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Madison Smith
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I’m starting to realize that behavioral economics can have a very large impact on marketing and advertising to the masses as a few of my classmates have discussed. I feel like it’s easy sometimes to know that you would or would not buy something based on an ad, but the emotion that comes with that isn’t necessarily something that we all think about. This paper puts more of a reason behind our actions rather than just people do or do not like this product or would or would not buy it. As Austin mentioned, I also think in general this paper does a good job of laying out its findings in a way that is honest and unbiased. I think that it has a clear goal; to find out what really can work in the prevention of smoking. I thought that the last paragraph was most interesting because it shows how papers like this can have a real impact on policy. Without the correct data, people like the FDA make aren’t able to make the decisions that could actually have real effects on people’s lives.
Toggle Commented Nov 10, 2015 on ECON 398 for next Tuesday at Jolly Green General
I know a lot of people have seemed to express that this paper makes sense automatically, but I think this work has some definite phrases that are counterintuitive to the way that we usually think about emotions, rationality, and decision-making. First, I would not say that you hear people say very often that emotions help us in making the right decision. Actually, I think you usually hear the exact opposite; that emotions should be taken out of the decision-making process. Then, we go on to the idea of measuring emotions based on verbal and non-verbal ways, which surprised me as well because I don’t necessarily feel like everyone conveys emotions in such a predictable way. I’m not doubting that they can do it, but it does seem at first thought to be more subjective than objective. And then, in the same paragraph, the authors state that emotions behave lawfully, which I don’t really think I’ve observed very often either. The part about mixed emotions helped a little bit with my initial feeling that the authors were making this seem like to simple of an idea. I find the confidence of the authors to predict behavior to be really interesting and something that I would like to learn more about in order to understand what it really means to have emotions affect decision-making.
Toggle Commented Nov 3, 2015 on Econ 398 at Jolly Green General
While reading the beginning section on empathy in the chapter, I kept wondering why they were acting like empathy was a trait that all people had equally. Luckily, they addressed that on page 522 with the individual differences in empathy, which I found to be of particular interest (and also a bit over my head). I guess what I am wondering is can people empathize, but not do it well? How do we know when these parts of the brain are being activated when someone is having an empathetic response that it is the right one? For example, if someone is feeling a particular type of sorrow, what if a person isn’t able to empathize with that because they have never felt a sorrow of that sort, but they can empathize with someone who is feeling pain because they know what that feels like. Like Ali, I am wondering about how time effects empathy. It seems like the older people get, usually, the more empathetic they get because they have seen and felt more emotions that allow them to understand their own emotions more and therefore could be correlated with more activation in the AI. Going further, it makes sense that you can feel more empathy for people in your in-group, but I still feel like empathy is something that has more variance for each individual than the chapter is necessarily explaining.
Toggle Commented Oct 27, 2015 on econ 398 next two weeks at Jolly Green General
First, as silly as this might sound, I think it is pretty cool that words like mood, stress and emotion have tangible effects on decisions. When I think of those words, I think of more abstract concepts that have been created to help humans describe how they feel to others, but in reality, they are all words that can be connected to parts of the brain and even to physical reactions. As many of my classmates have discussed, the section on mood was particularly fascinating to me, especially because I have definitely been subjected to the “increased likelihood of ownership when not endowed with the item” (I think this would be what normal people call therapy shopping). I have definitely witnessed the reversed endowment effect with how much easier it is to convince myself or a friend to buy something while in a sad mood. Overall, this chapter shows us that all of those times in other econ classes where a problem told us that “Bobby prefers two apples over 4 oranges” should probably also have a clarifying statement about his mood and emotions at that time. I think that it points out that a lot of what we may think we know about preferences is not necessarily set in stone. This was definitely seen in the chapter’s section on choice blindness. It is crazy that you can convince someone to defend that they like something better than something else right after they told you that they actually like the other better.
Toggle Commented Oct 20, 2015 on ECON 398 at Jolly Green General
I think that what is great about neuroeconomics is that it is a step in the right direction towards realizing that social scientists cannot have walls up when doing their own research. If social scientists ever want to gain real understanding of the world around us, they will have to concede that there are strengths and weaknesses to all different forms of thought. Neuroeconomics is a start towards realizing that we need to talk to one another and borrow ideas and techniques in order to fill in the holes. I particularly liked when the book talked about the strengths and weaknesses to axiomatic approaches because I think that it shows that economics does have limits, yet these limits do not mean that we should forget about these axioms, nor does it mean that axioms are doomed to never improve. While neuroscience is not necessarily the solution to all of these limits, it certainly seems like the different technology and capabilities can give economists great insight in to things that we may have just been theorizing in the past. I would hope that as each field of study moves forward, sociologists, economists, psychologists, et al. will begin to read each other’s work and see what is going on from another perspective in order to create the best insights in to human behavior as we can.
Toggle Commented Sep 22, 2015 on ECON 398 at Jolly Green General
"Despite the claims of neoclassical economists, markets are far from perfect. Adam Smith’s “invisible hand”—the idea that if free markets are allowed to operate without interference, they will self-correct and benefit all member of society has proven arthritic when it comes to addressing all segments of the economy. Market failures abound." Found in my Social Entrepreneurship reading for today, and a few days ago I wouldn't have given it much thought, but after reading this piece, it is interesting to reflect on just how many times Smith's invisible hand is referenced as something more than he actually meant it to be.
This is the first class I have taken where we have talked about climate change and the impact that the environment is having on the lives of the poor. I like the way that the WorldBank has created an easily understandable document that can portray the effect carbon emissions are having on the climate. I do agree with Juan that it would be interesting to have the article lay out possibilities for reducing these impacts with new ideas or the idea that we talked about in class of disincentivizing the use of fossil fuels, but I understand that the executive summary seems to be solely focused on laying out the current and future impacts on society. Box 2: Social Vulnerability Impacts of Climate Change really struck me because the poor are much more affected by the warming climate, but they are not the ones that are contributing most to the problem. It seems as though agriculture will face many challenges in the warming world seeing a decrease in crop yields and food security. Additionally, poor individuals usually live in areas most vulnerable to the increasingly common extreme weather conditions. This goes back to what we were saying in class today about ensuring that producers and consumers are bearing the social cost. Policy should reflect this inequality by hopefully working to ensure that the cost of warming is not a larger burden on the poor than the rest of the world. Obviously this is a lofty goal, but it seems to be integral to ensuring that the poverty does not increase even more in the future as the climate changes.
I must admit that this Eichengreen and Mody article definitely went over my head, and I don’t think I have much of substance to say about it. The conclusion that it comes to about the importance of US interest rates on developing countries was pretty new to me, but I find it very interesting. It still surprises me just how much of an effect US policy can have on the rest of the world. Going back to the first article, I asked Maggie, the girl who was with me in Vietnam, more about the microfinance system that she researched while we were there. It goes along well with the theories of the importance of women in microfinance that we focused on in class. The village had a group of women who created their own microfinance program where they would collect money as a group and then distribute it to an individual once a month in the form of a loan. They had interest rates of 2% for the loans, which is much smaller than the rates that most banks have to provide in order to make a profit. Because all of the women were contributing their own money to the program, I think it fostered a sense of responsibility among the group to ensure that the money was being used well. The process is completely run by this group of women that know the community better than anyone. I found it interesting to contrast this program against the banking version of microfinance that we talked about on Tuesday. I am not sure how common it is for communities to create their own microfinance systems, but I think that they do have some positive aspects that the banks don’t have such as knowing the community, and possibly more accountability since you are repaying individuals that you know very well rather than a bank. Obviously, banks also have positives such as more capital to contribute to the process, and less risk because banks have so much money to begin with. I think that a really good approach could be for banks to team up with these small community groups to assess the need, but also allow for more money to be loaned out because of the extra money that banks have access to.
I think that Keynes’ argument of the importance of knowledge in determining weight should be something applied to most sectors of life. I know there have been studies (I believe in North Carolina) that show that when parents are sent a mailer with all information about schools in the area, they are more likely to move their children to a different school when given the choice. Information allows individuals to fully realize the benefits of something that may seem risky. I think it is interesting that human capital can come in all different forms, but can accomplish the same goals of essentially incentivizing people to make an efficient choice. From Casey’s results, it is easy see the benefits that human capital can have on increasing agroforestry. I would also think that if the government promised other assistance to farmers who switch it could have a positive effect. After individuals are more educated on agroforestry, if they know that they had a support system in place if things go awry, I would assume this would only give more weight to the decision to switch. I am curious about the part on page 504 where it says that farmers who do adopt agroforestry eventually abandon the system. Is this because they are not educated enough to know how to efficiently carry out the new process? Or because they believe that the risk is too high? It seems that if they adopt the new system, they would be able to realize the benefits.
Toggle Commented Nov 5, 2014 on Econ 280 for Thursday at Jolly Green General
A side note to add to Jean’s description of the Gates Ted Talk and Lucy's post: I also think that the Gates talk could definitely be used to describe what is going on right now with the Ebola Crisis. As soon as Ebola hit America, it became breaking news. When we think that it is possible that someone we know could contract a disease (and then possibly we could as well) everyone freaks out, but when it is somewhere else, I think it is so easy to forget about it. The first time I had to put up a bed net, I realized two things. First, it is much harder than you would think to put that thing up. And second, there are individuals who sleep under a net every night in order to try to stay safe from such a terrible disease. There are also millions of people who should be sleeping under a net who can’t afford one. I really enjoyed Schultz’ refreshing take on the importance of quality humans. I think that a lot of times, its easy to look at structural problems and try to fix them, and I don’t think that Schultz would deny that we need to do so, but I also think that investment in health and education are two of the most important factors to improving the lives of individuals. “Investment”, however, is a vague word that can have many different connotations. I would think that policy such as the conditional cash transfers would be a great way to invest in human capital. I also think that Schultz brings up a good point about the discrimination of rural workers. I never thought of the implications of the urban populations' pull in the political sphere. I would be interested to learn more about this phenomenon, and what sort of impacts it has on the levels of poverty we see in rural areas versus urban areas.
Toggle Commented Oct 29, 2014 on Econ 280 for Thursday at Jolly Green General
Something that I have been thinking about a lot since returning from Vietnam is whether or not schooling inherently has as much value as we put on it, when looking through the lens of other countries and other economies. While I obviously don’t advocate that kids should be working instead of going to school, I do think it is very important to realize that in certain economies the schooling that we are used to aren’t as helpful for the real world. For example, if you are living in a small village that is primarily agriculturally based, a parent may not see the benefit of putting their kids in school through high school if they are not learning skills that will help on the farm. They may especially not see the benefit if they are paying for the child to go to school. I think it is important to think about putting those sorts of incentives in to schools in order to help in the decision process of going to school or putting your child to work. Things like meals at school, and schools with no fees would be ways of potentially increasing the incentive to schooling rather than work. Udry gives some other examples of ways to encourage schooling. I would be interested to see the outcomes of the students versus the kids who didn’t receive the subsidy. I would want to know the differences in income/job opportunities for the kids who finished school and for those that didn't. Udry’s point about looking at more than just the monetary costs and benefits that could explain the correlation between low-income and high incidence of child labor was very informative. As we have seen in a lot of the other articles, people use their imperfect information to make decisions and in the case of whether to put your child in school or not, it is the same sort of idea. One small point is that I think it is important to note that uneducated parents place more value on education than sometimes people immediately assume, but the issue is that they aren’t as good at deciphering between high and low quality schools. Udry argues that educated parents might value education more, but I don’t think that is always necessarily the case.
Toggle Commented Oct 22, 2014 on 280 Paper for Thursday at Jolly Green General
The Rise and Fall of Development Economics provides us with a precursor to the Rodrik reading. While Rodrik saw the importance of looking at cases individually, Krugman emphasizes “silly” models that can help us explain things about the world even if they are oversimplified. I agree with Krugman in seeing the value in both ideas of thinking, and the importance of using both methods simultaneously. Krugman’s third conclusion about the Big-Push model was where the interdependence of models and experimentation really stuck out to me. As Krugman explains, while the Big Push theory might be true, we need to go out and test it in order to see (or not see) it in action. Additionally, the African map example was interesting because while I had never heard of the evolution of maps of Africa, the European’s methodology sounded like something that I would have followed as well. If you don’t know something for sure, don’t write it down. But what happens when you don’t know anything for sure? You get a blank map. From what we have learned about development economics so far, there have been some times of blank maps in its history because it is difficult to simplify such a complex subject in to a few lines on a graph. Even though Krugman wonders if the blank maps were necessary in development theory’s history, I would argue that it is a mute point to look back and ask that question. Instead, we need to be glad that this work has been done, and continue to work to both improve it and gather more data in the field to either credit or discredit the model.
One thing is certain, Rodrik’s article basically discredits anyone who thinks that people/countries are poor because of only one or two reasons. What I really like about this article is its ability to show how an interaction of policy prescriptions is able to promote development, but the article doesn’t try to conclude one magic interaction. I have always wondered how do you truly “liberalize trade” or “secure property rights”. These terms seemed vague and difficult to put in to practice. After reading this, I at least know one more piece to the puzzle. I realize now that there are multiple ways to reach the same goal. I think that this is a good reminder for what the Banerjee and Duflo article was talking about with rationality being in the eyes of the beholder, but on a macro scale. While one country may liberalize trade using one method, another country may need to do something completely different to see the same result. I have taken a lot of different poverty classes, and read so many small-scale studies on different programs and the effects on poverty, but it is important to remember that these studies are on a small scale and can not necessarily be replicated in a different part of the world.
Toggle Commented Oct 1, 2014 on ECON 280 Paper at Jolly Green General
As Jacob and Lucy have stated, it was surprising at first that there is a tipping point where female power causes girl’s enrollment to fall. But as Lucy said, there is possibly a point where the benefit of the child working outweighs the gain of school. I would maybe even argue that this isn’t necessarily only a benefit to the parent, but to the household (in the present) as well. If a family doesn’t have food to put on the table, having a child work could give them the money needed to eat. Education is an investment in the future, but it is hard to invest when there are real needs right now. In Vietnam this summer, I surveyed villagers about their educational attainment and their children’s education. Another researcher asked a village about their health habits. A big takeaway from the data is that money is the primary factor missing in getting kids to go to the school and to the doctor. This is pretty much a no brainer, but I like this cash transfer idea because in this village, the mothers seem to have a good amount of power although I don’t have the rFPSY data for this area. The government currently isn’t much help in getting money or reduced prices on education or health, but a program like this could do a lot for the community. On a different note, I know Professor Blunch has done a lot of work in Ghana on the effect of adult literacy programs on reducing child mortality, which is very interesting. It shows, similar to this study, that education of the parent and the well being of the child are definitely related. These programs I believe were set up for women, and by teaching them to read, they were able to learn about nutrition and pre-natal care. I would hypothesize that a literacy program would maybe even increase the amount of spending on the children through the cash transfer even more than it did in the study.
Toggle Commented Sep 24, 2014 on ECON 280 paper #1 at Jolly Green General
Rationality of one cannot be judged by the rationality of another. While many people believe that their rational choice is the best choice, they do not have the same information that another may have. While a lot of times economists assume perfect information, we often forget that our perspectives might overshadow the information needed to understand someone else's decisions. From my perspective, it was easy for me to question the lack of specialization and immediately judge, but after reading Duflo and Banerjee’s explanation, it makes more sense not to specialize. I cannot really have an opinion on whether someone is making a rational choice unless I see the choice through their lens. In the same regard, it would be possible that people who choose to consume alcohol or tobacco do not have information on the health consequences of these substances. This information could possibly change their view on the utility of using either alcohol or tobacco, which could change how much they rationally choose to consume. Preferences really do have to be individualized, but what Banerjee and Duflo really show is that when you have the right information, the decisions make much more sense.
Toggle Commented Sep 17, 2014 on 280 reading for Thursday at Jolly Green General
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Sep 17, 2014