Assignment #11

2 May

Chapter 4 of Freakonomics discussed how legalized abortion has caused a significant drop in the crime rate across the United States.  The Impact of Legalized Abortion on Crime by Donohue and Levitt also discusses the impact legalized abortion has had on the crime rate.  To try and prove this point, both cite that the United States started seeing a drop in the crime rate roughly 20 years after the legalization of abortion, referencing that children 18-24 were the most likely to commit crimes.  Also they noted that states that had legalized abortion before Roe v. Wade had started to see a drop in their crime rate before other states had; and finally they note that states where the most abortions occurred saw a higher drop in their crime rates.  One fact I found surprising was that 1.5 million abortions take place every year.  I did not think the rate was that high mainly because I thought it was a costly procedure, which brings us to the next fact.  An abortion today only costs $80.  I was always under the impression that an abortion was an extensive procedure that would cost thousands of dollars.  It really surprises me that you can get an abortion for about the same price as a pair of shoes.

 

Foote and Goetz released a critique of the previous assumption titled The Impact of Legalized Abortion on Crime: Comment.  In the critique Foote and Goetz say that the best way to analyze the effect of abortion on crime is to look at “young people who live in the same state in the same year but whose mothers had different probabilities of aborting an unwanted pregnancy”.  While I think that would give us the ability to see the affect abortion had state by state, I don’t believe that it shows us what is going on across the whole country as what Donahue and Levitt were trying to show. 

I really did not agree with this critique at all.  I felt that they were not really listening to what Donahue and Levitt were saying.  There was a point where the critique mentioned that there were high abortion rates and high crime rates before 1985.  They then criticize Donahue and Levitt for looking at changes in the crime rate rather than the average levels of crime.  But I’m pretty sure Donahue and Levitt explained that the reason there was still high crime till around 1990 was because that most crime is committed by people 18-24 years old.  So since abortion wasn’t legalized till 1973 this explains why there was not a change until 1990.  It just seems to me that Donahue and Levitt did a better job of proving their point than Foote and Goetz did trying to disprove it.

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Former Senator Russ Feingold Speech

22 Apr

Last Thursday, former Senator Russ Feingold gave a speech at Gettysburg College.  In his speech, Feingold talked about the United States since 9/11.  What I really liked about the speech was not so much as to what was said but how Feingold seemed to lack the political bias we have become accustomed to in this day and age.  When Feingold discussed the Iraq war he said democrats were to blame too, not just George Bush and the republicans.

Another thing Feingold mentioned that I liked and agreed with him on was on how we can better our international relations by learning foreign languages.  In today’s world the United States does not have good relations with many countries but if we learned to speak their languages and be accepting of their cultures we would significantly improve our relations.

One part of Feingold’s speech that could slightly be related to class was when he said that you need to always think in two directions.  We could relate this to econometrics in the way that when you run a regression you can’t just assume that there is nothing wrong with it and it is perfect.  You need to assume that there are multiple problems with it, whether it be heteroscedasticity, multicollinearity, or autocorrellation.  Then you need to figure out how to correct these problems.

Assignment 10

11 Apr

In chapter 7 of “Poor Economics” the author discusses the lack of loans to the poor from banks along with how most loans available to the poor are charged at very high interest rates, and how Micro Finance Institutions (MFIs), take part in giving the poor a loan, without charging ridiculously high interest rates.

The authors present the statistics by  giving us facts of the typical fruit and vegetable seller in India.  They buy 1000 rupees worth of fruits and  vegetables in the morning from a wholesaler, sometimes renting a cart to display them on.  Then at night  they reimburse the wholesaler 1000 rupees plus a 4.69% interest rate, per day.

The authors use the statistics presented to make a big point by putting the amount in terms of US dollars.  They say if you borrowed $5.10 at 4.69% interest, after a year you would owe $93.5 million dollars.  Also in some areas they say MFIs charge 1/4 of what a money lender charges in interest rates, making it more manageable for a person to pay off a loan.

From this chapter I learned that the reason the poor are forced to pay such high interest rates on loans is not only because of the high chance of default but also because of the cost of monitoring them is expensive.  I also learned that it is very difficult for to make individuals pay for the loans they defaulted on.  The authors explained that in India 40% of these cases were at least 8 years pending.  I also learned that MFIs lower the cost of lending to the poor by usually lending to a group of borrowers

Some questions I have after reading this chapter are since MFIs started to arise, what has been the percentage drop in poor people borrowing from money lenders and their family?  Also, if banks see the way MFIs work, why don’t they use practices similar to them to loan to the poor?

Assignment #9

29 Mar

“The Future of Human Life Expectancy: Have We Reached the Ceiling or is the Sky the Limit?” examines how the average human life expectancy has greatly increased over the past century.  But it brings to light the question of whether there is a maximum life expectancy for humans. 

Something that this paper brings to light is that if I was working on this research paper 100 years ago would there be as big of a difference in life expectancies based on how developed a country was.  Also, say that there is a maximum life expectancy for humans, if I did paper 100 years in the future would other less developed countries catch up to the rest of the world?

http://www.prb.org/pdf06/nia_futureoflifeexpectancy.pdf

 

 

Assignment 8

22 Mar

The picture of my regression is in the post below this one.

I regressed the average life expectancy of 30 countries on 3 variables; Level of Development, Obesity rate, and Tobacco use.  I felt that these variables are the biggest determinants of how long an average person would live for

The primary relationship of interest I was looking at was between the average life expectancy and the level of development of a country.  ( I divided countries into first world, second world, and third world, and I put this data as a first world country was 1, a second world was 2, and a third world was 3)

The coefficient on the variable of interest is negative 6.23.  This shows that as a country becomes less developed the average life expectancy of its citizens drops.

From this regression you can conclude that how developed a country is, is a strong determinant of the average life expectancy of its citizens.

There are definitely more variables I would like to include and I would definitely like to add more observations to get more sound evidence.

Image

Regression

22 Mar

Regression

Assignment 7

8 Mar

In the Slate article “To Educate Children, We Have To Teach Their Parents” the authors discuss how their is a significant lack of education for children in many impoverished parts of the world.  The authors of the Slate article present a similar argument to the one presented in chapter 4 of Poor Economics.  Both the article and Chapter 4 mentioned how the parents of the children should be taught what the returns to having a higher education is.  However, in chapter 4 it was discussed that A parent sacrifices a lot to send their kid to school and they will not see many of the benefits to themselves, while if a parent does not send their kid to school they can have them work all day and it benefits the family as a whole.  We  saw in the book and the article that parents were more likely to send their kids to school if they were given some sort of monetary incentive.

I would have liked to have seen in the Slate article the process they were going to use to mention to parents and children the benefits of education, not just say they are going to educate them.

The Slate article uses many statistics to present its argument.  First they say that 1/4 of all sub Saharan African children that are primary aged, do not attend school.  The article also mentions that to teach parents and children the benefit of education in Madagascar it would only costs $2.30 per child .

Slate Article