Month: July 2005

Why do people gamble?

by  Tyler Cowen in

Lucas Wiman, an MR reader, tries to explain gambling to me, using evolutionary psychology:

I think gambling is a result of a cognitive adaptation caused by the scarcity of certain kinds of resources.  Imagine that an individual has need for two resources (say fruit and water).  Fruit is obtained from bushes which bloom at irregular intervals, and is quickly eaten by other animals after it ripens, while water is always available at the creek.  In this circumstance, it is rational (from an economic perspective) to devote more time to checking whether there is fruit available than water.  Water can be easily obtained as needed, but given the irregularity with which fruit is available, it makes sense to check frequently and horde for later usage.  This applied a selective pressure, so that utility was increased simply by checking whether an occasionally-available reward exists, whether it was found or not.  Gambling is then a system designed to exploit this odd utility curve–by producing an occasional reward, a slot machine activates this system.  After someone wins once at slots, they get a utility boost from checking whether the reward is there again.

The economics of Texas roads

by  Tyler Cowen in

I grew up in northern New Jersey, where you must do a convoluted U-turn (think Rt. 17) to visit the other side of the highway.  I live in Northern Virginia, where you simply turn left into the strip mall of your choice, but you face an intimidating array of traffic lights along the way.

Houston and El Paso (and presumably other places as well) have a better system, or so it appears to me.  You drive on an elevated highway free of lights, and there are parallel service roads on each side.  The stores sit on the service roads.  Exit and entrance ramps are frequent.  This photo shows all.

A location theorist might worry this encourages too many shops to line up in a straight row along the main road, rather than clustering in a more circular fashion.  Who cares, I say?

Can you think of economic arguments against this arrangement?  Comments are open…

I might add that the elevated Rt.10 in El Paso is aesthetically impressive as well.  Headed west, to your right is the city and mountains, ahead of you is New Mexico, to your left is Mexico Mexico, all in one fantastic blick…

Acting White – Solutions to the Puzzle

by  Fabio Rojas

A few days ago, I wrote about a paper by Ron Fryer and Paul
Torelli (click here for the post). To sum it up, they found that white student GPA correlates positively
with popularity, black student popularity peaks with a GPA of about 3.5 and
Hispanic popularity peaks at about 2 to 2.5 GPA. My question to the readers:
why the marked difference between Blacks and Latinos?

I was deluged with emails. So let me start by thanking all
the Marginal Revolution readers for sending their thoughts! Even if I haven’t
gotten around to responding to every email, please know that I read them all
and learned quite a bit.

In general, there were two sorts of emails – personal
recollections and attempts to explain the phenomena. Among the former, many support that for the idea that there is an acting white penalty. At the very least, the "acting white" accusation is very real for many people. One
person wrote that although s/he earned a modest 2.1 GPA in their final year in
high school, s/he was till accused of acting white by peers. A teacher in a
mainly Hispanic high school told me that success for many children of
immigrants is defined in rather modest terms, and that striving for college and
advanced education was out of the norm.

Now, let’s turn to some proposed explanations. One popular
answer was that each ethnic group has different GPA distributions and that
people become unpopular as they deviate from the group average. It is certainly
true that GPA varies from group to group, but the mean white GPA is not 4.0 –
the height of popularity for white students. It is also true that in data that
Fryer and Torelli use black and Hispanic GPA are about the same at 2.5 (check out page 51). So the “deviate from
the mean” explanation only fits Hispanics, but not the other groups examined.

Another batch of emails suggested that a shared Spanish
language, close social networks and tight families might mean that Hispanics
are better at monitoring each other than Blacks. If a Hispanic student wants to
do well in school, they have to master English. It’s pretty easy to know if
someone speaks English with any degree of fluency. OTOH, Black students already
know English. I can imagine that an ambitious Black student could do pretty
well in school and not attract attention. They “fly under the radar,” in the
words of one MR reader. However, once you get a super high GPA, you get lots of
public recognition in school (honor roll, advanced courses, etc.) and it’s
harder to evade the “acting white” tag.

A couple of readers felt that the statistical finding for
Hispanics was misleading. They suggested that it was important to discern
between fluent English speakers and mainly Spanish speakers. Assimilated
Hispanics, they thought, might resemble White students and what Fryer and
Torelli report only pertains the least assimilated, where there would of course
be unusually strong in-group pressures for conformity. There might be some
credence to this; Fryer and Torelli don’t include English fluency as control
variables.

So thank you to all who emailed! As you can see, I enjoyed
the email enormously and I think we have some tips on solving this puzzle.

How to improve student evaluations

by  Tyler Cowen in

Bryan Caplan hits the nail on the head:

I have a simple solution: stretch the scale upwards. If students call 60% of their professors "excellent," we need to add stronger adjectives to the list of responses. I suggest we add 6="best professor I’ve had this year" and 7="best professor I’ve ever had."

I still suspect students would overuse these options – during their four years, a student might give out ten 6’s and five 7’s, instead of four 6’s and one 7 like they should. But my reform would publicly distinguish teachers who do their job and appease complainers from professors who change their students’ lives but refuse to coddle them.

Zambia fact of the day

by  Tyler Cowen in

If Zambia had converted all the aid it received since 1960 to investment
and all of that investment to growth, it would have had a per capita GDP of about $20,000 by the early 1990s. Instead, Zambia’s per capita GDP in the early 1990s was lower than it had been in 1960, hovering under $500.

That is Bill Easterly, courtesy of Mahalanobis.  And did I mention that fifty years ago, South Korea had about the same standard of living?

Where are the Conservatives for Bollywood?

by  Fabio Rojas

Conservatives love to rant about the evils of Hollywood. Too much sex and violence. Inappropriate for the family. Religion gets short shrift. Fair enough, a lot of Hollywood fare isn’t fit for the 13 and under crowd. Here’s my question: why aren’t conservative media critics rushing en masse to sing the praises of Bollywood films? Michael Medved, where are you?

Consider the following Bollywood film conventions:

1. No sex. If you’re lucky, you might see some wet sari.

2. The films often revolve around finding a wonderful spouse and getting married.

3. The bigger the wedding, the better.

4. Lots of piety. Religion is *never* mocked or portrayed in a negative light.

5. Although the parents initially oppose the wedding, they usually come around and you get one big happy family.

6. The reigning queen of Bollywood, Aishwarya Rai, is such a down home gal, she still lives with her parents.

7. Lots of trips to Egypt and Switzerland. I have yet to understand this convention.

8. Cities are usually bad, twisted places with corrupt politicians. Country folk are usually more honest.

9. In more recent Bollywood films, coming to America is the way to success and is admired.

10. Tons and tons of song and dance, which is mostly about finding true love. Those who miss Broadway’s glory days have much to admire.

If you haven’t seen any Bollywood films, you might want to check out Lagaan, which is about resisting the British in India. It’s available at most chain video rental shops. But if you want the full experience, seek out the blockbuster Kabhi Khushi Kabhie Gham.

Economics is a hot major

by  Tyler Cowen in

U.S. colleges and universities awarded 16,141 degrees to economics majors in the 2003-2004 academic year, up nearly 40% from five years earlier, according to John J. Siegfried, an economics professor at Vanderbilt University in Nashville, Tenn., who tracks 272 colleges and universities around the country for the Journal of Economic Education.

Since the mid-1990s, the number of students majoring in economics has been rising, while the number majoring in political science and government has declined and the number majoring in history and sociology has barely grown, according to the government’s National Center for Education Statistics.

The number of students majoring in economics has been rising even faster at top colleges. At New York University, for example, the number of econ majors has more than doubled in the past 10 years. At nearly 800, it is now the most popular major.

Economics also is the most popular major at Harvard University in Cambridge, Mass., where 964 students majored in the subject in 2005. The number of econ majors at Columbia University in New York has risen 67% since 1995. The University of Chicago said that last year, 24% of its entire graduating class, 240 students, departed with economics degrees.

Here is the full story, with a discussion of job prospects as well.

Auto scalping??

by  Fabio Rojas

Attention baseball fans and vertical integration researchers: The Chicago Cubs scalp their own tickets. I was recently pointed to the web page of a disgruntled fan (click here) who found out that a ticket re-seller is owned by the same company that owns Wrigley Field, the Tribune Company. And of course, the ticket reseller charges much more than the face value.

Why? Some guesses: you get the extra income without the negative publicity of raising ticket prices. The Tribune Company also gets to hide income in a subsidiary, which might be useful when negotiating with Major League Baseball over revenue sharing issues. Regardless of the economic motivations, disgruntled fans filed a lawsuit, which the Tribune Company eventually won (click here to read about the verdict).

My favorite things Texan

by  Tyler Cowen in

Music: How about Blind Willie Johnson, a pinnacle of the blues tradition?  Buy it here.  Can I overlook Scott Joplin and his "Euphonic Sounds"?  Lightnin’ Hopkins?  Woody Guthrie (if only he had read Economics in One Lesson…)?  Leadbelly?  Janis Joplin?  Roy Orbison?  Jimmie Rodgers?  Charlie Christian?  Ornette Coleman?  Buddy Holly?  Here is a longer list.

Painting: Robert Rauschenberg?  Look at this one with the goat, I believe it is in Stockholm.  I bet you, like I, say naaaah, but the field is thin.  I’ll opt for his "Bed" as an important work, however.

Literature: Cormac McCarthy’s Blood Meridian is the obvious choice, or try Katherine Anne Porter.

Food: Texas barbecue has a strong influence (sausage!) from German migrants.  That is also why Tejano music has so much accordion, with a hat tip to Poland as well.

Comedian: Steve Martin.  All of Me and Planes, Trains and Automobiles both make me laugh.

The bottom line: I love Texas, but I am surprised that the weight of achievement is so unbalanced toward music and food.  By the way, I’m in El Paso, doing research for my next book.

Addendum: Several readers write to tell me Guthrie is not a Texan…