Friday, June 29, 2007

Footballnomics #6: Fabio Capello

We've already seen some turnovers in the manager jobs. But nothing is more dramatic (this year, at least) as the sacking of Real Madrid's Fabio Capello. To be honest, I don't really know whether it was the club who sacked him, or was it Capello himself who wants to quit, or was it a mutual agreement between the two. Newspaper reports suggest that it was the club that took the decision (like this one, which used the word 'axed' in its title). Furthermore, the decision was taken while Capello was on vacation in Tibet, so no words from him are available yet.

Capello's departure seems to be a strange decision, given the fact that he brought the La Liga title in his first year (well, his first year of the second term at Madrid). But then, just like players, the manager job market is not like a standard labor market. So we need more than the standard labor economic analysis to understand what happens.

As Leo Tolstoy once said, "All happy families are alike. All unhappy families are unhappy in their on ways." All happy, job-secured managers have these conditions met: have a good relationship with the club, players and supporters, and is able to achieve the expectations of the club's stakeholders given the budget. With the exception of Jose Mourinho, Lose one of these conditions, and most likely you are heading somewhere.

That, perhaps, what happened to Capello. In the basic principal-agent setting, a manager is an agent acting on behalf the principal, who has some certain objectives. One may think that bringing the league title means that the objective is met. True, if it is the (only) objective. Looks like Madrid's board of directors has a greater set of objectives in their mind, which Capello could not deliver:
  • A Champions League title
  • Higher revenue (losing Beckham means losing a big source of revenue)
  • A certain type of 'style' in playing football
  • The directors' health. The board may be forward looking. If every year the title has to be won in the very last minutes, it would be bad for their heart condition, and the club's financial position if they have to pay the medical benefit. After calculating this potential expenses, even after considering the club's obligation to pay Capelllo's GBP 4m annual salary for the remaning 2 years of his contract, it is still beneficial for the club to terminate the deal.
However, having sacked seven coaches in four years (including Capello's first term), one should wonder what the principal's objectives are, if any.

Tuesday, June 26, 2007

Spit and Blood

...and Other Bodily Fluids We Want from You
While Aco and Anna were being amused in Japan, my middle finger was being pricked for blood by a research psychiatrist whose main field of research include depression and social dysfunction...
We often say that economists are not too interested in learning what people say or what people feel. We are more interested in observing what choices people actually made - revealed preference is an example of this approach. How much then, do you think, one should value the answer to the question "Are you very happy, pretty happy, or not very happy" in surveys? Not very much, if you're an economist. You'd want to be able to observe things that show people really are happy, some objective measures.*)

The similar is true when we want to study health status of individuals. Self-reported measures of health status (e.g. "How would you rate your overall health?"), while valuable, are subjective, prone to error, and often misreported. So we would look for "hard" evidence in the form of objective health measures to complement the self-reported measures. Robert Fogel, in one of his famous studies, look at long-term trend in height of individuals to study health, nutrition, and economic growth. There is now a large literature in economics that utilizes anthropometric data such as height and weight in various forms (Body Mass Index, weight-for-height Z-scores, waist circumference, etc.).

In recent years, economists as well as other social scientists have looked at other sources of "hard evidence": saliva, blood drops, urine, and practically any other bodily fluids they can have their hands on. These are of course some of the things that people in biology, medicine, and epidemiology have been studying in their respective fields. But several development have transformed activities that previously could only be conducted in a laboratory setting in such ways that they can now be done in the context of large scale population-based research.

First, the cost of doing so has never been cheaper. Equipment to measure blood pressure, blood hemoglobin level, cholesterol levels, are becoming smaller and cheaper. Methods to analyze blood sample from a dried drop of blood have been developed - no need to collect a whole tube- enabling researchers to incorporate blood sample collection into their large scale surveys. Second, researchers are realizing that so long as they follow strict ethical guidelines, people are willing to provide blood, urine, or saliva.**) In contrast, people are more guarded about their earnings, savings, or wealth. And this is true not only in developing countries but also in developed countries: people are generally more willing to spit for you than they are in telling you how much money they make last year.

, scientists have been able identify some biomarkers that can be linked to various health and behavioral outcomes. For example, the level of cortisol, a hormone that is released by our body in response to stress, could be useful for those who are interested in learning how negative events influence one's health. Asking "Are you stressed out?" could be useful too, but having objective measure as well would certainly be better. We can obtain cortisol levels by analyzing saliva (preferably collected at different times of day, because of its diurnal variation). C-reactive protein, a protein that is released during inflammatory episodes can be measured from a small spot of dried blood. There is now a body of evidence linking C-reactive protein levels with elevated risk of hypertension, cardiovascular disease, and diabetes. In this Cafe a while ago, Aco mentioned an economic paper that looks at cotinine level in blood. By collecting these objective measures of health, social scientists now have better access to study the relationship between health and socioeconomic status and the two-way nature of the relationship.

So there I was, my middle finger being pricked for blood by this research psychiatrist whose main field of research include depression and social dysfunction..

We were both eager participants of a workshop designed to equip social scientists with tools on how to integrate biomarkers into our research. There were psychiatrists, psychologists, demographers, sociologists, economists, and anthropologists in the room (note: some biological anthropologists are at the frontier of this interdisciplinary research) .

Part of the fun -besides exchanging bodily fluids- is to learn about the new terminologies and compare them to things we have in our own discipline. Take homeostasis, for example, the property of our bodies to internally maintain a stable condition regardless of changes in outside environment. Example: our body has a "thermostat" that regulates internal temperature that keeps our body from becoming too hot - we sweat. Economists would perhaps associate homeostasis with a steady state equilibrium. And there's allostasis, the process of maintaining stability or homeostasis through changes in physiological or behavior. Example: having endured prolonged exposure to heat, we will not only be sweating, but our kidneys will start to reduce urine output, eyes begin to dry out and so forth. Economists: think of allostasis is the process of moving from an old to a new equilibrium level, if there are multiple equilibria. And the fun goes on.

A look back at older posts and comments in this Cafe would reveal that many of the Cafe's visitors (Tirta, Roby, just to name a few) are already well-versed in inter-disciplinary crossovers. I, dear readers, still have a lot to learn.

*) There is of course a strand of literature in economics that increasingly take subjective measures of well-being seriously. See, for example, the paper by Kahnenman and Krueger in the Journal of Economic Perspectives, 2006 (20:1) on the topic. And yes, I know about Bhutan's Gross National Happiness project.
**) The ethical part of this body of research is something that cannot be taken for granted. Just last week, there was an article in the New York Times about a group of Amazon Indians who were aggrieved when they found out (from the internet!) that blood samples that were collected from them years ago are now being sold to researchers around the world.

Puzzling Stuff, Japanese

Again, I'm amazed with Japanese. It is true that Japan is one of the biggest players in the global economy. But its advance stage of economy might have nothing to do with the rest of the world. Well, I shouldn't put it that way. Try this: Japanese do not care that much with foreigners. Maybe that's the better claim.

The evidence is, of course, anecdotal. But just look around in Tokyo. Even in the most international part of it, Roppongi, the Japanese characters still dominates. And the service sector people do not care to speak English.

Take in particular tourism spots. Don't you think it is a good idea if all the information and promotion is in English? Or at least the sellers speak it? Well, Japanese don't seem to bother too much. Many times you are struglling just to find how much you actually should pay, and you end up leaving without even entering -- out of frustration. It might make sense for Kamakura Shrine, because temple is supposed to be, well, traditional. But not really for a modern tourist attraction like Enoshima Aquarium. I'm not making this up, but they had this doplhin show with girls cheering and singing to the visitors. They sang and cheered everybody in Japanese. They even did some interactive game, yes, in Japanese.

So Anna and I asked my sister who had been living in Tokyo for five years about this. Her answer was striking. Japanese tourism spots are meant for Japanese tourists! I looked around, and she was right: I could only identify a handful of strangers, I mean, non-Japanese.

Then, everything made perfect sense.

Tuesday, June 19, 2007

The Prambanan irony

Last week, Sjamsu and I were on an official trip to Jogjakarta (we also met Ujang there). We had a chance to visit the Hindu temple of Prambanan, and watched the famous Ramayana dance. (Honestly, I think the plot is very ugly! Read my comment here).

During a non-so-important dinner conversation, we discussed one interesting irony. By 850 A.D., the highly civilized 'nenek moyang bangsa Indonesia' had already built such great building (as well as the more famous Borobudur temple). But we knew that it was the Europeans who later came and colonized the country. Why was it not the other way around? The same thing also applies to the great Egyptians, Babylons, Persians, or Indians.

Yes, colonialism was bad. Yes, before those Europeans came, the Makassars have sailed to Australia and built a colony in Madagascar (while the Chinese had done it earlier by ruling the East Asian water). But regardless of our moral philosophy, it was the European's renaissance and colonialism that set the history of the world today.

To explain the irony - if we consider the level of technology at that time, building temples like Prambanan was made possible by a massive resource (especially human) mobilization. That was possible if and only if you had an autocratic government. We won't have Prambanans and pyramids under democracy.

Moreover, if you a despotic leader whose power made almost everything possible by mobilizing resources, there is little or no incentives to educate your people. In fact, you don't want your people to be educated; you'd want knowledge to be a monopoly of the elite.

On the other hand, the end of state/church monopoly over many aspects of human activity in the middle age Europe had paved the way for scientific revolution. For better or worse, that was the reason why we can build Prambanan, but it was the Europeans who set our history.

Thursday, June 14, 2007

Rethinking Expulsion

It is not only a question of whether the punishment fits the crime, it is more a question of how much logic was behind the punishment, if any. Tirta found time between his doctoral research (in psychology, if you need to know) to guest blog in the Café about whether expelling the four students who were accused of beating up a fellow student at Pangudi Luhur High School would do any good.
Disclaimer: Like Tirta, who graduated from Pangudi Luhur in 1998, three of the Café Salemba hosts also went to (and graduated from, we'd like to think) the same high school. - Manager

Rethinking Expulsion
by Tirta

It seems that school bullying is one of the classic problems in this country, one that is yet to be effectively dealt with. The most recent case took place about a month ago. Blasius Adi Saputra (18) was reported to be bullied by his seniors at Pangudi Luhur High School, Jakarta (The Jakarta Post, 22 May 2007).

Following the victim's father report to the police, and the frequent coverage by the media, the school authorities reacted promptly. Four seniors who were vindicated to be the bullies were directly expelled. At first sight, the expulsion looked right and appropriate.

If bullying is a valid character proxy, then the four seniors must be troublemakers who deserved to be expelled. More importantly, the expulsion was intended to be a lesson for other students. It was a strict warning to those bullies-to-be to behave accordingly, or else they would also have to leave the institution. It is so simple and straightforward a reasoning.

However, as it is often the case, education issues are neither simple nor straightforward. A critical reflection questions the logic behind the decision to expel the four seniors.

Expulsion is the most serious decision a school can exert upon its students. It is the most extreme punishment, one with long lasting impacts toward the social and psychological lives of the expellees. Expulsion is and should be exceptional, and therefore must be tightly framed by either of the two logic of punishment: retribution and consequentialism.

Retributive expulsion is backward-looking. The assessment is based on past deeds of the students, whereby two necessary principles are to be met. First, the school have tried – to the best of its ability – to educate and re-educate these students. Second, the students have been given adequate opportunity to correct their behavior. Only then the school is warranted to wave its hands and hope that some other institution would be a better place for the expellees.

As an outsider, it is not possible to speculate about either the track record of the four expelled students or how much effort have been put by the school. All one can do in this case is to apply a counter-thinking exercise, as it would be naive to downplay the role of the media and the public at large when the school made the decision in such a short time.

Let us try to hypothetically imagine what would have happened to these four seniors had this case not been brought up to the public. Would they have ended up the same, receiving expulsion letters? Or would they have received a different kind of penalty? Did they – given all they have done during their time in the school – thoroughly deserve to be expelled?

Some of us may start wondering if expulsion was the best retributive punishment to take. But regardless of its retributional justification, let us now consider the more problematic side of the expulsion: the consequential logic.

The consequential function of expulsion is purported to be bullying deterrence. This idea is so intuitive that many seem to have accepted it a priori. But a valid justification of such an extreme and exceptional punishment – one that is socially and psychologically affecting the lives of the expelled individuals in the long-run – must rest on empirical evidence, not fallible intuition.

What we need are hard data that speak of the effectiveness (or ineffectiveness) of expulsion in reducing the number of bullying. These data should come from controlled studies in our schools, studies that we currently are lacking.

In other words, we do not know whether expulsion effectively prevents future bullying from taking place. The causal effect is yet to be objectively demonstrated. And when hard data are yet to be available, it is wise not to further experiment by signing more expulsion letters.

One may nevertheless argue that expulsion does prevent bullying, at least temporarily. A kind of shock therapy effect, perhaps. But even if it does, it does so for the wrong reason. A school – unlike a prison, for instance – has its own special role as a formal institution. That role is to educate students with reason and understanding, not reward and punishment. Students should not refrain from bullying because they are afraid of expulsion, but because they rightly comprehend that bullying is an unacceptable behavior.

Surely this is not an easy task, but it is a task of which we should hold our schools up to. After all, we must not forget the reason why we send our children to school in the first place. We want them to be better citizens because they are thoughtful of societal values, not because they are afraid of going to prison.

What has been often overlooked is the fact that bullying is a very complex problem. It is not about a few bad personalities who simply do not deserve to sit in our schools. Bullying is a complex psychosocial problem, one that requires extensive analysis of both individual and situational factors, with all stakeholders – students, parents, teachers, and alumni – heavily involved.

In any case, particularly in the context of bullying, we may want to rethink expulsion and treat it with the utmost care.

Sunday, June 10, 2007

Our ancestors were economists!

According to Jared Diamond in his seminal Guns, Germs and Steel (1997), history of human civilization, hence economic development, began when our ancestors started producing food and create food surplus. That is, to grow crops instead of gathering wild berries, or domesticate animals instead of hunting them. The most interesting question is, as always, why.

Formerly, all people on earth were hunter-gatheres. Why did any of them adopt food production at all? ... From our modern perspective, all these questions at first seem silly, because the drawbacks of being a hunter-gatherer appear so obvious. ... In reality ... most peasant farmers and herders ... aren't necessarily better off than hunter-gatherers ... they may spend more rather than few hours per day at work ... less well nourished, suffered from more serious disease, and died on the average at a younger age than the hunter-gatherers they replaced. (pp.104-5).

But why did the switch take place, nevertheless? Here is my favourite part of the book:

... food production and hunting-gathering [are] alternative strategies competing with each other. ... Hence, we must ask: what were the factors that tipped the competitive advantage away from the former and toward the latter?

According to Diamond, there are some possible factors (pp110-11):
  1. Declining availability of wild foods, making hunter-gatherers lifetyle less rewarding.
  2. Conversely, domesticable wild plants were getting more available (due to both accidental discovery and genetic mutation), making steps leading to plant domestication more rewarding.
  3. Cumulative development of technologies for collecting, processing, and storing wild food, on which food production would eventually depend.
  4. The two-way causal link between human population density and food production, creating greater needs for food production.
If you are an econ student, and you are nerdy enough, you would think of a two-axis diagram with food producing on one axis, and hunting-gathering on the other. The you can think of a standard, convex isoquant curve that represents the choice over the two production mode. The other curve is an 'isocost' which slope represents the relative price of those two modes. The four factors describe by Diamond can be illustrated by changing the slope of the isocost (cheaper relative cost of producing food over hunting-gathering). As the result, the equilibrium also moved along the isoquant. (Note that it took thousand of years for the slope to change).

Well, before there were philosophers, politicians, lawyers or priests, apparently our ancestors were... economists!

If you'd like to discuss more about the book, please do tell Rara!

Wednesday, June 06, 2007

Footballnomics #5: transfer market

The English and most other European top leagues are going into summer hiatus. Now the activities and attentions switch off the field: transfer market. No World Cup or European Cup for clubs to do their window shopping, so most player buys will be based on mostly last season performance.

Football transfer market has been subject to many criticism for the past few years because of the inflated players' value and wages. The late Pope John Paul II once raised his concern that a football player can earn up to GBP100,000 per week, while millions of people in the world are still living below the poverty line. Forgive them, Father, for whatever sin they have committed.

Apart from that, explaining (or modeling) the transfer market is indeed a challenging task. What makes a club willing to pay GBP20m or more for a player (and pay him another 100k a week)? The player market is different from the regular labor market. It does not deal with labor with homogenous characteristics. It is rather a monopolistic competition market because each player have a monopoly over his skills that distinguish him from other players, which are observable by clubs. In the standard labor market, each workers have different skill. But firms can not observe each individuals, so they look at the pool of similar workers, and the market wage is the average earning of an average worker. Consequently, we cannot exactly draw the market demand/supply curve for player. (Therefore, it is more relevant to compare player market with the market for executive or other professionals).

So, again, what determines a player's transfer price and wage? The first and foremost is, of course, skill. This is very observable. A striker is judged by his goal tally; a midfielder by assists or passes completed; a defender by tackles; a goalkeeper by number of clean sheets or saves. Number of caps can also be another measure. There are also subjective measures like 'work rate' or 'contribution to team's success.'

A second factor is how far does a player have before his contract expires.* Obviously, when a player is closer to the end of his contract, the options for the club is either sell him in discounted price, or receiving nothing when the player decides not to extend his contract and becoming a free agent.**

If you think of a wage regression model, you may want to add a third thing: dummy variable for British player. For no obvious reasons, British players tend to be overvalued. Aston Villa just paid GBP7m for West Ham's Nigel Reo-Cooker, and Newcastle paid GBP5.5m for Man City's Joey Barton, and they don't even make it to the senior national team. The price of British youngsters are also inflated. That explains why most managers prefer to look for youngsters from the continent. And the English FA officials are complaining that the national team is suffering from the under-representativeness of English players in the top teams?

Some purchases are speculative. For example, youngsters are valued by their 'potentials for success' although they are yet to have established record. Players like Wayne Rooney may, up to know, justified their values. But no one knows why in the hell that Arsene Wenger was willing to pay GBP12m for Theo Walcott. (To be fair to Mr. Wenger, his buying record was excellent. But he made some blunders like Francis Jeffers a few years ago). Some players are skillful but injury prone. Newcastle paid GBP15m for Michael Owen who spent most of last season on the treatment table. Success in a country's league does not mean a replication in the other country's (Andriy Shevchenko, GBP30m from AC Milan to Chelsea). Some players are skillful but have off the field antics. And so on.

And some players are bought for partly non-footballing reasons. Think about the Asian players in the European leagues. Why do you think the reason Real Madrid bought David Beckham? And the motive behind Beckham's move from Los Galacticos to L.A. Galaxy?

Then, we can not ignore the role of agents in determining players' moves, transfer prices and salaries. Not that agents are bad. They do reduce searching costs, so players and managers can concentrate in training while their agents do the dirty work. Nevertheless, agents are also allegedly contributing to the players' inflated prices, although they do it legally. Well, some don't do it legally, like the recent allegation of transfer 'bung' involving Wimbledon FC.

Speaking about agents, I recently had a chat with an Indonesian sport journalist. According to him, transfer bung are very common in the Indonesian league. Here how it works. An agent offers the manager a deal to purchase a player he represents, and promised to share the transaction fee (or part of the player's monthly salary). It's the standard principal-agent problem since it's the club money, not the manager's. That's why we see a lot of foreign players with almost zero quality in the league (one player was a plumber in his home country).

* According to the Bosman rule, 6 months before his contract expires, the player can sign a pre-contract with the new club. That's why when clubs want to keep their star players, they must negotiate a new contract when the players are as far as 2 years away from the end of their contracts. If the negotiation collapse, the club at least will be able to sell the player at the beginning of his final season.
** If the club gets a player for free, that means the club has more money to increase the salary. Hence, we see many 'free' players have higher salary level.

I'm starting with the man in the mirror….

Frequent visitors would know that the hosts of the Cafe rant about anything from protectionism , ill-informed journalists, silly concepts, halal labels, to government paternalism. In a moment of self-reflection, Puspa, a friend of the Cafe's and current guest-blogger questions our shared angst about things not completely right in our beloved country. She suggests that we ought to look closer. Much closer. - Manager
I'm starting with the man in the mirror….
by Puspa

A couple of best friends and I have a peculiar post working-day habit. We love to get together, chit-chat and unwind, in one of the most frequented coffee shop chains in the city (you known, the one known for its Latte Index), that is situated in one of the city's central shopping centers. Peculiar, you say? To be doing what almost every other middle-class Jakarta citizen is doing to kill evening traffic while trying to relax? Hold on a sec, I'm getting there.

The coffee shop has a table, with three very comfy chairs, that overlooks the shopping centre's busiest corridor. Simply put, a very strategic position that gives you ring-side seat to the who's who that are visiting and walking to and fro and crossing the shopping centre. If you are a person who enjoys people-watching as much as we do, you'll probably have an idea at what I'm hinting. It is so damn entertaining to see 'peculiar' habits of the passer-bys, observe outrageous outfits and accessories mall-goers assemble, and how people of various walks of life and of differing sexual orientations demonstrate 'I'm seeking for companionship' behavior. We also compared notes on how attractive or interesting certain passer-bys of the opposite sex were.

Fun, innocent, rather juvenile but interesting activity, no? Well, that's what I thought…Until today. I was brought into my better senses when I saw three very young men, fashionably dressed, probably college students, who were sitting in our favourite seat and doing exactly the same thing that we were. Suddenly, it didn't look nice so nice, the vision that I was seeing. I thought, "D'oh , this is quite childish, actually……"

When is it that we actually do get to that point? I'm talking about a point of reflection, where you actually realize that something's wrong and needs to be changed. It's not easy to get there. Sometimes you won't get there unless you see someone very close to you experiencing hardships. In some cases you won't get there without experiencing some hardships yourself. Most importantly, when the 'something wrong' is just so ingrained in your system, you can only see it when you are able to detach yourself from the system and put things in perspective.

I recall an earlier opinion I often used to assert. This country is not in a deficit of ideal, true-to-their-heart intellectuals and public figures that are capable of seeing the 'something wrong' in this country. Yet many of them, when inserted into the system as direct actors fail to deliver, fail to implement the necessary actions to get this country out of the 'strutting' and 'muddling through' phase that has been going through in the past five years or so. Some of those who used to be on the outside looking in, are having a hell of a difficult time creating that critical mass to tip the balance over and initiate change. What lurks behind this inertia? Can change then, only be pushed from outside of the system?

My experience as a life-liver so far tells me that human beings, even rational individuals are bad at anticipating personal crisis, even when they know that the consequences of their actions may be horrific. A smoker rarely quits until he/she is sentenced with 'bronchitis' or 'pneumonia.' Efforts to establish some kind of world order did not gain ground until country leaders got tired of saw their people die from never-ending war. Early warning natural disaster systems are rarely designed and installed until a country is hit by natural disaster of great scale.

Do we really want to see disaster unfold, before realizing that something is wrong and needs to be changed? Do we really want to be stuck in 'muddling through' for the next five or ten years, while our neighbours out-develop us? You tell me. Perhaps Michael Jackson had it right all along.
"I'm starting with the man in the mirror….
I'm asking him to change his ways
And no message could have been any clearer…"

Monday, June 04, 2007

Playing cards in class

I just joined the faculty of one business school. And I am impressed. They have this system where you use blue, green, yellow, and red cards to motivate student participation. The cards are distributed following this rule: blue (which is worth 100 points) is for active student with sensible comments (I know, you have problem already with this criterion -- hold on). Green and yellow cards follow with 85 and 70 points, respectively. Red is actually a punishment rather than a reward -- it is worth minus 10, i.e. for student who has no idea what he talks about, or who gives totally wrong answer to your question. To ensure that you don't give too many blues or too few yellows, every session is provided with 5 blues, 10 greens, 20 yellows, and 5 reds.

Sounds good as far as recognizing the importance of incentive. But I think it has some drawbacks (at least to me):
  • I'm always skeptical of forcing students how they should study. Just because you're active in class doesn't mean you grasp the course well. (I recall my fellow students who never spoke a word in class ended up magna cum laude -- while some who were talkative -- too active you lost your concentration -- flunked their exams).
  • This whole thing of distributing cards break my concentration in teaching. The books are thick already -- I don't really have much time playing the card game. And it's not easy to make fair decision in split second, e.g. when you see three hands at the same time. Not to mention the sudden protests like "I think my comment is good and deserves a blue. Why green, Sir?" -- you need at least 3 minutes to settle on that.
So in the first three classes I abandoned the game and instead trying to explain 3 chapters as clear as possible. And I got a memo from the Director saying that I should follow the system -- the card game.

OK, I'll think about a better system next time. You have an idea? (Some time ago, when Tyler Cowen asked how to solve the RSVP problem, I offer an idea -- that kind of idea: like some machine does all that card distribution thing for me, while I can concentrate with my powerpoints).

Worms, wax, and test scores

How do we improve a country's (or region, community) education level?

From the research perspective, the first question to ask is 'what do we mean by education level?' Normally we use school enrollment rate to see how much is the share of population of a specific school age are enrolled in schools. Alternatively, we can use average test scores for quality measurement. There are many other measurements, depends on what do we want to see, but those two are the most common.

The next question is on what policy (intervention) to take. Is 'increase education budget' is the answer? Well, money is always nice, for sure. But what will the money for? To build more schools, to pay teachers, to provide scholarships? If someone do the counts of what appear in newspapers, these things are probably mentioned the most. The problem is, these interventions assume that the problems with education lies on the supply side, and budget is the biggest constraints.

However, this may not necessarily be so. Maybe school enrollment is low because, well, people don't see the point of going to school. Maybe test scores are low because students don't come to school for any reasons. Or, they do come to school but not for studying (i.e. beating their fellow students, like these guys).

Or, they do come to school but can not understand what the teacher says because of some other reasons. One possible reason is: incestinal worms. This is what Eduard Miguel and Michael Kremer found in Kenya. Worms infected billions of children around the world, and the problem is the most serious in Africa. When you are infected with worms, you share your nutrition with them, affecting your ability to grasp materials. Or worse, periodically you would have to be absent from school because of certain disease caused by worms. According to Miguel and Kremer, deworming program proves to be effective in increasing school attendance rate and raising test scores with lower cost than other types of intervention (like subsidizing school uniforms).

That was in Kenya. There is a similarly interesting story from Kepanjen Subdistrict, Malang, East Java. A local doctor found that attendance rate was not a problem there, but performance was. Later he found that, among other things, performance of students was affected by... earwax. Well, you know the channel. No rigorous studies have been done, but headmasters reported that regular de-waxing program increased average test scores.

Apparently, small things can lead to big changes.