I have once again failed to produce a constaint stream of postings for you, my dear reader (if you are still there!). But I am back. I am going to post a few items that have gabbed my attention over the last few months. They will be short and sweet, more of a FYI.
More to come ...
Monday, June 2, 2008
Monday, April 28, 2008
Teaching: More utility the second time around
After submitting my final grades, I feel a bit of a loss. I am sad it's over. Although I have failed to understand Generation "Why (am I failing?)", I have made some (perhaps not so new to anyone that teaches) discoveries.
1- The second time around is easier, but not how you think ... In a word: confidence. I no longer worry about making mistakes on the board (although it does happen). The classroom is welcoming. It seems my perception of risk is lower because I understand the nature of supply (the content) and demand (what students need) better.
2- Students appreciate win-falls and they respond to incentives (I know, not surprising, we all do). When I offered to re-weight their grades after their rather poor performance on the first midterm, they were happy because their expected outcome (their final grade) was revised upwards. It seemed they quickly priced-in the rewards of working harder. Because the class content was cumulative (Chapter 10 requires knowledge of Chapters 1-9) I was able to do this. Although it is possible that a few students would actual decrease the level of effort because it would be easier to reach their targeted grade, I felt that this "Do better, I will re-weight" approach was appreciated and useful for motivation ("You can turn this around!"). In fact, a number of students earned 20% better on the final than the first exam.
3- Why didn't more students "turn-it-around"? Clearly ability and effort play an important role, but is there something else? Most times students write papers or exams with little or no consultation afterwards. This semester I asked all failing students to speak with me about how they studied and what they were going to do differently for the second midterm and final. Although students were reluctant to meet, they were general appreciative when we did because they were shown where they went wrong and I made suggestions on how to study for the next exam. On the downside, these types of demand performances are time consuming and may negatively affect my evaluations.
4- Should we teach how to study during class? Over the past few months I started saying things like: "On page 458, the author says '...', this is an excellent summary." or "If you don't understand how we derived this result, please don't let it go: talk to me or the TA". Because I get very few questions in class and no one seems to use office hours, perhaps providing detailed study hints during class may yield good results.
5- Because I was more relaxed I could be more over the top and enjoy their reaction. I played for them the sub-prime mortgage blues!
Teaching: loved it.
1- The second time around is easier, but not how you think ... In a word: confidence. I no longer worry about making mistakes on the board (although it does happen). The classroom is welcoming. It seems my perception of risk is lower because I understand the nature of supply (the content) and demand (what students need) better.
2- Students appreciate win-falls and they respond to incentives (I know, not surprising, we all do). When I offered to re-weight their grades after their rather poor performance on the first midterm, they were happy because their expected outcome (their final grade) was revised upwards. It seemed they quickly priced-in the rewards of working harder. Because the class content was cumulative (Chapter 10 requires knowledge of Chapters 1-9) I was able to do this. Although it is possible that a few students would actual decrease the level of effort because it would be easier to reach their targeted grade, I felt that this "Do better, I will re-weight" approach was appreciated and useful for motivation ("You can turn this around!"). In fact, a number of students earned 20% better on the final than the first exam.
3- Why didn't more students "turn-it-around"? Clearly ability and effort play an important role, but is there something else? Most times students write papers or exams with little or no consultation afterwards. This semester I asked all failing students to speak with me about how they studied and what they were going to do differently for the second midterm and final. Although students were reluctant to meet, they were general appreciative when we did because they were shown where they went wrong and I made suggestions on how to study for the next exam. On the downside, these types of demand performances are time consuming and may negatively affect my evaluations.
4- Should we teach how to study during class? Over the past few months I started saying things like: "On page 458, the author says '...', this is an excellent summary." or "If you don't understand how we derived this result, please don't let it go: talk to me or the TA". Because I get very few questions in class and no one seems to use office hours, perhaps providing detailed study hints during class may yield good results.
5- Because I was more relaxed I could be more over the top and enjoy their reaction. I played for them the sub-prime mortgage blues!
Teaching: loved it.
Saturday, March 15, 2008
Now Spinning: No hype; all quality
Since my friends and family want me to stop playing "sub-prime mortgage blues" over and over again, I had to find some new tunes. So, I pulled these two gems to the top of my play list.
The Guardian recently published a wonderful congratulations to Jenn Grant's CBC Galaxie Rising Star award for her debut full-length album “Orchestra for the Moon”. To put this in context, Jenn was selected over the Joel Plaskett Emergency (sorry Joel) and several other (including indie faves The Weakerthans ). Give this article a read. Give a listen a few hits of hers here . I hope to see her in the Maritimes this summer.
Second, the international acclaim for Amy Whinehouse is not why I am a fan. Sure, popularity could be a strong buy signal, but it was not until I was getting my hair cut a few weeks ago that I heard this salty album (Previously, I had only heard that she does not want to go to rehab no, no, no). I was surprised and delighted.
Yes, economists do have taste.
The Guardian recently published a wonderful congratulations to Jenn Grant's CBC Galaxie Rising Star award for her debut full-length album “Orchestra for the Moon”. To put this in context, Jenn was selected over the Joel Plaskett Emergency (sorry Joel) and several other (including indie faves The Weakerthans ). Give this article a read. Give a listen a few hits of hers here . I hope to see her in the Maritimes this summer.
Second, the international acclaim for Amy Whinehouse is not why I am a fan. Sure, popularity could be a strong buy signal, but it was not until I was getting my hair cut a few weeks ago that I heard this salty album (Previously, I had only heard that she does not want to go to rehab no, no, no). I was surprised and delighted.
Yes, economists do have taste.
sub-prime mortgage blues
Believe it or not people visit my blog in search on "economics songs" and leave disappointed. Finally, supply meets demand: Thanks Greg Mankiw, here is a (soon to be) classic.
Please enjoy.
Saturday, March 8, 2008
Beyond Reason: From Jelly Beans to 'Group Think'
Every once in a while the Economist publishes a great article that one can use to teach undergraduate economics students. In the February 23rd edition (page 90), the Economist turned a jar of jelly beans into a look behind stock market anomalies.
"Perhaps the most compelling reason why market prices are tough to beat is the 'wisdom of crowds' phenomenon.
If people are asked to estimate the number of jellybeans in a jar, their average estimate is usually quite close to the truth; indeed, the average guess is far better than the vast majority of individual guesses. In other words, , as Michael Mauboussin of the fund-management group Legg Mason remarks, the collective is smarter than the average person within the collective."
Wait for it ... the twist:
"But this wisdom depends on the diversity of the people making the guesses", without a high degree of diversity, "group-think" takes over and investors "no longer guess how many jelly beans are in the jar, but what other people's guesses might turn out to be".
A little clearer: "There is an old test that neatly makes this point. Participants have to choose a number between zero and 100 that will be two-thirds of the average choice of the others taking part. So if you thought the average would be 50, you would go for 33. However, if everyone makes this logical leap, the best guess should be 22 (two-thirds 33). Extending this process a few times and you can work out that the best choice would be zero. In real life, however, not everyone is so rational and the correct answer is never that low."
In essence, this is why it is nearly impossible to quantify the precise of irrationality of investors. In addition, this is also why stocks can deviate far from their underlying worth (according to price-to-earnings ratios or otherwise) for a long period of time only to quickly come crashing back to reality (the dot-com case and point). The problem for investors is that if they do not join the party on the way up (such as the rise of Nortel to $120+), there client's complain of their poorly performance compared to their competitors in the short-run. Sadly, because if this, they may not be around to see the correction (and claim victory). We all wish we could pick the peak and the trough - making money (jumping) up and down.
Thoughts, comments, and/or objections wanted.
"Perhaps the most compelling reason why market prices are tough to beat is the 'wisdom of crowds' phenomenon.
If people are asked to estimate the number of jellybeans in a jar, their average estimate is usually quite close to the truth; indeed, the average guess is far better than the vast majority of individual guesses. In other words, , as Michael Mauboussin of the fund-management group Legg Mason remarks, the collective is smarter than the average person within the collective."
Wait for it ... the twist:
"But this wisdom depends on the diversity of the people making the guesses", without a high degree of diversity, "group-think" takes over and investors "no longer guess how many jelly beans are in the jar, but what other people's guesses might turn out to be".
A little clearer: "There is an old test that neatly makes this point. Participants have to choose a number between zero and 100 that will be two-thirds of the average choice of the others taking part. So if you thought the average would be 50, you would go for 33. However, if everyone makes this logical leap, the best guess should be 22 (two-thirds 33). Extending this process a few times and you can work out that the best choice would be zero. In real life, however, not everyone is so rational and the correct answer is never that low."
In essence, this is why it is nearly impossible to quantify the precise of irrationality of investors. In addition, this is also why stocks can deviate far from their underlying worth (according to price-to-earnings ratios or otherwise) for a long period of time only to quickly come crashing back to reality (the dot-com case and point). The problem for investors is that if they do not join the party on the way up (such as the rise of Nortel to $120+), there client's complain of their poorly performance compared to their competitors in the short-run. Sadly, because if this, they may not be around to see the correction (and claim victory). We all wish we could pick the peak and the trough - making money (jumping) up and down.
Thoughts, comments, and/or objections wanted.
Saturday, March 1, 2008
"The Big Picture" on the US Housing Market
Today I have added some popular US blogs links (Canadian blogs coming soon) to my blog, including Barry Ritholtz's "The Big Picture". It got my attention by posting this chart on the state of the US housing market today. I have not had much time to review these blogs thoroughly, but I hope to in the coming days. According to the NY Times, it looks like the number of foreclosures is close to the total housing sales in January - pointing a large amount of excess supply on the US housing market. This picture also adds some interesting regional flavor to this story (I feel for Nevada) .... go to The Big Picture for more!
BC is leading the Pigou way
The British Columbia Provincial Budget was the most "green" in Canadian history. It did not go unnoticed by this economist nor Greg Mankiw .
There has been a lot of news about the BC budget but the aspect I like the best is the revenue neutral nature of the structures: The money raised through carbon taxes are going to be redistributed to individuals and companies by tax reductions. Great! Exactly what I (and many others) have been suggesting.
My Favorite Details
1.) As of July 1st, gasoline will go up 2.4 cents and raise to 7.2 cents by 2012; 2.) Low-income West coasters will receive an annual "climate-action credit" worth $100 per adult and $30 per child; 3.) They have added a new transit plan; 4.) They plan to renovate public buildings and pay home owners to make energy saving changes.
I am not endorsing everything in this budget - for example, the increase in gasoline tax is less than what I was hoping (more like a $1.00 would of made a much bigger statement). However, it is start! Congratulations to the Province of British Columbia!
There has been a lot of news about the BC budget but the aspect I like the best is the revenue neutral nature of the structures: The money raised through carbon taxes are going to be redistributed to individuals and companies by tax reductions. Great! Exactly what I (and many others) have been suggesting.
My Favorite Details
1.) As of July 1st, gasoline will go up 2.4 cents and raise to 7.2 cents by 2012; 2.) Low-income West coasters will receive an annual "climate-action credit" worth $100 per adult and $30 per child; 3.) They have added a new transit plan; 4.) They plan to renovate public buildings and pay home owners to make energy saving changes.
I am not endorsing everything in this budget - for example, the increase in gasoline tax is less than what I was hoping (more like a $1.00 would of made a much bigger statement). However, it is start! Congratulations to the Province of British Columbia!
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