Marginal Revolution

What defines the Swedish soul?

This article, from Prospect, is interesting throughout.  Excerpt:

Inevitably, the subject turns to sex and marriage. I'll never forget asking one group what they thought of marriage in a country where most educated young people (and half go to university) don't get married or bear children until they are well over 30. A young woman gave me a thoughtful answer and so I asked her, "What are you looking for in a husband?" Without batting an eye or pausing for thought, she answered: "Three things. One, he must be good in bed. Two, he must be a good father. Three, when we divorce, he mustn't be bitter."

Robin Hanson comments on the USA.  Here is my earlier post on what I think of Sweden, one of my favorite MR posts.

Video testimonials to the Cowen/Tabarrok Principles text

You will find them here.  If you are thinking of using the book for a course, please write us and we will try to get you a review copy.  There is a macro book, a micro book, and a combined volume.

Not from the Onion: Teacher Rubber Rooms

Hundreds of New York City public school teachers accused of offenses ranging from insubordination to sexual misconduct are being paid their full salaries to sit around all day playing Scrabble, surfing the Internet or just staring at the wall, if that's what they want to do.

Because their union contract makes it extremely difficult to fire them, the teachers have been banished by the school system to its "rubber rooms" — off-campus office space where they wait months, even years, for their disciplinary hearings.

The 700 or so teachers can practice yoga, work on their novels, paint portraits of their colleagues — pretty much anything but school work....Because the teachers collect their full salaries of $70,000 or more, the city Department of Education estimates the practice costs the taxpayers $65 million a year.

More here.  Hat tip to Drea at Business Pundit.

Addendum: Rubber Room the movie (hat tip to Andy Orr) and from Gordon in the comments Rubber Room on the radio.

The view from your recession (markets in everything edition)

When the concept of starting a valet parking service came up at a recent Florida Atlantic University Board of Trustees meeting, it seemed less out of place than one would think. With the number of students growing, and the number of convenient parking spaces on campus unchanged, the idea to charge students and faculty for such a convenience did not seem unreasonable.

Florida Atlantic is just talking about valet service. Other colleges have implemented it. Florida International University and Columbia University introduced valet programs this spring. The University of Southern California has had a program in place since 2008, and High Point University brought in valet at the behest of its president, Nido Qubein, to provide a better student experience. California State University at Sacramento has also begun a premium parking program.

Here is much more.  Alternatively, you could view this as a behavioral economics attempt to extract surplus from people who are too often late for class.  By the way, Nido Qubein, the cited president of High Point University, runs a motivational speaking business on the side.

Zotero

Zotero is a free program for citations management and bibliography generation designed to be competitive with Endnote and similar products.  I've been using it for a couple of weeks.  Zotero lives as a Firefox extension and it's best feature is the ease with which you can import citations from the web.  If you are looking at a paper on JSTOR, for example, you can "one-click import" the citation.  One-click import is also available from Amazon, Cite-Seer, ABI-Inform, the Library of Congress, many university library catalogs, Medline, Google books and many others.

Thus it's very easy to generate a citations list in Zotero by visiting a handful of large databases - this is especially easy for books and not too hard for recent articles but it's more difficult to find older articles in online databases.  Zotero's interface is somewhat clunky so entering citations by hand is not as convenient as I would like.  In addition to grabbing the citation, Zotero can grab entire PDFs so you can keep articles and citations in one database.  Exporting of the citations in a variety of bibliographic format is clean and well done.

Zotero is only available as a Firefox extension (the developers take a perverse pride in this fact).  The developers are at GMU, although I don't know the team at all.  Zotero will import citations from another citations management program so switching is low cost.  Worth checking out.

My talk on economics for university administrators

Thank you all for the advice; in my talk I promoted the following ideas:

1. Many mid-level schools do not yet apply rigorous quantitative analysis in reviewing their fundraising techniques; this should change.

2. Norms will shift toward a greater inequality of rewards for lower-level staff.  Yet any single administrator who tries to bulldoze through a business-like, highly-incentivized solution does so at his or her peril.  The shift of norms will take a long time.

3. Community colleges are in many cases turning out to be stronger competitors than are for-profits.

4. The higher education bubble has burst.  The expiration of stimulus funds in 2011 will be a crushing event for many public sector universities.

5. Faculty governance is essential for tenure and curriculum decisions.  But faculty governance for setting university priorities is a big mistake.

6. The value of face-to-face classroom time (discussed in Create Your Own Economy, by the way) will prove robust.  But the very best teachers of the future will take on an increasing role as editors, collage creators, and DJs.  A brilliant scientist who doesn't understand YouTube will be crippled as a teacher.  Adjuncts may lead the wave of innovation here.

7. The way to be fiscally responsible is to refuse luxury projects in good times.  If bad times have come it is already too late.

8. Current administrators are using stimulus funds to buy off the old interest groups, under the view that these are temporary bad times.  Relative to what will come, these are "good times," and much of that surplus ought to be put in reserve funds.  That is not happening.

9. Many mid-level schools underinvest in making incremental improvements to their strong, core departments, because nobody gets much credit for that.

10. Being a good university administrator requires the right mix of idealism and cynicism and that is hard to come by.

What should university presidents and provosts know about economics that they don't?

I'm giving a talk to such a group tomorrow and I am curious to hear what you think I should be telling them.  This isn't a talk about public policy per se, it's a talk about the economics of universities.

In addition to what I say, I will refer them to the answers you all give. 

Markets in everything

http://www.corrupted-files.com/

They advertise that it will take days for your professor to notice that the submitted paper file is corrupted.  He then asks you for an uncorrupted copy, but in the meantime you have purchased a copy of the term paper you need.

I thank Tucker Hughes for the pointer.

Estimating Economic Growth

In How laypeople and experts misperceive the effect of economic growth (subs. req.), Christandl and Fetchenhauer ask a variety of people the following question:

What is the overall rise in national income within the next 25 years if the economy grows with an annual rate of 5%?

Most people could not even come close to the correct answer and importantly the errors were not random--almost everyone under-estimated.  (The correct answer is in the extension if you wish to test yourself.)

Only around 10–15% of the participants gave estimations between 50% less and 100% more than the true value...furthermore, the majority of the false estimations were systematically below the true value ...which was underestimated by 88.9–92.1% of the participants.

In my TED talk on growth and the economics of ideas I pointed out that average real world "GDP" per capita will be around $200,000 in 2100 if the world economy grows at the fairly modest rate of 3.3% per year on average.  Many of the commentators at the TED website were incredulous.  I think one of the reasons why is that most people have great difficulty understanding exponential processes.

Hat tip to Paul Kedrosky.

The answer is 238.64%.  A good way of approximating is to use the rule of 70.  If x is the growth rate then the doubling time is approximately 70/x.  Thus, with a growth rate of 5% we expect a doubling (100% increase) in 14 years and a quadrupling in 28 years so a bit more than a tripling in 25 years (200% increase) is a good guess.

Auctions and Politicians

David Warsh has an excellent column on economists, auctions and the politicians who oppose them: 

...the US Department of Transportation earlier this month canceled plans to auction landing slots for New York’s three busiest airports. The Bush administration had sought the measure, hoping to cut delays at the chronically congested airports (and, of course, raise some much-needed cash). The airline industry lined up against the proposal, so did Democratic congressmen. Incumbent airlines will continue to profit; frequent travelers will continue to suffer delays.

Similarly, the banking lobby, among the nation’s strongest interest groups, has so far successfully opposed Treasury Department attempts to put up for bid banks’ questionable (now “legacy”) assets. The reason is simple: when the asking price is, say, 90 cents on the dollar and the bid is closer to 40 cents, no manager will willingly take part in an auction that seems certain to lower book values.

[Similarly]...President Obama campaigned on a promise to auction the [carbon] permits. But a coalition of Midwestern and Southern Democrats teamed up to alter the bill, and when its language was released last week it turned out that fully 80 percent of the permits would be given away at first to electricity utilities and their big industrial customers...

Nevertheless, Warsh is optimistic about the ability of economic engineers to create value with more sophisticated and widespread auctions.  Read the whole thing for developments on the academic front.