Wednesday, September 29, 2010

Links of Interest: 29th September

1. President Barack Obama chose Austan Goolsbee to succeed Christina Romer as the head of the U.S. Council of Economic Advisers. Here, the Wall Street Journal do a profile of Goolsbee.

2. The Guardian: a "nudge unit" set up by David Cameron in the Cabinet Office is working on how to use behavioural economics and market signals to persuade citizens to behave in a more socially integrated way.

3. The Daily Telegraph on Rory Sutherland's quiet behavioural economics revolution in the advertising industry.

4. Greatest Good: "a unique firm formed with the goal of applying rigorous, cutting-edge data analysis and economic methods to the most salient problems of business and philanthropy." Founding partners include Steven Levitt, Gary Becker, Daniel Kahneman and John List. Affiliates include David Laibson, Emily Oster, Steven Pinker and Richard Thaler.

5. The U.S. National Commission on Fiscal Responsibility and Reform. They have a separate mandate to the Congressional Budget Office. "The Commission is charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run."

6. A fascinating read for any Ph.D. student in Economics, or Ph.D. economist: 'Market Structure in the Production of Economics Ph.D.s'. Frank A. Scott, Jr. and Jeffrey D. Anstine; Southern Economic Journal Vol. 64, No. 1 (Jul., 1997), pp. 307-320.

7. The (Irish) Department of Education and Skills Inventory of Data Sources: "This document contains a matrix of educational data sources which are available from the Department of Education and Science and the agencies under its aegis."

8. University Attendance Scanners: "Northern Arizona University has installed electronic devices that record student attendance in an effort to boost freshmen grades and lift lagging graduation rates. But some students say the monitoring makes them feel less independent." (Southern California Public Radio).

9. "The Production and Deployment of an On-line Video Learning Bank in a Skills Training Environment" - Gerald Cannon, Mary Kelly, Colette Lyng, Mary McGrath; AISHE-J: The All Ireland Journal of Teaching and Learning in Higher Education, Vol 1, No 1 (2009).

10. For economics undergraduates: the Irish Taxation Institute Fantasy Budget Competition. Who needs fantasy football?


Rob Gillanders said...

A nudge unit... its about time! They were meant to be set up 26 years ago.

Martin Ryan said...

26 years ago?

Liam Delaney said...

Orwell Martin. I dont like the framing here either Rob to be honest

Liam Delaney said...

Good links from Martin - will post separately on the Cameron stuff over the weekend. This just wont fly over in the UK or in Ireland using that type of language. For me, the real achievement of behavioural economics research has been to demonstrate practical ways to make the state less obstructive, particularly in areas like tax and regulation. This whole "nudge unit" stuff just doesn't sound right. It's way too paternalistic and patronising.

Martin Ryan said...

In fairness to the Cabinet Office, the "unit" is formally known as the Behavioural Insight Team.

Liam Delaney said...

I covered the main document on the blog before and a lot of the people involved are top notch scholars. As Martin points out, its not actually called "nudge unit", just as the Commission on Public Service Numbers and Expenditure Programmes in Ireland wasnt actually called board snip. But the main acronym used in their document is MINDSPACE to reflect the various different ways of influencing behaviour and I dont think they themselves would have too much problem with the idea of "nudge unit". But it really is becoming a problem in the UK - the ideas from the literature are coming out as top-down attempts to shape and control behaviour rather than as deliberative changes to completely inefficient regulatory and taxation systems.

Liam Delaney said...

One thing that might help with the Orwell stuff Rob is to remember that we already routinety use knowledge about behavioural biases to shape and control behaviour. A lot of the new policy work is an attempt to counteract this. For example, the literature on defaults points out clearly a major source of human decision making inertia and how it is routinely exploited. You can call it Orwellian but I don't see how we can ignore this type of evidence and why only private companies can contest on this pitch.

Kevin Denny said...

Rob: Big Liam is watching you.

Liam Delaney said...

Big Liam wouldn't want to watch Rob because he really wouldn't care less what any given individual wants to do subject to them not hurting someone else. Big Liam might give Rob the option of not taking a state pension and keeping the money for himself to spend now provided he was convinced that Rob knew what he was doing (e.g. by making him read a simple form first before he opts out online).

Rob Gillanders said...

Why should little Rob have to convince anyone he knows anything about anything. This whole opt-out thing really grinds my gears. Surely the default setting for adults should be independence and freedom! Capable till proven otherwise...

"Behavioural Insight Team" is even more dodgy sounding.

I don't doubt that the private sector uses this stuff, but maybe the answer is to ban them from doing it rather than get the government doing "counter-nudges".

Also, I don't doubt that this stuff works, and its certainly interesting from an academic standpoint...but so was splitting the atom...dun dun duuuuun!

Liam Delaney said...

Rob - just a few things

- The government has already opted you in to far more things than you could possibly count. The only difference is you don't have the option to opt out of most of them. If you are annoyed by opt-outs it is worth considering whether it is government intervention in general that annoys you. For example, if you just dont think government should be in the business of providing pensions at all then there is a lot of consistency in what you are saying. If you are in favour of mandatory pensions but the opt-out stuff gives you the creeps then I really can't see where you are coming from other than you think people who read psychology books are a bit creepy.

- Banning the private sector from using marketing techniques is surely completely at odds with the idea that people should be free to operate without unnecessary interference from the government. You have argued a few times here that people should be free to make mistakes and so on. I would argue for greater controls on marketing but this is just as much big brother as what you have been arguing against.

I would push for a view where we try as much as possible to put all the key influencers of human behaviour on the table and debate regulation on this basis. Debating regulation using the rational actor model as a starting point means we cannot talk about any of this stuff because it doesn't then exist.

I certainly share your view that the idea that the only reason that government departments would use this stuff is for the "benefit of the people" needs to be scrutinised heavily. I can think of lots of truly stupid uses of this literature in policy.