Why I'm not an economist

One of the things I did when I was studying for my exams was making a list of great people I would invite to my imaginary birthday party. Sometimes I'm really thankful for exams because such an exercise won't be excusable under any other circumstances. I looked over the list to see how many economists were on it. Zero. Musicians, authors, actors, physicists, comedians, cartoonists, artists and chefs but no economists. I had only considered two and chose to exclude them, not just because my list was restricted to 25 people, but also because I thought they would bring the party down. 


And that's when I realised that I would never be cool enough to get invited to my own party. 

Mostly Harmless Econometrics: the Voice of Marvin

I never wanted to exist in this Econometrics universe. Indeed, when it was first created, it was considered a bad idea by many. But it does exist and life in it is dull, dreary and depressing. You’d think someone with the capacity for such alliteration would be appreciated. Did they recognise my talent? Of course they didn’t. They left me stewing in a miserable mass of regression equations for 6 months. My only friend was youtube, a window to a fictitious universe far less depressing than my own. One day my internet connection died.

Vocabulary larger than the data collection problems involved in a medium-scale field experiment and they ask me to run data through Stata. I’m just a disregarded student who must study things that she doesn’t need to know so that she can get a job that she doesn’t want to do. Call that foresight? Because I don’t.

I spent 6 months rehearsing excuses for getting no useful results from my econometric exercises, often blaming the data instead of acknowledging our own incompetence. Oh I told them it was a futile exercise to begin with. But nobody ever listens. Lyrical verses flowing through my veins and they ask me to use crude words like heteroscedasticity.

Just when I was wishing most fervently that the universe itself would end, they started calling perfectly normal sectors of different galaxies – Beta 1 and Beta 2 – “regression coefficients”. It was too much for me to take. Had they taught me something useful, like how to combust spontaneously, I could have adequately expressed my thoughts. Words often don’t make the point: something that makes me feel very depressed. 

Choice for Spoilt

Economists often claim that, from a welfare perspective, more choice can never make one worse off. The argument is that if I’m given more options to choose from, I can’t possibly do worse because I still have all the options that were available to me in a smaller choice set. It’s a compelling argument. But what if the choice set is too large? Being lazy sounds pretty rational to me.

My inspiration for this argument, of course, is my job hunt. I started by staring blankly at the Google homepage wondering what I should type. I don’t even know which industry I want to work in so there really is no logical starting point to browse through all the choices unless I choose something entirely arbitrary. I like to think of myself as a new breed of ‘reasonably rational people’ or ‘neo-rational’. And I was somewhat relieved when I found that there are only about 5 firms that might bother to look at my CV. To think of all the time I would’ve spent writing preposterous cover letters had this realization not dawned upon me. The mental and psychological costs of browsing through choices are immense, particularly when you are required to repeatedly weigh the options of hating your job against not having one. The opportunity cost in terms of time is the loss of some serious youtubing.

Being neo-rational, I’m a strong believer in making decisions based on empirical evidence. I often toss an unbiased coin. Needless to say the coin can’t come to my rescue this time. Too much of anything in a non-theoretical world is bad. Listen to the old wise men who bothered to write proverbs that you could use when you don’t know how to end a blog post.

Kiran Bedi to be flogged

Gandhian Anna Hazare, whose claim to fame was flogging a dead horse, has declared that Team Anna member Kiran Bedi will be tied to a tree and flogged publicly next week for inflating travel bills. Preparations for the event are underway.

Feminists are have protested the move, arguing that Bedi is being targeted because she is a woman, and more deserving candidates like Kejriwal and Bhushan have been overlooked simply because “Mr. Hazare is awfully sexist.”

Despite the media attention, however, Team Anna members spoke of the event quite casually. “It’s really not that big a deal. They used to burn witches at the stake in Europe. We’re just flogging her,” said a spokesperson.

Meanwhile, drunks in Ralegan Siddhi where Annaji first instituted the holy practice of flogging drunkards in temples have suffered emotional breakdowns following the news. “I really thought I was special, that it meant something to him. And now he’s flogging pretty much everyone. In front of TV cameras. It’s shameful, shameful!” a former floggee cried.

"You're lying to yourselves," PCI Head tells Indian media

Former Supreme Court justice Markandey Katju, who is now the head of the Press Council of India, is facing a backlash from the Indian media for suggesting that they have poor journalistic standards, as opposed to this page.

Holding up a copy of Mail Today which had a picture of the Duke and the Duchess of Cambridge on the front page with “Kiss Me Kate!” written below it, Mr. Katju said, “Seriously. What is this?” to his interviewer, Mr. Karan Thapar, who nodded grimly.

“I want to have more teeth,” Mr. Katju continued, examining his dentures. “I want the power to regulate the electronic media, I want the power to stop government advertisements, I want power, power, power!” he exclaimed with an evil laugh. 

Exciting day at court today

The 2G scam trial, arguably the most awaited event of the year in India, kicked off yesterday. The who’s who of the business world and the political world are expected to attend the event, which will span several months. Nominations for a life term have been received by 17 stars, and it is expected to be a closely fought battle.

Leading the pack is Reliance – 11 of the 28 witnesses in the first batch are from the Reliance ADAG group, and are spearheading a campaign to renovate Tihar jail to make it a world class prison. Unitech Wireless and Swan Telecom have lent their support to this movement.

All eyes, however, will be on the nation’s sweetheart, Kanimozhi. She is expected to ditch international designers and wear an Indian outfit to this no-carpet event. The ceremony will be hosted by the charismatic Ram Jethmalani. 

Australia sets new test record: 47 all out

No, seriously. 

http://www.heraldsun.com.au/sport/sports-fix/aussies-crash-to-47-all-out-their-lowest-test-total-in-109-years/story-fn89guyk-1226189876750

Chinese government unhappy with Eric Schmidt

The Chinese government has reacted strongly to Google Chairman Eric Schmidt condemning their censorship policies. In its official response, the Chinese government said, “We have allowed them to make products that don’t require censorship. It is a huge market and we are asking them to operate under a few restrictions. They don’t have to be decadent capitalistic pigs about it.”

Defending the government’s censorship policy, a spokesperson for the government said, “We only censor things that nobody needs to know. We’re just like good parents who protect their children from harsh realities. We want our people to be happy. Sometimes erasing a part of your memory is a good thing. Haven’t you watched Eternal Sunshine of the Spotless Mind?”

On being reminded that the movie actually suggests that the reverse is true, he whispered, “Not in the version that hit Chinese screens.”

Sarkozy’s foot to be permanently inserted in his mouth

French President Nicolas Sarkozy is due to undergo a minor surgery this Saturday to permanently insert his foot in his mouth. Following his unsavoury and embarrassing remarks about Israeli Prime Minister Benjamin Netanyahu, Sarkozy has decided that the procedure will save him much time and effort.

“People are quite superficial and their expectations are often based on appearances. I want people to judge me correctly at first glance,” said the small Frenchman.

“If a taller man spoke like he does, the procedure would have been much more complicated. Fortunately, Mr. Sarkozy is short enough for the procedure to be completed in a matter of minutes. In fact, we expect that he will manage to perform the surgery himself,” said his doctor. 

Manmohan buys Mamata flowers, chocolates

A tiff between local couple Mamata and Manmohan was resolved amicably today with the latter buying flowers and chocolates to appease the lady. Softening her stance on leaving Manmohan for good, a visibly calmer Mamata agreed to forgive him. “He did not know about the fuel price hikes and he has promised me that he won’t do it again without informing me,” she beamed.

Manmohan is said to have explained his part in the matter, taking full responsibility for providing credence to the theory that raising petrol prices will divert attention from inflation.  

“He said there will be no hike in the prices of kerosene, diesel and LPG. He has even agreed to work on his excise duty addiction. I’ve promised to support him and I’m going to cut down on my sales tax habit too,” she said.

“We’ll make it work,” nodded Manmohan happily. 

Advani is emotional as Rajnath calls him PM material

No, seriously. 

http://www.hindustantimes.com/India-news/NewDelhi/Advani-is-emotional-as-Rajnath-calls-him-PM-material/Article1-766498.aspx

Game Theory Atheist emerges

Local man Pramod Thakur has strongly criticised game theorists for spending a lot of time agonising over what he calls “just semantics”. A well-known game theory atheist, Thakur is also believed to worship pagan gods like common sense.

“It’s just a case of poor problem phrasing. If we didn’t get into these ‘I know that you know that I know...’ cycles, and simply started with ‘we all know’, the solutions would be more intuitive and the reasoning less complex. It is rather unrealistic to assume that everyone knows how to solve a problem and will solve it exactly as we predict.”

He cites Prisoner’s Dilemma as a case in point. “Earlier, most people would have chosen to cooperate, but game theory came along and messed things up for criminals. We used to understand that we all have to work towards something mutually beneficial to expect a good outcome. If we deviate, the other guy will beat the crap out of us when he finds us. If there’s one thing I’ve learnt from gangster movies, it is that there will be revenge.”

“If it’s somebody else’s problem, leave it alone,” he sums up. 

The Perils of Optimisation and the Gift of Time

One of the most important skills required for someone who has to spend a lot of time travelling everyday is the ability to convince oneself that it really is “the gift of time”. It turns out, however, that when you have so many ways to kill time, such a gift really can’t be taken lightly. So I set about my optimisation exercise like I often do (somewhat unnecessarily). Of course I was only concerned with making optimal use of the time I spent travelling because that was the only “additional gift” I perceived – the rest of it was wasted exactly as before.

I took this optimisation exercise rather seriously so I constantly tried to read faster on the metro so that I wouldn’t have to carry the book around for too long (I’m not sure what my reasoning was for this because I always replaced it with an equally heavy book). While changing trains I’d hurriedly create playlists while running up the stairs, often running into people or nearly falling down. I was something of a nuisance to other passengers. All this running around was, of course, to pretend that I was following some sort of exercise regimen. I also wanted to minimise travel time because I did recognise that everything I did on the metro was just very organised time wasting.

I started planning fastidiously for the next day’s commute, often spending more time planning than I did travelling. My plans were overambitious. I almost always fell short of my goals and I would get off the metro thoroughly exhausted, relieved to have reached home/college so that I could waste time out of my pre-existing quota in a more regular fashion.

I try not to optimise too much these days. There's a time and place for everything.

  

CAT candidates to wear electronic tags

Following multiple violations of the Non-Disclosure Agreement that over 2 lakh aspirants across the country sign before taking the Common Admission Test (CAT), the IIMs have decided that all candidates who appear for the test must wear electronic tags similar to those sported by criminals out on parole. In addition to location, the tags will track all electronic communication by the wearer.

“We noticed that a lot of people are not as ethical as we expected them to be. While our ingenious system can’t prevent people from verbally discussing questions since there would be no evidence, we will endeavour to control the speed with which our papers are made public on social networking sites,” said Janaki Raman Moorthy, convener, CAT 2011.

“For someone conducting an entrance exam for a management degree, they sure suck at management,” said a candidate whose electronic tag began beeping wildly when he sent in this comment. 

Imran Khan to engage in some light politicking

Pakistani cricketer-turned-politician Imran Khan has found that issues like corruption, inflation, education and unemployment, about which he has held many drawing room discussions over the past 15 years, are not half as interesting as Kashmir.

“Led Zeppelin never sang a song called Inflation, did they?” reasoned the Oxford-educated Khan. Reaching out to a wider audience and cutting down the length of his speech to a crisp 50 minutes, he addressed a rally attended by 100,000 people in Lahore, hoping that they would vote for him based on his ability to deliver speeches that only render about 23.7 percent of the audience comatose.

After suffering a humiliating defeat in the 1997 elections, supporting Musharraf’s military coup in 1999 and withdrawing support just before the elections, receiving 0.8 percent of the total votes cast in the 2002 elections and finally boycotting the 2008 elections, Mr. Khan is optimistic about the 2013 elections. “We can only go up from here,” he said. 

Anna Hazare unable to lose last 6 pounds

Even after two rounds of fasting, anti-obesity crusader Anna Hazare has been unable to achieve his ideal weight. “At the end of the last hunger strike he was quite happy with the results, but he soon started regaining the pounds. He was so upset that he refused to speak to anybody,” said a Team Anna member.

But Mr. Hazare has refused to give up. Understanding the importance of a positive body image for the youth of the nation, he has decided to go on a fast yet again to show them that determination is everything and that the perfect figure is attainable for everyone.

Looking to espouse a cause that would inspire many to join him and thereby motivate him to see his weight loss plan through, Mr. Hazare has dropped the campaigning “against” political parties idea and decided to protest match-fixing by Pakistani cricketers instead, a cause that is expected to garner massive support because they haven’t played good cricket in years. 

EU wants WTO talks to be more fun

The European Union has suggested a change in the agenda for the WTO's eighth ministerial conference, which will be held in Geneva. Representatives from the Eurozone claimed that they are exhausted after the Greek debt crisis and would like to take a break and discuss something “light and breezy”.

“It’s been a decade since the Doha Round started and it’s quite clear at this point that we’re not getting anywhere. Why can’t we ever talk about how to mix a good drink or where our wives buy diamonds for a change?” wrote an unidentified EU representative in the informal trade negotiations committee.

The WTO remained cautious in its response. “I suppose a few rounds of blackjack or golf wouldn’t hurt,” said Pascal Lamy, Director General of the World Trade Organization. 

Optimising the Contents of your Bag

When I first read an article by Jeremy Clarkson where he complained about how women carry far too many things in their handbags, I chuckled, feeling strangely superior to all those lost women out there. I carry a big backpack – it makes me look 21 instead of almost 22 – but the bag was always nearly empty at the time.

Then I moved to the other end of the city and my bag became heavy. A big backpack became practical instead of being an accessory. If that’s not a sign of ageing, I don’t know what is. I started carrying things that I never had at all earlier – hand sanitizer, wet tissues, books to read on the metro, extra pens, notes, band aid, cough lozenges and God alone knows what else. I’m even a bit afraid of emptying out my bag these days because I don’t know what will turn up. And it’s not that the change occurred overnight. They are adaptations to problems – I had to face the prospect of eating with dirty hands, inexplicable injuries when I’m 30 minutes away from anything that’s even mildly familiar, a cold, boredom, guilt for not studying, and so on. After a month of shuttling between New Delhi and not-so-new Delhi in order to “pursue Economics at the Master's level”, I felt it’s about time Economics gave me something in return. I decided to apply what I had learnt to optimise the contents of my bag. I wanted to regain the respect that I once imagined Mr. Clarkson would have for me.

The first thing I discovered was that it helps to carry “big stuff”. This might seem counterintuitive, but the idea is to keep your bag clean and everything easy to find. If everything in your bag is large and heavy, you’re unlikely to carry anything you don’t need. It’s because the weight or space taken up by something is negligible that you throw it in and never take it out. For instance you would always remember to remove a big, heavy book once you finish reading it rather than a newspaper, 2-page notes, comics and suchlike. It also prevents you from buying crap that you’ll never take out. If you carry a small bottle you’ll invariably have many half-empty bottles of water you bought somewhere left in your bag.

The second rule is a monthly stock-taking. Ideally it should be weekly but it might not give you the same satisfaction because there won’t be as much rubbish and Mr. Clarkson will think you’re fastidious. Throw out everything you didn’t use that month. If everything you carry is pretty large, you might end up cleaning your room this way.

The third rule is not to carry substitutes. For instance you don’t need an iPod if it’s possible to load songs on to your phone, which will always be the case because it’s unlikely that you’re willing to spend on an iPod but not on a halfway decent phone. The iPod does give you an image advantage but that will be negated by the amount of crap you sift through in your bag to find it.

The fourth rule is never to buy anything unless you’re thoroughly psyched about it. That’s the only way you will remember to take it out of your bag when you get home. It will also prevent you from throwing in receipts that could line the bottom of your bag for many years.

The last rule is not to plan for contingencies. A lot of the material that I write is generated when I wind up in unfortunate circumstances. If I make it a point to carry everything I could possibly need when I fall, tear my lenses, get drenched in the rain, spill food on my clothes, find myself in a medical emergency or face the dilemma of ingesting food that could potentially cause jaundice, I wouldn’t have anything to write about.

Germans are "just awesome drivers"

Behavioural economists have concluded that Germans are “just awesome drivers.” The record for maximum grands prix won in a season is currently held by Michael Schumacher, and is now likely to be equalled by Sebastian Vettel. Pressed to explain why Germans are able to dominate entire seasons in such a manner, behavioural economists at the prestigious University of Wedonthaveanythingbettertodo claimed that their explanation is broad enough to answer similar questions regarding the rising number of popular German Formula 1 drivers such as Heinz-Harald Frentzen, Nick Heidfeld, Timo Glock, Nico Rosberg, Adrian Sutil and Ralf Schumacher. As to why none of these drivers actually live in Germany, their null hypothesis is “Germans just don’t like to pay taxes.” The study is expected to be completed in mid-2012. 

Game Theorist receives $2 for lost luggage

A top airline company reportedly compensated a top game theorist with $2 for his lost luggage based on the famous Traveller’s Dilemma formulated by Kaushik Basu.

“We just assumed that he would be rational so instead of going through the motions of telling him that another traveller has lost an identical item and that we would pay $2 extra to the passenger who claims a lower value, we just directly skipped to the Nash equilibrium outcome. Our corporate motto is to anticipate customer expectations and fulfil them and I think we have lived up to our reputation,” said an airline official on condition of anonymity.

The elated passenger commended the airline for its farsightedness and excellent grasp of rationality and game theory. “The ideal world is within reach now,” he declared.

Airlines are queuing up to offer exclusive services to game theorists and rational economic persons.  

Zerox it

I love how Xerox, complicated spelling and pronunciation notwithstanding, became a synonym for photocopy. Of course they now regret their own popularity and have been trying to rebrand themselves (mostly just by coming up with a new logo) so that people notice that they also provide “document management solutions”, whatever that is.

A few months ago, I noticed on the Delhi metro (which will soon become a synonym for spit-free public transport in India) that Parle Agro’s Kaccha Mango Bite advertised itself as “Kacche Aam ka Xerox”. My research informs me that they had to change it to “Kacche Aam ki Copy”, and later “Kacche Aam ka Zerox”, which doesn’t quite have the same zing to it. Not that I care; I’m no fan of raw mangoes anyway. My point is how fascinating it is to have an inadvertent advertisement (though it’s more likely to be seen as an infringement) within an advertisement.

I can just see the next toothpaste launch: “Colgate ka Xerox, McDonald’s ke daamon mein”.

Sale of "I am not Anna" caps to help Indian economy overtake China

In a dramatic turn of events, the recent charges of inflating travel bills against Kiran Bedi have led to a sharp spike in sales of “I am not Anna” caps.

“Well, my Facebook profile has not been very happening for a while now and I really need more likes for my photos,” said an ex-Anna Hazare supporter who did not wish to be identified.

“We followed the news closely after the Anna Hazare protests and placed the first order for ‘I am not Anna’ caps when Prashant Bhushan said something controversial about Kashmir. After that, things just kept getting better with Arvind Kejriwal being attacked in Lucknow and fined by the IRS for violating terms of employment,” said a Palika Bazaar shopkeeper.

“We had some excess stock of ‘I am Anna’ caps so we just added ‘not’ to get rid of what was left,” said a shopkeeper in Sarojini Nagar.

Finance Minister Pranab Mukherjee applauded the trend and said it will help put the economy back on the path to high growth after the sharp dip in consumption caused by the Jan Lokpal hunger strike.

Prime Minister to reduce MSP by epsilon to control inflation

Indian Prime Minister Dr. Manmohan Singh has decided to take stern measures against double digit food inflation by reducing minimum support prices for rice and wheat by epsilon, which is an arbitrarily small positive quantity.

“I just had to take stock of my life and wonder what the role of Economics was in it. And the answer was quite clear: it was about the same as my current role in the government. I’m there and I seem important but it would be unfair to say I did a terrible lot. So I decided to make a change.”

Economic theory often postulates that changing the parameters of the existing equilibrium by epsilon will upset the balance and lead to another dynamic adjustment process, something most economists prefer to wave their hands through or draw confusing arrows all over the place to describe.

Waving his left hand as he spoke and drawing an upward arrow on a hypothetical approval ratings sheet with his right, Dr. Singh explained that he expects the new equilibrium to be established at a healthy 5 percent level of inflation. When asked how he thought epsilon could effect this change, he said, “It’s pretty powerful.”

Economics is a Diva, research shows

Researchers who are paid to do research of this sort have found that Economics is a diva. “We conducted a structured study over many decades to obtain this result and it has been worth the effort,” says Thomas Smith of the University of Wedonthaveanythingbettertodo, who headed the study.

“We began by determining Economics’ gender, and that was quite simple because privileged white men have been obsessing over her for centuries,” said one of Dr. Smith’s enthusiastic interns.

“After years of thinking and figuring things out we decided that she is a diva because of certain behavioural traits that emerged,” another equally enthusiastic intern chimed in until Dr. Smith cut him off. “You see, she adopts the wayward children of Mathematics, Physics, Psychology and Sociology and gives them ridiculous names but has no children of her own. In addition to that, she has had affairs with nearly everyone from public policy to complex mathematics but she is still single.”

Not to be outdone, the visibly hurt intern whom Dr. Smith had cut off added, “Her marriage with political thought ended disastrously but the alimony made her rich enough to the live the rest of her life off it. She also spends a lot of time managing her public image and has a lot of money that she doesn’t exactly deserve.”

“A lot of people consider her insanely hot and go for her even though they know that she doesn’t have too much intrinsic value,” Dr. Smith concluded. 

What is Geekonomics?

That’s how almost every introductory Economics textbook that I have read began. Pretty sad, I agree. And when that’s followed by all that “allocating resources optimally” stuff, it really makes you wonder what possessed people like me to take it up in the first place.

There is much that is geeky about me these days. My glasses get thicker each year. I got retainers for my teeth at the rather too advanced age of 21. I stopped bothering with my hair a couple of years ago when I realised nobody noticed the difference when I forgot to do them one day. And I usually dress in loose kurtas and jeans - the trademark attire of social activists and the unemployed. 

Another reason why everyone (including me) should wonder why I took up Economics is I hate Maths, and Economics is really just Mathematics in disguise. My brain switches off, winds up for the day and leaves for some healthy meandering every time I see a page full of numbers and/or Greek alphabets. I suppose they don’t like using English alphabets because they are too easy to pronounce.

But the choice, it was made, and Economics I chose. So I’m doing exactly what economic models claim to do all the time, albeit in a wildly inaccurate and admirably haphazard fashion – stripping away unnecessary details and layers of complexity so that I can look at what I want to see. I present to you Geekonomics. 

I was travelling by the metro again. It's what I do. My association with the metro is a long and eventful one. The ladies' compartment is one of the best things about the metro. During my undergraduate days, the metro was still something of an elitist form of transport; it was new and shiny with the occasional “metro sahi hai” chants from first-time users. Today it's as bad as a blueline bus. In the ladies' compartment you have the privilege of only having to claw your way in without punching or kicking. 

But since there are no "gents" in the compartment, the ladies are very "adjusting". A bench designed for 7 people always has at least 8 people sitting on it, and often 9 or 10. To begin with, let’s assume the utility from getting a seat on the metro, no matter how little the space, is very high because it’s like winning a game of musical chairs; so high that it’s greater than the aggregate disutility to those already seated from having to accommodate an extra person. Let’s also assume that each person's marginal utility from getting a seat is directly proportional to the distance they have to travel, and that the utility from standing is zero. After the eleventh person, the marginal utility from being seated should turn negative, or you could say that seating is maximised with a constraint of 11 per bench. This is not an arbitrary number – it is the empirically observed maximum with daily observations made over a year. The utilitarian school of thought will tell you that Indians are the best utility maximisers ever. 

The Rawlsians aren't going to be so happy about it, though. They think the worst off should get a seat, i.e. those travelling the longest distances should have a chance to sit. Then to optimise under this school of thought, everyone should get up once they've had a seat for more than half their journey and seats will be shared on a rolling basis. It is possible that total utility is higher this way since there is likely to be less disutility from seat sharing. Also, if we adopt this method, senior citizens, heavily pregnant women and women with annoying children should definitely be offered seats by their younger, career-oriented peers. This doesn't happen on the Delhi metro. No, really. Indians would completely fail this test. 

So I suppose somewhere in our heads we're utilitarians. We can't stand to see an inch of empty space on the bench. We have to fill it up with our asses. Pareto optimisation? All public utilities in India are used many times over their capacity. Under-utilisation is an alien concept here. It's only meant for balding white men with thick glasses and a morning shadow: what a geekonomist would look like if I were a white male.