Robert Whaples and the Modern Principles

A blog on my teaching with Modern Principles of Economics by Tyler Cowen and Alex Tabarrok

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The “Impact” of Public Goods

Posted by Robert Whaples on October 13, 2009

Yesterday, I covered most of Chapter 17 of Cowen and Tabarrok — “Public Goods and the Tragedy of the Commons.”  Tyler and Alex have come up with the best public goods example that I’ve seen — asteroid deflection services (or as I recast it in class, asteroid tracking and deflection services).  Hopefully, the asteroid example had a big “impact” on my students.  The beauty of the example is that it is a public good that neither the market nor the government currently provides.  Although the chapter doesn’t include any theory-based graphs, I used the asteroid deflection example in drawing a marginal cost and a marginal benefit curve on the whiteboard.  The MB discussion allowed me to bring in consideration of how economists estimate the value of a life saved — a real plus.  I especially like the chapter’s caveat that “a public good is not defined as a good produced in the public sector.”

Whenever I cover public goods, I close with an assignment in which I give students some extra credit points, but they have to spend some of them to build a public good — a levee that will protect the class from a hurricane which will wash away all the class’s extra credit points unless students voluntarily contribute enough points to a levee-building fund.  With N = about 33 in both my sections, each student has to consider whether or not his or her points will be crucial to completing the levee. On Wednesday afternoon, we’ll tally up the points … and then move on to the tragedy of the commons and skip back to externalities.  (I’ve never been one for slavishly following textbook’s chapter ordering.)

I’ve been running a lecture behind my syllabus and so decided to skip Chapter 15, “Getting Incentives Right.” I told students to it  on their own, with the reward of extra credit points on the quiz for correctly answering questions related to the chapter.  It’s a short, interesting chapter but I think I’d have a hard time actually spending anywhere close to 50 minutes talking about it in class.  I asked three questions about it on the quiz — each related to the three big themes of “You Get What You Pay For,” “Tie Pay to Performance to Reduce Risk,” and “Money Isn’t Everything” — essentially covering the whole chapter in 5 or 10 minutes.  This may be an effective approach, since it’s one of those chapters that basically teaches itself.

Last Friday’s quiz (I give a 5ish-minute quiz at the beginning of almost every class) asked students to name the three African-Americans who have won the Nobel Peace Prize.  I found it quite interesting that nearly half of them guessed Nelson Mandela.  Is this a sign that Mandela is an honorary American or maybe sign of the ubiquity of the whole melting pot process — he speaks English, acts and looks like us, so he must be an American?  (BTW, hats off to Ralph Bunche — the first African-American to win the peace prize.)

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