Sociology and economics

A few years back I was interviewing a sociology graduate for a scholarship and loudly exclaimed that it was absurd that she had a masters in sociology while not knowing much economics – she had mentioned that her courses in sociology (bachelors and masters) had no “papers” (the word used by students of certain prominent Indian universities when they mean “courses”. The choice of words possibly indicates their priorities) in economics.

It is a result of my prior – everything I know and have learnt about sociology and social behaviour is from the realm of economics and game theory (iterated prisoners’ dilemma and derivatives). I’ve learnt it from reading blogs (Marginal Revolution, Econlog, etc.) and from pop economics books written by authors such as Steven Levitt and Malcolm Gladwell. So every time I think of a sociology problem I can’t think of any method apart from economic reasoning to attack it.

However, it turns out that the use of economic reasoning for sociological analysis is rather recent, and started only with the work of Chicago economist Gary Becker, who wrote a series on love and marriage. Becker’s wife had died, and he was a single father, when he wrote his series of papers on this topic. This is supposed to be one of the first steps in the “creep” of economics into (now) related disciplines such as sociology and political science. This has been uncharitably called by Becker’s critics as “economic imperialism“.

So my exclamation that a masters program in sociology not including a course in economic reasoning being absurd would be valid only in very recent times, when syllabuses would have been updated to keep track of any such above “imperialism” and “creep”. Given the glacial pace at which Indian universities move, however, I think my remark might have actually come across as absurd!

PS: Read this excellent Lunch with FT interview of Gary Becker by Tim Harford.

On Schooling

Usually I’m quick to defend the school where I studied between 1986 and 1998. I made lots of good friends there and generally had a good time. Of late, however, in discussions on schooling, I find myself mention teachers from that school who I considered particularly horrible, mostly for their method of teaching.

Yesterday I was chatting with a classmate from this school who now works in the education sector, and she happened to mention that she considered her schooling to be mostly “a waste” and that she didn’t learn too much there. And I quickly concurred with her, saying all that I had learnt was at home, and school didn’t teach me much. So what explains my love for the school even though they might not have done a great teaching job?

From 1998 to 2000, I went to another school, where again they didn’t teach much, and instead assumed all of us went to JEE factories which would teach us anyway. What made things bad there, though, was that they didn’t treat us well. That school had a strict disciplinary code which was enforced more in letter than in spirit. Teachers there had a habit of loading us with homework, calling us for Saturday classes and having surprise tests. The problem with School 2 was that not only did they not teach well, but they also made life miserable in several other ways. The only redeeming factor for that school was the truckload of interesting people I got to meet during my two years there.

So what explains my love for School 1 despite the fact that they didn’t do a great job of teaching? The fact that they treated us well, and left us alone. The uniform wasn’t very strictly enforced, as long as you wore blue and grey. The school had an explicit “no homework” policy. Exams happened only according to schedule and there were few assignments. Even in class 10, we had three “periods” a week dedicated to “games” where we played volleyball or basketball rather than wasting our time in “PT”. Teachers were mostly very friendly and the atmosphere on the whole was collaborative and not so competitive.

My friend might think she “wasted” her 10 years in the school because she didn’t learn much there, but I argue that it was better than her going to another school where she wouldn’t be treated as well and where her life wouldn’t have been as peaceful.

Fractal life

Recently I finished reading Mandelbrot’s The (mis)Behaviour of Markets for the second time. Fantastic book. I think it is a must read for people who are interested in financial markets, and especially for those who work in capital markets. While it stays away from equations and “math”, and prefers to use pictures (or cartoons) to illustrate and show concepts (a method I definitely prefer to obscure math), it does raise a lot of very interesting fundaas.

So last week I was feeling stressed out. I realized that I had worked too hard on Wednesday and Thursday hence I got stressed out on Friday. A couple of months back, I took a couple of days of medical leave because I was stressed out. I reasoned that was because I’d pushed myself too hard the earlier two weeks. And thinking about all this today, I thought the incidence of stress has gone up over the last couple of months. This, I reasoned to pushing myself excessively for over a year now. And if I were to analyze my today’s work, I could probably say that I pushed myself too hard in the afternoon and hence got stressed out in the evening.

Same pattern, you see. At different scales.You get the drift, I guess. And stress is just an example I took. If I think about how my louvvu for my wife has evolved, again same pattern. There is a “global pattern”, and that same “global pattern” repeats itself over shorter intervals over the last two years. Irrespective of the quantum of time I look at, I see that same “global pattern” stretched or compressed to the appropriate time scale. In other words, love is also a fractal.

You can see fractals all around you. You can see self-similarity everywhere. And yet, even when you have small samples. you instinctively try to model it as a normal distribution. Without realizing that the “normal” distribution in life is the Power law.

FabIndia Koramangala

There are very few clothing stores that I can say I’m in love with. There are very few stores where I feel like buying a large proportion of merchandise on display whenever I visit it. There are very few stores where just the atmosphere makes you buy much more than you had planned to. And it’s a pity that on two of my visits to the store, I bought nothing.

I haven’t been to too many FabIndia stores outside Bangalore (only a handful of stores in Gurgaon and maybe one in Delhi) but having shopped a few times at the FabIndia store in Koramangala, I feel distinctly underwhelmed whenever i go to any other outlet. Having been several times to this beautifully designed house, I find FabIndia outlets housed in less spectacular buildings sad. Of course there have been times (including two days ago) when I’ve shopped at other outlets but the experience simply doesn’t come close.

The first time I went to the store was some four or five years back when Anuroop wanted to check out kurtas. I think we went there on Bunty’s recommendation but I remember that I hadn’t bought anything. I had quickly made amends for it a couple of months later when I bought a couple of shirts, and then a year later when I bought a dozen shirts at one go!

The only other time I went there without purchasing anything was yesterday morning, when I was visiting the store after a gap of some two or three years. The first thought was one of guilt – of having shopped in a less spectacular Fabindia store (the one at Kathriguppe) just the previous night, and then as I got over it I got overwhelmed with the variety on display. I suddenly got afraid that I might over-spend and made a dash for the exit.

I wasn’t gone for too long, though, as I returned in the evening with Priyanka, and this time we discovered something even more spectacular – something that I had completely missed during my hajaar earlier visits – the store cafe. The brownie was decent, and the coffee was just about ok, but that didn’t matter one bit. Once again, it was the atmosphere at play, and that the coffee shop had in plenty.

It’s something like a small arena. If you can perform some visual art (say a play or a dance) in a five feet square area, this is just the place for you! All around the 5×5 “well” (which is full of pebbles) are stone benches, at different levels. Cushions have been placed on some arbitrary benches, and we understood that that’s where it was supposed to sit. There wsa some music that I didn’t quite recognized but was quite pleasant, and the wooden trays in which the waiter brought our coffees were also beautiful – I might have bought something like that from the store had I been in a spendthrift mood yesterday!

If you are in Bangalore and are interested in cotton clothes you should definitely check out this store sometime. It’s in Koramangala, in the extension of the intermediate ring road. Make sure you go there leisurely, for there is plenty to see and buy (the inventory is about six times as much as that of an “ordinary” FabIndia store). And while you are there, do visit the cafe and lounge around there for a while. And think about Priyanka and me while you are there.

Compensating Teachers

This is yet another of those things which I’ve been thinking about and have been intending to write about for a long time but have never gotten down to it. Pinky wrote this excellent post on the topic today and that has got me thinking. To quote her,

A bad teacher makes a bad student. A teacher who looks at teaching as just another job is doing no good to anyone. She neither grows in her life nor contributes to the positive growth of a kid.There have been a few teachers in my life who i have tremendous respect for, not because they taught me effectively enough to pass in their subjects but because they taught me to listen, think and speak!

I don’t have any solutions yet but I thought I should just put some bullet points here, just to try and give a structure to the problem. Let me know your thoughts

  • If we consider a person’s salary as Society’s recognition of his/her worth, school teachers are not recognized enough
  • Abysmal salaries drive away a large number of potential school teachers away from the profession
  • Love for teaching is important, but if teaching pays as abysmally as it currently does, the opportunity cost of doing what you love is way too high for some people, and so they end up in other professions
  • We have a market failure in teaching – how do we run a school profitably while paying teachers competently while on the other hand keeping fees reasonable, and not resorting to any subsidies?
  • India suffers from what I call the “official’s wife bug”. In the 60s and 70s, the teaching profession got flooded by women who weren’t really looking to make much money, but more to just pass some time and use their bachelor’s degrees rather than being housewives. This has fostered a culture of low schoolteachers’ salaries in India. People who weren’t looking to make money out of teaching crowded out those who found the opportunity cost of the low salaries in teaching too high.
  • McKinsey interview level arithmetic: assume a school having classes 1 to 12, 4 sections per class, 40 students per section. 8 periods a day 5 days a week gives a total of 12 * 4 * 8 * 5 = 1920 periods per week. Assuming each teacher can take 5 classes a day (or 25 a week) we will need 77 (round it off to 80) teachers. Number of students is 12 * 4 * 40  = 1920, so essentially 25 students have to pay for one teacher’s salary, and this is apart from expenses towards school building, maintenance, overheads, etc. McKinsey level handwaving. 10 students have to pay for one teacher’s salary. Doesn’t sound feasible
  • Primary and secondary education is simply way too important to be left in the hands of unmotivated disinterested people, but that seems like the situation we are in (I dont’ mean to say all teachers are unmotivated or disinterested; just that the situation doesn’t incentivize talented motivated people to enter the profession).
  • Universities attract talent by allowing faculty to make money by other means such as consulting and organizing for-profit courses. Will something like that work for schools? And no, I’m not talking about private tuitinos as the other source of income. Is there something else?
  • Government intervention is not a solution. In a place like India it will only end up messing up things further and draining more money from the system.
  • In the pre-IT era, teaching salaries were more competitive (with respect to competing jobs) than they are now, so they could attract better talent
  • I wonder if it is only in India that such a large proportion of school teachers are women. This is just a general pertinent observation, and has nothing to do with the rest of the post
  • The officer’s wife model was good when it started off – some motivated people came into the system because fo that. Just that the system is not sustainable and we’re facing the problems of that now and because a lot of school managements fail to take into account that the model isn’t sustainable

Any thoughts on this? Any possible solutions? Of course it’s not possible to implement any macro-level solution. All I’m looking at is a school-level solution. How do you plan to run one school (of size I mentioned in my bullets) sustainably while ensuring teachers are paid adequately enough to not scare away interested people?

Head, heart, phallus and arranged louvvu

In response to my arranged scissors series, my stalker has started her own thing called the “karabath series“. In the first (and so far, only) post in that series, she talks about this concept that she describes as “arranged louvvu”. It is a bit convoluted but the essence is that in “arranged louvvu” you don’t blindly get into it. Instead, you put on a rational approach to decide if the counterparty is best for you and if the cost of giving  up on all the other women in the world is covered by the joy this woman brings you, and then make sure that the counterparty satisfies all CMP constraints and only then, in a phased manner, do you fall in louvvu with the person.

It is a nice concept but unfortunately I think the way the stalker has explained it is extremely convoluted, and I think using the head-heart-phallus framework (Kunal Sawardekar, you can abuse me for this also) I can explain this a lot better. So basically the idea is that the phallus is the quickest to react, followed by the head and the heart takes the longest to react.

The way most louvvu happens, the way they show it in the movies is that phallus reacts first (it’s a purely biological reaction, so it’s quick and trustworthy). And then, quickly enough, the heart gets involved. And the thing with heart involvement is tthat it is an extremely illiquid investment – it is really tough to liquidate the “heart investment” without booking significant losses. And since the heart entered the scene before the head also gave its verdict, when the head finally comes into the picture, it finds the whole thing irrational, and thus it goes “love is blind”.

The typical arranged scissors process, however, doesn’t leave you with enough time for the heart to enter the process. And since relatives can’t help you with the phallus process (and since that’s anyway instantaneous) it’s the head that gets involved. It’s the head, the rational head that takes all the decisions there. The heart enters only later, in most cases after marriage.

So the funda is that the stalker is confusing “head involvement” for “arranged process”. What she calls as “arranged louvvu” is a case where one holds back the heart (yeah, it takes effort to do that after phallus has said yes) in order to allow for the head to take a rational decision, and then go ahead with “heart investment” only after head has said yes. This way, the head always has buy-in on any relationship that the heart has gotten into, so irrationality gets minimized to a large extent. And some of the problems of “pure louvvu” are hedged off.

Yeah, it takes effort. It takes effort to hold back the heart once the phallus has given go-ahead. But getting the right amount of head involved at the right time helps in preventing much disaster. It’s the logical way to go about things. “Arranged louvvu” is only a fancy name people give it. And now I don’t really know if the head-heart-phallus framework has made it any easier for you to understand this.

When I got Varmalanched

So one of India’s 50 most powerful people has released his book My Friend Sancho. People who have already read it tell me that it is a great book. I’ve read bits of the first chapter which he had put up online a few months back, and despite the fact that I dont’ normally read fiction, this had me fairly interested. However, my unread pile at home is still quite tall, so I don’t plan to buy this for a while at least. And the Delhi launch of the book is on a weekday, so I can’t attend that either.

So a while back I was going through Aadisht’s archives. I was looking for one specific post which he had written sometime in our 5th term at IIMB, and I managed to find all other posts he had written at that time, except the one I was looking for. And one of those posts had a linked to one of my posts, which was the only time when my blog got Varmalanched.

Instapundit is a famous blog aggregator and legend has it that whenever instapundit links to a blog, it goes down due to the sudden spike in trafffic. This is called an instalanche. Similarly when desipundit was good (in its early days), a link from there would lead to a small disaster (especially for people working with limited hosting space and bandwidth) which gave rise to desilanche. So when India’s most powerful blogger links you, you get Varmalanched.

The occasion was a post that I had written in search of lost love. I had seen a fairly cute girl at the Bangalore Landmark Quiz 2005, and had blogged asking for her whereabouts. First Aadisht linked me. Then I got desilanched (there were a few desipundit regulars who would read my blog back then). And then the ultimate thing happened. Varmalanche.It was like all the interwebs were trying to help me out in my search for love. If it had succeeded, it would’ve been truly filmi.

I was hosted on Liverjournal back then so my site didn’t actually go down. But this was the first time that a post that I had written had gotten more than 50 comments. I have linked to the livejournal post here (rather than the noenthuda.com page) so that you can read the comments. Do read the comments, they are extremely insightful and funny (ok now I seem to be pitching that blog post like Ravi Shastri pitches that 2020 magazine).

Commenting on that post, Gaurav Sabnis had advised me to shift to Pune saying that that was the only way I could improve my social skills. I interpreted his advice differently. A month later, I was hitting on a girl who was then living in Pune. That story had ended in disaster, though. A year back I met up with Salil the Younger for the first time and teamed up with him for a couple of quizzes. The first thing he mentioned to me was this particular post of mine and his comment on it. It is in the same thread as Gaurav’s comment.

Then there was Shamanth who was trying to convince all my readers that I would never get the girl because he had already bagged her (by giving her chocolate during the quiz). Do read his comments on the post, and the replies to them. Insightful again. And there was Gayathri, a girl who was then unknown to me who had taken to commenting on each of my blog posts. Her comments, and her conversations with Shamanth, are also insightful.

I have attended two landmark Bangalore quizzes after that. On each occasion, I’ve looked through the entire crowd trying to find this girl, without much success. On several occasions I’ve tried to describe this girl to fellow-quizzers and asked me to help me identify her. No luck there either. I’ve had a long history of stillborn relationships – things that were over before they could take off. I suppose I should accept the hard facts and add this one also to that already long list.

Arranged Scissors 9 – Cost Benefit Analysis

Neha, also known as MotherJane, writes in her blog:

…I do not believe in love. Partners offer solutions to everyday issues like running a house, satisfying needs and filling in the blanks. However they come at a cost – often too high to bother. Still we go ahead and do the trade – its just what we do. In our lives friends become the people we talk and listen to, partners become people we are forced to talk and listen to, so that we can have everything else they offer. If you think about it, your relationship is already transactional. If calling it love makes easier on your conscience, I won’t hold you back.

I was trying to figure out how it all fits in with the arranged scissors process. And every time the answer came out that the Arranged Scissors process is fairly irrational.Mainly because of the short time for decision. A few basic checks are made, obvious misfits are checked for, and things get “done”.

The biggest cost of getting married (which Neha doesn’t mention) is the opportunity cost of the option of getting married to any of the other women in this world apart from your wife. Divorce is messy and expensive (in more ways than one), and hence once you have hitched yourself to someone, this opportunity cost immediately kicks in.

Later in her post, Neha talks about the “friends-with-benefits” model, but the problem with that is that it doesn’t help propagate your genes. It is tough to raise kids in that kind of an environment, and considering that the purpose of life is to procreate (this is the general case; i konw you may be an exception so don’t shout at me for this) the friends-with-benefits model is not stable. The reason the world has settled down into a model of bilateral commitment is to optimize the costs and benefits of propagating genes.

So if you want to propagate your genes (again, I’m not sure if you want to. If you don’t, I’d recommend you to settle down with the FWB model – but then it’s easier to find one stable counterparty rather than several FWBs, so you’d rather get married) you need to get into a bilateral commitment deal. And these deals are mutually exclusive so you need to realize that when you get into one, you will be foregoing the option of getting into any other.

There are several other costs and benefits when it comes to the marriage thing – there will be lifestyle changes, you get “tied down”, you need to take on responsibility, share duties and all that, but in my humble  (and unmarried) opinion, the biggest cost is the opportunity cost.

I say this quite often (and this reminds me, I have a paper to write – which I’ve postponed for nine months now) but I think outside of the financial world, option value is generally underrated (even in finance options are more often than not undervalued since the most common pricing formula ignores fat tails). And in settling for a Common Minimum Programme in the arranged marriage market, people severely underestimate the value of the option value of the rest of the world.

So the next time you want to propose to someone, or want to answer “the question” in the affirmative, make sure you do the following:

  • Make a list of all the people in the world belonging to the opposite sex (gays feel free to generalize this)
  • Evaluate the option of marrying them. Your job will be quite easy because with respect to most people, either you don’t want to marry them or you know that the chance of them marrying you is so infinitesimally small that the option value is negligible
  • I’m sure there will be a number of peopl ewho you prefer to the person you are proposing to/saying yes to. If you think there is a nonzero chance of them saying yes to you, ask them. Rejection is cheaper than a lifetime of guilt
  • Once all the options have been evaluated, and an additional buffer term added to account for all the people you don’t know yet, you know the full value of the opportunity cost. Then add up the other costs and benefits, and then make your decision.

Typically to know the other costs and benefits of the person that you are currently evaluating, you need to know them rather well. Yes, you can draw a sample and estimate the population based on that, but the cost of a type 1 error (error of commission) is very high. So make sure you collect enough data. To collect enough data, make sure you give yourself enough time.

Ok now I don’t know the point of this post. I don’t even konw if it fits into the arranged scissors series, but I think I’ll let it stay. Changing the title is too messy. I think I wrote this to put fundaes about opportunity cost. Maybe I had something else in mind when I thought up this post, but then subsequently forgot the contents and remembered only the outline. In any case, I’ll stop here. Before that I’ll tell you for one last time that you need to keep track of option value, and opportunity cost.