Wednesday, October 1, 2008

Endogenous Cheating

Chicago Sun-Times has an article on the increased amount of cheating on tests at universities. This came up in a faculty meeting here several months ago. Students had been found to be texting answers to one another and other students outside of class. A friend of mine works with judicial affairs, or something like that, here on campus and told the story of a grad student selling physics answers to tests to students. All of it involved technology, and I pointed out in the meeting that probably cheating is rising because the probability of detection is falling. I then mentioned Becker's "Crime and Punishment" paper, and specifically the footnote in which he points out that when probabilities of detection are low, the correct punishment is to increase the fine, at which point he cites a Vietnamese practice at the time of cutting the hands off certain farmers who speculated on rice.

But the article also notes that not only is it rising, but that it seems to be more accepted among students too. And I think I can explain why. I suspect what is going on is this: people get some utility from doing well on the test, but also from doing other things with their time, and so for some, cheating is a solution to their time constraints. But, cheating is also costly in terms of reputational stigma. If you're caught, you'll incur some reputational cost - perhaps by a faculty member or a family member. Over time, the probability of detection has fallen causing the expected value from cheating to rise causing students to sort into cheating who previously couldn't "afford" it due to having a valuation on their reputation.

The Akerlof models on reputation also incorporate social norms into cheating, and it's very simple. Assume that the reputational cost is a function of how many other people cheat. As the probability of detection falls, other people cheat. But as other people cheat, the reputational cost itself falls since reputational cost is partly due to the rareness of the activity in the first place. Thus, you see two effects occurring - the marginal cheater shifts towards historically more honest people due to the effects of technology on the probabilities of detection, and secondly, social norms weaken causing even people who mostly concerned about the ethics to no longer be as much concerned and therefore more likely to cheat.

Fossett's Plane Maybe Found

The crash-site of the aviator, Steve Fossett, whose plane went down in the mountains months ago may have been found.

Obesity Contagions?

Is obesity an epidemic? These authors argue yes, but it's not what you think. In their paper, "Imitative Obesity and Relative Utility", Blanchflower, Oswald and Landeghem argue the following:
Abstract

If human beings care about their relative weight, a form of imitative obesity can emerge (in which people subconsciously keep up with the weight of the Joneses). Using Eurobarometer data on 29 countries, this paper provides cross-sectional evidence that overweight perceptions and dieting are influenced by a person's relative BMI, and longitudinal evidence from the German Socioeconomic Panel that well-being is influenced by relative BMI. Highly educated people see themselves as fatter -- at any given actual weight -- than those with low education. These results should be treated cautiously, and fixed-effects estimates are not always well-determined, but there are grounds to take seriously the possibility of socially contagious obesity.

CRA May Not Have Been the Problem

From Janet Yellen's opening remarks to the 2008 National Interagency, March 31, 2008, she writes -
Before I turn to potential interventions, I want to make one final point. There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending, or with lending to low-income families in general. I believe it is very important to make a distinction between the two. Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households. We should not view the current foreclosure trends as justification to abandon the goal of expanding access to credit among low-income households, since access to credit, and the subsequent ability to buy a home, remains one of the most important mechanisms we have to help low-income families build wealth over the long term.
In other words, most the CRA loans are not sub-prime, and most of the sub-prime loans are not CRA, which means that at worst, the racialist issues are complicating the analysis of the problems since CRA focuses our attention on Blacks and minorities and leads us to blame them for this potentially. You can see this explicitly in Steve Sailer's post, calling it a "diversity recession". I mentioned to one of my colleagues that many a dissertation began this week on CRA's role in all of this, which I think is one of the good things to have come out of it.

More Dissenting Views

Levine posts a lengthy article explaining the crisis and his views as to why the Treasury and the Fed are wrong on the problems.

Levine, as you may recall, is the "million dollar man." Washington University drew him away from UCLA at (wait for it) one MILLION DOLLARS per year. Say that in your best Dr. Evil voice. That's right, 6 zeros. Pretty much 3.5 times the highest paid faculty in economics I'd ever heard of before hearing that.

Open Letter to Tim Kring

Dear Tim,

Hey man. Looks like you're trying to turn the show around after season 2, which many fans thought was disappointing. I actually liked season 2, personally, but I'm apparently in the minority, and since I pirate your shows off various Chinese websites, my opinion matters even less. Listen, I know you're busy, so let me just make this short. I really think the writing team at Heroes needs a break. They seem to have lost their focus and can't figure out how to make the show work right.

First of all, there's the fact that your show is thinly veiled ripoff of Marvel's X-men and other mutant storylines. I know you said you'd never even heard of mutants and the X-men, but clearly your writers have, as it's a total ripoff as of season 3. Case in point - Dr. Suresh has injected himself with a serum from one of the evolved people that has jumpstarted his own mutation, and of course what powers did he get? The power of strength and agility. Then in episode 2, he started to physically change - something started happening to his back, like his skin started to peel off. In other words, the brilliant scientist and world expert on mutations is turning into a beast with powers of agility and strength. Still saying that this is all original? Then there is Sylar, who has an insatiable "hunger" to kill other mutants and take their powers. He's gone from being an obsessed serial killer to someone who can't control his hunger. Anyway, he's Sabretooth, as of episode 3.

The actors also seem glazed over, which I'm thinking has to do with direction and scripts, and less to do with their acting abilities. Everything is so existential. Which is fine, I guess. Any person who wakes up with various paranormal abilities is going to probably go through some serious soul-searching. But we're on season 3. At some point, they move on and this becomes less about their internal angst, and more about kicking ass (pardon my language, Tim, but you know what I'm saying!). Here is a scene that is becoming way too common. Claire learns she not only can regenerate, but she also cannot feel pain at all. Sylar also tells her she is immortal because of the powers in her brain. So what does Claire do? She starts filming herself trying to kill herself multiple times, just like from the first episode of season one. The same talking into the camera, in her most Serious Voice and Sad Face, saying really stupid things like, "When you stop feeling pain, are you even human anymore?" right before she's run over by a train. Is it too much to ask that you figure out a way to make this at all believable? You're telling me you found the one teenager who doesn't think it's cool they can never be killed, nor even feel pain, plus she talks like the kids who were obsessed with Bell Jar from high school? Come on. Move on. No more angst-filled heroes struggling to come to grips with their powers.

Which leads me to my last point. Please stop making the powers the center of the story. Make the characters and the various events the center of the story, but not the powers. The powers make it science fiction, but the best fantasy and science fiction still tries to sell interesting stories with interesting characters, and not constantly remind us with every single sentence that This Person Has Powers by actually having never-ending conversations between characters about the fact that The World Is Different Because People Have Powers, and Gosh Nathan, I Want To Be A Hero With My New Powers! Argh!

Basically, you're screwing it up, Tim. Don't make me stop watching your show on pirated Chinese websites, I'm serious. Fix these problems.


Earnestly Yours,


Pomeroy

Nobel Season

Well, it's that time again. Starting Monday of next week and through the 13th of October, Stockholm will announce the winners of the various Nobel prizes. Medicine is the 6th (Mon), Physics the 7th (Tues), Chemistry the 8th (Wed), Literature TBA, Peace the 10th (Friday), and the Economic Prize is the 13th, the following Monday. InTrade is not yet running any contracts on the likely winners, but you can expect the next two weeks to be full of speculation on economics blogs regarding this year's winners. I'm going to go with my old favorite and say it'll be Robert Barro, author of numerous influential pieces in macroeconomics such as his paper on Ricardian equivalence among about a half dozen others. I'm also going to go with the dark horse and say Paul Krugman and Avinash Dixit for their work on international trade. But, more than likely, it'll be someone I've never heard of, and then after I learn, someone I'm embarrassed that I'd never heard of, like nearly every other winner of recent years (almost).