In Case You Were Wondering

Category: In Case You Were Wondering

April 1 Comes Early

Though I’m not one to pile onto the United States Postal Service, it is probably worth noting this news item — Postal Union Election Delayed After Ballots Lost in Mail.

Coming on the heels of a post where everyone seems to have an opinion, I would guess that in this case you just have to shake your head and laugh.

So this post isn’t totally bereft of content, I point you to Rick Geddes’ review of postal reform in the Economics Journal Watch.

This essay examines the published views of vital economists regarding postal reform. I define a vital economist as one who has produced scholarly research on this issue, and who has expressed an opinion about the direction reform should take. The ten vital economists surveyed here express surprisingly similar opinions on the proper direction for postal reform. The vast majority advocate some combination of privatization and elimination or relaxation of the delivery monopoly. Those opinions are in stark contrast to the published views of economists who have not carefully examined this issue.

Geddes himself is pretty much the noted expert on the subject, so when he says it’s surprising, it may well be surprising.

Have a good weekend, Lawrentians.  Perhaps I’ll see you out at the festivities.  Watch out for that Nobel announcement.

Yet Another Update on the Economics Nobel

Some wagering odds have arrived on the scene. UPDATE: And here.

Looks like my picks of Thaler and Shiller are leading the way, followed by Weitzman, Hart, Nordhaus, and Tirole.

This time of year, there are typically grumblings about the lack of sufficient talent to justify a yearly Nobel in economics, but that is certainly an impressive list.  Weitzman wrote a paper 30 years ago that still defines the core idea of environmental economics.  No one has done more on the empirical cost-benefit modeling of climate change than Nordhaus.

Tirole is a co-author of a standard graduate industrial organization text,  as well as several highly-influential pieces on the economics of innovation.  This title alone should merit consideration for Tirole — “The Fat Cat Effect, the Puppy-Dog Ploy, and the Lean and Hungry Look.” Is there a more effective title to help teach strategic behavior?

Oliver Hart helped to push agency theory forward, developed a formal theory of the firm that is still being hashed out (in Economics 450 among other places), and probably has substantially expanded our understanding of corporate governance.

It’s probably worth noting that last year’s odds-on favorite, Eugene Fama, is not even among the leaders (UPDATE: The Ladbrokes odds have him 5:1).  Not to mention Armen Alchian.  No, I don’t think there is an absence of talent.

Of course, I’ll write about Shiller and Thaler next week after they win the prize.

UPDATE: Professor LaRocque has predicted Jeffrey Williamson.

Caveat Emptor

It might shock, shock many honor-bound Lawrentians that there are college students out there that don’t do their own work.  In fact, as many of you are likely aware, there is a robust market for term papers out there that allow you to buy papers from levels from high school to Ph.D. on topics ranging from, well, from Moses Abramovitz to Frederik Ludvig Bang Zeuthen.  It appears the going rate is about $10-$15 per page depending on how soon you need it.

This is certainly not a new phenomenon.  Years back, Seth Stevenson surveyed the market and gave a few pointers for cheaters and lazeabouts to choose the right site to purchase a paper, and he looks at some of the market characteristics.  For example, a custom paper is about twice as expensive as an off-the-rack piece.

But that was nearly 10 years ago, and certainly the market has matured by then.  For a more recent treatment, behavioral economist Dan Ariely dipped his toe in to see what he could find, and what he found was well worth reading. Here are a few snippets:

We ordered a typical college term paper from four different essay mills, and as the topic of the paper we chose…  (surprise!) Cheating…  We submitted the four essays to, a website that inspects papers for plagiarism and found that two of the papers were 35-39% copied from existing works.

Someone plunks down $100 for a paper, and still gets dinged for cheating?  Now that smarts.  Exactly what recourse do you have in that situation?  I guess you ask for your money back:

We decided to take action with the two largely plagiarized papers, and contacted the essay mills requesting our money back. Despite the solid proof that we provided, the companies insisted that they did not plagiarize. One company even tried to threaten us by saying that they will get in touch with the dean at Duke to alert them to the fact that we submitted work that is not ours.

I like their moxie — deny, deny, deny, threaten.

The comments to Ariely’s post are also interesting.

Talk Like a Pirate Day

It’s Talk Like a Pirate Day over at The Mudd, and elsewhere.

Perhaps you should celebrate by reading Peter Leeson’s The Invisible Hook, an economic analysis of piratical organization.  Or perhaps the JPE piece it was based on. Or even one of its many favorable reviews.

Here’s the gist:

The idea of the invisible hook is that pirates, though they’re criminals, are still driven by their self-interest. So they were driven to build systems of government and social structures that allowed them to better pursue their criminal ends.

I read this over the summer and found it interesting that the classic pirates created reasonably democratic governance structures with built-in checks and balances, whereas most organized crime we think of today — including modern-day pirates, I’d guess — is more conventionally hierarchical.

Prof. Brozek Screens Forbidden Planet, Tues at 9:30

Is there a bigger champion of the educational movie on campus than Professor Brozek?  I think the answer is decidedly not.   In the spirit (sort of) of last year’s international film series, this term he brings us Forbidden Planet to entertain and enlighten us in ways that only sci-fi movies from the 1950s can.

The movie screens Tuesday, September 21 at 9:30 p.m. in Warch Cinema.  Everyone in Freshman Studies (and beyond?) is invited.

For those of you who had a reasonably normal childhood, here’s the basic storyline:


Forbidden Planet is an adaptation of The Tempest set on the planet Altair IV in the year 2257 – Shakespeare in space suits, essentially. The parallels between the movie and the play are numerous – Dr. Morbius and his daughter, Altaira, are the only human inhabitants of the planet, although they have a faithful servant in Robby the Robot. When a mission from Earth comes to rescue Dr. Morbius, they discover threats (a machine that creates monsters in the crew’s subconscious) as well as romance (Altaira and a young Leslie Nielson as Commander Adams).

Part of the fun of Forbidden Planet – especially in the context of Freshman Studies – is picking out the parallels between the film and the play. It’s also interesting, though, to look at the spots where they diverge – SPOILER ALERT SPOILER ALERT I CAN’T BELIEVE HE SENT ME ALL THESE SPOILERS

If you’d like to read more, check out “Shakespeare in Outer Space: Forbidden Planet as Adaptation of The Tempest,” by Miguel Angel Gonzalez Campos at the University of Malaga.

The target audience is Freshman Studies students, but I don’t think we’re quite that picky.  See you there.

Textbook Tuesday

I’m a big fan of Steven Landsburg’s approach to micro theory, and hence I have adopted Price Theory and Applications the times I have taught the course (HT: Charles Steele).  The 8th edition is about to come out, meaning that there is no viable used market to purchase the 8th edition.  This also calls into question paying full price for a new version of the 7th edition (currently north of $160).

Since most Econ 300 students are majors (the ones that survive, at least), I am not worried about the resale market, because I think someone walking around calling themselves “an economist” should have a solid micro theory book on the shelf.

So, with all of that said, I recommend that you either pony up for the 8th edition (which I have yet to get a desk copy of), or start scouring your used options now. Amazon doesn’t seem to be much help, but a quick search of Valore Books and  Big Words (< $40), eBay, and, indicates that you should be able to locate a copy at a pretty reasonable price.

Worth every penny.  But there’s no sense squandering the surplus.

Robot Traders

There’s a peculiar piece in The Atlantic about peculiar behavior of robot traders.

As usual, I have no idea what these robots are up to, but it probably isn’t about making me rich. The picture shows “an extreme closeup of just one second of trading of the stock SHG, the Shinhan Financial Group. This is 760 quotes from a total of 10,000 made in 12 seconds.”

1000 quotes per second, baby

Now, why would a robot do that?  There’s no telling with these robot traders.

My suggestion is to take these pictures and ask Professor Azzi.

I bet he has an explanation.

It’s a (Very Exclusive) Jungle Out There

While we’re on the topic of the publishing industry, my insider contact has tipped me off to the latest delicious controversy.  Literary superagent Andrew Wylie is taking his clients’ backlist titles and selling the e-book rights directly and exclusively to Amazon.

Wow. I wonder what that means?

Let’s take a step back.  Suppose you are, say, John Updike, and Random House wants to publish your book.  The company gives you an advance and then pays you royalties based on sales and all things are right in the world.

But now, technology marches on and the next thing you know the Kindle and the iPad emerge, and all of a sudden there is a potentially new version of your product, the e-book.  What should we make of this? Does your contract with Random House extend to the right to publish the e-book? Or do they have exclusive rights to  Or do you maintain that right?

It wasn’t until the mid-1990s that Random House began explicitly covering e-books in its contracts, and Wylie seems to think that his clients maintain e-book rights.  The courts seem to agree.

It’s not clear from the article that that is the biggest problem.  According to the New York Times blurb:

John Sargent, chief executive of Macmillan, posted a response on his company’s Web site, criticizing Mr. Wylie for cutting an exclusive deal with Amazon for the 20 e-books, which in addition to Mr. Nabokov’s “Lolita” and Mr. Roth’s “Portnoy’s Complaint” include Ralph Ellison’s “Invisible Man” and John Updike’s “Rabbit” books.

“It is an extraordinarily bad deal for writers, illustrators, publishers, other booksellers and for anyone who believes that books should be as widely available as possible,” Mr. Sargent said.

Some of you may remember Mr. Sargent who locked horns with Amazon not too long ago over  rights to set prices for e-book prices.  The effect of that was for Macmilian and others to wrestle control from Amazon and raise consumer prices for many e-book titles.  Certainly, at least in terms of a partial equilibrium model, the higher prices aren’t consistent with “as widely available as possible.”

It’s probably more complicated than that, though.

The Price is Right? UPDATED, TWICE!

The Summer marches on, and that means it’s time for some more summer reading. My recommendation this week is from George Mason economist and Marginal Revolution blogger extraordinaire, Tyler Cowen.  His latest book is The Age of the Infovore.

So, I was poised to pick up a copy for my wife at Amazon for what seemed to be a bargain price of $10.88, but then noticed that the hardcover version, Create Your Own Economy, was selling for only $4.64.   It’s the same book, but the title changed when the paperback edition was released.

But then I thought, maybe she’d want the Kindle version instead.  But the Kindle edition of Create Your Own Economy is $12.99, whereas the Kindle for The Age of the Inforvore is $9.99.  Huh. So I’m paying a premium for a Kindle version of a hardcover version of the book, but I enjoy a steep discount if I actually purchase the hardcover.

Then I thought, well, maybe I’ll get her some perfume.

I think Yoram Bauman is right – choices are bad.

UPDATE: I sent this pricing info to Professor Cowen and he sent me a copy of his book with the inscription, “How is $0.00 for a price?”  Thanks!

UPDATE 2: While trolling the EconTalk archives, I came across an episode of Roberts and Cowen talking about the book.

Know Your LU Econ Bloggers

I came across a research note on how bloggers reveal their personality types through their word choices.

More neurotic bloggers used more words associated with negative emotions; extravert bloggers used more words pertaining to positive emotions; high scorers on agreeableness avoided swear words and used more words related to communality; and conscientious bloggers mentioned more words with achievement connotations. These were all as expected. More of a surprise was the lack of a link between the Big Five personality factor of ‘openness to experience’ and word categories related to intellectual or sensory experience. Instead openness was associated with more use of prepositions, more formal language and longer words.

I wasn’t really sure of what to make of that (did they misspell extrovert?), but fortunately, the comments section directed me to the site — a site that allows me to take a look for myself.  A few clicks later and it turns out that we fall into the category, The Thinkers.

The logical and analytical type. [LU Econ Bloggers] are especially attuned to difficult creative and intellectual challenges and always look for something more complex to dig into. [LU Econ Bloggers] are great at finding subtle connections between things and imagine far-reaching implications. (emphasis added)

That sounds about right.  And it continues…

[LU Econ Bloggers] enjoy working with complex things using a lot of concepts and imaginative models of reality.

Wow, they sure have us pegged.

Since [LU Econ Bloggers] are not very good at seeing and understanding the needs of other people, they might come across as arrogant, impatient and insensitive to people that need some time to understand what they are talking about.

Well, you can’t win ’em all.

Don’t Feel Like You *Have* To Become a CEO

News from the research front that (some) economics majors are going places. To wit, “the share of graduates who were Economics majors who were CEOs in 2004 was greater than that for any other major, including Business Administration and Engineering.”

Here’s the paper, appropriately titled “Economics: A Good Choice of Major for Future CEOs,” and here’s from the abstract:

We find evidence that Economics is a good choice of major for those aspiring to become a CEO. Economics ranked third with 9% of the CEOs of the S&P 500 companies in 2004 being undergraduate Economics majors, behind Business Administration and Engineering majors, each of which accounted for 20% of the CEOs. When adjusting for size of the pool of graduates, those with undergraduate degrees in Economics are shown to have had a greater likelihood of becoming an S&P 500 CEO than any other major. That is, the share of graduates who were Economics majors who were CEOs in 2004 was greater than that for any other major, including Business Administration and Engineering. The findings also show that a higher percentage of CEOs who were Economics majors subsequently completed a graduate degree – often an MBA – than did their counterparts with Business Administration and Engineering degrees.

I nicked that from Marginal Revolution, and I’m certain there will be plenty of snarky commentary over there about it.

Some other interesting data over there. For example, the total number of business majors is split pretty evenly between males and females, but economics is 70% male. Of course, females now make up 60% of the undergraduate population.

Whatever Works

The misery accompanying the U.S. recession / depression manifests itself firstly, I think, through the job market.  There seems to be an increasing perception that policymakers in Washington and at the Fed aren’t taking the unemployment situation seriously enough. Nonetheless, jobs are certainly on the minds of people who have them and, even moreso, people who don’t have them. We learned yesterday that the declining unemployment rate is actually bad news. Why? Well, in order to be counted as unemployed, a person has to be seeking employment, and consequently so-called discouraged workers, people who are no longer looking for work, do not count as unemployed.  And would-be workers are pretty darned discouraged.

This gives us a fundamental measurement problem, how can we determine how bad the employment situation really is?  One common way to tackle it has been to track the total adult population in the workforce.


As you can see, the picture isn’t a pretty one. Continue reading Whatever Works

To Spend or Not To Spend…

Most economists haven’t really been thinking about this issue, they haven’t really focused on it. It’s not their specialty. Most economists today, they haven’t really been thinking about this kind of multiplier issue… I don’t think most economists are focused on this, or that they’re familiar with the empirical evidence. I don’t think they’ve really worked on the theory. So I don’t know, maybe they have some opinion that they got from graduate school or something. — Robert Barro in The Atlantic Monthly

Even if by accident, you’ve probably noticed that there is an on-going debate on whether a massive government spending campaign is needed to “prime the pump” to stimulate the economy (the Keynesian route), or whether fiscal discipline (austerity) is in order. Last week, most members of the G-20 (but not the US) came down on the side of austerity.

As a trained economist, I know the basic institutional details and understand the basic arguments, but as Barro suggests, I have no great insight on the empirics or which side of the debate is likely to be correct.

Certainly, the primary mouthpiece for the pro-spend crowd is recent Nobel Prize winner, Paul Krugman.  In a recent column, he tears into those who promote “austerity”:

So the next time you hear serious-sounding people explaining the need for fiscal austerity, try to parse their argument. Almost surely, you’ll discover that what sounds like hardheaded realism actually rests on a foundation of fantasy, on the belief that invisible vigilantes will punish us if we’re bad and the confidence fairy will reward us if we’re good.

Of course, not all economists agree with Krugman’s assessment. In addition to our friend Hayek, Robert Barro is pretty clearly on the austerity side. This interview with Barro is a good place to see a sketch of the battle lines in the debate, and certainly indicates that he and Krugman are not on particularly friendly terms.  This week, Harvard professor Alberto Alesina is getting some press for his advocacy of austerity measures. And, as for the regime uncertainty argument that Krugman caricatures, I would recommend Robert Higgs as the central proponent of that idea.

As for me, I am not sure exactly what I learned in grad school that prepares me to take a side in this debate. What I find interesting is that most people who engage me in a discussion seem to think the Keynsian spending route is the way to go, and many of these folks invoke Krugman on this point as if Krugman is the voice of the profession. As today’s Krugman piece indicates, he seems to think that many in the profession are moving in quite the opposite direction. It’s not clear to me whether this boils down to pre-conceived ideology or not, but that is certainly his claim.

I guess I will leave it at that.

UPDATE: Keynes v. Hayek in print. Commentary here.

What’s with the Funny Hat?

The flowing robes, the grace... striking
The flowing robes, the grace... striking

In our continuing attempt to understand the world around us, today we will talk about the tradition of wearing cap & gowns for graduation ceremonies.

Well, the first thing you need to know is that this dates back nearly 1000 years, and the academy is a notoriously conservative place. In the words of F.M. Conrford, in his advice to young academics, “Nothing should ever be done for the first time.”* The corollary is that once we get started on something, it’s tough getting us to stop.

With that in mind, tackles the regalia question for us:

Standard fashion around 1100 and 1200 A.D. dictated long, flowing robes and hoods for warmth; the greater a person’s wealth, the higher the quality of the fabrics. This attire went out of style around the Renaissance. But sumptuary laws, often designed to prevent people from dressing above their class, kept academics (who were relatively low in the social hierarchy) in simple, unostentatious robes through the 16th century. Thereafter, academics and students at many universities wore robes for tradition’s sake. At Oxford, robes were de rigueur until the 1960s and are still required at graduation and during exams.

And, of course, the Americans played along:

When American universities sprang up in the 17th and 18th centuries, they adopted many Oxbridge academic traditions, including robe-wearing…

Continue reading What’s with the Funny Hat?

Is College Right for You?

In a continuing series on why I love being an economist, here’s a piece from The New Yorker on the costs and benefits of college education.  In it, the author discusses the job prospects and salaries of various disciplines, including our own:

Economics majors aren’t doing badly, either: their starting salary averages about fifty thousand a year, rising to a mid-career median of a hundred and one thousand. Special note should be taken of the fact that if you have an economics degree you can, eventually, make a living proposing that other people shouldn’t bother going to college.

Well, of course we do that. Maybe college isn’t right for everyone.  In our burgeoning post-industrial, service economy, some jobs might require at least some college (“consultant,” CSI analyst, attorney, surgeon, computer game developer), others might not (burger flipper, garden hand, dog walker, Wal Mart greeter, professional athlete), and others might require non-traditional schooling (massage therapist, engine diagnostic tester, fire watcher, marauder).

Here at Lawrence, however, we believe that college is right for people who share our mission — “commitment to the development of intellect and talent, the pursuit of knowledge and understanding, the cultivation of sound judgment, and respect for the perspectives of others.” Not exactly a vocational bent, that’s the point.

But for assessment purposes, many view college as a training ground for future professionals.  Thus the question, should we evaluate the efficacy of college on the basis of the integrity of its graduates, or on whether graduates get jobs, whether they like their jobs, and how much money they make? Given that whether someone has a job or not tends to be easier to measure than the (change in) integrity of a person over the course of their college life, whether college is “worth it” or not is often framed as whether the monetary benefits outweigh the costs.

Well, anyway, hope the Lawrence Experience is right for you.

“I often have tender, concerned feelings for people less fortunate than me”

Is that a Mike-n-Ike?

In another sure sign of the apocalypse, college students these days just don’t care that much about their fellow man.

Compared with college students of the late 1970s, current students are less likely to agree with statements such as “I sometimes try to understand my friends better by imagining how things look from their perspective,” and “I often have tender, concerned feelings for people less fortunate than me.”

The researchers put together a survey that elicits an “empathy” score (you can take the test yourself) and today’s kids scored 40% lower than generations of yore. That seems like a lot.  From this, the authors of the study conclude that people in my generation are more likely to donate a vital organ to a complete stranger, whereas today’s generation is more prone to knock over its grandmother for the last Mike-n-Ike’s.

Seriously, though, I wonder how much today’s lower score has to do with the language of the survey.  It seems a bit dated to me.  On the other hand, it’s hard to believe anyone ever talked that way.  I also wonder how such specious unpublished research winds up at the top of my RSS feed.

I just wanted to share that with you all.  I worry, you know.  Have a good weekend!

But What About the Cool ‘Stache?

It never occurred to me to ask the question: LawrenceVikings

Vikings did not wear horned helmets. According to [Cecil Adams], “contemporary Viking era artwork shows roughly half of Vikings in battle bareheaded, while the rest wear unremarkable dome-shaped or conical helmets.” The idea that Nordic invaders of the ninth and 10th centuries wore headgear festooned with ox horns developed a thousand years after the fact, when a Swedish artist illustrated them as such for a poem based on an old, Icelandic saga.

Here’s the source.

And, evidently, there’s a good reason why:

No self-respecting Viking warrior ever wore a horned helmet in battle–they weren’t that dumb. As anyone who has done any slaughtering can tell you, horns provide nothing more than a good handhold to steady your work while you’re slitting someone’s throat.

Keep that in mind next time you enter hand-to-hand combat.

Steven Strogatz explains calculus

OK, this may not be all you need to satisfy the calculus prerequisite for Micro Theory, but Steven Strogatz’s columns on mathematics are always fun and educational. In this most recent one he explains how calculus is “change we can believe in,” relating to hiking in the snow, Michael Jordan’s jumps, and the short days of winter.