November 27, 2013
Evolving Internet Solutions for Students
By Cindy Ivanac-Lillig
In October, we held a series of webinars to mark the Federal Reserve System Financial Education Day. We had guest presenters from the Illinois Student Assistant Commission (ISAC) and College Greenlight present a joint session on financial aid and scholarships. ISAC is a wonderful resource on the FAFSA process. College Greenlight is a customizable scholarship database, searchable on characteristics such as gender, religion, etc. They are both amazing resources. It is awesome to think that, on College Greenlight’s website, you can extract within seconds a list of customized scholarships available with all the pertinent application details at no charge. Please check out both organizations’ October webinar presentations here for more information.
The internet has enabled students and parents to find the cost of college, the scholarships available, and every possible statistic down to how many pounds, on average, freshmen gain. But something that doesn’t seem relatively available is how likely a particular student is to be able to attend and graduate from any given college. Based on research from the Center for American Progress, the particular college a student chooses impacts his/her probability of graduation as much as previous grades, availability of financial aid, etc. This is the type of complex analysis that is not easily aggregated. Therefore, college choice still seems to be dictated in great part by students’ exposure to particular institutions at home and in school. There must be a way to technologically bridge the gap of aggregating the average net cost of college, the level of students’ satisfaction, the graduation probability, the strength of alumni networks, etc. Coming soon, I hope, to a technology entrepreneur near you…
The internet has enlarged the marketplace, increased competition and ultimately value. Our students are being served well by organizations like ISAC and College Greenlight, but just think what else could be done to increase their chances of not only getting into college but graduating.
Please share any resources that you may have with readers on college choice or financial aid.
July 1, 2013
Has technology changed our world or just the incentive structures?
By Cindy Ivanac-Lillig
I am a news junkie. I love Flipboard, and I have Factiva and Google alerts set up for all sorts of finance and banking topics.
I often wonder what we did 15 years ago without all this technology. I’m still not sure; however, I am beginning to think that the world hasn’t changed all that much. We are just changing how quickly we are learning about it… and who we trust to teach us.
Today I was intrigued by an article that popped up in my news alert from the Financial Times (FT). I clicked on it, only to be greeted by a request to subscribe. Now, truth be told, I have an FT subscription at work, but instead of looking up my user name and password to log on, I just opened another browser window and searched for the article by title. I found a blog post that referenced the article, perhaps out of context, but I got the gist of the article and moved on with my morning reading. So, did I ever read the entire article? No. Did I even get the main point? I can’t really be sure.
My point is that I technically had access to a piece of journalism from a reputable news source, but it was easier to read a free and easily accessible recap of the story from a blogger I like. The free-of-charge stories you find on the internet are in large part opinion-led or crowd-sourced explanations, blogs or 140-word teasers. For some topics that is fine and Wikipedia has proven itself to be highly accurate under the rigors of academic research; however, when considering rather complicated and nuanced public and economic policy issues, it is difficult to see how a reader is incentivized to search out complete stories from objective and reputable journalism sources.
If I were still teaching my undergraduate economics class, I would assign the class this incentive problem: Evaluate how incentives are affecting our current structure of information flow and come up with ways in which policy-makers can incentivize citizens' demand and access to high-quality journalism? Our well-being depends, in part, on good public policy, which in turn depends on good information generated by trustworthy communication channels.
What do you think? And if you happen to be an educator, please let me know how you tackle the subject of incentives in your classroom.
April 22, 2013
GDP & IMDb
By Cindy Ivanac-Lillig
These days, it's nothing new to point out how technology is changing the way we are living, raising children, attending class, etc. However, I bet you haven't spent much time thinking about how technology is changing how we measure economic activity.
Gross Domestic Product (GDP) is the sum of the value of all goods and services produced in the United States. It is the go-to answer to the question: "How is the U.S. economy doing?" GDP is calculated by the Bureau of Economic Analysis (BEA), which has just announced that it will be changing some classifications and calculations to better represent value creation in our economy. One of the big changes is the treatment of Research & Development (R&D) spending. R&D will now be treated as an investment as opposed to an expense. So, for example, Apple's significant R&D investment will now be counted in GDP as opposed to simply final iPad sales.
This is a big deal and is easily the most profound change being made to the GDP calculation, but it was another rather small change that caught my attention and really made me think about how technology is affecting what we consume and how we count it. The BEA will now begin looking at artistic investment differently. According to the Financial Times, the BEA analyzed data from www.imdb.com (the Internet Movie Database for the scarce few who have yet to visit the site) to help discern the value of a movie long after it has been produced. This research seemingly helped craft new accounting treatments for what they are calling "artistic originals." Wow! And here I thought IMDb was only there for people like me that can't remember actors' names.
How has technology and the speed of technological innovation affected our overall perception of value? (For the econ students out there: Does this change your thinking about utility and indifference curves?)