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Austin Pierce
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I was a little confused by the logic on page 5 of the Berkeley article. It says tariff rates went down, encouraging trade and thus capital flow. But trade does the equivalent of transporting a factor of production to an area. Thus, the kapital-rich North stays kapital-rich and produces kapital-intensive and the South stays labour-rich and produces labour-intensive goods. Thus, it would seem that lowering tariffs would, cet par, keep such resources in the developed world. This would though increase the need to look for other potential factors if capital did indeed flow Southwardly. The anecdotal evidence and theory make sense, and I appreciated the authors looking at both the demand and supply sides of the issue. It helps to bridge a gap between two important areas of consideration.
I certainly enjoyed reading this, as it addresses the consistent question of why does WTA almost almost exceed WTP. However, with any such survey work, there are several factors that need accounted for, which I am uncertain if this research did. First, there is the tempering effect of having the participants rate the various emotions that would be associated with a choice before they actually have to make that choice. This is already starting to privilege the pre-frontal cortex's analytical power over the sheer emotional responses. If they had them choose and then rate how they felt, I think the results would be probably be closer to actual levels. Granted, there is the potential for regret afterwards. Thus, ideally, they would be hooked up to sensors, baseline levels for certain emotional indicators would be processed, and then the sensors could detect variations related to selecting the various choices. That would need more refinement as well. The other issue of note is social desirability. Although they try to maintain anonymity, the reminder that they will have to give their name and address right before hand will likely skew the actual central tendency in the data. From the instructions provided to participants, there is no account for social desirability effects, e.g. over-claiming estimates or BIDR. That would make me more wary on the ratings given to certain emotions, as we all know "one should feel good about donating to charity," even if we don't, and thus the stated positive emotions associated will likely be higher (and negatives lower) than in actuality.
Toggle Commented Nov 18, 2014 on Econ 398 Papers at Jolly Green General
What I find particularly interesting is how radically the "traditional" farming practices already have changed. In my ANTH 403 on Human Geography, a large focus was put on polyculture farms as a common traditional practice in the tropics. It hedged the uncertainty in planting a particular crop and also helped to itself reduce the spread of species-specific blights. However, in addition just to just annual crops, fruit trees were often included. Is there any documented evidence as to how farming use to be done in the area? Understanding how the practices have changed might illuminate a particular focus within either human capital or other investment that could most effectively change the incentive structure to promote agroforestry. Another important issue I think when looking at the agricultural issues is that the externalities are quite important. What is important are the entire ecosystem and the farmlands as a unit. If one farmer on a small plot invests in this but the surrounding ones do not, the investment might seem like a bad decision. But this is largely due to a coordination failure between the 9 or so farms that touch each other. If they all participated, the system could actually perform effectively. The importance of that is that, if only a few farmers have the formal training/human capital to invest, and therefore there is still a coordination failure, then how will the other farmers indirectly learn/gain confidence if the results are no better. Granted, a lot of that is speculation, as I don't have the data on tropical agroforestry. But if it is at all analogous to issues like livestock and vaccination (which I would be surprised if it wasn't), then a few people confident enough to participate is not enough.
Toggle Commented Nov 6, 2014 on Econ 280 for Thursday at Jolly Green General
Like everyone else, I really enjoyed the paper. However, as I have said all semester, I feel like a lot of the insights from these studies can simply be applied to the neo-classical structure. Id est, ceteris paribus, (using > to denote preference) if A > B and B > C then A > C. Emotional states aut alia fall under the auspices of the "ceteri." However, one thing that I really enjoyed reading about in this article was the idea of incorporating expectations and non-realized outcomes into the utility function. Exempli gratia, if one expected a raise of $X and only received $(X/2), then one would be much less excited, and the negative surprise could even drive the overall change in utility negative...although that would seemingly be irrational. The example about delaying good things and "quickly get over with" the bad things strikes up a particular question/model in my mind. I would think that this relates to humanity's loathing of the unknown, loathing of dread, and desire for hope. People like to know what is going to happen to them. It lets us order our world and brace ourselves for things. Thus, if we can know that the future will be good, it is not surprising that we will save ourselves the anxiety by postponing the good events. By postponing the good event, if they can guarantee enforcement of the scenario, they know that the future holds something with positive utility, and they are not anxiously awaiting the results. However, postponing a bad gives one a sense of dread. Knowing that the results are negative gives a negative now and then; whereas not knowing only gives a negative (anxiety) now. Thus, the matrix would be: Future Results Now Later Unknown: (-) (+) Known Good: (+) (+) Known Bad: (-) (-) Therefore, if one could control the outcome of future events in some manner (such as by paying for an unbreakable/nearly unbreakable contract), it would seem that postponing a good event would stochastically dominate. Granted, I must admit I always have a hard time with these articles, as although I'm decently good with empathy, sometimes I read an experiment and say "How could anyone make choice X?" I would be interested to see if people who more consciously incorporated neo-classical economic and logical axiomata into their decision making had different responses in these types of experiments and whether there was any neurological basis for it.
Toggle Commented Nov 3, 2014 on Econ 398 for Tuesday at Jolly Green General
I also have to add a critique from outside of economics in that "subduing Nature" might not be the best thing for humanity. A lot of this has led to mechanization, technicity, and an ideology that is potentially corrupting what it is for us to be human. We live in an age of plastics and factories where we don't know where things come from, we have no connection to what we are eating, and we are (as discussed some in ECON 398 on Tuesday) losing our qualities of compassion and empathy. So subduing Nature, while letting us fulfill our wants, might be doing so at the cost of our humanity and (relative) freedom.
Toggle Commented Oct 30, 2014 on Econ 280 for Thursday at Jolly Green General
It's a point we have discussed in class before, but I feel like most social science discounts all the education needed to be a truly efficient farmer. Granted, in a lot of these countries, not everyone on the farm is necessarily most efficient on the farm. Also, granted, being literate and numerate would probably increase output on the farm. But while you're learning how to quote Shakespeare or take derivatives, you aren't learning that sorghums produce prussic acid (ok...you probably aren't learning that in the field either) which can poison livestock (in different temperatures in different climates). You also aren't learning to look at a cow's flank to make sure it's eating, even if there is forage available. Those also are the types of things computers, mechanics, and technology can't do as well. So, there is a benefit to learning on the farm and not necessarily acquiring what economists would traditionally call human kapital. None of this is to bash the impact of higher education, scientific developments, engineering, etc. Those are all important and can lead to better qualities of life. Also, most of the poor aren't even acquiring the basic skills of literacy and numeracy that would make them more effective workers. I just feel that, especially when addressing agricultural, it is important to recognize that the standard economic explanations are likely failing to recognize some important element (in part because it is harder to quantify and model).
Toggle Commented Oct 30, 2014 on Econ 280 for Thursday at Jolly Green General
I think that Kate raises a valid concern in how models might seemingly work in one specific set of conditions but not across variations in circumstance. However, I think this is where it is important to remember the "ceteris paribus" and assumption rules of models and theories. Many assumptions are made that might not hold in reality. If the assumptions do not hold, then the theory itself says that the results might not be as the theory predicts when the assumptions hold. I think the problem here is that people have applied theories without remembering to check the assumptions. Another possibility is, of course, the dreaded omitted variable bias. Religious and ethnic strife is of course likely to significantly and substantially affect growth, and one could easily imagine a situation in which the strife leads to stagnant growth due to divisions of skill, assets, and many other variables. I overall would agree with Krugman that the models are still powerful and useful tools, and more importantly probably the proper tool by which to pursue economics. But as we go forward, we must look at ways to compound various models and theories to achieve more holistic pictures.
This was a really interesting article. Applying this to what we have learned about the role of investing profits, it would seem that women entrepreneurs, at least in the case cited here, are naturally following the conditions fairly well (re: reinvesting locally)
Toggle Commented Oct 2, 2014 on Link from Twitter at Jolly Green General
In response to Brett's concerns, sadly there isn't always a "miracle pill" for things. Actually...there rarely, if ever, is. The goal is likely that one generation of effort will change this, but what is more likely is that it will be a gradual progression that requires constant effort and attention from all parties involved. What I found particularly interesting though was that households in which one parent was more powerful, school enrollment rates were higher than when the household parents were equipotent. Maybe this could imply a power struggle that has consequences for the children, but such reading into such limited data isn't particularly fruitful. The phenomenon is interesting though (and approximately as large as the male-powered v. female-powered difference), and it merits further inquiry.
Toggle Commented Sep 23, 2014 on ECON 280 paper #1 at Jolly Green General
As Bennett, Esther Duflo, and many other people have pointed out, there is substantial endogeneity between achieving equal rights for women and economic development. This is a case when I would say the best answer is just to embrace the endogeneity. However, many issues end up sticking to both gender equality and economic development. I definitely think one of the most interesting points is the role of culture and how sometimes it even inhibits males. For example, in Maharashtra, boys are culturally expected to take Marathi-language jobs due to the caste relations (even though the caste system is supposedly "dead"), but girls do not have this cultural expectation. Granted, there are other expectations that bind the girls elsewhere. This is conveyed in the film the Namesake when a talented, female artist named Moushumi complains about being expected to be "a nice Bengali girl who makes somosas every Thursday." What is interesting is that Moushumi, and a fair portion of her family, lives in the Western World (the USA and France largely), but these cultural expectations still doggedly follow her. This would imply that some of these cultural expectations can't be as easily dealt with through government institutions as some might expect (an important point when trying to affect policy on these issues: sometimes some degree of moral suasion is necessary for the more "traditional" and "rational" policies to take grip and have anywhere near their intended effect).
Toggle Commented Sep 23, 2014 on ECON 280 paper #2 at Jolly Green General
This might just be where I differ from other people (although, I'm still pretty sure I produce oxytocin :P). However, I was overall disappointed with this article. Not disappointed with the poor's lot in life but in how they make certain decisions. That being said, the situations are bad, and I am thoroughly incensed at some of the circumstances. Perhaps most infuriating was the quality of education these people's children are receiving. Education (especially basic literacy and numeracy) is one of the fastest and most effective manners in which to improve this section of the population's situation in life. Granted, there may be cultural barriers causing the teaching to be rather feckless (e.g. it's hard to teach if you're having to focus attention on having neither yourself nor your students accosted or attacked). However, still, the issue of education is one which these governments should probably address (although it is hard to say without having all the pieces of the puzzle in one place). However, reading about the "entrepreneurial" nature of the poor made me realize just how docile most of the developed world's population has become. In my family, this "multiple jobs" thing is commonplace and just considered what you are supposed to do. We garden, hunt, run businesses, and do many more of these things that fell into the category of entrepreneurship in the article. I'm glad to hear that so many of the poor do this; but I consider it one of the very few cases in which the better off should be chastised instead of the poor being praised. Despite this, there are sections of the article in which I do feel some of the culpability can be said to lie with the poor themselves (albeit nowhere near as much as the standard run-of-the-mill sayings would have one believe). This is largely within the realms of entertainment and substances. Again, this might be due to my...rather atypical upbringing, but at such low levels of income, why one would spend on a radio or TV when there are free forms of entertainment available is nonsensical. Yes, there is a comparison to one's neighbours et cetera, but I would think that allocating resources differently would be much more efficient (even if I myself found myself in those straits). Moreover, the significant purchase of intoxicants as a percent-of-budget measure is mind-boggling as well. Granted, I must agree with Sam that we should also consider people's purchases of these in HDCs on more similar grounds than typically would be done. However, if someone in France were to purchase a bottle of wine on a regular basis, it would constitute less of his/her budget than it does for the poor in this paper. In these situations, I don't believe it would be a far stretch to call the actions relatively irrational. To borrow language from my 398, there are succumbing much more to the "doer" than the "planner." As a closing note, these issues are complex. I can see things that all parties involved are probably not handling as perfectly as they could. However, it is important to address each of those issues instead of putting on blinders to some of them.
Toggle Commented Sep 17, 2014 on 280 reading for Thursday at Jolly Green General
I feel like most of the arguments on this article have been addressed. The lack of a cost in the article worries me, as I expect the authors might have calculated it and found it unsightly. Furthermore, the amount of land required, the impact on trade and movement patterns, and the sheer scale of production make this not only a long-term goal but also one which should undergo significantly more inspection before any large-scale plan is implemented. I believe the best idea to start with is the roof-top solar panels, as that can be implemented on the individual level with the right incentives. I'm doubting the incentives are in place though as it could cut into energy company profits significantly.
I believe Chel nailed it on the head when she said that the decision was more economic and fiscal in nature than environmental. The price of natural gas has plummeted, and the cost of lawsuits paired with their probability is substantial to push the company's view towards a more natural gas/RE approach. On the China issue she mentions, we have discussed how they are shutting down a fair number of Beijing plants and implementing some form of carbon tax, but the trend is still more than likely on the rise, especially for inner China, where development has only recently began.
It seems as if black carbon is a very viable target for reduced emissions, as it not only has health implications but also has a much quicker rate of removal from the atmosphere. Furthermore, the author presents two sources of production that could easily be reduced. On the coal, this would also provide some form of spillover in the CO2 levels, as even other fossil fuels generally have lower levels of CO2. On the diesel front, I believe that people are overestimating the cost to developing countries based on our USA-centric view. Professor Casey mentioned how the technology for many of these things is already being implemented in countries such as Europe, and if I remember correctly, it is around the same price for such an efficient/clean car as for a gaz-guzzler in the USA. With the pairing of the health and environmental consequences, I believe this is a good place to start to look for lowering levels of warming-emissions.
Toggle Commented Feb 11, 2013 on Worse than we thought.... at Jolly Green General
I feel like almost everyone who has posted is quick to jump onto the anti-climate change band wagon and blame a lot of the disasters that are occurring on climate change. One thing I would like to ask everyone is what would the potential benefits of climate change be? Wouldn't it unlock fresh soil that is currently permafrost, raise the carrying capacity of extreme-latitude ecosystems, and have other "positive" results? It's just something worth considering. Another thing is that the disasters that the article mentions (drought, Sandy, etc.) are not necessarily caused specifically or solely by global warming. It is fairly obviously that there is a correlation between climate change and some of the superphenomena (annual 100-year floods, superstorms, etc.); however, whether global warming is the sole contributor cannot be proven. Furthermore, on some of the other issues, such as the drought, people willfully ignore other contributing factors. There are many poor environmental decisions that have been made by the environmentalists in Texas that are throwing the ecosystem out of whack (such as surveying for toads during a drought and then deciding to protect the "endangered population" by banning the cutting of all areas where they breed, etc. This in turn led to a much higher and attainable set of fuel for when the wildfires came through in 2011. Furthermore, the drought would be much less significant if the river water wasn't being diverted to unsustainable cities, which are also emptying the aquifers. This is all stuff that should be kept in mind if we're really seeking to understand the true costs and benefits of policies.
So, this article has largely been exhausted; however, what I would try to add is that when people advocate for a term other than "tax" for a Pigouvian tax, that implies a very normative economics. Furthermore, although this is simply due to the decisions the discipline has made, the economic definition of "tax" disregards the political philosophy of taxing, etc. This might not be important from the economic angle, but from a policy one, it definitely does.
Toggle Commented Jan 26, 2013 on My Bad..... at Jolly Green General
Several things about this idea give me pause. First, I am not predisposed to accept that the courts are the place to address any such issues. Not only does that add to the administrative costs of addressing these problems, but it also is a command-and-control framework that will make the overall socials costs of such a policy more weighty than is necessary. I would think that a set of pollution taxes would be better for addressing this issue, as you eliminate the court-administrative taxes and reduce the policy costs. However, even here, the funds should be directed towards a direct production mechanism, or things will only be kept from becoming worse. Applying the taxes in such a way would both remove a negative and introduce a positive to the equation, leading to better environmental stewardship. This leads to a third issue I have with the court approach, which is that climate issues are a collective issue. Although there are some variations of results, the overall damages apply to everyone. Scott addresses this in his post when he mentions what Pearce has recognized as necessary for liability. Unless the direct causality could be proved, the liability of any particular country or firm is virtually evanescent.
Both climate and fiscal policy are important for the governments of the United States; furthermore, the political miscontruance of the issues often leaves people with muddled perspectives on the issues. One of Friedman's best points is the fact that neither parties approach to the issues is sacrosanct, and the use of objective measures will be necessary to achieve appropriate conclusions. I wish there had been more explication on what he viewed the dangers of more carbon were. I'm not trying to say there aren't any, but I believe the next step from this article would be to examine the predictions for the climate results, as I believe those are a little harder for more people to understand than the consequences of the debt-to-GDP ratio reaching 90% plus of the GDP. This is probably because people consciously interact with the value of the dollar more than they do with the carbon ppm count, and the impact of the carbon ppm count increases would likely be more on environmental resources than more easily quantifiable, and appraisable, natural resources. This will likely need more support (and thus more evidence) to produce any necessary changes, and many people will still be less likely to support carbon taxes and the like until these other effects are better explained and advertised.
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Jan 13, 2013