GRE Vocabulary

It took me almost two years (June 2007 - March 2009) to go through all the GRE vocabulary in the Red Bible (a GRE vocab book that every test-taker in China uses). Now the mission is finally accomplished. Up to now I have learned the some 7,000 selected words in that book around eight times each. What I need to do in the future is to review and review and review. Try to keep a good memory until the day of exam.

Free Music from Google (A Public Good)

Google is now planning to offer legal free music downloads, this time only China. One may wonder whether Google will expand this service to the world. It is legal and free at the same time! Why not allowing all to enjoy such great benefit? Google has already changed the way people search, read, and probably even think. Why not the way to get music?

Quotes from the Conscience of a Liberal

Here are some quotes I made from Paul Krugman's Conscience of a Liberal. The reason why it is such a short list is not because of the book is lack of insights (in fact it is full of them), but I usually do not have a marker with me when I read (I usually carry a book with me everywhere).

If technology and globalization are the driving forces behind rising inequality, then Europe should be experiencing the same rise in inequality as the United States. (p. 140)

Republicans cut taxes on the rich and try to shrink government benefits and undermine the welfare state. Democrats raise taxes on the rich while trying to expand government benefits and strengthen the welfare state. (p. 158)

The rest of the reason why the American system works as well as it does is that the great majority of Americans who do have private health insurance get it through their employers. This is partly the result of history – during World War II companies weren’t allowed to raise wages to compete for workers, so many offered health benefits instead. (p. 224)

I believe in a relatively equal society, supported by institutions that limit extremes of wealth and poverty. I believe in democracy, civil liberties, and the rule of law. That makes me a liberal, and I’m proud of it. (p. 267)

You’re a liberal, whether you know it or not, if you believe that the United States should have universal health care. You’re a progressive if you participate in the effort to bring universal health care into being. (p. 268)

Krugman, Paul. The Conscience of a Liberal. London: Penguin Books. 2009.

A Leap for Liberals

The State of New York will raise taxes amounting to $4 billion annually from millionaires in the coming three years, as New York Times reports.

'Blog-post'?

I've just discovered that 'spot' in 'Blogspot' is an anagram of 'post', as in a blog post. Did the founders of this service notice that?

South Park: The Economy's Only Son

This is the first time I truly understand the essence of a South Park episode. Here for the full video.

Why I am not going on an exchange program

As people have been asking me this these days, and sometimes it is difficult for me to recall all the reasons I thought up last semester, I now jot them down here.

1. I want to minor mathematics, which is crucial for my further studies. If I'm going on an exchange, this plan will conflict with #2.
2. I definitely do not want to delay my graduation; I don't want to be too old when I can finally commence my career. If I'm going on an exchange, this plan will conflict with #1.
3. I still have chance to receive overseas education in the future.
4. I do not want to again spend weeks adapting to a new environment while alternatively I can use this period to concentrate on my pursuit.
5. I hate to move around with my bulky luggage.
6. I currently have a girlfriend here. (Ignore this if you are not her. By the time I made the decision upon exchange, I had not even met her yet.)

Why the prices of textbooks in U. S. are so much higher than in Hong Kong?

Yesterday Elvira raised this question to me. In Hong Kong, we are blessed to have those international version textbooks costing around 300 Hong Kong Dollars each, substantially lower than the same textbooks sold in U. S. Exchange students from the States here are often surprised at the price difference.

As I googled on the topic, a paper written by Cabolis, Clerides, Ioannou, and Senft bumped into me. According to their research based on comparative data from book markets in U.S., Britain, and Canada, the price differences do not result from cost differences, but different market demands.

Textbooks are adopted by professors but paid for by students. This gives rise to an agency problem: one individual (professor) is acting on behalf of another (the student) without bearing any cost relating to his action. If one is willing to accept that professors in the US care less about how much students pay than professors elsewhere, then agency might explain observed price differentials.

Actually I have even encountered professors in my university saying that, only if you are rich enough to comfortably afford the textbook, there is no need to buy it.

Besides, copyright enforcement is also pointed out to be a possible explanation. I am not familiar with the situation in the three concerned countries in the research, but in Hong Kong, it is very common for college students to use photo-copied textbooks.

Although the data cited in the paper does not support the hypothesis of secondhand market playing a significant role, it could be an explanation to the difference between Hong Kong and U. S. According to the articles I read on the topic, secondhand markets for textbooks are very popular and common in the States; however, in Hong Kong, as I experienced, very few students would sell their textbooks after use (which may be a little more common, though, among the mainland China student community in Hong Kong universities). When buying a new textbook, if the student has the expectation of recovering part of the price paid after the use of a semester, he or she probably would care less about the price, thus pulling a higher markup in price.

Of course the tuition difference also explains. A typical three year college education (in the British system, equivalent to a four-year undergraduate education in U. S.) in Hong Kong would roughly cost only that of one year in America. When paying some twenty thousand U. S. Dollars for their annual education cost, a few hundred dollars for textbooks would be marginal towards American students.

Mathematics and Economics

Having written Statistics and Economics a few days ago, I never intend to make this a series of Whatever and Economics articles. However it just happened that today I made a comparison again between economics and another subject.

I used to think that in mathematics, unlike economics, there are some facts that need not be substantiated by assumption, e.g. one plus one always equals two; while in economics, no basic fact exists. Even the very fundamental descriptions are essentially assumptions. When we say that, by receiving more dollars, Tom would buy extra ice creams, we have to assume ice cream is a normal good, i.e. the increase in income raises the consumption of ice cream for Tom. (He can actually choose to consume less if the substitution effect prevails, basing on some assumption.) Actually most economic questions require models on much more complicated and specific assumptions than this example.

Nevertheless, as I was trying to explain my opinion upon religious beliefs to a friend today, I used the example of one plus one equals two, and immediately I found that this is so not a fact. Instead, it is an assumption, one that is so widely used and applicable when explaining most, if not all, questions that require an answer to 1 + 1, that in most cases no alternative assumptions would be needed. That is to say, the behavior of consuming ice creams could be so possibly divergent when different individuals are faced with an increase in income or consumption budget, but possibly no phenomenon requires an answer to one plus one, other than two, to be sufficiently explained.

Therefore it seems that both mathematics and economics are based on assumptions that are unnecessary to be true, and probably the same to any theoretical studies.

Photo by UniqueO Mania♥

My Major: E.....xamination!

Basically, I have got six mid-terms this semester, alongside my eight grand finals (so called because the mid-terms already collectively resemble a set of finals) coming in May. This morning I have just done with Linear Algebra and there are another two coming up on this Saturday. I don't know why as an economics major I face so many exams. By now I've not yet heard of anyone (other than my economics fellow students) having as many of them as I do.

Statistics and Economics

I am taking a statistics course this semester. In today's class, we encountered some typical sample inference question like this:

Direct Mailing Company sells computers and computer parts by mail. The company claims that at least 90% of all orders are mailed within 72 hours after they are received. A recently taken sample of 150 orders showed that 129 of them were mailed within 72 hours. Do you think the company’s claim is true? Use the 2.5% significance level.

The method to solve such problems is not difficult, by setting a hypothesis test. The conclusion would look something like “we cannot say that the company’s claim is false”. Ambiguous, isn’t it? The problem is neither can we assure that the company’s claim is true. Actually even the company themselves do not know for sure the integrity of their statement, without incurring ridiculously large costs. It is all theoretical, only depending on what model you believe would be suitable to the particular situation.

In a recent blog post by Greg Mankiw, Are fiscal multipliers now big or small, he pointed out Richard Clarida's and Christy Romer's different conclusions about the current fiscal multiplier in the economy, also citing his own argument previously made. He immediately admits,

that all of these arguments--Clarida's, Romer's, and mine--are essentially theoretical. I don't know of much empirical work on state-dependent fiscal multipliers to establish convincingly which side of this debate is correct.

Again it is a question of what kind of model and intuition are being applied, or chosen, in constituting the argument. We cannot say which hypothesis is correct and which is not.

This is some similarity I found in these two subjects. Not a big statistics fan myself, I still look for the virtues that interest me in this subject. The characteristic stated above is definitely not exclusive for statistics and economics. It is shared by all academic realms which try to make use of speculative methods to explain events in the real world.

p.s.: I came across an interesting quotation today on the newly-acquired mathematical economics textbook:

If you want literal realism, look at the world around you;

if you want understanding, look at the theories.

- R. Dorfman (1964)

Writing story that matters: themes, techniques and voice

These were some notes (not complete) I took down when listening to a lecture given by Susanne Gervey, a writer.

Kids read different from adults: They read and re-read and re-read.

Write very purposely. Write stories for youngsters to engage in when they choose.

“I’ve read Butterflies every year from 14. And it’s different every year.”

Mistake of many writers: TELL young people what to do.

The cave: when Susanne’s son went to survival camps (17yr old)

Why boys seek packs (of kids)? What is this pack capacity of violence? – pack behavior <> leadership, true values

Write with sole & heart.

Boy/Girls: same journey of self-discovery but different ways to explore it.

Writing a short story:

• Theme: something you care about and you are familiar with
• Characters: Never more than a few when dealing with a story of a few hundred words. The characters have to change at the end of the story.
• Opening: Start with immediate emotional engagement
• Ending: Don’t look for a trick, but find a satisfactory answer to the question raised in the story
• Descriptions are there for a purpose. Do not use verbose descriptions that serve nothing.

Telling a story:

• Love your story.
• Believe in it and have courage.
• Don’t think about the audience.

Trimming down the story (for length requirement):

• Cut the plot