Monday 23 May 2011

Malthusian Growth

One of the take-aways from recent growth theory reviewed in DV409 is that modern growth as we experience it (where better technology leads to higher standards of living) is a very recent phenomenon -only from the last several hundred years. Here is another working paper by Ashraf and Galor that again confirms this surprising but profound observation. You can read the paper online and I reproduce the abstract here:

Abstract:
This paper examines the central hypothesis of the influential Malthusian theory, according to which improvements in the technological environment during the pre-industrial era had generated only temporary gains in income per capita, eventually leading to a larger, but not significantly richer, population. Exploiting exogenous sources of cross-country variations in land productivity and the level of technological advancement the analysis demonstrates that, in accordance with the theory, technological superiority and higher land productivity had significant positive effects on population density but insignificant effects on the standard of living, during the time period 1-1500 CE.

Sunday 22 May 2011

Alternative medicine and Statistics

A good article in this week's Economist Magazine summarises the overall results from one Professor Edzard Ernst's career spent testing the efficacy of alternative medical treatments. Overall his team has found statistically significant efficacy for 5% of all treatments studied. This was reported by the Economist as evidence that 5% of alternative medical treatments were "truly" effective.

But is this the correct interpretation of this outcome? Putting on our statistical hats, assume that NO alternative treatments were any better than placebos, and that Prof. Ernst and his team had examined their efficacy using a 95% cut-off for level of statistical significance. In what percentage of the studies would you expect them to (incorrectly) find that the treatment was statistically significant? (i.e. make a type-1 error) Ha ha!! Is that a coincidence??!

Monday 9 May 2011

Supply and demand policies to improve educational outcomes

Thanks Anita and Linda for suggesting two interesting pieces on the challenges of improving educational outcomes in the developing world, and the relative merits of supply and demand side initiatives.