Tyler Cowen and Alex Tabarrok, George Mason University economists and co-bloggers at Marginal Revolution announced today that they will offer a free, online Developmental Economics course at their new online university, MRUniversity. Sign-up today.
I have a course suggestion: Drawing Conclusions from Comparisons.
This is a weakness I see at all levels, even the well-educated, who should know better. We often make comparisons between two populations and draw conclusions about the differences that happen to fit our biases and give too little thought to alternative explanations.
One example: Homeowners appear to be more responsible than non-homeowners. If we make it easier to buy a home, we’ll make a lot more people responsible.
Cue 2008 mortgage crisis that people are still trying to figure out, or still trying to blame on free markets or deregulation.
Alternative explanation: Turns out before we relaxed the standards, responsible people were more likely to become home owners and that’s what explained the difference in responsibility between these two groups.
Folks who were able to meet the requirements to own a home did so by being responsible before they owned a home.
Short circuiting home ownership qualification tests (like being responsible enough to exercise financial discipline and save a down payment) ended bad. It allowed irresponsible people to own homes, and surprise, they continued being irresponsible.
It would have been nice to consider alternative explanations to the idea that started it all — that home ownership causes responsibility — before committing to it.