File under Interesting

Very interesting.

Quote of the Day

From Paul Collier:

Americans are in for an analogous shock as other economies become dominant, and as other societies offer higher living standards: if you want to see the future visit Singapore, not New York.

I'm scared. They work almost twice as many hours a day, struggle to innovate, have a king and weak civil liberties, their arts are stagnate (ever hear about Singaporean books, movies, or music?), and, worst of all, they never get laid. Basically, they aren't happy.

Post-code lotteries: should you play?

Tim Harford writes two great columns and I can't recommend them enough. I also recommend his book, The Undercover Economist, because (I think) it's one of the best introductions to be big ideas in neoclassical economics.

But in this advice column I think he skips over an important point. Normal lottery tickets are a waste of money because (1) they tend not to make winners happy and (2) you expect to lose money on them. Post-code lotteries are different, though. They work by giving everyone in a given ZIP code a prize (tens of thousands of dollars). This point is important because research suggests not buying a lottery ticket could make you sad becuase you'll feel poor compared to your neighbors if you don't win. Ben Bernanke summarized the research:

If I live in a country in which most people have only one cow, and I have three cows, then I will have lots of social status and self-esteem and will thus feel happy. But if everyone around me has a luxury car, and I am hung up on status, I won't feel very special unless I have both a luxury car and an SUV. This relative-wealth hypothesis can explain why rich people are happier than poor people in the same country, but also why people in richer countries are not on average much happier than people in poorer countries. It's the big fish in a little pond phenomenon.

So you can think of the ticket as insurance again feeling worse if your ZIP code wins. I still don't know if it's worth it, but postal-code lotteries might be a worthwhile form of insurance.

Cheating

Plagarism and cheating in general are surely big problems at universities these days. The fact that there is a cottage industry of essay-writing companies is also disconcerting.

Lawrence Hinmann, a philosopher, wrote a surprisingly good op-ed on the topic a few years ago.

I think he overemphasizes the importance of investing time in students and creating unique problems. In many fields it's hard to make up good problems because of complexity (math, engineering, etc.) and in others new topics are often just rehashed forms of old topics: philosophy students rarely have anything interesting to say, except when they rediscover an age-old argument.

By the same token he probably underemphasizes the good that technology can do, at least to fight plagiarism. If students were asked to a little bit more work, and had more and more of their writing digitized, perhaps starting in high school, then there would probably be enough data to identify each student's "writing signature." Essay-writing companies would try to adjust to that but I think it'd be difficult, and fear must cut down on their business in the short run.

The real solution is cultivating norms, as he notes in passing, though no one knows quite how. Fortunately, with so many colleges and departments, there is plenty of room for experimentation.

Quote of the Day: Dan Airley Edition

But is this really the case? Before you make up your mind, let’s see what the empirical evidence shows.

Dan Airley in his new book, The Upside of Irrationality. How sad it is that he (rightly, I think) has to remind readers not to make up their mind before seeing the evidence?

Update: Another quote from a discussion of why we care more about things "we make" as opposed to just buy:

A would-​be baker would hardly be willing to consider herself (or publicly admit to being) someone who makes birthday cakes from “just a mix.” Not only would she feel humiliated or guilty; she might also disappoint her guests, who would feel that they were not being treated to something special.

This is probably an example of how I'm a hyper-ratonal person. I'd never want someone to bake me a birthday cake instead of buying a better tasting cake. I'm also not sure why people assume baking a cake from scratch takes more effort than baking a cake from mix: the time it takes to mix the ingredients and put them in the oven is trivial compared to other circumstances. For instance, if you don't have the mix and you have to walk through the rain for 30 minutes to get it (true story, that happened once) then all the sudden making a cake with a mix is vastly more time-consuming. Or suppose that someone's birthday is on Sunday and you spend a few hours baking a cake before church. Compare that with a birthday on Friday where you spend Thursday night (when you have something due the next day) baking from a mix. Most people would say giving up the time on Thursday night was a bigger sacrifice.