Saturday, April 24, 2010

Esther Duflo

I first met Prof. Duflo in 2004 when I was a student at the Harvard Kennedy School. She came as a guest lecture in our seminar series. She presented her work on the impact of a quota for female politician in India's local government.

During my two-year time in Cambridge I hadn't had too much opportunity to interact with her. But I learned much about her works and MIT-based Poverty Action Lab, the organization he leads with Abhijit Banerjee and Racherl Glennerster. Her most cited work was, of course, her dissertation-turn-seminal paper on measuring the return on education using Indonesian data. In the paper, she exploited the fact the SD INPRES policy in the 1970s could serve as a exogenous quasi-experiment. By comparing the average years of education and wages between the pre- and post-INPRES cohorts, she corrected the endogeneity and omitted variable biases.

In 2008 I had a privilege to get involved as one of the te aching assistants in the Poverty Action Lab's short course in Bali. There I had some chance to discuss some technicalities in doing randomized experiment studies with her and her co-workers. I also learned that she likes to go hiking and mountain climbing. In fact, after the Bali course finished, she and Pascaline Dupas went to Lombok to climb Rinjani.

This week the American Economist Association awarded her the John Bates Clark Medal (see the story here and here). It is a highly prestigious award, given every 2 years to "American economist under 40 who have had a significant contribution to economic thought and knowledge." (Note: Prof. Duflo is now 37). Former medalists include Milton Friedman, Joseph Stiglitz, Paul Krugman, and recently Steven Levitt, Daron Acemoglu and Susan Athey. Duflo is the only second medalist after Susan Athey. And in the past, Clark Medal is a good predictor for winning the Nobel Prize.

Prof. Duflo had her Ph.D from MIT, and has been working there since then. In the US academic job market (in economics), it is very unusual for a Ph.D to work in the same institution immediately.

If I can summarize her contribution, it will be 'helping to understand which development policy or initiative work, and measure the impact, using randomized experiments.' True, there has been so many debates over the use of randomized experiments. The fact that is has been debated only shows its importance. Although Prof. Duflo was not the inventor of the technique, she and her co-workers are the ones to make it popular not only among academia, but also for policy makers and pracitioners.

For those who have always been skeptical, even hostile, to economics and economists, please spare some time to take a look at her and the Lab's website, and see how diverse the discipline has been.

And The Medal Goes To

Esther Duflo of MIT. She obviously very well deserves for the medal indeed. Congratulation.

Your barista Ape, her fellow randomista, will probably serve you a review on what Prof. Duflo has done and brought her to the prestigious John Bates Clark Medal.

Tuesday, April 20, 2010

Torture of Book Sale

I am at my local library now and could not decide what to buy from their ridiculously low-priced ongoing book sale: Goethe's The Sorrows of Young Werther, Carlos Fuentes' A New Time for Mexico, or Toni Morisson's Sula.

One thing I know I won't take is anything from Michael Moore.

I think I'll go for Goethe.

Update: Goethe's Werther has gone. No wonder, it costs just 50 cents.

Wednesday, April 14, 2010

Who Wants Industrial Policy?

Dani Rodrik of HKS is one - with some twist from the old definition.

Nonetheless he said:
The standard rap against industrial policy is that governments cannot pick winners. Of course they can’t, but that is largely irrelevant. What determines success in industrial policy is not the ability to pick winners, but the capacity to let the losers go – a much less demanding requirement.
Uhm, I am not convinced. Letting the losers go is very hard, and probably equally demanding with picking winners. I made a serving in this Cafe sometime ago, arguing that old policies don't simply die.

Friday, April 02, 2010

Which books?

Dear Kate,

I'm off to Kelapa Gading today. The Gramedia there runs a handsome price discount. Any suggestion on books?

Bookbuff @ Karet

Dear Bookbuff,

First, forgive me that I doubt you're a book buff. Book buffs don't ask suggestion on books. They know what they want.

But I'd tell you anyway what I just did in my latest shopping spree. I bought SuperFreakonomics (Levitt-Dubner), Nudge (Thaler-Sunstein), Animal Spirits (Akerlof-Shiller), The Return of the Great Depression (Krugman), and The White Tiger (Adiga). All but Tiger are with econophone, but Tiger is equally entertaining - it's the winner of 2008 Man Booker Prize. My usual formula in bookshopping is 4:1, four econ and one literary work.

Oh, while we're at it, why don't I share with you what I would not buy? Here goes. I don't buy books of authors who put their academic titles on the front cover. They're usually bad bad bad. I don't trust self-help books. And I don't like books with dry title.

Finally, I also judge books by their cover. And sometimes I buy books just for the sake of ridiculing them: John Perkins, Naomi Klein to name two.

Happy shopping,

For Auction: Freshman Seats

Greg Mankiw told us that Harvard admission committee has decided to auction off 100 freshman seats for the next academic year to overcome their budget shortage.

Of course, you may want to be little bit careful in reading the date of such announcement.

On the second thought, the idea is not as outlandish at it may seem. What about the FEUI follows the suit and would launch an open auction for, say, 30 seats next year -- and use the money to buy books for library and send their junior lecturer to study abroad?

I think it is a good idea as long as they make it open and transparent. On a smaller scale, they can try to auction off seats in Aco's class -- I wonder how much the true market value of his lectures is :-D

What do you think?