The Sacred AEA Book Room
On my most recent trip to the AEAs I was reminded of the rules governing the "book room" where publishers, policy groups, and computer programs show their wares to economists. During past visits to this room this seems to me to be nothing more than advertising. This year, I did not register for the conference; therefore, I was prevented fromentering the room. Though I really did not care, I find this odd. Book publishersgive me tons offree books all the time. Why do they want to exclude me from theroom? They normally don't miss an opportunity to stick free books under my nose.So I doubt the publishers want this rule. The other entity that might desire this rule is the AEA, which wants to prevent free-riding on conference attendance.Economists may want to take advantage of the spatial agglomeration oflike-minded individuals without paying the registration fee. But, the necessary exclusion seems to occur at the main conference events. I certainly do not value a trip to the book room worth the price of registration...even if my school subsidizes my trip 100%. And the one area where most free-riding occurs, those engaged in the job search, is not excluded. You can read the message board and find the job disclosure codes publicly available. What is going on here? JC
Re: News Coverage and bad economics
If you already know the correct answers better than the professor why are you taking the class instead of teaching it? JC -Original Message- From: [EMAIL PROTECTED] [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, January 09, 2003 7:41 AM Subject: Re: News Coverage and bad economics Yes, indeed I was informed recently that I recieved an A- instead of an A in one of my PhD courses because I include too much historical content in my exam answers. I suppose there's no better way to protect faulty theory than to ignore the lessons of economic history. In a message dated 1/9/03 7:00:41 AM, [EMAIL PROTECTED] writes: Fred Foldvary a *crit : one is a better economist if one knows some law, history, geography, literature, political science, and philosophy. And besides his specialty, a good economist should know some history of thought, economic history, and something about the various schools of thought besides his own. True, but what do students in economics study all that? Too much maths usually divert students from all these topics : they just don't need all these to pass their exams. begin:vcard n:Girard;Bernard
External Value of the Nobel
There is an article in this morning's Wash Post that disputes the value of the recent Nobels awarded to professots at GMU and VCU to their respective institutions. "Still, David W. Breneman, dean of U-Va.'s education school and a scholar of higher education, said the Nobels signify little more than bragging rights for the schools. Fenn, 85, spent his most fruitful period of research at Yale University before accepting VCU's offer of a laboratory after his 1994 retirement. Smith, 75, already was being heralded as a likely future Nobel winner when GMU snagged him last year. "This is not an indication that the young people at either of these two institutions are doing work that's likely to produce Nobel prizes years from now," Breneman said. " This person is clearly a loser because 1) he is a Dean and 2)works in the education field; but he raises a legitamate question. How much more valuable are faculty positions and diplomas from graduate programs with Nobels? How do Harvard (graduatedegree provider)and Arizona (long-time employer)benefit fromSmith's Nobelrelativeto GMU (current employer)? How might we measure this? _John-Charles Bradbury, Ph.D.Department of EconomicsThe University of the South735 University Ave.Sewanee, TN 37383 -1000Phone: (931) 598-1721Fax: (931) 598-1145E-mail: [EMAIL PROTECTED]http://bradbury.sewanee.edu
TANSTAFB
I tried to send the to the list earlier, but it has not gone through according to my records. If this is a repeat message, I apologize. "There is no such thing as free blood." See this story below from The Charlotte Observer. Apparently, the Red Cross's "free" blood is too expensive for hospitals. http://www.charlotte.com/mld/charlotte/3673996.htm So what's going on? Is all this altruism simply a transfer to the Red Cross bureacracy? 10 hospitals plan to open blood center to compete with Red CrossMIKE STOBBEStaff Writer Ten local hospitals plan to open a new blood center by early next year. The plan, announced Tuesday, sets the stage for an unusual new battle for blood donations in the Charlotte area. The hospitals say they are reacting to price increases by the American Red Cross, the predominant blood collector and supplier in the area. Hospitals in other North Carolina communities have grumbled, too, but Charlotte hospitals are the first to move forward with concrete plans. The participating hospitals will provide loan guarantees to cover the more than $3 million in start-up costs for the center, which will operates as an independent, non-profit organization. But participating, together, the hospitals expect to see savings of $3 million once the center is up and running. Participating hospitals include Gaston Memorial Hospital, NorthEast Medical Center, Piedmont Medical Center, Carolinas Medical Center, Carolinas Medical Center -- Mercy, Carolinas Medical Center -- Pineville, Carolinas Medical Center -- University, Presbyterian Hospital, Presbyterian Hospital Matthews and Presbyterian Orthopaedic Hospital. A Red Cross spokeswoman said her organization is in favor of any efforts to increase blood donations in the area, but would be concerned if it results in a competition between blood collection agencies that might leave donors confused. _John-Charles Bradbury, Ph.D.Department of EconomicsThe University of the South735 University Ave.Sewanee, TN 37383 -1000Phone: (931) 598-1721Fax: (931) 598-1145E-mail: [EMAIL PROTECTED]http://bradbury.sewanee.edu topstory_fromthe_txt.gif Description: GIF image spacer.gif Description: GIF image
Re: PhD Gluts
Speaking from a student's perspective, I am not basing what I plan to study in college on the salaries that profession makes. Those of us who want to be in academia are usually not the same people who pay a lot of attention to money. I do not want to study economics to make money, but to study economics. Please excuse me, but I am going to have to call BS on this comment. What kind of car do you drive? How expensive are your clothes? What do you eat for dinner? What is your debt situation? All of these choices provide some indication of your expected life-time income. Would you really contiunue your college education if you knew you would earn the same income as the lowest skilled workers? You might for consumption reasons, but most people would not. Also, people who have studied a subject for four years and realize it pays peanuts are probably unwilling to change majors, because a low-paying degree is better than no degree at all. I disagree. The forgone income from writing a history disertation is likely to be quite high: 2-3 years (at least) of forgone income plus additional debt. Because the small liklihood of getting a job after getting your degree, on average, abandoning the degree is worth more than getting the degree. In fact, a friend of mine recently left grad school in history after heading up his school's search for a part-time adjuct slot. He said the CVs were glowing.
PhD Gluts
An article in today's Chronicle by Robert Wright http://chronicle.com/weekly/v48/i31/31b02001.htmposes the obvious economic solution to the glut in the History PhD market: cut wages. He argues that cutting salaries eliminates non-price rationing and makes the market more efficient. However, I have a problem with this. Whydon'tcolleges cut wages in glut disciplines such as history, philosophy, etc.? Certainly, economists and computer scientists command higher salariesto account for greater scarcity,indicating that schools dorespond tolabor market conditions. Why then arewages in glut disciplines so high?Also, why do people continue to enter the discipline when the expected wage is so low? Some suggested answers: 1) Asymmetric info between administrators and departments. The administration keeps wages high toattract a large number of applicants to any job so that department hiring committeeswill have a harder time hiding candidates who make the current department look bad. (But then why don't administrators do this for all disciplines?) 2) To attract good thinkers to become historians, schools must keep the wage high enough to compete with other disciplines and occupations that require intelligence.Therefore, it is beneficial to keep the wage high and sort applicants for non-wage purposes after the fact. That is PhDs who will work for 30K are not worth 30K. That is 40K historians are at the minimum level of competence. This explanation would also entail thepoor screening of PhD worthiness by graduate schools. A school could easily gain a reputation for having only 40K PhDs, thereby cutting search costs, and outcompete other programs. 3) Interest group reasons. Faculty lobby for higher wages. (This answer is boring and I think incorrect,because current facultybear the cost of the non-price rationing.) In other words, I don't have a good answer. Anyone else want to give it atry? JC _John-Charles Bradbury, Ph.D.Department of EconomicsThe University of the South735 University Ave.Sewanee, TN 37383 -1000Phone: (931) 598-1721Fax: (931) 598-1145E-mail: [EMAIL PROTECTED]
Re: Organ shortage - a tragedy of the commons
Also, the incentives to provide good organs in this market seems weak. Those with high quality organs benefit much less from this arrangement than in a market. I am at a loss as to what this means. The argument made in EARLIER posts is that people with GOOD organs have are encouraged to provide organs to the market due to monetary rewards. A person with GOOD organs gains little from reciprocal agreement, because he is less likely to need a transplant, but he WOULD be an excellent donor. JC _ John-Charles Bradbury, Ph.D. Department of Economics The University of the South 735 University Ave. Sewanee, TN 37383 -1000 Phone: (931) 598-1721 Fax: (931) 598-1145 E-mail: [EMAIL PROTECTED] - Original Message - From: Pinczewski-Lee, Joe (LRC) [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Monday, February 18, 2002 2:46 PM Subject: RE: Organ shortage - a tragedy of the commons Among the participants in the cooperative the organs still remain a common pool. How do you allocate differing body parts? Well, there are medical criteria NOW for transplants that could be used. The need for the organ, plus one's health, plus one's compliance with the various regimes of pre-treatment all can advance one up or donw a transplant list, PLUS the one vital factor, organ compatibility. Organs are NOT carburetors, they won't just fit anyone! As an aside, my wife has had FOUR kidney transplants, so she and I have some familiarity with this area. We are not talking about an exchange program here. Anyone that needs an organ transplant will NOT have healthy organs. I don't get on a kidney transplant list becasue I don't like my current kidney function, but because I have lost kidney function. The idea proposed is that before one can become eligible to RECEIVE a transplanted organ, one must have acceeded to be willing to DONATE an organ. Though that idea has some flaws, too. It runs afoul of a free-loader problem. If I have diabetes I might well want to become an organ donor. I won't be able to donate, very much if anything, upon my death, but I would be eligible to RECIEVE a lot, kidneys, livers, pancreas, hearts, a host of things diabetes damages. -Original Message- From: John-charles Bradbury [mailto:[EMAIL PROTECTED]] Sent: Monday, February 18, 2002 3:19 PM To: [EMAIL PROTECTED] Subject: Re: Organ shortage - a tragedy of the commons Indeed the policy is essentially as efficient as pricing organs. Please explain further on this point. Certainly, it is better than the current situation, and the political objections are minimized. But I don't think its efficiency properties rival market efficiency. Among the participants in the cooperative the organs still remain a common pool. How do you allocate differing body parts? Also, the incentives to provide good organs in this market seems weak. Those with high quality organs benefit much less from this arrangement than in a market. JC
Re: Photographers
How about asking some photographers? Armchair economics is not a contact sport. JC _ John-Charles Bradbury, Ph.D. Department of Economics The University of the South 735 University Ave. Sewanee, TN 37383 -1000 Phone: (931) 598-1721 Fax: (931) 598-1145 E-mail: [EMAIL PROTECTED]
Re: Photographers
Producing a photograph requires creating a negative and transfering it to a positive image. It would seem simple to separate the two processes. Certainly, a photographer ought to be able to sell the negatives for the PV of the positive image revenue. The industry probably does not specialize in negatives and positives, due to economies of scope. But, even with scope economies a photographer would still be willing to sell his negatives. It is the buyer who pays bears the cost of separating the production process. The real problem in this industry may be the nature of reputation acquisition as a photographer. Most viewers judge photographers by the positive print. I would guess that most wedding photographers are picked out from seeing the photos from a friend's wedding. Photographers who develop their own pictures (most good photograohers do) take the negative with the knowledge that they can manipulate the negative image. Developers may misprint a photograph, because they do not have the information that the photographer has. Passing the negative onto the owner, puts the reputation of the photographer into the hands of another individual who may, or may not, do as good a job. This external cost argument raises the question of why the photograoher does not offer sell at a price that will compensate for lost revenue from a damaged reputation. JC _ John-Charles Bradbury, Ph.D. Department of Economics The University of the South 735 University Ave. Sewanee, TN 37383 -1000 Phone: (931) 598-1721 Fax: (931) 598-1145 E-mail: [EMAIL PROTECTED] - Original Message - From: Alex Tabarrok [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Wednesday, January 23, 2002 10:56 AM Subject: Photographers Whenever I get a professional photograph I am always infuriated that the photographers keep the negatives and then charge me every time I want a print. This wouldn't be so bad but the system is inefficient since I move around a lot and can lose track of who holds the negatives to photographs that I had taken 10 years ago. I have tried several times to arrange an alternative deal - paying more up front in return for the negatives - but the photographers always react with horror to this suggestion and refuse. I have a two part question. First, why do photographers want the system this way. (Note that obviously the photographers have a monopoly over the prints once the prints are taken but that this does not really answer the question - see Landsburgh's discussion of the popcorn problem in The Armchair Economist.) Second and relatedly why don't entrants offer an alternative system? Alex -- Dr. Alexander Tabarrok Vice President and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621-1428 Tel. 510-632-1366, FAX: 510-568-6040 Email: [EMAIL PROTECTED]
Re: odds and terrorism
General rule on the costs of regualtion: Every $15 mil. decline in wealth leads to loss of 1statistical life. See Lutter, Morall, and Viscusi Economic Inquiry, Volume 37, Issue 4, pp. 599-608 From Abstract: Using new empirical estimates for the income elasticity of many of the most consequential risk-related behaviors, our results imply that a $15 million decrease in income is associated with the loss of an additional statistical life. Regulations that cost more than $15 million per expected life saved will have counterproductive effects on individual mortality. JC PS- Good to see you around DeBacker. _ John-Charles Bradbury, Ph.D. Department of Economics The University of the South 735 University Ave. Sewanee, TN 37383 -1000 Phone: (931) 598-1721 Fax: (931) 598-1145 E-mail: [EMAIL PROTECTED] - Original Message - From: Jason DeBacker [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Wednesday, November 28, 2001 2:51 PM Subject: Re: odds and terrorism One could also argue that the current bills being considered for airport security are killing people. More bags scanned, more security workers, and higher salaries for them will result in higher ticket prices. This raises the cost of flying and thus more people drive on their vacations- a much riskier form of travel... Jason DeBacker - Original Message - From: Alex Tabarrok [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Wednesday, November 28, 2001 9:40 AM Subject: odds and terrorism Here is a nice article on the odds of various events and terrorist related odds. It's familiar material to this audience but might make a good discussion item in a class. Best Alex http://www.washingtonpost.com/wp-dyn/articles/A7812-2001Nov23.html -- Dr. Alexander Tabarrok Vice President and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621-1428 Tel. 510-632-1366, FAX: 510-568-6040 Email: [EMAIL PROTECTED]
Re: Austrians and markets
What certain institutions does Science lack that markets have? _ John-Charles Bradbury, Ph.D. Department of Economics The University of the South 735 University Ave. Sewanee, TN 37383 -1000 Phone: (931) 598-1721 Fax: (931) 598-1145 E-mail: [EMAIL PROTECTED] - Original Message - From: Peter Boettke [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Monday, November 26, 2001 9:19 AM Subject: Re: Austrians and markets Mark, I am surprised you would be making this argument ... do you believe that the market for legislation is efficient because it exists? Whatever is, isn't necessarily efficient. The market for ideas in economics is a distorted market. Fads and fashions come and go all the time. Science is not like a market because it lacks certain institutions which are the backdrop against which markets operate. Nobody ever said individuals pursuing their self interest, under whatever conceivable set of institutions you could imagine, would generate a desirable social order. The invisible hand postulate is specified within an institutional environment. Of course, some really fascinating research has been done on the application of invisible hand processes to the framework itself. I have a paper with Bill Butos which examines the nature of science and its relationship to entrepreneurship and if anyone is interested just send me an email and I will send you the attached file. Pete Boettke
Re: the justification for urban planning
Markets do very well at allocating goods like coffee or gasoline or clothes in the short term because of their flexibility in response to short term preferences. They don't do well in things like supplying housing in proper configurations and locations because housing is a durable good that once sold is relatively permanent (30-100 years or more). It is a common misconception that myopia among economic actors leads to market failure. Why would any rational individual run a house into the ground, when they plan to live ther for the short run? I assume since most individuals have 30 year mortgages that they would like to maximize the sale price. (This is true even without the mortagage argument) In this instance economic incentives are exactly correct for allocating resources in the short and long term. Keep the house nice and it will raise the resale value. The reason individuals buy shoddy houses it the prefences for cheap and crappy over expensive and quality. The incentives faced by the individual once the house is purchased is not the reason for this. A complaint about ugly houses is about personal tastes. Related to this is the famous prisoner's dilemma. Consider the landlords of a declining neighborhood who must decide whether they will improve their property or invest their money elsewhere. If one landlord improves her property and none of the others do, the others reap short term windfall gains when rents uptick slightly and then go back into decline. But she could also free ride and let everyone else invest and reap the benefits. In reality, nobody invests and the neighborhood continues its downward spiral. The externality issue is why private communities have grown so popular. For instance, I live in a house where the land (10,000 sq. acres) is leased from a single landlord. Anyone wishing to paint thier house pink must get permission. This in tern raises the value of all the individual leases on the property. The externality is internalized. Zoning can somewhat mirror this, but then you have to get into public choice issues.
