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Thursday, July 30, 2009

Ban Teachers from PowerPoint!

Wow, this is probably the most creative pitch I've heard for education reform. The Chronicle for Higher Education reports that students found PowerPoint to be the easiest, dullest and most forgettable teaching method.

It's unsurprising, really. I've dozed off at many of those bullet point presentations (and I'm sure you have too). And the worst is actually when professors even read the text for you like you're some sort of stupid. People can read faster than you say things, you know. It's a sign of laziness, which in turn breeds lazy students, who get used to being spoon fed.

Ppt is evil, according to Edward Tufte. "Power corrupts. PowerPoint corrupts absolutely."

Thanks to Freakonomics for the pointer.

Monday, July 27, 2009

Karma Kitchen

I simply can't wait to try this. And it's right near where I live.
At a time when everybody’s looking for good dining deals, Karma Kitchen’s one-page menu is a big attraction. It changes almost every week, but the prices don’t: There aren’t any.

Instead of a bill, diners receive a note explaining that their meal is a gift from a previous patron. The only request: Leave what you will to cover the next person’s meal.

Here's the Washingtonian article. A restaurant run entirely on the spirit of generosity. Even the servers are volunteers.

I wonder how long this experiment can last. This is a great example of how trust reduces transaction costs.

Sunday, July 26, 2009

A Microfinance Experiment in Manila - the newest paper is out

I was actually fortunate to personally meet one of the authors Dean Karlan from Yale a few months ago when he presented the initial results at CGD. Mostly he was amused at how we called informal lenders "bombays" and that we referred to the practice as "5-6." You can access the paper here.

The effects are diffuse, heterogeneous, and surprising. Although there is some evidence that profits increase, the mechanism seems to be that businesses shrink by shedding unproductive workers. Overall, borrowing households substitute away from labor (in both family and outside businesses), and into education. We also find substitution away from formal insurance, along with increases in access to informal risk-sharing mechanisms. Our treatment effects are stronger for groups that are not typically targeted by microlenders: male and higher-income entrepreneurs. In all, our results suggest that microcredit works broadly through risk management and investment at the household level, rather than directly through the targeted businesses.

I defer to the wisdom of CGD research fellow David Roodman for an in depth analysis of the paper (but of course with comments from "CGD in-house Manilan Paolo Abarcar"). To be brief, I find the results a bit puzzling: Particularly that male borrowers are found to be more profitable than females and also that businesses substitute away from household labor when getting access to microfinance. The results are weak (and perhaps even spurious). Plus I find the lack of convincing explanation as to how such results occur to be problematic. In the end, such is the weakness of most RCT experiments: we are able to know what "works" but just not why it "works". We are able to determine scientifically the effects of microcredit, just not the reasons why it has those effects.

For further reading, the economist recently put out a nice short article summarizing what we know about microfinance. The verdict: despite the rockstar status of microfinance owing largely to Nobel Prize winner Mohammad Yunus, economists have found incredibly little evidence on its effectiveness in reducing pov

The New Development Economics: We Shall Experiment

"A new kind of development research in recent years involves experiments: there is a “treatment group” that gets an aid intervention (such as a de-worming drug for school children), and a “control group” that does not. People are assigned randomly to the two groups, so there is no systematic difference between the two groups except the treatment. The difference in outcomes (such as school attendance by those who get deworming vs. those who do not) is a rigorous estimate of the effect of treatment. These Randomized Controlled Trials (RCTs) have been advocated by leading development economists like Esther Duflo and Abhijit Banerjee at MIT and Michael Kremer at Harvard."

That's Bill Easterly on his blog, talking about the latest craze in development economics: the use of RCTs to evaluate development programs. The method and critique of it is a must read for any aspiring researcher who wants to work in development. It is said that making use of an RCT for a paper is an almost sure fire way to get published. To what extent this incentive is good for the field is up for debate.

To non-economists, let me give an example to illustrate. To measure the effect, say of a tutoring program, an inexperienced researcher would compare how tutored students fare on a standardized test versus non-tutored students. For example, on the average, they score 20 points better. The 20 points will be an overstated benefit of the tutoring program because kids who select into the program, naturally or by mandate, might be the more talented, genetically endowed. Therefore, part (or even the whole) of the 20 point gain is not due to the program itself but simply to selection (the mere fact that people who opt into the program are the more talented ones gives them a better score). We call this selection bias. Randomization is the best technique out there right now to remove selection bias so that we can have a true and scientific estimate of the program's effect. It mimics clinical trials done by medical researchers.

I would love to do RCTs in the Philippines if circumstances permit. To the extent that GK allows me, I want to measure the true effect of providing housing on development outcomes - nobody has ever written about that. That would be a wonderful paper.

Brain Drain? Think Again

What’s the top exporter of nurses in the world? Just by looking at this chart, one can never tell. According to estimates, there are around 5000-8000 nurses that leave the Philippines every year – the most of any country in the world. If anything, we should expect to find the brain drain here. Data however shows even a hint of its presence is lacking.

In fact, the reverse might be occurring. The last few years have seen a spike in the number of nurses who went abroad to the US and UK. And yet, Filipinos, who would never have educated themselves if not for the option to migrate, are enrolling into nursing schools in huge numbers. As a result, we have almost twice as many nurses per capita as developed Greece, thrice as many as that of our neighbor Malaysia. We are producing the most number of nurses per capita among all other countries in our income group.

But still experts are quick to admonish the migration of nurses as a drain in the country’s human capital, which, they point out, have grave consequences. Former Secretary of the Department of Health, Dr. Jaime Galvez-Tan, declares it a “brain hemorrhage.” Lack of qualified healthcare workers due to the exodus, for example, is blamed for the failure to adequately service rural posts.

But even if there was a shortage of health care workers due to the migration of nurses, just because this occurs in tandem with a boy in rural Mindanao not getting proper healthcare does not necessarily mean it causes it. In the same way that rain occurring at the same time someone dies does not demonstrate a clear cause. All bright students of statistics would know that correlation is not causation. The poor healthcare system in urban and rural areas might actually be the one that is driving away the workforce. Or a third factor, such as poor pay incentives that nudge people to migrate and cause rural hospitals to be understaffed. Whatever it is, the relationship is ambiguous. And we should hesitate in calling out migration as the easy culprit.

Meanwhile, let me talk about what is crystal clear. A nurse who moves from Manila to the US earns thrice as much, immediately, even when adjusting for the cost of living. I am astonished how this tremendous gain to migration is often overlooked, or if not, is depicted as a saddening truth.

People are not lost in any sense when they move overseas. People cannot be "drained," like natural resources are. Migrants are human beings with hopes and desires. Their fulfillment in the US or elsewhere is a beautiful thing. Nurses freely choose to migrate and continue to do so in huge numbers. They have reason to value it. Now tell me, how is this not development?