Friday, May 18, 2012

Derivatives and a simple example

This article on provides a helpful explanation of what derivatives are, all in the context of chicken farmers. I'm never sure whether near-metaphors like that are helpful or only more confusing, but I can't resist them!

Thursday, May 10, 2012

Brooks and Collins on education

What don't they discuss in this week's Conversation, which is about education?  A wide-ranging and fascinating back-and-forth ensues.  I particularly liked the discussion about costs and the growth in managers at UC ("Soon every faculty member will have a personal senior manager") and the trajectories over 4 years of college in various metrics of students' well-being and progress from the Wabash National Study.  Motivation?  Fuhgeddaboudit!

Wednesday, May 2, 2012

Conard's full monty in the NYT-M

Edward Conard, a retired Bain executive, is interviewed in the NYT Magazine about his forthcoming book on inequality, Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong.  I admit I skimmed the article, but I couldn't find the promised argument about why more inequality was better than less.  Conard is big on saving and investment, which most would agree is important. Perhaps he just doesn't view inequality as good or bad, or maybe it's one of those perspectives that ex post inequality could be evidence of ex ante opportunity.

But the best passage by far was at the bottom of the fourth page:

There’s also the fact that Conard applies a relentless, mathematical logic to nearly everything, even finding a good spouse. He advocates, in utter seriousness, using demographic data to calculate the number of potential mates in your geographic area. Then, he says, you should set aside a bit of time for “calibration” — dating as many people as you can so that you have a sense of what the marriage marketplace is like. Then you enter the selection phase, this time with the goal of picking a permanent mate. The first woman you date who is a better match than the best woman you met during the calibration phase is, therefore, the person you should marry. By statistical probability, she is as good a match as you’re going to get. (Conard used this system himself.)

Look out, eHarmony!!