Monday, December 19, 2011

Is this also a joke? [updated]

Yoram Bauman is known for his econ-based stand-up comedy.

I wonder about his latest piece in JEBO. He shows that economics students at the University of Washington are less likely than other students to donate to two charitable organizations.

At registration, students were given the option to donate to two organizations: WashPIRG and ATN. WashPIRG's mission, quoted by Bauman, is "to deliver persistent, result-oriented public interest activism that protects consumers, encourage a fair, sustainable economy, and foster responsive, democratic government". ATN was a lobby group pressuring government for "sensible tuition rates, quality financial aid, and adequate funding of colleges...".

Bauman's substantive finding is that those who went on to major in economics were less likely to donate than others, even before having taken any economics. So econ majors are different than other folks even prior to training. Econ majors' donation rates vary little with the number of courses taken while non-majors' donations are sensitive to it.

In a few spots in the paper, Bauman frames these differences badly:
Are economics majors inherently less generous, or are the differences due to their training? We can start to answer this question in terms of the random effects model...
I just can't see how he concludes anything about econ student generosity from his data. But in the conclusion, he recognizes that perhaps econ students are less likely to view these organizations as providing public goods:
The interpretation of these results – in particular whether lower donation rates are a sign of “selfish” behavior – also depends in part on whether the requested donations are public goods. ATN is arguably a pure public good within the student body because the aim is to distribute resources to students from outside groups. Our results here echo Marwell and Ames (1981): economics students are more likely to free-ride. It is not so clear that WashPIRG provides a similar public good because the organization's agenda extends beyond the interests of the student body. Indeed, it is possible in this case – as in, say, a requested donation for an organization dedicated to replacing competitive markets with economy-wide price controls – that economics training would reduce donation rates not because students become more selfish but because they become more educated. Regardless of the cause, however, it is clear that economics training changes the giving behavior of non-majors.
Indeed! Further, if Econ students recognize that tertiary subsidies are already too high, they may also view ATN as providing a public bad!

But here's how he frames it in the New York Times:
THE stereotypes about economists are well known: that we’re selfish Grinches; that we don’t read human interest stories because they don’t interest us; that the only reason we don’t sell our children is that we think they’ll be worth more later.

But are the stereotypes true? And if so is the cause nature or nurture? In other words, are selfish people disproportionately likely to become economists? Or is there something about being an economist (or being on the receiving end of economics education) that makes people selfish?

...My recent research with the economist Elaina Rose, published in August in the Journal of Economic Behavior and Organization, has looked at a real-life public goods situation faced by students at the University of Washington. During our study period (1999 to 2002), when students went online to register for classes each quarter, they were asked if they wanted to donate $3 to support WashPIRG, a left-leaning activist group. Students were also asked if they wanted to donate $3 to Affordable Tuition Now (ATN), a group that lobbied for “sensible tuition rates, quality financial aid and adequate funding.”

You may question whether these groups actually serve the common good, but that’s mostly beside the point. Regardless of the groups’ actual social value, a purely self-interested individual would choose to free-ride rather than contribute; after all, a single $3 donation is not going to make a noticeable difference in tuition rates.

...In line with previous research, what we found supported the Grinch stereotype. 
It wouldn't at all surprise me if economists were less likely to contribute to public goods. There's reasonable prior evidence for it. And, Bauman gives a nice bit of evidence on selection versus education effects in giving to these two groups.

But there's no way that you can conclude that economists are more selfish on the basis of their unwillingness to contribute to these causes. WashPIRG's current highlights: an anti-nuclear campaign and an anti-BPA campaign. Am I selfish for thinking the former campaign a horrible public bad that, if effective, makes global warming worse? Or for thinking the latter just a bunch of trendy anti-chemical scaremongering that makes baby gear too expensive for poor people? Maybe WashPIRG weren't a bunch of nuts in 2002 when the data was collected, but I'd sure like to see some evidence of it before concluding that economists are Grinches for failure to give these guys money.

As for Affordable Tuition Now, perhaps economics students recognize that government subsidization of higher education is largely a transfer to the middle class, the progressivity of which is at best debatable? Those kinds of concerns are alluded to in the conclusion to the JEBO piece but sure seem absent from the Times piece; there, if economists aren't selfish for free-riding on others' donations, we're selfish for not agreeing with the groups' objectives. Or at least that's how I read the piece's conclusion, which calls for greater balance in principles courses.

Worse, Bauman says that whether "these groups serve the common good" is "mostly beside the point". He's right that it's tangential if the question is whether education or selection drives differences between economists and others, but it's front and centre if he wants to paint economists as being the bad guys for failing to contribute to groups the aims of which reasonable people can very easily oppose.

Update: Ah, crud. Robin Hanson and Greg Mankiw said the same things, more concisely, already. But the truth bears repeating.

Update 2: Darian Woods reminds me of a nice piece by David Fielding and coauthors showing that Econ students are more generous than others in the case of contributions to a proper charitable cause - helping poor people with WorldVision.

And if you're looking for worthy causes: don't forget Seasteading.

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