Friday, February 27, 2009
The Psychology of Surveys
Barry C. Burden of Harvard University lectures on the science and technology behind measuring public opinion. How can we know what 200 million Americans think, feel, and know? Can telephone interviews with a few hundred people really describe public opinion? How much can answers be manipulated by rewording the questions?
Cork Economics Blog
Here's a link to a very amusing post from the new Cork Economics blog (check it out) that describes the economics of student transport choice as they migrate from the UCC campus to Cork city-centre for a night out. I've seen similar episodes at the UCD bus-stop. Also, the majority of buses didn't stop outside the UCD campus after 8.30 pm last semester, due to an incident between a bus-driver and a student. This brought plenty of uncertainty and heightened taxi-demand (and then supply) into the UCD market.
Thursday, February 26, 2009
Inequality and Human Development - Cunha Heckman IZA
The Economics and Psychology of Inequality and Human Development
by Flavio Cunha, James J. Heckman
(February 2009)
Abstract:
Recent research on the economics of human development deepens understanding of the origins of inequality and excellence. It draws on and contributes to personality psychology and the psychology of human development. Inequalities in family environments and investments in children are substantial. They causally affect the development of capabilities. Both cognitive and noncognitive capabilities determine success in life but to varying degrees for different outcomes. An empirically determined technology of capability formation reveals that capabilities are self-productive and cross-fertilizing and can be enhanced by investment. Investments in capabilities are relatively more productive at some stages of a child's life cycle than others. Optimal child investment strategies differ depending on target outcomes of interest and on the nature of adversity in a child's early years. For some configurations of early disadvantage and for some desired outcomes, it is efficient to invest relatively more in the later years of childhood than in the early years.
by Flavio Cunha, James J. Heckman
(February 2009)
Abstract:
Recent research on the economics of human development deepens understanding of the origins of inequality and excellence. It draws on and contributes to personality psychology and the psychology of human development. Inequalities in family environments and investments in children are substantial. They causally affect the development of capabilities. Both cognitive and noncognitive capabilities determine success in life but to varying degrees for different outcomes. An empirically determined technology of capability formation reveals that capabilities are self-productive and cross-fertilizing and can be enhanced by investment. Investments in capabilities are relatively more productive at some stages of a child's life cycle than others. Optimal child investment strategies differ depending on target outcomes of interest and on the nature of adversity in a child's early years. For some configurations of early disadvantage and for some desired outcomes, it is efficient to invest relatively more in the later years of childhood than in the early years.
What should be done about rising unemployment in the UK
Bell and Blanchflower
From the IZA Discussion Paper
Abstract:
This paper considers the issue of unemployment one of the most pressing issues facing the UK and other governments, as the current recessions deepens. It begins by trying to accurately date the beginning of the current downturn in the British economy, arguing that it is clear that the recession commenced in the 2nd quarter of 2008. It then examines whether this recession is substantively different from past downturns in the UK and argues that, although the extreme rationing up of credit marks the current recession as different, some of the labour market consequences, such as the concentration of unemployment among the young and other disadvantaged groups, is typical of past experience. The paper reviews past literature on the causes of unemployment, arguing that the origin of the present difficulties lies with a collapse in demand rather than with frictions in the labour market caused by institutional inflexibilities. There is a large literature on the negative impact of unemployment both on society and on individuals. The adverse societal consequences are reviewed in the next section, while we discuss some of our own research on the adverse consequences on the individual in Section 6. Just as in previous recessions, it is becoming clear that some groups will suffer a much higher incidence of unemployment during this downturn and therefore suffer to a greater than average extent the adverse individual effects that we discussed in Section 6. The evidence on the composition of these groups is reviewed and presented along with some of our own research on this issue in the following section. One of the key groups who are likely to be affected by the recession is the young. In Section 8, we review the particular difficulties faced by them in trying to secure a footing in the labour market. In the last two decades many governments have introduced policies (collectively described as Active Labour Market Policies or ALMPs) for direct intervention in the labour market to improve outcomes for particular groups and for the young in particular. The next section reviews the evidence on the success of these policies. The final section discusses some policy proposals which we offer to alleviate what we believe will be the very serious adverse consequences of the likely increase in unemployment in the UK over the short to medium term.
From the IZA Discussion Paper
Abstract:
This paper considers the issue of unemployment one of the most pressing issues facing the UK and other governments, as the current recessions deepens. It begins by trying to accurately date the beginning of the current downturn in the British economy, arguing that it is clear that the recession commenced in the 2nd quarter of 2008. It then examines whether this recession is substantively different from past downturns in the UK and argues that, although the extreme rationing up of credit marks the current recession as different, some of the labour market consequences, such as the concentration of unemployment among the young and other disadvantaged groups, is typical of past experience. The paper reviews past literature on the causes of unemployment, arguing that the origin of the present difficulties lies with a collapse in demand rather than with frictions in the labour market caused by institutional inflexibilities. There is a large literature on the negative impact of unemployment both on society and on individuals. The adverse societal consequences are reviewed in the next section, while we discuss some of our own research on the adverse consequences on the individual in Section 6. Just as in previous recessions, it is becoming clear that some groups will suffer a much higher incidence of unemployment during this downturn and therefore suffer to a greater than average extent the adverse individual effects that we discussed in Section 6. The evidence on the composition of these groups is reviewed and presented along with some of our own research on this issue in the following section. One of the key groups who are likely to be affected by the recession is the young. In Section 8, we review the particular difficulties faced by them in trying to secure a footing in the labour market. In the last two decades many governments have introduced policies (collectively described as Active Labour Market Policies or ALMPs) for direct intervention in the labour market to improve outcomes for particular groups and for the young in particular. The next section reviews the evidence on the success of these policies. The final section discusses some policy proposals which we offer to alleviate what we believe will be the very serious adverse consequences of the likely increase in unemployment in the UK over the short to medium term.
The Datarati
The 'Datarati' refers to "a new generation of data gurus who have emerged on the online advertising scene. The 'Datarati' are responsible for using data to optimise the campaign performance of the world’s largest brand owners." I read about this group on the blog of Will Scully-Power, after discovering this blog-post: "Google’s Chief Economist Hal Varian on the Future of Data".
A quote is as follows:
The blog-post links to an article in the McKinsey Quarterly, which includes an audio-stream. We've mentioned Hal Varian quite a bit on the blog before, including this post with a link to a talk by Varian on the "Economics of Internet Search".
Also worth looking at is the interview with Varian conducted by Kenneth Train. This can be accessed on Kenneth Train's website (here). There are also some very interesting interviews with other Berkeley Economists, including George Akerlof, David Card, Daniel McFadden and Janet Yellen.
A quote is as follows:
“I keep saying the sexy job in the next ten years will be statisticians. People think I’m joking, but who would’ve guessed that computer engineers would’ve been the sexy job of the 1990s?"
The blog-post links to an article in the McKinsey Quarterly, which includes an audio-stream. We've mentioned Hal Varian quite a bit on the blog before, including this post with a link to a talk by Varian on the "Economics of Internet Search".
Also worth looking at is the interview with Varian conducted by Kenneth Train. This can be accessed on Kenneth Train's website (here). There are also some very interesting interviews with other Berkeley Economists, including George Akerlof, David Card, Daniel McFadden and Janet Yellen.
Templeton Fellowship Essay Contest
The Sir John M. Templeton Fellowships Essay Contest for junior faculty and students in higher education is held every year. The submission deadline is May 1, 2009 . Winners will be announced in October, 2009 . The 2009 Templeton Fellowships will be awarded for the best essay on the topic:
“Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters.”
—Benjamin Franklin
Which virtues contribute the most toward achieving freedom, and how can the institutions of civil society encourage the exercise of those virtues?
http://www.independent.org/students/essay/
“Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters.”
—Benjamin Franklin
Which virtues contribute the most toward achieving freedom, and how can the institutions of civil society encourage the exercise of those virtues?
http://www.independent.org/students/essay/
Wednesday, February 25, 2009
Irish Society of New Economists
The Irish Society of New Economists (ISNE) will host its sixth annual conference at the University of Limerick on Friday 2nd October 2009. The conference is intended to provide a forum for new economists (in post-graduate research programs or the private and public sectors) to present papers from any area of economics. This forum is intended for anybody in the early stages of research careers - eligibility to present has nothing to do with age. The conference strongly encourages those working on economics-related research in all settings to present.
Home (ISNE Annual Conference 2009)
Home (ISNE Annual Conference 2009)
Monday, February 23, 2009
RateMyArea.com
A new website, ratemyarea.com, is bringing the consumer review process into the Web 2.0 sphere. Users can review, share and discuss local services in their area, pinpointed on Googlemaps. This information-producing mechanism is user-driven and allows for group formation which makes it feel somewhat like a social networking site. Businesses can also promote themselves - though this is not free; there is a charge of €50. Liam has already discussed mechanisms for assessing publicly provided goods in Ireland (here) - some of the most popular being ratemyteacher.ie or ratemyhospital.ie. While ratemyarea.com may be contextualised by geographically constrained decision-making, it is actually possible to search on a "what" as well as a "where" basis. Also, one does not necessarily have to restrict searches to private-sector services, though the benefits of this will of course depend on how the user-driven platform develops. Finally, it would be unfair not to mention the compettition (http://www.yourlocal.ie), who also came to my attention last year.
To Tweet, or Not to Tweet
We have discussed the technology developed by Twitter.com before (here), with a particular emphasis on the information that can be generated from the search tool (using applications from Summize Labs). Since then Summize Labs was acquired by Twitter (see the story from the Twitter blog here). One used to be able to enter a topic in the Summize Labs search engine to find up-to-the-second "tweets" about that topic, then automatically analyze the tweeted attitudes. According to the story on the Twitter blog, they said they would add search and its related features to their core offering. So far, all I can see available is a limited search application (here), which also shows some trending topics. if anyone is aware of other features that are currently available, I would be interseted to hear about them.
Besides using Twitter data in novel applications, we have also discussed offline how Twitter might be a useful tool at academic (and other types of) conferences. The essence of Twitter is not to provide data for social scientists; rather - it is about sending a series of thoughts - each of 140 characters or less - to a network of friends (using a laptop or mobile phone). Importantly, anyone can listen in - you can send a universal text message to the whole planet - as James Harkin describes it in a recent Times article. The article also covers an apparent backlash against the use of Twitter. The criticism is "why would anyone want to dedicate time informing everyone in the world what he or she is up to at any given moment?" The answer, is the idea of “being in the loop”.
A Sunday Times article from yesterday (by Andy Pemberton) further develops the criticisms that are being made about the use of Twitter. According to Pemberton, it’s a fair question to ask "what kind of person shares information with the world the minute they get it? And just who are the “followers” willing to tune into this rolling news service of the ego?" Pemberton mentions the suggestion by clinical psychologist Oliver James that “twittering stems from a lack of identity. It’s a constant update of who you are, what you are, where you are. Nobody would Twitter if they had a strong sense of identity.” According to Dr David Lewis, a cognitive neuropsychologist and director of research based at the University of Sussex, “using Twitter suggests a level of insecurity whereby, unless people recognise you, you cease to exist."
The criticisms above may seem somewhat extreme to avid Twitter users - and maybe Twitter is just an added layer of online social capital, or a bit of fun, for most users. I've blogged recently (here and here) about personality and usage of online social networks such as Bebo or Facebook; a similar study on Twitter usage could be illuminating. Alain de Botton (author of Status Anxiety) offers the most sanguine comment in the article by Andy Pemberton: “Perhaps closeness is not always possible, or desirable. Twitter gives us another option. It says: I want to be in contact with you, but not too much. It’s the equivalent of sending a postcard.”
Finally, in terms of how Twitter may be useful for conferences and other activities, the Pemberton artcile mentions that companies such as Starbucks have been quick to recognise the marketing potential of Twitter; even think tanks such as the Institute for Public Policy Research have begun using twitter to publicise their activities.
Despite the criticism from some quarters, Twitter boasts 6m users — small compared to Facebook’s 150m — but its audience has surged by more than 1,000% in the past year. Right now, the San Francisco-based company that owns Twitter is valued at $250m, its inventors recently rejected an offer from Facebook to buy their company for $500m. The article by James Harkin is followed with a short piece by Mike Harvey, which contains five tips for those who wanted to start tweeting.
Besides using Twitter data in novel applications, we have also discussed offline how Twitter might be a useful tool at academic (and other types of) conferences. The essence of Twitter is not to provide data for social scientists; rather - it is about sending a series of thoughts - each of 140 characters or less - to a network of friends (using a laptop or mobile phone). Importantly, anyone can listen in - you can send a universal text message to the whole planet - as James Harkin describes it in a recent Times article. The article also covers an apparent backlash against the use of Twitter. The criticism is "why would anyone want to dedicate time informing everyone in the world what he or she is up to at any given moment?" The answer, is the idea of “being in the loop”.
A Sunday Times article from yesterday (by Andy Pemberton) further develops the criticisms that are being made about the use of Twitter. According to Pemberton, it’s a fair question to ask "what kind of person shares information with the world the minute they get it? And just who are the “followers” willing to tune into this rolling news service of the ego?" Pemberton mentions the suggestion by clinical psychologist Oliver James that “twittering stems from a lack of identity. It’s a constant update of who you are, what you are, where you are. Nobody would Twitter if they had a strong sense of identity.” According to Dr David Lewis, a cognitive neuropsychologist and director of research based at the University of Sussex, “using Twitter suggests a level of insecurity whereby, unless people recognise you, you cease to exist."
The criticisms above may seem somewhat extreme to avid Twitter users - and maybe Twitter is just an added layer of online social capital, or a bit of fun, for most users. I've blogged recently (here and here) about personality and usage of online social networks such as Bebo or Facebook; a similar study on Twitter usage could be illuminating. Alain de Botton (author of Status Anxiety) offers the most sanguine comment in the article by Andy Pemberton: “Perhaps closeness is not always possible, or desirable. Twitter gives us another option. It says: I want to be in contact with you, but not too much. It’s the equivalent of sending a postcard.”
Finally, in terms of how Twitter may be useful for conferences and other activities, the Pemberton artcile mentions that companies such as Starbucks have been quick to recognise the marketing potential of Twitter; even think tanks such as the Institute for Public Policy Research have begun using twitter to publicise their activities.
Despite the criticism from some quarters, Twitter boasts 6m users — small compared to Facebook’s 150m — but its audience has surged by more than 1,000% in the past year. Right now, the San Francisco-based company that owns Twitter is valued at $250m, its inventors recently rejected an offer from Facebook to buy their company for $500m. The article by James Harkin is followed with a short piece by Mike Harvey, which contains five tips for those who wanted to start tweeting.
Brainstorming & "brainwriting"
Brainstorming sessions are popular but surprisingly ineffective. Research shows that people actually come up with more ideas working on their own than they do brainstorming together. According to business psychologist Peter Heslin, an alternative way for groups to generate ideas is called "Brainwriting", and early evidence suggests that it, unlike brainstorming, helps groups to spawn more ideas than the same number of people working alone.
There are several reasons brainstorming is thought to be ineffective. To give two examples: it's easy for members of a group to remain creatively passive while others bandy ideas around - a phenomenon dubbed social loafing. Or group members can worry that their ideas will attract negative comment - this is called evaluation apprehension - thus leading them to keep quiet.
Brainwriting aims to avoid some of these issues and is designed to encourage all group members to engage with each others' ideas. Briefly, it involves four group members writing ideas on slips of paper in silence. Group members pass the slips of paper between each other, reading others' ideas and inserting their own. Ink colour indicates who owns which ideas and when a paper slip has four ideas on it, it is placed in the centre of the table for all to see. This is repeated up to 25 times. The second stage involves group members withdrawing to the corners of the room and recalling as many of the ideas generated so far as possible - the rationale being that this encourages attention to the ideas generated. The final stage involves group members working alone for 15 minutes in an attempt to generate yet more ideas.
A study published in 2000 with student participants found that they invented more novel uses for a paper clip using the brainwriting technique than did an equivalent number of students working alone.
Peter Heslin is calling on more research to be conducted to find out whether brainwriting really is as effective as this preliminary study suggests, and to pin down under exactly which circumstances it is likely to be useful. For example, perhaps this technique would be more useful in some company cultures than others. Or maybe it would suit some personality types more than others. It's possible, for example, that extravert employees used to brainstorming would find the silent nature of brainwriting uncomfortable.
"A prime purpose of this paper is to raise awareness among scholars, practitioners, and managers of brainwriting as an alternative to the well-known brainstorming technique," Heslin said. "It also highlights the imperative for rigorous field research to investigate - and thus either confirm or refute - the validity of the contextual-based research ideas offered in this paper, so as to shed light on how and when organizations should consider using brainstorming instead of brainwriting."
Peter A. Heslin (2009). Better than brainstorming? Potential contextual boundary conditions to brainwriting for idea generation in organizations.
Journal of Occupational and Organizational Psychology, 82 (1), 129-145
http://dx.doi.org/10.1348/096317908X285642
There are several reasons brainstorming is thought to be ineffective. To give two examples: it's easy for members of a group to remain creatively passive while others bandy ideas around - a phenomenon dubbed social loafing. Or group members can worry that their ideas will attract negative comment - this is called evaluation apprehension - thus leading them to keep quiet.
Brainwriting aims to avoid some of these issues and is designed to encourage all group members to engage with each others' ideas. Briefly, it involves four group members writing ideas on slips of paper in silence. Group members pass the slips of paper between each other, reading others' ideas and inserting their own. Ink colour indicates who owns which ideas and when a paper slip has four ideas on it, it is placed in the centre of the table for all to see. This is repeated up to 25 times. The second stage involves group members withdrawing to the corners of the room and recalling as many of the ideas generated so far as possible - the rationale being that this encourages attention to the ideas generated. The final stage involves group members working alone for 15 minutes in an attempt to generate yet more ideas.
A study published in 2000 with student participants found that they invented more novel uses for a paper clip using the brainwriting technique than did an equivalent number of students working alone.
Peter Heslin is calling on more research to be conducted to find out whether brainwriting really is as effective as this preliminary study suggests, and to pin down under exactly which circumstances it is likely to be useful. For example, perhaps this technique would be more useful in some company cultures than others. Or maybe it would suit some personality types more than others. It's possible, for example, that extravert employees used to brainstorming would find the silent nature of brainwriting uncomfortable.
"A prime purpose of this paper is to raise awareness among scholars, practitioners, and managers of brainwriting as an alternative to the well-known brainstorming technique," Heslin said. "It also highlights the imperative for rigorous field research to investigate - and thus either confirm or refute - the validity of the contextual-based research ideas offered in this paper, so as to shed light on how and when organizations should consider using brainstorming instead of brainwriting."
Peter A. Heslin (2009). Better than brainstorming? Potential contextual boundary conditions to brainwriting for idea generation in organizations.
Journal of Occupational and Organizational Psychology, 82 (1), 129-145
http://dx.doi.org/10.1348/096317908X285642
Sunday, February 22, 2009
TCD Psychology Blog
Michael Daly has revamped the TCD Psychology blog - looks good. He seems to have solved some problems with blogger design that i have not had time to figure out so expect a change of design on this blog as soon as I track Michael down.
http://tcdpsychology.blogspot.com/
http://tcdpsychology.blogspot.com/
Saturday, February 21, 2009
Psychology of Recession and Recovery
Just a reminder that Gerard O'Neill will speak on the Psychology of Recession and Recovery on March 2nd at 4pm in the UCD Geary Insitute. All are welcome. We hope to have a very lively session and to use the event to promote a more wide scale discussion of the role of psychology in economic recovery in Ireland.
On the theme of psychology of recession and recovery, I spent last night reading "Animal Spirits" by Shiller and Akerlof. Its a cracker and very timely. I do not use this blog for full reviews but in general this is one I cant recommend highly enough for both academics and lay people interested in what's happening around us. The authors write very lucidly, have impeccable academic backgrounds, seem to have a real humanism and interest in the real world and address hard-hitting questions head on.
The book is divided into two sections.
The first section addresses "Animal Spirits" and is sectioned into five chapters
1. Confidence and Its Multipliers
2. Fairness
3. Corruption and Bad Faith
4. Money Illusion
5. Stories (on the role of narrative in economic life)
The second section addresses eight key questions about the economy. I look forward hugely to talking about these questions at Tuesday night's bookclub. I will also blog extensively in the next year about related papers, ideas and resources.
Why do Economies Fall into Depression?
Why do Central Bankers Have Power over the Economy?
The Current Financial Crisis: What is to be done?
Why are there people who cannot find a job?
Why is there a trade-off between Inflation and Unemployment in the long-run?
Why is saving for the future so arbitrary?
Why do real-estate markets go through cycles?
Why is there special poverty among minorities?
On the theme of psychology of recession and recovery, I spent last night reading "Animal Spirits" by Shiller and Akerlof. Its a cracker and very timely. I do not use this blog for full reviews but in general this is one I cant recommend highly enough for both academics and lay people interested in what's happening around us. The authors write very lucidly, have impeccable academic backgrounds, seem to have a real humanism and interest in the real world and address hard-hitting questions head on.
The book is divided into two sections.
The first section addresses "Animal Spirits" and is sectioned into five chapters
1. Confidence and Its Multipliers
2. Fairness
3. Corruption and Bad Faith
4. Money Illusion
5. Stories (on the role of narrative in economic life)
The second section addresses eight key questions about the economy. I look forward hugely to talking about these questions at Tuesday night's bookclub. I will also blog extensively in the next year about related papers, ideas and resources.
Why do Economies Fall into Depression?
Why do Central Bankers Have Power over the Economy?
The Current Financial Crisis: What is to be done?
Why are there people who cannot find a job?
Why is there a trade-off between Inflation and Unemployment in the long-run?
Why is saving for the future so arbitrary?
Why do real-estate markets go through cycles?
Why is there special poverty among minorities?
Friday, February 20, 2009
Book Club - Akerlof and Shiller Animal Spirits
A group of us will meet to discuss Akerlof and Shiller's 'Animal Spirits'. I will bring a synoposis of the book to hand out so if people have not got a chance to read it please still free to come along.
The time is Tuesday the 24th Feb at 7.30pm at the Duke Bar near Trinity.
The time is Tuesday the 24th Feb at 7.30pm at the Duke Bar near Trinity.
Thursday, February 19, 2009
Jobless and Proud
Steve K. links to a website called "Jobless and Proud" which chronicles one guys experience. It is another example of the role the web is playing in the current version of Irish recession. Gerard O'Neill uses the phrase "Recovery 2.0" to suggest that the next recovery could be happening in online network formation. Judging from a recent post on jobless and proud, the recovery of one guy at least might be happening online.
http://www.joblessandproud.com/blog/
http://www.joblessandproud.com/blog/
St Brendan and Jasconius the Whale
From Today's Irish Times - a very interesting and multi-layered metaphor.
"According to the Irish legend, St Brendan alighted from a boat constructed from animal hides somewhere in the mid-Atlantic and cooked a meal on Jasconius’s back, mistaking the enormous creature for a tiny island.
Most historians presume this story to be a metaphor for survival in the face of adversity."
http://www.irishtimes.com/newspaper/world/2009/0219/1224241417698.html
"According to the Irish legend, St Brendan alighted from a boat constructed from animal hides somewhere in the mid-Atlantic and cooked a meal on Jasconius’s back, mistaking the enormous creature for a tiny island.
Most historians presume this story to be a metaphor for survival in the face of adversity."
http://www.irishtimes.com/newspaper/world/2009/0219/1224241417698.html
Spend More
As far as I can see, the average Economix post gets about 40 or so comments. This one below by Edward Glaeser got nearly 200 and many of them angry - Glaeser's point is that people who are comfortable should not start hoarding for the sake of it and that such saving is, at least partly, holding back the economy. Though judging from the comments, many of the Economix readers do not feel so comfortable.
http://economix.blogs.nytimes.com/2009/02/17/if-you-got-money-its-time-to-spend-some/
http://economix.blogs.nytimes.com/2009/02/17/if-you-got-money-its-time-to-spend-some/
Galton Bibliography
I came across a link today to a full linked bibliography for Francis Galton. Some illustrative titles include "Gregariousness in Cattle and Men"; 'the measure of fidget" (a way of figuring out if your talk is going well!); "on head growth among students at the University of Cambridge"; "arithmetic by smell" and so on. Really nice resource.
http://galton.org/galton/index.html
Galton appears as a controversial figure in some later debates about nature and nurture as well as a heroic figure in several fields involving measurement and analysis (including being widely credited with the development of regression analysis).
http://galton.org/galton/index.html
Galton appears as a controversial figure in some later debates about nature and nurture as well as a heroic figure in several fields involving measurement and analysis (including being widely credited with the development of regression analysis).
Foreclosure Mitigation
The Irish Economy blog points to a very important paper about how to deal with home foreclosures
http://www.imf.org/external/pubs/ft/spn/2009/spn0902.pdf
Below is a link to one of the few papers I could find examining the psychological consequences of unsustainable housing commitments
here
http://www.imf.org/external/pubs/ft/spn/2009/spn0902.pdf
Below is a link to one of the few papers I could find examining the psychological consequences of unsustainable housing commitments
here
Why do mostly men blog about economics?
Partly because males are still more numerous than females in Economics.
Partly because males tend to blog more anyway.
But neither of the explain the vast disproportions of males who blog on all the main economics blogs compared to females.
We put up a paper before that discussed this but doesnt really develop a theory of why it is the case.
http://www.cs.biu.ac.il/~koppel/papers/springsymp-blogs-07.10.05-final.pdf
it is a relatively serious issue if you believe that men and women think differently about economics and if you believe that blogs matter for economics. It is worth thinking about whether there are other types of forums that are more gender neutral.
I will remove any pointless sexist remarks in either direction.
Partly because males tend to blog more anyway.
But neither of the explain the vast disproportions of males who blog on all the main economics blogs compared to females.
We put up a paper before that discussed this but doesnt really develop a theory of why it is the case.
http://www.cs.biu.ac.il/~koppel/papers/springsymp-blogs-07.10.05-final.pdf
it is a relatively serious issue if you believe that men and women think differently about economics and if you believe that blogs matter for economics. It is worth thinking about whether there are other types of forums that are more gender neutral.
I will remove any pointless sexist remarks in either direction.
Health Research Board Interships
Stephen Kinsella has the message below on his site. The same goes for me. If people are interested in applying to conduct research with me or others in the Institute let me know. These will be competitive and probably few in number but they are a great opportunity nonetheless. Some relevant projects being conducted here include the ones linked below. Other projects include ongoing work with Professor Kevin Malone on suicide and work with Professor Patrick Wall on the psychology of food risk perception.
http://geary.ucd.ie/share/index.php
http://geary.ucd.ie/wellbeing/
The Health Research Board are funding summer studentships. I can advise one student in health economics, perhaps two. The details are here, but interested 3rd year and fourth year students should email me to discuss it. The deadline is 27 March, but we should start working on a proposal sooner.
Addendum: This grant is not open to final year students
http://geary.ucd.ie/share/index.php
http://geary.ucd.ie/wellbeing/
The Health Research Board are funding summer studentships. I can advise one student in health economics, perhaps two. The details are here, but interested 3rd year and fourth year students should email me to discuss it. The deadline is 27 March, but we should start working on a proposal sooner.
Addendum: This grant is not open to final year students
How Hal R. Rolls
Hal R. Varian gives a valuable, well articulated and humourous insight into the procedure he follows when writing a paper.
How to Build an Economic Model in Your Spare Time
How to Build an Economic Model in Your Spare Time
Wednesday, February 18, 2009
The benefits of binge drinking
It's widely recognised that binge drinking is not all bad. In fact, many would argue it is all good. Of course selectively ignoring potential long-term health consequences. Professor Anna van Wersch, a psychologist in the University’s School of Social Sciences & Law, has published an outline of the binge drinking culture in Britain in this months Journal of Health Psychology.
Definitions of what constitutes a binge vary, but anything more than 3 or 4 drinks is generally considered excessive. Based on interviews with 32 drinkers the authors conducted a grounded theory analysis and outlined a conceptual model. Investigating the reasons for heavy drinking using a qualitative approach was motivated, at least in part, by the limitations of quantitative social psychology models. Subtle cultural and contextual factors that may influence drinking are not captured well under broad categories such as 'social norms' in models such as the theory of planned behaviour.
The authors asked what allows these social norms to persist and aimed to detail specific linkages that promote a cycle of drinking. They found people typically associated binge drinking with initiating interaction, escapism, and positive feelings. As a way to protect this outlet people minimize negative experiences and promote the positives. The mental neglect of potential harm is seen as changeable over the life-course as a function of changes in the self (e.g. more dutiful), and varying levels of responsibility and finance.
Whilst binge drinking can have harmful immediate and long-term effects the authors point out that it fulfills a need in society. Binge drinking appears to have positive affective consequences when people remain in control. This is seen by various academic commentators as ‘constrained ritual drinking’, ‘bounded hedonistic consumption’, ,‘sensuous indulgence of consuming happens in a planned, carefully controlled way’, or my favourite ‘controlled decontrolling of emotions’. It's all just a bit of catharsis, as Aristotle would have said.
Though clearly binge drinking isn't always just blowing off steam. Drinking outliers will be literally laid out in A & E wards and holding cells across the country. By reducing the binge drinking culture we restrict the likelihood of problematic anti-social behaviours. A restriction of alcohol supply may be a positive step. This is especially so, given the often cited relationship between liberal opening hours and reduced levels of binge drinking appears incidental. The authors also emphasize the importance of putting in place realistic alternatives to the stress-excess weekly work-binge drinking cycle. Though I wonder what these are?
Given recent research showing television advertisements increase our viewing pleasure, maybe theatre or other mechanisms that externally restrict our drinking for prolonged periods will make us enjoy it all the more, without endangering our health!
Definitions of what constitutes a binge vary, but anything more than 3 or 4 drinks is generally considered excessive. Based on interviews with 32 drinkers the authors conducted a grounded theory analysis and outlined a conceptual model. Investigating the reasons for heavy drinking using a qualitative approach was motivated, at least in part, by the limitations of quantitative social psychology models. Subtle cultural and contextual factors that may influence drinking are not captured well under broad categories such as 'social norms' in models such as the theory of planned behaviour.
The authors asked what allows these social norms to persist and aimed to detail specific linkages that promote a cycle of drinking. They found people typically associated binge drinking with initiating interaction, escapism, and positive feelings. As a way to protect this outlet people minimize negative experiences and promote the positives. The mental neglect of potential harm is seen as changeable over the life-course as a function of changes in the self (e.g. more dutiful), and varying levels of responsibility and finance.
Whilst binge drinking can have harmful immediate and long-term effects the authors point out that it fulfills a need in society. Binge drinking appears to have positive affective consequences when people remain in control. This is seen by various academic commentators as ‘constrained ritual drinking’, ‘bounded hedonistic consumption’, ,‘sensuous indulgence of consuming happens in a planned, carefully controlled way’, or my favourite ‘controlled decontrolling of emotions’. It's all just a bit of catharsis, as Aristotle would have said.
Though clearly binge drinking isn't always just blowing off steam. Drinking outliers will be literally laid out in A & E wards and holding cells across the country. By reducing the binge drinking culture we restrict the likelihood of problematic anti-social behaviours. A restriction of alcohol supply may be a positive step. This is especially so, given the often cited relationship between liberal opening hours and reduced levels of binge drinking appears incidental. The authors also emphasize the importance of putting in place realistic alternatives to the stress-excess weekly work-binge drinking cycle. Though I wonder what these are?
Given recent research showing television advertisements increase our viewing pleasure, maybe theatre or other mechanisms that externally restrict our drinking for prolonged periods will make us enjoy it all the more, without endangering our health!
Tuesday, February 17, 2009
Irish Recovery Ideas Forum
Below is a link to a new forum that myself and some others are developing to develop specific and micro-focused ideas for generating recovery in the irish economy. it is heavily influenced by the development of behavioural economics and the experimental approach in applied econometrics. It will push heavily for micro-level experimentation and reform in public services including innovative approaches to healthcare delivery, labour market programmes and so on. it will also act as a venue where ideas from other countries can be rapidly fed into the Irish public sphere. A number of events are also planned around the forum. The forum is currently in very early stages and will be chopped and changed a lot in the next week so all comments welcome.
http://geary.ucd.ie/irishrecovery/forum/phpBB3/index.php
http://geary.ucd.ie/irishrecovery/forum/phpBB3/index.php
Monday, February 16, 2009
Alien Life May Exist Among Us
according to another physicist - The BBC article has, among other quotes, "The descendants of this "second genesis" may have survived until today in a "shadow biosphere" which is beyond our radar because its inhabitants have biochemistry so different from our own." I am struck by the number of recent BBC posts on these types of topics. Im also somewhat amused by the idea of colonies of ancient creatures living under the sea and having a good laugh at our current woes.
http://news.bbc.co.uk/2/hi/science/nature/7893414.stm?lss
http://news.bbc.co.uk/2/hi/science/nature/7893414.stm?lss
One Solution - Tax Tall People
The Irish Government are currently considering many options to raise finance - some options such as the tax on air travel have been considered potentially very distortionary. In light of the new climate, its worth looking again at the working paper from a few years back on taxing people based on height. Before we start getting complaints, Im not advocating this but it is an interesting thought experiment. The basic idea, as most people who read this know, is that taller people earn more and that there is not much you can do about your height. Thus, you can achieve a potential raising of finance and redistribution of income without creating a distortion. Before you read the paper its worth thinking in your own mind why this idea seems wrong (assuming it does seem wrong to the majority of people). In my view, the objection against it is well articulated on page 15 of the paper.
http://www.economics.harvard.edu/faculty/mankiw/files/Optimal_Taxation_of_Height.pdf
http://www.economics.harvard.edu/faculty/mankiw/files/Optimal_Taxation_of_Height.pdf
Robert Shiller Lecture from Nudge Blog
A really superb lecture on behavioural finance from Robert Shiller - those doing my courses will recognise hopefully all of the topics - looking at him lecture is rekindling my ancient ambivalence with respect to powerpoint - chalk and talk can be a disaster when there are lots of very complex notation but in this case I dont think this lecture would have been as engaging if he had got each point noted as a bullet.
http://nudges.wordpress.com/2009/02/10/robert-shillers-lecture-on-behavioral-finance/
Yale have a channel now on youtube - Shiller's full course is available on this. You would be mad not to spend a few hours with this plugged in to your ears if you are interested in financial markets. Amazingly few downloads
http://www.youtube.com/user/yalecourses
http://nudges.wordpress.com/2009/02/10/robert-shillers-lecture-on-behavioral-finance/
Yale have a channel now on youtube - Shiller's full course is available on this. You would be mad not to spend a few hours with this plugged in to your ears if you are interested in financial markets. Amazingly few downloads
http://www.youtube.com/user/yalecourses
Pollution and Life Expectancy
Following on from a discussion about pollution and life expectancy earlier today, it was a coincidence that I stumbled upon some relevant research. An article in the Tipperary Star cites research by Dr C Arden Pope III from the Department of Economics, Brigham Young University in Provo, Utah, and colleagues from Harvard. Their study matched air pollution in 51 cities with the life expectancy of their inhabitants between 1980 and 2000. It found that people in cities with the biggest shift from polluted to clean air had an average 10 months longer lifespan. The study was published in the New England Journal of Medicine.
Personality and Life Expectancy (Conscientiousness and Non-Cognitive Skills)
Following on from growing evidence that higher levels of conscientiousness are associated with greater health protection, Kern and Friedman (2008) show that conscientious individuals tend to live longer. Associations with longevity were strongest for the achievement (persistent, industrious) and order (organised, disciplined) facets of conscientiousness.
This suggests that there may be links between longevity and what economists refer to as non-cognitive skills. Even more interesting is the approach taken to de-compose (overall) conscientiousness into a range of non-cognitive skills, including persistence, industriousness, organisation and discipline.
The importance of concientiousness is also documented by Terracciano et al (2008). Furthermore, this study shows that the association of personality traits with longevity is largely independent from the influence of smoking and obesity; longevity was associated with being conscientious, emotionally stable, and active (a facet of extraversion).
Low levels of neuroticism and high levels of extraversion are also associated with a lower later-life risk of developing dementia, according to recent research in Neurology (reported in the Leitrim Observer).
This suggests that there may be links between longevity and what economists refer to as non-cognitive skills. Even more interesting is the approach taken to de-compose (overall) conscientiousness into a range of non-cognitive skills, including persistence, industriousness, organisation and discipline.
The importance of concientiousness is also documented by Terracciano et al (2008). Furthermore, this study shows that the association of personality traits with longevity is largely independent from the influence of smoking and obesity; longevity was associated with being conscientious, emotionally stable, and active (a facet of extraversion).
Low levels of neuroticism and high levels of extraversion are also associated with a lower later-life risk of developing dementia, according to recent research in Neurology (reported in the Leitrim Observer).
Undergraduate Economics Competition
I received an email to say that the deadline for paper submissions to the Carroll Round is now the 1st March. This is an annual international economics conference at Georgetown University, which provides a forum for research and discussion among top undergraduates in economics.
There is a $125 registration fee that must be paid prior to attendance, though the organisers advise that in the past, many departments have sponsored participants and covered their registration fees.
The Carroll Round will arrange and pay for your accommodation at the Marriott Hotel and the majority of meals and expenses. Individuals will be responsible for two or three meals. Transportation subsidies are available. Last year, the average subsidy was $250.
There is a $125 registration fee that must be paid prior to attendance, though the organisers advise that in the past, many departments have sponsored participants and covered their registration fees.
The Carroll Round will arrange and pay for your accommodation at the Marriott Hotel and the majority of meals and expenses. Individuals will be responsible for two or three meals. Transportation subsidies are available. Last year, the average subsidy was $250.
Sunday, February 15, 2009
UK Internships Programme Questioned
I mentioned a few times on the blog that the UK are thinking of a massive internship programme but I have found it difficult to find information on it. An article in the Guardian cites a former cabinet minister as saying "No money has been committed to this internship scheme and the idea is frankly vague." I hope he is wrong as this scheme sounded like it could lead the way in taking action against the biggest issue in the current recession and I was sincerely hoping that it would act as a wake-up call in our part of the world as our response thus far on unemployment has been very weak. The short article is interesting in that it raises themes such as the potentially devastating effect of large scale and eventually long-term unemployment and the inadequacy of the UK response. The former Minister also questions the preparedness of the British job centres. There is no such questioning in Ireland due to discussion being crowded out by a very popular debate about the expenses policy of the main organisation in question. I despair again at the weekend coverage of the recession in the Irish newspapers. A litany of tirades and abuse and almost nothing hitting seriously at the main issue at present - the growing cloud of unemployment and the protracted waste of human potential that will come with it. Nobody has advanced a serious proposal yet as far as I can see whether on blogs, in print or even verbally about how to get 350,000 people back working.
http://www.guardian.co.uk/politics/2009/feb/15/lord-jones-unemployment
http://www.guardian.co.uk/politics/2009/feb/15/lord-jones-unemployment
Measuring the Financial Sophistication of Households
the Economic logic blog points to an interesting new paper on measuring different types of financial mistakes and the predictors of who makes them
http://ideas.repec.org/p/nbr/nberwo/14699.html
http://ideas.repec.org/p/nbr/nberwo/14699.html
How to Design Smart Business Experiments
the Harvard Business Review carries a piece by Thomas Davenport that is recommended reading for companies looking to examine "what works"
http://hbr.harvardbusiness.org/2009/02/how-to-design-smart-business-experiments/ar/1
http://hbr.harvardbusiness.org/2009/02/how-to-design-smart-business-experiments/ar/1
Thousands of Earths
according to another astrologist - the discovery of these planets will be most handy to people working in applied econometrics
http://news.bbc.co.uk/2/hi/science/nature/7891132.stm?lss
http://news.bbc.co.uk/2/hi/science/nature/7891132.stm?lss
Friday, February 13, 2009
Aging and Sensor Technology
From the IT Conversations channel, Eric Dishman of INTEL talks about the role of sensor technologies in the development of responses to an aging society
http://itc.conversationsnetwork.org/shows/detail3904.html
http://itc.conversationsnetwork.org/shows/detail3904.html
Psychology in the Aid of Recovery
David Brooks, who Michael blogged about earlier, arguing for the need for psychology to be placed at the heart of the stimulus. As said before, I dont neccesarily disagree but what does psychological fiscal policy look like? If Brian Cowan or Gordon Brown is going to call in a psychologist to be with them and advise them on the recovery plan what would that person do differently as opposed to how the person would think differently
http://www.nytimes.com/2009/02/13/opinion/13brooks.html?_r=2&ref=opinion
http://www.nytimes.com/2009/02/13/opinion/13brooks.html?_r=2&ref=opinion
Paying People to Quit Smoking Once Again
Another paper (this time an RCT) shows that paying people to quit smoking works.
"The incentive group had significantly higher rates of smoking cessation than did the information-only group 9 or 12 months after enrollment (14.7% vs. 5.0%, P<0.001) and 15 or 18 months after enrollment (9.4% vs. 3.6%, P<0.001)."
Please, Please, Please someone do this in Ireland - I will do your stats for free provided the results are made public!
http://content.nejm.org/cgi/content/short/360/7/699
"The incentive group had significantly higher rates of smoking cessation than did the information-only group 9 or 12 months after enrollment (14.7% vs. 5.0%, P<0.001) and 15 or 18 months after enrollment (9.4% vs. 3.6%, P<0.001)."
Please, Please, Please someone do this in Ireland - I will do your stats for free provided the results are made public!
http://content.nejm.org/cgi/content/short/360/7/699
Heckman on Early Education and Later Health
if you invest in roads it is considered capital but we consider education current spending. While our roads need development, it is worth opening the public debate about treating large scale education programmes as investments. Nancy Folbre talks about this in the excellent Economix blog. She references and links to another mammoth presentation by Heckman.
http://economix.blogs.nytimes.com/2009/02/12/the-ultimate-growth-industry/
http://www.partnershipforsuccess.org/uploads/20081021_capabilformchiDISP20080921ajlt11.pdf
http://economix.blogs.nytimes.com/2009/02/12/the-ultimate-growth-industry/
http://www.partnershipforsuccess.org/uploads/20081021_capabilformchiDISP20080921ajlt11.pdf
Unemployment - Economics and Psychology
from time to time we have a policy focus on this blog and I ask for specific posts. I have blogged extensively about unemployment on this blog but in my lectures recently when I am debating with students about what could be done in the current environment I am struck by the lack of ideas that have been generated on this issue. Many of the undergraduate students are viewing doing a masters as being the way to ride things out and its very difficult to argue with this view but what then?
Our blog is not the place for wider spread political discussions, but if you consider that there are approximately 350 thousand people out of work in Ireland it seems that everyone with any claim to be connected to economics should be thinking and debating what to do. It is amazing that our main state training and employment agency doesn't even currently have a Director and this gives a basic feel of how unemployment is not receiving its share of attention. When it does get attention, the emphasis is on documenting the dissappointment of being made redundant and the fear and uncertainty people face with less attention given to ideas to do anything about it (though in fairness the RTE site does contain some useful information for people who have been made redundant).
http://www.rte.ie/money/2009/0209/economy.html
The establishment of an unemployment taskforce may redress some of this balance but for the forseeable future our economic debate looks like it will be almost exclusively devoted to documenting and analysing the failures of our financial system.
From the point of view of what economics has to say about unemployment, some of the following considerations are worth thinking about.
- what are the potential long-run costs of unemployment? There is abundent evidence for short-run unemployment leading to unemployment persistence, psychological scarring and lower long-terms wages. Is there anything that can be done to counteract such effects either by individuals themselves, companies or government programmes? How would such interventions differ by age and other circumstances of the individual? What are the characteristics and behaviours of individuals who make it through periods of recession-based unemployment without long-term effects on their career?
- How should career advice structures react in colleges and schools react or do they have any role or effectiveness in such situations? Are there broader networks that could be utilised to ensure that students do not end up making sub-optimal choices during a downturn? Gerard O'Neill and some others have suggested setting up alumni networks whereby alumni who wanted to contribute other than by cash could offer mentoring to students.
- is there a way to shift fiscal spending around toward more labour intensive programmes that have longer-term benefits?
- what is the role for internships? Can the government work with companies and universities to rework unemployment payments so that companies are given the equivalent sum as an incentive for hiring individuals? Can this be done without displacing the current workforce? The British are moving to something like this but I cant track down their document.
- how effective are current programmes being conducted by organisations like FAS? Are there others that could be tried?
- what role is there for organisations to work with their employees to cut hours instead of jobs. Is this a more desirable strategy from an aggregate point of view?
- what role can wages play in adjusting the current labour market? If prices are falling, will it be possible for people to price themselves into the labour market by reducing wages? What implications would such a strategy have in a country with very high levels of private debt?
- what role is there for independent financial advice consequent on unemployment? There is abundent evidence that people make poor financial decisions when subject to elated or depressed mood states. How optimally do people use redundancy payments? Does financial advice help people to smooth between bouts of unemployment better? For example, are people managing their debts optimally consequent on being made redundant?
- what programmes for encouraging people to start their own business consequent on being made unemployed have proven effectiveness or most likely chance of success? Do they have any role to play in a global economy with such depressed demand levels?
- what is the psychological impact of unemployment? Are there psychological programmes that are cost-effective and have a proven benefit in alleviating psychological suffering and improving labour market outcomes? For example, should the recent British emphasis on Cognitive Behavioural Therapy be examined more closely?
Our blog is not the place for wider spread political discussions, but if you consider that there are approximately 350 thousand people out of work in Ireland it seems that everyone with any claim to be connected to economics should be thinking and debating what to do. It is amazing that our main state training and employment agency doesn't even currently have a Director and this gives a basic feel of how unemployment is not receiving its share of attention. When it does get attention, the emphasis is on documenting the dissappointment of being made redundant and the fear and uncertainty people face with less attention given to ideas to do anything about it (though in fairness the RTE site does contain some useful information for people who have been made redundant).
http://www.rte.ie/money/2009/0209/economy.html
The establishment of an unemployment taskforce may redress some of this balance but for the forseeable future our economic debate looks like it will be almost exclusively devoted to documenting and analysing the failures of our financial system.
From the point of view of what economics has to say about unemployment, some of the following considerations are worth thinking about.
- what are the potential long-run costs of unemployment? There is abundent evidence for short-run unemployment leading to unemployment persistence, psychological scarring and lower long-terms wages. Is there anything that can be done to counteract such effects either by individuals themselves, companies or government programmes? How would such interventions differ by age and other circumstances of the individual? What are the characteristics and behaviours of individuals who make it through periods of recession-based unemployment without long-term effects on their career?
- How should career advice structures react in colleges and schools react or do they have any role or effectiveness in such situations? Are there broader networks that could be utilised to ensure that students do not end up making sub-optimal choices during a downturn? Gerard O'Neill and some others have suggested setting up alumni networks whereby alumni who wanted to contribute other than by cash could offer mentoring to students.
- is there a way to shift fiscal spending around toward more labour intensive programmes that have longer-term benefits?
- what is the role for internships? Can the government work with companies and universities to rework unemployment payments so that companies are given the equivalent sum as an incentive for hiring individuals? Can this be done without displacing the current workforce? The British are moving to something like this but I cant track down their document.
- how effective are current programmes being conducted by organisations like FAS? Are there others that could be tried?
- what role is there for organisations to work with their employees to cut hours instead of jobs. Is this a more desirable strategy from an aggregate point of view?
- what role can wages play in adjusting the current labour market? If prices are falling, will it be possible for people to price themselves into the labour market by reducing wages? What implications would such a strategy have in a country with very high levels of private debt?
- what role is there for independent financial advice consequent on unemployment? There is abundent evidence that people make poor financial decisions when subject to elated or depressed mood states. How optimally do people use redundancy payments? Does financial advice help people to smooth between bouts of unemployment better? For example, are people managing their debts optimally consequent on being made redundant?
- what programmes for encouraging people to start their own business consequent on being made unemployed have proven effectiveness or most likely chance of success? Do they have any role to play in a global economy with such depressed demand levels?
- what is the psychological impact of unemployment? Are there psychological programmes that are cost-effective and have a proven benefit in alleviating psychological suffering and improving labour market outcomes? For example, should the recent British emphasis on Cognitive Behavioural Therapy be examined more closely?
Thursday, February 12, 2009
Economic History and the Banking Crisis
Some of the recent trouble in the Irish banking system might have been avoided if the warnings of one of Ireland's great economists had been heeded. Richard Cantillon (1680-1734) was likely referring to the Mississippi Bubble in France (1719-20), but he could have been writing about the current crisis. His "Essai Sur la Nature du Commerce en Général" ends with the following paragraph:
"It is then undoubted that a Bank with the complicity of a Minister is able to raise and support the price of public stock and to lower the rate of interest in the State at the pleasure of this Minister when the steps are taken discreetly, and thus pay off the State debt.
But these refinements which open the door to making large fortunes are rarely carried out for the sole advantage of the State, and those who take part in them are generally corrupted. The excess banknotes, made and issued on these occasions, do not upset the circulation, because being used for the buying and selling of stock they do not serve for household expenses and are not changed into silver.
But if some panic or unforeseen crisis drove the holders to demand silver from the Bank the bomb would burst and it would be seen that these are dangerous operations."
"It is then undoubted that a Bank with the complicity of a Minister is able to raise and support the price of public stock and to lower the rate of interest in the State at the pleasure of this Minister when the steps are taken discreetly, and thus pay off the State debt.
But these refinements which open the door to making large fortunes are rarely carried out for the sole advantage of the State, and those who take part in them are generally corrupted. The excess banknotes, made and issued on these occasions, do not upset the circulation, because being used for the buying and selling of stock they do not serve for household expenses and are not changed into silver.
But if some panic or unforeseen crisis drove the holders to demand silver from the Bank the bomb would burst and it would be seen that these are dangerous operations."
Wednesday, February 11, 2009
Reykjavik-on-the Economist
Last week the Economist ran an article 'Reykjavik-on-Thames' rife with the language of despair and dissolution, money and jobs 'evaporating', people peering into the abyss of a declining London fizzling into plainness. This weeks it's Ireland's turn for a more hackneyed 'Reykjavik-on-Liffey' analysis, running through the various shades of dull dishwater that has been restaining headlines up and down the country for the last two months. The Economist seems to have suffered something of a collapse of the imagination if it can't stretch further than outlining a projected exhaustion of both Ireland and the UK in the coming years. Taking a stab at gathering creative solutions could be more productive than just twisting the knife!
Seminar - Frank Walsh
February 17th 2009 1pm. Frank Walsh (University College Dublin). "Supervision and Wages" at the Geary Institute Seminar Room.
Costs of Waiting
Using data from the American Time Use Survey, Alan Krueger puts a valuation on time lost due to waiting around - a collective time of 847 million hours. When he includes all time spent, the economic time valuation stretches to an aggregate 240 billion dollars. Assigning dollar values to time spent in non-market activities is an issue with a lot of nuances but this is something we should look at over here. As krueger points out, just focusing on monetary cost efficiency can be severely distorting if we dont take these non-priced factors into account
http://economix.blogs.nytimes.com/2009/02/09/a-hidden-cost-of-health-care-patient-time/
http://economix.blogs.nytimes.com/2009/02/09/a-hidden-cost-of-health-care-patient-time/
Economics Blogs Featured in the Top 100 Blog Chart
I've just been alerted to a site ranking the top 100 blogs. Three economic blogs manage to feature in the rankings:
Freakonomics, Marginal Revolution and Havard Professor Greg Mankiw's blog.
Freakonomics, Marginal Revolution and Havard Professor Greg Mankiw's blog.
Tuesday, February 10, 2009
Lessons from the Laureates
IZA DP No. 3956, William Breit, Barry Hirsch: http://ftp.iza.org/dp3956.pdf
Abridged Abstract:
Abridged Abstract:
This paper uses as source material twenty-three auto-biographical essays by Nobel economists... and published in Lives of the Laureates (MIT Press)... We... identify common themes in the essays, relying heavily on the words of the laureates. Common themes include the importance of real-world events coupled with a desire for rigor and relevance, the critical influence of teachers, the necessity of scholarly interaction, and the role of luck or happenstance. Most of the laureates view their research program not as one planned in advance but one that evolved via the marketplace for ideas.
Its Not Me, Its You: the Crisis
A couple of interesting NBER papers have recently offered interesting historical perspectives on the financial crisis. Carmen Reinhart and Kenneth S Rogoff have written "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises". These authors state that a recent example of the "this time is different" syndrome is the false belief that domestic debt is a novel feature of the modern financial landscape. Michael David Bordo offers a slightly different perspective in "An Historical Perspective on the Crisis of 2007-2008". He suggests that the current crisis has many similarities to those of the past but also some important modern twists.
Monday, February 09, 2009
A Guide for the Young Economist
"A Guide for the Young Economist - Writing and Speaking Effectively About Economics" is available on GoogleBooks.ie as a preview (here). The book is written by William Thomson; according to Repec.org(here), it is an invaluable guide for young economists working on their dissertations, preparing their first articles for submission to professional journals, getting ready for their first presentations at conferences and job seminars, or facing their first refereeing assignments. "In clear, concise language--a model for what he advocates--William Thomson shows how to make written and oral presentations both inviting and efficient. Thomson covers the basics of clear exposition, including such nuts-and-bolts topics as titling papers, writing abstracts, presenting research results, and holding an audience's attention."
Do Enterprise Zones Create Jobs? Evidence from California's Enterprise Zone Program
In a recent NBER paper (Dec 08), David Neumark and Jed Kolko use new establishment-level data and geographic mapping methods to improve upon evaluations of the effectiveness of state enterprise zones, focusing on California's program. Because zone boundaries do not follow census tracts or zip codes, they created digitized maps of original zone boundaries and later expansions. They combine these maps with geocoded observations on most businesses located in California. The evidence indicates that enterprise zones do not increase employment. They also find no shift of employment toward the lower-wage workers or manufacturing sector targeted by enterprise zone incentives. They conclude that the program is ineffective in achieving its primary goals.
Social innovation converstations
This collection of innovation conversations includes an entertaining and broad scoped talk by David Brooks emphasizing the importance of non-cognitive skills and emotional, automatic and mirroring processes in understanding behaviour, decision-making and human capital formation. Producing a language that facilitates consideration of emotional and relational processing at the political level is a focus of his discussion on the transition from a physical to a human-capital economy. Brooks covers findings from neuroscience, psychology, sociology, genetics, and behavioural economics and is fairly on the ball when it comes to the importance and trajectory of this stuff.
One thing that came up in the discussion on this talk is the value of an emotional connection to education and the importance of forming relational interconnections between life-domains. There is a lot of work on student satisfaction and other aspects such as self-discipline and emotional management, however, in terms of reducing achievement gaps in a 'meritocracy' boosting emotional engagement with education and social confidence is likely to be an essential complement to self-regulation.
One thing that came up in the discussion on this talk is the value of an emotional connection to education and the importance of forming relational interconnections between life-domains. There is a lot of work on student satisfaction and other aspects such as self-discipline and emotional management, however, in terms of reducing achievement gaps in a 'meritocracy' boosting emotional engagement with education and social confidence is likely to be an essential complement to self-regulation.
Should the Government Subsidize Supply or Demand in the Market for Scientists and Engineers?
This NBER paper by Romer (2000) suggests that innovation policy in the United States has erred by subsidizing the private sector demand for scientists and engineers without asking whether the educational system provides that supply response necessary for these subsidies to work. It suggests that the existing institutional arrangements in higher education limit this supply response. To illustrate the path not taken, the paper considers specific programs that could increase the numbers of scientists and engineers available to the private sector.
Open-Source Econometrics Teaching
Following on from the posts about the MIT opencourseware teaching materials, Michael Creel has initiated a project (details available here) to develop a document for teaching graduate econometrics that is "open source", specifically, licensed as GNU GPL. "Anyone can access the document in editable form, and can modify it, as long as they make their modifications available. This allows for personalization, as well as a simple way to make contributions and error corrections. The hope is that people preparing to teach econometrics for the first time might find it useful, and eventually be motivated to contribute back to the project." The document is written using the LyX word processor, which can be thought of as a very user-friendly version of LaTeX.
Sunday, February 08, 2009
Psychology of Recession and Recovery
Gerard O'Neill will speak at 4pm on Monday March 2nd in the UCD Geary Institute on the "Psychology of Recession and Recovery". Gerard has collaborated with Michael Daly and I on a project applying online diary methods and bio-markers to commuting stress and urban planning www.stressmapping.com He also helped a lot in putting this research together and has been a valued colleague for a number of us.
His company Amarach Research conducts research into a wide variety of commercial and policy issues. Gerard himself runs a popular blog called Turbulence Ahead that discusses contemporary issues in Irish society. I hope all those who tune into either of these blogs will consider coming along to Gerard's talk and you will be made very welcome if you have not come to Geary before. As anyone who reads this blog will know, our research group is one of the Geary research groups and runs a very strong and specialised set of academic seminars and we are proud to have continued to do this over the last few years. But we are also very keen to develop a real and and meaningful session with people from outside the academic community analysing these issues and to bust open the discussion of the implications of behavioural economics and related disciplines for policy in Ireland and internationally. We are delighted that Gerard is agreeing to be the first in our public policy series and one of the first talks in the overall irish economic recovery theme.
In preparation for Gerard's talk, I put forward the following points for discussion, some of which Gerard will address in his talk. I will post further items for discussion in the next couple of weeks leading up to his talk.
What areas of psychology are relevant for thinking about the current economic downturn? What insights can be drawn from psychology to promote the process of recovery and reform?
What can we learn from looking at the psychology of how people and institutions make investment decisions in conditions both of strong economic growth and recession? Princeton University Press very kindly emailed to send a copy of the Akerlof and Shiller book so we will do a book club on this before Gerard's talk. I must say that its impressive that PUP emailed me within minutes of putting up that post. A and S are getting good service!
What is happening in the economy at the moment with respect to the psychology of consumption? What is driving current consumption patterns?
Who are suffering most from the current economic downturn? What is the relationship between self-concept and strain resulting from economic downturn?
How important are reference effects both with respect to one's past and with respect to others in understanding the psychological effects associated with the current downturn? What comparisons are people using to decide how well-off or how badly off they are?
How important is the high level of personal debt in conditioning psychological responses to the recession?
What are the implications of the different fates of people at different grades of the public and private sectors for people's level of trust and confidence in the Irish political and economic system?
Is there such a thing as a psychological soft-landing, whereby a poor economic position is buffered by social norms of hardiness, resilience and positive comparisons with a poor past?
How important is Libertarian Paternalism as a philosophy for crafting solutions to the current economic downturn?
What other disciplines should be involved in crafting a discussion of recovery? For example, what role for philosophy, law and political science?
How do we truly extend the discussion to people actually charged with developing policy to promote human welfare? I get regular emails from people expressing gratitude for doing this blog but frustration that so many good ideas are hidden in a language that will never gain currency among people charged with implementation.
What are the implications of online networks for the psychology of recession and recovery? There is a lot of talk about the idea that the current recession and potential recovery is the first to take place under the gaze of constant online attention. What might this attention imply for things like peer and network effects in innovation?
His company Amarach Research conducts research into a wide variety of commercial and policy issues. Gerard himself runs a popular blog called Turbulence Ahead that discusses contemporary issues in Irish society. I hope all those who tune into either of these blogs will consider coming along to Gerard's talk and you will be made very welcome if you have not come to Geary before. As anyone who reads this blog will know, our research group is one of the Geary research groups and runs a very strong and specialised set of academic seminars and we are proud to have continued to do this over the last few years. But we are also very keen to develop a real and and meaningful session with people from outside the academic community analysing these issues and to bust open the discussion of the implications of behavioural economics and related disciplines for policy in Ireland and internationally. We are delighted that Gerard is agreeing to be the first in our public policy series and one of the first talks in the overall irish economic recovery theme.
In preparation for Gerard's talk, I put forward the following points for discussion, some of which Gerard will address in his talk. I will post further items for discussion in the next couple of weeks leading up to his talk.
What areas of psychology are relevant for thinking about the current economic downturn? What insights can be drawn from psychology to promote the process of recovery and reform?
What can we learn from looking at the psychology of how people and institutions make investment decisions in conditions both of strong economic growth and recession? Princeton University Press very kindly emailed to send a copy of the Akerlof and Shiller book so we will do a book club on this before Gerard's talk. I must say that its impressive that PUP emailed me within minutes of putting up that post. A and S are getting good service!
What is happening in the economy at the moment with respect to the psychology of consumption? What is driving current consumption patterns?
Who are suffering most from the current economic downturn? What is the relationship between self-concept and strain resulting from economic downturn?
How important are reference effects both with respect to one's past and with respect to others in understanding the psychological effects associated with the current downturn? What comparisons are people using to decide how well-off or how badly off they are?
How important is the high level of personal debt in conditioning psychological responses to the recession?
What are the implications of the different fates of people at different grades of the public and private sectors for people's level of trust and confidence in the Irish political and economic system?
Is there such a thing as a psychological soft-landing, whereby a poor economic position is buffered by social norms of hardiness, resilience and positive comparisons with a poor past?
How important is Libertarian Paternalism as a philosophy for crafting solutions to the current economic downturn?
What other disciplines should be involved in crafting a discussion of recovery? For example, what role for philosophy, law and political science?
How do we truly extend the discussion to people actually charged with developing policy to promote human welfare? I get regular emails from people expressing gratitude for doing this blog but frustration that so many good ideas are hidden in a language that will never gain currency among people charged with implementation.
What are the implications of online networks for the psychology of recession and recovery? There is a lot of talk about the idea that the current recession and potential recovery is the first to take place under the gaze of constant online attention. What might this attention imply for things like peer and network effects in innovation?
MIT Course - Disseminating Innovations for the Common Good
An example of the MIT courses is linked below - there are a number of features of this course that make it worth studying including emphasis on student participation, applying knowledge to real-world problems and so on. I have introduced a policy design feature into some of my behavioural economics teaching whereby undergraduate students are asked to define an important economic problem, examine the underlying behavioural principles and develop a behaviourally informed policy response. I havent seen the solutions yet but the general process is an interesting one.
http://mirror.mit-ocw.sbu.ac.ir/OcwWeb/Special-Programs/SP-723Spring-2007/CourseHome/index.htm
http://mirror.mit-ocw.sbu.ac.ir/OcwWeb/Special-Programs/SP-723Spring-2007/CourseHome/index.htm
MIT OpenCourseWare
I've posted before on these but it cant be said often enough that MIT deserve huge credit for developing this initiative - an absolute treasure trove. Every university in the world should look to ways that people outside the institution can benefit to some extent from what goes on inside. I know there are arguments to the contrary (why should people who havent paid to attend get benefits and so on) but I dont find any of the arguments very convincing particularly in light of the mandate of most universities to benefit the wider society and promote the dissemination of knowledge.
http://ocw.mit.edu/OcwWeb/web/home/home/index.htm
http://ocw.mit.edu/OcwWeb/web/home/home/index.htm
MIT Poverty Lab Executive Education Programmes
For policymakers and executives interested in understanding the causal effect of the programmes they are running or financing, the following courses look like very good options.
http://www.povertyactionlab.org/course/
http://www.povertyactionlab.org/course/
Saturday, February 07, 2009
Votes and Violence
A really nice piece on Vox by Paul Collier and Pedro Vicente on their "Votes and Violence" work
http://www.VoxEU.org/index.php?q=node/3003
http://www.VoxEU.org/index.php?q=node/3003
Volunteers Requested - Irish Recovery Site
A small but growing group of academics, business people and researchers have been working on a set of events, websites, message boards and so on related to the theme of Irish economic recovery. We are looking for volunteers to help set everything up. Below is not even a beta-site but it will be updated very rapidly over the next month and then launched as www.irishrecovery.ie and used as a portal for ideas about micro-level reforms in Irish policy and as a host site for a set of online and conventional events and discussions. Colm Harmon is one of the individuals supporting this (hence the Geary address) but it is a cross-sectoral and cross-institutional initiative so we will move this once we get the set-up done.
recovery site
If anyone wants to help with some of the tasks below, get in touch with me. We dont have any money but I do buy pizza for anyone who comes in to help. In general, we will work in five hour sessions on either Saturday or Sunday throughout the next year.
- help with organising events.
- help with developing the web resources.
- manage mailing lists, data-bases and so on.
recovery site
If anyone wants to help with some of the tasks below, get in touch with me. We dont have any money but I do buy pizza for anyone who comes in to help. In general, we will work in five hour sessions on either Saturday or Sunday throughout the next year.
- help with organising events.
- help with developing the web resources.
- manage mailing lists, data-bases and so on.
Seminar - Daniel Goldstein
Daniel Goldstein from London Business School will give the seminar "Choosing Outcomes versus Choosing Products: Consumer-Focused Retirement Investment Advice" at the UCD Geary Institute Seminar room on February 10th at 1pm.
More Psychologists Needed in Generating Stimulus Plan
The editor of the Harvard Law Record makes a strong plea for more psychologists to be involved in the US Stimulus plan.
here
The article notes that Robert Shiller and George Akerlof are about to release a book called "Animal Spirits: How Human Psychology Drives the Economy" - we will do a bookclub on that here as soon as I get my hands on a few copies
Its obvious that I, at some level, agree with the basic idea that psychology needs to inform more the debate about economic recovery. But we better start thinking more about what this means. Some of the recent commentaries are in danger of creating a behavioural economics bubble and fall in the very traps talked about in the literature. To me, behavioural economics in our part of the world needs to start having an influence and that needs to start by small-scale behaviourally informed experiments cutting across innovation policy, labour market policy, health reform, education reform and so on. These should be done rigorously and scientifically and should be heavily shaped by the people who will run them on a day-to-day basis but also heavily guided by good scientific practice. Irish policies are currently not approaching this ideal with some noteworthy exceptions. This is one area with huge potential for reform even with straitening economic circumstances.
here
The article notes that Robert Shiller and George Akerlof are about to release a book called "Animal Spirits: How Human Psychology Drives the Economy" - we will do a bookclub on that here as soon as I get my hands on a few copies
Its obvious that I, at some level, agree with the basic idea that psychology needs to inform more the debate about economic recovery. But we better start thinking more about what this means. Some of the recent commentaries are in danger of creating a behavioural economics bubble and fall in the very traps talked about in the literature. To me, behavioural economics in our part of the world needs to start having an influence and that needs to start by small-scale behaviourally informed experiments cutting across innovation policy, labour market policy, health reform, education reform and so on. These should be done rigorously and scientifically and should be heavily shaped by the people who will run them on a day-to-day basis but also heavily guided by good scientific practice. Irish policies are currently not approaching this ideal with some noteworthy exceptions. This is one area with huge potential for reform even with straitening economic circumstances.
Innovation Resources
As said many people have been asking for information on current initiatives on research and innovation so here follows another long set of links and ideas that might be worth looking through particularly for people interested in researchers careers. Thanks to Cathy for digging out this stuff
1) Overview of Lisbon Agenda
The below report was a review of the Lisbon strategy for growth and employment. The Lisbon Agenda was set out in 2000 and aimed to increase innovation and growth in Europe. This report was written in 2004, includes what has been achieved to then (not much) and outlines recommendations to move forward. It is very well-written I think. Chapter 2, Section 1: Realising the Knowledge society is the most relevent to researchers and universities.
here
2) European's Researcher Charter
Below is the link to the European Commission's Researchers in motion website, they provide services such as information on accommodation, day care and schooling, language courses, etc for researchers. The European Charter for researchers is available on this page - worth reading if you are a researcher
here
3) Innovation Scoreboard and Growth and Employment in Europe
European Commission Growth and Jobs, annual progress report:
here
European Innovation Scoreboard: (Copied Ireland section), link below
Ireland
Ireland is in the group of Innovation followers, with an innovation performance above the EU27 average. It is a growth leader within this group of countries with a rate of improvement just above that of the EU27. Relative strengths, compared to the country's average performance, are in Human resources, Throughputs and Economic effects and relative weaknesses are in Firm investments and Linkages & entrepreneurship. Over the past 5 years, Human resources and Finance and support have been the main drivers of the improvement in innovation performance, in particular as a result from strong growth in S&E and SSH doctorate graduates (12.8%), Private credit (14.6%) and Broadband access by firms (37.5%). Performance in Firm investments, Linkages & entrepreneurship and Innovators has worsened, in particular due to a decrease in Non-R&D innovation expenditures (-5.7%), Innovative SMEs collaborating with others (-7.0%) and SMEs introducing product or process innovations (-3.3%).
4) Researcher's Concordat - useful to look at this to see how the British treat their researchers
here
1) Overview of Lisbon Agenda
The below report was a review of the Lisbon strategy for growth and employment. The Lisbon Agenda was set out in 2000 and aimed to increase innovation and growth in Europe. This report was written in 2004, includes what has been achieved to then (not much) and outlines recommendations to move forward. It is very well-written I think. Chapter 2, Section 1: Realising the Knowledge society is the most relevent to researchers and universities.
here
2) European's Researcher Charter
Below is the link to the European Commission's Researchers in motion website, they provide services such as information on accommodation, day care and schooling, language courses, etc for researchers. The European Charter for researchers is available on this page - worth reading if you are a researcher
here
3) Innovation Scoreboard and Growth and Employment in Europe
European Commission Growth and Jobs, annual progress report:
here
European Innovation Scoreboard: (Copied Ireland section), link below
Ireland
Ireland is in the group of Innovation followers, with an innovation performance above the EU27 average. It is a growth leader within this group of countries with a rate of improvement just above that of the EU27. Relative strengths, compared to the country's average performance, are in Human resources, Throughputs and Economic effects and relative weaknesses are in Firm investments and Linkages & entrepreneurship. Over the past 5 years, Human resources and Finance and support have been the main drivers of the improvement in innovation performance, in particular as a result from strong growth in S&E and SSH doctorate graduates (12.8%), Private credit (14.6%) and Broadband access by firms (37.5%). Performance in Firm investments, Linkages & entrepreneurship and Innovators has worsened, in particular due to a decrease in Non-R&D innovation expenditures (-5.7%), Innovative SMEs collaborating with others (-7.0%) and SMEs introducing product or process innovations (-3.3%).
4) Researcher's Concordat - useful to look at this to see how the British treat their researchers
here
Lecture on Judgment Heuristics and Biases
Below is a recent lecture on judgment, heuristics and biases. It gives a brief overview on the relationship of this topic to textbook models of choice under uncertainty and value. The lecture: outlines what is meant by heuristics; discusses theories of why they may be adaptive; outlines the idea of bias and how this relates to heuristics; examines the main Kahneman and Tversky literature; outlines experimental literature on availability, representativeness and anchoring; examines overconfidence and planning fallacy; examines the role of emotions in guiding probability judgments and risk perception; discusses limitations of the literature on heuristics and biases; discusses of implications of use of heuristics for economic theory and policy.
http://geary.ucd.ie/econpsych/lectures/4-lecture-3-judgment-heuristics-and-biases-
As usual, get in touch if you are interested in this stuff or in applications.
http://geary.ucd.ie/econpsych/lectures/4-lecture-3-judgment-heuristics-and-biases-
As usual, get in touch if you are interested in this stuff or in applications.
Behavioural Economics and Food
Nudge links to a one-hour session on behavioural economics and food given at Cornell.
http://nudges.wordpress.com/2009/02/05/assorted-links-8/
http://nudges.wordpress.com/2009/02/05/assorted-links-8/
Friday, February 06, 2009
"Ireland in America"
This brief New York times article from April 2nd 1852 is a vivid reminder of truly challenging times though probably not where we want to be setting our reference point!
Thursday, February 05, 2009
361 Intelligent Civilisations outside earth
According to a paper in the International Journal of Astrobiology - if any of you tune into the blog let us know if you have any suggestions for the current difficulties and remember that corporation tax in Ireland is only 12.5 per cent.
http://news.bbc.co.uk/2/hi/science/nature/7870562.stm
http://news.bbc.co.uk/2/hi/science/nature/7870562.stm
Card on Immigration and Inequality
I'm just after finishing reading David Card's recent paper on immigration and wage inequality in the US between 1980 and 2000.
Card uses time-series data from the 1980, 1990 and 2000 US censuses to measure the impact of immigration on the growing inequality between high and low skilled workers. The paper concludes that immigration accounts for only a small share of the increase in US wage inequalities during this period (5%).
It would be quite interesting to see how or even if Card's research could be extended to Ireland, in particular the conclusion that "workers with less than a high school education are perfect substitutes for those with a high school education."
Card uses time-series data from the 1980, 1990 and 2000 US censuses to measure the impact of immigration on the growing inequality between high and low skilled workers. The paper concludes that immigration accounts for only a small share of the increase in US wage inequalities during this period (5%).
It would be quite interesting to see how or even if Card's research could be extended to Ireland, in particular the conclusion that "workers with less than a high school education are perfect substitutes for those with a high school education."
Wednesday, February 04, 2009
Give Young Researchers More Money to Boost Productivity
is the conclusion (more or less) of a recent Fiscal Studies paper
http://ideas.repec.org/a/ifs/fistud/v29y2008i1p75-87.html
http://ideas.repec.org/a/ifs/fistud/v29y2008i1p75-87.html
Tuesday, February 03, 2009
Should Irish Students Turn Their 'Free-Fees' Campaign Towards Higher Education Grants?
Yesterday the HEA published the third Eurostudent Survey to be conducted in the Republic of Ireland; the report is available on the HEA website here. There is a short discussion of the report in today's Irish Independent (here), which quotes the report saying that "there are substantial negative effects of working beyond 20 hours per week. Up to this point, the effects of working extra hours do not seem to be important." Other findings are that:
- Some 65pc of students earn at least some income from employment
- Students' spending averages €1,086.64 per month
- The most popular job held by students is shop assistant, followed by working as waiters or waitresses and then bar staff
The third Eurostudent Survey reports on 2007 field-work that was conducted here with colleagues at the Geary Institute. Now we are at the start of 2009 - and with economic recession underway - the concern of working more than 20 hours a week during college is mostly a thing of the past. Despite this, student expenditure costs of approximately €1,000 a month (or €12,000 a year) still have to be financed. So average living costs of a four-year undergraduate degree are circa €50,000, and somehow they must be paid.
According to a report in today's Irish Times, over 20,000 students are expected to take to the streets of Dublin tomorrow to oppose the reintroduction of third-level fees, and to highlight the role they feel education should play in any economic recovery plan. It might be the case that a better use of the protest would be to re-direct the campaign towards a call for improved higher education grants.
The rationale for this stems from the unemployment problem that students now face. Instead of worrying about whether they are working too many hours, or wishing they had a handier number, many students are now lucky to have any job at all. A discussion on this issue is provided by Bridget Fitzsimons in the current edition of the UCD University Observer: "No part-time means full-time trouble...". "Student Advisor, Aisling O’Grady has noted 'a definite marked increase' in those visiting (UCD) Student Advisors for financial advice after being unable to find employment." For any students in severe financial difficulties, some options for advice and support are mentioned in the article. One comment about the new conditions facing students is provided by Juan Houlihan in 1st Arts:
With the uncertain and unlikely prospect of getting a part-time job to cover living costs during higher education, students would gain considerably from an improved higher education grant. This could be a preferable option if there were to be an either/or scenario between 'free frees' or 'improved grants'. The re-introduction of fees in the context of an interest-free student loan system has been tabled by the Minister for Education, Batt O'Keefe. An interest-free lending initiative would mean that students would not have to worry about the cost of their higher education until they have secured post-graduate employment and are earning above a certain level of salary. In a detailed discussion of interest-free student loans on this blog, it was previously noted that the UK student loan system has the following features:
- repayments do not start until April of the year after students have completed their course
- repayments do not start until the student is earning more than 15,000 pounds
- the repayment is 9% of gross salary
- the repayment is transacted as an automatic deducation (through PAYE though this could as easily be a direct debit)
- there is no particular schedule for clearing the debt, but, if it has not been cleared 25 years after repayment began, or if the student turns 65 years old ---- then the remaining debt will be cancelled
In fact, the UK student loan system is a really good offer. Though it does mean that British taxpayers (particularly those that do not get the chance to attend higher education) sacrifice the time-value of their tax-pounds. In other words, they stump up cash so that other people can get a higher education. The money might otherwise be spent on things such as better policing, better healthcare or better primary school services. What's more, the loans on offer are subsidised by taxpayers so that there are some tax-pounds that will never go towards other public services. (What this means is that there really is no such thing as 'free fees' - as somebody else will pay the cost!). All that being said, the recipients of interest-free student loans shouldn't feel so bad, as there is such a thing as non-private returns to education (in other words, externalities - including more tax revenues for govt.).
So, it may be the case that some students would prefer to have 'interest-free student loans' as well as 'improved higher education maintenance grants', rather than just maintaining the status quo of 'free fees'. At present, to get a full maintenance 'grant' of €3,420, the maximum income limit for a family of four children is €38,675 a year. For more than eight children, it is €46,140 a year. Former education minister Niamh Bhreathnach, who abolished tuition fees, admitted she was disappointed at these figures. For more on the 'grant' and its history, see this previous blog post.
What we do know is that the annual maintenance support of €3,420 seems very low, and that it falls very far below the €12,000 that students are estimated to need for their annual expenditure (see Eurostudent 3). Without part-time employment opportunities to cover the difference, will every student comtinue to attend college? Furthermore, what about the students who are not entitled to a grant but can't get a part-time job? That is, those students from a four-kid family with an income above €38,675? A Geary working paper from 2007, "Household Characteristics of Higher Education Participants", suggests that eligibility for maintenance grants is an important factor for encouraging particpation in higher education.
All of this leads to the suggestion that a better use of tomorrow's protest would be to call for interest-free student loans and improved higher education grants (improvements to both the amount of the payment and the level of family-income at which the grant is payable). All that being said, 'interest-free student loans' combined with 'improved higher education grants' is a much more expensive prospect for the government compared to simply introducing interest-free loans, or for that matter, simply re-introducing student fees.
One thing is for certain, if the 'free fees policy' is definitely on the way out (and the govt. deficit is certainly putting this on the agenda), then students would be better served lobbying for an interest-free loan system rather than protesting against the inevitable. What might be needed now is some thought on how to generate short-term finance for interest-free student loans (and perhaps even improvements to grants). One suggestion is to issue ring-fenced special savings bonds. These bonds would bear interest in the same way as any other Irish govt. bond; however, the buyers of these bonds would also know that they are generating cash-flow to support Irish higher education.
- Some 65pc of students earn at least some income from employment
- Students' spending averages €1,086.64 per month
- The most popular job held by students is shop assistant, followed by working as waiters or waitresses and then bar staff
The third Eurostudent Survey reports on 2007 field-work that was conducted here with colleagues at the Geary Institute. Now we are at the start of 2009 - and with economic recession underway - the concern of working more than 20 hours a week during college is mostly a thing of the past. Despite this, student expenditure costs of approximately €1,000 a month (or €12,000 a year) still have to be financed. So average living costs of a four-year undergraduate degree are circa €50,000, and somehow they must be paid.
According to a report in today's Irish Times, over 20,000 students are expected to take to the streets of Dublin tomorrow to oppose the reintroduction of third-level fees, and to highlight the role they feel education should play in any economic recovery plan. It might be the case that a better use of the protest would be to re-direct the campaign towards a call for improved higher education grants.
The rationale for this stems from the unemployment problem that students now face. Instead of worrying about whether they are working too many hours, or wishing they had a handier number, many students are now lucky to have any job at all. A discussion on this issue is provided by Bridget Fitzsimons in the current edition of the UCD University Observer: "No part-time means full-time trouble...". "Student Advisor, Aisling O’Grady has noted 'a definite marked increase' in those visiting (UCD) Student Advisors for financial advice after being unable to find employment." For any students in severe financial difficulties, some options for advice and support are mentioned in the article. One comment about the new conditions facing students is provided by Juan Houlihan in 1st Arts:
"...I couldn’t go home every weekend for work, and I thought it would be easy to find work in Dublin. I’ve looked in a lot of places, but nowhere will even look at CVs. It’s difficult, and if I didn’t have grants to cover some expenses, I’d be in a lot of trouble. It’s hard to get through college..."
With the uncertain and unlikely prospect of getting a part-time job to cover living costs during higher education, students would gain considerably from an improved higher education grant. This could be a preferable option if there were to be an either/or scenario between 'free frees' or 'improved grants'. The re-introduction of fees in the context of an interest-free student loan system has been tabled by the Minister for Education, Batt O'Keefe. An interest-free lending initiative would mean that students would not have to worry about the cost of their higher education until they have secured post-graduate employment and are earning above a certain level of salary. In a detailed discussion of interest-free student loans on this blog, it was previously noted that the UK student loan system has the following features:
- repayments do not start until April of the year after students have completed their course
- repayments do not start until the student is earning more than 15,000 pounds
- the repayment is 9% of gross salary
- the repayment is transacted as an automatic deducation (through PAYE though this could as easily be a direct debit)
- there is no particular schedule for clearing the debt, but, if it has not been cleared 25 years after repayment began, or if the student turns 65 years old ---- then the remaining debt will be cancelled
In fact, the UK student loan system is a really good offer. Though it does mean that British taxpayers (particularly those that do not get the chance to attend higher education) sacrifice the time-value of their tax-pounds. In other words, they stump up cash so that other people can get a higher education. The money might otherwise be spent on things such as better policing, better healthcare or better primary school services. What's more, the loans on offer are subsidised by taxpayers so that there are some tax-pounds that will never go towards other public services. (What this means is that there really is no such thing as 'free fees' - as somebody else will pay the cost!). All that being said, the recipients of interest-free student loans shouldn't feel so bad, as there is such a thing as non-private returns to education (in other words, externalities - including more tax revenues for govt.).
So, it may be the case that some students would prefer to have 'interest-free student loans' as well as 'improved higher education maintenance grants', rather than just maintaining the status quo of 'free fees'. At present, to get a full maintenance 'grant' of €3,420, the maximum income limit for a family of four children is €38,675 a year. For more than eight children, it is €46,140 a year. Former education minister Niamh Bhreathnach, who abolished tuition fees, admitted she was disappointed at these figures. For more on the 'grant' and its history, see this previous blog post.
What we do know is that the annual maintenance support of €3,420 seems very low, and that it falls very far below the €12,000 that students are estimated to need for their annual expenditure (see Eurostudent 3). Without part-time employment opportunities to cover the difference, will every student comtinue to attend college? Furthermore, what about the students who are not entitled to a grant but can't get a part-time job? That is, those students from a four-kid family with an income above €38,675? A Geary working paper from 2007, "Household Characteristics of Higher Education Participants", suggests that eligibility for maintenance grants is an important factor for encouraging particpation in higher education.
All of this leads to the suggestion that a better use of tomorrow's protest would be to call for interest-free student loans and improved higher education grants (improvements to both the amount of the payment and the level of family-income at which the grant is payable). All that being said, 'interest-free student loans' combined with 'improved higher education grants' is a much more expensive prospect for the government compared to simply introducing interest-free loans, or for that matter, simply re-introducing student fees.
One thing is for certain, if the 'free fees policy' is definitely on the way out (and the govt. deficit is certainly putting this on the agenda), then students would be better served lobbying for an interest-free loan system rather than protesting against the inevitable. What might be needed now is some thought on how to generate short-term finance for interest-free student loans (and perhaps even improvements to grants). One suggestion is to issue ring-fenced special savings bonds. These bonds would bear interest in the same way as any other Irish govt. bond; however, the buyers of these bonds would also know that they are generating cash-flow to support Irish higher education.
Behavioural Economics and Scams
The Nudge blog wonders whether Nudge ideas are leading to scams
http://nudges.wordpress.com/2009/02/03/has-nudge-unintentionally-lead-to-airline-marketing-scams/
I dont want to get into specific examples but the dogs in the street know that some companies use defaults for all sorts of nefarious (though not neccesarily illegal) purposes and did so long before they would have heard of behavioural economics.
An article from a few years talks about the potential benefits of defaults but also how important they are to companies and some of the legal issues involved
http://us.ft.com/ftgateway/superpage.ft?news_id=fto082920061459015528
One thing Nudge and wider discussion of behavioural ideas might do is to increase awareness of how defaults in airlines and financial institutions that may be framed as attractive may actually lead us to do things that we would certainly not do if making active and informed choices.
http://nudges.wordpress.com/2009/02/03/has-nudge-unintentionally-lead-to-airline-marketing-scams/
I dont want to get into specific examples but the dogs in the street know that some companies use defaults for all sorts of nefarious (though not neccesarily illegal) purposes and did so long before they would have heard of behavioural economics.
An article from a few years talks about the potential benefits of defaults but also how important they are to companies and some of the legal issues involved
http://us.ft.com/ftgateway/superpage.ft?news_id=fto082920061459015528
One thing Nudge and wider discussion of behavioural ideas might do is to increase awareness of how defaults in airlines and financial institutions that may be framed as attractive may actually lead us to do things that we would certainly not do if making active and informed choices.
Geary Institute Symposium
Dear Colleague,
Janet Currie is a Professor of Economics at Columbia University. She is a Research Associate at the National Bureau of Economic Research and an affiliate of the University of Michigan's Poverty Center and has served on several National Academy panels. She has held positions at MIT, Princeton and UCLA. Her recent work, amongst many other interests, evaluates the extent to which programmes for poor children and families can be viewed as successful social investments. She has also extensive interests in the intergenerational relationships between parents and children in outcomes such as health and education.
The Centre for Market and Public Organisation (CMPO) is a leading research centre at the University of Bristol. CMPO studies the intersection between the public and private sectors of the economy, to understand the right way to organise and deliver public services. The Centre aims to develop research, contribute to the public debate and inform policy-making.
To mark the visit to Dublin by Janet Currie, researchers at the CMPO and the UCD Geary Institute have joined forces to organise a workshop being held in UCD Geary Institute 24th February 09 entitled "Health, Education and Social Outcomes for Children".
The full day workshop will be held in the Geary Institute seminar room B003/4. Please find the programme below for info.
It would be much appreciated if all RSVP's were sent back before 15th February as to allow time to make appropriate arrangements for the attendance. Please indicate if you are just attending for Janet's talk, or the whole event where possible.
Please send RSVP's to Emma Barron (emma.barron@ucd.ie / Ph: 01 - 7164631)
Kind regards
Colm
---------
24th Feb
1115 Early conditions and Health - Evidence from Irish History
Liam Delaney (UCD)
1145 Understanding the Relationship Between Parental Income and Multiple Child Outcomes: A Decomposition Analysis
Elizabeth Washbrook (Bristol)
1215 The Early Childhood Determinants of Time Preferences
Orla Doyle (UCD)
1245 Break to allow lunch to be set up etc
1300 Working Lunch & Keynote:
Child Health and Young Adult Outcomes
Janet Currie (Columbia)
1430 Cross-Generational Predictors at 5 Year Follow-Up in Lifeways Cohort Study of 1000 Irish Families: Preliminary Findings
Cecily Kelleher (UCD)
1500 Child weight and academic outcomes
Stephanie von Hinke Kessler Scholder (Bristol)
1530 Examining the Impact of Early Childhood Services on Social and Biological Outcomes: Proposed Plan for International Comparison
Sylvana Cote (Montreal/UCD)
1600 Break
1615 Beyond Test Scores: the Role of Primary Schools in Improving Multiple Child Outcomes
Claire Crawford (Institute of Education, London)
1645 Child Support and Educational Outcomes
Ian Walker (Lancaster/UCD)
1715 DISCUSSION
1800 CLOSE
Janet Currie is a Professor of Economics at Columbia University. She is a Research Associate at the National Bureau of Economic Research and an affiliate of the University of Michigan's Poverty Center and has served on several National Academy panels. She has held positions at MIT, Princeton and UCLA. Her recent work, amongst many other interests, evaluates the extent to which programmes for poor children and families can be viewed as successful social investments. She has also extensive interests in the intergenerational relationships between parents and children in outcomes such as health and education.
The Centre for Market and Public Organisation (CMPO) is a leading research centre at the University of Bristol. CMPO studies the intersection between the public and private sectors of the economy, to understand the right way to organise and deliver public services. The Centre aims to develop research, contribute to the public debate and inform policy-making.
To mark the visit to Dublin by Janet Currie, researchers at the CMPO and the UCD Geary Institute have joined forces to organise a workshop being held in UCD Geary Institute 24th February 09 entitled "Health, Education and Social Outcomes for Children".
The full day workshop will be held in the Geary Institute seminar room B003/4. Please find the programme below for info.
It would be much appreciated if all RSVP's were sent back before 15th February as to allow time to make appropriate arrangements for the attendance. Please indicate if you are just attending for Janet's talk, or the whole event where possible.
Please send RSVP's to Emma Barron (emma.barron@ucd.ie / Ph: 01 - 7164631)
Kind regards
Colm
---------
24th Feb
1115 Early conditions and Health - Evidence from Irish History
Liam Delaney (UCD)
1145 Understanding the Relationship Between Parental Income and Multiple Child Outcomes: A Decomposition Analysis
Elizabeth Washbrook (Bristol)
1215 The Early Childhood Determinants of Time Preferences
Orla Doyle (UCD)
1245 Break to allow lunch to be set up etc
1300 Working Lunch & Keynote:
Child Health and Young Adult Outcomes
Janet Currie (Columbia)
1430 Cross-Generational Predictors at 5 Year Follow-Up in Lifeways Cohort Study of 1000 Irish Families: Preliminary Findings
Cecily Kelleher (UCD)
1500 Child weight and academic outcomes
Stephanie von Hinke Kessler Scholder (Bristol)
1530 Examining the Impact of Early Childhood Services on Social and Biological Outcomes: Proposed Plan for International Comparison
Sylvana Cote (Montreal/UCD)
1600 Break
1615 Beyond Test Scores: the Role of Primary Schools in Improving Multiple Child Outcomes
Claire Crawford (Institute of Education, London)
1645 Child Support and Educational Outcomes
Ian Walker (Lancaster/UCD)
1715 DISCUSSION
1800 CLOSE
Monday, February 02, 2009
Vox on Innovation and Venture Capital
"The current financial crisis has shut off venture capitalists’ opportunities to cash in their investments by bringing their portfolio firms to public stock markets. As a consequence, they are currently hesitant to invest in young firms in the first place. However, taken together, the evidence supporting the positive impact of VC on innovation is weak at best. Some innovations, especially less profitable ones, may take more time to be commercialised, but innovation is likely to persist even during this downtime, thanks to scientific curiosity and enthusiasm"
See the full article below
http://www.VoxEU.org/index.php?q=node/2919
See the full article below
http://www.VoxEU.org/index.php?q=node/2919
The Development of Personality Over the Life Cycle
Bart Golsteyn will be giving a seminar at 1pm in Geary tomorrow on "Economics and Personality." Borgahns and Golsteyn (2008) have done some work with the DBN Dutch panel data to examine whether changes in personality are related to changes in outcomes and/or specific events and activities during the life cycle.
They report that individuals become more extraverted, conscientious and emotionally stable across the life course. Openness to experience has a hump-shaped relation with age. Risk aversion increases dramatically after adolescence but remains relatively stable thereafter. They also report that individuals who start their college education become more extraverted and agreeable but less emotionally stable and conscientious.
In addition, Borgahns and Golsteyn report that time preference has a U-shaped relation with age: adolescents have very high time preference, then at 36 years of age time preference reaches its minimum, after which it increases again. This is the first longitudinal evidence that we know exists on time preferences. As we mentioned on the blog before, no longitudinal study has previously measured the mean-level stability of time preference over the life cycle, according to Frederick et al. (2002).
They report that individuals become more extraverted, conscientious and emotionally stable across the life course. Openness to experience has a hump-shaped relation with age. Risk aversion increases dramatically after adolescence but remains relatively stable thereafter. They also report that individuals who start their college education become more extraverted and agreeable but less emotionally stable and conscientious.
In addition, Borgahns and Golsteyn report that time preference has a U-shaped relation with age: adolescents have very high time preference, then at 36 years of age time preference reaches its minimum, after which it increases again. This is the first longitudinal evidence that we know exists on time preferences. As we mentioned on the blog before, no longitudinal study has previously measured the mean-level stability of time preference over the life cycle, according to Frederick et al. (2002).
Psychological Traits and the Gender Gap in Wages
Nils Braakmann from Leuphana University, Lüneburg has used the German Socio-Economic Panel to show that differences in various non-cognitive traits, specifically the “Big Five”, positive and negative reciprocity, locus of control and risk aversion, contribute to gender inequalities in wages and employment. The evidence suggests that gender differences in psychological traits are more important for inequalities in wages than in employment. Differences in the “Big Five”, in particular in agreeableness, conscientiousness and neurocitism matter for both wages and employment. The paper is available here.
Joe Ferrie Seminar
Economic historian Joe Ferrie (Northwestern) will present a paper in the UCD School of Economics this Friday. The presentation will be particularly appealing to those interested in how early life conditions influence later life outcomes. The paper is entitled :"Healthy, Wealthy, and Wise? Physical, Economic and Cognitive Effects of Early Life Conditions on Later Life Outcomes in the U.S., 1915-2005."
The seminar is scheduled for 3pm on Friday February 6th in G214 of the Newman Building.
Abstract:
Understanding the link between early and later circumstances is vital to enhancing our understanding of basic physiological, social, and economic mechanisms in operation over the entire life course, to identifying the protective factors that mitigate the negative effects of some early life experiences, and to designing effective interventions that reduce the long-term costs of adverse early life conditions. This project assesses how circumstances very early in life (e.g. economic privation, social isolation, proximity to environmental hazards or to medical care, exposure to unfavorable local disease environments) contribute to outcomes that are observed
only decades later. It examines nationally representative data that follows several million individuals (who were born in the U.S. between 1895 and 1929 and who died in the U.S. between 1965 and 2006) from under age 5 until their death, with a wide range of information on early-life circumstances (at the individual, household, and community levels) and later life physiological, cognitive, and economic outcomes. This makes feasible for the first time linking early and later life circumstances across the twentieth century for a variety of sub-populations defined either in terms of demography (gender, race, specific birth cohort) or geography (region, city, neighborhood, block). The early-life information available for individuals includes exact place and date of birth, ethnicity, birth order, school attendance, the socio-economic status, ethnicity, and employment of both parents and neighbors, proximity to schools, stores, churches, and environmental hazards, and measures of the local disease environment. The later-life information includes adult height and weight, intelligence, educational and occupational attainment, income, disability, longevity, and specific cause of death.
The seminar is scheduled for 3pm on Friday February 6th in G214 of the Newman Building.
Abstract:
Understanding the link between early and later circumstances is vital to enhancing our understanding of basic physiological, social, and economic mechanisms in operation over the entire life course, to identifying the protective factors that mitigate the negative effects of some early life experiences, and to designing effective interventions that reduce the long-term costs of adverse early life conditions. This project assesses how circumstances very early in life (e.g. economic privation, social isolation, proximity to environmental hazards or to medical care, exposure to unfavorable local disease environments) contribute to outcomes that are observed
only decades later. It examines nationally representative data that follows several million individuals (who were born in the U.S. between 1895 and 1929 and who died in the U.S. between 1965 and 2006) from under age 5 until their death, with a wide range of information on early-life circumstances (at the individual, household, and community levels) and later life physiological, cognitive, and economic outcomes. This makes feasible for the first time linking early and later life circumstances across the twentieth century for a variety of sub-populations defined either in terms of demography (gender, race, specific birth cohort) or geography (region, city, neighborhood, block). The early-life information available for individuals includes exact place and date of birth, ethnicity, birth order, school attendance, the socio-economic status, ethnicity, and employment of both parents and neighbors, proximity to schools, stores, churches, and environmental hazards, and measures of the local disease environment. The later-life information includes adult height and weight, intelligence, educational and occupational attainment, income, disability, longevity, and specific cause of death.
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