Congestion in college applications and admissions

The Chronicle of Higher Ed writes about changes in college admissions: Those Tweedy Old Admissions Deans? They're All Business Now

"More applicants doesn't necessari­ly mean better applicants, however. Four years ago, Mr. Allen decided to refine his recruitment strategy to emphasize quality over quan­tity. How? By shrinking the college's prospect pool. Since then, his office has done more to identify and engage students who are genuinely interested in the college.

"That move, coupled with the recession, has shrunk the college's application total. In the 2007-8 cycle, Grinnell received 3,900 applications; for this fall's freshman class, it received 3,000. During that time, however, Grinnell increased its enrollment of minority, low-income, and first-generation students, as well as those from other countries.

"This wouldn't have happened if apps had been skyrocketing, and we didn't know who all these applicants were," Mr. Allen says. "My experience helped me get off the treadmill of thinking that more applications are better. They're still important, but as a crude measure, they're not the most important thing."

"In other words, Mr. Allen had to re-evaluate his relationship with one of the most powerful numbers in his profession. He predicts that in a market­place saturated with messaging, colleges will need to rethink recruitment in the coming years. "The new enrollment manager," he says, "is going to have to take a more-sophisticated approach to pierce through all that stuff, to make an impression on students."

Divorce in Malta

The BBC reported a few weeks ago on the retreat of another formerly-more-widely repugnant transaction, divorce.

Malta has voted "Yes" in a non-binding referendum on legalising divorce

"Almost three-quarters of the electorate voted on Saturday on whether divorce should be introduced in Malta.

"A majority Catholic country, Malta is the only EU country not to allow divorce.

"Figures from the electoral commission late on Saturday showed turnout was 72%, the Times of Malta reports.
...
"Dr Gonzi, who campaigned against the introduction of divorce, has said it is now up the parliament to enact a law legalising the dissolution of marriage on the island.

"The Catholic Church, which is very influential in the archipelago, had also supported a "No" vote during the campaign.
...
"Malta is one of only two countries in the world (with the Philippines) to ban divorce - apart from the Vatican.

"Chile was the last country to legalise divorce in 2004 after overwhelming public pressure."

Carbon trading down under

An ongoing carbon market in New Zealand and a proposed one in Australia...

The NZ ETS: carbon pricing in the neighbourhood, by Basil Sharp and Nan Jiang.
"Participants in the New Zealand ETS surrender emission units that match their annual emission levels. A New Zealand Unit (NZU) is the primary domestic unit of trade. To meet obligations under the scheme, participants can surrender free units, if they have any, at the rate of 1 for every 2 tonnes emitted. Otherwise, participants have to either pay the fixed price option, or purchase NZUs or other Kyoto compliant units."

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Australia Proposes Carbon Trading Plan, Again

"Prime Minister Julia Gillard of Australia announced a plan on Sunday that would tax the carbon dioxide emissions of the country’s 500 worst polluters and create the second-biggest emissions trading program in the world, after the European Union’s.
...
For the 500 companies — which would include mining giants with operations in Australia like BHP Billiton, Rio Tinto and Xstrata — the government has set a price of 23 Australian dollars, or $24.70, for each ton of carbon dioxide emitted starting July 1 of next year, rising 2.5 percent annually before shifting in 2015 to a market-driven trading program.

"A similar proposal by Ms. Gillard’s predecessor, Kevin Rudd, was largely blamed for having led to his political downfall."
...
"When the European Union initiated its carbon-trading program in 2005, many polluters passed on the cost of the free permits they were given to consumers, creating large corporate profits. That is unlikely to happen in Australia, said Mr. Jordan of Deutsche Bank.

“Australian policy makers learned the lesson from Europe that there’s a risk if you hand out too many free permits and you hand them out to the wrong sectors, that you get emitters both passing on the cost of carbon but also pocketing the value of those permits,” he said."

Debate over kidney sales in Scotland

Here's a 4 minute interview on Radio Scotland from August 2011, on kidney sales, in which Sarah Toom talks to me about the debate there about whether payments to living kidney donors should be allowed, and other ways of increasing transplants (including kidney exchange).

The proximate cause was a proposal by Sue Rabbitt Roff, a senior research fellow at the University of Dundee, in the BMJ: "We should consider paying kidney donors."
Her proposal calls for a tightly regulated system with a standard payment to donors of around the current average Scottish salary (at which price transplantation is still a bargain compared to dialysis).

She concludes "So it’s time to begin to explore how to pilot paid provision of live kidneys in the UK under strict rules of access and equity. We need to extend our thinking beyond opt-in and opt-out to looking at how we can make it possible for those who wish to do so to express their autonomy in the same way as current donors are encouraged to do by making available a healthy kidney for a fee that is not exploitative.

The proposal has sparked a lot of British press coverage, e.g. here, and here, and here, and here. In each of the articles, the other reported comments are all negative. (I can't tell if British reporters work differently than American reporters and only solicited negative views to balance the proposal being reported as the main story, or if it is harder to find pro as well as con views in the UK.)
*******

Here are links to my previous blog posts on compensation for donors, and to my two papers that lead to unexpected calls on this subject from radio journalists in far places.

Roth, Alvin E. "Repugnance as a Constraint on Markets", Journal of Economic Perspectives, 21:3, Summer, 2007, pp. 37-58. 

Leider, Stephen and Alvin E. Roth, ''Kidneys for sale: Who disapproves, and why?'' American Journal of Transplantation , 10 (May), 2010, 1221-1227.

Incentives for cheating and for cheating-detection

A chilling and surprisingly complicated story from Panos Ipeirotis at NYU Stern (who blogs under the title "A Computer Scientist in a Business School): Why I will never pursue cheating again (since deleted, but that URL now has related links). Apparently he got a cease and desist letter, and the story has since attracted some press.

Here's one story about it: NYU Professor Catches 20% Of His Students Cheating, And He's The One Who Pays For It,

and here's another: NYU Prof Vows Never to Probe Cheating Again—and Faces a Backlash

Ultimately he draws a market design conclusion:
"In Mr. Ipeirotis’ view, if there’s one big lesson from his semester in the cheating trenches, it’s this: Rather than police plagiarism, professors should design assignments that cannot be plagiarized.

"How? He suggested several options. You could require that projects be made public, which would risk embarrassment for someone who wanted to copy from a past semester. You could assign homework where students give class presentations and then are graded by their peers, ratcheting up the social pressure to perform well. And you could create an incentive to do good work by turning homework into a competition, like asking students to build Web sites and rewarding those that get the most clicks."

A secret of school performance...(admissions)

From kindergartens to colleges, one thing that helps a school produce lots of good graduates is if they admit lots of good students. Charter schools, which are publicly funded but privately operated, are supposed to admit students by lottery, and many run very public lotteries to make it clear that they aren't trying to influence the results. But it's tempting to cheat, hence this story from the NY Times:

Bronx Charter School Disciplined Over Admissions Methods

"A South Bronx charter school has been put on probation for what city education officials called “serious violations” of state law mandating random admissions, including possibly testing or interviewing applicants before their enrollment.



"The school, Academic Leadership Charter School, opened in 2009 and is the first New York City charter to be disciplined for violating the rules for random admissions.


"The violations go to the crux of the debate over charters, which are publicly financed but independently operated. Random admissions is a key tenet in most states, but critics have long contended that the schools surreptitiously weed out students who are unlikely to do well on standardized tests or are more difficult to educate.
...
"At most city charter schools, students are selected at public meetings where applicants’ names are picked from a box. But city officials found that at Academic Leadership, which has about 200 children in kindergarten through second grade, hundreds of applicants were left out of this year’s drawing. The lottery was supervised not by an impartial observer, but by a member of the parent association, the letter said. And while students who applied after the lottery should have been added to the waiting list, scores of them were not, it said.
“They are treating it like it’s a private school on the Upper East Side,” said a former school employee, who spoke on the condition of anonymity for fear of reprisal. “Like people are applying to Dalton. This isn’t Dalton.”
*************


At the other end of the spectrum from charter schools are exam schools, which are charged with admitting the best and the brightest. And maybe it's good for good students to be together with other good students (and not just good for a school's performance). I'm inclined to think that it is, but it's hard to show. A recent NBER paper suggests that good schools don't change the standardized exam scores for their students very much; the ones who just made the cutoff in public exam schools, and the ones who just missed getting in, do around the same on  tests.


The Elite Illusion: Achievement Effects at Boston and New York Exam Schools
by

Atila Abdulkadiroglu, Joshua D. Angrist, Parag A. Pathak
NBER Working Paper No. 17264
Issued in July 2011


Abstract: 
"Talented students compete fiercely for seats at Boston and New York exam schools. These schools are characterized by high levels of peer achievement and a demanding curriculum tailored to each district's highest achievers. While exam school students clearly do very well in school, the question of whether an exam school education adds value relative to a regular public education remains open. We estimate the causal effect of exam school attendance using a regression-discontinuity design, reporting both parametric and non-parametric estimates. We also develop a procedure that addresses the potential for confounding in regression-discontinuity designs with multiple, closely-spaced admissions cutoffs. The outcomes studied here include scores on state standardized achievement tests, PSAT and SAT participation and scores, and AP scores. Our estimates show little effect of exam school offers on most students' achievement in most grades. We use two-stage least squares to convert reduced form estimates of the effects of exam school offers into estimates of peer and tracking effects, arguing that these appear to be unimportant in this context. On the other hand, a Boston exam school education seems to have a modest effect on high school English scores for minority applicants. A small group of 9th grade applicants also appears to do better on SAT Reasoning. These localized gains notwithstanding, the intense competition for exam school seats does not appear to be justified by improved learning for a broad set of students."

Romeo and Juliet with an Afghan twist

The NY Times reports on one of the oldest of repugnant transactions, marrying outside of approved circles. But there's an unexpected twist at the very end of the story (the newspaper story, not the story of the young lovers, which is still unfolding):
In Afghanistan, Rage at Young Lovers

"...a group of men spotted the couple riding together in a car, yanked them into the road and began to interrogate the boy and girl. Why were they together? What right had they? An angry crowd of 300 surged around them, calling them adulterers and demanding that they be stoned to death or hanged.

"When security forces swooped in and rescued the couple, the mob’s anger exploded. They overwhelmed the local police, set fire to cars and stormed a police station six miles from the center of Herat, raising questions about the strength of law in a corner of western Afghanistan and in one of the first cities that has made the formal transition to Afghan-led security.

"The riot, which lasted for hours, ended with one man dead, a police station charred and the two teenagers, Halima Mohammedi and her boyfriend, Rafi Mohammed, confined to juvenile prison.
...
"Ms. Mohammedi’s uncle visited her in jail to say she had shamed the family, and promised that they would kill her once she was released. Her father, an illiterate laborer who works in Iran, sorrowfully concurred. He cried during two visits to the jail, saying almost nothing to his daughter. Blood, he said, was perhaps the only way out.

“What we would ask is that the government should kill both of them,” said the father, Kher Mohammed."
...
"Family members of the man killed in the riot sent word to Ms. Mohammedi that she bears the blame for his death. But they offered her an out: Marry one of their other sons, and her debt would be paid."

College admissions in England

Inside Higher Ed follows the Plan to Restructure British Higher Ed

"The British government released its long-awaited "white paper" on the future of higher education, offering a sweeping set of proposals that would produce dramatic changes in how the country would educate students and fund institutions.
...
"The reform plan released by British government's Department for Business Innovation and Skills says that in the first year of the new funding regime, around 65,000 high-achieving students will be able to go to whichever university will have them. This represents a change from the present strict controls on the number of students each university can accept. It raises the prospect of some elite institutions expanding their intake to vacuum up more top students.

"The government’s aim is to ensure that students with very high grades -- AAB or above -- on the country's college entrance exams will have a better chance of reaching their first choice of university.
...
"However, this new contestability will sit within an overall cap on the total number of student places in the sector. Consequently if some elite institutions expand their intake, it will be at the expense of others, which will necessarily have to shrink.

"It also means that highly selective institutions, such as those in the 1994 and Russell Groups (consortiums of elite universities), will have to compete for a large proportion of their students, many of whom already achieve AAB or above on the "A level" exams.
...
"Willetts denied that the government’s aim was to create an elite set of institutions in which all the top-achieving students were concentrated.

“I’m not trying to plan the system. The whole point about this is we’re taking some steps back and it will be the choices of students and the reaction of institutions – I have no view on that,” he said.
"He argued that with funding following the student, and universities and colleges forced to compete for those students, the quality of teaching and learning, and the student experience, would rise.
“We’ve got very strong incentives to reward research, and the intense competition through the [research excellence framework] and research councils has yielded an incredibly strong research [base]. We haven’t had comparable incentives on teaching,” he said."


**********

A followup article elaborates on the two tier structure being contemplated: New Competition in the UK

"Asked for comments on the changes ushered in by the white paper, two vice-chancellors were critical of plans to make another 20,000 student places "contestable" by auctioning them off to institutions that charge average fees, after waivers, of below £7,500 (about $12,000).
...
"Under the government’s proposals, universities with students who secured grades of AAB or higher would lose those students from their standard allocation of places, but would then be allowed to recruit as many above the AAB threshold as they wanted, provided they could attract them.

"As an estimated 65,000 such places become contestable, some universities will lose AAB students and will be forced to drop their average fees below £7,500 if they want to claw back their numbers.Times Higher Education understands that an elite group of just 10 institutions have 40 percent of all AAB students
...
"Martin Hall, vice-chancellor of the University of Salford, said the combined effect of the AAB plans and the sub-£7,500 auction would be to increase "social sorting." Applicants would increasingly "end up going to universities with students like themselves," he argued.

"Hall said the government was allowing universities with more privileged student cohorts to charge £9,000 because they were perceived to be "high quality," while seeking to force down fees at universities such as Salford with high proportions of disadvantaged students.

"We serve that group. That is our mission, and we try to serve them well," he said. "The assumption that we don’t do that through providing quality is completely untested. If you are serving students … from non-traditional university backgrounds … you have to provide more resources to help [them]. In my university, teaching provision costs more than in a so-called 'top' university, where students come in with two As and a B."

Update on efforts to ban circumcision in CA

Here's a legal update on the matter, from the Volokhs... Court Tentatively Decides That State Law Preempts Proposed San Francisco Ban on Circumcision of Boys.

Some background on the effort to ban circumcision is in my earlier post here.

Hockey: the NHL draft is different

Yesterday's post, with an update at the bottom...

Four Harvard Freshmen Selected in NHL Draft

"Months before they’ll put on a Harvard uniform for the first time, four incoming Crimson freshmen were chosen in Saturday’s National Hockey League draft.

With these four additions, there will be eight NHL draftees on Harvard’s roster going into the 2011-12 season.

"The structure of the NHL draft differs from that of the other three major American sports. Unlike in MLB, the NBA, and the NFL, players selected by NHL teams can continue to compete on the amateur level while remaining the protected picks of the team that originally selected them.

Baseball, football, and basketball prospects are forced to choose between signing a professional contract or retaining amateur status and NCAA eligibility shortly after the draft."
********

Can someone fill us in  on why the NHL works this way? i.e. why do pro hockey draftees include students who are about to go to college?
*********
Update (Friday, July 29):

Jaron Cordero writes with some relevant detail:

"NFL draft: to be eligible players must be out of high school for at least three years.

NBA draft: you have to be 19 years old to be eligible.

--So a student can't enter either draft before entering college.

NHL and MLB: you can be "drafted" and still retain NCAA eligibility. In fact, there are plenty cases each year where a player fresh out of high school will get drafted by a major league baseball franchise, but instead choose to play college baseball.

The difference between the NHL and MLB is their respective collective bargaining agreements:

The MLB's requires a team to sign their drafted player in order to retain exclusive right of negotiation for his services. NCAA legislation states that an athlete's amateur status is forfeited if he/she signs a contract with a professional team.

On the other hand, the NHL's CBA allows teams to retain the exclusive right of negotiation of a drafted player until the summer after the athlete graduates from college. Thus, the athlete is not forced to sign any contract with a professional team; therefore he keeps his status as an amateur."

Thanks, Jaron.

So...now I'm puzzling over a new set of questions, e.g. why are the agreements so different? E.g. in MLB, they seem to think that playing in the minors is the way they want to develop players, in contrast to football, where players often develop in college. (Maybe because for football you have to see how big they are going to be when full grown?)  Is hockey somewhere in between?

Can new science universities flourish in Saudi Arabia? In Egypt? In China?

I've written before about the difficulties of breaking into the top ranks of universities, and so it will be very interesting to watch what becomes of well funded attempts to create first rate technical institutes that will concentrate on subjects which shouldn't be religiously or politically controversial.

There's a well-funded attempt in Saudi Arabia, and also a post-revolution proposal for something similar in Egypt, although a pre-revolution attempt at a new technical university appears to be running into trouble. And finally there's China, which seems much more likely to succeed.

The Chronicle of Higher Ed reports on Saudia and Egypt:

 Saudi Arabia's $10-Billion Experiment Is Ready for Results

A Promising Egyptian Research University Gets Tangled in Post-Revolutionary Politics

Here's the Saudi story:

"King Abdullah University of Science and Technology is an anomaly many times over: a spectacular campus in the middle of nowhere; an international, co-ed institution in a gender-segregated society; and an aspiring world-class research graduate university created virtually overnight.

"Kaust, as it is known, also faces a unique challenge. It must convince the world that through a combination of wealth and vision, it can flourish in one of the most restrictive countries in the world. Many here believe that the next year will be a critical one in its development.
...
"King Abdullah, Saudi Arabia's absolute ruler, donated the university's $10-billion endowment in the hope that Kaust will make his country "a player in global science," says Kaust's president, Choon Fong Shih, who formerly headed the National University of Singapore.
...
"The university is organized around nine research centers, which focus, for example, on advanced membranes and porous materials, plant-stress genomics, and solar and photovoltaics engineering. The work of all these centers feeds into three fields key to Saudi Arabia's future: solar energy, water desalination, and drought-resistant crops.
...
"Yet while the university has been able to attract established senior academics ready for another challenge before retirement, as well as promising young faculty taking what they hope will be a career-making gamble, it remains difficult to lure tenured professors in the middle of their careers (especially since Kaust, in line with Saudi Arabia's labor laws, can offer five-year rolling contracts but not tenure).
...
"The university has also made every effort to attract a bright cohort of international students. Admission comes with free housing, insurance and a yearly round-trip ticket home; students receive $20,000 to $30,000 stipends.
...
"The institution is particularly concerned with attracting Saudi students since one of its main goals is to create a new scientific elite for the country. Saudi students make up between 15 and 20 percent of about 300 students now at Kaust. The university plans to eventually enroll 2,000 graduate and 1,000 postdoctoral students.

"The number of Saudi students with the required English and science skills is limited, and Kaust must compete for them with international universities. And it must teach some of those skills itself."
...
"Several Saudi observers expressed doubts about the university's future, saying there is no guarantee that whoever succeeds the 87-year-old King Abdullah will share his vision for it."
***********

That last line brings us right into the story about the Egyptian university:

"When Nile University opened four years ago, it offered something unusual in Egyptian higher education. In a country with weak research infrastructure, the small private nonprofit engaged students and professors in applied research in high-demand fields, such as information technology and construction engineering. Over time, it has developed global partnerships and international support.

"But today the university finds itself in the cross hairs of post-revolutionary politics. The government has repossessed its soon-to-be new campus. Uncertain about the institution's fate, many corporate and philanthropic backers have stopped their donations.

"A high-placed government official, speaking on the condition of anonymity, said the state was "rectifying" the improper allocation of public land and funds to a private university. Supporters say the university is a target because it was supported, and is thus now tainted, by the regime of former President Hosni Mubarak.
********


The story goes on to say that there's a new, post-revolutionary plan for a technological university in Egypt.

"Mr. Zewail, the Egyptian-American Nobel laureate, says he was contacted by Egyptian government officials shortly after the revolution and asked to revive his 10-year-old proposal for a city of science and technology that will combine a university, research centers, and a technology park. In a few months, Mr. Zewail has raised over $100-million in donations. The university that will be part of the planned city will have a different, more ambitious mission than Nile's. "It will be a national project," says Mr. Zewail, "not a private university. But I do feel very strongly we should help students and first-rate researchers" from the troubled university, he says, by absorbing as many of them as possible."
********

In China, there are also political restrictions on universities, but there shouldn't be any problem finding technically well qualified and motivated students, although there may be other cultural barriers to overcome (aside from political ones). Here's a Chronicle story on that:

News Analysis: China Looks to Western Partners to Reshape Its Universities

"Last year the University of Nottingham, which runs the oldest foreign branch campus in China, was approached by government officials from Shanghai asking if it would consider opening another location, this one 140 miles north of its undergraduate campus in Ningbo.

"The project would involve a substantial donation by a wealthy Chinese philanthropist, along with a host of government perks, including enough land to support an enrollment of 4,000. In return, Shanghai municipal officials hoped Nottingham would build a research-oriented campus in Pudong, Shanghai's major development zone. There, graduate students and professors could work on such subjects as drug development, stem-cell research, and regenerative medicine.
...
"Through speeches and policy papers, the Ministry of Education has made clear in recent years that it is unhappy with the widespread use of rote learning and narrowly defined academic programs at its universities. Last year it came out with a 10-year plan for educational reform that outlined what it viewed as the system's deficiencies.

"With China's booming and increasingly modern economy as a backdrop, the plan proposed to introduce Western-style critical thinking and interdisciplinary work into the college curriculum, and expose students to other Western concepts, such as experiential learning and professional training. The government also wants to introduce more programs taught in English."

Brandeis and critics agree that sales of donated art are repugnant

After a change in presidents, the controversy about whether Brandeis University could sell its art has ended, Inside Higher Ed reports: Brandeis Will Keep Its Art

"One of the flashpoints in the debate over whether colleges and universities should ever sell significant works of art was resolved Thursday -- with Brandeis University pledging to strengthen the Rose Art Museum rather than sell its masterpieces.

"Based on the promise, four supporters of the museum who sued the university two years ago agreed to end the litigation. Further, the Massachusetts attorney general's office has agreed to end its inquiry into the university's handling of the art collection.

...

"There have been several cases in recent years of colleges trying to sell or being pressured to sell parts of valuable collections. Fisk University remains in a legal battle over its desire to sell (or to partly sell) a $30 million collection of modern paintings by Georgia O'Keeffe and others. The University of Iowa this year fended off calls for it to sell Jackson Pollock's "Mural," an 8-by-20 foot painting that is considered one of the masterpieces of abstract art and of modern American art. Some estimated that the painting could have brought in as much as $140 million.

"Longstanding policy in the art world is that donated works of art be sold only to finance the purchase of more art, not to have the funds shifted to other purposes. So art supporters at Brandeis and elsewhere were stunned when the university in 2009 announced plans to shut the Rose Art Museum and sell off its works.

...

"The university made the announcement in January 2009, with officials citing a major hit taken by the endowment and severe budget problems facing Brandeis. “These are extraordinary times,” said a statement from Jehuda Reinharz, then the university's president, as the decision was announced. “We cannot control or fix the nation’s economic problems. We can only do what we have been entrusted to do -- act responsibly with the best interests of our students and their futures foremost in mind.”

The decision immediately prompted an outpouring of anger at the university from supporters of the arts, and donors to the Rose. Eventually, the university faced the lawsuit, an inquiry from the state, and widespread condemnation -- even as Brandeis put the plans to sell the art on hold.

...

"David A. Robertson, director of the Mary & Leigh Block Museum of Art at Northwestern University, was president of the Association of Academic Museums and Galleries when the initial Brandeis plans were announced. He said Thursday that he was thrilled with the news that the university was committing itself to strengthening the collection.

"The Brandeis controversy was "the flagship problem" for those worried about the sale of art, because of both the caliber of the university and the stature of the collection, he said. "It was very detrimental to art that Brandeis would have considered that move," he said.

"The debate over art at Brandeis has been valuable, Robertson said, in that it has "made other institutions aware of the issues that revolve around their collections." He said he hoped the uproar Brandeis has faced would discourage similar proposals."


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Here's the museum website: The Rose Art Museum

NSF Social, Behavioral and Economic Sciences--attack and defense

As budget talks go on in Washington, the Social, Behavioral and Economic Sciences division of the National Science Foundation has become a specific focus of discussion (as distinguished from support for other science funded by NSF). The Consortium of Social Science Associations posts a number of documents, including Talking Points, which highlights some of the economics research funded by NSF over the years, including several research streams in market design (e.g. spectrum auctions and kidney exchange).

"According to the Consortium of Social Science Associations (COSSA), amendments will probably be offered to disproportionately cut or completely eliminate funding for the National Science Foundation's Social, Behavioral, and Economic (SBE) Sciences Directorate when NSF's 2012 appropriations are voted on by the House.
...
"Amendments to cut NSF/SBE funding are most likely to be submitted when the spending bill comes to the House floor in the first week of August.

"We are calling this to your attention now because there might not be enough time for AEA members to express their opinions once the amendment is proposed and before it is voted on. Economists of all people understand the need to take action to deal with the U.S. fiscal challenge. But these amendments might target the social sciences for disproportionate funding reductions and possibly elimination. Economic research has profound value for society and we want to make sure that this is understood by policymakers. Although the NSF budget for the social and behavioral sciences is small (in FY2010 $255 million out of a total NSF budget of $7 billion), eliminating it would have very negative consequences for economic research and economic policy.

"The following are some reasons why Republicans and Democrats both should oppose this amendment:
• Unique Role: NSF’s SBE Directorate is the only place in the Federal government with a broad mandate to maintain and strengthen the basic science of economics. It provides over one-half of all external support by the Federal government for basic research in economics. SBE’s Economics Program current budget is only $26.5 million. Although other government agencies, private foundations and the private sector support applied and some basic economics research, none have the resources and the incentives to support the new methods, data and broad range of substantive research funded by NSF. Severe cuts in an already small NSF budget for economics would be a major blow to the infrastructure needed to support the best research on extremely complex and important economic questions.

• Very High Return on Past Investments: Since 1994 spectrum auctions have generated more than $50 billion for the U.S. Treasury and worldwide revenues in excess of $200 billion. Researchers at Stanford University and the California Institute of Technology, supported by grants from NSF, developed the simultaneous ascending auction mechanism as a technique for auctioning off multiple goods whose values are not fixed but depend on each other. The mechanism was then tested experimentally in a laboratory, also financed by NSF, before its implementation by the Federal Communications Commission. These auctions not only benefit the US taxpayer, but ensure efficient allocation of spectra so that the winners of the auction are indeed the individuals who value the spectra the most. This method has also been extended to the sale of divisible goods in electricity, gas, and environmental markets.

• Innovation and Adoption of New Technologies: SBE funded a number of awards that have resulted in fundamental advances in our understanding of the economic factors that encourage innovation and the adoption of new technologies. For example, Nicholas Bloom at Stanford University was awarded a Faculty Early CAREER Development award for his research into the role innovation plays in determining economic productivity and growth. This research includes developing new data collection methods for measuring management practices and adoption of information technology (IT) in business. Using an innovative double-blind survey, he has been able to gather systematic evidence about the effects of specific management practices on the success and failure of firms. His research also has shed new light on the links between increased use of IT and patterns of international trade between the US and less developed countries. Other
work supported by SBE contributes to our understanding of how uncertainty shocks affect decisions made by businesses that in turn contribute to macroeconomic fluctuations.

• Lives Saved: Researchers in economics at Harvard University, the University of Pittsburgh, and Boston College have applied economic matching theory to develop a system that dramatically improves the ability of doctors to find compatible kidneys for patients on transplant lists. Organ donation is an example of an exchange that relies on mutual convergence of need; in this case, a donor and a recipient. This system allows matches to take place in a string of exchanges, shortening the waiting time and, in the case of organ transplants, potentially saving thousands of lives. Similar matching markets exist in other contexts, for example, for assigning doctors to residencies or students to schools.


• Millions Lifted out of Poverty: Microfinance has spread very rapidly in the last decade, raising the hope that it has the power to lift millions out of poverty by providing them with access to capital. Loans are often given to groups of five to ten women who are jointly liable for the loan to the group. Basic research findings from SBE grants have led to important practical advice for microfinance practitioners. SBE grantee Esther Duflo was named by TIME magazine one of the 100 most influential people in the world in 2011 for her work this area.


• Many More Accomplishments: ...
******

In a possibly related development, the NSF recently (June 2011) highlighted some of our early (1992 and 2006) grants: Economists Design Life-Saving Exchange for Kidney Transplants

More on deceased organ donation in Israel

In an earlier post I wrote about the recent Israeli legislation giving priority for deceased donor organs to those who have themselves registered as potential donors. Now, Haaretz reports on some difficulties that may present themselves in implementing the law as intended: Officials: New donor cards will reduce organ transplants

"Health officials are worried that the Knesset will authorize changes to organ donor cards that would move certain people up the waiting list for transplants without increasing the overall number of transplants. The officials are putting the blame on religious groups.

"In the current format, a potential donor may condition a donation on the decision of a clergyman of the family's choice.

""But MK Otniel Schneller (Kadima ) has put forth a bill to be sent to the Knesset Constitution, Law and Justice Committee. The bill would amend Article 28 of the organ transplant law of May 2008. Potential donors would be able to specify a religious figure or rabbinical committee that would approve an organ donation after the person's death.

"Over the past year, changes have been made that allow the health authorities to give preference in the transplant waiting list to anyone who signs an organ donor card.

"Health officials suspect that the proposed legislation is part of an effort by religious groups to bypass the system. In effect, people who do not genuinely intend to donate organs would receive preferential treatment while on the waiting list for a transplant. Their religious patron would then veto the organ donation if the person dies.

"A senior source in the medical establishment says that "this proposal may significantly curtail organ transplants in Israel."

"The privilege of being moved up on the waiting list if one is a donor is meant to go into effect in January for everyone who signs the donor card by then. The privilege can be exercised only three years after signing the card.
...
"The tension between the rabbis and doctors over organ transplants dates to 1986, when the Chief Rabbinate demanded that a religious representative be present when determining brain death. Only in 2009 was legislation on brain death approved, after a compromise forged by Schneller. The law requires that brain death be determined by a medical committee and objective machine-based data.

"Still, the Chief Rabbinate refused to acknowledge that brain death is a condition that allows for organs to be donated and transplanted."

HT: Maya Bar Hillel and Assaf Romm

764 anniversaries in NYC

I thought of heading this post "7/24 to be an anniversary for 764."

New York City will be conducting a lot of marriages today: Expecting Overload on Day 1 of Gay Marriage, City Sets 764-Wedding Limit

"Demand for same-sex marriage in New York is so great that the city has decided to cap at 764 the number of couples who can be wed at clerks’ offices on Sunday, Mayor Michael R. Bloomberg said on Tuesday.

"Mr. Bloomberg said the city would hold a lottery to determine which couples, gay or straight, will be allowed to marry at the five borough clerks’ offices. Sunday is likely to break the single-day record for marriages performed by the city, which currently stands at 621."
********
There will also be weddings elsewhere in NY State, some at the stroke of midnight:
"The first marriages were scheduled to take place just after midnight in Niagara Falls, where officials planned to illuminate the famous cascade in the colors of a rainbow, and in Albany, where an eager mayor planned to marry eight gay couples.
...
"Not everyone will be celebrating. Town clerks in at least two rural communities have resigned in recent days, saying their religious convictions precluded them from marrying gay couples, and some cities will see public demonstrations on Sunday. The National Organization for Marriage is planning protests on Sunday afternoon..."

*********

And in related news (related through the transformation of a formerly repugnant transaction into an ordinary one),
"President Obama formally certified on Friday that the American military is ready for the repeal of the “don’t ask, don’t tell” policy as Pentagon officials said that nearly two million service members had been trained in preparation for gay men and women serving openly in their ranks."

"Enactment of the repeal will come in 60 days, on Sept. 20. The two-month waiting period is called for in the legislation passed late last year that ended “don’t ask, don’t tell,” the 17-year-old law that banned openly gay men, lesbians and bisexuals from military service.

“As of Sept. 20, service members will no longer be forced to hide who they are in order to serve our country,” Mr. Obama said in a statement. He signed the certification, along with Defense Secretary Leon E. Panetta and Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, about 3:30 p.m. in the Oval Office."
*********

Mazel tov to all...

Behavioral Economics in Management Science

Kathleen McGinn forwards the following announcement, a version of which also appears here:

Given the tremendous growth and importance of behavioral economics research and building on the success of our Behavioral Economics and Finance Special Issue (which is scheduled to appear in the January 2012 issue), we have created a new department in Management Science: 
Behavioral Economics
We provide below our editorial team, the editorial statement for the department and information about Management Science. You are receiving this email most likely because you have reviewed or submitted to Management Science.  Please pass on this information to all that may be interested. 

Department Editors:
Uri Gneezy, University of California, San Diego
Teck-Hua Ho, University of California, Berkeley
John List, University of Chicago

Associate Editors:
Nick Bloom,Stanford University
Colin Camerer, California Institute of Technology
Jeffrey Carpenter, Middlebury College
Gary Charness, University of California, Santa Barbara
Yan Chen,  University of Michigan
Anna Dreber,  Stockholm School of Economics
Simon Gaechter,   University of Nottingham
Stephan Meier,  Columbia University
Klaus Schmidt,  Univeristy of Munich
Andrew Schotter,  New York University
Uri Simonsohn,  University of Pennsylvania
Matthias Sutter,  University of Innsbruck
Chad Syverson,  University of Chicago
John van Reenen,  London School of Economics
Roberto Weber,   University of Zurich  

Editorial Statement:
The Behavioral Economics Department seeks to publish original research broadly related to behavioral economics. We welcome laboratory experiments, field studies, empirical and theoretical papers. The goal of the Department is to promote research on incentives and behavior in domains such as markets, groups and individual decision making.  In the cross-disciplinary tradition of Management Science, we encourage research that draws ideas from multiple disciplines including economics, psychology, sociology, and statistics to provide novel insights on behavioral economics.  In all cases, manuscripts should provide high quality original approaches to behavioral economics, should be motivated such that the importance of the results are clear to nonspecialists and have important managerial implications for business and public policy.

Real estate agents as middlemen

A new NBER paper examines real estate agents in Boston:
The Costs of Free Entry: An Empirical Study of Real Estate Agents in Greater Boston,
by Panle Jia Barwick and Parag A. Pathak

Abstract: This paper studies the real estate brokerage industry in Greater Boston, an industry with low entry barriers and substantial turnover. Using a comprehensive dataset of agents and transactions from 1998-2007, we find that entry does not increase sales probabilities or reduce the time it takes for properties to sell, decreases the market share of experienced agents, and leads to a reduction in average service quality. These empirical patterns motivate an econometric model of the dynamic optimizing behavior of agents that serves as the foundation for simulating counterfactual market structures. A one-half reduction in the commission rate leads to a 73% increase in the number of houses each agent sells and benefits consumers by about $2 billion. House price appreciation in the first half of the 2000s accounts for 24% of overall entry and a 31% decline in the number of houses sold by each agent. Low cost programs that provide information about past agent performance have the potential to increase overall productivity and generate significant social savings.

Middlemen and repugnance

Luke Coffman has shown how employing a middleman can reduce the apparent blameworthiness of an action ( Intermediation Reduces Punishment (And Reward) , forthcoming, American Economic Journal: Microeconomics, , November 2011)

But being a middleman is complicated. Just as adding money to some transactions can sometimes change them to something that is regarded as repugnant and perhaps illegal (e.g. selling a kidney versus donating one), so can adding a middleman.  And it matters how the middleman is compensated.

Inside Higher Ed reports on the controversy surrounding middlemen who act as marketers for colleges: Holding the Line on Agents

"The National Association for College Admission Counseling has long had a policy barring commission payments to anyone for recruiting or enrolling students. The policy is consistent with U.S. law with regard to domestic students -- a statute that was developed in part out of concerns over admissions practices at some for-profit institutions.

The U.S. law doesn't apply to the recruitment of foreign students -- and a growing number of colleges have employed agents, who are paid in part on commission, to recruit abroad. Advocates for the use of agents have been encouraging NACAC to consider differentiating between the recruitment of foreign and domestic students, and permitting commissions for recruiting the former. But NACAC appears headed in the opposite direction. The association's board has released a draft policy revision that clarifies the issue only by being more explicit that the ban on commissions applies whether the recruited students are in the U.S. or abroad.

...

"NACAC is not opposed to the use of agents or agencies to recruit international students," the draft states. "We believe, however, that the use of agents who are compensated in the form of bonus, commission or other incentive payment on the basis of the number of students recruited or enrolled creates an environment in which misrepresentation and conflicts of interests are unavoidable."

*********

The Chronicle of Higher Ed also covers the matter:
Use of Paid Agents to Recruit International Students Sparks Lively Debate at Forum

"The practice of using commissioned agents to bring in foreign students to American colleges and universities came under sharp criticism during an international-education conference organized by the U.S. State Department, with one panelist comparing it to contracting out the student-recruitment process to a car salesman.
...
"The practice of paying overseas agents for the students they recruit has become more contentious as it has grown more common among American colleges. Proponents say it can help attract students in an increasingly competitive global student market, and they note that other countries, like Australia and Britain, rely on foreign representatives to bring in students.
But a primary membership group for admissions officials, the National Association for College Admission Counseling, or NACAC, has released a proposed policy statement that would expressly forbid colleges from using commission-based agents to recruit domestically or internationally. (Institutions cannot pay commissions for domestic students if they receive federal financial-aid funds.)
...
"One person who was clear about where he stood was Mr. Nassirian. "It's a very simple proposition," Mr. Nassirian said. "It stinks to high heaven."
In his comments, Mr. Nassirian criticized the American International Recruiting Council, a group that has begun to set standards for and accredit overseas recruiters, calling its efforts "laughably inadequate."
"It's like attempting to regulate bribery overseas so it is done ethically," he said.
Officials for the recruiting group, which is known as AIRC, were not present at the event, and no supporters of paying overseas commissions were included on the panel. In an e-mail message, Mitch Leventhal, AIRC's founder, called Mr. Nassirian "long on bombast and short on facts."
"It is unconscionable to stand in the way of these developments, which are aimed at protecting students and which are being undertaken from within the mainstream of American higher education," said Mr. Leventhal, who is vice chancellor for global affairs at the State University of New York. "Rather than inventing facts, these critics would be well served to read the AIRC standards and suggest specific modifications, which will lead to a better outcome."
********

And here is the AIRC site, which includes a memo reply to NACAC:
"AIRC agrees with NACAC that “it is in the interests of institutions of higher education, as well as the public diplomacy of the U.S. itself,  to maintain high standards for the recruitment of students.” We also agree that there is potential  for misrepresentation, fraud,
and other unethical behavior in an “unregulated” international student recruitment environment.

"However, AIRC is convinced that the proposed ban on commission-­‐based international
recruitment would not be an effective way to achieve these goals."

Kaushik Basu on India

Kaushik Basu, Currently on leave from Cornell as Chief Economic Adviser, Government of India, gives a wide ranging interview.

On Indian bureaucrats and bureaucracy:
"But one of my big surprises when I joined the government of India was to see the quality of the top civil servants in India. They really are very talented people, because it is a highly competitive system of recruitment. But the efficiency of the bureaucracy leaves so much to be desired. It’s like getting a bunch of ace drivers and then getting caught up in a traffic jam and leaving them there. There is something in the system which makes it go very slowly and sluggishly. I’ve felt this frustration as an ordinary citizen before I joined government, and I feel it now because I feel that if we can do better then India’s economy can really take off.

"There are two major things that can hold back an economy. One is the physical infrastructure, and the other is this soft infrastructure, which is the bureaucracy. On the physical infrastructure, I’m very optimistic that India is going to change. Even within the next four to five years, you’ll see the change. There is investment happening, the government is putting in money, and it will improve. On the bureaucratic side, it’s very tough. Everyone frets about it, but you don’t quite know where to begin. I’m less hopeful on that. However, the economy has done well despite that because, mercifully, one big difference with China is that India’s government, despite the inefficiency, doesn’t quite have the power of the Chinese government."
...

"Now to my policymaking work. In our everyday life, we have to practice what I call normal economics. You have to recognise and respect the laws of the market, allow individual enterprise to flourish, international trade has to be open, and all the regular things economists say I would also repeat. At the same time we must not blight our chances of a more idealistic world. My book is based on two views of the invisible hand. For Adam Smith, the invisible hand was the little minions going about their everyday life, unwittingly creating order. That’s true in many domains, and its discovery was a major scientific breakthrough. But I contrast it with Kafka’s view, drawing on The Trial and The Castle, where little minions are going about their everyday chores without thinking about the larger implications of their actions and they create a horrific world. The book argues that both these visions have a role to play. Economists have given complete predominance and priority to the Smithian view, but we should be aware of the Kafkaesque view of what can happen and take guard against such a predicament.

Have you been able to move that into the policy world in your current job?

"No. My work as a policymaker is to attend to everyday life. This is what I meant by normal economics. What I do now is normal economics. I have to make sure that prices don’t rise too fast, interest rates don’t fluctuate too much, India’s economic growth is rapid and sustained, and unemployment is low. There is a lot of standard economics that addresses these matters. We need to apply this accumulated wisdom well and that’s what I try to do my best with. To reject all standard economic theory as conspiracy, as some do, is a big mistake. It can only lead to policy failure. But, at the same time, we must not abandon the somewhat utopian project of creating a distinctly better world some day. This needs a lot of analysis and research. The possibility of such a world is what my book is about.

Kosher and Halal slaughtering repugnant in the Netherlands

Dutch slaughter ban sparks Jewish and Muslim outrage

"Just one week after the acquittal of fiery far-right politician Geert Wilders, the Dutch parliament struck another blow against multiculturalism in the Netherlands yesterday with the passage of a bill banning ritual animal slaughter. The bill requires that all animals be stunned before being slaughtered, a requirement that conflicts with halal and kosher stipulations that animals be fully conscious.

The bill was initially proposed by the Party of the Animals, which holds two seats in the 146-seat Dutch parliament and maintains that ritual methods of slaughter are inhumane. It gained support from centrists on similar grounds, but Wilders's Freedom Party has also been a longtime proponent. In fact, it was Wilders who first raised the issue in 2007 when he objected to halal meat being served at a public school in Amsterdam.

The ban has provoked a furious reaction from Jewish and Muslim leaders in the Netherlands and Europe. From Reuters:

"The very fact that there is a discussion about this is very painful for the Jewish community," Netherlands Chief Rabbi Binyomin Jacobs told Reuters. "Those who survived the (second world) war remember the very first law made by the Germans in Holland was the banning of schechita or the Jewish way of slaughtering animals."

It should be noted that a last-minute amendment attached to the bill states that halal and kosher slaughterhouses will be able to apply for special permits if they can show that their methods do not cause more pain than non-ritual methods. But some are skeptical of the permit process's efficacy, and the European Jewish Congress is already considering challenging the law in court."

Peter Cramton video on the Medicare Auction

"If you are building a bridge, you need a bridge expert. If you're building an auction, you need an auction expert."

From the 12 minute video Peter Cramton has posted at Medicare auctions update: video and legislation