Thursday, August 30, 2012

Bad Incentives in Academia

It's really tough to incentivize the correct amount of "general research." This is research that advances technology or humanity in important ways but cannot be easily monetized because once it is known, "anyone" can apply it. Thus, there little incentive to do it since people can free-ride on others' hard work. Patents don't usually help because there is usually no product to protect. Prizes don't usually help because it's really hard to know the value of research and thus, what is the optimal prize amount. Since prizes and patents don't usually help, most general research is done in universities or governments using government funding or university money (and you thought Universities paid Professors to teach!). Sometimes it's even hard to determine after the fact whether research is important or valuable.

Because of this, academia has settled on using citations as a proxy for importance. The more papers written and citations received, the more important one's research is perceived to be. The idea is that you are doing a lot of work if you publish a lot of papers (or more papers in better journals), and that if lots of people have cited particular papers, those papers must have been important.

Tuesday, August 14, 2012

I've Been Out-Blogged

I was going to write up some more blog posts about the health care decision and the impact of the Affordable Care Act/Obamacare, but over the last month or so, John Cochrane has been writing some fantastic posts that pretty much sums up how I feel, too. So I didn't feel a need to duplicate the work he's already done. Instead, you should read the linked posts! Here is what Cochrane said:

1. On June 28th: "I think the court did the right thing....the mandate was never the weakest part of this law as a matter of economics....We should not rely on the court to determine economic policy or write laws."

2.  On June 30th: "There is in fact a huge difference between a tax on people without health insurance and a mandate enforced with a penalty."

3. On July 12th: On health care versus health insurance, competition and the price system, and alternatives to the ACA. In particular:
Health care is a complex service, in which each person’s needs are blurry, and the line between “need” and “want” blurrier still....If we don’t ration by price, we will ration directly....Where are the health-care equivalents of Southwest Airlines, Wal-Mart, and Apple -- innovating, dramatically lowering costs and bringing everyday low prices to health care? They have been kept out of the market by anti-competitive regulation....Insurance should be insurance, reserved for unpredictable and catastrophic expenses.

Cochrane's written up a bunch of quality posts lately, including Myths and Facts About the Gold StandardJust How Bad is the Economy?, and Subsidies for Economists?

In fact, you should just add Cochrane's Blog to your feed.