Friday, August 15, 2008

I know I've said THIS before...

Check THIS out. I've said it for several years, citing a mid-nineties Foreign Affairs Article by Krugman (The Myth of the East Asian Miracle...):

China can grow at a rapid rate with a collectivist spirit because it
has so many resources (ie, so much labour) to put towards fuelling
its growth. We saw in previous decades other Asian economies quickly
accumulate capital and labour, and it also resulted in impressive
growth rates. However, long-term growth can only be achieved through
innovation and entrepreneurship.
Pure capital accumulation peters out once relative returns start to even out across sectors and across countries, and pure labor mobilization peters out when the marginal return for "collective" labor is matches that in the market sector. So, kudos to China, but don't be shocked when they hit a "wall" with their ability to grow: Property rights don't incentivize innovation or entrepreneurship, and markets aren't fully in place to weed out those entrepreneurs who take bad risks.

Penn and Teller Bullshit - Mad Cow

Wednesday, August 13, 2008

Marriage & Insurance

There are a handful of economics articles relating marriage to a type of insurance contract, with an emphasis on countries where arranged marriages are common. This idea is as old as the earth. In fact until about the last 50 years most marriages were a form of diversification and specialization in household production. Now they are more consumption-based in the sense that experiences that make us happy are enhanced by a partner we like. But health care is a new dimension and has turned marriage back to the old model in the US. Couples are marrying because they need their partner's health insurance, but paradoxically, some are considering divorce so that ailing partners can qualify for subsidized insurance. Crazy, but two comments:

1. is marrying for health insurance all that different from the incentives folks are trying to reinforce into the tax code to incentivize marriage?
2. I'm always a little troubled by people who say things like "“Nobody should have to make a choice like that,” Ms. Moulton said. “What happened to our country? I don’t remember growing up like this.”"

I feel for Ms. Moulton, but people like Ms. Moulton (who considered divorce to qualify for subsidies for her kidney transplant) faced even greater difficulties in the past. As bleak as the current system may be for some it was in fact always been difficult for many people like her who were poor and in need of transplants or other very costly procedures. People too often look on the past with rose-tinted glasses. We usually see this type of reactionary response dressed in conservative morality, but Lou Dobbs has bred a new strain of it among progressives. Instead of romanticizing the past that never was let's work together for a better future.

Wither, Reform (Math)?

I received info on a new study on remedial math and studying economics by an acquaintance of mine, Andrew Selzer. Summarizing, they find:
  • overall high school performance and performance in high school math positively affect performance in college economics courses.
  • taking remedial mathematics after arriving has a statistically insignificant effect on college performance, performance in economics core courses, or other long-term outcomes (i.e. these outcomes have more to do with "ability" and pre-college performance).

I guess that leaves more questions than answers, though. We know that students who are deficient when they arrive will struggle, but what do we do about it? Essentially, this tells us that if our goal is getting the econ curricula to stick, then remedial "catch-up" math courses are basically a waste of University resources, but why?

I would suggest that the weak link for deficient students is not math per se, but those types of analytical and critical thinking skills that are developed with a longer-term exposure to mathematical reasoning (Atin, we've talked about this in fact). There is also some selection bias in which students are more or less attuned to acquiring these critical skills. Some students (namely non majors forced to take economics courses) have deliberately avoided those types courses as much as possible, taking just the bare minimum. At the same time, this choice may reflect those students' rational awareness of her or his own abilities. Therefore a "D is for degree" approach to their econ courses may be optimal for obtaining the degree credential. Similar selection bias has been show to be exhibited in the fertility choices and educational outcomes of women.

Tuesday, August 12, 2008

Two neat maps

Interesting parallels.

More Flatulence over Gas

Hopefully the hot air over gasoline prices will wane soon and things will turn again towards emissions. Gas prices are down about $0.30 from their peak and the sheep are starting to jump on the bandwagon for predicting more of a fall. Here's todays fuelgaugereport from AAA (similar info can be gotten from the Department of Energy):

Unleaded Average

Regular Mid Premium Diesel E85 **E85 MPG/BTU adjusted price

$3.799 $3.962 $4.082 $4.517 $3.070 $4.040
$3.810 $3.974 $4.093 $4.537 $3.090 $4.066
Ago Avg.
$4.104 $4.357 $4.514 $4.817 $3.299 $4.342
Ago Avg.
$2.770 $2.941 $3.048 $2.934 NA NA

are in US dollars per gallon

Recorded Average Price:

Regular Unl.$4.1147/17/2008

Gasoline hit $3.73 from its $4.19 peak in Lexington. It was rumored to have been $3.47 as close as Roanoke.

Sunday, August 10, 2008

Favre... Traded

I guess I miscalcluated, and I still think Favre made a poor choice. Why would someone wanting to contend and play 1 or 2 more great years agree to a trade to the Jets?