Interesting blog bits

1. Eric Crampton on Do Costs Matter (Revisited)
   

   Crikey's Bernard Keane has been questioning the taxpayer-subsidised anti-alcohol campaign in Oz. And, usefully, he's drawn a response from Sandra Jones. Let's have a bit of a look.

2. Mattia Nardotto, Tommaso Valletti and Frank Verboven, on Unbundling the incumbent: Evidence from UK broadband
   

   In many countries, incumbent broadband providers are required to let new entrants access their network, what is called ‘local loop unbundling’ (LLU). This column uses data from the UK to ask whether such a policy stimulates broadband penetration. In contrast to what is commonly believed, local loop unbundling doesn’t provide more choice. However, it does raise both the quality of service and the speed of internet connections.

3. Gary Becker on Online Courses and the Future of Higher Education

   What is new about the MOOCs (which stands for “massive open online courses”) is not the use of the Internet to instruct in particular subjects, but that they are free, and they often are sponsored by some of the very best universities, such as MIT, Harvard, and Stanford. Since they cost little if anything to take, it is much easier for the MOOCs to get massive enrollments than the fee-charging courses offered during the earlier boom in online courses. Various recent articles on MOOCs in the New York Times by Tamar Lewin show that the massiveness of the enrollments is somewhat misleading since, as one would expect with free courses, the great majority of those initially enrolled fail to finish. Still, the number of persons who do finish these courses is very large compared even to what are considered very big enrollments in on-site courses.

4. Eric Posner on MOOCs—Implications for Higher Education

   Not that online education is new; there are adult-education online courses such as are sold by The Teaching Company; there are even online college degree programs, offered mainly by for-profit colleges. What is new is the scale and potential of free online education offered by, or in conjunction with, the nation’s leading universities.

5. Greg Mankiw on Slugging It Out, Inside Obama’s Mind

   Throughout Washington, policy makers are debating how to avoid hitting a wall on Jan. 1, when large and abrupt tax increases and spending cuts will take effect automatically unless Congress acts. The debate is perhaps no more fervent than it is inside the head of our newly re-elected president, who must now decide what kind of policy leader he will become, both in this confrontation and throughout his second term.

6. Nicolai Foss asks A Naturalistic Foundation for the Hierarchy?

   In economics, the hierarchical firm arises for reasons related to economizing with transaction costs, managerial attention allocation, information synthesis and what not. Many organizational economists would argue that absent transaction costs, there would be no hierarchies as there would be no firms. But, what if the existence of hierarchy has a partly genetic basis, that is, humans evolved in such a way that they have come to “like” hierarchies (which may therefore exist even if transaction costs were zero)? After all, those small hunting bands roaming the African savannahs 30, 000 years ago likely had leaders, a division of labor and so on, and evolutionary anthropology suggests that our brains evolved to handle the intricacies of handling this division of labor. Thus, we may be “hardwired for hierarchy.”

7. Diego Comin, Mikhail Dmitriev and Esteban Rossi-Hansberg on Heavy technology: The process of technological diffusion over time and space
   

   Geographical distance is a fundamental impediment to virtually all economic transactions. This column, using data on technology adoption in 161 countries over 140 years, argues that it also inhibits the spatial diffusion of technology. Moreover, it shows that technology spreads like an epidemic. As more people adopt a technology, the importance of distance to the technological leader diminishes until it eventually becomes irrelevant.

8. John Cochrane on Taxes and cliffs
   

   The whole tax debate is supremely frustrating to anyone who survived econ 1.

9. Mark Hubbard on The Dairy Cliff in America: An Alice in Wonderland of the Planned.

   A journalist from the land of fiat money and central banking sat down this week and, no doubt with a straight face, wrote the following about the American ‘dairy cliff’: