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Bobby DeStefano
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I find it interesting, like many other classmates, that we are not taught about how the metal state of a person effects their preferences. We are taught that if I prefer A to B, that I will always prefer A to B. But this is not the case; my preference can change with the mood I am in. So far this semester we have questioned the idea of rational choice, and this idea that our preferences change depending on mental state may help us overcome the idea that people make irrational decision. The idea of rational choice (if I prefer a to B and B to C, the I prefer A to C) may only hold true in the same mental state. The Cognitive Dissonance Theory is something that I find to be very interesting. In my other econ classes, I was told that the choices people make are based on their preferences, but was never told that the choices people make effect their preferences. The experiment that Sharot and colleagues conducted in 2010, showed that “simply believing that they had chosen an item increases participants’ preference for that item” (232). I find this particularly interesting because you can see this idea everyday. PC or MAC. I prefer MAC to PC simply because my parents gave me a MAC so now have convinced myself that MACs are better than PCs. But I have friends who prefer PCs to MACs simply because they own a PC.
Toggle Commented Oct 20, 2015 on ECON 398 at Jolly Green General
As many of my classmates have already stated, I find it troubling that economist have labeled people as “irrational,” yet at the core of all economic models is the idea that people make rational choices. Not wanting to repeat what me classmates have already said, I will just say this, economist use models based on GARP, which does not show the unpredictable of human choices. Because of this it is no wonder current economic models mis-predict the action of human choices. I also agree with Katherine’s belief that neuroeconomics is incompatible with mainstream economic thought (at least after reading the first chapter). Neuroeconomics challenges a core pillar of neoclassical/revealed preferences. I refer again to the fact that human choices are not always transitive. I will be interesting to see how this rapidly expanding field of economics with effect/change current economic models in the near future.
Toggle Commented Sep 22, 2015 on ECON 398 at Jolly Green General
This journal article, as many of my classmates have said, attempts ‘monetize’ the benefits of reefs surrounding Barbados, a non-market goods. It highlights the difficulty of trying to put a price on conservation. A statement that helps explain this point and that I found interesting is; “One of the challenges is that many of the benefits of conservation only occur in the future, so that there is a short-term imbalance between costs of conservation and the immediate gains from activities that deplete and/or degrade the environment.” The fact is that it is hard to convince people to spend money on something that they do not directly own. This idea stems from last weeks article, “The Tragedy of the Commons.” On another point, I agree with Matt and others about their concerns about the lack of diversity in those surveyed and how it may have caused bias in the results.
Toggle Commented Jan 28, 2015 on Reading for Thursday at Jolly Green General
I found Garrett Hardin’s The Tragedy of the Commons to be very interesting. As many of my classmates have mentioned in previous post his stance on over-population is controversial as well as thought provoking. Before reading this paper, I had not thought of issues like over-population and pollution as examples of tragedy of the commons. But after reading this paper, these issues clearly are and that we as rational people will not act to help solve these issues individual and that our current institution and laws are unable to combat these issues. I also found it interesting after explaining why over-population and pollution are tragedy of the commons that Hardin went on to state why current thoughts on how to over come these issues would not work.
Toggle Commented Jan 21, 2015 on Readings for Thursday at Jolly Green General
Prior to reading this article by Sachs and Malaney, I truly did not understand how horrible malaria is in tropical countries. Set aside the fact that “every 40 seconds a child dies of malaria, resulting in a daily loss of more than 2,000 young lives worldwide”, the negative impact that malaria has had on tropical countries’ economies is shocking; with GNP of malarious countries about half that of non-malarious countries. The effect on human capital, and the quality of human capital alone is eye opening. Schultz and Lewis stated in their Nobel Prize lecture, increasing population quality is one of the most important parts of developing the economies of poorer countries. Malaria effects human capital both directly and indirectly. Countries with high malaria rates also have high fertility rates. As stated in class and in this article, higher fertilely rates generally have negative impact on the quality of human capital. Also, studies have shown that children miss anywhere from 4.3-11% of school days a year due to malaria. This means that children’s education, a factor in human capital quality, is also being negatively effected be malaria. It has also been shown that malaria may possible effect cognitive abilities in those that have been infected. This article shows gives evidence to the belief that if malaria were to be eradicated, or even limited, in tropical countries, these countries would experience large economic growth.
Toggle Commented Oct 29, 2014 on Econ 280 for Thursday at Jolly Green General
I really enjoyed reading Kurgman’s article, and like many of my classmates agree that models are needed to understand and teach economics. However, it is important understand the limitation of models, especially very simplistic models that make many, sometimes unrealistic, assumptions. We need to be cognizant that models do not represent a whole phenomenon; that models show what the model-maker believed to be important and had the resources to model. As Kurgman said, in order to create models, “there is a narrowing of vision imposed by the limitations of one’s framework and tools.” He illustrates this idea with the example of the African map. Mapmakers of the 15th century only mapped the parts of Africa that they were absolutely certain about, leaving out many details, mainly of the interior, that were included in previous maps. It was not until the end of the 19th century that these details were added back to the maps. Kurgman also suggests that models are not the end-all-be-all, and that one should not “let important ideas slip by just because they haven’t been formulated your way.”
Rodrik’s conclusion that there is no one strategy to create economic development is not too surprising. Early economic development theories believed that less-developed countries should mirror policies of developed-countries. However, Rodrik gives many examples of how countries, particularly in Southeast Asia, have been able to create economic development without following the Washington Consensus. The path to economic development is different from country to country, as each country has its own history, culture, and policies. As Rodrik states, “that even the simplest of policy recommendations- ‘liberalize your trade’- is contingent on a large number of judgment calls about the economic and political context in which it is to be implemented.” Simple policies changes may be all that is needed to “push” a countries economy forward. This suggest that the wide-sweeping policies changes that the “Washington Consensus” calls for may hurt a developing country’s economy. Rodrik uses the example of East Asia and Latin America to illustrate this point. Countries, such as China and South Korea, were able to create huge economic growth during the second half of the 20th century without using policies suggested by the “Washington Consensus.” Instead that created policies that fit what their respective economies need in order to grow. Compare this to Latin America, where countries attempted to remake themselves by following the Washington Consensus, have seen slower economic growth.
Toggle Commented Oct 1, 2014 on ECON 280 Paper at Jolly Green General
The findings by Gitter and Barham that directing funds to women and requiring school attendance can improve school enrollment and nutrition for children are not surprising. It was been well documented that women tend to spend more on their children than man. However, (as my classmates have said) this idea of a “tipping-point”, where after a women’s power passes a certain threshold education is negatively effected is concerning. This suggests, as Heeju said, that possibly power should be evenly distributed within a household to have optimal decision-making. Gitter and Barham also concluded “the mother’s relative education level always has a positive impact on boy’s education”(18), but after women’s power pass this “tipping-point” girl’s enrollment is negatively effected. This seems to contradict findings Gitter and Barham reference from other articles that suggest that mothers are more likely to spend an increase in non-wage income on their daughters rather that sons. This raises the say questions as Andrew asked. Perhaps these questions have to deal these cultural issues.
Toggle Commented Sep 24, 2014 on ECON 280 paper #1 at Jolly Green General
As the rest of my classmates, the point I found most interesting is “the average person living at under $1 per day does not seem to put every available penny into buying more calories” (5). According to an article referenced by Banerjee and Duflo, Deaton and Subramanian (1996), the poorest people “consume on average slightly less than 1400 calories a day” (8) far less than the recommend amount of calories. The article also states that when the poor do have more money to spend on food, they are not spending their money on buying food with better nutritional value but instead buying sugar, salt and processed foods. The poor’s poor diet is causing disease and sickness. As we discussed in class on Tuesday, there appears to be strong correlation between better health and higher income. If this is true why are poor not spending their money more wisely on food? Perhaps the poor are unaware how their food purchases negatively affect their health and should educated on how best to feed themselves.
Toggle Commented Sep 17, 2014 on 280 reading for Thursday at Jolly Green General
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Sep 17, 2014