Thursday, November 29, 2012

Academic research and teaching

(HT Economic Logic)

The main aims of a University are to teach students and to generate new knowledge. These two aims could conflict with each other. For example, when I devote much time and effort for teaching, I might miss these resources for research. An alternative view is that good researchers also make good teachers, because they have a deeper understanding of the problems and this will improve their teaching. The empirical evidence is not conclusive.

It has, of course, implications for the organization of universities, in particular for the incentives related to teaching (typically: none) or to research (typically: somewhat more than for teaching). Some argue that spezialisation is a good way of addressing such conflicting goals, for example, by separating the faculty into "teachers" and "scientists". Others require mandatory teaching training (I have not yet heard of mandatory research training).

Recent research by Aurora García-Gallego, Nikolaso Georgantzís, Joan Martín-Montaner, and Teodosio Pérez-Amaral provide evidence from a Spanish University that

professors with a typical research output are somewhat better teachers than professors with less research. Moreover, non researchers are five times more likely than researchers to be poor teachers. In general, the quality of university-level teaching is positively affected by published research across most levels of research output. (p3)

This does not conflict with my suspicion, but I would like to see more evidence on this. As universities regularly collect students' evaluations of teaching and require staff to provide details on their research, this evidence could be readily provided, for example, as students' term projects.

Friday, November 23, 2012

Wage costs

I encountered these rental rates for boats in Pokhara, Nepal.

What I find interesting are the costs for a "driver", the Nepalese equivalent of a gondoliere. The difference between hiring a boat for one hour with and with no driver is 50 rupees.

However, if you rent the boat for two hours, the difference is 250 rupees, or 125/hour. If you'd take a boat for a whole day, the difference is 800 rupees, or 100/hour in an eight hour day.

The one hour rental rate has the cost of the driver at 14% of the rental price. The wage costs of the daily rental is 800 rupees, or impressive 53% of the rental price.

Is it worth it? You'll have to find out for yourself.

Monday, November 19, 2012

The Economics of Retractions

How much harm is created by "false science"? False science leads others scientists into spending effort, time, and resources on replicating fabricated results, cutting promising research short, and may "stifle the field".

New research by Azoulay, Furman, Krieger, and Murray, "Retractions", aims to quantify the impact of false science on other ("honest") research. Theirs is a tremendous data sifting job:

1. They identify retractions to be caused by standing on the "strong" or "shaky" shoulders (of giants), or the absence thereof. In other words, retractions that are caused by e.g., editorial mishaps, such as printing the same article twice ("strong"); retractions where part of the claims are unsubstantiated ("shaky"), or the almost 600 articles where all claims are false ("absent shoulders").

2. Using the medical PubMed database, they identify related articles through keywords and define a scientific field as the set of articles whose keywords overlap with the retracted articles.

3. By restricting the analysis to articles that were published before the retracted article, excluding articles by the authors involved in the retraction, they construct a treatment group of articles--a field--that were shocked by the retractions. Comparing their citations to articles of a "control group", consisting of articles in the same issues of the journals, they can estimate the causal impact of false articles on the field.

"findings show that scientific misconduct and mistakes, as signaled to the scientific community through retractions, cause a relative decline in the vitality of neighboring intellectual fields. These spillovers in intellectual space are significant in magnitude and persistent over time. In other words, there is clear evidence of negative spillovers in instances of "false science" to broader swaths of the intellectual field in which they take place."

What keeps unemployment durations short?

Experimental evidence shows that early and intensive support (a the combination of meetings, job search courses, and early activation) keeps unemployment durations short. However, it was not clear from these experiments what "did the trick", was it the meetings, the courses or the combination of interventions?

Pederson, Rosholm, and Svarer expand on these experiments and show that the effects are due to the early meetings. The 6 to 7 meetings during the first two months of an unemployment spell have dramatic consequences:

individual meetings between newly unemployed workers and caseworkers can increase employment rates over the next two years by 10%, corresponding to 5 weeks, and our cost-bene…t analysis shows that the surplus per new unemployment spell is around EUR 4725.

Group meetings also have positive consequences, but these are more moderate than those from individual meetings.

Thursday, November 15, 2012

Fame! Fortune! Markets!

Hilmer, Hilmer, and Ransom have a new working paper where they analyze the pay of 1,009 US academic economists and estimated the effect of their journal articles on their salaries.

While I seriously doubt their estimation results---it appears to be a textbook example for endogeneity bias as unobserved ability will influence both the capacity to write good papers and to negotiate good salaries---the compiled data are interesting and they provide some interesting facts.

For example, of the almost 15,000 articles that were published before 2000, about one quarter were never cited (so far). Similarly interesting is the distribution of the Hirsch-Index presented in their Table 5: the median is at 5 and cumulative citations per author hover around 50.

"... but it is only articles in the elite journals that have an impact on pay."

Tuesday, November 13, 2012

On rent controls

Vienna is a pleasant city and it regularly tops the quality of living surveys. A such, it attracts plenty of new citizens, Statistics Austria estimates "forcasts" that Vienna is "expected to have the most marked population growth till 2060 [in Austria]". It is perhaps not surprising that rent prices increased over the last years. (This is what we expect if demand increases and supply responds sluggishly, e.g., because it takes time to obtain planning permissions et cet.)

What are likely consequences of (binding) rent controls? We may learn from other situations, e.g., Manhattan: Glaeser, Gyourko, and Saks argue "that the limited supply response is not the result of technological constraints, or imperfect competition in the construction industry, but rather the consequence of an increasingly restrictive regulatory environment."

Rent control, i.e., an imposed maximum rent price, is perhaps the most frequent regulation and has been studied widely. In principle, rent controls need not be harmful:
"whether such controls are harmful or helpful depends on the particular package of regulations adopted, which is the outcome of a political process. Thus, second-generation controls should be judged on the empirical evidence and, since the programs are so varied, on a case-by-case basis."

And this is why calls for tighter regulation should be met with scepticism: For Vienna, too few facts are available that permit the judgment of recent calls for tighter rent controls. Beware Greens bearing gifts.

Friday, November 9, 2012

Do immigrants cause crime?

According to a newly published study in the Journal of the European Economic Association by Bianchi, Buonanno, and Pinotti (an earlier working paper is here):

According to these estimates, immigration increases only the incidence of robberies, while leaving unaffected all other types of crime. Since robberies represent a very minor fraction of all criminal offenses, the effect on the overall crime rate is not significantly different from zero.

Wednesday, November 7, 2012

Contingent Valuation

Jerry Hausman (MIT) launches a broadside against contingent valuation in the latest Journal of Economic Perspectives: "From Dubious to Hopeless".

I do not expect that proponents and opponents of contingent valuation will ever agree. Some bad ideas in economics and econometrics maintain a surprising viability. Numerous branches of the federal government continue to fund contingent valuation research in the hope that it will support their favored policies subject to cost–benefifi t analyses. (p54)

There are two more articles in this issue--somewhat more positive-- and all are worth reading.

Sunday, November 4, 2012


A signpost I encountered in Nepal:

"all prices are same price": despite my expectations--high prices and low quality--the food was very good at reasonable prices!