Thursday, June 07, 2007

Autistic Economics

I've been browsing last few issues of The American Economic Review and it's making me feel duller than usual. Sometimes I can really relate to Nietzsche's disgust with myopic "deductive" logic.

Then again, perhaps what's most striking is how many articles point out that consumers are not rational and that markets are not always efficient.

Here is the abstract of an interesting (and less jargon-strewn) article from the AER Vol. 96, No. 3, 2006:
Long-Term Educational Consequences of Secondary School Vouchers: Evidence from Administrative Records in Colombia
Joshua Angrist, Eric Bettinger and Michael Kremer

Colombia's PACES program provided over 125,000 poor children with vouchers that covered the cost of private secondary school. The vouchers were renewable annually conditional on adequate academic progress. Since many vouchers were assigned by lottery, program effects can reliably be assessed by comparing lottery winners and losers. Estimates using administrative records suggest the PACES program increases secondary school completion rates by 15 to 20 percent. Correcting for the greater percentage of lottery winners taking college admissions tests, the program increased test scores by two-tenths of a standard deviation in the distribution of potential test scores. (JEL: I21, J12, I28)

Could the free market be the solution to education woes? I think so.


ADHR said...'re kidding, right? In Colombia, extremely poor children's high school completion rates are, it seems, improved by vouchers to private schools. From this you conclude the free market can "improve" education?

undergroundman said...

Not this alone, but it's entirely reasonable that a free system (in which parents can choose schools, administrators can discipline and fire teachers, and ultimately are responsible for shaping up in order to keep their job) could improve education. Think about it for a while.

Every study on vouchers that I have seen (and I've seen a few on the programs in the US and Sweden) has shown a positive effect.

Do some research, and don't be afraid of it.

I suppose you're thinking that the quality of education in Colombian public schools isn't on par with the quality of ours? I'm not sure I agree. Colombia has changed a lot.

ADHR said...

Actually, I was just criticizing the logic. I don't care one way or the other on the voucher issue. The issue is what's the most effective way to educate children to be good citizens. Public or private or some mix makes no difference to me.

For what it's worth, though, there will never be a system where teachers can be hired and fired at will unless and until administrators face the same risk. Right now, teachers tend to get caught up in stupid policies that they're powerless to change (standardized testing, for example).

ADHR said...

This is the kind of thing I mean.