World Hunger, Income and Substitution Effects

Don't miss one of the best articles I've seen in a long time on hunger and development. Governments simply can't ignore economics when designing policy. A good starting principle: people respond to incentives. And not always the way governments imagine they will.

In one study conducted in two regions of China, researchers offered randomly selected poor households a large subsidy on the price of the basic staple (wheat noodles in one region, rice in the other). We usually expect that when the price of something goes down, people buy more of it. The opposite happened. Households that received subsidies for rice or wheat consumed less of those two foods and ate more shrimp and meat, even though their staples now cost less. Overall, the caloric intake of those who received the subsidy did not increase (and may even have decreased), despite the fact that their purchasing power had increased. Nor did the nutritional content improve in any other sense. The likely reason is that because the rice and wheat noodles were cheap but not particularly tasty, feeling richer might actually have made them consume less of those staples. This reasoning suggests that at least among these very poor urban households, getting more calories was not a priority: Getting better-tasting ones was.

Keep Those Reasons Coming

Headed toward 100 reasons for NOT going to graduate school. I like #35: Mumbo-jumbo abounds.

It is difficult to exaggerate the degree to which mumbo-jumbo has permeated academe. The problem is especially egregious in the humanities, but it exists everywhere in the modern university. Mumbo-jumbo takes many forms, but it is closely associated with the desire of far too many academics to be perceived as sophisticated at the cost of clarity or meaningfulness in the most fundamental sense. Four years before it dissolved its Department of Physical Education completely in 1997 (“P.E.” not being terribly sophisticated anymore), the University of California, Berkeley, renamed it the Department of Human Biodynamics. But terminology-inflation is only the tip of the mumbo-jumbo iceberg.

Read more about this reason, and (coming up on) 99 more, to skip it altogether.

Beijing Capsule Apartments

Just $35 a month? Wouldn't mind one myself...

Business Education in China

Good news for those of us who teach business-related subjects in China: Bob Ludwig says business education is on the rise here, with GMAT volume rocketing.

What's the most valuable non-fuel mineral commodity?

I love questions like this: they help students see there's a whole world waiting for them beyond the consumer products they know so well because they're bombarded with advertisements.

The world's most valuable non-fuel mineral commodity? Guess first, then take a look...

Keep Learning

I once heard that taking up square dancing later in life helped keep the mind sharp, by requiring the learner to take up something new--new patterns, new faces, etc.

Since I have two left feet, looks like I'll have to keep pursuing the second language way to boost brain power.

I'll Take It!

Even small increases in pay for college teachers are welcome!

Russian Rumblings

Is there a "looming political crisis?" Masha Lipman says economic reforms may be part of the solution:

Thus critics are calling for less governmental control and for policies that would ensure sustainable development and growth. If people’s incomes were not directly tied to the government budget and spending, traditional paternalism would be gradually overcome. That requires a fair business environment, regulated by law and due process, and mechanisms of public accountability preventing, or at least tempering, abuse of office.

Bad Headline, Great Audio

The headline writer at Bloomberg must not have listened carefully. But the audio of Greg Mankiw is well worth the download.

Adding a Canada Every 2 Years or So

India's already hit 1.2 billion, on its way to becoming the world's most populous country. That would be by official statistics, though; China's is likely above the reported 1.3 billion.

More Evidence for Signaling?

If education was really increasing human capital, you wouldn't have outcomes like this:

Vedder drove home the point that much of the problem with college — probably the core factor leading to a “higher-ed bubble” — is simply that ”number of graduates is growing faster than the number of jobs.”

You'd simply find more productive people in those same jobs, and that would raise the value of education in line with its price.

But if education is more about signalling than human capital, there's not much to counteract trends like this:

students are studying less and don’t learn very much more by their third or fourth year than when they started. But within the institutions themselves, he argues there are no incentives for institutions to be efficient.

(Link to the video, here.)

India's Sex Ratio Imbalance

That's a serious gap:

New data from the 2011 Indian census show that there are now 914 girls aged 0-6 years old for every 1,000 boys of the same age, or 75.8m girls and 82.9m boys.

What does it mean for India's future? For that of other countries?

Decline of Newspapers

An interesting comment on this article about the decline of certain industries in the U.S., of which one of the largest is newspapers:

Newspapers aren't dying. Advertising is dying, and taking newspapers down as collateral damage.

TA's

Actually I wouldn't care if they were graduates or uundergraduates, any kind of teaching assistant would be welcome.

Education and Signaling

Just a couple of weeks ago in Intermediate Microeconomics we touched on the idea that the higher incomes that more educated workers receive may not be because the education actually made them more productive.

It could just be a signal that the educated person will be more productive, because they come from a certain socio-economic background, or because they have demonstrated an ability to stick with something that's not always fun for four years.

So maybe the signal is breaking down.