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Lucy Ortiz
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This executive summary reminded me of an article I read over Thanksgiving break. The general gist of it was that people's political ideologies affect how they interpret abnormal weather patterns. McCright, Dunlap and Xiao analyzed a gallup poll from 2012, after an abnormally warm year. They found that while most people said that it was a warm winter, self reported Democrats were much more likely to report that it was a warmer than average winter. From there, Democrats, Liberals, and women were more likely to attribute the warmer local weather to global warming. I thought that it was also interesting that living in a urban area or working in the fossil fuels sector had no effect on either perceiving an abnormally warm year, or attributing the heat in general to global warming. I guess I just found that this article just drove home the point that are not blank slates, rather all information is received through a filter, and in this case that filter is political ideology. I found that this executive summary was very somber, but for good reason. As made evident by the Gallup poll, everyone will not start realizing the effects of global warming simply from feeling it. The article has a shock value that might wake people up. If they do not feel the difference, it might be good to read about the actual damage and change this warming creates. Newspaper Article: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/11/24/do-democrats-and-republicans-actually-experience-the-weather-differently/ Journal Article: http://www.nature.com/nclimate/journal/v4/n12/full/nclimate2443.html
I too have found the various readings we have had about WTA versus WTP very interesting. I find it interesting that even though we do not generally think about the gap between the two in everyday life, when it is brought to our attention almost all of us can relate. This paper brought to mind two main idea. One, is the concept we discussed on Tuesday in both classes, in regards to signing up to be organ donors. Maybe I was missing something pretty clear in this experiment, but did they account for this? It seems that if participants had to go out of their way to respond that they either wanted to change their payment to a donation or change the donation to a payment, laziness may play a part in the outcome? It may be however that it required the same amount of effort to respond with the decision to stay with the original break up of the payment, in which case than this would be moot. My second thought, was that this paper reminded me of one the findings that stood out the most to me in the text book. Not only do the emotions caused by the experimental situation affect the WTA and WTP, but so do the overall state of the participant. A very sad participant would be more likely to have lower WTA and higher WTP I believe as they would want to change their current state. I wonder what kind of affects these emotional states would have on an experiment like this one, if at all.
Toggle Commented Nov 20, 2014 on Econ 398 Papers at Jolly Green General
I admit that I found this paper a little complicated due to its math speak, however what I took from it reminded me strongly of the conversation we had in 398 (I think) recently, in regards to Sommer's project (again, I think). We were discussing the importance of looking at both the supply and demand side in the Loanable Funds market, in regards to the effect of violence on microfinance institutions. As was discussed Eichengreen and Mody piece, a shift in both sides can sometimes mask the movement of the individual curves. In the context of Sommer's work, we discussed how an act of violence may decrease the supply of funds, but may also cause a decrease for the demand of loans, due to a fear of continued acts of violence. In this situation, if the shifts were the same magnitude, both shifts would be unrealized if one only looked at the interest rate. Along the same line, these authors suggest that the reason that there hasn't been much documented changes in demand for foreign bonds due to increases in the US interest rate, is because people are failing to look at the demand side of the foreign countries as well. The change in supply of US funds has been masked by decreases in demand in developing countries. I didn't really wrap my head around the effects of fixed-rate issues and floating rate issues though and would like to discuss that a little more.
This reading reminded me of Thomas Jefferson's quote, "Whenever the people are well-informed, they can be trusted with their own government." Although this article focuses on decision aiding in conservation efforts specifically, the findings could clearly be carried over to all forms of policy creation, leading one to question the accuracy of Jefferson's belief in our ability. This paper clearly shows that it is not just information that sparks decision making in these circumstances, but affect as well. And in certain times, humans even rely more heavily on affect even after the information has been presented. I also thought that it was interesting that we even question each other in this arena, as made clear in the third study. After reading this paper I was trying to decide what decision-makers should be doing differently in response to the conclusions on an individual level and the main idea that stood out to me was simply realizing that affects were affecting your decisions. But in the first two studies the participants were asked to rate their affects right away, which I would assume lead one to have them on their mind for the rest of the study, disproving my original thoughts. Wilson concludes by saying that participatory processes for conservation should take these ideas into account and provide more structure to ensure more balanced decisions by using both sides of the dual processing model, but where does this take us on a broader political scale in terms of policy decisions? Also I just wanted to point out, on a completely unrelated note that this piece was published in "Conservation Biology," clearly from the conservation efforts side of the paper. But its also just cool to see how neuroecon is poking its head up everywhere.
Toggle Commented Nov 11, 2014 on Econ 398 for Tuesday at Jolly Green General
Like the previous comments have mentioned, this article is an interesting applied explanation of the importance of human capital, in terms of education, that we discussed last week. I found the part about how lower income families being more likely to accept agroforestry surprising as Juan and HeeJu did. The explanation that popped into my mind was that potentially it is because all of the farmers that were interviewed were poor. Its not that the poor were more likely to use agroforestry than the rich. In addition, its important to remember that that result was not statsitically different from zero. So while it is interesting that income did not have a statistically significant positive effect, its not as important that it had a potentially negative coefficient as it could also have been zero. Potentially, maybe the income differences across the families were not big enough to have much effect on the risk of agroforestry from the farmers perspective.
Toggle Commented Nov 5, 2014 on Econ 280 for Thursday at Jolly Green General
As mentioned many times in the previous comments, this article was a great summary of many of the various ideas we have discussed so far. It was interesting to read another author's interpretations of the various theories and hear them explained other ways. One of the main things that sticks out to me when doing reading for this class is how, like we've discussed, neuroeconomics is so tightly intertwined in so many other disciplines. Quite a few of the papers described in this article and our text book have been used in some of my other courses, mainly education and development psych. Specifically, we watched the video of Mischel's 1974 study of the impact of physical promximity of rewards on the impulsivity of children. Rather than discussing the diminishing utility of future marshmallows, we focused on how the various children reacted to the situation. Some of the kids turned completely way, some played with the marshmallows, some closed their eyes, and some even just smelled the marshmallow in front of them. Understandably, the kids that allowed themselves to smell and touch the marshmallows were much more likely eat the first one. The one thing that stood out the most though, was I believe that the older the children were, the more likely they were able to hold out for more marshmallows. This just made me wonder about how as we develop our preferences for future versus present rewards changes. Is it accurate to say that as we get older we are more likely to value future rewards higher? Is that only true for the early stages of development? On another note, the study of "lowbrow" versus "highbrow" movies really intrigued me. What are the short-run versus long-run benefits of these movies? This just seemed rather subjective to me. Do people feel like they will want to watch one of the intense movies in the future but one of the easier to watch movies now? Or is it just the benefit of saying that they would potentially like to watch one of these prestigious movies in the future that propels the participants to make these claims?
Toggle Commented Nov 4, 2014 on Econ 398 for Tuesday at Jolly Green General
After reading about Malaria and the importance of human capital in regards to poverty, it just made me think about other diseases and their overall effect on economic development. We discuss health as an input to human development on a broad level but it is also important to look at shocks to the health of countries and how these might effect economic development differently. On the surface one could think of the cost of Ebola as lives lost, resources spent on eradicating the disease, and the lost wages and output of those sick and quarantined. These articles bring to light a lot of other economic development costs as well though. Most may not be realized in the moment. First off, like malaria, the presence of Ebola will decrease foreign investment in the area as firms will be afraid of contracting the disease, as well as will shy away from the increased costs associated. Tourism in these areas will also decrease significantly, and also in the surrounding areas, which decreases all the jobs associated with the industry. I know my mother is not too happy about the Ghana spring term trip, even though there have been zero cases of Ebola in the country yet. Also, development projects lead by outside organizations and volunteer programs such as the Peace Corps have had to be stopped due to the outbreak. Restarting all of these programs will have significant costs involved starting with simply regaining interest. Ebola has put development on hold in affected countries as they focus simply on containing the disease. The issue is that there is not just a pause button that can be pushed again and development will continue as it had been before. Ebola and other outbreaks cause countries to have to restart many aspects of economic development and recover many of the steps that they had previously gained.
Toggle Commented Oct 29, 2014 on Econ 280 for Thursday at Jolly Green General
After reading this article, two main thoughts stuck out to me. The first, was a continuation of our discussion in 398 today. Udry discusses the decision to have your children work in a very neoclassical "rational" way. It made me wonder how his straightforward decision making model would change if we added the affects of emotion, mood, and stress into it. While poor families report happiness levels equal to those of higher income, they also report much higher stress levels. Does Udry take these differing stress levels into account when discussing the future discount rates these families might calculate? Although Udry does a good job laying out a basic model that a family might follow when making these important decisions its still important to realize that its just that, a very very simplified model. On a completely different note, the discussion of how to get students enrolled in school brought to mind an article that I read recently in which students in Pakistan were simply given report cards with both their test scores, as well as the average of their school compared to other nearby schools. Not only did this simple thing increase enrollment significantly, it also brought up the quality of the schools in the areas. As the community was able to see the average academic achievement of the various schools, it worked to hold the schools accountable. Some of the weaker schools took steps to increase the quality and decrease costs, and some of the private schools at least were forced out of business as parents had the ability to send their students to higher quality schools. I just thought that it was a good example of, as many of our authors advocate for, a simple solution to a big problem. http://www.povertyactionlab.org/publication/report-cards-impact-providing-school-and-child-test-scores-educational-markets
Toggle Commented Oct 22, 2014 on 280 Paper for Thursday at Jolly Green General
I thought that this piece had perfect timing for me, as we discussed the importance of models in a different social science, public policy, in POL 232 this morning. We concluded that the best models in public policy: • order and simply reality • identify what is significant • are congruent with reality • provide communication • direct inquiry and research • suggest explanations In essence, as most previous bloggers have pointed out, is Krugman’s argument for models in economics. Models provide a way to communicate a complex thought in a more clear, straightforward way. Every model in public policy that we have come across so far has a “but” or a “sometimes, in this certain situation” attached to the end of it, like our economic assumptions. I think something that we can take away from the best practice list from public policy is how models should direct inquiry and research. Murphy et al.’s big push model shows, visually, how rational actors might get stuck in a low level trap, and why looking into how to get communities out of these traps is so important. It also shows where specifically the problem might, or then again might not be happening, directing research even further. As Krugman put it, “ Verbal expositions of the Big Push story make it seem like something that must be true. In this model we see that it is something that might be true. A model like this makes one want to go out and start measuring.”
Jumping off Curtis’ point, I found it interesting that Rodrick was able to illustrate the basic idea of the paper that developing countries need specific, not pre packaged, strategies with the institutions of developed countries. Rodrick mimics his argument for using the first order economic principles as only a very basic starting point when discussing the institutions in the developed world. He explains that Europe, Japan, and the US all have appropriate regulation, social insurance, and macroeconomic stability but all have different institutional forms, pointing out that capitalism and welfare states look very different in each. Each country took the basic theories and implemented them in their own way. Taking this a step further I found that Berkowitz et al. ‘s findings on the creation of legal institutions that “countries that developed their formal legal orders internally, adapted imported codes to local conditions, or had familiarity with foreign codes ended up with much better legal institutions than those that simply transplanted formal legal orders from abroad”(27) was a valid explanation of a starting point for Rodrick’s argument. Yes, the first order economic principles are important and should be taken into consideration, but just as imported legal codes need to adapted to local conditions, as far as development as a whole goes, “The hard work needs to be done at home” (18).
Toggle Commented Oct 1, 2014 on ECON 280 Paper at Jolly Green General
In response to Austin's comment about how the enrollment rate of children with parents of equal education is lower then the enrollment rate of children with parents with differing educational attainment, I think that this could be tied to the same phenomenon happening in consumption measurements. On page 281 the authors note that this is most likely due to the fact that the group of parents with equal years of schooling included many sets of parents with no completed years. This would suggest that it is not so much the difference in years of schooling between the parents that was correlated to the increase of enrollment of the children but rather just simply the education of the parents overall. There of course could be an effect of the difference in years of schooling like the authors suggest in terms of power differences, but this particular part might just be attributed to the total education of the parents rather than the difference between the spouses. In response to Jacob, the point the authors make about high rates of female power struck me as interesting as well. Basu's thoughts on page 288 made a lot of sense to me though. It makes sense that a parent would choose to take the child out of school that would be of the most benefit to the themselves. During my econometrics project last year I researched the educational attainment of Ghanaian children and found that girls are the most likely to be taken out of school, not only because the returns to the boys education was thought to be higher, but because the returns to the girls working was higher. The girls are thought to be more useful in the family businesses and at home, than their brothers. I thought that this was fitting given Basu's explanation that female head of households benefit more from girls leaving school than boys. Given the choice, a female head of household might be more tempted to take a daughter, rather than a son, out of school to help around the home, with siblings, and at a job, as they would receive more of this benefit than the male head of household.
Toggle Commented Sep 24, 2014 on ECON 280 paper #1 at Jolly Green General
This article was very eye opening for me. I admit that I had many of the same feelings as Samantha as I read through it but looking back I realize that that was my quick judgment coming through and thinking through it I fully understood the spending on alcohol and other treats. I thought that this sentiment was very similar to an idea discussed in the Adam Smith: Behavioral Economist paper from Econ 398. In the Theory of Moral Sentiments Smith described how he believed that humans sympathize with and respect the rich and famous while we tend to despise and neglect the poor. He wrote that this is the “great and most universal cause of the corruption of our moral sentiments”. We don’t think anything of rich and famous people spending absurd amounts of money on partying and other forms of entertainment. In fact, we buy magazines and watch shows about these happenings alone. On a little smaller but still absurd scale, we spend significant money ourselves on Fancy Dress each year when we could invest it back into our university, the same way the people in the paper could be investing the money spent on entertainment back into their business. Why do we distinguish between the two decisions? According to Smith it might be because of our tendency to worship those more rich than ourselves while putting those less well off.
Toggle Commented Sep 17, 2014 on 280 reading for Thursday at Jolly Green General
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Sep 16, 2014