Check my sources! (Week 12 - Health and organ markets)
Becker, Gary and Julio Elias. 2007. "Introducing incentives in the market for live and cadaveric organ donations." Journal of Economic Perspectives 21:3 (Summer). Working paper version of the same paper.
Abecassis, M.M. 2006. "Financial Outcomes in Transplantation -- A provider's perspective." American Journal of Transplantation 6:6 (June). Note that we do not have a subscription so you'll only be able to get the abstract; I was able to get a full copy, but it isn't exactly easy.
Dubner, Stephen and Steven Levitt. 2006. "Flesh Trade" New York Times Magazine 9 July.
Virginia Postrel's blog, Dynamist. She has lots of stuff on organ markets, and if you look back through the archives to May, 2006, you'll find her story about donating a kidney. Well worth a read.
Richard Epstein is one of the finest legal scholars out there, probably because he has such a sound understanding of economics. He chats on EconTalk with Russ Roberts about The Economics of Organ Donations. Listen to the whole thing! They also have a nice reading list of other materials on the subject.
Xavier Sala-i-Martin's website. You have to click on the soccer trophy picture to get to the main site. Careful for songs that start playing on various pages for no good reason.
Perry, Bryan. 2005. "Social report indicators for low incomes and inequality". Ministry of Social Development. Unfortunately, this piece no longer seems available online.
Sarlo, Chris. 2006. "Poverty in Canada: 2006 update". Fraser Institute (A Canadian think tank somewhat comparable to the Business Round Table here). The two Sarlo pieces do well in explaining the difference between absolute and relative standards.
For a contrary view, check Johnson, Nick. 2005. "'Working for Families' in New Zealand: Some early lessons". Fullbright New Zealand. Johnson does note the pernicious effects of high effective marginal tax rates though, around Figures 9-10.
Buchanan, James. 1976. "The Samaritan's Dilemma". Published in Phelps, Edmund, ed., 1976 "Altruism, Morality and Economic Theory." Russel Sage Foundation. Unfortunately, not available online. It is reprinted in Volume 1 of Buchanan's collected works; alternatively, a Google scholar search finds related articles. The theory here provides one argument underlying the collapse in support in the US for welfare.
Murray, Charles. 1985. "Have the poor been "Losing Ground"?". Political Science Quarterly 100:3 (Autumn). This article encapsulated the mood shift that led to American welfare reform in 1996.
Heckman, James. 2008. "Schools, skills, and synapses". NBER working paper no W14064.
Update 28 September 2009
First, this week we covered material normally covered in Week 12 due to a rescheduling with our normal guest speaker for Week 10, Andy Tookey. So Weeks 10 and 12 have flipped positions.
McKinsey Global Institute. 2003. Offshoring: Is it a win-win game?". Note that the paper is behind a (free) registration wall. Mankiw discusses the article in his piece in the reading list.
Easterly, William. 2007. "Was development assistance a mistake?" American Economic Review 97:2 (May), pp. 328-32. Note that both of these articles are available only in the library's print selection as the moving wall gets us only to 2005 via the library's e-journal holdings
Update 21 Sept 2009 (Week 9)
Check my sources! All are available via the library or its e-journal subscriptions.
Becker, Gary. 1971. The Economics of Discrimination: Second Edition. University of Chicago Press. Available in the library.
Roback, Jennifer. 1984. "Southern Labor Law in the Jim Crow Era: Exploitative or Competitive?" University of Chicago Law Review. 51:4 (Autumn), 1161-1192.
Coate, Stephen and Glenn Loury. 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?" American Economic Review 83:5 (December), 1220-1240.
Loury, Glenn. 1998. "Discrimination in the Post-Civil Rights Era: Beyond market interactions." Journal of Economic Perspectives 12:2 (Spring), pp. 117-26. Available via JSTOR.
Levy, David. 2002. How the Dismal Science Got Its Name: Classical economics and the Ur-Text of racial politics. University of Michigan Press. Note that Levy discusses his work online at Liberty Fund. Levy discusses how economists' opposition to slavery, in contrast to support of slavery in the "gay sciences" of poetry and literature (see Dickens and Carlyle), are what led to our appelation as being the dismal science. We can and ought take pride in the name. I didn't mention this one in lecture, but will note it next week.
Note that careful student Kirsten has found a typo in the reader: the Roback article listed in the supplemental readings list is from volume 46, not 56. It is in JSTOR though. Thanks Kirsten!
British Petroleum. 2006. Table of proved oil reserves. Note that another big field was just found in the Gulf of Mexico, which previously had been thought tapped out.
Grossman, Gene and Alan Krueger. 1991. "Environmental impacts of a North American free trade agreement." NBER Working Paper 3914. This is the paper that started the literature on the environmental Kuznets curve: they were trying to work out whether NAFTA would improve or deteriorate environmental quality.
Gaudet, Gerard. 2007. "Natural resource economics under the rule of Hotelling." Canadian Journal of Economics 40:4, pp. 1033-1059. Available via library e-journal holdings
Stern, Sir Nicholas. 2006. The economics of climate change: The Stern review. Cambridge University Press. Prepublication version available here.
Weitzman, Martin. 2007. "The Stern Review of the economics of climate change". Journal of Economic Literature 45:3 Available via library e-journal subscription.
I'd noted the passing of Norman Borlaug, the greatest environmentalist you've never heard of. Please do read the summaries of his work at The Atlantic and at Reason. The man personally saved a billion lives and nobody's heard of him. Mostly because he spent his time actually doing good work instead of posturing with rock stars to "raise consciousness".
I noted the debate between Oberholzer-Gee and Liebowitz. Some of this is listed in your supplemental readings list. A more general discussion by Liebowitz is here
New Zealand's Creative Freedom Foundation is a great resource for copyright skeptics. They're especially good in discussing S92, or variants thereon, that would have your ISP kick you off of the internet if anybody even accused you of file sharing.
David Farrar also keeps close watch on the latest Kiwi copyright developments.
Walker, Douglas and A. H. Barnett. 1999. "The Social Costs of Gambling: An Economic Perspective" Journal of Gambling Studies 15:3 181-212. Available via library ProQuest subscription; no easy direct link.
Adda, Jerome and Francesca Cornaglia. 2006. "Taxes, cigarette consumption, and smoking intensity." The American Economic Review 96:4 pp. 1013-28.
Dobkin, Carlos and Nancy Nicosia. 2009. "The war on drugs: Methamphetamine, public health, and crime." The American Economic Review 99:1 pp. 324-49. ungated version.
A nice take on the efficacy of prohibition via The Guardian: Ex-drugs policy director calls for legalisation.
I'd mentioned the fights between Lott and Levitt. Chicago Magazine has a fantastic summary of it here. Go check it out.
Freeman, Richard. 1999. "The Economics of Crime". Chapter 52 in Handbook of Labor Economics, pp. 3529-3571.
Lochner, Lance. 2007. "Individual perceptions of the criminal justice system." American Economic Review 97:1 (March) 444-60.
Chen, M. Keith and Jesse Shapiro. 2007. "Does prison harden inmates? A discontinuity-based approach." American Law and Economics Review, Spring. Working paper version available here.
Klick, Jonathan and Alexander Tabarrok. 2005. "Using Terror Alert Levels to Estimate the Effect of Police on Crime. Journal of Law and Economics XLVIII (April), 267-279.
Shepherd, Joanna. 2002. "Fear of the First Strike: The Full Deterrent Effect of California's Two- and Three-Strikes Legislation". Journal of Legal Studies XXXI (January), 159-201
Ekelund, Robert, John Jackson, Rand Ressler and Robert Tollison. 2006. "Marginal deterrence and multiple murders." Southern Economic Journal 72(3), 521-41. No direct link available but available via library online journal holdings.
Helland, Eric and Alexander Tabarrok. 2004. "The Fugitive: Evidence on Public versus Private Law Enforcement from Bail Jumping". Journal of Law and Economics XLVII (April), 93-122.
Update 27 July 2009: Check my sources!
Buchanan, James and Wm. Craig Stubblebine. 1962. "Externality". Economica 29 (November) pp. 371-84.
Coase, Ronald. 1960. "The problem of social cost". Journal of Law & Economics. III (October) pp. 1-44.
I talked about fiscal externalities in lecture. Gary Becker, one of the Elder Gods in the Econo-Pantheon, discusses similar issues regarding restrictions on fatty foods at his blog. Don Boudreaux today comments usefully on Demsetz's Nirvana Fallacy, pointing to Buchanan's 1963 work "What should economists do?" Simply pointing to a blackboard failure isn't sufficient to prove the necessity of a government solution.
Your policy briefing note assignment was handed out in class. If you missed it, it's also here.
Treasury has updated its default discount rate for cost benefit analysis: it's now 8%.
My analysis of the ASH and SmokeFree Coalition report on the costs and benefits of smoking. If you're interested in the topic, the analysis was part of a longer-running debate with the anti-tobbac lobby in the NZ Med Journal which can be found via my Scribblings page.
Viscusi, W. Kip and J. Aldy. 2003. "The value of a statistical life: a critical review of market estimates throughout the world". Journal of Risk and Uncertainty 27:1 pp. 5-76.
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.
Other interesting bits:
David Farrar notes that the meningococcal vaccine cost $200 million and is estimated to have prevented 1.7 deaths and 54 cases of the disease. He asks if it was worth the money. On lives saved considering only these numbers: certainly not. $100 million per statistical life saved, as we showed in class, probably means that the programme killed 13.3 people via reductions in GDP while saving 1.7 lives: on net, the programme killed about 11 people. Now, if the costs of the non-fatal 52 cases were very high, and if immunization has ongoing reductions in disease and fatalities rather than the one-off effect noted above, then you could make a case for the programme having passed cost-benefit analysis. But we'd need some measures on it.
Bruce Schneier, security expert extraordinaire, looks at cost-benefit analysis of US airline security measures. Federal air marshals cost $180 million per statistical life saved while hardening cockpit doors cost only $800,000 per statistical life saved. So, the air marshals also, via effects on GDP, kill more people than they ever save. More than 10 statistical deaths from GDP effects for every life saved. Pretty expensive stuff.
Econ 224 hit its stride in 2008. I first taught the course in 2006; I revised it considerably over the next two years. Last year's first trial run of the InformED programme went well; we've identified a couple of kinks that we're improving for this year's version. So, what's new for this year?
A couple of improvements to to InformED, including due dates for the modules to help keep folks on track
Updated reading lists
No plans on dropping or changing topics from the 2008 edition. They all look pretty relevant for '09, and I think they all worked. Feedback from students in '08 didn't suggest that any particular topic ought to be dropped, and there wasn't much consensus either as to topics to be added. Only caveat: While it would be great to be able to do a week on the financial crisis, that's a topic in macroeconomics and this course focuses on applications of microeconomic theory. This course does not even have a macro prerequistite.
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.
Note: if you score higher on the final than on the midterm, the final counts for 35%, the midterm for 25%.
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. Email your preference to your tutor.
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.
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?
First, it means lots of reading. I expect you to do each week's readings and to come to the tutorials ready to argue about them. 20% of your grade derives from discussing the readings in tutorial; I'll be asking the tutors to call on people during the post-presentation debates and to embarrass them if they haven't done the reading. It's best that you do your readings.
Second, it means that assessment will focus on analysis of arguments using concepts developed in the class. There will be no "turn the handle on the equation to solve the problem" type questions.
Finally, it means that I lecture during the lectures. I don't write very much down on the board and I don't provide hand-out notes. You have to pay attention and sort out for yourself which bits are most important to write down. You will find it helpful to record the lectures to listen to again later on.
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!
