A blog about economics instruction. "Things should be made as simple as possible, but not any simpler."--Albert Einstein

Thursday, September 29, 2005

How Much is the Life of a Reindeer Worth?


Without Reindeer, How Will Santa Make His Rounds? Posted by Picasa

In labor economics classes instructors usually cover the economic value of life. In a variety of circumstances, such as when a worker is killed on the job, economists are brought in to determine the size of the financial settlement paid by the employer to the dead worker's family. The typical economic study brings considers net future earnings, discounted in a present value computation.

An unusual value of life computation is the subject of a story coming out of Denmark. It seems there was this Santa Claus (there are lots of them in Denmark) whose reindeer had a heart attack and died when Danish Air Force jets flew over his farm. The military was clearly responsible and had to pay off the reindeer's next of kin, who in this case was Santa.

How much to pay was the question. The answer was 31,175 Kroner, about $5,032 U.S. dollars. This value of life computation was probably a lot more straightforward than the computation done when a human being is killed. Why? Well, if human beings could be bought and sold like reindeer, cattle, pigs, and dogs, then there would be a market price for a person. That price would vary according to the individual's productivity, and it might not be known with certainty. In the case in question, it's likely that the market value of reindeer in Denmark is established through livestock auctions.

Of course, if the reindeer who was killed had a red nose, thus helping light Santa's way on his Christmas eve journeys, then that unique bit of human capital ... uh, "reindeer capital," would make Rudolph worth quite a bit more than ordinary, run-of-the-mill reindeer.

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Sunday, September 25, 2005

QuickTake: An Integral Approach to Teaching Economics

From the web comes this 24-page paper by Marcelo Clerici-Arias of Stanford University. Although the paper is more than 10 years old, the approach is still fresh and would be of use to faculty in a variety of disciplines.

The "integral" approach refered to in the title is deceptively simple. First, devise a set of course objectives, design and implement activities to achieve the objectives, assess how successful the activities were, and then followup by rewriting the objectives and activities.

The reason I consider this one of the best papers I've ever seen on teaching is that the author provides several examples of the activities he's used in his own classes. That makes it easy for any instructor wanting to implement this approach to get started. The paper is also well grounded in the literature and contains an extensive bibliography.

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