Friday, September 18, 2015

Elite efficiency

A recent paper (1) studies the “distributional preferences of the elite” and makes a somewhat obvious (startling to them) conclusion - “the elite” prefers not to distribute compared to the general population. There are many problems with the study including the premise and the definition of the “elite,”  comprising of the graduates of the Yale Law School (YLS). The assertion is that these graduates are destined to power and influence (and presumably wealth) and hence the “branding” of “elite.” Institutions and researchers looking backwards and frozen in time, may be in for a shock when they look outside their theoretical and historically adorned windows and see the future.

How do we test a hypothesis that YLS students prefer not to redistribute compared to a random graduate? Could we use the same study and data? Suppose we prove that YLS students are not “elite” at all because the probability of a YLS graduate to have any influence on society is roughly equal to a random graduate, what would it imply for the study? Economists tend to use fancy words and create complexity so that they can live within their secluded ivory towers, contributing nothing to society. In this context, what exactly does equality-efficiency trade-offs mean? Does it mean that the “elite” like to keep the money for themselves and phenomena that cannot be understood in this framework is assumed to maximize efficiency?

Practical educators and researchers should stop wasting time assigning labels and useless observations in a label prone, segregated and tiring society.

(1) The distributional preferences of an elite
Raymond Fisman1,*, Pamela Jakiela2, Shachar Kariv3, Daniel Markovits4
1Department of Economics, Boston University, Boston, MA, USA.
2Department of Agricultural and Resource Economics, University of Maryland, College Park, MD, USA.
3Department of Economics, University of California, Berkeley, Berkely, CA, USA.
4Yale Law School, Yale University, New Haven, CT, USA.