ECO352H5 Lecture Notes - Lecture 4: Dynamic Inconsistency, Water Chlorination, Selection Bias
Document Summary
Information, faith/trust, issues w/ public system, time inconsistency, underestimation of benefits. Rational agents do something when benefits exceed cost default option does not matter. When go to get chlorinating device for water have it right beside the well makes the usage higher of chlorinating. In the west these are already in place (adding vitamins into milk, clean water = default option) Education quality / supply: decreasing class size, computers in class, incentivize students. Education choice / demand: things that make people choose to be in school longer. Log (wage): linear regression of indiv wage on years of schooling years (si) Interpretation: tells you the percentage change in wage due to one year increase in schooling. Beta = 0. 08 means one more year of schooling leads to 8% higher wage. Ability bias: people who do more schooling have higher ability than those who do not.
