Tuesday, May 29, 2012

Why is Facebook's IPO called a failure?

So Facebook's share price closed about 15% lower than what it was offered at. Google's share price closed about 15% higher than what it was offered at. Yet while Google was business as usual, facebook is considered a monumental flop (Ok facebook has dropped more since then) but still I find it odd that IPOs are presumed to be underpriced, when it seems a more reasonable presumption is that if markets were efficient, IPO mispricings should be normally distributed around around zero.

Friday, May 25, 2012

meeting bo xilai

All the news about the downfall of (corrupt?) Chinese reformer Bo Xilai has reminded me of when I gave him a tour as an undergraduate tour guide 13 years ago. Even then he was an up and coming reformist mayor of Dalian, and I felt really bad when I was the only representative of MIT to greet his entourage of dozens of people when he came to visit. I felt even worse giving my standard tour in bad Chinese (I gave them the option of the english version or the bad chinese version). The only upside was that I was able to answer his question about MIT's operating budget, (around $2 billion if I recall, which impressed him.. it took a to translate billion into chinese having to recount the zeroes but I think I got it right).

Thursday, May 10, 2012

Junk Economics by Climate Scientist in the NYTimes

It is incredibly frustrating when green activists and even mainstream news media complain about Republican use of junk science when those very same activists freely engage in junk [economic] science. In an Op-Ed in the NY Times recently, James Hansen--a leading advocate for curbing carbon emissions said that "Economic losses [of tar sand oil] would be incalculable". This is blatantly wrong and ignorant of most economic studies done by people that have been doing the calculations of the economic losses due to climate change for years, which are substantial but not catastrophic. See Tol (2009) for a review paper, or the many studies led by Nordhaus and others. Hysterical exaggeration and junk science are typical from all sides.

Sunday, May 06, 2012

Data Science?

So called Data Science or "Big Data" has been getting a lot of play in the news recently. With recent articles in the NY Times about Target tracking its customers to how data analysis is changing all parts of the business world. The same trend has shifted the economics profession. But I recently got a solicitation for this $3000 class at General Assembly to learn from a Data Scientist. The problem is that its taught by the "Data Scientist" from OkCupid whose blog posts were very cute and very attention getting, but always hopelessly amateurish. It's embarassing to call it "Science."

Friday, May 04, 2012

Keynote on Online Education

Lots of articles (e.g. David Brooks, Vassar's president on NPR) all of a sudden in the past couple days on online education. The timing just struck me since I just gave the keynote a couple weeks ago at Vassar's Teaching with technology forum talking about the economics of online education and some of my personal experiences teaching for udemy.com's faculty project. My basic thoughts were just that education always suffers from Baumol's cost disease (e.g. a Mozart sonata that took 4 musicians 4'17" to produce 200 years ago still takes 4 musicians 4'17" today, while a farmer produces several orders of magnitude more food today than 200 years ago). Online education could change that, and thus I have been using udemy.com to learn about it, though I don't think the high-touch liberal arts education is going away any time soon.

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