A useful insight

Jane Galt writes as if this were a criticism uniquely applicable to the political left, which it certainly isn’t, but I do like her point about the view that

after all, people are stupid, so they need the government to protect them from themselves. My take is a little subtler than that:

1) People are often stupid
2) Bureaucrats are the same stupid people, with bad incentives.

Mean or median? ‘Average’ household income

As a result of David Cameron’s new interest in relative poverty, as defined as living below 60% of the median income, maybe we need to remind ourselves about the difference between mean and median averages. One person who certainly seems to need reminding is Lord Young of Graffham, one of Mrs Thatcher’s former ministers, who, as Chris Dillow notes in Stumbling and Mumbling, wrote a letter ‘of quite staggering imbecility’ to The Times:

The Conservatives now wish to eradicate “relative” poverty, defined as those living on less than 40 per cent of average incomes. Simple arithmetic shows that, as you increase the incomes for the relatively poor, the average income would rise, promptly putting some back into the relatively poor category.

As Chris points out, one of his imbecilities is that

relative poverty is defined an income below some fraction of median income. And the median doesn’t change just because the incomes of the very poor rise

Which beautiful, naked woman do you choose? An economist gives his reasons

The Times reports on some of the quirkier questions candidates are asked in entrance interviews at Oxford and Cambridge Colleges, though I can’t say I remember being asked anything particularly fiendish at my interview to read English at Cambridge (I got in, too — maybe they asked me something they thought was fiendish and I didn’t notice). That was a long time ago, of course, but I’m sure I’d recall something as imaginative as

If there were three beautiful, naked women standing in front of you, which one would you pick? Does this have any relevance to economics? (PPE, Oxford)

If they did, I’m sure I wouldn’t have been able to give so excellent an analysis as that provided over at Stumbling and Mumbling… whoever said economics was boring?

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