EclectEcon

Exam-Marking Shenanigans by Professors

I was inspired to write this by some conversations with some Facebook friends. It seems that many of us are toiling away, grading term papers and exams during this week between Christmas and the New Year. Here are some stories to help while away the time (and for me to take a long break)

• Many profs in the past used to joke about standing at the top of the stairs and throwing the term papers in the air, down the stairs. Those that traveled the farthest got higher marks. [update: Instapundit reminds us of this posting on this method; I like his suggestion that we auction grades on eBay].
• I have alleged recently that I downloaded the MagicBall app for my iPhone (btw, it ain't great), and I use that for marking my exams.

Several decades ago, Charlie, Bob and I concocted a drinking game for exam marking. It went like this:

• If you got a really bad answer for an exam question, you would read it aloud.
•  If the other two agreed it was hilariously bad, you could take a drink.
•  If the others disagreed, they got to drink and you didn't. Of course the incentives for the game were really buggered up, but as I recall, we coasted through our marking and had a very good time.

I don't know what possessed me, in the twilight of my career, to assign both a term paper and a lengthy essay-type exam for a class of 62 students this past term. Fortunately, based on what I have read so far, the students have been doing well. Also fortunately, I have a large supply of scotch to see me through the ordeal (various single-malts from Islay, which are smoky and peaty to one degree or another). No drinking games this time. In fact, I mostly like to sip them very slowly, so slowly that I probably never feel the effects.

Mike Moffat says he is failing students who mispell either his name or their own names. Along this line, as a gift question on exams, I used to ask my students the name of their prof. Despite the fact that my name was at the top of the exam question sheet, some of them, for some reason, thought my name was "Parkin".

I have actually deducted marks for those students who, contrary to my instructions,

• put their names on their exam booklets ((I asked for only student numbers so I could mark the exams without knowing whose exam I was marking)
• wrote every line when I asked them to write on every other line in the exam booklets.
• answered all the questions in one booklet when I asked them to answer different parts of the exam in different booklets.

As all professors know, there is a very high correlation between the marks that students receive on their first midterm and their final course mark. Knowing that, it is tempting to give only one exam and cut down on our workload. I guess the only reason for giving a lot of exams is to induce the students to study more. But also knowing that, at least one of my former colleagues was suspected of not really bothering to mark the final exams. As I recall, he left campus after the exam and didn't even have to deal with the appeals.

btw, Happy New Year. And may the students in my classes never read this....

Canadian Housing Market: It Ain't Broke But Let's Fix It Anyway

Aside from the spill-over effects from the US economy, Canada has not suffered nearly so much from the current recession and did not experience either the huge housing bubble or the big housing bust seen in the US. James MacGee has pointed out that Canada escaped the seriousness of the US financial crisis largely because of its more conservative mortgage insurance and regulations of financial institutions.

The Canadian market lacks a counterpart to Freddie Mac and Fannie Mae, both of which played a significant role in the growth of securitization in the U.S. In addition, bank capital regulation in Canada treats off-balance sheet vehicles more strictly than the U.S., and the stricter treatment reduces the incentive for Canadian banks to move mortgage loans to off-balance sheet vehicles.

Finally, as noted above, the fact that the government-mandated mortgage insurance for high LTV loans issued by Canadian banks effectively made it impossible for banks to offer certain subprime products. This likely slowed the growth of the subprime market in Canada, as nonbank intermediaries had to organically grow origination networks. [also, see this video of MacGee commenting on the rising house prices in some Canadian markets (h/t Glendon)]

With these differences, I have to wonder whether the Canadian housing market really needs more regulation or control to head off future housing bubbles and busts. And yet Canada's finance minister, Jim Flaherty seems to think Canadians need even more protection from themselves. From the Globe and Mail,

Policy makers are concerned homeowners will take on more debt than they'll be able to afford when interest rates rise again, possibly leading to a painful correction later.

The Bank of Canada has vowed to keep lending rates low into the middle of next year, limiting its options for taking the pressure off a hot market.

But since the federal government dictates rules around down payments and amortization periods, it can effectively dampen the housing market without increasing borrowing costs for businesses.

I.e., the gubmnt would increase credit rationing rather than adjust lending rates. But the premise here is that gubmnt officials can

1. recognize a bubble 
2. do something about a bubble
3. that won't be worse than the effects of the bubble
4. and do so in a timely fashion

The thought that politicians think they can fix something that isn't broken by tinkering with it is downright scary.

The Book of Eli (and my tangential relationship to it)

The other day I saw an ad on television for the movie The Book of Eli, an apocalyptic/adventure/fantasy movie starring Denzel Washington. I don't pay much attention to movies, and so I tend to ignore movie ads. But something about this sounded familiar.

And then I remembered: about 7 years ago, when I was doing some professional acting, I auditioned for a role in this film. It was so long ago, I can't remember what the role was --- a prophet of some sort as I recall. But I remember waiting in a room with about 50 guys, most of them with big-time professional training and experience, nearly all of them dressed in their perceptions of how Hasidic Jews might dress.

The audition was in Toronto back in the days when many major production companies were shooting films and commercials in Canada to take advantage of the low US price of the Canadian dollar (well below purchasing-power parity in the film industry) and to exploit some of us poor Canadians*. I see from IMdb that in the end, the locations were all in Alcatraz and in the southwestern US -- none in Canada.

I don't see that role in the film, now. I wonder what happened to that role and I really wonder what caused the lengthy delay in getting that film made and into the theatres.

*No, I didn't get the role. Their loss. And believe me, I wouldn't have felt exploited if I had been given the role.

A Brief History of Settled Science

From the Weekly Standard via Portal of Ideas

More "creeping gradualism" in the US Economy

It has become official: Fannie Mae and Freddie Mac can now give away mortgage insurance according to political criteria and ignore credit-worthiness or default risk. From the Washington Post,

The Obama administration pledged Thursday to provide unlimited financial assistance to mortgage giants Fannie Mae and Freddie Mac, an eleventh-hour move that allows the government to exceed the current $400 billion cap on emergency aid without seeking permission from a bailout-weary Congress.

The Christmas Eve announcement by the Treasury Department means that it can continue to run the companies, which were seized last year, as arms of the government for the rest of President Obama's current term....

The administration is set to release broad principles in February for reforming the companies. Many experts predict that the government will have no choice but to hold on indefinitely to many of the companies' most troubled assets -- mortgage investments made during the housing bubble to less-than-worthy borrowers.

But an administration official said it could take several years to resolve the future of the companies, especially if Congress isn't keen to take up the politically charged issue during the 2010 midterm election year, and if the government wants to preserve the ability to influence the housing market. The companies together own or insure the majority of home loans, and no viable private system exists that could replace them.

My guess is that these agencies will become bloated agencies of rent-seekers throughout the US. It would take another Reagan-type sweep to de-politicize the mortgage insurance business.

Conrad Black on Copenhagen

From his National Post retrospective about the past decade,

The heads of government fellowship will pat itself hydraulically on the head and back, and money will be handed over to the toads of despotism when pigs fly and shrimps sing.     

This must be the supreme coruscation of what Malcolm Muggeridge christened the “great liberal death-wish;” a canard about a fraud, invoked to impoverish the world’s advanced countries in favour of its most rancid despotisms, which have already squandered and embezzled a trillion dollars of Western aid; all for a nonsensical purpose, solemnly agreed to, and then ignored.

h/t Jack

Teaching the Economics of Trade Restrictions

Over the past couple of years, I have strongly resisted the trend toward teaching international trade early in an introductory micro economics course, where it appears in many introductory textbooks. Those who want to teach it early, point out that understanding division of labour and comparative advantage lie at the heart of understanding any exchange.

I don't deny this.

The problem is that so many of the incorrect oppositions to free trade involve the misuse of macro economics, as is so aptly pointed out by the author of the textbook I use in his comment about a posting by Scott Sumner.

Scott then goes on to propose an explanation of these events that can be viewed as consistent with the textbook Keynesian model. In particular, I interpret Scott as saying that the retreat from free trade reduced business confidence, shifted the investment function I(r) to the left, and thereby reduced aggregate demand.

One general lesson from his discussion is that it is often hard to distinguish shocks to aggregate supply and shocks to aggregate demand.  Policies and events that adversely affect aggregate supply (e.g., trade restrictions) will often reduce the marginal productivity of capital, decrease investment spending for given interest rates, and depress aggregate demand as well.  In the short run, the indirect demand-side effects of "supply shocks" could potentially be larger than the direct supply-side effects.

Maybe the pure theories of international trade are also pure micro, but dealing with the criticisms of the basic theories requires an understanding of macro as well. 

h/t Kip

Merry Christmas --- my annual rude Christmas card

Sorry for the delay in posting this. I know many of you have come to look forward to this annual tradition.

More on Paul Samuelson

This two-part interview  in The Atlantic does an excellent job of revealing both the wisdom and the arrogance of the late Paul Samuelson. Be sure to read the comments, too.

h/t JJ

-59 with the Wind Chill in EdmontonI'm going geocaching!

According to the Globe and Mail, the temperature in Edmonton reached -46 yesterday morning with wind chill of -59. There was some fascinating ice fog in parts of the city yesterday.

It is slightly warmer here today, so I think I might go out geocaching.... The temperature this morning is -32, and the forecast high for today is -28.

After last year's experience here in Edmonton, Ms. Eclectic thinks this is a plot to punish people who travel early to avoid peak Christmas fares. And after last year, our nieces and nephew are convinced our visits are related to the cold weather in Edmonton, pointing out that temperatures are forecast to rise to zero (C) next weekend, after we are back in Ontario.

Paul Samuelson

I discovered during the Newsweek debates (really alternating week editorials) of the late 1960s that Milton Friedman was a whole lot better economist than Paul Samuelson, even though I had been trained otherwise by a bunch of elitist east coast interventionists. As Kip Esquire said on Facebook:

Paul Samuelson, the man who almost single-handedly turned economics into worthless alchemy, is dead.

Foundations? nice mathematical exercises. Anything else? How about his accusation that, "Chicago is not just a place but a state of mind"? Turnpike theorems? Again, nice mathematical exercises that had zero relevance for economic growth policy.

Brilliant man? probably. But one whose work will not have much lasting value. Especially not for policy.

How Cold Is It in Edmonton?

I thought it was cold when I was here last year.

Here is a photo of current conditions in Edmonton on Sunday, December 13, 2009 at 8am, from the television in our hotel room:

And last night my neice made me walk a half mile from her house to the LRC so we could avoid parking hassles at the Rexall Place where we went together to watch the finals of the Canadian curling Olympic trials (more here). That was one heck of a walk! [Update: She writes that the thermometer at her house said it was -40 as I was leaving there last evening!]

How did people survive here 200 years or more ago? and WHY did they bother to try??

Reference for a Former Student

This may seem strange to most of you, but recently I received a request from a former student to write a letter of reference on his behalf. He is a baseball player and sports enthusiast. Unfortunately, I misplaced his request and his email address. I'm hoping he reads this and gets in touch with me again.

Curling: The Roar of the Rings

As many of you know, I quite enjoy watching curling (and have done some sportscasting for curling in the past). Some of the best curling in the world is going on right now out in Edmonton as the top Canadian teams vie to represent Canada in Vancouvre at the 2010 Olympics. Alan Adamson and I are blogging up a storm about it here.

Prospects for Peace in Israel/Palestine

For a quite different perspective than we usually see in the western media, please read this piece by Tom Gross in the WSJ. Some excerpts:

A new Palestinian city, Ruwabi, is to be built soon north of Ramallah. Last month, the Jewish National Fund, an Israeli charity, helped plant 3,000 tree seedlings for a forested area the Palestinian planners say they would like to develop on the edge of the new city. Israeli experts are also helping the Palestinians plan public parks and other civic amenities.

Outsiders are beginning to take note of the turnaround too. The official PLO Wafa news agency reported last week that the 3rd quarter of 2009 witnessed near-record tourism in the Palestinian Authority, with 135,939 overnight hotel stays in 89 hotels that are now open. Almost half the guests come from the U.S or Europe.

Palestinian economic growth so far this year—in a year dominated by economic crisis elsewhere—has been an impressive 7% according to the IMF, though Palestinian Prime Minister Salam Fayad, himself a former World Bank and IMF employee, says it is in fact 11%, partly helped along by strong economic performances in neighboring Israel.

In Gaza too, the shops and markets are crammed with food and goods. But while photos from last Friday's Palestine Today newspaper, for example, depict sumptuous Eid celebrations, these are not the pictures you are ever likely to see on the BBC or Le Monde or the New York Times. No, Gaza is not like a "concentration camp," nor is the "humanitarian crisis in Gaza is on the scale of Darfur," as British journalist Lauren Booth (who is also Tony Blair's sister-in-law) has said. ....

The truth is that an independent Palestine is now quietly being built, with Israeli assistance....

12 Days of Christmas:Heavy Metal Version

Last year, one of our granddaughters insisted we watch Twisted Sister perform their version of the 12 Days of Christmas. As usual, I couldn't understand what they were saying, so thank goodness for Google. Here is the last verse:

On my heavy metal Christmas my true love gave to me,
12 silver crosses
11 black mascaras
10 pairs of platforms
9 tattered t-shirts
8 pentagrams
7 leather jackets
6 cans of hairspray
5 skull earrings
4 quarts of Jack
3 studded belts
2 pairs of spandex pants
and a tattoo of Ozzy!

Rude Christmas Card

Here it is again, the annual tradition from EclectEcon. I trust you all will enjoy the sentiments and share them with your friends and relatives.

Gubmnt Intervention in Climate Science

My friend MA sent me this link from the Times which reports the UK Met weather office is going to take three years to re-evaluate weather and temperature data for the past 160 years. Be sure to read the last sentence quoted below:

The Met Office plans to re-examine 160 years of temperature data after admitting that public confidence in the science on man-made global warming has been shattered by leaked e-mails.

The new analysis of the data will take three years, meaning that the Met Office will not be able to state with absolute confidence the extent of the warming trend until the end of 2012.

The Met Office database is one of three main sources of temperature data analysis on which the UN’s main climate change science body relies for its assessment that global warming is a serious danger to the world. This assessment is the basis for next week’s climate change talks in Copenhagen aimed at cutting CO2 emissions.

The Government is attempting to stop the Met Office from carrying out the re-examination, arguing that it would be seized upon by climate change sceptics.

No foolin'.
So much for the pursuit of truth. So much for the apolitical ivory tower.

"Up" in Canada

I just realized that Clinton, Ontario, (where I live) is south of Mankato, Minnesota (where Phil Miller lives). In fact, the bulk of the population of Ontario probably lives south of the bulk of the population of Minnesota; Trono is way south of the Twin Cities, and London and Windsor are even more south than Trono.

Blood Libel?

Israelis have been accused by a Swedish journalist of killing Palestinians to harvest organs from them. Despite the lack of evidence (indeed, despite assertions from both Israelis and Palestinians to the contrary), the story now seems to have been recirculated in the Ukraine (see this).

Swedish newspaper Aftonbladet's August 2009 story (translated into English in full here) accusing the IDF of harvesting Palestinian organs caused an uproar. Donald Bostrom, the author of the offensive piece, duly demonstrated his utter lack of any basic journalistic standards when he said: "But whether it's true or not - I have no idea, I have no clue." On top of this, the story was further undermined as one of the Palestinian families interviewed said they never told any reporter that their son was missing organs.

With the credibility of the story in tatters one might have expected the outrageous accusations to have a limited shelf life or to disappear altogether. However, the Swedish blood libel is a textbook case study of how what starts as an article published in a language read by few from a country of limited international influence can turn into a poison that spreads much wider.

As Ha'aretz reports:

Stories appearing on several Ukrainian Web sites claim Israel has brought around some 25,000 Ukrainian children into the country over the past two years in order to harvest their organs.

This is truly reprehensible and must stop.

What Is the Price Elasticity of Demand for the H1N1 Vaccine?

Ms. Eclectic and I lined up with hundreds of other local residents last Monday when the county health authority came to town to provide swine flu shots for us. It was windy, cold, and there was mix of rain and snow blowing as we stood outside the Legion Hall, waiting to join the queue inside the hall.

Overall, people were in good spirits, and the organization was pretty slick. Nevertheless, the wait (especially when we were in the portion of the queue that was outside the building) was uncomfortable. From the time we arrived until the time we left, the total elapsed time was about an hour and a quarter, in contrast with about twenty minutes earlier in the fall when we received our seasonal flu shots. [note: both times included about a ten-minute waiting period following the shot].

As I proceeded from health bureaucrat to health bureaucrat at the H1N1 vaccination site, I asked each of them how long they thought the line would be if people were charged $5 each for the vaccine. Everyone I spoke with volunteered that they thought the line would be much shorter. The implication from this non-scientific survey is that the price elasticity of demand for the H1N1 vaccine is certainly greater than zero. Using arc elasticity calculations and rough guesstimates of the sizes, and supposing that charging $5 for the vaccine would reduce the quantity demanded from 2000 to 1500, then the price elasticity of demand would be approximately .143.

That's still a pretty small number, indicating that the quantity demanded would not be very responsive, in percentage terms, to a change in the price in this region. Nevertheless if 500 people (I know, it's a very rough guess) would give the vaccination a miss just because of a $5 charge, it is difficult to see how the vaccination can be thought of as a dire necessity.

Two additional notes:

1. Most of the health bureaucrats I spoke with didn't twig to the fact that I was asking about how much the quantity demanded would decline with the charge. They just thought that people receiving the vaccine ought to contribute to the costs of producing and providing the vaccinations. I don't have the numbers, but judging from the numbers of computers and health professionals involved, I suspect the cost of delivering the vaccinations was greater than the cost of producing the vaccine itself.
2. While receiving my vaccination, I overhear Ms. Eclectic say, "That's my husband. He turns everything into an economics question."