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Archive for July, 2010

Remark of the Week: Theory and Policy Edition

Posted by erweinstein on July 18, 2010

In a week relatively devoid of memorable quips (post a counterexample in the comments if you think I’m wrong), this week’s Remark of the Week goes to George Loewenstein and Peter Ubel, writing in the New York Times:

As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked to solve problems it wasn’t meant to address. Indeed, it seems in some cases that behavioral economics is being used as a political expedient, allowing policymakers to avoid painful but more effective solutions rooted in traditional economics.

The op-ed is filled with interesting (if perhaps overstated) examples, so read the whole thing.

Here is Tyler Cowen on Loewenstein and Ubel. Tyler writes,

Often there is no nudge-based free lunch and we need a straightforward relative price shift

Here is Erik Voeten from The Monkey Cage on Loewenstein and Ubel. Erik elaborates,

Ultimately, changing relative prices is much more likely to meaningfully impact behavior deemed socially undesirable. So, making healthier foods cheaper is much more important than labeling unhealthy food.

Loewenstein and Ubel’s op-ed is mostly aimed at warning people that behavioral solutions are no panacea.…Yet, it strikes me that if they are right, their argument is really quite damning for the behavioral economics revolution. Essentially, they assert that traditional economic analysis has ultimately much more relevance for the analysis of major social problems and for finding solutions to them. Behavioral economics can complement this but cannot be a viable alternative. Within political science and other social sciences the insights of behavioral economics are sometimes interpreted as undermining the very foundations of classical economic analysis and warranting an entirely different approach to social problems. At the very least, the op-ed is a useful reminder that careful scrutiny of effect sizes matters greatly.

Although Loewenstein and Ubel may not have intended it as such, their op-ed provides even more evidence that mainstream economics offers useful and robust solutions to many pressing policy issues, and that challengers such as behavioral economics serve up “corrections” to the mainstream models that are limited in practical use. While there are some insights to be gathered from behavioral economics (especially when combined with experimental methods, such as John List‘s tests of prospect theory), as a movement it is unlikely to do much to revolutionize economics because it does not posit critiques of mainstream methods that are both novel and useful, especially concerning policy applications.

Posted in Economics, Random Thoughts | Comments Off on Remark of the Week: Theory and Policy Edition

Remark of the Week: Opera Edition

Posted by erweinstein on July 4, 2010

This week’s Remark of the Week comes from John von Rhein, the classical music critic for the Chicago Tribune, reviewing a Chicago Symphony Orchestra concert of Wagner highlights at the Ravinia summer music festival:

One’s pleasure in hearing one of the world’s great Wagnerian “pit” bands playing this glorious music from center stage, along with the full-throated singing of the soloists, was mingled with dismay at the smallish audience. Wagner remains a tough sell on the North Shore [of Chicago]. The “Ringheads” in attendance cheered lustily, as if to compensate for the acres of empty seats.

I can offer only speculation as to why “Wager remains a tough sell” for the people of the northern suburbs of Chicago. That speculation is twofold: 1) The North Shore of Chicago is known for its substantially above-average prevalence of Jews, as well as high levels of social and political support for tolerance and diversity among the general population (although there are some areas, such as ultra-wealthy Kenilworth, that reliably vote Republican). 2) The music of Richard Wagner is still tainted by its associated with Nazi Germany–where it was highly popular with Hitler and other Nazi leaders–as well as the perceived anti-Semitism of Wagner himself (note the controversy caused by Daniel Barenboim’s performance of Wagner in Israel). Putting together 1) and 2) leads me to conjecture that the North Shore has a higher-than-average number of people who consider Wagner distasteful for political reasons, leading to a below-average popularity of Wagner’s music among the population in that area.

Also, I didn’t know that fans of Wagner’s Ring Cycle had a special name (“Ringheads”), although a quick Google search demonstrates at least two different instances of using “Ringheads” to denote Wagner fanatics.

As always, thank you for reading my random musings on subjects like the relative popularity of Wagnerian opera. For my friends, family, and other American readers, Happy July 4th! Here’s to an excellent rest of 2010!

Posted in Arts and literature, Music, Random Thoughts | Comments Off on Remark of the Week: Opera Edition