Perhaps the biggest talking point the past few weeks — certainly in the world of technology — has been the terribly sad news about Steve Jobs. I have never been an Apple person — we’re talking somebody who has never even owned an iPod — but I was surprised by how much his passing affected me. He may not have been a philanthropist or, by all accounts, always a great person to work for, but here was someone who had the vision to think up beautiful and innovative products that people just loved. It’s testament to him that he is considered a visionary despite not inventing anything outright — not the personal computer, the MP3 player, not even the tablet computer — because, instead, he looked at them and made them immeasurably better. Ryan Block said an interesting thing on TWiT a couple of weeks ago — that he credited the massive public outpouring after Steve’s passing to a subconscious feeling amongst many that, because someone made things that fitted their desires so well, they felt like someone out there really understood them. That’s incredibly powerful — and maybe even true. I don’t know.

And the interesting thing is that, as I heard the awfully sad news, I was actually waiting for a phone call from his company, to tell me whether they wanted to give me a job or not.

You see — he writes, with the air of someone spilling the beans — quite a few weeks ago I put in an application to work as a Genius in one of Metro Vancouver’s four Apple Stores.

Looking back, applying to be a Genius was recklessly ambitious. I’m still a PC user, and I’ve only had my first Apple product — an iPad 2 — for a couple of months. I may have picked up a lot about iOS along the way, but it’s hard to think that 95% of a Genius’ work is anything other than fixing genuine and thorny problems with MacBooks and iMacs. The position gives two weeks of training at Apple’s headquarters in Cupertino, but even with that I’m not sure I’d be up to scratch right away.

However, it quickly became apparent that they’d consider me for the Specialist role instead — the people who do the selling and the advising and the smiling on the shop floor — which worked in my favour, because it was something I knew that I could actually do, and was almost qualified for.

Now, if I know one thing about Apple it’s that they wouldn’t look kindly on me detailing the application process on a public blog. Or at all. There was even talk of signing non-disclosure agreements, although that didn’t happen in the end. So all I’ll say is that it was fast-paced, informal and overall, actually quite enjoyable.

The process ended on a Monday and I was told that I’d hear back by that Friday, so to stay close to my email and phone. I spent the rest of the week in mild fear, constantly replaying the interviews in my mind. As the days passed I became less and less confident, with the memory of more and more silly or inopportune things I had said during the process. In the past I’ve been a ridiculous disaster in job interviews, and although I was a lot better this time round, there was still a fair bit of fail left over.

But then, at the very last minute — 6pm on Friday — I got a phone call: would I like to join the team as a part-time Specialist?

Yeah, I think I would.

Not a lot has happened since then. I’ve been to the store twice to fill out many, many forms — an oddly large number of pen-and-paper forms from a company that even scans new employees’ documents by taking an iPhone picture of them. But still, at least the forms were beautifully designed. (Oh, such forms!) The next thing is some intensive training, starting at the end of this week, and then I should start working in the store shortly thereafter. I’m not sure how well the job will suit me, but I’m really excited to give it a go.

But if I was ever unsure about whether I really wanted to work for Apple — which I was — seeing the reaction to Steve Jobs’ passing couldn’t help but put those fears to rest. After filling out forms in store last week, I spent ten minutes reading post-it notes that visitors had left with their personal tributes to Steve. They covered an entire wall of the store.

Whatever you may say about Apple, there aren’t many companies you could work for that inspire that sort of emotion in people. And that’s not nothing.

Clearly the most obvious point of discussion here is how so many reputable news outlets could unquestioningly run the ‘study’ and its results—especially since it was from an unknown company, and with a wholly unbelievable press release with phrases like “teeny bit” and without a P-value in sight. But I’ll leave that to one side for today.

My first reaction to the revelation that the study was a hoax is that it just doesn’t matter. Since I posted the link on Twitter and Facebook, some people have been replying to me pointing out that the results were faked, with a little bit too much apparent enjoyment. The fact is, I didn’t post it for its accuracy, nor because I wanted to vouch for its conclusions or its scientific value. I posted it, as did most people, because it’s a great headline.

“Internet Explorer users have a lower than average IQ, according to research by Consulting firm AptiQuant.”

Just great. It may not be truthful, but it was certainly truthy.

However, I don’t think most people who read it believed that Internet Explorer users had a 10-point lower IQ that users of other browsers, or that IE6 users had an average IQ of 80 (categorised as ‘borderline deficiency’). Regardless, it’s a funny sentiment, and one that was made for sharing on Facebook and Twitter. Whether it was actually true was clearly peripheral, and that’s why I don’t think it particularly matters that it was shown to be a hoax.

A reaction that I didn’t expect, however, was how a lot of people have been saying that Internet Explorer users aren’t any less intelligent, because this study was fake, or similar. This is clearly a logical non sequitur and I’m finding it hard to believe that people really do think along those lines. I’m not saying that Internet Explorer users are less intelligent, just that it prompts further research.

The methodology that AptiQuant described doesn’t actually seem to have any fundamental flaws, and could be put into practice to answer the question fairly definitively. The biggest issue would probably be the potential for self-selection to bias the results—are the kind of people that would stumble on an online IQ test likely to have a higher or lower IQ than the average, regardless of their browser?

I’ve been thinking about it, and I don’t really think that any research into this would reveal much of a statistically significant link between use of Internet Explorer and IQ. If such a link did exist, it would rely on a strong link between technological ability and overall intelligence (as I think we can agree that the more savvy you are, the less likely you are to use Internet Explorer). I don’t know if there’s any evidence covering this, but I doubt this link is strong enough, or even exists at all apart from at the far lower IQ ranges, where intelligence may be a limiting factor to technological competence. Simply put, I don’t think you have to be stupid to stick with Internet Explorer; I think you have to have a low level of technological savvy. Moreover, I would imagine that the confounding effects of people not choosing their browser themselves (think companies insisting on Internet Explorer 6, and teens switching their parents over to Firefox or Chrome) would make a statistically significant effect very unlikely.

But, as I’ve previously argued, I don’t think the question of truthfulness is the most important thing about this story. What it has undoubtedly shown is that the media will run with anything. Whether it will achieve the creator’s stated aim of raising awareness of the persistent use of 10-year-old versions of Internet Explorer, however, remains to be seen.

However, astronomy is in one sense not as observational as it first seems; it is built on principles of particle physics, which have been well tested in the laboratory. Is there a similar role for experimentation as a foundation for economic theory? The rise of experimental economics says so.

A brief history

In the 1950s, peripheral economic journals became scattered with papers describing findings from controlled laboratory experiments that had more in common with psychology, but whose results were being used to appraise economic theory. As this type of research became increasingly prevalent, it produced more and more surprising results that often directly contradicted well-established theory, and were thus taken with more than a pinch of salt. However, the exponential rise of the field became a trend in the following decades. Nowadays, a large proportion of published economics papers report or refer to experimental findings, and experimentation is generally accepted as a valuable source of information in the discipline. In 2002, Vernon Smith and Daniel Kahneman won the Nobel Prize “for having established laboratory experiments as a tool in empirical economic analysis”, which is perhaps the clearest sign of the field’s coming of age.

Experimental economics’ primary medium is the laboratory experiment. These have become more sophisticated over time, and nowadays usually involve subjects using computers to complete tasks and interact with other subjects. The most unique feature of economic experiments is that subjects are typically paid according to the payoffs they earn within the experiment, so that they are incentivised to act as they would in a freely-occurring situation.

What has it taught us?

Much early experimental work focused on the idea of creating experiments that replicate real-world markets, with buyers, sellers and transactions. Vernon Smith was the pioneer of this use of experiments; using the principle of ‘induced values’ to gain control over subjects’ preferences, he found that the prices and quantities converged on the levels that a model of perfect competition would predict, despite almost all of its assumptions not holding. Because of the accuracy with which in-experiment markets can predict outcomes of those in the real world, experiments are often used as a ‘wind tunnel’ for new market designs. They have particularly been used in this sense to test various auction mechanisms, the results of which have often fed into the design of government auctions for telecommunications licences, emissions permits and more.

The most common use of experiments in economics is to test pre-existing theories, similarly to how Smith’s experiments tested models of competitive equilibrium. Not all results have been as complementary to the theory as his, however. Results from individual decision making experiments can reject many of the assumptions made by standard decision and preference models, insofar as they are accurate. For example, ‘preference reversal’ is a puzzling yet robust finding that, when given a choice between two gambles, subjects very often choose the safer gamble, but place a higher value on the riskier one when asked to value the same gambles separately. Depending on interpretation, this example challenges standard assumptions of the procedure-invariance of preferences, and of their transitivity and consistency. Similarly challenging are ‘dictator’ and ‘ultimatum’ games, where subjects are often found to freely give money away to other players even when there is no game-theoretic explanation of why they might do so. Results from these types of experiment contest the assumption that preferences are solely self-regarding, and hint at the importance of concepts like altruism.

Lab experiments are also a natural place to examine strategic interactions between multiple players. A particular focus, perhaps because of its clear policy implications, has been on public goods and testing the standard economic theory that nobody would voluntarily contribute to their provision, because of the ‘free-rider’ problem. Experiments have revealed, however, that concepts of altruism and reciprocity can sustain high levels of contribution. More broadly, the lab is often used to test how outcomes of strategic interactions compare to game theoretic predictions, with results suggesting that equilibrium concepts do not fully capture the outcomes of real-world interactions.

These kind of observations are of great relevance outside of the lab. For example, in analysing the effect of a policy change, welfare economics makes many of the assumptions that experimental results challenge. Knowledge of observed biases, furthered through experimentation, can and should be used to predict how individuals and groups will actually be affected by a policy change. Use of behaviour observed in experiments has also recently been used to argue for certain political approaches; in ‘Nudge’, Richard Thaler and Cass Sunstein advocate ‘libertarian paternalism’ – methods of influencing decisions without removing choice – which has its foundations in behavioural observations in the lab, and that has gained traction with David Cameron and Barack Obama.

Are experiments realistic?

As a new and fast-rising field, experimental economics has faced a great deal of scrutiny, and is no stranger to criticism. Perhaps the most frequent critique is that economic experiments are simply ‘unrealistic’. It is natural to wonder whether observation of students sitting at computers playing abstract games can really make predictions about what might happen in a complex, dynamic marketplace. However, experiments are by their very nature abstractions of reality, so to analyse this criticism it is important to look at specific realism concerns and whether they cause the lab to be truly unrealistic, and thus unrepresentative, or whether they are just evidence of necessary simplification.

For some, the relatively modest payoffs typically used cause the lack of realism, if they are not high enough to encourage subjects to think through their behaviour as thoroughly as they would otherwise. This is not the reason why outcome-dependent incentives are used in experimental economics, however. Instead, they are used to create the some constraints and forces that subjects would feel in real world situations, and to ensure all subjects put the same value on outcomes. In this sense, experiments are designed to create situations that are no less realistic than the natural scenarios they model, only simpler. Even if increasing the stakes was argued to make an experiment more realistic, extensive testing has shown that doing so, sometimes hugely, does not drastically alter behaviour.

Experiments could also be said to be unrealistic because they typically only involve students, whose decisions may not be representative of the wider population, limiting the predictive power of experiments. However, in theory-testing, this should not matter, because the predictions of economic models rarely depend on demographic factors. In others, such as decision-making experiments, this argument holds more weight. However, the only inherent reason why lab experiments rely on students is convenience; there is no reason why a wider subject pool could not be used, although this is often more easily achieved through field testing.

Field testing is perhaps the most obvious reaction to criticisms of experimental realism. This approach, championed primarily by John A. List, applies a lab-like methodology to naturally-occurring environments. Field experiments inherently sacrifice control to gain greater realism, but, as previously argued, there is little to suggest that lab experiments inherently lack realism. Considering that a lab experiment could offer incentives just as large as in the field, and use subject pools that are just as diverse, it is unclear what true benefit field testing brings. As James Heckman and Armin Falk argue in an article for Science, the real quest should not be for an abstract concept of ‘realism’ but for the best way to isolate the causal effect and most effectively control for the others.

The future

Experimental economics is becoming an integral part of research in a range of areas within economics, and rightly so. As it becomes more widely accepted, it is important to think of it as less of a niche sub-field and more of a tool that, when applied appropriately and carefully, can shed light on the gulf between economic theory and empirical reality in ways that were previously impossible. Whilst studying how individuals and groups should act has been historically integral to economics, it would be foolish to suggest that a study of how they actually act is not just as important.

There are, however, some unresolved criticisms of the field. Inherent to experimentation are questions of whether issues like self-selection bias and the Hawthorne effect jeopardise results. Neither is generally considered the major problem that they can be in other disciplines, and in some cases they can even be leveraged for the experimenter’s means, but despite this they are persistent issues that any experimenter must consider.

There is also much criticism that is less credible. Catherine Eckel and Herbert Gintis argue, in a paper tellingly entitled “Blaming the Messenger”, that some criticism is symptom of little more than a lack of willingness to accept the often stark implications that experimental findings have for traditional economic theory. That this is the case is unsurprising given the meteoric rise of the field within a discipline that is more familiar with steady development. To me, the view that experimental settings are unrealistic fits all too easily into this category of insincere criticism.

It is often forgotten that experimental results are not inherently contrarian; experiments tend to give theory its ‘best shot’ and sometimes produce results showing that a theory has greater predictive power than was expected. Regardless, it is in economists’ best interests to remain open-minded about developments in experimentation and to focus on a dialogue about genuine concerns with experimental methodology. In this way, problems can be addressed and methods refined so that experimentation can be used in as many areas of economics as it has the true potential to benefit. Experimental economics can become a significant part of the future of economics – as long as economists let it.

Written for Nottingham Economic Review
and crossposted at http://neronline.co.uk/?p=693.

What it was all about was ‘preference reversal’. The good news is, this is actually a very simple concept to explain, and I would argue, a very interesting one, even if you don’t care to familiarise yourself with the psychological or economic theory behind it. It can best be described as a tendency to pick one uncertain outcome (in my experiment, called a gamble) over another, but then place a higher value on the second one, when asked what they are worth. Needless to say, it doesn’t seem to make a lot of sense, regardless of whether you’re an economist.

I’ve split this up into sections so you only have to read the bits you’re interested in. If you just want a summary of what it’s all about, read ‘Origins’, ‘Where my research fits in’ and ‘My experiment’. If you want the whole picture, read it all until ‘Colophon’. If you’re also interested in an explanation and mini-review of the technologies I used, try ‘Colophon’ as well.

Origins

Preference reversal was first ‘discovered’ — or, observed — by two American psychologists called Paul Slovic and Sarah Lichtenstein in the early seventies. They did so by offering subjects (it’s a harsh word, you can pretend I’m using ‘people’ instead, if you want) a choice between two bets — a ‘P-bet’, one with a high chance of winning a small amount of money, and a ‘$-bet’, one with a low chance of winning a large amount of money — and then asked them to value each bet individually. They found a very strong tendency for subjects to choose the P-bet but value the $-bet higher. Because around two thirds of subjects always did this, and barely any made the opposite reversal, they argued that this represented a systematic effect, and not just misunderstandings and a slight randomness of expression (which should cause reversals in both directions equally).

Although Slovic and Lichtenstein replicated their results several times after their first foray into the topic (including, quite wonderfully, in a Las Vegas casino), psychologists didn’t spend much time on it throughout the seventies, and to an extent, haven’t ever since. However, in 1979 two economists named David Grether and Charlie Plott picked up on the research and argued for its relevance to economics. Their argument was based around the fact that, in economics, we assume that people have consistent ‘preferences’ in mind over anything you could offer them. And, very simply, it isn’t hard to see how preferring one thing but valuing another more highly means that preferences appear not to be consistent. Whilst this is fairly inconsequential to the integrity of psychologists’ prior work (their response was mostly acceptance that preferences are not independent of the process used to find them out), it would have massive implications for a whole range of areas within economics due to a reliance assumption-heavy preference theory:

“It suggests that no optimization principles of any sort lie behind even the simplest of human choices and that the uniformities in human choice behavior which lie behind market behavior may result from principles which are of a completely different sort from those generally accepted.”

Grether and Plott, however, were quite sure that preference reversal was not applicable to economics, and were very open in their intentions to prove this in their paper. No such luck, however:

“Needless to say the results we obtained were not those expected when we initiated this study…The preference reversal phenomenon which is inconsistent with the traditional statement of preference theory remains.”

Explanations

Grether and Plott started an interesting trend in this literature: making consistent and aggressive attempts to prove it was a load of rubbish. Lakatos would call it a legitimate defence of hard core assumptions, but I’m a bit more sceptical of its sincerity. I can’t help but feel this started with their slightly baseless suggestion that initial research was invalid purely because it was done by psychologists. To be fair, they raised a lot of legitimate concerns as well, although they all turned out not to affect the result. This pattern continued throughout the eighties, and to an extent to the current day, with numerous papers picking faults in past experimental technicalities, which they argued invalidated preference reversal findings. The phenomenon was lessened slightly when subjects were offered greater amounts of money, but it was never truly explained away with this line of reasoning.

Inevitably, then, the focus had to switch to accepting the true existence of preference reversal and proposing reasons why it occurs, and ideally ones that aren’t too damaging to the well-established assumptions about preference. These mainly fall into two distinct categories.

• Preferences are stable but not transitive. [Transitivity is a standard assumption of preference theory and states that, if you prefer apples to bananas, and prefer bananas to coconuts, you must prefer apples to coconuts.] One account of why preferences could violate this but still be stable and well-defined is ‘regret theory’, which says that when you consider gambles you put particular importance on the potential regret of what might have been, if you lose. I’m not going to explain why here. Preferences being intransitive has some implications for the theory, but this theory crucially maintains the assumption that preferences are stable, which would be far more damaging to reject.
• Preferences are stable but not fully reflected in decisions. Decisions are constructed based on the type of decision being made, rather than being pure expressions of underlying preferences. Other branches of this state that decisions are subject to a degree of imprecision and ‘error’, which could make it look like preferences are being reversed. This isn’t too damaging to preference theory, as it implies that preferences could fulfill all the assumptions, although if preferences are not perfectly expressed, it does raise questions about the relevance of studying preferences at all (as opposed to choices, an approach of Paul Samuelson‘s).

I think it’s most likely the explanation is a combination of both of these. Another explanation is that preferences are not stable but this scares economists a bit so there hasn’t been much work into it. All the time evidence can justify the two reasons above, there doesn’t need to be, I suppose.

Where my research fits in

One thing I became increasingly aware of when reading about preference reversal in search of a dissertation topic was that the sort of ‘errors’ that the second explanation refers to were taken as given, with few questions being asked about what type of person was more likely to make them. In my research proposal I wondered out loud whether people of lower cognitive ability were more likely to show preference reversal, and, secondarily, whether this was because they made more errors in decision tasks. Economists talk of ‘bounded rationality’ — that people are as rational as they are able to be — so, does cognitive ability limit people’s ability to hold consistent preferences, to express them, or both?

This seems like a fairly relevant question to ask, and I hope you feel the same, but I couldn’t find a single mention of it in the preference reversal literature (which consists of hundreds of papers). Meanwhile, in similar fields of behavioural economics, the effects of cognitive ability has been fairly well researched; for example, two papers asking whether people of higher cognitive ability are less averse to risk have been particularly helpful for me in working out my methodology.

My experiment

In economics, experiments are most usually carried out in ‘labs’: rooms where subjects sit in front of a computer and complete tasks in complete isolation from other subjects. In some, the computers are networked so that subjects interact with others in the room, albeit anonymously. Laboratory testing mostly takes place in the US, but in the UK, it’s almost exclusively at the Universities of Nottingham, East Anglia and York. Students can spend an hour or so taking part and earn up to around £10, depending on their performance in the tasks. They’re like medical or psychological experiments, although perhaps not quite as invasive!

This is where most existing preference reversal research has taken place, but unfortunately as a lowly undergraduate, the expense involved meant it was sadly beyond my means. Instead I came up with the idea of running an online experiment — almost like a survey — that friends and family could complete in their own time, as a favour to me, instead of expecting to earn money. Therein would lie the biggest criticism were this publishable research — the lack of monetary payoffs means people have no incentive to make decisions thoughtfully. However, my feeling is that people can ‘imagine’ payoffs almost as well as if they were actually at stake, and especially in this case, where they’re doing so to help me out with my schoolwork. At an academic level this reasoning would not be accepted, but as an undergraduate dissertation, it really doesn’t matter.

So, if you recall, you were given 6 sets of gambles and asked to choose between 2 each time (making 12 gambles in total), and then asked to value 12 gambles. In both tasks these 12 gambles were the same, although shown to you in a random order so the whole thing wasn’t too obvious. You were then asked 12 fairly abstract questions which formed the ‘cognitive ability’ test — a kind of IQ test-lite. What I was then able to do is compare your choices and valuations and calculate in how many of the six sets you reversed your preferences, and in how many your preferences were consistent. I was then able to compare this with your score on the cognitive test to see whether the two were linked. For a summary of results, see the next section.

Testing for intelligence is, of course, a massive can of worms and it should be obvious that no 12-question test conducted in uncontrolled conditions could ever be a good assessment of it. This may even be the biggest criticism of my paper, and would certainly render it useless in psychological circles. All of that notwithstanding, I feel justified in saying that, within the significant constraints of my methodology, the test was a good proxy variable for intelligence since it covered four different types of reasoning, and was shown in my results to be neither too easy nor too hard.

Back to the gambles. You may remember one set being fairly strange (see below). In this case, as one gamble was better than the other in every way, if you valued the worse one (gamble A) higher than the better one (gamble B) I took this to be a simple ‘error’ so I could investigate whether this caused other preference reversals, and whether people with lower cognitive ability were more likely to make more errors. Reassuringly, no one chose the worse gamble (although 5 people strangely said they were indifferent), but 14 people valued it more highly (d’oh?).

Results

In total I ended up with 103 complete responses, which blew me away, especially since I wasn’t convinced that I would break 30 to begin with. Interestingly, there were an additional 51 responses that were started but not finished. Entirely predictably, most people decided to call it a day upon reading the instructions for the valuation tasks (I spent ages trying to make it as simple as possible, honest!) But that’s okay.

Before I could test my hypothesis I needed to be sure that my preference reversal results were in line with most other research in the field. Sure enough, of the 515 pairs of decisions I had to analyse, 44% were standard preference reversals, and only 3% were the opposite reversal. In other words, of everyone who chose the P gamble, 80% went on to value the $ gamble higher. Of everyone who chose the $ gamble, only 4% valued the P gamble higher. Another 51% were consistent decisions, and the remaining 2% were indifferent choices that I was unable to analyse.

Confident that I had achieved meaningful results, I could turn to my question about whether cognitive ability affects preference reversal. It turns out that there is something to it. On average, people of lower cognitive ability were not more likely to make preference reversals in a binary sense, but, when they did, made valuations that disagreed with their choices by vastly larger amounts (in both absolute and relative terms). When high cognitive ability people reversed, they did so by 26%; low cognitive ability subjects, however, reversed by 54%.

The supposed link between cognitive ability and error-making was also found: earning one more point on the cognitive test made you 4% less likely to make the ‘error’ described above.

This point brings me up to the current stage in my research. My conclusion is that people of lower cognitive ability make more drastic preference reversals, which is partially (but only partially) caused by them being more likely to make simple errors on the valuation tasks. This is a fairly simple conclusion, and I’m not sure if I’ll be able to extend it in another ways; this’ll depend on whether I have any brainwaves, or whether my supervisor has any useful suggestions. He’s a bit of an expert on preference reversal, so there’s a good chance he will.

Talking to people after the experiment, some enjoyed it, almost treating it as brain training, whilst some just got confused and worried that they were screwing up my results. A lot of people have said that they thought economics was all stocks and shares and that they didn’t know it could be as interesting as this, which is a reaction that I like. Feel free to let me know what you thought, in the comments section below.

Colophon

I had a slightly worrying amount of fun setting up this experiment. At first I considered hosting it on a simple survey platform like Surveymonkey or the spreadsheet form entry in Google Documents, but they didn’t offer as much customisation as I felt I needed (and the University’s Ethics Committee has an inexplicable issue with storing data on external providers like these). Right in the nick of time I found LimeSurvey, an open-source survey system that runs on PHP and MySQL, and ran it on hosting kindly provided to me by my good friend Chris Radford. Although LimeSurvey is antiquated and messy in parts, its open-source nature meant I was able to tinker with the code to add things like time limits for the cognitive questions, and a system that tracks how long the subject spends on each question (the data from which I haven’t actually used yet). After working with it for quite a while I realised that it’s actually great software, and with a bit of polishing (and a better support community; wow, don’t get me started on that) could become a popular and viable survey platform.

The pie charts that represented the gambles were generated dynamically by Google Charts API (yeah, Google do everything), which was a godsend as it meant that I didn’t need to make 18 different charts in Excel then convert, upload and link each one.

I am also managing the 26 papers that I have referenced so far in my written work using software called Mendeley, which allows me to categories the papers as I wish for easy access, and then to export the citations to Word without having to format them myself. Another piece of great software, and one that I think a lot of research students could benefit from.

I advertised my experiment on Facebook and Twitter initially, as well as with word-of-mouth, and received a surprisingly high number of responses straight away. It’s kind of great to know that people are willing to give up 15-20 minutes of their time to help you out. At one point I decided to tweet the link at a few relevant economists on Twitter and ask that they retweet it to their followers. Tim Harford, author of the Undercover Economist amongst other things, very kindly obliged and shared the link to his 14,000 followers, which I would estimate contributed around 35-45 responses. Lots of people who saw that retweeted it themselves, which I really didn’t expect, and just shows the power of Twitter, I think.

When I ended the experiment (about 3 weeks after it started), I exported the LimeSurvey data straight to Microsoft Excel, and did probably the most difficult bit of the whole process — devising a series of formulae to calculate the type of reversal for each set, the subject’s average reversal statistics, as well as their score on the cognitive test. Not quite as easy as it sounds, but to Excel’s credit I definitely couldn’t have done it with any other software package.

Finally, I needed some statistical software to do the serious number crunching — including descriptive statistics, regressions and nonparametric tests. I have used EViews before, which is the defacto econometrics software of the Economics department at Nottingham, but it isn’t free and I didn’t want to do all my data analysis in the library, so I instead found Gretl, which is a very impressive open source econometrics package. In many ways it is actually more user-friendly than EViews, and in areas that is isn’t — well, you can’t argue with the price.

That’s it! Thanks for reading.

In the same vein, bassist and lyricist Nicky Wire described the album as “one last shot at mass communication”. More than a media-friendly soundbite, this was actually a promising hint to the fans that the band are doing what they do best — living on the edge. The Manics have never been a band that exuded longevity: they famously claimed that their debut album, Generation Terrorists, would be their last, came close to breaking up after the disappearance of Richey Edwards and seemed close to the end after the failure of Know Your Enemy and the 3-year break and cash-in-on-past-success Greatest Hits packages that ensued. The key point is that neither do they suit it; their worst material comes from periods when the band was stable and comfortable; Wire’s statement seems to reassure fans that the band have regained their immediacy.

It’s not hard to see why. Journal For Plague Lovers could have represented the band reaching the end of its natural life; it featured lyrics entirely written by Edwards ‘back in the day’ and was the spiritual successor to The Holy Bible, thus carrying a real sense of a band come full circle. Instead of interpreting it this way, however, it seems the band have looked at their current place as free of that circle — refreshed, rejuvenated and perhaps down an albatross or two. This sets them up nicely to move on to do what they do best — finely-crafted arena-primed pop-rock.

And boy, have they succeeded. Not since Everything Must Go have we seen such sweeping choruses, exuberant strings and richly layered melodies. Simply put, it combines the mass appeal of that album, This Is My Truth and Send Away The Tigers and somehow manages to further it, albeit in a direction even further away from the more caustic roots that truly define the band to most fans. That said, the layers upon layers of strings, choirs and vocals help achieve the rich sounds and melodies that do define this album, and they have just about remained on the right side of creating too dense a mix — although with some tracks like ‘Some Kind of Nothingness’, it might take a few listens to realise that this is the case. James Dean Bradfield’s trademark majestic yet aggressive vocals preside over all this, adding definition to the musical chaos, and sound every bit as good as they did back in 1996.

Wire’s primary topic for discussion this time round is the social-political-economic state of our nation, including the decline of the manufacturing sector (‘All We Make Is Entertainment’), New Labour (‘Golden Platitudes’) and the online revolution (‘A Billion Balconies Facing The Sun’ and ‘Don’t Be Evil’). However, what separates it from being an ‘A Design For Life’ for the noughties is that social and political commentary is more of a means to an end this time round; the key focus is, as the title suggests, the rupture of growing up and growing old. Don’t look for innovation in these lyrical topics, but instead, look towards the revelation that Wire’s lyricism is seeming more natural than ever, and for once, never ceases to truly complement the music, without losing its sophistication. The familar esoteric, confused or downright undecipherable metaphors are still there of course, but the fans wouldn’t have it any other way. Richey certainly wouldn’t have, either.

The album is inarguably indulgent — a big bombastic, lumbering thing — but at the same time, it is clearly the one the band have been itching to make for a while; Wire’s excitement in early interviews was palpable: “it’s going to be an amazing album!” And, because anyone would say they deserved to cut loose and make an album like this, it manages to be an overtly radio-friendly collection of songs that won’t be fly-paper for pretentious mockery. If you want to know what the Manic Street Preachers’ defining characteristic is, it could just be the fact that they can achieve that small miracle.

The Leaders’ Debates have been extraordinary. To get them to talk solely on policies for 90 minutes at a time, and for people to actually watch, in their millions, is a revelation, and now the main question turns to why we’ve only just realised they were a good idea, whilst the US has been doing them for as long as they can remember. We haven’t quite got the hang of it yet though: first of all, they were often stilted, due to their restrictive structure (this was especially true of the first, and Alastair Stewart’s relentless barking of surnames made the whole thing quite surreal). Second, I think this desire of the media’s to designate a single winner for each debate (apparently Clegg in the first and Cameron in the second and third) is just silly; to assign an objective and absolute winner of such debates — especially ones containing so little actual person-to-person debate — is futile and surely only really reflects pre-existing allegiances. Clegg’s victory in the first debate doesn’t adhere to this assertion of course, but that was only because the shock of him actually being a credible politician from a credible party merely shocked everyone into submission. The third, and more obvious flaw is the emphasised focus on the leader himself that this format creates. Debates featuring other members of the potential cabinets would have been nice, but admittedly, far less interesting (for evidence, look no further than the almost ignored Chancellors’ Debate). Really, I think we all secretly lust after having a president…or more to the point, our very own little Obama.

The hung parliament talk has been blown out all proportion and then out of any sort of remaining proportion. Like, if it was originally a square, it’s now a mobius strip or something. It doesn’t help that the term “majority” is misleading; I worry how many people hear the explanation and think it means all parties will have around the same number of MPs, which would admittedly yield pandemonium. I don’t necessarily think having a hung parliament is a good thing per sé, but if it is the outcome of the nation being indecisive about who should lead this country, then it is the right one, at least until a better solution is found down the line. Unfortunately not everyone sees it this way, and the way the concept has been used and abused by the Tories, amongst others, is just something else, leading on to the fact that…

Surely the second most remarkable aspect of this election has been the unending talk of tactical voting. It must be the mark of a flawed voting system that it has proliferated so heavily, and I would hope it represents first past the post’s death knell. Between the Tories’ absurd and beguiling warnings against voting for the ‘Hung Parliament Party’ (as if they’re the only ones who can see that that’s what a vote for Labour or the Liberal Democrats self-evidently is), Ed Balls astonishing subtext that voters in Tory-Lib Dem marginal seats should vote for the Liberal Democrats and a worringly dubious yet popular website telling you exactly how to vote for a hung parliament, I honestly think all this talk is in a profoundly undemocratic spirit, and, all the time we have a FPTP system, it’s only going to be poisonous to how people think of their vote.

The Liberal Democrats pretty much got everything they could have out of this election after the first debate; there wasn’t a great need to go on after that. Instead of being mocked or dismissed as they have been for as long as I can remember, after that unprecedented surge in the polls they suddenly became taken very seriously indeed, even by Have I Got News For You. The Tory-supporting media suddenly picked up shit and threw shit as hard and as fast as they never bothered to in the past, but, thankfully for democracy as a whole, most of it missed. The surge in the opinion polls isn’t the point though; under the very system they oppose, even achieving a popular vote of their post-first debate opinion poll high wouldn’t give them many more seats than they have had in the past. With the opinion polls as they are, they’re probably going to get a similar amount of seats to the last five years. Instead, what matters is that sudden surge of credibility, which is all they could realistically hoped for. It’s not hard to foresee the real benefits being reaped in future elections: expect Lib Dem votes to increase over the years and if we were ever lucky enough to take a turn towards proportional representation, they could be a real party to lead the country. In the long run, having a true three-party system can only be good for everyone.

One of the most astute points made about the economy was actually made by Gordon Brown; that Cameron’s plans to reduce the deficit immediately were for “purely ideological” reasons. It applies to him too though; although I recently argued in favour of Brown and Clegg’s plans to delay cuts, it’s somewhere between incredibly difficult and impossible for anyone to weigh up the risks associated with making cuts now (jeopardising the recovery) or in the future (a burgeoning national debt), be it professional economists, let alone politicians, laymen or, least of all, myself. Because of this, any opinion on what to do is inherently based on ideology and predisposition: Brown doesn’t really know that making cuts tomorrow would begin a spiral into his imfamous “double dip”, and similarly Cameron doesn’t really know that the future risks of not cutting tomorrow, in terms of Britain’s place in international finance markets, would be too great. It all depends on your underlying ideological view on the size and role of the state, as did my assertion, and as will the opinion of the voters, tomorrow.

By and large, the focus has been on the right policies, although there have been some noticeable absences. It’s staggering how quickly people have stopped talking about the expenses scandal (or Expensesgate, as I’m not going to call it — as American comedian Jon Stewart put it, “you can’t add ‘gate’ to the end of a scandal! That’s our abuse of power, that’s not yours!”). Perhaps the MPs involved were right to be complacent about it after all; this adds to a lot of evidence of the shortness of our political memory, especially under the excitement of an election. Avoided, too, were higher education funding (much to the chagrin of Students Unions up and down the country) and the environment (perhaps not surprising given the focus on the economy; expect the Green Party to do comparatively well because of this, although it’ll only induce the Green vote from those who would consider giving it anyway). I too would have liked to hear more about the Digital Economy Bill, although the entire spirit of that Act seems to be for as few people as possible to hear about it. Incidentally, I think Nick Clegg provided absolutely the right response to it.

I was initially quite surprised that full-time elephant in the room Gordon Brown wasn’t replaced to allow someone else to lead the Labour Party in this election, but then I suppose he had very little to lose in the last month, and maybe all to gain. You see, when someone becomes quite that unpopular, the only way is up; no double-dip for him! Who knows, maybe his gaffes will have started to turn around and actually get people back on his side, like a bumbling but well intentioned uncle. I can almost hear the empathy: support the underdog! He’s only human! He means well! So what, he makes mistakes! Yeah, she was a bit of a bigot! But then, perhaps most people don’t think like I do. On a more serious note, though, when he’s at his best he can be far, far better than critics ever give him credit for.

What was supposed to be the election of the new media has turned out to be anything but. The debates, held on good old television, have been the driving force, leaving social media such as Twitter by the wayside. This is interesting as it reminds us of the need to challenge the assumption that new technologies will automatically change and revolutionise things like politics over time, when sometimes all we really need to do is look back at how older technologies can be used more effectively to even greater an effect.

There you go, just a few thoughts that have struck me over the last few weeks. May the best man — oops, I mean party — win.

As an ‘international student’ — not an identity I was used to — I attended a three-day induction programme with the thousand-odd other exchange or transfer students, at the start of term. This meant it was incredibly easy to meet friendly people from all over the world, many of whom I’m still in contact with, and that’s on top of the range of people you can meet in lectures and tutorials. As a friend put it, I essentially now have a network of sofas across the world at my disposal in any future travelling!

Perhaps some people are put off studying abroad by the perceived risk of struggling academically due to differences in course content abroad, but I actually found that UBC’s modules weren’t dissimilar to what was on offer back at Nottingham, clearly an advantage of studying such an international discipline as economics. I’d been warned of a heavier workload but, although friends studying different subjects did experience this, workload and difficulty within the economics department seemed to be similar to Nottingham’s. The main differences seemed to lie in perspectives, teaching style and, often, the empirical examples that professors used, but rather than making things difficult, it just made for a more interesting and horizon-expanding way to study for a while.

I had an amazing experience at UBC. Having never been to Canada before, I had no idea what to expect, but it ended up being one of the most rewarding experiences of my life so far and I think every student owes it to themselves to study abroad at one point in their degree. I would recommend UBC — and really, any other study abroad opportunity, like at Nottingham’s campus in Malaysia — to anyone.

Written for the Nottingham School of Economics’ Newsletter 2010 [PDF].

Due to both the short word limit I was given and the piece’s intended audience, this does gloss over some issues and have the air of ‘toeing the party line’. That said I stand by everything I said here about how great the overall experience was and how I’d recommend it to almost anyone.

Like so many within economics, this issue is a complex one without an objective yes or no answer, and as an economist coming to a conclusion on this issue, you are equally likely to be influenced by your views on the role of the government and the strength of free markets than actual empirics from the UK economy. However, I feel a far more important issue to consider here is a behavioural one — to what extent consumers and business leaders understand the economic situation, and how they would respond to potential policies and, perhaps more crucially, to newspaper headlines. This is far outside the realm of Classical economics, but, fortunately, more and more economists are realising the limitations of assuming economic actors are the ultra-rational ‘Homo economicus’ that possesses perfect information about everything around them.

It’s hard enough for economists to understand the current state of the economy, let alone the man on the street, wading through conflicting and confused newspaper articles about whether you should be worried by the recession and the UK’s position in the world. Because of this uncertainty, consumer and business confidence is inherently volatile at the moment. However, whilst people may not understand the economy, what they will understand is Huw Edwards describing service cuts and tax rises on the Ten O’Clock News and exaggerative articles in the papers explaining How This Will Affect You.

Strong and buoyant confidence is so crucial to the success of this recovery, and the current signs of steady improvement in this area are looking good. However, to jeopardise that important bedrock by announcing contractionary fiscal policy in this early stage of the recovery is a risk no one should be willing to take.

It is perhaps easy to see our current position as further along in the recovery than we had thought: inflation reached an annualised 3.5% in January (for which more open letters were required, this time between Mervyn King and Alistair Darling), and unemployment levels are reaching a plateau, but crucially, ceasing their upward trend. Although these statistics will not fool economists, they may fool the man on the street or the man in the suit. However, the unfortunate fact is that we still have a long way to go before we are at a stage when contractionary measures can even be considered. To put it another way: I feel the risks associated with cutting the deficit now are far greater than the risks of sustaining it for a few more years.

What I am not saying is that the engorged state of the deficit is not a problem; rather that it is one that cannot be solved today. After all, it is arguably the biggest political hot potato going into the general election; it has been thrown around ad infinitum by the parties, but held onto perhaps longest by the Conservatives, resulting in David Cameron’s frankly scary nationwide billboard campaign. But what politicians across the spectrum have forgotten to tell you is that a huge amount of their forthcoming heroic efforts to reduce the deficit will happen…well, automatically. As we rise from recession, tax receipts will revive, on the tails of increased employment and business activity, and spending on unemployment support will fall. It’s the concept of automatic stabilisers and the countercyclical nature of fiscal policy, and you learn it in A-level Economics. Some even say it will account for over half of the work required to halve the deficit by 2014.

Perhaps the key issue then, if we are not to make cuts now, is how and when to make them in the future. Policies to reduce the deficit are inevitable and indeed required, but this should be at a stage where the economy is far more stable, if not fully recovered to the trend rate of the noughties. When this point is reached, some real political and economic intelligence is needed, to devise inventive medium-run policy changes to ease our reliance on debt.

Although the Homo economicus may be indifferent to equivalent spending cuts and tax rises, it has been found in empirical studies that people respond far less to spending cuts, so work on currently bloated government expenditure is the way forward. Cuts should be canny and targeted: for example through easing the budgetary pressure borne of the state pension, by ‘extending working life’ and more actively regulating employer pensions. This is one example of less damaging cuts amongst many, but, incidentally, proposed cuts in education spending do not fall into this category: a recovered economy will be the ideal scenario for longer-run policies to improve structural conditions, and cutting education spending betrays this need.

To sum up, there are two issues to consider: ‘when’ and ‘how’. As for ‘when’, the only answer is ‘not now’. We are on the road to recovery but not yet at a stage where cuts would not be of detriment to the economy. When we are at such a stage of greater stability, the question shifts to ‘how’. Sadly, it is likely that the focus will be on short-run spending cuts and tax hikes to inch back the deficit, but if we want to reduce it without undermining the current and future state of the UK economy, targeted middle- and long-run policies are the only real solutions.

“There is no disagreement that fiscal consolidation will be necessary to put UK public finances back on a sustainable basis. But the timing of the measures should depend on the strength of the recovery.”
- Lord Skidelsky et al

But the hype, whilst being rabid and credulous, isn’t totally unjustified. The iPad’s aesthetics will be immediately familiar to any iPhone owner and all indications point to it being a beautiful device to both look at and use. Its main attraction is the stunning 9.7-inch multi-touch screen, but this is also backed up with some real hardware clout: a fast processor, storage capacity of between 16 and 64GB and impressive battery life of “up to” 10 hours of constant use. Connectivity comes in the form of Wi-Fi and 3G, although you’ll have to wait another month for a version with the latter. Apple haven’t yet released any UK prices, but you can expect to pay around £400 for the entry-level 16GB model, up to around £650 for the 64GB model with 3G.

Brand new to the device is ‘iBooks’, an application for downloading and reading e-books, although in this market the iPad may struggle to compete with dedicated e-book readers such as Amazon’s Kindle, which offer greater readability through E Ink screens and vastly superior battery life. The iPad will also feature all the iPhone’s functionality short of actually being able to make calls: iTunes, the Safari web browser, email, calendar, photos, YouTube and more, all of which have been upgraded for the larger screen. But before you rush out and spend your next loan instalment on one, bear this in mind: the iPad is not a laptop. It isn’t even a netbook. For example, although the storage capacity sounds impressive, it pales in insignificance next to most netbooks, and its functionality will be limited to the applications Apple authorise for its (admittedly expansive) App Store. You can too say goodbye to multitasking and Flash, features that computer users have enjoyed for years. However, the iPad does have a lot of potential if you consider it the new concept that it is: an accessible and simple entertainment device, and one that is wholly more fun to use than a netbook.

However, I’m sure much of this won’t matter to some; put simply, the poser potential is enormous. It isn’t hard to imagine one of these being lovingly extracted in university libraries up and down the country, to a self-satisfied smile and adoring glances, a fate the iPhone itself too often suffered upon its release two years ago.

Apple are marketing the iPad as “magical and revolutionary”, Stephen Fry labelled it a “game-changer”, Charlie Brooker referred to it as an “oblong that lights up”, and you’ll be able to make up your own mind when it hits the UK next month.

Written for Impact Magazine — Issue 202, March 2010.

Well, I’m back at home in the UK after flying back from Canada and away from so many amazing things in my life on Tuesday. Of course it was great to be back in the motherland for a nice family Christmas and hopefully seeing of some friends soon, but at the same time I’ve been thinking a lot about the last four months. And, all sickly hyperbole aside, they were the four best months of my life, hands down. More so than at any other point in my life, I was consistently happy, did some incredible things and met some amazing people who I hope I can stay in contact with for much time to come. I won’t even go into how much I’ve changed through the time there, whether coming to terms with shortcomings or realising that some weren’t there in the first place. And now I’m at home, again sitting in my cluttered room; nothing has changed, and I occasionally avoid the sense that the last four months could have been a dream. Fortunately I’m wearing a hand-knitted toque that says they weren’t.

Without wanting to make this an even cheesier blog entry, I’ve learnt a lot during my time at UBC, including the following. Some of these are in-jokes, you might just be able to tell which…

1. I’ve met people from all over the world and I have loved how quickly coming from a place thousands of miles from someone else dissipates into complete irrelevance. It really does means nothing (besides facilitating easy conversation about accents, which is admittedly hilarious).
2. Helmets are good protection for walking.
3. Straight from the Uncomfortable Truths Well, my heart really isn’t in economics, or at least as it has been taught to me. However I am still able to find things within it that inspire me, so for the next year and a half of my life I am fine with sticking with it. I’ve come to realise that it’s just not in my nature to be able to focus on a single thing and be good at it; I need this strange ‘jack of all trades, master of none’ existence.
4. Someone, somewhere pronounces my name “Mork.”
5. Breakfast can be the best meal of the day. Nom.
6. I “have an accent.”
7. Luck is all…I’ve had such a great time because I fairly coincidentally met some fantastic people with whom I was able to have a fantastic four months. It all started when I bumped into Max, who I’d met once or twice in Nottingham, and who invited me to the pub. Without that, who knows what could have happened? Some others were inevitably not so lucky and found the whole thing so much harder. I didn’t reinvent myself, approach life differently or anything else to have been so fortunate: it’s just luck. (Mentioning this was designed to be of comfort to nobody.)
8. Skiing is amazing fun. It’s been less than a week since I went last (night skiing at Grouse Mountain on my last night in Vancouver) and I’m already desperate to take to the slopes again.
9. Halloween isn’t such a useless holiday after all.
10. Phrases like “taking the piss” and using “well” as in “well good” confuse the hell out of Canadians. As does, frankly, a British accent in general. And don’t even think about using the word “queue.”
11. However…Canadians are Americans but with common sense. It’s true.

I’ve been asked a few times, and I’m sure will be asked many more times to come, whether I’d recommend doing a study exchange, and you can probably imagine my answer. Although I struggled quite a lot with the academic side of being at UBC (in some cases, for reasons I still can’t understand), everything apart from academia made studying abroad the most incredible experience, which is why I will heartily recommend it to anyone. Nottingham just isn’t going to compare, but that’s not wholly its fault. If you’re wondering why, in that case, I didn’t stay longer, I tried (and tried, and tried, and tried) but certain parties at Nottingham just weren’t willing to help me make it happen, which only adds to my disillusionment…more on this later, no doubt. I’ve sent and received some of the most depressing emails in my life over the last couple of months. But now that I know that I’m here to stay, I’m under no illusions that getting into a routine in the next few months is going to be difficult, but for the moment it’s still really nice to be home.

To wrap up, it has just struck me that this will be my last post of the decade, if you choose to consider this the end of a decade, which for the purposes of this paragraph, I will. It’s been a great year in which I gradually made the volatile transition from freckly angst-machine to relatively coherent adult, realised who my actual friends were and then went and had the time of my bloody life in Canada, as this blog has explained at length. Meanwhile, Gary Glitter, Kanye West and Tiger Woods made twats of themselves, Michael Jackson ceased to do so, Obamania overtook the world (as did H1N1, mind you) and Twitter became the official replacement for actual communication.

Happy new year everybody!