David R. Henderson  

Bryan Caplan's Notes

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In a post this morning, co-blogger Bryan Caplan made the following statement:
Furthermore, when there's a surplus of workers, the cost of outright bigotry sharply falls. I thought the link he would give would be to the article "Discrimination" in my Concise Encyclopedia of Economics or to The Economics of Discrimination by the late Gary Becker. Both would have been good links to give.

He didn't. Instead, Bryan linked to his own lecture notes on discrimination. Am I upset? Hell no, because his notes are magnificent. Go to this link and you will see that he has taught a wide range of courses and has detailed notes on each. If you wanted a high-level, rigorous, fact-filled education in economics, undergrad or grad, and wanted to spend virtually zero money, you would do well to spend hundreds of hours going through those notes. He has taught undergrad courses in micro, macro, labor, industrial, organization, and public choice. Bryan has taught graduate courses in public choice, public finance, macro, micro, monetary, and even econometrics.

Moreover, he includes homework sets and answer keys to those sets.

Here's an example of a homework problem from the first homework set in his undergrad labor econ course:

XIII. Your market wage is $20/hour. Should you value your time at more than $20/hour while vacationing in a foreign country?

When I was 19 and had graduated as a Math major (or, as we said in Canada, a Maths major) from the University of Winnipeg, I took a year off and worked my way through the Journal of Law and Economics for 4 hours every weekday morning. If magically I were 19 today and wanting to teach myself economics, I would combine that with working my way through Bryan's notes.


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CATEGORIES: Economic Education




COMMENTS (8 to date)
Conor writes:

Been a while since labor econ (or as my school brilliantly called it "women and men in the labor market," which meant it took care of the gender studies requirement), but I'll take a shot at the HW problem.

The expected value of your time abroad should be greater than $20/hour, or you shouldn't take the vacation. While you're in the foreign country. your market wage should be irrelevant, since earning that wage during vacation isn't an option.

R Richard Schweitzer writes:

The "value of time." (not the value of a wage):

One might consider PPE as a guide. If $20 or $100 will get one more "satisfactions" then you could weight the time one spends there as costing one less of the time to gain wages than if one were to go to a place where those "satisfactions" require a greater portion of the$20 or $100.

On another scale one could spend more TIME in a place where the $20 buys more than in a place where it buys less.

Pravda?

R Richard Schweitzer writes:

@ Conor:

It's probably over 70 years since I took my first econ and 65 since my last; so that's no sure shot either. Hiatus in the national interest.

Joeleee writes:

Conor,

I agree. The opportunity cost of your time while you're on vacation should be higher than at home. If you've gone overseas then you've effectively paid:

- Airfares each way
- You've given up the value of any rent you pay at home
- You've given up either earning wages, or your annual leave
- Any planning time that you didn't get more than $20/hour of value from (making it a net cost)

In order to break even, you need to cover not only your market wage of $20/hour, but also the fixed costs of taking the holiday, spread out over the period of the holiday.

I had never thought of it in this way before, but it explains why, on a business trip, people are much more likely to lounge around in a hotel watching TV than on a trip for leisure. The value of their time is much the same as at home, because many of the fixed costs such as flights and accommodation are covered by the company.

liberty writes:

Well, the opportunity cost is only for the hours you would have and could have worked -- the working hours (not 12 or 24 hours a day) and only those that you would have wanted or been capable of working: if you need a holiday then you cannot expect value equal to the earnings that you theoretically would have earned had you been superhuman enough to work productively without a break.

So, I would not hold the vacation hours up to as high a value standard as some indicate here. So long as you value it above the outright cost and would rather enjoy the holiday than exert the effort of working in exchange for that $20/hr, then you're all good.

R Richard Schweitzer writes:

@ Liberty:

That was not the question.

But using that approach then how you value (in market rates) your time does not change while you are on vacation.

Your market rate value remains the same.
What you are "giving up" is another matter.

id writes:

It strikes me that a lot of the responses here, plus the answer key on Bryan's site are playing a little fast and loose with timing regarding the "while on vacation" part. The waters are getting muddied with respect to what is sunk and what is not sunk.

Frank Lumbar writes:

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