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Posts Tagged ‘Economists’

The Nobel Prize Goes to an Odd (but Worthy) Economic Trio

I awoke yesterday to the happy news that two of my friends won the Nobel Prize in economics.*

Gene Fama was one of the three recipients.  He and I share two important beliefs about the world.  First, we value empirical research in economics — i.e., getting deep into the data to understand what is going on.  Second, we both believe that golf should be played quickly!  So every weekend, at least once, Gene and I get up before the sun rises and get in 18 holes (walking) in about 2.5 hours.  Gene is 74 years old — he didn’t take up golf until his sixties, and I’ve seen him post a scorecard with multiple birdies on it. 

Gene believes deeply and fundamentally in markets, which is why pairing his prize with Robert Shiller, a market skeptic, is quite odd.  But Shiller is a wonderful economist — someone whose work I read a lot and was inspired by early in my own career — and I’m glad he was chosen.

Should Candidates for AEA Elections Tell Us What They're Thinking?

Joshua Gans is an economist at the University of Toronto. He has appeared on this blog before and, as the author of Parentonomics: An Economist Dad Looks at Parenting, was featured in our podcast “The Economist’s Guide to Parenting.” He has a long-standing interest in the economics of science as well as studies of the economics profession. He is also a long-standing member of the American Economic Association. On that last note, he has written a thoughtful essay that wonders if the candidates standing for AEA elections should be required, or at least encouraged, to be more forthcoming about what they’d stand for if elected.


Should We Learn More About AEA Candidates?
By Joshua Gans

It is that time of year when the 18,000 members of the American Economic Association (AEA) receive their ballots to vote for the society’s leadership. I have been voting in AEA elections for 25 years and the information provided is always the same. There is a voting sheet and then a pamphlet listing the bios of each candidate (e.g., significant publications, awards and administrative positions held) and a photo of each (see here). This is not a lot of information to go on. In my younger days, when I had little personal information on the candidates I would choose on their basis of their work, whether they are close to my field of interest (macro vs. micro, theory vs. empirical), and perhaps whether their politics matched my own.

These days I know many of the candidates both professionally and personally, and so now I factor into the equation whether I think they will be good leaders of the AEA. This may be correlated with the information in their bios but it is not a given. Very often I have found those who are less widely known in the public to have thoughtful ideas about the AEA and economics profession. That gives rise to a natural question: should we know more about AEA candidates than is presented to us formally?

Calling All Data Memoirists

The statistician Andrew Gelman has asked us to publicize what sounds like a nifty project: a Year-in-the-Life look at what data hounds and statisticians actually do:

So here’s the plan. 365 of you write vignettes about your statistical lives. Get into the nitty gritty—tell me what you do, and why you’re doing it. I’ll collect these and then post them at the Statistics Forum, one a day for a year. I think that could be great, truly a unique resource into what statistics and quantitative research is really like. Also it will be perfect for the Statistics Forum: people will want to tune in everyday to see what comes next.

In an e-mail, he adds:

I think it would be a great service to the professions of quantitative research to get vignettes from a wide variety of statistical practitioners.  (I’d be interested in hearing what empirical economists do during their days too!)  So I’d like to spread the net wide and get lots of stories from people.

And yes, for those of you who read the agate type, this post goes in the Bygones Being Bygones file.

When the Economists Arrive, Do the Prostitutes Leave?

I was walking outside the American Economic Association meetings this past Sunday when a man stopped me and asked what all the university professors were doing in one place.  I told him that it was the annual convention of economists, and got a hearty laugh by telling him the old joke that when the economists arrived in town, the prostitutes left.  This joke is a good illustration: the arrival of economists represents a decrease in demand; the prostitutes’ leaving represents a decrease in the amount supplied.  I don’t know the shape of the supply curve, however, so I can’t speculate about the size of the change, if any, in the equilibrium price. But the joke does suggest that the equilibrium quantity transacted decreased.

Have a Very Homo Economicus Christmas (Ep. 105)

Our latest Freakonomics Radio on Marketplace podcast is called “Have a Very Homo Economicus Christmas.” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.) 

It’s the latest in our annual series of explanations about how economists can take all the fun out of the holidays. In the past, we’ve looked at gift cards, deadweight loss, and gift registries.

This year, we have one simple mission: ask economists how they go about shopping for the holidays.

Free-conomics (Ep. 103)

Our latest Freakonomics Radio on Marketplace podcast is called “Free-conomics.”  (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.) 

The gist: economists are a notoriously self-interested bunch, but a British outfit called Pro Bono Economics is giving away its services to selected charities. Martin Brookes is one of its founders:

BROOKES: When we first set up Pro Bono Economics, there were some economists who thought it was wrong, in principle, to give a service to charity for free. That if the service of analysis of their data was valuable, they should have to pay for it.

If the supply side was reluctant, so was the demand side:

The Return of the Freelance Economist

A few weeks back, we posted a query from a young economist who, before heading for the job market, was looking to pick up  freelance work. She (yes, she) promised to report back with her progress, and now she has:

Thank you for posting my email. I received a decent handful of responses, but was not flooded with emails. I did get one big project that I am very excited about and will carry me through to the job market, so it worked out very well for me, but is probably not a good career strategy. I had no idea what to charge, so started with the rate I would have received from the employer that didn’t work out, which was clearly too high. I tried to make it clear that it was negotiable, but fear I may have scared off a few people.

Freelance Economist for Rent

From the mail:

Hi there,

I am a recent graduate of an economics Ph.D. program. I had what I thought was a successful trip through the adventure that is the economics job market and chose the risky but exciting option of working for a small start-up. Unfortunately, it turns out that it was more risky than exciting and the company doesn’t have work for me after all. So, I will be going back on the job market next year, but in the meantime I have extra time on my hands and bills to pay. I don’t want a permanent position and I don’t necessarily need much work, just enough to keep the lights on and food on the table.

My brother-in-law is a graphic designer and does some freelance work on the side which made me wonder if there could be such a thing as a freelance economist. There must be many small companies or organizations who cannot afford staff economists or expensive consultants, but have data they don’t know what to do with or questions about how their business runs that they don’t know how to answer. Freakonomics readers know that economics shows up all over the place.

Economists in a Coal Mine

From the Onion, “Nation’s Economists Quietly Evacuating Their Families”:

As employment stagnates, manufacturing continues its slump, and overall confidence in the U.S. financial system wavers, the nation’s economists have begun abandoning their homes and sending their loved ones overseas. “We’ve noticed a trend among the leading economic thinkers, be they Keynsians, supply-siders, or students of the Austrian school—they’re putting their families on one-way flights out of the country, often leaving half-finished survival bunkers behind them,” Paul Klement, an analyst with the Brookings Institute, told reporters Tuesday.

This, meanwhile, is not a joke: Economists for Romney today announces that its statement in support of Mitt Romney for President has been signed by more than 400 economists, including Nobelists Gary Becker, Robert Lucas, Robert Mundell, Edward Prescott, and Myron Scholes.

(HT: Dave Domingo)


Are Economists as Biased as Everyone Else?

All nine nominees for office in the American Economic Association are from private universities, all from states on an ocean. (All but one member of the Nominating Committee was also on a coast.) Two are friends of mine, and all are good people, but: isn’t this evidence of reverse discrimination? Surely there are scholars from public universities, or from the several top-ten non-coastal private schools, who are at least as qualified.

Like others, we economists favor those like us. That’s the bad news—and it’s been shown in conferring other honorifics (Hamermesh and Schmidt, 2003). The good news is that, where it really matters—in judging scholarly papers for publication—economists are remarkably fair (Blank, 1991; Abrevaya and Hamermesh, 2012), ignoring an author’s affiliation, gender or prior reputation.

Given human nature of helping one’s friends, perhaps we should be congratulated for indulging ourselves only where it’s not important.

The Secret Consensus Among Economists

If you follow the economic policy debate in the popular press, you would be excused for missing one of our best-kept secrets: There’s remarkable agreement among economists on most policy questions.  Unfortunately, this consensus remains obscured by the two laws of punditry: First, for any issue, there’s always at least one idiot willing to claim the spotlight to argue for it; and second, that idiot may sound more respectable if he calls himself an economist. 

How then can the quiet consensus compete with these squawking heads?  A wonderful innovation run by Brian Barry and Anil Kashyap at the University of Chicago’s Booth School Initial on Global Markets provides one answer: Data.  Their “Economic Experts Panel” involves 40 of the leading economists across the US who have agreed to respond on the economic policy question du jour.  The panel involves a geographically and ideologically diverse array of leading economists working across different fields.  The main thing that unites them is that they are outstanding economists who care about public policy.  The most striking result is just how often even this very diverse group of economists agree, even when there’s stark disagreement in Washington. 

That observation is the starting point for my latest column with Betsey Stevenson

Question of the Day: Should We Just Let Murderers Do Their Thing?

A reader named Mark Kozel writes to say:

I heard that Chicago will be pouring up to $14 million into police overtime to prevent murder and violent crime.

It got me thinking: is it cheaper to prevent this kind of crime, or to just let it happen and clean up the mess afterwards?

It would be hard to find many people, even economists, who would arguing that “just letting it happen” isn’t an outcome that society should even think about accepting.

Hope and Ye Shall Find

I am not an avid runner but I do it pretty regularly because it is good, cheap, easy exercise. I often run in Central Park. The other day on my run there, it was hotter than usual and I ran further than usual, maybe 5 miles. So I really, really wanted to buy an iced coffee when this ordeal was over. I usually tuck a $5 or $10 bill into my running shorts but I’d forgotten. Oh well.

But then, just a few hundred yards from the end of my run I saw on the ground directly in front of me a suspicious little lump of green paper. I stopped. It was money. Three single dollar bills, crisply folded. Just enough for an iced coffee. I was grateful to whoever dropped it and I hoped it didn’t represent their last three dollars.

How to Crowd-Fund an Economics Book

Eva Vivalt, an economist, is looking for financial backers to fund her book on Kickstarter. Along with a group of students from Georgetown and GWU, Vivalt is conducting meta-analyses of various aid programs. Here’s her project summary:

Have you ever wondered whether aid programs actually work? Wouldn’t it be useful to know how effective programs are in achieving their objectives (e.g. reducing poverty, improving health, improving education)? This book will review the quantitative evidence on the effectiveness of aid programs in a very thorough and rigorous way, using meta-analysis. After explaining this method and its merits, each of ten chapters will apply it to a different type of aid program. Throughout, the lessons that we can draw from these analyses will be discussed using plain English. 

In Defense of Two-Handed Economists

My latest Bloomberg View column with Betsey Stevenson is now online:

Here’s something you don’t often hear an economist admit: We have very little idea where the economy will be next year.

Truth be told, our best guesses just aren’t very good. Government forecasts regularly go awry. Private-sector economists and cutting-edge macroeconomic models do even worse.

Our objective isn’t to beat up economists. Rather, we want to make the point that when we recognize our shortcomings, we’re forced to confront the enormous uncertainty that lies ahead.  And appropriate humility about the economy changes how we think about policy.

Does Studying Economics Teach You to Lie?

new paper by Raúl López-Pérez and Eli Spiegelman investigates “truth preferences” — i.e., preferences for being honest versus lying. Their goal was to study whether economics students lie more as a result of their education. Or do liars self-select? From the paper:

Does studying economics give people “maximizing” habits of thought, and thus cause them to  behave more in line with its own predictions, or do people already inclined towards such behavior tend to self-select into economics?

A computer test structured with a slight incentive to lie was administered to 258 students at The Autonomous University of Madrid. The screen showed two colors, and participants were paid 14 euros for declaring blue and 15 euros for declaring green to another person, regardless of the actual color shown on screen. So what happened? According to the authors, the business and economics (“B&E”) majors gamed the system.

The Life of the Number-Crunching Analyst

Thousands of economics majors head off to industry each year to work as analysts. They’re lured by the promise that they’ll learn a lot, work hard, play hard and get ahead.  But is it true?  Who better to ask than the brilliant young analyst Elisabeth Fosslien.  And as a good young analyst, she’s distilled her portrait of life as an analyst into charts.  Having once lived the analyst life—my first job out of college was at the Reserve Bank of Australia, crunching numbers and making charts—all of these resonated with me.

Some Links We Like

1. Why people hate economists (HT: Ian McKay)

2. The Planet Money crew holds a live literary event, “Money Greed and Power.”

3. Excellent article by Howard Beck on Jeremy Lin‘s improvement over past two years; also explains why Golden State cut him:

Unfortunately for the Warriors, they hardly had a chance to assess Lin’s off-season transformation. The N.B.A. lockout prevented them from working with him until camps opened in early December. He was on the court for maybe 90 minutes before the Warriors cut him in a move to clear payroll room to chase a free-agent center.

Happy Valentine's Day: Economist Edition

 You might think that the dismal science has very little to offer on matters of the heart.  But I disagree.  And so does Elisabeth Fosslien. She’s a brilliant young analyst interested in design, math, and economics. Yes, she’s the sort of person who dressed up as a bear market for Halloween.  All this makes her the perfect person for economics-themed data visualization. And so when #FedValentines lit up Twitter last week, she decided to go a step further, and provide the perfect valentine for the economist in your life.  Make your selection, below:

It’s the Economy, Honey

Yesterday’s NY Times contained a very flattering (and quite personal!) profile of Betsey Stevenson and me. For me, it was all worth it just to get a great family portrait. (Have you ever tried to get a dog and a toddler to look at the camera at the same time?)

I don’t really have a lot to add, other than to say that I thought the author, Motoko Rich, did a fabulous job.  Hopefully it gives folks outside the ivory tower some sense of just what it is that animates the lives of economists.  And yes, I admit that reading it, you’ll quickly conclude both that we are passionate about economics, and that we fit the usual stereotypes about academics.  And if the article makes it sound like we are crazy about our kid, that’s because we are.

Some Links We Like: Economists in the News Edition

1. Allen Sanderson on numbers in the news.
2. Dan Ariely on how online dating is like drinking wine: “You could describe it, but it’s not a very useful description. But you know if you like it or don’t.”
3. Betsey Stevenson and Justin Wolfers (friends of the blog) on their lives as the It Couple of Economics. My favorite line? Betsey talking about economics itself: “It’s not a profession that rewards modesty in any way.” One might consider this a print version of the Stevenson-Wolfers story we told in our “Economist’s Guide to Parenting” radio program

Economics and Open Marriage

I have to admit that it counts as one of the more bizarre requests of my scholarly life.  After all, I’m just a straight-laced economist. But in light of the Gingrich affair — (which one? the one involving his wife’s accusation that he asked for an open marriage) — the New York Times Room for Debate section asked Betsey Stevenson and me to give an economist’s perspective on open marriage. 

If All the Economists Were Laid End to End, Would They Reach a Conclusion?

There is an old quip, attributed to George Bernard Shaw, that if all the economists were laid end to end, they’d never reach a conclusion.

My own experience has always been just the opposite. Most economists think very much alike.

If you want to feel like the smartest person in the room, often a good way to accomplish this is to be the only economist. Frequently, the one economist will say things that make a lot of sense that no one else would ever come up with. When I am that one economist, I sometimes feel like a genius. Until a second economist enters the room, that is. Because when the second economist shows up, he or she often says all the smart things I was going to say, before I can say them. It turns out, it is not the economist who is brilliant, but rather the training we get as economists which leads us to think differently from non-economists, that sometimes makes us seem smart.

The World's Best Economics Department?

A new website, from the University of Chicago’s Initiative on Global Markets (IGM), will “pose one question a week, and post answers from 40 senior professors at elite U.S. universities” in an effort to create “the world’s best economics department.”

“We’re doing this because we think economists have a distorted role in policy debates,” said Brian Barry, the director of IGM. “When experts fight about minor points they get much more attention than when they broadly agree about important ones. And when they disagree about big issues, the reasons don’t often come through clearly. Sometimes, ideas that are shaky or on the fringe get passed off as mainstream.”

So far, economists have responded to questions about federal “buy American” mandates, education and taxes.

Economists in Charge

We’ve noted in the past that various countries routinely elect economists to be president or prime minister — a trend that has decidedly escaped the U.S.

We also released a podcast a while back called “What Would the World Look Like if Economists Were in Charge?” — which, despite the title, was about the U.S. more than “the world.” (Yes, I am as synecdochically myopic — or is that myopically synecdochal? — as any other American.)

Now, a British reader named Peter Bennett writes in with this challenge:

Looking forward to hearing your take on these new technocratic economists in charge in Italy and Greece.

Just how bad would things have to get in the U.S. before they’d call in the economists?

We will try to scare up a worthy contributor to answer both those questions in the near future.

Roland Fryer: It’s Official, He's a "Genius"

I first met Roland Fryer a decade ago. It didn’t take me long to figure out he was a genius. It took the folks at the MacArthur Foundation a little longer to come to that realization, but they finally got on board last week when they gave Roland one of their high-profile MacArthur “Genius” Awards.
Most of Roland’s research has been devoted to understanding the factors influencing Black economic progress. He’s worked on segregation, the sources of the Black-White test score gap, the reasons why Black longevity is less than that of Whites, and the Ku Klux Klan, among many other topics.

Who Is Alan B. Krueger?

President Barack Obama nominated a new chair of the White House Council of Economic Advisors on Monday: Princeton labor economist Alan B. Krueger will replace outgoing chair Austan Goolsbee. Krueger, 50, is known as a strict “empiricist” with a broad range of economic knowledge, having researched topics as diverse as subjective well-being to the relationship between the minimum wage and employment.
His 2007 book, What Makes a Terrorist, explores the economic roots of modern-day terrorism. Which Levitt has blogged about here on several occasions. Krueger was also presented Freakonomics with an award in 2006 at the National Council on Economic Education.
Krueger’s biggest asset in the job will likely be his expertise as a labor economist, as the Obama administration is desperate to reduce unemployment heading into the 2012 election.

The Worst Mistake I Ever Made: An Economists' Parenting Quorum

For our latest podcast, “The Economist’s Guide to Parenting,” (you can download/subscribe at iTunes, get the RSS feed, listen live via the media player, or read a transcript here) we turned to some of our favorite economists for advice on how to raise children. It’s safe to say you won’t find much of what you hear in any “expert’s” guide to parenting (which was of course the point) but it was a thought-provoking exercise in applying economic principles to one of life’s most perplexing and stimulating activities. As a supplement to the podcast, we thought it would be fun to convene a Freakonomics Quorum and ask some of our contributors, not for their best moment as a parent, but for their worst. The specific question we asked was:

What is the worst mistake you ever made as a parent?

Good sports that they are, they obliged with some lighthearted anecdotes of how sometimes the best intentions of rational, unemotional economists often run face-first into something called kids.

Australia's Rising Political Star Is an Award-Winning Economist

My good friend Andrew Leigh is the winner of the Young Economist Award, granted every two years to the best Australian-based economist under the age of forty. It’s really a rather splendid achievement. And entirely well-deserved.
Andrew’s career has been quite extraordinary. You see, economics was neither his first career, nor is it his current career. He began life as a star lawyer—clerking for the Aussie equivalent of the Supreme Court, and joining one of the big city firms. He then moved on to his second act as a policy advisor for the center-left politicians in both Australia and the UK, and a think tank in the U.S.
Finally, he began his third act, as an academic economist.