Tyler Cowen's Blog, page 280

Housing the homeless in shipping containers

I was sceptical at the outset, but quickly won over. The toilet and shower unit is exactly the same as my daughter had in her student accommodation and she much preferred it to having to share bathrooms and toilets with other students. Who wouldn’t?

What really excites me about this opportunity is that land that might otherwise lie idle for five years will be brought back into life and used to provide much-needed temporary accommodation for 36 men and women in Brighton and Hove.

…Before embarking on this venture, we spoke with our homeless clients about the concept. They loved it. In particular, they loved the fact residents would have their own kitchen, bathroom and front door. They felt that being self-contained is far more desirable than a room in a shared house even though the floor space, at 26 sq m, is roughly the same as they would have if they were sharing.

…When it was suggested that we house homeless people in steel shipping containers in a scrap metal yard, I thought it was either April Fool’s Day or we had lost all concept of decency.

There is more here.  For the pointer I thank a loyal MR reader.

Assorted links

1. The true size of Africa.

2. Martini markets in everything, Winston Churchill edition.

3. How the theory of lines and totally empty restaurants applies to Texas barbecue.

4. Stephen L. Carter on Average is Over and also sports.

5. Interview with Lars Peter Hansen.

6.  An eighteen-point polemic against neoclassical economists.

How good are computers as tutors?

Here is one new report:

…the Wolfram Alpha team is launching a new service for learners, the Wolfram Problem Generator, that turns the “computational knowledge engine” on its head.

The Problem Generator – which is available to all Wolfram Alpha Pro subscribers now – creates random practice questions for students, and Wolfram Alpha then helps them find the answers step-by-step.

Right now, the Generator covers six subjects: arithmetic, number theory, algebra, calculus, linear algebra and statistics.

Here is a 2011 Kurt VanLehn paper (pdf) on human vs. computer systems of tutoring:

This article is a review of experiments comparing the effectiveness of human tutoring, computer tutoring, and no tutoring.  “No tutoring” refers to instruction that teaches the same content without tutoring.  The computer tutoring systems were divided by their granularity of the user interface interaction into answer-based, step-based, and substep-based tutoring systems.  Most intelligent tutoring systems have step-based or substep-based granularities or interaction, whereas most other tutoring systems (often called CAI, CBT, or CAL systems) have answer-based user interfaces.  It is widely believed as the granularity of tutoring decreases, the effectiveness increases.  In particular, when compared to No tutoring, the effect sizes of answer-based tutoring systems, intelligent tutoring systems, and adult human tutors are believed to be d = 0.3, 1.0, and 2.0 respectively.  This review did not confirm these beliefs.  Instead, it found that the effect size of human tutoring was much lower: d = 0.79. Moreover, the effect size of intelligent tutoring systems was 0.76, so they are nearly as effective as human tutoring.

One more specific result found in this paper is simply that human tutors very often fail to take advantage of what are supposed to be the advantages of human tutoring, such as flexibility in deciding how to respond to student problems.

By the way, LaunchPad, the new e-portal for our Modern Principles text, contains an excellent adaptive tutoring system.

Tyler Cowen talks to Emily Moore

Here I am interviewed in Tank magazine about my article “An Economic Theory of Avant-Garde and Popular Art, or High and Low Culture,” co-authored with Alex.  Excerpt:

EM: Your essay contains one of the most interesting footnotes I’ve ever read: “The interactions between the quantity and subjective quality of art are similar to the interactions analysed by Becker and Lewis (1973) between the quantity and quality 
of children.”

TC: Becker’s work considered how families might regard “more investment in each child” as a replacement for “having lots of children”, and that is indeed a common substitution as economic development proceeds. Analytically, we can think of artworks as similar to children in this regard. Quality, in the sense of an artist pleasing himself or herself, can substitute for quantity. Syd Barrett perhaps knew he had nowhere left to go, aesthetically. Proust and Cervantes didn’t need to write so many other works, perhaps because they felt satisfied with how thoroughly they expressed their visions through what they did. Balzac took a different course and achieved a different kind of creative satisfaction, yet precisely for that reason he may resonate less with people today than the more idiosyncratic visions of Proust or Cervantes.

The original article you will find here.

Assorted links

1. Markets in everything, although in this case I am not sure exactly what that is.

2. Kim Jong receives an honorary economics doctorate.

3. The Economist on the economics of interstellar flight.

4. More on the science of ice cubes.

5. New RCT results on cash transfers.

Precocious Albion: A New Interpretation of the British Industrial Revolution

That is a new paper by Morgan Kelly, Joek Mokyr, and Cormac Ó Gráda, and the abstract is here:

Why was Britain the cradle of the Industrial Revolution? Answers vary: some focus on resource endowments, some on institutions, some on the role of empire. In this paper, we argue for the role of labour force quality or human capital. Instead of dwelling on mediocre schooling and literacy rates, we highlight instead the physical condition of the average British worker and his higher endowment of skills. These advantages meant that British workers were more productive and better paid than their Continental counterparts and better equipped to capitalize on the technological opportunities and challenges confronting them.

The British were fed better, they may have been smarter for nutritional reasons, and they also had a better system of apprenticeships.

Arnold Kling on the problems with the health insurance exchanges

Somebody who had experience with creating a health insurance brokerage business would know that the systems problems are more complicated than just putting up a web site. In the background, the system needs to communicate with the systems at several government agencies and at the insurance companies. That changes it from a simple technical project to a complex, time-consuming, project involving business and technical staff.

You build a complex, mission-critical system through a process of continual negotiations among business units and technical people. You do not treat it as a procurement process. You cannot just write up a spec, put it up for bid, and parcel it out to dozens of contractors.

The development of the computer system probably would fall under operations, but you would want a project executive with a lot of authority to negotiate with all of the business units and to make project decisions. When conflicts arise, the project executive should be able to go straight to the CEO and get them resolved.

The project executive’s main focus is keeping the project’s complexity from getting out of control. The project executive must have the authority to trim features in order to meet deadlines.

You go through a lot of analysis and many painful meetings before anyone writes a line of code. The technical staff have to be able to challenge the business units, because sometimes the business unit asks for something to be done in a really complicated way, when a much simpler solution is available to solve the business problem.

One of the worst things that can happen on a systems project is to find yourself revisiting the business-technical negotiations process after writing a lot of code. If that is what is happening now, this project is in an unbelievable amount of trouble.

5. I suspect that the technical problems are mere symptoms. Probably what is fundamentally messed up in this health insurance brokerage business is the org chart.

There is more here.

The Implications of Behavioral Economics Are Not Obvious

Yesterday’s post, Stayaway from Layaway, elicited lots of comments but less analysis.

Some commentators suggested that people who use layaway plans have commitment problems (self-control problems) but that they are meta-rational and choose layaway programs to help them overcome. The problem is that when people are irrational at one level and rational at another it’s difficult to know which level is in control and which level is being appealed to by firms.

People who have self-control issues may think that they are being meta-rational by entering into layaway programs but perhaps, ala Dunning-Kruger, they are fooling themselves and will soon find it difficult to pay on the installment plan. According to one marketer, “up to 25% of layaway orders, on average, are cancelled.” Canceling exposes the consumer to service and cancellation fees. Moreover, I wouldn’t be surprised if some people never get around to reclaiming their payments. We know, for example, that billions of dollars on gift cards are never used.

We also need to keep in mind the incentives of the seller. Walmart, Kmart and Best Buy offer layaway programs because they increase profit. Are the higher profits a result of selling commitment to the meta-rational? Or are the higher profits the result of getting the less than perfectly rational to buy more? The ultimate commitment plan is to not buy what you can’t afford and layaway doesn’t help you with that problem. What layaway does do is encourage you to commit now to buy at Walmart. In other words, it binds you to Walmart and, fyi, it does so weeks before goods typically go on sale.

The way the programs are often advertised and discussed–layaway in case the store runs out!–is also a classic sales technique to encourage buying by eliciting feelings of (false) scarcity and potential loss.

I would like to see more data but I have not yet seen any reason to revise my belief that layaway plans are often a bad deal for consumers. I have, however, discovered one reason for layaway that does make some sense. Namely, to keep the presents hidden from snooping children.

MasonKorea opens 2014

George Mason University is branching out, adding an undergraduate program in Korea to supplement its Fairfax, Arlington and Prince William campuses.

Mason Korea will begin enrolling undergraduates in March 2014, offering economics and management degrees. Students on the Mason Korea campus will be joined by Fairfax students who will take general education and elective courses during the inaugural period…

There is more information here.  There are pictures of Songdo here, and photos of Songdo Global University here.

Good sentences

We came to Moscow as political correspondents.  We leave as crime reporters.

That is from an excellent Jonathan Steele LRB review (free registration) of two new books on Central Asia.