Can Mentoring Help Female Assistant Professors? Interim Results from a Randomized Trial (unstable ungated link, stable gated link)
Francine D. Blau, Janet M. Currie, Rachel T.A. Croson, Donna K. Ginther
While much has been written about the potential benefits of mentoring in academia, very little research documents its effectiveness. We present data from a randomized controlled trial of a mentoring program for female economists organized by the Committee for the Status of Women in the Economics Profession and sponsored by the National Science Foundation and the American Economics Association. To our knowledge, this is the first randomized trial of a mentoring program in academia. We evaluate the performance of three cohorts of participants and randomly-assigned controls from 2004, 2006, and 2008. This paper presents an interim assessment of the programs effects. Our results suggest that mentoring works. After five years the 2004 treatment group averaged .4 more NSF or NIH grants and 3 additional publications, and were 25 percentage points more likely to have a top-tier publication. There are significant but smaller effects at three years post-treatment for the 2004 and 2006 cohorts combined. While it is too early to assess the ultimate effects of mentoring on the academic careers of program participants, the results suggest that this type of mentoring may be one way to help women advance in the Economics profession and, by extension, in other male-dominated academic fields.

What’s striking about this is that the intervention is only a 2-day workshop. I can’t quickly locate an up-to-date reference for the salary value of an top-tier publication, but let’s conservatively guess that it’s $100,000 of lifetime income. Given that participants are foregoing only a couple of days of their own time, that suggests they ought to be willing to pay at least $25,000 out of their own pockets to attend. (Naturally, this only works in partial equilibrium, since there are fixed number of articles published in top-tier journals each year.)

The European Union has never been stress tested, so we don’t know how strong the union is.  The US started out as a very loose federation after the War of Independence ended in 1783.  The 13 colonies were more like NATO than the EU.  They created a constitution, then federal institutions slowly evolved, and a sense of American uniqueness and manifest destiny grew from 1820 to 1850.  But they were still “these United States” until the fearful test of the union by the civil war.

The core of the EU is tight and I think it will survive for many years.  The Treaty of Rome is fundamentally a political rather than economic union.  The aim of its founders was to end the wars for control of Western Europe that raged on and off from the breakup of Charlemagne’s Carolingian empire in the 10th century until 1945.  WWII was to be the final tragic act, and in particular an end to the wars driven by Prussian militarism.   The core of the EU — France, Germany, Italy and the low countries will likely move to a deeper political union over the next decades.

Germany is likely to have a more prominent and assertive role in the EU as WWII moves further into history.  Germans are reminded very day of their national disgrace, because the modern era is defined by the second world war   Whenever the boundary of the modern era is mentioned — most goals scored since WWII; best prime minister since WWII; largest crowd since WWII — these are constant reminders.  However, the modern era will soon be defined by the turn of the century.  That has been true in every century and is particularly true this century because it begins a new millennium.

When the modern era no longer begins with WWII, then the war will seem a long time ago and it will change how Germans see their place in the world.  I am not predicting a return of German nationalism — not at all, that chapter is closed — but I do think that Germany will take a much larger leadership role in Europe.  We can see that already in the discussions over a bailout for Greece.

The smaller countries of the EU are not so tightly attached and some could fly off over time.  Major political disputes between EU member countries have not arisen yet, nor has there been a major conflict within one member country, but these things will happen eventually.  Disputes between, or within, the newer members are more likely since their borders are more recently drawn and less settled.  Moreover, in the smaller newer members of the EU there are emigre populations that can be the source of great friction.

Regarding the fiscal problems of Greece.  Why would the EU bail out Greece?  That would create a moral hazard problem that would only end when an member is allowed to default — so why start down that road?  There has never been any explicit guarantee of Greek Treasury debt holders by German and other taxpayers.

It is probably best if Greece does default.  Greece is not a global financial institution like Lehman Brothers.  A Greek sovereign default would be similar to the Argentinian default.  Debt holders, including banks will suffer.  Greece will be excluded from global capital markets for a while and growth will be low for a decade.  But it will not be a financial catastrophe.  It would not plunge the world into GFC II.  The sooner that Germany states categorically that it will not bailout Greece, and the EU gives Greece the nod to default, the sooner the resolution process can begin.

The alternative to default is problematic.  Working through the debt means many years of low growth and high unemployment.  It is not obvious that democratic institutions can survive in Greece under that strain.  Greece had a military government for seven years until as recently as 1974.  From the EU’s perspective the economic pain of default is probably better than a fracture in the Greek polity.

A third possibility is that Greece sell some assets.  It is a pity that notions of sovereignty rule out the sale of Greek islands.  It might be better for everyone if Greece could sell off a few islands to pay some of its debt.

Now, maybe I am just a skeptic, but the so-called revolution sounds like the sort of tired old policy I have seen in Melbourne many times before. Try and ration road space on the basis of some sort of command and control system so that vehicles move more efficiently.

The plan, expected to be released by the government this month, centres on the creation of a ”road use hierarchy” that gives priority to cars, cyclists, pedestrians and public transport at different times of the day to improve travel times.

Now that brings back memories – transit lanes, priority tram zones, systems of alternative routes for trucks, cycle paths marked on roads that are close to death traps, priority traffic lights for buses. Indeed there is nothing in the article that we haven’t seen before – in fact many times before. And guess what – while it may give politicians warm and fuzzy feelings, none of it works to significantly reduce traffic congestion. Is this a problem? Well according to the article:

Traffic congestion costs Victoria $2.6 billion every year, but that figure will double to $5.2 billion by 2024 the report warns, unless radical change to road use is embraced.

That sounds like a bit of a problem – $2.6 to $5.2b in congestion costs. (Of course the optimum is not zero congestion costs, so a large number doesn’t prove that this is ‘too much’ but I am happy to go with the article and agree that there is a problem here).

So what is the source of the problem? As the article notes:

”Road space is precious. We’re not getting any more, but demand is soaring … This is a turning point.”

and

the plan would belatedly recognise that road space is scarce and can’t be everything to everybody.

So the problem – road space is a scarce commodity. But for some reason, unlike other scarce commodities, we refuse to charge for it on the basis of use. Instead we deliberately ignore the price system and try to use some form of rationing. And like most rationing systems it ends up in queues – called congestion. Indeed, the queues at the end of the Eastern Freeway in Melbourne in the morning resemble nothing better than the queues of consumers for bread in the old USSR. We used to laugh at those. And yet we put up with the same silly rationing systems in our transport system.

Even worse, we know how to at least partially fix the problem – put on some real time congestion pricing. This would not need to be a revolution. We would simply have to copy some of the ideas that have been tried and tested overseas – for example in London and in Singapore. Even simple charging for peak period road use or a charging ring around the central part of Melbourne could have a significant impact. What is more, many vehicles in Melbourne already have the technology to make such charging simple – it is the same technology that is used on the private toll roads.

Of course we could have a real revolution and use more sophisticated systems such as GPS-based information and charging, for example, for commercial transport.

As the articles lined above point out, congestion charging is not a magic bullet, but it does make a difference. However, it is also politically controversial and takes some political leadership to put it in place.

So two pleas. First, can someone tell me what is the opposite of a revolution? And, second, can we not have one of these again in Melbourne’s transport system?

I also listen to podcasts on the bus as I did when I drove to work. So it was of some surprise that I listened to a recent episode of Tim Harford’s More or Less (while on the bus) about the environmental impact of bus as opposed to car travel. Tim repeats the issue in his FT column today.

According to my colleagues on the BBC’s More or Less programme, cars emit 127g of CO2 per passenger per kilometre and buses 106g, based on average occupancy. Even London buses average a mere 13 passengers.

Add my additional walking to the equation and my emissions may well be higher as a result of this change in activity. Indeed, as I like to work on the bus, I prefer to avoid the crowds. So on the bus I catch at 6:30am there are rarely the average number of passengers.

So what is the environmentalist’s response? It is that the bus “would be running anyway.” The idea is that buses have a regular schedule and so there are going to be times where they are more empty than full and other times where the reverse is out. So the appropriate thing is to look at the marginal rather than the average to work out net impact. As the bus is running anyway but a car would not, buses win.

Tim Harford points out, of course, that the same is true for air travel. Air travel is, for the most part, public transport. So the same argument applies to it: “the plane would be going anyway.”

An admittedly unscientific poll of environmentalists at dinner parties suggests to me that they think “the plane is making the journey anyway” excuse is unacceptable but “the bus is making the journey anyway” excuse is spot on – and that they have no coherent justification for the distinction. Their favourite excuse is “you have to set an example” – but surely, before you decide to set an example, you need to be sure that you aren’t setting a bad one.

The resolution lies in a very tortured argument.

For all you environmentalists out there, then, here is the justification for the double-standard of taking the bus but not the plane: it is that bus schedules might be insensitive to passenger demand, while planes are highly sensitive – and ever more so since the budget airlines arrived on the scene. Your best argument for taking the bus is a perverse one: that, no matter how many people do likewise, it’s the rare public transport tsar that will lay on extra buses.

The idea is that airlines and bus authorities put on buses to match demand. But airlines are in a competitive market environment while buses are managed by public authorities who are really bad at putting on extra buses. I’m not sure what the empirical evidence really is for that potential out but it strikes me that it could also go the other way. Public authorities have trouble cutting the 6:30am bus that a private company would happily do away with. In some countries, buses don’t leave until they are full — that is the market system at work.

This all suggests that just like we have ‘time of day’ airline pricing we need ‘time of day’ bus pricing. I should pay for travelling on my average emitting bus more than I would pay for stuffing myself into a crowded one. The interesting question is whether I would end up contributing to emissions less once all of this is in place. For the moment, there is no reason for me to be smug but I do enjoy being able to work while commuting.

My classes don’t have much discussion of ethics in them.  I believe that ethics can only credibly be taught by either philosophers, since philosophy directly addresses the question of how we should live and how we should be governed, or by people who have lived a highly moral life and therefore have the personal authority to instruct others.  Lets be clear, ethics and morality are the same thing.  But, of course, ethics courses are never called morality courses.  I don’t  have the intellectual of moral authority to teach students about ethics.

On the hand change in our society is rapid.  We need a continuous, high level discussion of the ethical/moral issues that arise in the evolving business environment.  Business schools are an important part of that discussion because of their thought leadership, impartiality and academic freedom.  So, I don’t know.  I guess I support the teaching of ethics in business schools, so long as right people do it, and so long as ethics is recognised for what it really is — morality.

The German Government’s purchase of a list of names of secret Swiss bank account raises some interesting ethical questions.

On the one hand those records are the property of the Swiss banks.  The taking of those records without permission is theft of valuable data.  The German Government is buying a stolen good.  It is committing a crime to solve a crime.  Is that ok?  Do the ends justify the means?  Some of the people on that list will be doing nothing wrong.  Many of them will not be German citizens.  Is it ok to infringe their privacy in that way?  If the German Government believes that the Swiss banks involved are harbouring the wealth of tax cheats then why don’t they just order those banks to hand over the data or face seizure of their assets in Germany?  If there is reason to believe that the Swiss banks are giving safe harbour to criminals then why are they not challenged head-on by the German state.  Isn’t the buying of stolen records all a bit sleazy?

What if a newspaper paid for classified information from a German Government official in the belief that the Government is acting unlawfully?  Would that be ok?  Wouldn’t the German Government say that you have to go through official channels, and that the end does not justify the means?

On the other hand the German Government might argue that there is no theft involved.  The payment for the CD containing the names on bank accounts is payment for information, such as might occur in any criminal case.  Often the payment for evidence is not is cash, but in a reduced sentence for the testifying party, but it amounts to the same thing.

German citizens who avoid their taxes have no natural right to privacy.  The right to privacy does not extend to the right to hide criminal activity.  If innocent parties are caught up in the collection of evidence, well so what?  That happens all the time in the covert collection of evidence — in telephone taps, surveillance, mail interception, etc.

It would make for an interesting ethics class.  Personally, I applaud the German Government.  I don’t know why they have put up with Switzerland hiding the well of tax cheats for so long.  It would suit me if they were more proactive.  Instead of waiting for CDs to turn up and then paying for them, why don’t they offer a reward of 10% of the taxes that are reclaimed.  Sharpen the incentives a bit and see what happens.  Let loose some bounty hunters into the secret world of off-shore banking and see what they come with.

The issue is somewhat complicated. The straight out economist in me likes that idea that Amazon is really just a re-seller and delivery mechanism for books and that the price the consumer should see is the one the publisher wants (actually, I’d like it to be what the author wants but let’s not get crazy). The reason is that this avoids the double mark-up problem and ensures that Amazon is paid based on units sold rather than the book’s quality.

But there are other considerations. First, $9.99 for a book may make it a ‘no brainer’ purchase just like those $0.99 iPhone apps. In that case, pricing above that could see a dramatic loss in sales. That is something Amazon is thinking about but if that is really the case, the publishers will come into line anyway and it is unclear why Amazon should care more or less than them about eBook sales. In each case, they have paper book businesses and if anyone thinks that the Kindle as a device is going to earn Amazon money on its own, they’re dreaming.

Second, there is the issue of piracy. What will it take to pirate an eBook? Once you have worked out how and have a device that can accommodate pirated books, then it should be really easy. But that is the issue: you have to work it out. The issue with music and videos is that consumers worked it out prior to content providers getting with the program. Once consumers have sunk those costs, it is all too late.

Now arguably, Apple’s $0.99 price insistence for music stemmed the tide. Not because of the $0.99 itself but of Apple’s commitment to some sort of price. With that knowledge along with an easy to use system, those who hadn’t invested in pirating technology, may well have chosen not to. The move away from DRM has made that so much easier by getting rid of some annoyance.

The problem publishers face is that they now have no similar commitment mechanism. Amazon wants to hand them one and maybe Apple will do so as well at a higher price point. But if they want the free option of being able to set prices ‘at will,’ consumers will be more tempted to expend the costs in working out how to pirate and not pay anything at all. Only a price commitment that, yes, gives consumers a better deal than hard copy books, will be able to accommodate that. And if you think normal trade eBooks are the big game here, think again. Textbooks is where the real threat lies. Let’s hope the $49.99 textbook price commitment comes soon.

Nearly every ranking of economics journals uses citations to measure and compare journals’ research impact. Raw citation data, however, include a number of factors that generally are thought to mismeasure impact. For example, under the view that a citation in a top journal represents greater impact than a citation elsewhere, it is usual to weight citations according to their sources. The most common means by which weights are derived is the recursive procedure of Liebowitz and Palmer (1984) (henceforth LP), which handles the simultaneous determination of rank-adjusted weights and the ranks themselves.

Alas, the lists to be used by the ARC in assessing research under the ERA (including the economics list) have eschewed this approach. Instead, they’re using the pre-1984 method of ranking journals by asking senior people in the field wot they reckon.

The US Federal budget deficits are a key part of the fecklessness of Congress and the last two administrations.  In President Bush’s first budget, FY 2002, US Federal Government spending went through $2 trillion for the first time and revenues were about $1.9 trillion. President Obama’s 2011 budget has spending at $3.8 trillion and revenues at $2.5 trillion.  Spending up $1.8 trillion and revenue up $0.7 trillion.  The AFR quotes Obama as saying on Tuesday that “It is time to save what we can, spend what we must and live within our means once again“.  At the same time he announced that the budget deficit will be $1.3 trillion in 2011.  The President may actually believe that his statements and actions are congruent, which is pretty frightening.  

The loss of fiscal discipline in the US and the inability of national leadership to stop spending and take some tough decisions is evolving into a national disaster.  Bush and Obama both came to power promising fiscal rectitude.  I guess every president does.  Bush promoted his sweeping tax cuts within his own party in Reaganesque terms  - cutting taxes without cutting spending is not irresponsible he claimed, because the path to smaller government is to starve the beast of funds.  Bush pushed two big tax bills through the Congress.  The 2001 tax bill cut the maximum tax rate to 35% (which kicks in at an income of about $340k) and the second bill cut taxes on dividends to 15%.

The Senate, where most of the adults in Congress reside, had the wisdom to insist on a sunset clause for the 2001 Bush tax cuts.  Senators on both sides were concerned that the tax cuts would not be matched by spending cuts.  They insisted that the tax cuts must be reviewed 10 years hence so that they would naturally lapse if the budget was in poor shape in 2011.  The foremost proponent of this common sense approach was John McCain.  President Obama is now proposing that a large part of the Bush tax cuts be maintained permanently after 2011.  McCain versus Obama, what can you say?

Of course Bush went on a reckless spending binge in his two terms.  He introduced the largest increase in middle class welfare for four decades with the prescription benefit entitlement.  He launched two wars and ramped up spending on everything.  Obama appears to be made of the same stuff in tax and spending terms.  A big new social program in his first year and a budget deficit of $1.3 trillion in year when the economy is expected grow at 4.3%.

It is always hard to comprehend the real feeling in the US electorate at any particular gauge.  Having said that ,I sense some real fear and disappointment about the state of their polity.  I expect something major to happen in the mid-term elections in November.

The main part is an Emissions Reduction Fund. It appears that this is a fix pot of money that the Coalition will then spend via a tender process to identify projects that will reduce emissions, not involve price increases to consumers, protect Australian jobs and need the funding. What this appears to mean that the Coalition will ‘pay for carbon’ and cap the total pay. It is a ‘fiscal cap and stay.’

But that only appears to be part of what the fund is for. It also looks set to pay businesses for emissions reductions below their historic average. If they agree to reduce emissions, they will be paid for the reduction. It is not compulsory for small businesses.

That said, the Coalition will hold the line at the status quo. Businesses who exceed their current emissions will incur a penalty. Aside from the obvious issue that this puts an amazing weight on working out what ‘business as usual’ actually is for each individual business what if they can actually do that? Does that mean a polluting business can’t expand? Not quite. So long as they can justify it as ‘best practice.’ In other words, it isn’t a ban but a regulatory hurdle. It is claimed that this will be less complex or bureaucratic than Labor’s proposal, although it is hard to see how. It is also, by its very nature, hard to scale up if a target of more than 5% is required by international agreements. (That said, it makes it much harder for Australia to be part of such agreements too).

This approach of setting a budget and then somehow allocating it to a grab-bag of projects is a difficult task. In the bizzaro world we are living in, it is the sort of thing that those who have great faith in governments recommend. By faith I mean in the ability of governments to gather accurate information and allocate funds in a way that doesn’t encourage rent seeking. Call me crazy but this proposal seems a textbook example of how not to do things when you note that in the real world, there is a governmental knowledge cap and a flow of funds to industry in a way that would surely be difficult to account for — even if you can somehow make it transparent. It throws two decades of public sector management improvements out the window.

I had previously called Abbott an environment-hater. In retrospect, I realise that can’t be the case. After all, how can someone willing to expend so much in economic inefficiency for the sake of the environment, hate the environment? The Coalition policy caps the government’s fiscal commitment to climate change but not the economic commitment of the economy. It is still unknown how costly that economic commitment will be and hopefully we will never have to find out.

Breaking Up is Easy to Do, Australian Financial Review, 2 February 2010

Why are there so many countries in the world? At the end of World War II, there were 74 nations. Today, the United Nations has 192 members. Proliferating nations are more than an academic curio. As trade ministers and environment ministers know, one of the reasons it is so difficult to strike an international deal these days is because it requires the agreement of a couple of hundred representatives.

In The Size of Nations, Alberto Alesina (Harvard) and Enrico Spolaore (Tufts) present a theory of country size that is as simple as it is powerful. In determining how big countries should be (and therefore how many countries there are in the world), they argue that there are two opposing forces. For economic reasons, nations should be big. For political reasons, countries should be small.

Economics favours large nations because it means more of us share the costs of running the central bank, paying for embassies, and maintaining an air force. And because commerce is easier within borders than across them, businesses are more likely to prosper in a big nation than a small one.

But politics drives towards smaller nations because large nations are hard to control. Smaller nations are more homogenous on several dimensions. Incomes tend to be more equally distributed, there is less ethnic and racial tension, and people are more likely to share a common language and religion. It’s a lot easier to find common ground when you’re the President of Costa Rica than if you happen to be President of the United States.

Sure, you say, but why are countries these days breaking up quicker than a Hollywood marriage?

The answer is that the two great forces of the post-war era – globalisation and democratisation – both favour smaller nations. Globalisation does it by making secession more attractive. In 1950, when average tariffs were around 40 percent, regions paid a large price for going it alone. Now that the average tariff is around 5 percent, breaking up is easier to do.

Democratisation raises the pressure to split off because it gives voice to regional interests. Among their many talents, dictators specialise in repressing separatist voices. From the Roman Empire to the Soviet Union, authoritarian regimes have forcibly imposed national symbols and languages. When regimes democratise, it can prove impossible to hold together a large and diverse country. It is no coincidence that East Timor’s independence quickly followed Indonesia’s democratisation. When China finally democratises, it is almost certain that outlying provinces will split away.

From Greenland to Georgia, Scotland to Somalia, the dominant pressure in the world is towards more nations, not less. Mergers (such as German reunification in 1990), are the exception that proves the rule. It’s a fair bet that the UN will have more than 200 members before long.

For policymakers, Alesina and Spolaore’s book has three major implications.

First, it challenges the old theory that Africa’s biggest problem is that the continent has too many countries. While mergers would have economic advantages (particularly given the substantial trade barriers that prevail), they would also have political costs. Africa’s ethnic, racial and religious diversity means that mergers could well end up creating new countries as ungovernable as Sudan and the Democratic Republic of the Congo are today.

Second, it suggests that the tectonic forces of geopolitics are moving against an Australia-New Zealand merger. The easier our Kiwi friends find it to trade with the world, the less likely they are to become the seventh state. And speaking of states, if you thought that Australian separatist movements were dead, you may be in for a rude shock. Western Australian secession would be costly for them, but the price keeps falling.

Third, we have to rethink the way that international organisations operate. Would the post-war negotiators have thought their new institutions would be viable in a world with nearly three times as many countries? Consensus may be a fine way to choose a family holiday, but when it comes to a trade deal, perhaps it’s time to start voting. (Ironically, getting the World Trade Organisation back on track will reduce global trade barriers, in turn fuelling secessionist fires.)

So get used to hearing the phrases ‘separatist movement’ and ‘autonomous region’ plenty more times. Unless we press the pause button on globalisation and democratisation, splintering nations are set to be the way of the future. But perhaps parents could stop chastising the younger generation for not knowing their maps. Honest, mum – geography really is harder than when you studied it.

Andrew Leigh is an economist in the Research School of Economics at the Australian National University.

By the way, apologies to anyone who has strong views on the distinction between ‘nation’ and ‘country’. If only there were more synonyms…

But at least the anticipation of this report, and its prediction of an Australian population number by 2050, has sparked some discussion about Australia’s population dynamics.  The fact that Australia’s population might grow to 35 million persons by 2050 is not in itself surprising.  The (geometric) average growth rate of population over the last 100 years has been 1.8%, so forty years of growth at 1.2% per annum would be nothing new for Australia.   What I find surprising is the stridently negative reaction from several quarters to a forecast of 35 million.

What is the big deal about 35 million?  That projection represents a considerable slowing of historical growth rates.  There isn’t any natural resource constraint on having a larger population.  At 35 million there would be 22 hectares of land per person in Australia, which seems like enough.  Saying that Australia doesn’t have enough water for 35 million people is as sensible as saying that we don’t have enough electricity.  Generating electricity and desalinating water are perfectly scalable industrial processes.  There is plenty of water of in the ocean, we just need to get the salt out it, which gets cheaper every year.  What else don’t we have enough of (apart from people)?

I agree with Prime Minister Rudd on this.  I favour a big Australia.  A grow rate of 1.2% is fine.  That would give us a population of 64 million by 2100.  More people living fulfilled lives is an end in itself.  More overall human happiness — isn’t that what we want?

A larger population also gives Australia a more secure place in the world.  Pax Americana will come to an end eventually and we will then need more political and military weight in the world than we have now.

A larger population will sustain a more robust, vital and distinctive Australian culture.  Globalisation is reducing cultural diversity at every level at a frightening rate.  The smaller our population the more quickly we will be assumed into a global monoculture.

How to protect and restore that environment in Australia in the face of a growing population is, I think, the critical issue.  However, many of the most pressing environmental issues in Australia are not closely related to population.  The wanton destruction of the Murray-Darling river systems has nothing to do with population growth rates.  Loss of native species, logging of old growth forests, protection of wild places and the spread of salinity are also essentially unrelated to population numbers.

CO2 emissions are clearly related to population numbers.  But population growth is driven by immigration, so global emissions would not change if we could get Australia’s per capita emission rate down to the global per capita rate.

This is related to things I have been thinking about. In the olden days, publishers and booksellers were the big filters. There was also a role for reviews in the mainstream media and some social networking. This is how you chose what books to read. What is interesting is that the vast majority of the filters were from interested parties — people who wanted to sell you books. We passively just let this filtering process take place with the idea that reputational mechanisms and learned behaviour would keep the filters honest.

Today this whole set has changed. There is a vastly more diverse set of people who provide information that assist you in choosing books (among other things). The publisher and bookseller have been reduced in their importance. Bloggers, reviewers etc (to be sure they were always there in some form) have become more important — especially when facilitated by Google searches. The problem is that there hasn’t been enough history for most of these sources to have built up a trust relationship for quality. There is pollution both of quality and also likely hidden conflicts of interest. For instance, I can claim my independence but I have my own biases and views and these influence what I review and how I review it. How that is of relevance to you is something you have to learn and if you have got here on the basis of a Google search, then what do you do?

iPhone apps are instructive here. For the most part, it is a new market — people were not buying software in this quantity before. But where are the publishers? We may know about EA games but the rest are new. The best source is what Apple is providing at its storefront. This is the publisher and the filter although they are not disinterested and we have little guidance as to what determines what gets there. The other filter is provided by Apple but is different — it is revealed preference in the market — the top downloads lists. But that has other issues. Finally, there are some blogs and mainstream media that provide pointers. But which ones there are ones that you can trust? It is really hard to tell. I used to monitor all app releases but have given up and now use a few sites that review a few things for news. Am I missing stuff? Undoubtedly. But the equilibrium filter is not there yet.

The filtering issue was at the heart of the Wikipedia/Britannica debate. Britannica could not fathom that they lost the filter prominence so quickly given that they had the reputation and, in many respects, still do. But the filter is not just about that but about ease of access and here Wikipedia wins hands down.

Anyhow, I can recommend this Clay Shirky video; if only for the way in which this is all working on Facebook.

It is hard to understand what is going on. This post is as informative as it gets. It looks like Macmillan would like to charge more for its eBooks and to receive a greater share than Amazon is willing to give. Fair enough. In other places, that has led to titles being removed that are part of the dispute. But to extend that to the bigger and otherwise stable broader book market is a more troubling move. Of course, the deletion is only for the US. You can still get Macmillan books from Amazon.co.uk, for example. This indicates that Amazon is willing to use whatever power it may possess in book retailing in general to get what it wants in eBooks in competition with many new, but less well-known, entrants.

This happened in Australia, not in books, but in bread. Safeway in Victoria deleted entire lines of bread from a given manufacturer from its stores when smaller outlets were found to be discounting standard loaves. The Federal Court found that to be an anticompetitive act and Safeway faced substantial penalties. Amazon is surely heading down that path itself.

[Update: confirmation of all this from Macmillan].

The main problem is the uncertainty introduced by the Court.  The Court arbitrarily changed the priority of claims on the cash flows and assets of the firm.  Before the decision all shareholders are treated the same in the wind-up of the firm.  Shareholders have the residual claim and all shareholders had the same claim.  The court changed this by elevating a sub-group of shareholders to the level of unsecured creditors.  This gain for the subset of shareholders was at the expense of the original unsecured creditors — which seems to make no sense at all.  The remaining shareholders are not punished because their claim remains worthless.  The High Court’s decision created uncertainty and punished the innocent (the unsecured creditors), for no gain.

The decision also ignored the symmetry between shareholders who bought shares on the basis of false information and those who chose not to sell shares on the basis of the same information.  Surely shareholders who chose not to sell have the same grievance.

The decision demonstrates a key difference in the way that corporations are viewed by financial economists versus the legal profession.  The legal view of a corporation maintains the deliberate fiction that a corporation is like a person in that it can own property, enter into contracts and appear before the courts.  In this view the corporation is quite separate to its shareholders and so a group of shareholders can ask the court for judgement against the corporation.

Financial economists look at the firm and instead of seeing an individual they see a set of contracts between the corporation and each of its stakeholders (the “nexus of contracts” view).  The stakeholders only differ in the type of contracts they have with the corporation.   The financial economist view doesn’t ignore the separation of management and control of the corporation.  The management are stakeholders.  If the management misleads shareholders then the management must be held to account, not the other shareholders.

Groups that believe that the High Court decision enhanced the protection of shareholders have the legal firm of the corporation.  If they took the economist’s view they would see that it does nothing for stakeholders in aggregate and actually destroys value by creating uncertainty about the claims of creditors.

I think the best result for the AFL is for the bid to simply fail.  Australian rules football and soccer are competitors for players, fans, sponsorship and government support.  This is not a win-win situation.  If Australia hosts the world cup then some kids who would have played football will instead play soccer; some viewers will switch from watching football to watching soccer; some sponsors will switch; a whole season of football will be disrupted; and the building of rectangular stadiums will not help the AFL one iota.  It is silly to say that a winning world cup bid would help all codes — if the world cup comes to Australia it will diminish the status of Australian rules football.  Soccer is like an introduced species — beautiful in its own environment but a threat to the indigenous species of football in Australia.  

Hosting the world cup would be good for the rugby codes.  Aussie rules and soccer are competing for the same types of athletes — those with high skill who can run all day.  But elite rugby players are out of a different mould.  The dominant requirements in rugby are explosive power and physical toughness.  Aussie rules is tough contact sport, but rugby is a collision sport played with frightful brutality at the highest level.  If soccer becomes more popular in Australia then the pool of players available to play rugby will not be diminished.  Moreover, the building of new rectangular football stadiums will help rugby tremendously.  For instance, there is no quality rectangular stadium in Perth despite it being the home of a Super 14 team.  A world class stadium would surely be built in Perth if the soccer world cup came to Australia.

So, it is obvious that the rugby codes should support the soccer world cup bid, but what about the AFL?  The AFL has the power of veto over the Football Federation of Australia (FFA) bid.  It can refuse to allow the MCG or the Docklands stadiums to be used.  The AFL has watertight leases over those stadiums which go out beyond 2022.  But such intransigence would damage its political support, so the AFL has already offered up the MCG.  However, the AFL doesn’t have to refuse anything.  All the AFL needs to do is to do to sink the bid is to have a big public argument with the FFA.  The bid needs everyone in Australia behind it to have any chance of success.  If the AFL doesn’t positively support the world cup bid then it won’t succeed.

The best strategy for the AFL is to offer wholehearted support for the bid in exchange for government funded building program for oval stadiums.  Aussie and cricket are played on ovals.  Soccer and rugby are played on rectangles.  The AFL should team up with Cricket Australia to insist on funding of the building and improvement of oval facilities.  The price of wholehearted AFL and CA support  for the soccer world cup bid should be a Government commitment to a building program that goes ahead if the soccer world cup bid is successful.

2. Apple will release a tablet device that will be a large version of the iPhone designed to accommodate easy web and email viewing as opposed to pocketable portability. It will probably include a camera the other way for video conferencing and integrate with Apple TV (anyway you might figure). I wonder if it will slot into a fridge but there is a chance that it may be part of a new iMac with separating screen.

3. All MacBooks will migrate to a touch screen option and will have a GSM or Edge integrated option.

4. There will be a GPS navigation version with iPod included specifically for cars.

5. And, finally, for my big hope: an ebook reader that will do to books what the iPod has done to music.

OK we are not quite there but there is something quite natural in the evolution of these devices. But here is why the iPad will be a revolution.

1. eReading will now take off. The iPad will offer Apple’s store but also the Kindle and probably many others as well through applications. Apple may end up controlling the hardware but that is far from a given as eInk still has the quality that it has long battery life and you can use it on planes during take off and landing.
2. eMedicine will now work. The idea is that doctors should be able to enter reports and get access to data at the hospital bed rather than transcribing back to computers. This will change the way health is practiced.
3. eEducation will get a big lift. The iPad is the natural education device for the classroom. Children as young as one can understand a touch screen but the key has been having a larger screen that did not require as much dexterity. This is now solved. All they need now is flash so that sites such as starfall.com will work. Think also about the drawing apps.
4. The end of DVDs: this is it for DVDs. The only thing holding back their destruction is that the iTunes store is so proprietary. Once that goes, there is no need for a portable DVD player and the iPad will simply plug into televisions as a substitute.
5. Presentation computers. We will have no computer in the classroom for lectures. This will be the device we use for PowerPoint and other demonstrations. If we need a computer application, we can use logmein to access one elsewhere.
6. The newspapers may be saved. OK this is harder to think about but my speculation is that the format for reading will be comfortable and will be a paid subscription. Moreover, the newspaper will be browsed again so advertising will come back as being more effective.
7. New games: iPhone games are impressive but only a few really work on a small screen. The larger screen will open up more games — especially board games and games like Air Hockey among others.

I could go on but you get the point. This device creates options that have not been there before and given the price point, the potential to become widespread. What I don’t think will happen is a camera and that whole videoconferencing angle. The camera on a computer is never flattering and I just don’t think it will work for people on a handheld device. Apple’s camera ambitions will grow off the iPod and iPhone.

Rational Ignorance in Education: A Field Experiment in Student Plagiarism (stable gated link)
Thomas Dee and Brian Jacob

Despite the concern that student plagiarism has become increasingly common, there is relatively little objective data on the prevalence or determinants of this illicit behavior. This study presents the results of a natural field experiment designed to address these questions. Over 1,200 papers were collected from the students in undergraduate courses at a selective post-secondary institution.

Students in half of the participating courses were randomly assigned to a requirement that they complete an anti-plagiarism tutorial before submitting their papers. We found that assignment to the treatment group substantially reduced the likelihood of plagiarism, particularly among student with lower SAT scores who had the highest rates of plagiarism. A follow-up survey of participating students suggests that the intervention reduced plagiarism by increasing student knowledge rather than by increasing the perceived probabilities of detection and punishment. These results are consistent with a model of student behavior in which the decision to plagiarize reflects both a poor understanding of academic integrity and the perception that the probabilities of detection and severe punishment are low.

In this report we advocate that:

The current measures of school performance published on the ‘My School’ website should be replaced with value-added measures of school performance because:

• Their greater accuracy creates a fairer system, particularly for schools in lower socio-economic communities;
• A focus on student progress rather than performance at a single point in time serves a variety of policy objectives and is more effective in improving instruction and school education.

School principals and teachers should be empowered to use value-added measures to improve instruction and school programs. To achieve this:

• A user-friendly information technology system should be developed that allows school principals and teachers to better analyse and then act upon their own performance data;
• Education and training to incorporate performance assessment into instruction and school programs should be provided;
• Resources should be provided for teachers and schools to develop programs based on value-added measures and disseminate best practice.

Value-added measures of school performance should become an important benchmark in school evaluation. School evaluators should make their qualitative judgements of good practice in the context of value-added performance measures;

Value-added measures of student progress should be the basis for categorising schools as under-performing. Developmental steps should be explicit, with additional support for under-performing schools; and

School principals should be granted autonomy to effectively lead the school for which they are being held accountable. Individual teachers have continually been shown to have the greatest impact upon student performance and school principals should be empowered to determine who teaches in their school.

The full report is here.

The US case raises a variety of issues. The US court is looking at whether the league, which has independently owned teams, is really a single entity from an antitrust perspective.

[T]he bigger question was whether the NFL should be considered a “single entity” — rather than a collection of 32 independently owned teams — and thus shielded from the Sherman Antitrust Act. A single company cannot be guilty of conspiring with itself to harm consumers.

Change the name of the league and insert Trade Practices Act (s.45) insterad of the Sherman Act and you have the same issues in Australia.

There have been some previous decisions on Trade Practices and the football leagues. in the 1996 Superleague case, Burchett J found that rugby league competed in a broader market against other ‘entertainment’ although the precise limits of the market were not stated. But this doesn’t mean that the clubs in either the AFL or NRL are exempt from the laws on collusion. Further, during my time at the ACCC, I can’t remember seeing any applications by either league asking the ACCC to authorise any conduct that would potentially be illegal.

Now, there may be old authorisations dating back to the Trade Practices Commission days. And there are certainly some earlier court decisions that I am not familiar with. So the lawyers reading this may tell me that it has all been sorted out. But if not – well the best new spectator sport for our football gurus may be watching the US supreme court.

Sure, money matters to everyone; the more fears that Dr. Pachauri and Mr. Gore stoke about climate change, the more money is liable to flow to them and the companies and institutions they are affiliated with. Given all the accusations they have made about the financial motives of climate change “deniers,” there is a certain justice in having their own finances investigated.

But I don’t doubt that Mr. Gore and Dr. Pachauri would be preaching against fossil fuels even if there were no money in it for them, just as I don’t doubt that skeptics would be opposing them for no pay. Why are journalists and ethics boards so quick to assume that money, particularly corporate money, is the first factor to look at when evaluating someone’s work?

He points to laziness — it is easy to point to conflict and assert this causes conclusions — and to snobbery — conclusions that are above “trade” are intrinsically better. The problem is that, in each case, this pressure leads to a prohibition (sometimes voluntary and sometimes mandatory) on the acceptance of corporate money. If all such money corrupts that might be justified but let’s face it, it is likely that the vast majority of corporate financed research is just as rigorous and dispassionate that research funded from other sources. This is something Derek Bok argued in a book (Universities in the Marketplace: The Commercialization of Higher Education) I read, recently.

Tierney suggested disclosure or transparency as an alternative:

Instead of stigmatizing certain kinds of research grants, perhaps we should consider the bigger picture. If scientists listed all their public and private donors on their Web pages, journalists could simply link to that page and let readers decide which ones are potentially corrupting. Instead of following rigid rules to report “conflicts,” journalists could use their judgment and report only the ones that seem relevant.

This is, of course, something that should definitely occur. However, I wonder if it will solve the problem. The stigma may still remain. What we need is some careful study to see whether the stigma has any basis and to consider why academic standards of peer-review may not be doing their job and ensuring quality regardless of source.

But while it’s true that roads are more dangerous when it rains, people aren’t stupid. Most of us compensate for rainfall by driving more slowly. Indeed, it turns out that we overcompensate: slowing down more than necessary on days after it has rained. Higher rainfall raises the road toll on the day it falls, but lowers the road toll in subsequent days. On net, more rain means fewer deaths.

Here’s a regression using daily data:

And here’s a regression using monthly data:

Here’s the abstract (click on the title for the full paper).

Precipitation, Profits, and Pile-Ups
Andrew Leigh
In considering the economic impacts of climatic changes, economists frequently use annual national income as a proxy for social welfare. I show that such studies suffer from a significant bias, arising from the fact that such models typically ignore changes in mortality rates. Using panel data from Australia, I show that rainfall lowers traffic deaths, suggesting that the standard approach may underestimate the true economic cost of droughts.

As Peter Martin points out, the result is counterintuitive. But putting together the daily and monthly results, it’s now pretty clear to me that I’d better smile and agree with my wife. Rain is good, and not just for the garden.

* I’ve put the paper out as a working paper because I couldn’t see myself doing anything with it. So any journal editor who’d like it, feel free to get in touch.

The first issue relates to the participation targets.

The Government has therefore announced its ambition for growth in higher education attainment, so
that by 2025, 40 per cent of all 25 to 34 year olds will hold a qualification at bachelor level or above.
The achievement of this ambition will produce around 217,000 additional graduates by 2025.

Explaining this to my University-student daughter, and noting that this means a 30% expansion in the University sector, her response was illuminating:

I guess that means there will be a lot of pretty average Universities

OK, the language was a bit stronger, but she hit the nail on the head. Australia has a small group of very good research Universities (and I am proud to say that Monash University is clearly one of these) but it has a long tail of Universities that are supposed to be good research Universities – but are not.

The second issue relates to the role of education and research and growth. This was inspired by a podcast interview with Paul Romer available here. Romer talks about the dual role of Universities in growth – both educating students who will go out and be more innovative and also carrying out basic research that improves innovation. In recent times, however, all Australian Universities have acted as if they should do both of these functions. It is not clear that this makes sense.

With diversity in the tertiary sector an aim of the Federal Government reforms, it is a good time to think about the structure of the University sector. In particular, should the Australian government explicitly denote a small number of Universities as postgraduate-research institutions while the remaining Universities concentrate on undergraduate teaching?

The benefits of this seem clear. It recognizes that world class researchers are a scarce group of people. We cannot expect all Australian Universities to have world class researchers and research units. By focusing high-level research on a smaller number of Universities, the Federal government could ensure that we have world-class research institutions in Australia doing valuable, cutting-edge research.

Dividing the system between undergraduate and graduate institutions also means that specialist undergraduate institutions could concentrate on teaching. They would be excellent teaching institutions, akin to the best undergraduate teaching institutions in the US. The Professors would need to keep up to date with research but need not be world class researchers themselves. They would however need to be world class teachers.

This form of division would help the government reach its target for undergraduate education and create diversity in the tertiary sector. It would, however, mean a major change in incentives for Australian Universities and a recognition that some of our Universities are not – and never will be- world class research institutions. What they can be is world class undergraduate education institutions.

Now that is not something that is usually worth a blog – except this is a case of a silly Met trap to catch interstate visitors trying to do the right thing. The visitors all had day tickets but stayed in the city until 1am. Heading for the 1.09 train, they all thought through a tricky question: if you buy a day ticket one day, presumably it ends at midnight and so you need a new ticket the next day (like 1am)?

Now the day tickets do not say what time they end (they simply have the date of validity – for our guests at 1am that meant yesterday). There was no signage around the ticket machines to help them and they wanted to use public transport later that day, so they brought out the credit card and bought 5 new day tickets.

Ooooops

Unfortunately, the day tickets they had actually didn’t finish on the day marked on the tickets – they finished at 3am (not marked on the tickets). “Well, no problems”, I hear you say. “They just have their new tickets a bit early”.

Unfortunately not.

Day tickets issued at 1am are NOT valid for travel on the day of issue. They are only valid for travel on the previous day! So our five visitors now have two sets of day tickets – all for the previous day. Of course they can catch the train home, but have ‘done their dough’ and have to re-buy new day tickets later that morning if they want to travel again.

The outcome:

1. they have to fill in a form and send it off to get a refund. Apparently this couldn’t be done at the station; and
2. they decided to forget the train system and borrowed the car the next day!

To our visitors – welcome to Melbourne: Where else would you have a public transport system that will sell you a ‘day ticket’ that can only be used on the previous day, and make sure there is no way you can tell until you have done your money!

The I.R.S., however, isn’t rushing to offer returns that are already filled in. In the 2009 report to Congress of its Taxpayer Advocate Service, it noted that during the 2008 presidential campaign, Barack Obama proposed giving taxpayers “the option of pre-filled tax forms to verify, sign and return.” The report said “it is not feasible at this time” because the agency receives W-2 data from the Social Security Administration and 1099 data from financial institutions too late in the filing season, “much later than most eligible taxpayers would be willing to wait.”

And a cute analogy:

Requiring taxpayers to file returns without being told what the government already knows makes as much sense “as if Visa sent customers a blank piece of paper, requiring that they assemble their receipts, list their purchases — and pay a fine if they forget one,” said Joseph Bankman, a professor at the Stanford Law School.

At the moment, apart from the usual high prices Australians must endure for books (even on the Kindle), that device also has an additional US$2 charge per book to handle the international wireless delivery fees. That charge is also imposed on the iPhone Kindle application even though Amazon incurs no such delivery charges in that instant. Amazon would likely claim that since books can be downloaded on several devices, this charge is to reflect that option rather than its reality. However, with them also set to charge authors/publishers for delivery, such a response would seem misplaced.

So with an iPad, this might turn explicitly into farce as one could more readily expect that device to replace the Kindle. This is to Amazon’s benefit by the way as they likely earn money from the books rather than the hardware so if Apple foots the latter bill, it is all better for them. But these additional charges would fly in the face of what is reasonable and could, at the moment when Amazon is the only game in town in Australia for e-Readers, be quite appropriately the exercise of market power. This is not likely to be illegal and may well be temporary but, on another level, it highlights the asymmetric status Australians find themselves in due to copyright laws that give Australian publishers excessive rights — and allow Amazon to piggy-back additional charges on top of that. It isn’t a healthy state of affairs.

The main worry about the MySchool website is that it will be crippled somehow into some aggregate league tables while keeping the underlying data as well as historical information obscure. That is what will be of most use in generating complete information to assist in parent choice and political pressure. Otherwise, it may end up the way of GroceryChoice that never stood a chance precisely because the information was kept hidden.

Hopefully, the Gov2.0 people will get on to this and MySchool will have an open standard and available data as appears to be the case in the US. This will allow others to set up websites to build on the comparative information and provide more subjective comments. Just take a look at GreatSchools. All of the standardised tests are there as well as historical information and comments — not just from parents but (egad!) from students. It was invaluable for us in choosing a school and also working out that thinking about private schools here is just not worth it relative to public options. In other words, high performance can be informative too.