Do countries that are already rich become even happier when they become yet richer? This was the essential question on which I entered a gentleman’s bet in 2004 with Andrew Leigh and which just recently got settled.
The reason for the bet was a famous hypothesis in happiness research called the Easterlin hypothesis which held that happiness did not increase when rich countries became even richer. In my ‘Fred Gruen’ presentation on this matter in 2004 I used the following graph to illustrate the happiness income relation across countries:
This graph shows you the relation between average income (GDP in purchasing power terms) and average happiness on a 0-10 scales for many countries. As one can see, the relation between income and happiness is upward sloping for low levels of income, but becomes somewhat flat after 15,000 dollars per person. I championed the idea that this was not just true if you looked across countries, but that this would also hold true over time.
Andrew Leigh’s thinking was influenced by other data, particularly a paper by Stevenson and Wolfers which – he thinks debunks the Easterlin hypothesis. Here’s one of their graphs: Continue reading →
I’m doing some research for a talk I’m giving in New Zealand to heads of private schools – the invitation for which came from a similar talk I gave to the Australian Heads of Independent Schools Association. I’m sruiking the wonders of education 2.0 about which I’ve waxed and waxed on this blog. Who would you trust to guide you in your adoption of such obviously sensible technologies?
Obviously the power of the web should be used, but how? What are the pitfalls and what are the things to really focus on. Well I’ve got a nerve telling anyone anything. I did do a stint as a school teacher – a kind of self-funded Teach for Australia gig before there was such a program. And I’m an enthusiast for the web, for web 2.0 etc. But that’s it. So what would I know? What real research have I done. The problem is most people are in the same position. With bits of insight, bits of experience etc. And what kind of ‘research’ would be useful here. What kind of research would have been useful for Mark Zuckerberg setting up Facebook, Steve Jobs thinking of the iPhone or the Mac or Jimmy Wales wondering if Wikipedia would work. Or any of them trying to make those products and platforms better?
So who do you go with. The TED talkers? The consultants? Academics? Well the academics are peer reviewed after all. But then there’s a problem. What’s peer review doing in a field like that? It could add some value at least in principle. But does it? Well the academic articles that I’ve seen are more or less the same hunches marketed in the TED talks, or different ones. But they’re dealing with a massively complex subject - and no matter how many data-points one had on a topic like ‘blended learning’ (the combined use of online and ‘traditional’ learning methods) the conclusions one draws can’t really be extended beyond the circumstances of their adoption. And there are any number of ways to blend learning. As one can see from the chart.
And what we end up with is empty kinds of assurances as to what conclusions one can draw which are nevertheless shoehorned into the genre of any other academic article - which is to say one can’t make a claim that the sky is blue without references. And great lengths are gone to to provide the patina of science – single things are measured and reported on with great seriousness. But the conclusions are lame generalisations just as cliched and ultimately empty as the supposedly less ‘rigorous’ consultants and TED talkers – though the latter are partly marketing their profile and reputation elsewhere – along with the charisma of their presence and presentation.
Below the fold are the substantive conclusions from a summary article introducing a whole thematic edition of Internet and Higher Education (the reference is 18 (2013) 1–3, since you ask) It’s entitled “Blended learning policy and implementation: Introduction to a special issue” of by Ron Owston. Does this add anything to your understanding of the issues? Continue reading →
Imagine yourself to be in the mythical Land of Beyond where you need minions to do a dirty job that men with honour would refuse to do. A classic trick in this situation is to pick people despised by the rest of society who are thus dependent on protection and will simply do what is asked for.
The Chinese emperors hit upon this truth when they started to surround themselves with eunuchs, despised by the rest of Chinese society and thus fiercely loyal to their protector, the Emperor. The roman emperors, similarly, made a habit of surrounding themselves with freed slaved who were despised by other Romans, as well as by a dedicated palace guard (the Praetorians) who were the only militia allowed in the vicinity of Rome.
The European colonialists too used this basic ‘dirty dozen’ technique when it came to keeping a large population in check with minimal own presence, particularly in Africa, by elevating some small despised group (ethnic or religious minorities) as the preferred club from whom the senior administrators came. This small favoured group would get personal benefits (riches and influence) but in return they would do whatever the colonizers wanted.
To see the relevance of this for university cuts in the Land of Beyond, you first need to step back a level and imagine yourself to be the Vice Chancellor of a second-rate university that brings in, say, a billion ‘Beyond’ dollars a year out of which some 300 million is money you dont really need to generate that 1 billion. It is ‘potential profit’ if you like. Continue reading →
Looking at the newspapers you’d think Catholicism is having a hard time with philandering priests and cover-ups of their doings being found out on a weekly basis. Dutch and German newspapers kept track for a while of the regional frequencies of new cases of sexual misconduct allegations. You might think Catholicism is getting its long-awaited come-uppance. Nothing is further from the truth however: Catholicism is in rude health.
There are now around 1.3 billion adherents making Catholicism the largest religion on the planet and the largest branch on the tree of Christianity that appears to hold about 2.1 billion adherents. Its strongholds in Latin America and Southern Africa are looking rock-solid, and conversion rates in the new centres of Asia (China, Thailand, Vietnam, Indonesia, etc.) are looking very healthy indeed. The Christian World Database hence proudly announced Christianity was the world’s fastest growing religion in 2006 and in terms of numbers, Catholicism is by far the biggest and probably fastest growing of the Christian faiths.
What is interesting about Catholicism is that it seems to have lost its footing in its traditional stronghold, Southern and Western Europe. The area where all the popes came from, where all the old cathedrals are, where nearly all the alternative branches of Christianity originated, is now more secular than ever. Europe now has to import monks from Latin America and Africa to fill up its most prestigious and old monasteries (such as the one in Poblet, Spain). Things are so bad for Catholicism in Europe that in April 2009, the Archbishop of Vienna proclaimed that “The time of Christianity in Europe is coming to an end”. It is of course partially this retreat of the power of the Catholic church that allows all the skeletons to emerge from the cupboard. It is striking how few scandals come to the surface in places like Brazil and Nigeria compared to the almost massive ‘coming out’ currently seen in Europe.
Last Thursday I posed the question of how often the water you drink has been pissed by a vertebrate already. If the number is very small, then those who baulk at drinking recycled water have more cause to complain than if the number is very high.
As some commentators to that post pointed out, in reality we are all drinking water that includes some recycled piss: every dam from which we drink has ducks, lizards, and all sorts of animals pissing and shitting in it, so it is already a bit of a myth to think one can drink water that has not been recently mixed with piss. Still, as another comment revealed, many think the idea of copying Singapore and drinking water that is officially recycled sewage is deemed ‘gross’. So the question how often water has been piss in the past still matters for the ‘yuk factor’.
The answer comes from a very simple formula, which requires a few guesstimates as inputs:
Piss ratio = (total water pissed)/(total water) = (total vertebrate biomass ever lived* piss rate)/ (total water) = (average biomass vertebrates * piss rate per year * years of vertebrates) / (total water)
As in part one of this series, I’m thinking about an idea that seems very possible, extremely interesting and well accepted, but which has little going for it in terms of observed evidence.
The idea today is societal collapse. The premise is simple. Human societies are very complex entities which rely on innumerable interdependencies between people, resources, institutions etc. The resulting structure is subsequently both strong and fragile; like an archway it will stand forever, except if a single stone is removed, whereupon the whole thing will fall instantaneously. Following this collapse people fall into a world solitary, poor, nasty, brutish and short. Precipitating events can be the loss of a resource, the severing of links or population loss through conflict or disease, or exogenous shocks.
I should stress that I am not talking about declines, or gradual change due to long term processes. That’s not the interesting part of this idea. This is about collapse, where a complex system can be brought down rapidly by a few factors and can only be succeeded by something that is not recognisably the same. Continue reading →
Is the real genius of economics our ability to see things that are impossible to objectively measure? The examples I have in mind are incentives, market failures, groups, power, and corruption. Below, I will point out just how impossible these things are to objectively measure but how easy we as participating humans can spot them. I will argue that it is our ability to ‘see’ these things that is the real cause of the success of economics, not our superior connection to hard data.
Incentives. Economists go on and on about incentives and how changes have to be ‘incentive compatible’. Yet incentives come in many shapes in sizes, both monetary and non-monetary. In the economists’ worldview, men and women have different incentives inside the home. Ministers and their constituents have different incentives. Firms and clients have different incentives. Yet, how on earth would you actually measure an incentive? It is damned hard to do. How would you for instance measure the incentives of a minister whose official duty is to do the right thing for Australia? How would you objectively say what the incentive is for a bank manager whose mission statement is one of ‘oneness with the world’? Neither their mission statement nor their list of official duties tells you much about their actual incentives for it is not those that determine whether they will get re-elected or promoted. In order to even start to measure incentives, a statistician would thus have to ignore most of what could be objectively measured as somehow not quite true. Yet, as a human being, incentives are almost childishly easy to observe. We ‘know’ that the baker and the butcher care for their own well-being. We ‘know’ the manager wants to solidify his power and get more sales. We ‘see’ the minister who wants re-election and does his cabinet team’s bidding. We ‘know’ young men by and large want sex. Etc. These incentives are sometimes uncomfortable to note, but very simple to observe. Why are they so simple to observe? Because we can use our introspection to guess the actual wishes of other people: other people are just like us and hence a little bit of honesty about ourselves allows us to immediately see what incentives others have in particular situations. We merely need to ask ourselves what we would find important in someone else’s position. Easy for us as individuals, virtually impossible for the statistician.
I couldn’t resist buying a copy of Daniel Kahneman’s best-seller when returning from holidays. Several friends and colleagues told me it was a great book; it got great reviews; and Kahneman’s journal articles are invariably a good read, so I was curious.
Its general message is simple and intuitively appealing: Kahneman argues that people use two distinct systems to make decisions, a fast one and a slow one. System 1, the fast one, is intuitive and essentially consists of heuristics, such as when we without much thought finish the nursery rhyme ‘Mary had a little…’. The answer ‘lamb’ is what occurs to us from our associative memory. The heuristic to follow that impulse gives the right answer in most cases but can be lead astray by phrases like ‘Ork, ork, ork, soup is eaten with a …’. Less innocuous examples of these heuristics and how they can lead to sub-optimal outcomes are to distrust the unfamiliar, to remember mainly the most intense and the last aspect of an experience (the ‘peak-end rule’), to value something more after possessing it than before possessing it (the ‘endowment effect’) and to judge the probability of an event by how easily examples can come to mind.
System 2, the slow way to make decisions, is more deliberative and involves an individual understanding a situation, involving many different experiences and outside data. System 2 is what many economists would call ‘rational’ whilst System 1 is ‘not so rational’, though Kahneman wants his cake and eat it by saying that System 1 challenges the universality of the rational economic agent model whilst nevertheless not wanting to say that the rational model is wrong. ‘Sort of wrong sometimes’ seems to be his final verdict.
Let me below explore two issues that I have not seen in the reviews of this book. The first is on whether or not his main dichotomy is going to be taken up by economics or social science in the longer-run. The second, related point, is where I think this kind of ‘rationality or not’ debate is leading to. Both issues involve a more careful look at whether the distinction between System 1 and 2 really is all that valid and thus the question of what Kahneman ultimately has achieved, which in turn will center on the usefulness of the rational economic man paradigm.
Last year I spent some idle time doing some rough work to see if ethnic and religious populations were more clustered in Sydney than in Melbourne – presumably due to geographical factors. This was done by calculating Gini coefficients and Herfindahl indices on the numbers of various foreign born populations by postcode.
The answer was “plausible”.
OK, it was about a week of work, but since then I have discovered far quicker ways of doing things, and this morning the 2011 Census results were made available to plebs. Subsequently I have done the same calculations for the 2011 data.
For the three people who are interested here are the Gini Coefficients. I don’t think the Herfindahl Indices add much, but they are available if you really want them, as well as comparative Lorenz curve graphs. I’ve included the 2006 results for comparison.