People respond to incentives

Life on the dole in Britain.

Leaving Greenland

What happened to the Vikings who settled in Greenland? Did they starve or leave? New evidence suggests that they did adapt to hunting seafood so that they did not starve. Rather, they could not preserve the way of life that they preferred so they left:

"But, without trade, they couldn't survive in the long run."

And

In the final phase, it was young people of child-bearing age in particular who saw no future for themselves on the island. The excavators found hardly any skeletons of young women on a cemetery from the late period.
"The situation was presumably similar to the way it is today, when young Greeks and Spaniards are leaving their countries to seek greener pastures in areas that are more promising economically," Lynnerup says. "It's always the young and the strong who go, leaving the old behind."

The piece is from SpiegelOnline.

We are number 12

The Legatum Institute in England has a ranking of nations by prosperity. Prosperity is more in their index than simple per-capital income. It includes a variety of other factors such as health, safety, governance, and personal freedom. The U.S. has fallen out of the top ten for the first time that the index has been computed. We are now at 12.

McArdle on price discrimination

Megan McArdle has an interesting piece on Groupon and pricing discrimination:

Coupons basically serve two functions for businesses--advertising, and price discrimination.  Advertising means it brings in new customers by making them aware of your service, or giving them an incentive to try it.  Price discrimination, on the other hand, is what food processors do with grocery store coupons: it lets them sell their products to customers who are very price sensitive, without lowering the price paid by people who are too busy or embarassed to clip coupons.

As far as I can tell, small businesses viewed Groupons largely as the former....

The problem is that for consumers, it seems mostly to have been about price discrimination....

Banking in 1947

I saw this video of banking in 1947 on another economics blog a few days ago. A lot has changed in the 65 years since it was made.

Student debt

From an article at newsandtribune.com:

The average amount of debt for 2011 graduates at Indiana’s public, four-year colleges rose to $27,500.

 If that is the average, there must be some with very big numbers because there are certainly many with no debt at all. The article has no information about debt of graduates from private colleges.

The piece contains this idiotic statement:

“In these tough times, a college degree is still your best bet for getting a job and decent pay,” Asher said.

There is a difference between correlation an causation. Most highly motivated and highly intelligent students go to college, while most students with little motivation and little intellectual ability do not. The differences in outcomes between those with college certification and those without may mostly reflect these a-priori differences, not value added from college.

College is a very good decision for some people but it is a very bad decision for others. If those who will not benefit from college not only go to college but rack up huge debt in the process, college can be something that will ruin their lives. One of the unseemly aspects of college admissions is that in the quest to fill seats, many colleges make little or no effort to separate those who will benefit from those who should be pursuing other options. Rather they spout nonsense like the statement of Mr. Asher. Many faculty are aware of the problem, but because their livlihood depends on admissions, they try their best to ignore it.

One of the benefits of being a retired academic is that I am no longer part of this system.

Public choice theory from 1377

Here.

An effective political ad

Bank failure and the financial crisis

From a book review on the financial crisis:

•When the FDIC took over Washington Mutual, it paid uninsured depositors in full using money that would have gone to bondholders. Writes Mr. Allison: "This was in complete contradiction to past practice. The bondholders suddenly realized that there is no rule of law when government regulators are involved…The decision to treat WaMu bondholders this way closed the capital markets for banks."

Another review here.

Watching light move

http://www.dailymail.co.uk/sciencetech/article-2191451/The-camera-TRILLION-pictures-second--making-fast-watch-beams-light-travelling-slow-motion.html