Class Information

Economics 224: Economics and Current Policy Issues

2008 Edition (second semester)


CDF of econ 224 scores

Latest news

Update 5 December 2008. This will be the last update of this page. Over time, link rot will set in, so don't expect that all the links will continue working forever. I'm not going to be going back and fixing things as this happens. The url for this page will eventually be migrated to 224-2008.html in order to make room for next year's version of the site.

The cumulative frequency distribution of grades for the course should appear at left if everything's working correctly. The bottom axis traces the percentage of people in the class earning the score listed on the y-axis or lower. So if you trace upwards from 50 on the x-axis, you'll find the median grade for the class (a 63).

If you haven't already sent in your recommendations of which lecture ought be axed and which topic ought be put in its place, please let me know. I want to keep topic content fresh by rotating topics in and out with student interest. Nominations for best paper (readings list) and paper most warranting being dropped also happily considered. Feedback on the InformED programme would be really helpful in improving things for next year - thanks to those who've already provided such feedback! Hope to see you in Econ 336 next year!

Update 15 October. Trade theorist Paul Krugman, who showed up in Monday's lecture, won this year's Nobel Prize for his work in international trade.

Check my sources!

Update 9 October. One more source I'd forgotten to link: Heckman, James. 2008. "Schools, skills, and synapses". NBER working paper no W14064.

The final exam is coming up. It's open book / open notes, but otherwise the same format as the midterm. There will be 6 questions, one for each week, with an equal mix of questions about lecture and about readings. The nature of the questions will change somewhat: I won't be asking things like "Tell me what X says about Y", I'll rather be asking "If X is right about Y, then what are the implications for Z?". Note also that, while the final is on the material from the second half of the course, the material is cumulative: it's totally fair for me to ask you to apply cost-benefit analysis to one of the later topics, or to tell me about market failures (or lack thereof) relating to different bits from the second half.

Update 7 October. Check my sources!

Here are some sources for the bits I had to cull from the lecture for time.

For more on Roger Beattie, see the article in Idealog.

Update 30 September

Check my sources!

Some other fun sources on the topic:

A big thanks to Andy Tookey for a fascinating talk! Here's his presentation for those who wanted to see it again.

In other news, we have now more evidence that the US Endangered Species Act works to kill endangered species, courtesy of the Journal of Environmental Economics and Management. Check the link to the article by Ferraro, McIntosh and Ospina. Abstract copied below.

The effectiveness of the US endangered species act: An econometric analysis using matching methods.

Abstract: Diametrically opposed views of the effectiveness of the United States Endangered Species Act (ESA) co-exist more than 30 years after the Act's creation. The evidence marshaled to date for and against the ESA suffers from a problem common in analyses of biodiversity protection measures: the absence of a well-chosen control group. We demonstrate how matching methods can be used to select such a control group and thereby estimate how species listed under the ESA would have fared had they not been listed. Our results show that listing a species under the ESA is, on average, detrimental to species recovery if not combined with substantial government funds. In contrast, listed species with such funding tend to improve. Our analysis offers not only new insights into a controversial debate, but also a methodology to guide conservation scientists in evaluating the effectiveness of society's responses to biodiversity loss.

Update 24 Sept 2008

The latest Econ Journal Watch has a nice article showing the broad consensus of the economics profession on the wasteful nature of stadium subsidies. Check it out.

Update 22 Sept 2008

Check my sources! All are available via the library or its e-journal subscriptions.

Update 18 Sept 2008: Check my sources!

I didn't have time to go through the economics of the Stern report and climate change. Do feel free to consult the original report and its most important criticisms though, listed below:

Update 11 Sept: More Cowbells! We've talked about copyright and derivative works. More Cowbells allows you to upload your favourite MP3 and make it better by adding in more cowbells and bits of Christopher Walken. You can also listen to previously-created cowbelled tunes. I'm currently listening to "I Am The Walrus" by the Beatles, improved by maximal cowbell addition and a 53% Walken insertion! Infringing use or not? Probably infringing. But should it be?

Addendum: the Cowbell version of Zepplin's Immigrant Song is even better.

Update 8 Sept: Paradis! And, check my sources!

Jerry Paradis, linked to below, is giving a talk at the Economics Department on Wednesday afternoon, 10 September, 3 PM. Use it as a break in your studying! Or, as interesting refresher for your material from our week on the Economics of Prohibition! Room 534.

Check my sources!

Update 25 August

Kim Hill had a great interview on Saturday with retired Canadian judge Jerry Paradis, a member of Law Enforcement Against Prohibition, in which they talked about alternatives to the current regime. The MP3 audio is available here and here.

Your midterm exam is coming up. I sent around an email with the following helpful details:

The mid-year exam is coming up the Wednesday after break (6:30 - 9:30). I've had a few folks asking about the exam.

The exam will consist of 6 questions, one for each week of lectures in the third term. Half of the questions will be drawn from material from the readings; half will be drawn from material from the lectures. Don't ask me which weeks' questions will come from lecture and which will come from the readings. I don't even know yet as I haven't written the exam.

On questions based on material covered in lecture, I don't provide choice in questions. It's stuff that you should know as you were in lecture. On questions based on material covered in the readings, I'll either ask an open-ended question allowing you to apply evidence from any of the recommended/required readings from that week, or I'll give you choice of questions where the set of questions together cover all of the recommended readings. So, make sure that you have done all of the required reading and that you've read at least one of the recommended readings per week. The questions will be a mix of 1 to 2 page short essays.

A sample question from last year, to whet your appetites:

5. Answer the following in no more than ONE double-spaced page.

"The same type of burglary imposes the same level of social costs regardless of whether it's the burglar's first robbery or his fortieth. There's consequently no good reason to punish someone more severely for a second offence than for a first offence. The punishment for an offence should be equal to the social cost of the offence." Discuss with reference to the theory we developed in lecture.

There, I was expecting folks to apply material from lecture to talk about the marginal cost of the offence and the marginal cost of deterring offences and how optimal deterrence requires higher penalties for second and third offences than for a first offence because the first offence carries with it a big stigma cost that's then irrelevant by the time someone hits subsequent offences. So while the marginal cost of the offence doesn't change, deterring the second offence requires a higher penalty than deterring the first offence. So the optimal punishment needs to be higher for the second offence. Depending on which reading you'd done for that week, you could bring in material from that reading, but you can answer the question very competently relying only on material from lecture.

So, how should you study for the exam? Know the main ideas from each lecture, study the graphs and make sure you know how they work, and make sure that you know your readings. If you followed my advice from week one, you'll now have a nice set of study notes already ready for you: your article summaries. Worry less about remembering the names of the authors of articles and worry more instead about remembering the ideas they were trying to get across.

Happy to talk more about it at end of lecture Monday if needed. Study hard, and make progress on your term papers!

Update 18 August (again)

Bootleggers and Baptists? Or, an efficiency-augmenting coalition? Depends on what gets to be called a "sustainably managed forest", doesn't it?

Note that my link to the Parliamentary site, below, only works sometimes. There's something odd going on with the Parliamentary site today; hopefully it gets fixed soon.

Update 18 August: Check my sources! Update 14 August 2008

A nice take on the efficacy of prohibition via The Guardian: Ex-drugs policy director calls for legalisation.

Update 11 August 2008

I'd mentioned the fights between Lott and Levitt. Chicago Magazine has a fantastic summary of it here. Go check it out.

As always, feel free to check my sources:

Update 8 August 2008: Stallman!

Richard Stallman, pioneer of CopyLeft, open source and free software movements, developer of GNU and critic of current copyright laws, is giving a talk at Canterbury Saturday 16 August!! It should be very interesting for anybody interested in economics of copyright, which we'll be covering in a few weeks' time. Details on Stallman via Computerworld; details here on the lecture tour.

From the Computerworld article:

The leader of the Free Software movement, Richard Stallman, is calling New Zealand's copyright laws unjust and plans to use an upcoming tour of the country to rouse opposition to them.

Stallman, the founder of the GNU project and of the Free Software Foundation, says New Zealand's copyright laws place restrictions on distributing certain free software packages. Specifically, these enable users to "escape from digital handcuffs (also known as Digital Restrictions Management or DRM)", he says.

"New Zealand's law does not go as far as the DMCA in the US, but it is unjust nonetheless," he says.

"DRM is nearly always the result of a conspiracy of companies to restrict the technology available to the public. Such conspiracy should be a crime, and the executives responsible for it should be sentenced to prison."

Note that I put the clip up there not because I endorse the position but to highlight that it ought to be a pretty lively talk!

Update 6 August 2008: Check my sources!

Update 29 July 2008: Check my sources, both available via the library's online journal holdings

I talked about fiscal externalities in Monday's lecture. Gary Becker, one of the Elder Gods in the Econo-Pantheon, discusses similar issues regarding restrictions on fatty foods at his blog.

Your policy briefing note assignment has been emailed to you. If you lose it, it's also here.

Update 22 July 2008

Monday's lecture was on cost-benefit analysis and the value of human life. Two very relevant news items today:

Update 21 July 2008: Check my sources!

Viscusi here surveys pretty much the entire literature, including about 19 of his own studies on the matter. This is a wonderful example of what we call a meta-study. That is to say, it takes an overview of pretty much every study conducted in the field and draws general conclusions from the set of dozens and dozens of such studies, accounting for differences in techniques used in different studies. Want to find out more? Check the source! The library's e-journal holdings have a subscription. There are wonderful gems in there, like that regulations prohibiting the land disposal of certain types of wastes save 3 statistical lives while killing 66 people via reductions in GDP, for a net cost of 63 lives.

Update 14 July 2008. The Learning Skills Centre would like me to inform you of courses they're offering this term. I strongly recommend their courses to any student who needs to build experience in essay-writing. From their email:

Lectures offered this term

Workshops offered this term

Enrol online: click on "Undergraduate Students" then either click "Lectures" or "Workshops".

Update 23 June 2008. The syllabus and reading list are now updated for 2008. I reserve the right to make minor tweaks prior to the start of classes, but don't expect anything major. Note also that you can now sign up for tutorials. For both, see the links at the top of the page.

Update 27 March 2008. This year's required texts are listed below with links for (very reasonably priced) purchase at Amazon.com.

Update 25 January 2008. Hi all. Econ 224, Economics and Current Policy Issues, is on again for 2008, second semeseter. As semester approaches I'll here put in updates on the syllabus and reading list. To get a feel for what the course is like, consult last year's edition of the page. I'm currently going through the new Tim Harford book for updates to current readings, mulling over which old readings I'll drop, and so on. You can also consult my teaching evaluations from 2007 and 2006 at my teaching page. Selected comments from the 2007 evaluations (each from a different respondent, do check the full evaluations if you're worried about selection bias):

Summary statistics:

QuestionEcon 224Commerce Average (2005)
This was a well organised course 4.173.90
The course helped to stimulate my interest in the course area4.393.60
The overall workload was reasonable3.503.20
The level of difficulty was reasonable3.173.30
Developed my ability to engage in research related activities4.223.10
Assessment encouraged learning for understanding3.893.50
Overall, a good quality course4.223.80
The lecturer was able to communicate ideas and information clearly4.00n/a
The lecturer's attitude towards the students has been good4.33n/a
Overall the lecturer is an effective teacher4.22n/a

Most folks don't put all of this out there. If you've taken game theory, you might wonder about courses where you can't get this kind of information. Oodles of learning goodness for your tuition dollar: that's the Crampton promise.

What's new in 224 in 2008?

2007 was the second time I taught Econ 224. I liked the changes I made last year to the syllabus and method of delivery. Those changes partially were in response to comments from the student course evaluations, partially from chatting with lecturers of similar courses while on Erskine leave in the fall of 2007. I think things worked out pretty well in 2007. What am I going to do differently in 2008?

Welcome to the new and improved Econ 224!

Course synopsis

Economics isn't just about dollars and cents: it's a way of thinking about the world. Incentives matter everywhere, not just in traditional market environments. What happens when we apply the economist's lens to other policy issues? Policies that look good on the surface often wind up hurting the people they're meant to help.

Each year's section of topics may vary. Broad topics to be examined will be contrasting of market failure and government failure, law and economics approaches, and the economics of social issues. Particular topics will vary from year to year and may include issues such as the following: market failure and comparative institutional analysis; the environment and externalities; reputation and the economics of information; crime and punishment; the economics of prohibition (alcohol and other drugs); regulation; copyright and file sharing; discrimination in markets; health and organ donation; poverty and welfare; globalisation and trade; culture.

Assessment - Updated!

Evaluation will consist of:

You will produce a short essay providing an economist's analysis of a policy issue. Your essay will receive two grades: one for style and grammar, the other for quality of economic analysis. Each contributes equally to the final grade. You are encouraged to seek assistance from the Learning and Skills Centre if you need assistance with style and grammar.

A significant portion of assessment is based on performance in tutorials; failure to attend does not assist you in earning points towards that assessment. Tutorials begin during the second week of lectures. During the first week of tutorials, you must choose one week in which you will serve as presenter and one week in which you will serve as discussant.

As presenter, you will be required to provide a 10 minute presentation of one of the starred readings: explain the main point of the reading, how it fits into the general topic under consideration, and the article's broader relevance. You must provide a written summary of your comments to your tutor prior to your presentation. While the summary itself is not marked, failure to produce one will knock your presentation down by 2.5 points.

I fully intend that the in-tutorial discussions be debate oriented. Keep it civil, keep things focused on the ideas and arguments presented, and don't take criticism personally. You get five points for in-tutorial discussion. Did the presenter get the main point of the article or do you disagree with the summary? Did the presenter identify the broader importance of the article or miss the point of it? Or, is the article just clearly wrong in light of what you've read in other suggested readings (or from your own analysis of New Zealand data?): the presenter correctly summarised the article, but the article is just horribly wrong from an economic perspective.

Your tutorial grade is based on the quality of your presentation and general contribution to debates following presentations and discussions. Come to tutorial ready to argue about the articles you've read. Expect to be asked questions about them!

Overall, this course works to build not only your ability to apply economic ideas to areas beyond our normal purview, but also your ability to communicate those ideas to others orally and in formal written English. These skills are essential for any job you'll take after university: employers consistently tell us that they want graduates who are able to communicate.

Reading

The reading list contains several suggested readings for each week (and one required reading in most weeks). You should aim to read at least two articles each week comprising at least 40 pages worth of reading - so three or four short readings or a couple of longer ones. In each week's tutorial, you'll be expected to contribute to discussion and debate; your contributions there should build on your reading. I will expect you to cite arguments presented in the readings when answering exam questions: I will provide choice among a few open-ended questions that will allow you to draw on your knowledge of the readings in providing an answer. Do not expect to do well on the exam if you have not kept up with the readings.

Any readings not readily available in the library and not available online will be included in a course reader. Chapters from texts on library reserve are not duplicated in the reader. I hope and trust that the library has placed copies on reserve.

Course style

This course is taught very much in the arts tradition within economics. What does that mean?

So, the course will be a lot of work, especially if you're not accustomed to lots of reading and debate. Feel free to peruse the syllabus and reading list, and the web pages of other courses I've taught, to see whether you think this is the right course for you.

Please feel free to contact me via email if you have any questions about the class or if you're wondering about taking it. Hope to see you in the fall!

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