Tyler Cowen's Blog, page 294

Can we sell a good undergraduate degree for $10,000?

Dylan Matthews has an interesting discussion of a plan by Anya Kamenetz, you can read an outline of the plan here.  The upshot of her approach is that an entire degree can be done for 10k per student.  There is much in the plan I have sympathy for, and I do think higher education could be much cheaper and still serve most of its useful functions.  That said, I consider this specific proposal to involve some overselling.

Let me just pick up on the single sub-proposal closest to my life:

She [Kamenetz] would also abolish the major of “business,” the single most popular undergraduate major, but perhaps also the least rigorous, and which produces relatively poor-achieving students. Instead, she’d fold practical business classes into the economics major.

Let’s just, for the sake of argument, accept the premise of the business major being less rigorous at many schools.  I would not make such an incendiary claim myself, certainly not about my own school, but this is an exercise in logic, not empirics.

OK, so at many schools below the top, what would happen?  It would be simple: many of the former or would-have-been business majors would not be able to pass the mid- or upper-level classes of the economics major.  What then?

You can flunk out the less scholastically oriented business majors, which is probably not a good idea.

Or you could make all of those economics classes much easier, which is also probably not a good idea.  The better students lose out and the whole major becomes worth less money and also less prestigious for the school.  In essence you end up abolishing the economics major.

Or you can push the former business majors into some other easy major (communications? education?…those are againt purely hypothetical examples, please put aside the empirics).  That’s not the end of the world, but then the point of the exercise is less than clear.  If a lot of students want to be business majors, is it such a big educational gain to shovel them into some major they perhaps do not want and may also be less marketable?

The most likely outcome would be the creation of a multi-tiered economics major, with a harder track and easier track, labeled accordingly, a bit like the B.S. vs. the B.A., though different in the details.  Again, that is hardly the end of the world, and maybe the idea is worth considering, but at this point we must again ask where are the gains.  I have an idea: let’s call the less rigorous economics track the business major.  Or in the interests of the fig leaf producers, how about the business economics major?  The reality is that many schools do combine economics and business and they don’t seem to achieve major competitive or cost advantages in doing so; in fact they may be more likely to encounter clashes of mission and disagreements over what kind of faculty to hire.

(Are there big gains in overhead reduction from consolidating these two departments?  I don’t see it.  And note that some business schools which contain economics departments are broken down into “groups,” sometimes with semi-autonomous status to limit conflict and transactions costs, and that is going to bring back some overhead costs.)

And so on.  Many parts of such proposals cannot be readily translated into reality, at least not a reality where the cost of a four-year degree sinks to 10k total.  A big problem with a lot of “good ideas” for education is simply that (in various hypothetical universes) the students are not up to them.

Are gas station restaurants the future of cuisine? Or is cuisine the future of gas stations?

Gas stations have not historically inspired confidence as palate pleasers. Day-old (or longer) doughnuts or hot dogs rolling (and rolling) on a spinner grill come to mind. But across the Washington region, there are at least a dozen eateries serving delectable, sometimes organic, fare near the pump. There’s Korean bibimbap in Wheaton, authentic Mexican in Jessup, Thai in Leesburg and Latin American in the District. Corned Beef King cooks its meat for 11 hours.

And here are the economics:

The chefs and dreamers have found willing partners in gas station owners. Some have volunteered to cover the cost of building kitchens to tap new sources of revenue — from rent and increased foot traffic — as the margins on gas sales shrink even furtherand retailers such as Best Buy encroach on their quick-bite turf by stocking soda and snacks at the register.

Here is much more, from Michael Rosenwald.

Assorted links

1. John Gray on Leopardi.

2. “A Portland strip club hands out red-stained $2 bills, despite warnings from the feds to stop.”  Can you figure out why?

3. The helium crisis is being resolved.

4. Is disability the new guaranteed annual income program?  And more on duration dynamics in the labor market.

5. Why have income expectations declined so sharply?

6. Interview with Malcolm Gladwell.

7. Eleven myths about Obamacare (very good post).

The nature of current unemployment

Dylan Matthews writes:

…Short-term unemployment is actually lower than it was in 2007. Indeed, the percentage of the labor force that had been unemployed for five weeks or less didn’t grow all that much during the economic meltdown. What changed was what happened after or within those five weeks. In 2007, they typically ended with a job. In 2009 and 2010, they more often ended with another few weeks of unemployment. The result is that if you break down the unemployment rate by duration, the problem appears to be almost entirely about long-term unemployment…

There is more here, including a good picture.

Book and movie splat

1. Ilya Somin, Democracy and Political Ignorance: Why Smaller Government is Smarter.  From my colleague at GMU Law, I have not yet read this one.

2. Damien Ma and William Adams, In Line Behind a Billion People: How Scarcity Will Define China’s Ascent in the Next Decade.  How often does a book have both a good title and subtitle these days?  The authors are more pessimistic about China long-term than I am, but nonetheless this is a very interesting take on The Middle Kingdom.

3. Clare Jacobson, New Museums in China.  Good text but mostly a picture book, I loved this one.  Stunning architecture, no art, full of lessons in multiple areas, think of it as a Straussian picture book with beauty on its side too.

4. John Durant, The Paleo Manifesto: Ancient Wisdom for Lifelong Health.  A useful overview of its topic, with an influence from Art DeVany, but you will not find recipes for either “grubs” nor “worms” here.

5. John Sides and Lynn Vavreck, The Gamble: Choice and Chance in the 2012 Presidential Election.  Good, sane tome on how the fundamentals matter and lots of campaigning ends up being cancelled out by the campaign of the other candidate.

From another direction, In a World… is a subtle and entertaining movie with much economics in it, most of all the economics of superstars in the “voiceover” sector.  The Autobiography of Nicolae Ceacescu is mesmerizing, like watching one of the great silent films of the past, and the scenes where the Chinese communists praise the Romanian communists are some of the best ever filmed.

None of the Above Wins!

NEW DELHI—Indians have a new choice when they go to the polls: None of the above.

On Friday, the Supreme Court said voters in the world’s largest democracy have the right to disapprove all candidates on the ballot, a step that could put pressure on parties to field better-qualified politicians.

“This judgment allows people to send a clear message to political parties,” said Mahi Pal Singh, national secretary of the People’s Union for Civil Liberties, which had petitioned the court for the change.

Activists said they hope the court’s ruling—ahead of five state elections this year and national polls due by the end of May—is a first step toward the establishment of a broader “right to reject.”

Excellent news. Bear in mind:

Nearly a third of the members of the lower house of Parliament are facing criminal charges, according to the Association for Democratic Reforms, a New Delhi-based advocacy group for transparency in governance.

Even if that were not the case, however, one of the problems of democracy is that there is too little feedback and information transmission, due both to rational ignorance and the bundle nature of politics. Allowing for “none of the above” provides, not a panacea, but a little bit more feedback. Many people vote but have to hold their noses to do so. Many others don’t vote but do they not vote because they are satisfied or dissatisfied? None of the above gives the dissatisfied a chance to reveal their views and in so doing it may encourage more and better candidates.

At present, voting none of the above is just informational, i.e. none of the above is never “elected” even if it gets a majority, although the option to vote NOTA may change the outcome of the election. In the future a NOTA majority might signal a new election.

India is the world’s largest democracy. It will be interesting to see how this plays out.

Hat tip: Reuben Abraham

Chinese edition of *An Economist Gets Lunch*, Friday cat blogging edition

Finally MR steps up to the plate with a cat photo:

There is (probably) more information here.  For the pointer I thank Kunlung Wu.

Very good sentences about Forever stamps

The good news is that you can buy up to 1 million stamps in a single order from the USPS, and pay a mere $1.75 in shipping (shipping is their business, after all).

There is more here, which is a guide to whether you can buy Forever stamps at the current price and resell them once postal rates go up to 49 cents.  At the end of the day this piece is also a (scary) lesson about banking.

For the pointer I thank Sheel Mohnot.

Syria crisis fact of the day

Via Chris Blattman, from Hugh Eakin and Alisa Roth:

Already, the number of school-age Syrian children in Lebanon is scheduled to surpass the entire population of school-age Lebanese children by the end of the year.

The article is interesting more generally.

Assorted links

1. More on the Morlocks of Singapore.

2. Who are (were) the top American communists?

3. Long profile of Leszek Kolakowski.

4. How badly are the formal arts hurting?

5. Will the Chinese attempt to clean up air pollution result in much higher carbon emissions?  And debt in China and what they are doing about it.

6. Matt Yglesias reviews Average is Over.

7. Brainpicker on Angela Duckworth and grit.