I have just returned from the 25th annual PhD Conference in Economics and Business held at the University of Western Australia. There were parallel sessions in economics and in finance – I attended only the 16 economics student presentations. This Conference – organized by UWA’s Professor Ken Clements - is one of the most-focused and best-managed conferences held in Australia. PhD candidates from all over the country make presentations from their theses and are assigned a relatively senior academic discussant who focuses on their paper alone. Then the presented paper is opened up to general discussion. Awards are made to the most promising contributions in both the economics and finance streams and to the assigned discussants. This year I was in charge of selecting the award for the best economics work. It was a serious task since the recipient of this award can signal this award in their CV and it presumably has an effect on their job market prospects.
Of the 16 economics presentations 2 were in economic theory (modelling without data) and 7 were in one of a wide range of applied microeconomics areas – consumption, environmental, resources, laboratory, health, population ageing and so on. The remaining 7 were in applied macroeconomics – mainly high tech DSGE models and highly technical econometric approaches but two very interesting papers on the economics of migration that were microeconomic as much as macroeconomic.
It is important to take a balanced view in assessing the strength of these presentations. Some presenters would not have had much presentation experience and for many it is their first major involvement in economic research. Nevertheless I thought almost all presentations showed some measure of excellence either in terms of offering economic insight or in using advanced quantitative technologies. My task in picking the best paper was not an easy one.
Finally I did select a paper by Jason Collins, Sexual Selection, Conspicuous Consumption and Economic Growth. Jason is from UWA – draft here. This paper suggested that males engage in conspicuous consumption to indicate to potential females their genetic fitness because of their implied “burden-carrying”. The consumption itself involves high technology – the example he gave was a very expensive but intricately crafted watch – and the demand for such technology helps to drive economic growth. It’s a nice idea that is based on evolutionary biology that Jason sought to apply to the origins of the Industrial Revolution. He illustrated the idea with a slide of a male peacock – the elaborate tail feathers constituted the “burden”. An interesting idea and a presentation that eschewed technical detail – these were provided in the accompanying paper – and focused on the intuition of the results. Professor Paul Frijters, the discussant, rightly question the ability of the model to explain the growth takeoff after the advent of the Industrial; Revolution but I think the model does nail something important in the determinants of growth.
Good luck Jason with your paper and with your ongoing interest in this field – BTW Jason blogs on these issues here – I’ve added it to my blogroll.
There were 7 other papers that I thought were possible contenders for the award though I was gratified that my selection matched that provided by an independent democratic vote by all Conference participants.
I had two polemical remarks about the research that was displayed at the meeting. They are in some ways connected.
- The macroeconomics papers presented using VAR and other more elaborate technologies disappointed me a little. The presenters obviously have formidable technical skills – and good presentation skills – but I am not certain the social value of the outputs obtained matched their efforts. I have to be careful here as I have not kept up with modern macroeconomic theory in recent years and it is a tough call if you want to work in this area. Distinctive low order theoretical models with more economics content are going to be difficult to come up with. But my question is whether these highly specialized exercises that seem to mainly involve throwing extra technology rather than extra economics at macroeconomic problems is a good strategy.
- The microeconomics papers presented seemed to me also disappointing in the sense that there were no applied industry and only one environmental economic studies. Such studies seem to offer more social value added and also seem to offer better prospects of a distinctive contribution. Is it too down-market to think about a PhD thesis on deregulation of the taxi industry? There has recently been a public inquiry in Victoria and one is proceeding in NSW on the same topic. Taxis provide an important transport service in our congested cities and there are significant costs of the current system as well as significant costs in deregulating it. I think it is a beaut applied microeconomics PhD thesis topic. This is only an example – there are a host of applied industry studies that could potentially yield high returns – studies of the electricity sector, urban water supplies, manufacturing and Dutch Disease-induced restructuring needs and so on. I have not mentioned climate change policy because I think there is a fair bit of work going on in this area although it did not surface much at the Conference.
I make these remarks tentatively. There are tough choices here for PhD students who are entering a global economics profession that is overwhelmingly focused on technique and theory. I think this emphasis is hopelessly misguided but must recognize its reality.
A semi-final remark I would make that I think might be useful for students is to really think in a general way about the problems they are investigating and the context in which they exist. A time-honored approach is to ruminate over the problem with a jug of beer sitting in front of you and a few friendly colleagues to chat to. Academic life is all about specialization and doggedly pursuing a narrow problem by digging away at an issue. Don’t dig such a deep hole that you lose sight of the horizon. Try to maintain perspective. It is otherwise easy to lose sight of the obvious.
A final remark is that it is very instructive if you are examining a data set using advanced econometrics to get a picture of the problem being addressed by plotting a few simple graphs of key data series and trying to explain to yourself what is going on. The human brain and introspection will always be a useful complement to the most elaborate software package. (1975)