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Topic

Economics

A collection of 67 issues

When the Cost of Misclassification is Higher for the Customer than for the Business

Consider a bank making decisions about loans. For the bank, making lending decisions optimally means reducing prediction errors*(cost of errors) minus the cost of making predictions (keeping things simple here). The cost of any one particular error, especially the denial of a loan when eligible, is typically small for

Raising Money for Causes

Four teenagers, on the cusp of adulthood and eminently well-to-do, were out on the pavement raising money for children struck with cancer. They had been out raising money for a couple of hours, and from a glance at their tin pot, I estimated that they had raised about $30 or

Education and Economic Inequality

People seem to believe that increasing levels of education will reduce economic inequality. However, it isn’t clear if the policy is empirically supported. Here are some potential ways increasing levels of education can impact economic inequality: 1. As Grusky argues, the current high wage earners, whose high wages depend

Structural Inequality

Nick Clegg, leader of the Liberal Democrats, recently spoke about social mobility. He said, My particular focus is on inter-generational social mobility – the extent to which a person’s income or social class is influenced by the income or social class of their parents. Social mobility is a measure of

Corporate Beneficence

Apple “Apple has agreed to host music for an organization that uses African music to help people caught in the escalating ethnic violence in Darfur, Sudan.” MacWorld McDonald’s The mission of Ronald McDonald House Charities is to “provide a “home away from home” for families of seriously ill children

Piracy, the Real Mantra Behind Indian Success

The Wall Street Journal (WSJ) ran an opinion piece yesterday arguing that India is “rapidly evolving into Asia’s innovation center” and “leaving China in the dust” because of its famed intellectual property regime. Not only is the claim patently bogus, but the opposite—that the Indian innovation is surviving