Tuesday, January 13, 2009

Freakout-onomics

I've said several times that as far as "downturns" or "recessions" go, this one actually isn't as bad as it's made out to be so far. It may well get much MUCH worse, but so far it has been relatively mild in terms of changes in actual output and employment and that this particular financial crisis is not all that different or unique in comparison to past episodes in the postwar era, but don't take my word for it: Take theirs, or theirs (cross-posted via Economix). Basic idea: Times are indeed tough, but we've been through worse, and made it out. Hang in there as best you can, folks.

Small Transaction Costs and the Marginal Utility of Cafeteria Food

Trays are making college students fat. University cafeterias (all you can eat) waste about 30% less food when trays are eliminated, which essentially requires students to go through the line getting ONE plate and ONE drink instead of loading up. I like the comments on this one, especially Michael:
As someone who goes to a college that just eliminated trays, it really
isn’t a win-win situation. It might make people eat less food and waste
less, but it substantially increases the hassle when you have to carry
a plate or two plus a drink and silverware. All that isn’t easy to
carry without a tray.
Yeah, that's basically the point, Michael. That relatively small hassle, or cost, is what we call a transaction cost, and its keeping you from eating enough for a small African village for lunch.

Class Size, Practice, and Learning

Universities are starting to work harder to supply a better product to the market. Instead of cramming butts into several-hundred-seat lectures, MIT and others are reducing class sizes to try to improve their product. But the move is not just for class size: the size reduction is geared towards getting students to have a more hands-on experience - to learn by doing and create a peer-collaborative learning environment.

I certainly can't say that I'm not guilty of falling into a lecture trap of the old school, but we need to think innovatively to capture students with different strengths and learning styles, and do a better job of creating a open line of communication between students and instructors as well as among the students so that they can unlock the material for themselves.

Monday, January 12, 2009

Lessons in Opportunity Cost: Immigration

This is an important lesson in opportunity cost, focusing on the allocation of resources to immigration enforcement. As we expend more budgeted resources towards deportation, and quota enforcement, the more difficult it becomes to control the smuggling of drugs, weapons, and criminal activities across the border. Maybe a more sensible policy on quotas and their enforcement will come, say, in the next decade or so.