We’re not going to talk about this. Not at all. In particular, no mention will be made of the fact that seconds before the first delivery was bowled, I confidently texted a friend ‘England have this in the bag – amazing comeback!’. Further, we will gloss over that (not insignificant) portion of me that was howling with laughter inwardly at the ability of the England team to call up that awful temptress, Hope, only to reveal at the last moment her true identity – that of her evil twin: Despair. Very quickly, to the sweet balm of economics.
1. I have a friend whose immediate reaction when confronted by an opinion different to his is sympathy for the poor soul who has yet to discover the truth. This drives me nuts, but apparently it’s not uncommon. Tim Harford puts it thus: “We see what we want to see. We also tend to think the worst of the ‘idiots’ and ‘maniacs’ who think or act differently”, and has a really nice write up of the research into this phenomenon. I think this is particularly important for development workers. When working for developing country governments it was a constant annoyance that every donor who wasn’t greeted as the messiah for suggesting that we institute an MTEF would ask me “Why don’t these pesky locals see the need for this?”. Rarely would someone think “well, these guys have been here way longer than I – maybe they know something about this that I don’t.” We did: MTEFs had been tried repeatedly and never worked, because the budget was a fiction anyway – you might as well keep it a relatively easy fiction to write.
2. Speaking of things that drive me nuts: the mean (or arithmetic average) being used, even when it’s wildly inappropriate, because so many people assume it’s the ‘best’ or ‘normal’ average. There is no such thing! The right average depends on what you’re measuring and what you care about, and actually, I think the safest bet tends to be the median. Priceonomics has an interesting piece on the history of the ‘average’, and they must be right because they agree with me.
3. One particular situation where the mean average is guaranteed to make me swear: analysis of incomes, when we should care very much about the distribution. Inequality guru Branko Milanovic writes here about The Great Gatsby Curve, and the erroneous idea that in the US high income inequality matters less because social mobility is high. Not only is this weirdly persistent myth wrong, the reality is the opposite: actually, when there’s higher inequality, the poor get poorer over time, relatively.
4. On the value of information in crises, and how that value is eroded over time. A very nice breakdown, but I’m not sure how much this tells us without breaking down the different kinds of information and how their value-erosion varies – and how their value compares in absolute terms. More information is almost always better (almost: I have no desire to know about the hygiene of my favourite restaurants), but we need some way of prioritising what we invest in.
5. Planet money on a sovereign debt default in that weird in-between place, Puerto Rico: part of the US, but kind of not. Debt crises can seem a bit remote, a bit difficult to really think about in concrete terms, and the Planet Money team do a great job of both accessibly explaining how this one came about, and giving some indication of the human cost (Transcript).
6. Harvard’s 1953 economics exam was awesome. And I disagree with Chris. I think economists are still typically way behind the curve on history.
7. Lastly, because these links have been depressing, two happy ones: first, remember that crazy depressing story about the guy who faked the study showing how exposure to gay people made people discriminate less? Well it has a happy ending! Real researchers who didn’t make up the data have found some pretty similar results, but even more positive in some ways. And lastly, the best poem I have read so far this year. What a line: ‘I was born aflame, I believe.’
Have a great weekend, everyone!