osewalrus (osewalrus) wrote,

Quick shots, then back to work

(What is this "sleep" thing of which you speak? The Peruvian Monkey God sent to me by St. Dogbert tells me it is a myth.)

Yes, it is a busy time -- and mostly rearguard actions and stupidity. Perhaps that's why I wanted to note Nicholas Kristof's Paen of Praise to Economists with a grain of salt.

Kristof's point is a good one. Data is extremely helpful in trying to solve poverty problems. Oftentimes it can tell you things you don't expect. In this case, de-worming children in developing nations can make a significant impact on alleviating poverty because it decreases absenteeism from school. Deworming is cheap, and it turns out if you follow a dewormed cohort they do much better than if you spend the same amount of money on subsidizing school uniforms for a comparable cohort.

My caution for Kritsof's enthusiasm is threefold. First, data are often ambiguous. This one appears fairly straightforward and the causality appears obvious once explained. Worms in the developing world are a major cause of recurring absenteeism. But many issues are more complex and results are often mixed or dependent on multiple variables. To take an example from my field, sometimes municipal broadband projects return good value, sometimes they don't. The reasons for this for success or failure are complicated, including what we define as "success." e.g., If a system does not return a direct profit, but encourages several new businesses to locate in the area, is that a success?

My second caution is that economics is funny because people and circumstances change over time and may even be different from place to place. the "dismal science" is not like physics, where things automatically work the same everywhere. My favorite example is from Freakonomics. In the U.S. parents are occasionally late picking up their children from daycare. Studies show thatv if day care providers charge parents for late pick up -- for example, $5 for every ten minutes late after a modest grace period -- it reduces tardiness. When a day care center in Haifa implemented this, the number of tardy pick ups dramatically increased. Why, because the parents in Israel did not see it as a penalty. Previously, they viewed picking up their child on time as required by the rules. Once the day care instituted the "tardy pick up fee," parents viewed tardy pick up as a legitimate option.

My third caution is to beware economists with corporate funding. Like scientists with drug company money, it is always best to remember the words of Deut. "For bribery blinds the eyes of the wise and twists the words of the righteous." This is not to say that corporate sponsored research is invariably wrong. But I am more likely to probe deeper than I am if the study comes from a source I know has no financial interest in the outcome.

Finally, in an unrelated note, this Huffpo piece reports on a World Bank study that shows that by 2025, more than half of world growth will come from 6 emerging economies. It is the latest in a series of studies that confirms that economic power is generally shifting from the developed North (U.S./Canada, EU Zone) to emerging economies in a more multi-polar world. On the plus side, yesterday's Washpo had a piece on how the current upswing in manufacturing is driven by the fact that U.S. wages are now lagging the developing world, so that it is cheaper to manufacture in Indiana and ship to the emerging economies in India and Brazil than it is to manufacture in China. So our transformation into an "emerging economy" is proceeding apace.

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