Dos and Don'ts of Honours Year

Towards the end of last year when I was procrastinating editing my thesis and writing a journal article, I put together a short list of Dos and Don'ts I wish someone had told me when I started my honours year. I wanted to share this on the blog in the hope it may help new honours students this year or final year students considering honours for 2015. Please remember though, these are my personal views and reflections and they may not apply to all students in all circumstances.

DO…

• Start in summer.

This is fairly obvious, but the earlier you can start your research the better. I started “seriously” researching my topic in late 2012 and quickly found that life often gets in the way of research, whether it’s internships, holidays (you or your supervisor), or medical issues. Start early and (hopefully) you'll be able to maintain your sanity come submission day in October.

• Teach. 

They say you have only really mastered a topic when you are comfortable teaching it to others. Teaching allows you to think deeply about a topic you’re interested in and share your knowledge with others. It improves communication skills (verbal and written) and is an opportunity not available to undergraduate students at Griffith. I thoroughly enjoyed teaching and found it provided a nice break from the endless research during Semester 2. Plus, it pays well and you get your own office. :)

• Explore other research areas outside your dissertation. 

This can be through RA work (which is another great way to earn some extra $$$), talking to your peers or other academics, or simply reading widely. This benefits your own research by introducing new perspectives and keeping things fresh.

DON'T...

• Take on an excessive teaching load.

You are there to research first and foremost. It’s okay to say no to extra tutorials.

• Choose a supervisor based solely on prestige or job title.

Most importantly, your supervisor needs to share your research interests, so do your research and speak to academic staff to get an idea of who might be a good match for your project. Almost as importantly, you need to get along personally with your supervisor, because you are going to be spending A LOT of time together. Your supervisor will do more than just read drafts and answer some emails – they can be a referee for job applications, a gateway to a whole network of contacts, a confidant, a co-author (if you choose to publish your work), and a source of employment (for teaching or RA work). And don’t forget, you can also choose two supervisors if you want to!

• Think you have to alienate yourself from your peers to succeed.

In my experience, in honours your peers become an even more important support network than they were as an undergraduate. They can relate to your research journey better than anyone, and can be useful during the editing phase when you need a fresh pair of eyes to proofread your thesis.

I hope these points are helpful. I'm happy to talk more about my experience in the comments if anyone has any questions.

Side note: if any honours or final year students are interested in being a co-author on this blog this year, please let me know! You can email me at griffitheconomicsblog@gmail.com or message me on Facebook.

Bitcoin

I don't know about you, but in the past few months I've been hearing more and more about the digital currency Bitcoin. For a quick summary, read this.

The discussion has quickly turned from the novelty of its invention to whether digital currency can act as a viable substitute for fiat currency. From a basic economics standpoint, we know that money performs three functions - medium of exchange, unit of account, and store of value. At present, Bitcoin fails on all three - it is not (yet) widely accepted by retailers, prices are not readily reported in Bitcoin, and the enormous price fluctuations experienced in the past year suggest it does not protect wealth in the same way as dollars or euros do. While there have been defenders, economists in the media seem to agree that Bitcoin is better suited as a payments system (like PayPal, for instance), than a new currency.

So what do you think? Does Bitcoin have a place in our economy, and if so, as a payments system or new currency? Or perhaps you agree with Robert Shiller, one of the 2013 Nobel laureates, who recently labelled Bitcoin as "an amazing example of a bubble." Let me know in the comments!

Economics Humour

Some funny videos for the holidays.

The Principles of Economics - Translated
http://www.youtube.com/watch?v=VVp8UGjECt4

A Tribute to Ben Bernanke
http://www.youtube.com/watch?v=8uBLlfNlFxI

Chicken Chicken Chicken
http://www.youtube.com/watch?v=yL_-1d9OSdk

Please share your own in the comments!

Teaching Behavioural Economics

Happy New Year! I hope everyone has been enjoying their holidays.

For my first post of 2014, I wanted to bring up the explosion of research on behavioural economics in recent years. Behavioural economists use psychology’s deeper understanding of human behaviour to inform economic models, theories, and policy development. Traditional assumptions such as unbounded rationality and the axioms of consumer preference are relaxed to allow for biases and heuristics including endowment effects, loss aversion, and poor mental statistics. Behavioural finance is similarly concerned with deviations from rational markets, and Robert Shiller was recently awarded a Nobel prize for this research in this field.

As a research area, one of the drawcards of behavioural economics is its generalisability. Hypotheses can be tested using a variety of data sets covering everything from laboratory experiments to professional sporting competitions (think patterns in athlete or team performance over time), and conclusions tend not to be restricted to one locality. Behavioural economics is gaining credibility outside of academia too – in the broader business environment and in public policy making.  

The question I wanted to pose in this blog is – what place do behavioural economics and behavioural finance have in undergraduate teaching? Would you like to see these issues covered in an elective course (as is the case in some larger economics departments) or would you prefer academics to present traditional models alongside the new research?

Personally, I think students will increasingly be exposed to criticism of neoclassical models regardless as text books and learning resources are updated with the latest research. An elective course (or several) would certainly attract more serious interest in the area and help to refine student thinking, but would be an issue in many departments simply due to limited resources. With so many anomalies in human behaviour to explore, I think this area would be great for an honours or PhD thesis (I am biased though, as my honours thesis was in behavioural economics). J

GUEST POST: Investing for a Better Future

Elliot Dolan-Evans (elliot@surgia.org)

(Year 3 MBBS; Past President of the Surgical Interest Association; CEO Investing for Charity Health)

As a medical student, I don’t often write blogs in economics pages – but I have been a long-term admirer of the opportunities, power, resources and capabilities that the finance and economics sectors hold. I entered medicine with the common idealism that many do; to help those less fortunate than I. However, more and more as I move through medicine, I have come to the realisation that to enact significant and sustainable change for those who suffer with curable disease or are affected by widespread transmittable pathogens, the medical field must look for help. Medical teams and health organisations simply do not have the resources or even the expertise to effectively address wide-spread social issues. Experts in business, the wealthy organisations that shape the economy, and the leaders in the finance sector are the ones who possess what well-meaning charities and medical practitioners do not – expertise, professionalism and resources. It is imperative that the health and medical field partner with business, and utilise each other’s areas of expertise to address the avoidable and fixable health inequalities that are engulfing people around the world.

Leaders in the business field have already realised this fact; Gates, Buffet and others are leading the revolution – but the effort needs to be wider, and involve the whole community. Indeed, a culture change may be what is required in the financial world, to involve and empower everyone in combating these pertinent social issues. And to do this, cultural reformation must occur at the grassroots level – with ambitious young people and enthusiastic students. These individuals are the future of the world’s wealth, and to develop a philanthropic and socially conscious attitude in them would change the face of this world for the best. Students need to feel empowered to address wider social problems and inequalities. Young people with an interest in finance and investing often do not have the opportunity to learn about sound, responsible and socially conscious investment principles; and how their decisions and actions can potentially influence the lives of millions.

I, along with others around the world, are creating an outlet for philanthropic students and young people in the finance and business world, a charity that utilises sound financial and investing principles to raise money and combat health inequality. Investing for Charity Health (I4C Health) has been established to draw attention to global problems, and empower students and young professionals with a means to really make a difference in terms of worldwide health inequalities. I4C Health is starting on the Gold Coast in 2014, and will provide an opportunity for ambitious, young leaders in the business and finance worlds to enact meaningful change. The organisation will teach students principles of practical investing on the share market, and then those so trained will invest money for the charity, with the eventual profits passed on to where it is needed most.

I4C Health will invest in students and young professionals, providing them with opportunities to enhance their personal brand, leadership and professional skills through practical investment experience, networking with the professionals on the Board and mentors in I4C Health and through becoming a leader in the organisation. By investing into young people and creating a culture of selflessness and giving I4C will promote inter-professional collaboration with the goal of directly addressing global societal problems.

I am looking for others to share in my vision for a healthier future, and the I4C Health fund will be the key component of this vision. To leave you all with the mission of the charity:

Investing for Charity Health will provide education in responsible investing and create a culture of philanthropy and integrity in young Australians, with the ultimate aim of sustainably and significantly supporting health-related charities.

Nobel Prize in Economics

So for those who missed it, the Nobel Memorial Prize in Economic Sciences was awarded last month to three Americans - Eugene Fama, Lars Hansen, and Robert Shiller "for their empirical analysis of asset prices."

http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2013/press.html

I found this an interesting move because Fama and Shiller are at opposite ends of spectrum when it comes to their views on market efficiency (the former developed the efficient market hypothesis, while the latter is famous for his contributions to behavioural finance and identifying market inefficiencies). Meanwhile, you also have Hansen who developed the Generalised Method of Moments (GMM, a method for estimating the parameters in an econometric model) that has much wider applications for finance and economics. A bit of an assorted bag here.

Personally, I would have liked to have seen Shiller share the prize with Richard Thaler (a key figure in behavioural economics), but I guess that's my own bias given I have been researching behavioural economics for the best part of the last 12 months!

Anyone else have thoughts on the recent Nobel Prize announcement? Feel free to disagree.

Australian Households' Exposure to Banks

Here is a very interesting article courtesy of Brett Doran concerning the relatively high exposure of Australian households to bank securities. What implications do you see this having for fund managers or financial planners in the short and long term? Should we be concerned?

http://www.macrobusiness.com.au/2013/11/australian-households-ludicrous-exposure-to-banks/

Looking forward to reading your comments!