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Incentives in economics are wrong, but how?

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Re: Incentives in economics are wrong, but how?

#41

Post by whimsicalism »

michaelt wrote: post #35
whimsicalism wrote: post #28

Earlier quoted context omitted.

> Have we reached a state of elite-overproduction? I'm very curious about this line of thought, as it seems to have become very popular in the blogospher over the past year or two. What are the consequences of "elite overproduction"? I'm curious what the implications of this line of thought are. Generally, I think more education is better than less - I am wrong to think that? My personal hypothesis is that this fear…

> What are the consequences of "elite overproduction"? Underemployment, leading to... Long term student debts, leading to... Fewer people starting families

> Long term student debts

I agree that this is a problem, and to the extent that we make it too easy for 18 year olds to take out massive amounts of debt, that is bad.

But I feel like many of the people arguing about "elite overproduction" would be opposed to something like making all public schools free or just free community college.

Re: Incentives in economics are wrong, but how?

#42

Post by BeFlatXIII »

thebean11 wrote: post #16
greenail wrote: post #14

Maybe the incentives for universities are all wrong. In the early 1900's only 4% of the US went to university. There ended up being a big push to get more people into college with the assumption that it would benefit society. Eventually we ended up with a notion that everyone should go to college and this has been buttressed with government support but what if this idea is wrong? What if the incentives created lots o…

Agree with your larger point but: > This may show up as lots of superfluous/unreproducible papers and journals many not even based on the scientific method. seems very STEM-centric. It sounds like you're saying academia outside of the realm of science is useless which I completely disagree with.

A distinction should be drawn between “this entire field is useless” and “the current discussions in this field are wankery”. IMO, STEMlordery stems from students surmising—correctly or not—that their humanities professor’s publications are wankery and then falsely assuming that the entire field is hokey junk.

Accrediting boards who demand proof that all departments produce relevant scholarly work are also to blame for the situation, as it leads to a proliferation of write-only journals that will publish any word salad that can be convincingly proven to be in dialogue with contemporary scholarship.

Re: Incentives in economics are wrong, but how?

#43

Post by paulpauper »

>In the abstract this might be a difficult question to answer, but today, it’s really not. Guys, a third of social science papers have zero citations. Let’s not kid ourselves: most of this work might as well never have been written; it affects nothing; nobody even cares enough to disagree. Meanwhile, two thirds of social psychology experiments fail to replicate. Does economics do better? Well, sure, yes, some experimental economists are quietly smug because 60% of their results replicated. Whoopee! Only 40% of what we produce is misleading, i.e. literally harmful!

>We aren’t starving for quantity: we’re drowning in garbage. If we have higher standards than other social science disciplines, good, they should be higher still.

I dunno why this article went so viral. The author makes elementary reasoning errors. Top journals have very high standards in terms of adhering to academic rigor, competitiveness, statistical analysis, etc. Whether or not it replicates or is cited is secondary. The journal has little way of predicting how often something will be cited or how well it will replicate; their main focus is publishing papers that meet academic standards and are of interest to subscribers and the scope of the journal...

IMHO, it is irrelevant if we are 'drowning in garbage'..the more important metric is, are there more diamonds, rather than lamenting about the size of the rough.

Re: Incentives in economics are wrong, but how?

#44

Post by ashtonkem »

greenail wrote: post #14

Maybe the incentives for universities are all wrong. In the early 1900's only 4% of the US went to university. There ended up being a big push to get more people into college with the assumption that it would benefit society. Eventually we ended up with a notion that everyone should go to college and this has been buttressed with government support but what if this idea is wrong? What if the incentives created lots o…

A podcast I listen to[0] had a throwaway line that’s stuck with me. I’m not sure if it’s actually correct, this isn’t an area I’m an expert in, but it’s interesting nonetheless.

> Colleges are really just real estate speculation businesses that also incidentally give you a degree in dentistry or whatever.

If that’s true, wouldn’t it explain why colleges do things that don’t make sense for education?

0 - Well There’s Your Problem Podcast, Episode 71

Re: Incentives in economics are wrong, but how?

#45

Post by whimsicalism »

ta1234567890 wrote: post #33
distribot wrote: post #31

Earlier quoted context omitted.

I think this elite notion is over-simplified and inaccurate. It suggests that some significant portion of students are at these kind of "walled garden", elite institutions where students become disconnected from the struggles of "real people". 80% of students go to a school where over half of applicants are accepted. Yes, these schools definitely are centers of, frankly, liberal idealism and free-spiritedness. But I…

Not OP. My interpretation is that society doesn’t really need as many university degrees as we are producing. Not because of competition but because not all jobs require a college degree, and ideally we should be increasing the pay of those jobs. It might be better to adopt a model similar to the German or Swiss, in which people follow different tracks depending on their skills and interests, and not everyone goes to…

> ideally we should be increasing the pay of those jobs.

The pay of which jobs? The ones that require a college degree or not.

> Not because of competition but because not all jobs require a college degree

And are the number and prospects of these jobs increasing or decreasing?

I also find this whole conflation of having a college degree and being an elite silly. The problem seems much less to be that we have too many educated people and seems much more that wealth is concentrated by the small subset of wealthy people who "got here first" and then get the compounding returns.

Re: Incentives in economics are wrong, but how?

#46

Post by whimsicalism »

ashtonkem wrote: post #44
greenail wrote: post #14

Maybe the incentives for universities are all wrong. In the early 1900's only 4% of the US went to university. There ended up being a big push to get more people into college with the assumption that it would benefit society. Eventually we ended up with a notion that everyone should go to college and this has been buttressed with government support but what if this idea is wrong? What if the incentives created lots o…

A podcast I listen to[0] had a throwaway line that’s stuck with me. I’m not sure if it’s actually correct, this isn’t an area I’m an expert in, but it’s interesting nonetheless. > Colleges are really just real estate speculation businesses that also incidentally give you a degree in dentistry or whatever. If that’s true, wouldn’t it explain why colleges do things that don’t make sense for education? 0 - Well There’s…

I think the type of person who tends to browse HN has a problem with latching on to phrases or ideas that "sound interesting" and then never doing any further research. I think it's where a lot of the rhetoric around 'elite overproduction' comes from.

> Colleges are really just real estate speculation businesses that also incidentally give you a degree in dentistry or whatever.

Why would that incentivize colleges to enroll more students? How does college as real estate speculation business work?

Re: Incentives in economics are wrong, but how?

#47

Post by TheOtherHobbes »

ashtonkem wrote: post #44
greenail wrote: post #14

Maybe the incentives for universities are all wrong. In the early 1900's only 4% of the US went to university. There ended up being a big push to get more people into college with the assumption that it would benefit society. Eventually we ended up with a notion that everyone should go to college and this has been buttressed with government support but what if this idea is wrong? What if the incentives created lots o…

A podcast I listen to[0] had a throwaway line that’s stuck with me. I’m not sure if it’s actually correct, this isn’t an area I’m an expert in, but it’s interesting nonetheless. > Colleges are really just real estate speculation businesses that also incidentally give you a degree in dentistry or whatever. If that’s true, wouldn’t it explain why colleges do things that don’t make sense for education? 0 - Well There’s…

It's a perfect example of incentives being wrong. If you're a huge corporation with land, property, and a tradition of relying on bequests and bloated fees, the reward function will optimise for more land, more property, more bequests, and more fees.

The nominal purpose - education - becomes more of a marketing exercise than the primary concern.

Re: Incentives in economics are wrong, but how?

#48

Post by Matticus_Rex »

eyeundersand wrote: post #34
seibelj wrote: post #13

Earlier quoted context omitted.

The moment any economic argument is made that relies on human altruism is the moment it should be rejected. Some people may act altruistic some of the time, but in aggregate people refuse to be scammed to help the “greater good”.

Curiously, most econ folks seem to miss this. More likely: they conveniently ignore it when it suits their ends or when writing opinionated pieces after they've "made it".

Huh? Can you point to examples? I can think of a few, but I am unaware of any field or approach that has this tendency less than Economics.

Re: Incentives in economics are wrong, but how?

#49

Post by whimsicalism »

kapuasuite wrote: post #40
tartoran wrote: post #36

Earlier quoted context omitted.

> Have we reached a state of elite-overproduction? I don't see that as a bad thing. Of course they won't be elites when overproduced but its output, when looking at the big picture, will be positive. If you're so with your view why stop at universities then? Why educate the masses at all? Why not have classes of educated and uneducated people?

There are tradeoffs, though - the resources that are poured into higher education are resources that cannot be spent on other vital things.

Like giving a $200k/yr tech worker $6k in stimmy checks?

There are broad benefits to having an educated society, this rhetoric about 'elite overproduction' has classist/snobbish undertones, in my view.

Re: Incentives in economics are wrong, but how?

#50

Post by ashtonkem »

whimsicalism wrote: post #46
ashtonkem wrote: post #44

Earlier quoted context omitted.

A podcast I listen to[0] had a throwaway line that’s stuck with me. I’m not sure if it’s actually correct, this isn’t an area I’m an expert in, but it’s interesting nonetheless. > Colleges are really just real estate speculation businesses that also incidentally give you a degree in dentistry or whatever. If that’s true, wouldn’t it explain why colleges do things that don’t make sense for education? 0 - Well There’s…

I think the type of person who tends to browse HN has a problem with latching on to phrases or ideas that "sound interesting" and then never doing any further research. I think it's where a lot of the rhetoric around 'elite overproduction' comes from. > Colleges are really just real estate speculation businesses that also incidentally give you a degree in dentistry or whatever. Why would that incentivize colleges to…

You can disagree with the podcast without attacking me.
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