Saturday, September 29, 2007

Marriage

Since I was at my cousin's wedding today, I figured I'd steal this from Dr. Mankiw:
The narrative of rising divorce is also completely at odds with counts of divorce certificates, which show the divorce rate as having peaked at 22.8 divorces per 1,000 married couples in 1979 and to have fallen by 2005 to 16.7.

Here's hoping.

Friday, September 28, 2007

Obscure Scholarships

Uh, if anyone wants to apply for the "Canadian Japanese Mennonite Scholarship", there's a poster up in the economics department. Seriously.

This, apparently, beats out SSHRC.

Friday Nights

Nothing like Friday nights in the economics department. Playing Civilization 4 with the grad students and the new prof. And here I thought I was going to get some math assignments done.

To get serious, we closed above parity today. Not that it matters.

This is also why I try not to read the Oil Drum. In a post about a proposed carbon tax, in the midst of reeling off reasons why the tax is bad:
Everyone would pay more for motor fuel.

Well, uh, yeah. That's the whole point. I wish, for the nth time, that they would get their collective act together. It purports to be serious, but most of the authors (definitely not all) who post are very much sub-par. Which is sad, because a ton of work goes into that site.

And 'The Economist' had a poor issue this week. That's about it.

Thursday, September 27, 2007

SSHRC Funding, II

As some of you may be aware, SSHRC (the main funding agency for graduate studies in economics), divides funding into two parts: Cash for master's degrees, and cash for doctorates. One is prohibited from applying to both, which places me in a dilemma.

One. I am effectively a "lock" for a master's scholarship, worth $17,500 for one year of study in an MA program.
Two. My odds are unknown for a doctoral fellowship, which takes a wide range of values (between $20,000 and $105,000).
Three. Not applying to a doctoral fellowship would negatively affect my chances of being accepted to a US PhD.
Four. Most importantly, I don't know the rules of the game. I am unsure of what sort of negotiation is allowed, say if I won a Master's and went to Brown, or won a doctoral, and went to Queen's.

My instinct is to apply to the doctoral awards. Will keep you posted.

EDIT: Here's the list of schools currently on my application list:
MA: UBC, Toronto, Queen's.
PhD: Brown, Minnesota, Yale, Princeton, Berkeley.

Wednesday, September 26, 2007

Adjustment to Equilibria

Seriously, I should change the name of this place to 'Andrew's Globe Review' or something. Despite all the news sources and blogs in my aggregator, the Globe is the one that always piques my interest. Two short tidbits.

A TD study confirms what I've been saying for years (albeit not in this space), arguing that the gender wage differential is just part of an adjustment towards equilibrium, and not because of any male conspiracy against the other half of the world. Now if we can just make the Women's Studies department listen. Fat chance.

A class action lawsuit against Canadian car manufacturers for allegedly colluding to keep prices up, even as the Canadian dollar appreciated. The sentiment is nice, but I seriously doubt there's anything here besides the fact that markets don't adjust instanteously to shocks. (Especially when prices are set only once each model year by the manufacturers.)

Memo to world: The speed of light is faster than the speed of markets.

EDIT: What news sources/blogs should I be reading?

Let's Tax iPods

As I pointed out some time ago, there's been some movement towards taxing mp3 players as instruments of piracy, just as blank digital media is so taxed.

However, should we not also hit them up with a Pigovian tax to counteract the negative externality? Whenever someone is plugged into music, they recieve all the benefits (in terms of having their music with them), but become less careless of their environment (trampling grass and bumping into people), deprive others of the opportunity for social interaction, and generally make it more awkward. For example, I routinely see people purchasing from Tim's with headphones in, which always complicates the process, extending everyone else's wait.

So, let there be a tax! I'm suggesting ipods in particular because nobody would really object to taxing that part of the population, and because I suspect that most people in the ipod market don't see generic mp3 players as close substitutes, so the tax will collect all the more.

Monday, September 24, 2007

Auto Manufacturing

I don't think I've ever managed to find any sympathy for people affected by auto-sector restructuring, and not only because I am light-years away from being able to afford a car.

Regardless, I don't need to provide a conservative's view about the role for government in accomodating these things. No bailouts. The NDP, however, (Canada's socialists), are inclined to disagree. Though the Liberals do the same thing.

Anyway, let me be a cynic for a moment. From Forbes:
The two sides are considering a type of health care trust fund called a voluntary employee beneficiary association, or VEBA. Such a fund could save General Motors billions of dollars in retiree costs. In a VEBA, GM would provide the initial money to fund a trust. The UAW would assume responsibility for managing and investing the money, which would be used to pay for retired employees' health care costs.

Now, since I don't think this VEBA saves billions in administrative costs, synergies, etc, that implies UAW is willing to take the hit for said costs, since GM doesn't save these billions from nowhere.

Of course, that's a small price to pay for the added prestige/influence of having all that money under UAW's control. Besides, they can keep benefits even for a while by running down the plan/running up unfunded liabilities/I'm not an accountant. I doubt they will actually fund all those billions themselves. Of course, rapid growth of their membership would also do the trick, but that's fairly unrealistic, I should think.

But I do understand incentives. UAW's interests, by definition, are not precisely aligned with that of whom they represent, and it seems GM management is exploiting the difference.

Sunday, September 23, 2007

Superstardom

Once again, I am reminded that my comparative advantage is not as a research economist. (Though I have more 'A+' grades than him.)

See, as much as the idea of being a "famous economist" appeals, I always wonder if that's what I want to be. Or strive to become. There is something innately appealing about lounging in an office with a playstation and a stack of anime, not being expected to crank out papers like lightning, being able to converse with students, being able to teach, not working sixty hours a week.

Now, I fully realize that reputable graduate programs try to weed out those that don't want the high-powered research lifestyle. But I want to get into the best program possible, if only so I can be exposed to that elite level of academia and make an informed decision as to whether I want to push for as far as I can go, or call it an innings in midafternoon and do something else.

Saturday, September 22, 2007

Laws of Blogging Economics

I'm sure there are more of these, but here's a hard and fast one:

Anyone who discusses the price of gold is not worth listening to.


I have yet to see a counterexample.

Friday, September 21, 2007

Book Prices Redux

I just want to remind my loyal readers the extent to which I've been ahead of the curve on this one. From Free Exchange:
I [don't] know what you all are doing this weekend, but I have a new agenda item planned. Rent a truck, drive to the nearest bookseller, buy them out, and drive northward. Today, for the first time in thirty years, the Canadian dollar has achieved parity with the American dollar.

Seriously. I was all over this back in July. Why doesn't someone give me free sushi? I work Saturdays, too.

ANECDOTE: Getting good sushi in St. John's is, to the best of my knowledge, an impossibility.

WAFF

For those of you unfamiliar with the lingo: WAFF = Warm And Fuzzy Feeling.

So, I struggling to stay awake about 80 minutes through an economics of health class (it's hard to doze when you're the only student in the class) when the professor mentioned something about a 'caring externality'.

The idea is that utility functions are interdependent, and that I derive satisfaction from seeing other people not dying on the streets, or more formally, from seeing them consume health services.

I am sorely torn on whether this is a legitimate externality. From basics: an externality is when the marginal social benefit does not equal the marginal private benefit, or vice versa for costs. In this case, it does seem equality does not hold, because someone I know who consumes health care also confers benefits on me, because I prefer seeing them healthy than ill.

BUT! Doesn't this argument extend to everything? Food? Video games? Should the government subsidize Halo 3 because then I'll be able to play with more people, and more people I know will be able to enjoy the game, which subsequently makes me happier?

This clearly is leading us into a minefield. If we accept the 'caring externality' for health care, we accept that every good has such a positive externality attached. I have not legitimately heard this suggested by anyone, and nor would I take seriously anyone who suggested it.

Thus, I reject the concept of the 'caring externality' until I can think of a more cognet argument in its defense.

POSTSCRIPT: I do not plan on purchasing Halo 3.

Thursday, September 20, 2007

Parity!

I guess I shouldn't abandon my predictions so quickly.

Family business entails me to keep this short. Expect fewer updates for the next couple of days. For the four IP's that follow this.

Wednesday, September 19, 2007

SSHRC Funding

For those of you unaware, the SSHRC (Social Sciences and Humanities Research Council) is where the good money is when it comes to Canadians seeking funding for graduate studies in economics. However, to my mind, the criteria for who gets these grants (often exceeding $100,000 for those completing a doctorate at a Canadian university), could use some rewriting.

Basically, the idea of the competition centres around trying to evaluate people on the basis of predicting their future research. They do this by inquiring what research will be completed while one is supported by the grant.

Okay, this sounds reasonable enough for professors. You want money? Okay, what are you going to do with it? Students, less so. For starters, the deadline for SSHRC funding for Fall 2008 - my anticipated start date (hopefully!) for a graduate program is due before the applications to the graduate schools themselves. Let alone before I actually know what school I will be enrolled at, or even which degree I will be pursuing; the MA, or the PhD.

Clearly, what school/degree I end up in will have a profound impact on what my time gets spent on. An 8-month coursework MA at Toronto is not going to see any substantial research output. Even if we assume that I will be accepted to a PhD program, whatever my dissertation ends up being related to will be heavily influeced by my graduate coursework and professors.

So, conclusion: The main determinant of the ability of a Canadian gradute student in economics to secure funding is best determined by one's ability to fake a good research proposal. Note that SSHRC, having awarded the funding, requires no commitment for one to actually complete the proposed project.

Now, bear with me. It gets worse. If the object of the competition was to see who could dream up the best research proposal, fine. Someone who is more in-touch with the literature, is interested in research, etc, is more likely to be able to come up with a good proposal, and I'm willing to bet those prior characteristics correlate very well with future research ouput.

But the shoe drops. The proposal will be evaluated by people, who, for the most part, will not have any experience in economics. (Or vice-versa: my folklore proposal might be evaluated by an economist.) So the proposal is forced to be non-technical.

Final Conclusion: SSHRC funding is determined by the ability of an applicant to pander to the warm, fuzzy feelings of people who know next-to-nothing about your discipline. And I will not admit that the generation of fluff is correlated with future research output.

ANECDOTE: I'm tentatively entitling my proposal "Endogenous Economic Growth, Patterns of Canadian Innovation, and Public Policy", which, drawing on the theory of creative destruction and the economic relationships implied therein, will (never actually) look into a large number of exogenous shocks (predominately from political action) to the system of technical innovation in Canada. Results will hopefully analyze the nature of successful, growth-inducing policy, and produce theoretical refinements in the area of endogenous growth.

Good News Dashes Hopes

Inflation data surfaces today, crushing my hopes of having a prediction come true, as the CPI falters, with the corresponding reduced expectation for interest rate hikes, which in turn would tend to place downward pressure on the dollar.

Inflation was running at 1.7% y/y, and prices actually decreased by 0.3% over the month of August. If we see similar data come out of the USA in the near future, it will make Bernanke seem prescient.

More interestingly, let us remind ourselves of what an increasing dollar can do in the fight against inflation: the prices of the goods-only index fell 0.8% for the month, and is down -0.4%
for the year as a whole. I would attribute that deflation entirely to the currency appreciation.

Which isn't a good thing for those counting on US inflation to remain dormant.

Tuesday, September 18, 2007

A Prediction!

Given that Bernanke has seen fit to cut rates by a full 50 beeps (yarr, a bond trader be I!), I will make a prediction.

(The completely irrelevant goal of) parity will be reached on Friday's close.

I might as well get started on the advice of a master:
The experience of being proven completely wrong is salutary. No economist should be denied it and none are.
--John Kenneth Galbraith

I'm not sure how I feel about the rate cut itself. I doubt I would have gone so far. It certainly relieves the pressure for Canada to cut, though. I'd bet on the Canadian rate being up 25bps by Christmas.

EDIT: Fixed, sorry.

A Note About QALYs

So, I was just out for a run around the pond - beautiful out - and a thought occured to me. The health economics literature uses the concept of 'QALYs' - Quality-Adjusted Life Years - as their cost-effectiveness tool. If drug A can save more QALYs than drug B, and both cost the same, choose A.

But I was pretty sure that a pretty big thing in micro was that interpersonal (or even intertemporal) utility comparisons are not valid. Period.

What happens if life is an experience good? Can we make the argument that knocking off someone at 1 day probably isn't that detrimental, because nobody depends on them? Does the death of an elder confer huge loss? Either way, it's a concept that ruffles my feathers, as it were.

Foreclosures

I'm sure a lot of the (quite arguably justified) doom-and-gloomers will be picking up on this data in the (very) near future:
The number of foreclosure filings reported in the U.S. last month more than doubled versus August, 2006, and jumped 36 per cent from July[.]

Particularly Econbrowser. Regardless.

The one question that I've never managed to receive a satisfactory answer to is what percent of these foreclosures are people being kicked out of their homes, and what percent are real estate speculators who've had the value of their speculations drop in the middle of the flip, and are now finding it to their advantage to let the payments lapse and have the bank take the house in exchange for the debt.

I have yet to see whether such figures exist, and the nature of how much of these foreclosures fall into each category has real implication (in my mind) for monetary policy.

The Virtues of Competition

Now, I have about as much need for a real, live teller as I do for nicely appointed DVDs I'll never watch, but seeing both makes me happy:
CIBC's decision to start opening some of its Toronto- and Vancouver-area locations on Sundays, beginning later this year, comes as Toronto-Dominion Bank is aggressively recruiting staff in preparation for Nov. 1. That's the day TD rolls out its new extended hours.

The change will bring the number of hours the average TD branch is open each week to more than 60 from about 50.

And a Royal Bank of Canada spokeswoman said yesterday that all of its main market branches are moving, or have moved, to extended hours.

And lo, the market responds to demand. Pretty neat, eh?

Link here.

Monday, September 17, 2007

On Economics

This is, of course, a patently stupid topic to be discussing, but I just returned from a seminar given by one of the world's most eminent chemists, James Tour. You may know him by proxy from his work on nanocars, research which he led. (The wheel effort, if I understand, owes a lot to Newfoundland.)

Anyway, he was an excellent presenter. He was in the middle of discussing the use of carbon nanotubes for fighting ex post radiation treatment, since said tubes can somehow capture/neutralize the creation of free radicals, which are spawned by radiation impacting cells, causing a chain biological reaction with successively more radicals, killing off your stem cells, at which point you die. But I was thinking how bizarre it was that nobody contradicted his view.

Now, you go to a seminar in economics. Any one. I don't care which. How often will everyone agree with everything the person is saying? I humbly submit this is rare, to say the least. But in the questions after the presentation, it was all about building on the current research to actually produce more things, not whether what he had presented was valid. In economics, it's about questioning the assumptions.

Economics, of course, can make no such claims to being a natural science, but we should remember that it is actually people in said natural sciences that are producing those all-critical technological advances upon which the rest of us rely for increasing living standards.

We should also not forget that our profession (well, not mine, yet, anyway) does have an indirect role in providing these people support. I'm pretty sure research funding tends to dry up during a recession, and I think at this point it's hard to deny that we have collectively gotten better at running society from an economic standpoint.

Metanomics

I won't be in attendance, but if you play Second Life, you may want to become aware of an initiative called 'Metanomics'. And what is that, exactly? "Metanomics is the study of business and policy in the "metaverse" of virtual worlds." (From here. HT: Kotaku.)

If you don't want to bother logging in, you can watch it over at the Second Life Cable Network. Some of the more interesting ones look like a discussion of contract law in online worlds (given by an Indiana law prof), and on the taxation of virtual worlds (given by a Texas Tech law prof).

Now, I'm skeptical of how much anyone can actually learn from any of this - very much so - but who knows. I am not a central planner who decides what computing, lwill get funded and what will not.

Sunday, September 16, 2007

On...English Language Techniques and Parity

Not much to say this weekend. Turning 21 and whatnot has kept me busy, plus a math assignment that lasted till friday midnight. As typical of friday nights, the resident monetary prof was still there when I left at 12:20am or something stupid. There's a certain respect garnered at that point, especially considering all the other profs and grad students are gone by 4. It was an excellent assignment, though.

Anyway, resident english majors can feel free to correct me, but the...simile? metaphor? personification? embodied in headlines like this has always driven me nuts:

"Economists gird for parity as dollar tops 97 cents."

Does reaching parity hospitalize economists with chest pains? Are we going to have to break out the Tylenol? Is some disembodied hand going to punch all those who said the dollar at 64 cents was going straight down?

More importantly, does reaching parity actually constitute anything significant that's not derived from psychological effects? Are we going to see retailers radically reorient their pricing schemes as the dollar moves the remaining three cents? (I wish. I'd stop my book boycott.)

Anyway, fewer sensational headlines, either about the imagined physical distress the dismal science suffers from reaching round numbers, or the imagined impact reaching those round numbers will have.

(Link here.)

Friday, September 14, 2007

Today's Globe

If you live in Canada, make a point to read today's Globe & Mail. They're not always perfect, but today's issue was definitely one of the better ones I can recall. Some tidbits.

1) China surpassed Canada in feeding imports to the United States, ferrying $312.2b between August 1, 2006 and July 31, 2007, while Canada sold $305.6b over the same period. Figures in USD.

2) The CN tower, standing 553m, lost it's hold as the world's tallest freestanding structure as construction crews working on the Burj Dubai hit 555m yesterday.

3) The OECD (the holy grail for Canadian public policy - trust me, I worked there {the latter, not the former}) has come on record as declaring biofuels - notably ethanol, of which corn ethanol is the worst - to be bad.
...[biofuels] offer a cure worse than the disease they seek to heal...[governments should] cease to create new mandates for biofuels and investigate new ways to phase them out."

4) Tim Hortons, my preferred national icon, is hooking up with Wal-mart to place coffee shops in their stores. Does this presage further US expansion? If you live south of 49, hope so. Related: McDonald's coffee ranked better than Starbucks. I'd believe it.

I apologize for not providing links, but I do have (some) constraints.

Yatta!

I have an assignment on gauges that's staring me in the face, one that I really should look at before class, but let me first reference this:
Manga, anime and video game-related stocks made a noticeable rise on the Tokyo Stock Exchange on Wednesday, after Prime Minister Shinzo Abe announced his resignation. The sudden rise can be attributed to expectations that the self-proclaimed manga and anime fan Aso Taro, currently the Liberal Democratic Party’s Secretary General, will succeed Abe as Japan’s next prime minister...
...
Among the stocks that rose on Wednesday is the Tokyo-based card game company “Broccoli,” whose stocks went up from 92 yen to 157 yen, a 71% rise.
...
Aso Taro’s interest for manga is well-known, and claimed in a 2003 interview that he read some 10-20 manga publications a week. Taro also established the International Manga Prize in 2007, for non-Japanese manga authors. He received some headlines ahead of the French presidential election this year for recommending Segolene Royal to read more manga, after she had criticized it for being violent and pornographic.

I am amused! For those unaware, reading 10-20 publications is no mean feat. It takes me a good hour, if not more, to read one. Personally, I don't particularly enjoy them, though.

One wonders if there's something behind the market movements besides general excitment. Perhaps manga will start being distributed as part of Japanese foreign aid?

The Effect of Papers

Dani Rodrik counts some fan papers, noting that it has to be a sign of advanced age that one's been around long enough to have someone else chronicle your academic work.

The problem, of course, for 99.9999% of us, is not that papers make us feel old, but that they make us feel really, really stupid. Conceptualizing the idea that I will at some point in the future become a published author is particularly frightening.

Sadly, it will likely be an ecomomics paper, and not credits for video game dialogue or a novel.

Thursday, September 13, 2007

Newfoundland National Oil Corporation

The Globe provides a convenient link:
...the province would pay around $44-million to take a 5-per-cent stake in future extensions to White Rose, although that amount could change if exploration efforts indicate the oil reservoir - estimated to have reserves of 214 million barrels - turns out to be a different size than believed.

Plus, there are ambitious future plans:
Newfoundland and Labrador will seek a 10 per cent ownership stake in all oil and gas projects, Premier Danny Williams announced yesterday as he unveiled the province's first long-term energy plan.

Now, I'm not opposed to minority holdings by government in oil projects. Newfoundland has lost out - substantially - on previous resource plays. See: Churchill Falls. As long as government doesn't try to operate projects themselves.

The main problem, is, of course, that there's no more substantive reserves to exploit, now that Hebron's signed.

Blog Update and Language Laws

I've fooled around a little bit with the sidebars. Greg Mankiw gets demoted for not meeting my stringent criteria. Various 'Frivolous Destinations' have appeared below the ads, and for you keeping track at home, the AdSense has stood still since my last update on the subject.

I read this article in the Globe today. An undisclosed deal by the language police of Quebec (for those of you unfamiliar, yes, Quebec actually has special forces dedicated to keeping out English) targets the vide game industry:
The Entertainment Software Association of Canada says the deal with the Office quebecois de la langue francaise will result in significant costs for its members.

The language group said Monday it believes that more than 80 per cent of video games in Quebec will be available in French in 2009, compared with about 40 per cent right now.

How much do you want to bet that increase will not come from more english games being translated, but rather more publishers deciding not to release their product in Quebec?

Circles Within Circles

Slate gets critical of how private equity firms are making a few bucks from purchasing discounted debt from banks - debt that is becoming less valuable as the US economy sputters and the credit mess continues:
Typically, banks like Citigroup would commit to fund loans and then sell them off later to investors. But today, investors aren't particularly interested in such loans. The result: Banks are sitting on a few hundred billion dollars of debt committed to buyouts. And as credit conditions worsen, those loans lose their value. In other words, the overreaching of private equity firms like KKR, the Blackstone Group, and the Carlyle Group has reduced the value of bank loans.
...
And guess who wants to buy them? Private equity firms.
...
It sounds very complicated and convoluted. Private equity firms are raising money from investors, which they will use to buy the loans made by banks to private equity firms, who are using money raised from earlier investors to buy companies.

The story is not "private equity has an obligation to fix its own mess", but rather "banks shouldn't have guaranteed that they would fund private equity deals with so few strings attached".

Capitalism doesn't function well because someone who messed up your balance sheet owes you a favour next time, but rather because there's a strong incentive to learn from your mistakes.

Tuesday, September 11, 2007

Term Research & Grad Applications

Plans are for two term papers this fall, tentatively on how medical/hospital innovation is affected by how the health system is financed, and on the Newfoundland mining industry, in a historical/sustainable development context.

Neither topic is dear to my heart (or brain, as it were), but economics is a wide-ranging science full of good questions to be asked. Besides, it's not like my future specialities are fixed yet. Graduate studies are likely to be sufficiently differentiated from undergrad so as to reorient my preferences. (Yes, I know how lame it is to explain things through changes in tastes. Go away.)

I've also started the path to grad school by filling in the pre-application for Queen's. Right now, looks like I'll also apply to Toronto and Minnesota. UBC, Western, and some American reaches (Princeton, Yale), also look like possibilities. The strategy is only to apply to Ph.D programs I would consider 'reaches' - those that are a bit of a longshot, since I assume an MA improves my profile, and I place a substantial amount of value on the perceived ranking of my doctoral school.

Monday, September 10, 2007

On Online Worlds

Last year, I petitioned Blizzard for information about the World of Warcraft economy. As would be expected, I did not receive a reply. The fact that EVE Online is on it's way towards challenging Statscan makes me quite happy. The article is worth reading in entirety. (HT: MR)

Even so, I don't fundamentally see online games transforming the study of macroeconomics, as Alex Tabarrok suggests. People fundamentally play games in a realistic manner (i.e. with objectives consistent with real-world ones, such as profit maximization), because they are fun. Sure, there are going to be a number of good chances to witness purely exogenous shocks and see how people react (like when EVE introduced new mining technology, or when WoW released an expansion), but I doubt that macroeconomics will be able to start fundamentally answering a lot of questions that depend on unknown parameter values because people have started to game together. EVE is not going to resolve the slope of the Laffer curve, the marginal excess burden of taxation, whether a short-run Phillips curve exists, etc, etc.

I see lots of new models, especially those in topics like transport costs, but I don't see any answers that reasonably well-informed people outside of academic economics looking in could really care much about.

Saturday, September 8, 2007

Extracurricular Merit

I've always wondered why 'society' has a preference for certain after-school activities. This really first jumped to my attention when applying to MUN, noticing that I didn't qualify for many (most?) scholarships because I didn't volunteer my free time, participate in the right activities, or have demonstrable leadership qualities.

Okay, while these sound all well and good, the point of merit-based scholarships is to attract students to a school that will do a university credit. Is the student who scores mid-80's in high school, plays the saxophone, and volunteers at the SPCA really likely to do much more for the institution than the introverted physics nerd with the same grades?

Maybe this is just me whining about how I didn't get as much money as I would like four years ago (I can't believe I'm in my last year of undergrad) - but to a certain extent I just don't comprehend why volunteering earns more points than say video games, or why a team sport is worth more than running.

It's funny that in so many places, we've moved beyond judging people for their preferences. Now, I'm not comparing scholarship committees to segregationist America, but sometimes it's difficult for my mind to make a large distinction.

Hopefully, there's an economic rationale at work. I've even briefly poked through the literature, but I haven't seen anything on analyzing the returns to scholarship money, let alone breaking those returns down by personal characteristics. Maybe there is a secret pool of institutional knowledge that explains this, but I'm pretty sure it's just a blind preference based on what feels good.

WAFF has never been something I've enjoyed.

Class Sizes

For a typical year's worth of tuition (full course loads - five courses - for two of three semesters - I, like most, work during the summer), I pay $2,550.

This is substantially lower than what likely any student reading this pays. However, let me list my class sizes:
S={3,5,6,8,39}

This, I suspect, is also considerably better than what many students get. Which worries me, because I think the focus is too much on maintaining acceptable class sizes and less on other useful uses of funds, like research. Or attracting better professors. Etc. In the long run, I don't think small class sizes determine the success of universities that desire to be more than liberal arts colleges.

Thursday, September 6, 2007

Revolution!

From one of my math profs this morning:
At some point, we're just going to scrap the Riemann integral at the undergraduate level. Replace it with something better.

I am apparently out of touch with the mathematics journals. Of course, I do approve of advancing the curriculum on a regular basis. I don't know enough math to evaluate the implications of this. Note to self: Take that course on Lebesgue integration next term.

ANECDOTE: On a related note, this is the first class I've been in where it feels as if I'm below the median.

Wednesday, September 5, 2007

A Health Care Proposal

Okay, this is an idea I had this afternoon whilst daydreaming about health policy. In my defense, I was in 'Economics of Health Care'.

Let's rewrite the whole national insurance system such that all health care purchases are co-financed by the user. Let's also scale this by total health care expenditure. For example, the user pays 100% of the first $1000, 80% of $1k-$5k, 50% of 5k-10k, etc. I have not cruched the numbers. An acceptable mix of numbers/included services must exist for any health budget of your choice, though.

Combine this with a health voucher mailed to all citizens, scaled on income, like the GST rebate. A lump sum gets mailed out once every year, though households making a certain amount lose everything. Say payment = 5000(1 -(household income / 50000)). Subtract $10,000 off one's household income for each kid.

Let all health-care service providers go private. There, finished.

I'm sure there's a number of gaping holes, but it instinctually appeals to me. Thoughts?

Mathematics

Dani Rodrik states that:
....we use math not because we are smart, but because we are not smart enough.

Okay, granted. But also because it is quick, convenient, and highly reproducible. I can describe a consumer in only a few lines - it takes much longer verbally. Similarly, mathematics has shorthand for numerous things that are difficult or tedious to express in words.

Perhaps more importantly, it's a heck of a lot easier to remember a proof and deduce what it stands for than it is to memorize a lecture. An equation, while not a thousand words, is at least generally a hundred or so.

The only thing that concerns me is bumping into mathematical walls - when the profession, by and large, is limiting their work because of infamiliarity with the mathematics, or because the needed mathematics doesn't exist. I'm pretty sure the latter is not a concern, but the former may be (though it's well beyond my scope to evaluate, since I don't know the math).

ADDENDUM: All things equal, shouldn't the gap in knowledge of math between economists and mathematicians widen over time? Since we have to learn math+economics, while they are not so hindered? Or is this offset by diminishing marginal returns, i.e. each successive piece of math less useful and more difficult to learn?

Monday, September 3, 2007

Questions for Environmentalists

One genre of question I always try to work in to my conversations with environmentally-minded people goes something like the following: "So, how much of the ozone layer (or how much mercury in a certain lake, etc) would you sacrifice to reduce atmospheric C02 by 10 ppm?"

Denying this question is valid is a black mark, at least in my books. I don't particularly encourage you to try it out, though - I haven't found it much use at making friends. In fact, I have yet to see it spark a productive debate, but it remains interesting to. The notion of tradeoffs is always relevant.

POSTSCRIPT: Posting from St. John's.