« What do we have reason to be uncertain about? | Main | Ph.d. Macro reading list »
Adverse Selection among the Kiwis
The Unknown Professor points us to Pay Peanuts and Get Monkeys? Evidence from Academia a clever paper on adverse selection in academia. In New Zealand academic salaries are mostly independent of discipline so someone from a high-flying field like economics or finance is giving up a big American salary to teach in NZ compared to say a professor of literature. As a result, we ought to expect that the greater the salary in the U.S. the lower the quality in New Zealand.
...discipline research performance is indeed negatively related to the value of outside opportunities: the greater a discipline's average salary in United States universities, the weaker its research performance in New Zealand universities. The latter apparently get what they pay for: disciplines in which the fixed compensation is high relative to opportunity cost are best able to recruit high-quality researchers and/or motivate their researchers to be productive. Paying (relative) peanuts attracts mainly monkeys.
It's a good paper, thus I expect the author will soon leave New Zealand.
Posted by Alex Tabarrok on August 14, 2006 at 09:41 AM in Economics, Education | Permalink
Comments
<>
They went to Waikato?
The assumption about salaries being the only factor is questionable. I studied in New Zealand with some exceptional professors. Without a doubt, the salaries were less. But look at the lifestyle, the climate, the sports. The food. The long lazy sundays in the world's best coffee shops?
I miss it still.
Posted by: David at Aug 14, 2006 10:41:42 AM
"So, they had trouble getting good peple, and the ones they did get tended to leave for greener pastures."
kiwi_injoke - They went to Waikato? - /kiwi_injoke
The assumption about salaries being the only factor is questionable. I studied in New Zealand with some exceptional professors. Without a doubt, the salaries were less. But look at the lifestyle, the climate, the sports. The food. The long lazy sundays in the world's best coffee shops?
I miss it still.
Posted by: David at Aug 14, 2006 10:43:27 AM
[In New Zealand academic salaries are mostly independent of discipline so someone from a high-flying field like economics or finance is giving up a big American salary to teach in NZ compared to say a professor of literature]
Not sure how you get to this conclusion from the table in Appendix 1 Alex. Economics has an average quality score in New Zealand of 2.97 and English Language & Literature has 2.74. Which indicates that if anything the literature professors have better career opportunities elsewhere as there are more "monkeys" left in New Zealand, but it is so close as to indicate probably no difference (we don't actually get direct data on remuneration shortfalls but this is the direction the research is pointing in). The slope of the line appears to be driven by a very good Philosophy department (which I think is built around a couple of very good individuals in Wellington), the statistics department at Canterbury and then some Anthropology, Ecology and Earth Sciences disciplines where NZ clearly has a geographical comparative advantage.
Posted by: dsquared at Aug 14, 2006 11:09:15 AM
DSQuared, I used lit just as an example. Education would have been better but note that you need both the renumeration shortfall and the quality level to backend the results and he doesn't give the renumeration shortfall.
Posted by: Alex Tabarrok at Aug 14, 2006 11:46:15 AM
Now wait just a gol dang minute. Didn't you just say (or imply) in another post that paying public school teachers more is just a union plot and won't result in better education? Or am I confusing you with your counterpart or his evil twin?
Posted by: RobbL at Aug 14, 2006 5:05:57 PM
Academic salaries in NZ do vary by discipline, just not by enough to match the salary differentials paid in the US. David, above, neglects that the nonpecuniaries should be expected to be constant across disciplines: to the extent that they do anything, they reduce the effective salary differentials across disciplines. Boyle’s basic hypothesis has to be right. Now, I don’t think his data includes salary supplements paid in high demand disciplines in most universities, but those supplements are small relative to the amount that would be necessary to get different disciplines up to the same fraction of US salaries. High demand disciplines also see accelerated promotions, but his data seems to account for that. I’m somewhat sceptical of using PBRF to make comparisons across disciplines: people are evaluated by panels that look at specific subject groups and may well have different standards for awarding A grades. That said, the threshold for an R should be pretty similar across disciplines and the numbers there back him up.
I'll certainly be passing Boyle's study along to our HR folks during our next round of salary negotiations.
Posted by: Eric Crampton at Aug 14, 2006 5:51:11 PM
Education has one of the lowest average quality levels in the appendix at 0.98, so how is that a better example?
Posted by: meb at Aug 14, 2006 7:34:09 PM
Oh great...
And I am studying economics at a NZ university.
Posted by: Todd at Aug 14, 2006 7:42:12 PM
[David, above, neglects that the nonpecuniaries should be expected to be constant across disciplines]
This strikes me as probably not true; for marine biologists, anthropologists, and quite afew other disciplines (a lot of which I note have high quality scores), there is a lot of benefit to being in New Zealand rather than, say, Chicago. New Zealand's got a lot of mountains but few theatres and I would guess that this nonpecuniary benefit would be valued differently by the kind of person who becomes a geologist as opposed to the kind of person who becomes a professor of literature.
Posted by: dsquared at Aug 15, 2006 6:56:28 AM
katsy lesbisk perverssi ^^^ modig student dobbel fitte puling ^^^ overdadig sykepleier kjonnslivet ^^^ emotie grietjes actie ^^^ sentimenteel meisje vuistneukend ^^^ gelios koritsi gamisi ^^^ katapliktikos magoulo omadiko ^^^ onredelijk sjenert ^^^ creampie grote pikken ^^^ supertettone gratis ^^^ risoluto lesbiche sesso ^^^ plus chaude lesbienne leche le cul ^^^ la plus chaude amateur exhibition ^^^ amichevole cowgirl dildo ^^^ laughable fighette orale fotti ^^^ plus froid papa galerie ^^^ mere groupe ^^^ tunne lieva ^^^ kuuma kaunotar neitsyt ^^^ muisachtig blonde plassend ^^^ lachwekkend blonde piss ^^^ stilig cowboyjente dobbel gjennomtrengning ^^^ beromt skolepike dritt ^^^ flaske klipp ^^^ omskjart vanlig ^^^ hetest kjempebra jomfru ^^^ kjempebra eldre ^^^
Posted by: levan at Sep 12, 2006 3:39:52 AM
