivocal regarding traditional messaging: “None of the pro-vaccine messages created by public health authorities increased intent to vaccinate with MMR among a nationally representative sample of parents who have children age 17 years or younger at home. Corrective information reduced misperceptions about the vaccine/autism link but nonetheless decreased intent to vaccinate among parents who had the least favorable attitudes toward vaccines.”

By the way, Werner Troesken at the University of Pittsburgh will be publishing a new book on how American freedoms have allowed infectious diseases to spread, or so sounds the description.  It is from University of Chicago press, due out in May.

This NYT article has been widely read and emailed.  Ron Lieber argues yes, you should tell your children, but I’m not sure I can pull out the exact thread of his argument from the piece.

I say no you should not tell them.  But you should tell them something about your monetary situation.  If you are not so well off, you should tell your children that you are upwardly mobile, and will someday be more prosperous, through hard work.  At the very least then they won’t be scared.  If you are middle class, tell them a somewhat scaled-up version of the same.  You don’t want to tell them anything they can use as a “club” against their possibly poorer friends, so leave creative ambiguity in your answer.  If they boast about the family income, they will mostly end up embarrassing themselves, in addition to the negative externalities they might impose on others.

That said, you are marking out a range, so when they grow up and the time comes for them to learn the exact truth, they won’t feel you were tricking them or keeping family secrets.  In the meantime you are a role model for upward mobility.

If you are well off or very well off, tell them “Yes, we are well off but the real metric of success is X,” depending on what you think they need to hear, within the bounds of realism of course.  X might be how many friends you have, how happy your children are, how holy or pious or God-fearing you are, how many books you have read, or how much you have helped the world, among other candidates.  Serve them up a weighted average of those Xxs over time, so as to a) avoid seeming like a monomaniac, and b) give them a sense that many values are important, and c) drive home that money is not at the top of the list, even if you think it is.  They’ll have enough chances to learn to feel that way.

Remember, you’re trying to maximize some weighted average of covering your bases for future revelations, moral instruction, not scaring them with Piketty-like reasoning, stopping your kids from making fools of themselves with the information you give them, and stopping your children from making you look foolish or like a bad parent.  You’re in essence the central bank here, and it’s creative ambiguity all the way.

Here’s the data on Swedes at Oxford.

The average acceptance rate for EU applicants was 9.2%. For Swedish applicants it was 3.2%.

For 2013, both Oxford and Cambridge accepted 140 students from Singapore, a country of 3.3 million citizens.

They took 26 from Canada, which has 33 million people.

http://www.ox.ac.uk/about/facts-and-figures/admissions-statistics/undergraduate-admissions-statistics/nationality-and-domicile

That is from Chip.

From a recently published research paper by Gustaf Bruze:

Counterfactual analysis conducted with the model suggests that Danish men and women are earning on the order of half of their returns to schooling through improved marital outcomes.

For the pointer I thank the excellent Kevin Lewis, and there are ungated versions here.

married-at-first-sight

In addition to my earlier pick of Chile, I now must nominate Sweden and Norway for this honor.  Both are wonderful countries, and in absolute terms very likely to remain strong performers.  But I think a good deal of that old Nordic magic is slipping away, and this has become more evident in the last few years.

Let’s start with Sweden and maybe I’ll get to Norway another time:

1. The average product of their education system seems to have declined rather rapidly, as measured by test scores.  On PISA they have gone from #4 to #21.

2. Arguably the basic Swedish economic social model is inconsistent with their level of immigration, and I don’t see them switching to a different economic and social model anytime soon.  You can be pro-immigration, and still not think Sweden is honing in on the right mix of domestic policy and immigration policy.

3. Swedish manufacturing seems to be deindustrializing at a faster than expected pace.  And some of Sweden’s most successful sectors are exposed to a lot of competition from emerging markets, in particular because they rely heavily on engineering talent.  Sweden also has a significant presence in financial services, but they are not an obvious future winner in that area.  And do timber, hydropower, and iron — their main commodity exports — have such a promising future?  There are probably few disasters lurking here, but lots of question marks.

4. Sweden doesn’t seem to have a lot of low-hanging fruit left.  Female participation in the labor force already is high, and they already have done lots of liberalization, privatization, and deregulation.  It is not clear where the next generation of policy improvements will come from.  The McKinsey report recommends “increasing government productivity” as a major source of potential gains, but that is hardly easy, even for the Swedes.

5. The Swedish central bank seems to have scored an “own goal” by engaging in premature tightening, coming out of the earlier recession.  They’ll make much of that up over time, but still it is a sign the country has lost some mojo.

6. Sweden’s household to debt ratio is about 170%, one of the highest in the world.  This is not only troubling in its own right, but arguably it is a sign debt is being used to make up for a slow accumulation of underlying economic deficiencies, as was the case in the United States.  Furthermore “Four in 10 mortgage borrowers in Sweden are not paying off their debt, according to data collected by Reuters, and those that are repaying the principal are doing so at a rate that would on average take nearly a century.”  They are probably still in the middle of a housing bubble.

7. There is an erosion of support for mainstream Swedish political parties.  You don’t have to approve of those parties to see this as a symptom of a very slight underlying political rot setting in.  The “extreme Right” party has seen a rapid rise in support.

8. A rampaging Putin probably won’t harm them directly, but still recent Russian events raise geopolitical risk in their neighborhood.

Don’t worry, the Swedes will do fine, but they have arrived at officially overrated status.  I was more sanguine about their prospects a few years ago than I am today and I would not invest in their stock market.  If you wish to count their pluses however, they still have a very good system of government, a strong ethic of trust and cooperation, a good ability to change course when necessary, high productivity, a strong presence in information technology, a wonderful export capacity, low public debt, and first-rate proficiency in English, among other virtues.

That all said, the Swedish currency is actually down against the euro since the beginning of the year.

Should economists shy away from teaching hard topics for fear of offending someone’s moral sensibilities? Should we restrict ourselves to the market for ice cream? The tagline of our textbook, Modern Principles, is See the Invisible Hand: Understand Your World. We take understand your world seriously and we teach topics that other textbooks do not such as the economics of network goods like Facebook or the economics of tying and bundling which students see regularly when they purchase cell phones and minutes and Cable TV.

The world, however, is not always a pleasant place and so we also discuss modern slavery and how the concept of the elasticity of supply can help us to evaluate programs like slave redemption. It’s important to teach this material with seriousness, it’s not an idle exercise in “freakonomics,” and it’s possible to misstep but we think students need to see economics as a vital discipline that can be used to make the world a better place, even if only one small step at a time.

Here is Tyler on elasticity and the economics of slave redemption. This is from the elasticity section of our course at MRUniversity, released today along with taxes and subsidies. You can also find a lengthier treatment with more details in Modern Principles.

Based on my paper, Lessons from Gurgaon, India’s Private City (with Shruti Rajagopalan) I discuss private cities with Russ Roberts over at EconTalk this week.

I think the conversation went well but I haven’t heard it yet so let me also take the time to point you to my favorite recent EconTalk, Russ interviewing Greg Page, the former CEO of Cargill, the largest privately-held company in America. Their discussion covers the global food supply, false definitions of national food security, the role of prices, comparative advantage and more. It’s a great discussion.

Mostly, yes, although with some caveats (the headline of the piece doesn’t exactly capture this).  That is the topic of my latest column for The Upshot.  Here is one excerpt:

Niclas Berggren…and Therese Nilsson…have produced a fascinating series of papers on these questions, sometimes writing singly, sometimes together or with the collaboration of a variety of co-authors. Their most notable study is perhaps a paper they wrote together, “Does Economic Freedom Foster Tolerance?

…One of their most striking findings is that societies characterized by greater economic freedom and greater wealth do indeed exhibit greater tolerance toward gay people, a tendency suggesting that gay rights, including gay marriage, will spread globally as national economies liberalize and develop.

Some metrics of economic freedom count more than others:

This greater tolerance is strongly associated only with certain features of what has often been defined as economic freedom. For example, a smaller government, measured as a share of gross domestic product, is often included in so-called economic freedom indexes as an objective measure of freedom. But the data show that smaller government has a slight negative correlation with tolerance of gay people by heterosexuals. One implication is that many conservatives may be overly preoccupied with the size of government as a measure of how free societies actually are.

On the other hand, the data shows that when a society has impressive scores on property rights security and low inflation — two other components of economic freedom indexes — these characteristics are strongly and positively correlated with tolerance of gays. It’s possible that low inflation, and the behavior of a central bank, are stand-ins for the general trustworthiness of a nation’s government and broader institutions, and such trustworthiness helps foster tolerance.

The results for race are not nearly as strong, namely both freedom and prosperity are less clearly associated with higher levels of racial tolerance, although the correlation is still a positive one.

And there is this:

We are often told that education is an important remedy, yet it does not register as a meaningful factor in the cross-country data in this paper. Higher levels of education simply have not correlated significantly with higher levels of tolerance across countries.

Do read the whole thing.

The Supply Curve

by on January 23, 2015 at 7:25 am in Economics, Education | Permalink

Here is our video introducing the supply curve from our principles of micro-economics course at MRUniversity. Supply, Demand and Equilibrium are available now. Next week, elasticity!

From the letters page of the FT:

Sir, Whether the European Central Bank chooses to embark on a programme of sovereign QE (or quantitative easing, as it used to be known) is of little day-to-day interest to most citizens of the EU. Whether the compilers of dictionaries accept that QE is now a word in its own right — as opposed to an abbreviation — is of far more relevance to us scrabble players. Using a Q without needing a free U it would rapidly be up there with Qi (the Chinese word for life force) as one of the most useful words in the lexicon.

Richard Kemmish

Surbiton, Surrey, UK

I would think that for the foreseeable future QE would be ruled an abbreviation, not a word, although enough years of macroeconomic misery eventually could flip this the other way.

Some abbreviations, however, are acceptable Scrabble words because they have entered common parlance.

Here are other “Q without U” words which are eligible for use in Scrabble.