Predicting productivity
To follow up on the discussion in my last post about testing regimes, I want to recommend a New Yorker article by Malcolm Gladwell about evaluating hard-to-evaluate skills. He describes a football scout named Dan Shonka working in his hotel room carefully reviewing the DVD of a game he has just watched live: “He had a stack of evaluation forms next to him and, as he watched the game, he was charting and grading every throw that Daniel [the quarterback] made…. Shonka had seen all the promising college quarterbacks, charted and graded their throws, and to his mind Daniel was special: ‘He might be one of the best college quarterbacks in the country.’ ” The football industry in the US also collects mountain of statistics on each player. Imagine just going with the objective statistics and losing the subjective evaluation of the scouts. Gladwell says that even with people like Shonka watching rising quarterbacks like a hawk, the failure rate is high. Some productivities are just very hard to assess and predict before the fact. (more…)
Testing regimes and productivity
There is a large literature on the effect of testing on learning, but as far as I know very little of it has been applied to Iran’s concour. How we evaluate students has obvious effects on the students’ incentives to learn and teacher’s incentives to teach. In market economies where employers have a voice in what is worth learning and what is not, because they have to pay for it when they hire workers, the effect of testing on incentives is not paramount. Teachers may teach to the test, but parents and students know what is important to learn for later life– holding a job with good pay and getting promoted. Not so in Iran. (more…)
Jobless youth: are they too many?
In my last post I argued that what is wrong with Iran’s unemployment is not the quality of data (though there are quality problems) nor that they come from official sources. The problem is rather with the structure of unemployment, which is is unjust and inefficient. The burden of unemployment falls disproportionately on the young and that they wait a long time after graduation to find a job and get along with their lives. Instead of arguing about the data collection and manipulation, we should be discussing the underlying economic structure that generates this pattern in the data. (more…)
What is wrong with Iran’s unemployment data?
As I wrote in another post a few weeks ago, every time a western reporter writes about unemployment and inflation in Iran, he or she seems obligated to say that the actual rates are twice the official rates. Often an “expert” is present to give this made-up claim an air of expertise. (See examples for unemployment here and here, and on inflation here and here.) I have not seen the claim repeated for inflation in 2008 ( I guess President Ahmadinejad took care of that in 2008 by doubling the actual inflation rate!), but for unemployment it is still being reported.
It is easy to dispel the myth that actual inflation has been always twice the official rate. If you take a calculator and punch in the price of anything in 1990 and then increase it every year at twice the rate of official inflation, you would know what I am talking about. But what about official unemployment data? Is there a way to check their veracity? The answer is yes. (more…)
Jobs, poverty, and Mr. Moussavi
A news item on Iran’s “Worker’s news agency” (ILNA), in Persian, which belongs to the workers’ organization House of Workers, reads, “A wealthy country in which people are poor is not Islamic.” This is a curious title for a report of a speech by Mr. Moussavi which is entirely about jobs, unemployment and productivity (delivered to the organization’s annual congress). Why would something mentioned at the end of a speech (and reported in the last sentence of the news report) become the headline? I think I know why. (more…)
Poverty and the PPP
There appears to be some confusion surrounding the meaning and use of the PPP (Purchasing Power Parity) among some readers of this weblog and of Rastak, where Dr. Davoud Souri published a rejoinder to my comments on his poverty calculations. (I am sorry I cannot participate in Rastak discussions because I am not good in typing or composing in Persian!)
Comparison of poverty across countries is an important subject, and impossible to do without some sort of comparison of purchasing power of different currencies across countries. Unfortunately, market exchange rates are not generally a good guide for such comparisons, hence the need for PPP comparisons.
A good starting point for a useful discussion of poverty and policies to combat it is to establish common ideas about what is regarded as high and low rates of poverty. To establish such benchmarks, it is natural to refer to what other countries with similar level of productivity and income are able to achieve in poverty reduction. It is one thing to complain about poverty if countries with similar incomes to Iran are doing much better and quite another if they are not, in which case the only point of reference is one’s own high and lofty ideals.
What does the PPP mean and how is it used in poverty analysis? (more…)
Choosing a college
I was not able to write on this weblog last week because I was visiting colleges with my daughter to help her choose where she will enroll next year. Having grown up in Iran, it is impossible to have your children go through the US system without thinking about how different they are, even though Iran’s is more or less modelled after the western education system. So, it seems appropriate to write something about the big contrast in the transition from high school to college in the two countries, which happens to be on my mind this week and which is what I do in my research. (See my commentary on concour reform, on women in universities, and a longer paper on Iranian youth.)
There is no greater contrast between the two systems of education than in how they select students for college. We know how this is done in Iran. Students work hard to get good grades, which helps them go into successively more selective schools which is all to increase the chance of getting a high score in the Big Test–Iran’s infamous concour. Iran’s system receives praise for its objectivity (computers not humans grade the test) and for its selectivity (more than a million take the test and the top universities pick from the top 1% (hear a Chronicle of Higher Education reporter visiting Iran praise the concour’s selectivity–past minute 8). What proponents of Iran’s concour miss are the costs of objectivity and selectivity. (more…)
Mothers and child education
Today the New York Times published my letter to the Editor (posted here on April 9), in which I made the point that mothers focused on educating two children tend to think more long term and be less apocalyptic.
There is a lot more good that happens when families change their primary role from procreation to production of human capital–economic development, for example. (Robert Lucas explains this beautifully in a non-technical article.) This process took place in rural Iran starting in the late 1980s, thanks in large part to government-provided health care and family planning for rural families. We do not know which way the causation goes here: is having fewer children the impetus to invest more in children, or does the desire to invest in children cause lower family size? Economists have spent a great deal of time disentangling the relationship between the quality and quantity of children. There is a lot of evidence globally that greater desire for education, often because its rewards have increased, is necessary to lower fertility. (more…)
Roger Cohen on Iran
Today’s New York Times has an excellent opinion piece by Roger Cohen (“Israel Cries Wolf”). In his columns since his visit to Iran in February, Cohen has been busy countering the myth of Iran as a failed state and failed society. In this piece he is exposing Israeli prime minister Netanyahu’s Iran paranoia who has labeled Iran’s leaders a “messianic apocalyptic cult”. Cohen wonders if this is the same leadership that, “has survived 30 years, ushered the country from the penury of the 1980-88 Iran-Iraq war, shrewdly extended its power and influence, cooperated with America on Afghanistan before being consigned to “the axis of evil,” and kept its country at peace in the 21st century while bloody mayhem engulfed neighbors to east and west and Israel fought two wars.”
I wonder to what extent the inaccurate portrayal of Iran also as a failed economy has contributed to the image of Iran as a backward, poverty-stricken, failed state. For example, last October Tom Friedman wrote in NYT, “as a real nation-building enterprise, the Islamic Revolution in Iran has been an abject failure.”
If the answer to my question is a partial yes, there is a lot of work to do to set the record straight about Iran’s economy. (more…)
Living with lower oil prices
Iranians are more likely to complain about the prices of cucumber and watermelon, but if you ask economists what are the two most important prices in an economy, they would say the exchange rate and the interest rate. The exchange rate is the price that links Iran to the rest of the world, and the interest rate is the link between the present and the future. If a government can get these prices right, it has done half of its job in economic policy. (more…)
Tyranny of numbers 
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