Incentives in economics are wrong, but how? • Hacker News Board

Re: Incentives in economics are wrong, but how?

#141

Post by ihsw » Fri, Jun 11, 2021, 10:41 PM UTC

TheTrotters wrote: post #113

bluedino wrote: post #74

Earlier quoted context omitted.

>> focus on making high school much much better Meanwhile we're lowering standards and just passing every kid we can, for 'fairness'

I wouldn't pooh pooh that. It's a tough problem for politicians, teachers, education activists and researchers. If you set high standards and allowed only those who pass them to advance to the next grade, graduate HS etc. then you'd end up with clear racial disparities. I don't want to get into a discussion about what's the cause of these disparities and who's fault they are. But, based on available data on e.g. SAT…

Self-selection has already lead to increased racial segregation, Asian and white students are already increasingly being put into private or charter schools.

If we want to improve academic performance of students in predominantly black neighborhoods then we should aggressively remove disruptive students from classrooms regardless of race. An entire classroom is held back by a handful of students intent on raising hell and it does more harm towards ambitious young black boys and girls than any policies intent on solving "disparities."

Disparities in outcome is not evidence of discrimination.

Re: Incentives in economics are wrong, but how?

#142

Post by bngybmgrglflps » Fri, Jun 11, 2021, 11:02 PM UTC

taneq wrote: post #138

scroot wrote: post #137

Earlier quoted context omitted.

I think the point is that everyone should have such an opportunity without having to be independently wealthy in the first place.

I think we agree on the fact that it's nice to have nice things, and it'd be nice of the government paid for more nice things?

A government can only acquire revenue by siphoning productivity ("nice things").

The organization and its agents bear no consequence for mistakes in the allocation. It has no means to compare value or incentive to do so. The system evolves according to the "iron law of bureaucracy" as a perfect rent-seeking apparatus.

It's nice to imagine everyone having enough, or maybe that everyone is "equal." But you can't save anyone from their choices.

That's not nice. It's prison.

If you know how to optimize human life for a given group of agreeable people, go for it. For the rest of us, no means no.

Re: Incentives in economics are wrong, but how?

#143

Post by lodi » Fri, Jun 11, 2021, 11:35 PM UTC

eigenket wrote: post #116

taneq wrote: post #108

Earlier quoted context omitted.

> 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? The mistake was assuming "going to college" was the goal and not "learning something useful." Too many kids spend years of their life and earnings studying completely useless degrees. > Maybe the incentives focused universities on creating more "education" so t…

Speaking as someone who went pretty heavily into STEM (I have a PhD in math and work as a mathematical physicist) I absolutely hate this view. I have not seen any evidence that on average STEM is harder in a meaningful sense than non-STEM subjects. A huge amount of non-stem stuff is really difficult, if you tried to push me as an undergrad through a philosophy or history or literature degree or whatever I'd probably…

> I have not seen any evidence that on average STEM is harder in a meaningful sense than non-STEM subjects.

1) STEM admissions require vastly higher GPA's, SAT/GRE scores, and admit a smaller fraction of applicants.

https://www.admissionreport.com/university-of-cambridge

(10% of 1330 applicants accepted for Computer Science, 60% of 57 applicants accepted for BA Classics)

2) STEM graduates earn more.

https://www12.statcan.gc.ca/census-recensement/2016/dp-pd/dt...

(72k/85k median/mean for STEM in Canada, 56k/69k for non-STEM)

3) Most STEM undergrad programs require students to take roughly half of their credits in non-STEM subjects, which they pass just fine, but non-STEM students are not required to learn about chemistry, electrical circuits, etc.

4) Math and compsci departments split (read: simplify) intro courses like "Statistics" into separate courses for STEM vs non-STEM students, for obvious reasons. I've never seen gender studies simplified for STEM students.

> if you tried to push me as an undergrad through a philosophy or history or literature degree or whatever I'd probably fail.

Ridiculous. I'm calling out your false modesty. If you obviously had enough intelligence and work ethic to get a PhD (any doctorate, but especially math), and then gainfully work as a physicist, you obviously could have passed any other 4-year undergrad program in any field. Undergrad is a low bar to clear.

---

One more note on this topic: when comparing fields/careers like this, I don't find it useful to look at how difficult things are for the top performers. Everything is super competitive at the very top level. Is it harder to be a Fields medalist or a Formula 1 driver? I don't know; there's literally only a handful of genius/superhuman people at that level. But looking at the median level, ask people if they would rather take a math test or a driving test and the results will be predictable.

Re: Incentives in economics are wrong, but how?

#144

Post by drdeca » Fri, Jun 11, 2021, 11:50 PM UTC

ggggtez wrote: post #118

sokoloff wrote: post #91

Earlier quoted context omitted.

Looking over the list of top billionaires, well under half appear to have been passive beneficiaries of birth randomness.

Is this supposed to be reassuring? From a societal standpoint, we should design a system that rewards the behavior we want to see. No one has given me any evidence that "being born to someone rich" is actually the thing we want to reward in our tax code.

Of course inheritance is not meant as an incentive for people to choose to be born to someone rich; that is not something one can choose.

When asking whose behavior something incentivizes, the answer must always be among those who can influence it.

The possibility of inheritance is an incentive to have money when one dies, that it might be passed on to one's heirs, whose wealth one often values, by virtue of valuing their general well being (as money can be exchanged for goods and services).

It is not the not-yet-conceived who advocate against there being large inheritance taxes.

Re: Incentives in economics are wrong, but how?

#145

Post by whatshisface » Fri, Jun 11, 2021, 11:58 PM UTC

ad8e wrote: post #93

nohuck13 wrote: post #30

We're walking into the middle of an argument that's been going on for a while here. "Economic(s) imperialism" is the tendency of economists to write papers topics outside traditional economics. While the people in (say) the sociology department seem to have to confine themselves to sociology. As Tyler Cowen writes on Marginal Revolution [1] quoted by Kevin Munger in the piece this piece is responding to: " - Mammogra…

I like imperialism a lot, from harder to softer sciences. It can represent a frustration that people are missing something very obvious, reflecting an underlying ignorance that is farcical or embarrassing. For example, Hardy the mathematician is best known not for his brilliant work in number theory or analysis, but for one paper in 1908 which taught biologists how to multiply numbers together. Ergo, we can presume t…

I thought reverb was mainly implemented with running windowed convolution, making delay line tuning not important.

Re: Incentives in economics are wrong, but how?

#146

Post by pontifier » Sat, Jun 12, 2021, 12:36 AM UTC

When compensation comes after effort as a reward, it incentives completion of tasks, but it requires someone to be willing to pay for that task to be done.

There is an imbalance between "worthwhile tasks" and "things someone will pay for".

This leaves many good actions undone, or done only by volunteers. Also investigating new and unexplored ideas is often a long and unrewarded task until a breakthrough occurs. I believe some people would prefer to live without money worries, and to explore their passions. Not enough of us have that luxury, but I believe that in the future we could all have that opportunity.

Re: Incentives in economics are wrong, but how?

#147

Post by ggggtez » Sat, Jun 12, 2021, 12:45 AM UTC

sokoloff wrote: post #130

ggggtez wrote: post #118

Earlier quoted context omitted.

Is this supposed to be reassuring? From a societal standpoint, we should design a system that rewards the behavior we want to see. No one has given me any evidence that "being born to someone rich" is actually the thing we want to reward in our tax code.

It’s not clear that the tax code is rewarding that in a significant way. You might argue it’s failing to punish it enough for your taste, which is a fine discussion to have. When I look over the top 10 here, 9/10 are on that list from being overwhelmingly self-made and I want what 8 of those have created to exist. (I think lots of other people self-evidently want LVMH to exist, even though I don’t care either way. Sa…

So when deciding on the policies of a nation of 350 million people, you look at the top 10?

That's a completely arbitrary cut off. Why not look at the top 1, and then tell me that I should extrapolate that out to say that every billionaire is bald and owns Amazon.com ?

Surely you see how choosing top 10 is a completely arbitrary cut off that you invented.

Re: Incentives in economics are wrong, but how?

#148

Post by BeFlatXIII » Sat, Jun 12, 2021, 12:51 AM UTC

dash2 wrote: post #98

paulpauper wrote: post #65

Earlier quoted context omitted.

I have observed that purported STEMlordery is more of myth than reality, or a caricature created by the media. I have found that on many stem-centric communities that people employed in STEM have great respect for the humanities, such as history, philosophy, or writing. Look at how many non-STEM articles get voted to the top of hacker news, such as articles about literature or philosophy.

Personally I love literature and art, my bedroom is lined with poetry books in several languages, and for that very reason, I dislike much of the modern humanities, with their pious, dreary approach to these beautiful and important things.

> I dislike much of the modern humanities with their pious, dreary approach

As someone who recovered from a mild case of being a STEMlord in college, grandiose claims of unearned self-importance are what turned me off from literature classes. I was always down to take a class in history, philosophy, or music if my schedule had an opening for that semester, but I took the minimum I could get away with in languages & literature.

Part of the problem is that English departments insist they are important because they “teach you how to be fully human”, which induces eye rolls: it’s like how the Quality Inn having the word “quality” in its name is unintentionally ironic. I still don’t know if the Dead Poets Society was meant as a satire of self-important literature classes or as a genuine homage to them.

At least the way it was taught when I was in high school, poetry was either cheesy rhymes or was the literary equivalent of debugging someone else’s code golf. It wasn’t until I discovered the authors Mark Danielewski and Christian Bök that I understood the joy in playing with language for its own sake.

Re: Incentives in economics are wrong, but how?

#149

Post by ABCLAW » Sat, Jun 12, 2021, 1:24 AM UTC

sokoloff wrote: post #130

ggggtez wrote: post #118

Earlier quoted context omitted.

Is this supposed to be reassuring? From a societal standpoint, we should design a system that rewards the behavior we want to see. No one has given me any evidence that "being born to someone rich" is actually the thing we want to reward in our tax code.

It’s not clear that the tax code is rewarding that in a significant way. You might argue it’s failing to punish it enough for your taste, which is a fine discussion to have. When I look over the top 10 here, 9/10 are on that list from being overwhelmingly self-made and I want what 8 of those have created to exist. (I think lots of other people self-evidently want LVMH to exist, even though I don’t care either way. Sa…

This has a LOT to do with the fact that inherited wealth is distributed amongst a number of heirs and held in trusts that they aren't the full beneficiaries of.

The argument that the top few have self-generated wealth doesn't in any way impinge upon the larger trend of wealth being concentrated amongst a smaller cohort over time.

Re: Incentives in economics are wrong, but how?

#150

Post by NotSammyHagar » Sat, Jun 12, 2021, 1:43 AM UTC

whimsicalism wrote: post #86

billytetrud wrote: post #85

Earlier quoted context omitted.

There's a difference between outlawing enforcement of segregation by law and enforcing laws requiring people to go to schools they may not want their kids to go to. I think calling the second "finishing" the first is misleading. However, there is a huge problem in school funding. The fact that school funding is primarily local means that poor neighborhoods get bad schools. That is a huge problem. We definitely should…

> However, there is a huge problem in school funding. School funding is actually not as inegalitarian as you might have been led to believe - federal & state funding usually makes up for the differences in property tax funding, we're often spending more $/kid at these bad schools. > There's a difference between outlawing enforcement of segregation by law and enforcing laws requiring people to go to schools they may n…

I am very skeptical of that view. Nicer public schools get money in the form of parental fundraising. At my kid's elementary school in a big town on the west coast - not even in California, we raised > 500k every 2 years; poor schools probably didn't have an event where the members of the programmer class dropped a few $k each. This is just the latest way to help your kids.