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Is economics really that hard?

I confess, when I saw an article on Slate.com about how economists had struggled to make their theories account for how it could make sense to stand still on a moving escalator but walk up a staircase, I thought I knew what I was in for. The article's description indicated that the solution was eventually found; I looked forward to at least a chuckle over whatever lack of insight had created the false conundrum.

Boy was I disappointed. The author, Steven Landsburg, is apparently a professor of economics at the University of Rochester — someone who should know his stuff. But his article, while roughly describing the solution to the escalator problem (the benefits of a step up either an escalator or a staircase should be measured in time saved, not distance traveled), doesn't even gesture toward an actual explanation, and suggests that discovering that solution was some sort of miracle: It "came in a blinding flash."

I find this really frustrating, and on two levels. First, to my mind, you haven't really solved anything if all you've done is retinkered your mathematical model to produce the result you knew you wanted before you started. (After all, if you're dextrous enough, you can use a misapplication of mathematics to prove just about anything). A real solution would explain something about why one analysis is actually better than another.

And the second frustration is that that's not even that hard a question, as far as I can tell. Not that I have a rigorous definition — I've never studied economic theory, ack — but the general underlying principle seems pretty straightforward to me: If you want to determine the value of an action, it has to be measured against its relevant alternative. The relevant alternative to stepping up a staircase is staying on it indefinitely; the relevant alternative to stepping up an escalator is staying on it for however long it takes to carry you to the top. So a step up one has a much greater value than a step up the other: Actually getting where you're going (as opposed to not) is much more valuable than just getting there a little bit more quickly.

Thinking about this, I feel like I'm picking nits. But then I look back at the article, and sentences like "Who cares how close you are to where you're going?" — the closest Landsburg comes to an argument for why the value of a step should be measured in time and not distance. Argh. That's no argument; it's not even a respectable rhetorical device. But I'd better stop now, before I find myself frustrated on three levels....

August 30, 2002 1:32 AM

Comments

You don't need a degree to realize people are more concerned about effort than time.

Why do people drive around for 15 minutes looking for a parking spot that's close to the door instead of taking the first available spot? Because sitting on your ass driving takes almost no effort. But walking does.

Same issue.

Call it Mr. Nosuch's first rule of human nature: people are lazy.

Sounds like the author of the article suffers from "academic reality detachment syndrome".

Posted by Mr. Nosuch on August 30, 2002 12:41 PM

people are more concerned about effort than time.

Interesting. If you combine all three factors — distance, time, and effort — you get what seems like a pretty decent solution:
value ~ speed / effort.

That would even solve the (non-)conundrum Landsburg drops in at the very end of his piece, when he says "The same argument proves, incidentally, that even if you choose to walk on the escalator, you should always walk even faster on the stairs." The reason that isn't true is probably because effort (or perceived effort, at least) doesn't increase uniformly with speed -- if you're climbing a staircase, matching the speed you get by walking up the escalator requires a much greater effort, so it's not necessarily worth it.

Posted by M on September 1, 2002 12:23 PM


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