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Each choice that you make as an individual is decided by a society of billions: namely, the billions of neurons that populate your brain. Economics, being the science of choice, has until recently treated the human being as a black box rather than looking inside. That has changed with the advent of neuroeconomics, a branch of science which examines what those cells are doing when people are making choices.

Neuroeconomists have studied blood-flow to find where the brain measures uncertainty; measured hormones in subjects’ saliva and their effect on impulsive decisions; and worn conductive caps to measure brain activity while they make a purchase.

The questions thrown up by neuroeconomics include whether we are really rational, or destined to be biased, and whether it will be possible in the future to read off someone’s preferences with a powerful brain scan. In an article for Slate and a recent programme on BBC Radio 4, Tim Harford discusses the potential power of this emerging discipline.

Tim Harford writes both the ‘Undercover Economist‘ and ‘Dear Economist‘ for the Financial Times.

The publication of The New Palgrave Dictionary of Economics compiles contributions from not only 1500 economists but also other fields, a Swedish zoologist for example, supporting the end of ‘dismal’ economics.

Read more: Matthew Reisz (2008) Figure It Out Times Higher Education

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Parents who are active in various kinds of clubs “from sports to charities, from political parties to religious groups“ may raise the test scores of their children. That is the central finding of new research by Professor Sarah Brown and Dr Karl Taylor presented at the Royal Economic Society’s 2008 annual conference.

The report uses data from the National Child Development Study, which has tracked the lives of a representative sample of the British public born in a single week in 1958. It finds that the test scores of children in reading, mathematics and vocabulary tests are positively related to their parents’ level of social participation.

What’s more, the authors argue, this is more than chance correlation. By looking at the activities of parents at the age of 23 and their children’s test scores a decade later, they conclude that a higher level of social activity actively raises children’s attainment.

The relationship between education and social interaction is not surprising since education plays an important role in developing the social skills of children. Reading and writing (for example) are crucial for the ability to communicate and hence engage in social interaction later on in life.

The authors analyse the relationship between social interaction and educational attainment using British cohort data. In particular, the authors explore the relationship between a parent’s level of social interaction (as measured by club membership) and their child’s academic development.

The different types of clubs analysed include: political parties, environmental charities, other charities or voluntary groups, women’s groups, townswomen’s guilds or women’s institutes, parental or school organisations, tenants’ or residents’ associations, trade union or staff associations, and religious organisations.

Because family background is an important determinant of educational attainment, one might predict that the level of formal social activity undertaken by an individual may influence the academic development of their children. Social interaction outside the family may lead to parents being able to access the support and assistance of other individuals and, hence, may benefit parents in bringing up their children.

The study explores whether the children of parents who report relatively high levels of social interaction report relatively high levels of academic achievement.

Children’s scores in reading, mathematics and vocabulary tests are positively associated with the extent of their parents’ formal social interaction thereby highlighting a hitherto neglected influence of social interaction. The results suggest that a lack of social interaction may have adverse intergenerational effects in terms of educational attainment.

Children of parents who engage in relatively low levels of social interaction attain relatively low scores in reading, maths and vocabulary tests. These findings are not affected by how much social interaction exists within the family as well as the social interaction of the child outside the family.

Notes for editors: ˜Social Interaction and Children’s Academic Test Scores: Evidence from the National Child Development Study” by Sarah Brown and Karl Taylor was presented at the Royal Economic Society’s annual conference, 17-19 March 2008.

Sarah Brown and Karl Taylor are at the University of Sheffield

For further information: contact Sarah Brown on 0114 222 3404 (email: sarah.brown@shef.ac.uk); Karl Taylor on 0114 222 3420 (email: k.b.taylor@shef.ac.uk); or Romesh Vaitilingam on 07768 661095 (email: romesh@compuserve.com).

Read more research by Karl Taylor at EconPapers. Intute: Social Sciences features more Internet resources on the topics of the economics of education, economics of the family and economic sociology.

“Most of the things that economists do don’t even look like economics: adoption policy; money laundering (detecting!)… The range of topics is truly astonishing. From Becker’s early re-widening of mainstream economics, We now analyse

• Auctions
• Sex and race discrimination
• Sport
• What you can and can’t get on the NHS and why
• Competition and quality of education
• Value of time and even life
• Happiness itself
• Inner-city dynamics
• Passenger safety
• Marriage and divorce: which partner gets the most in marriage?
• Crime and drugs
• Social exclusion
• Immigration
• Does performance-related pay make people work harder?
• Are we taxed too much?
• Is competition always good?
• Do people gamble rationally on the lottery and on quiz shows on television?
• What causes wars?
• Obesity
• How to match kidneys?
• Private returns to education (economists do particularly well!)
• Behavioural economics (engaging classroom experiments)
• Voting behaviour
• Social mobility
• Why are there so many junk media channels, all the same?
• Why aren’t there petrol stations in the centre of cities?
• Are cities green?
• Why are cities so astonishingly productive? What are the agglomeration effects of human beings huddled together?
• Should we put folic acid in bread?
• Should nursery care be subsidised?
• Is Sure Start off to an unsure start?
• Of course, there’s the climate and the welfare of future generations
• Yes, all the stuff by Steven Levitt: Do teachers and Sumo wrestlers cheat? Did abortion reduce teenage crime? Do doctors pump up their earnings by performing unnecessary operations?
• Economics, Socionomics, Bionomics, Freakonomics, Wikinomics, Happinomics… Of course no one wants bollonomics: we’re concerned about peer review and the quality of data. Not everything goes.

Even this list is parochial and narrow. In government, these are just tips of whole new icebergs. I suspect there may be more exciting topics for the economics student than just the economy.”

NB: the opinions presented here are the personal views of Andy Ross and not necessarily official positions of the GES.

Intute Social Sciences blog has more coverage from the conference.

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Academics are underpaid and overworked compared with other graduate professions and this is likely to have consequences for the quality of UK degrees. That is the conclusion of new research by James Walker and colleagues, presented to the Royal Economic Society’s 2007 annual conference at the University of Warwick.

The study finds that:

• Not only do academics work longer hours than the average graduate, but they also earn around 3% less.
• In terms of their earnings, academics compare particularly poorly with accountants, those in the legal professions, consultants, engineers, physicians, pharmacists and dental practitioners (across both the public and private sectors).
• On average, academics earn approximately 17% less than other similarly qualified individuals in the accountancy profession, 23% less than lawyers, 24% less than doctors and 49% less than dentists.
• Only two groups of workers do worse than academics: teachers in further education and, to a lesser extent, secondary school teachers.
• Academic pay is an important policy issue because if the relative pay of academics falls, it is likely to lead to lower quality individuals entering and remaining in the profession, as well as a brain drain to countries that reward academics more highly.
• These trends are in turn likely to have a knock-on effect on the quality of UK higher education.

Higher education is of crucial importance to the UK economy. The sector is estimated to be worth £45 billion. It is also becoming a global business with current export earnings of about £3.6 billion. The sector is playing a key role in achieving the government aspiration for a high skill strategy to transform the UK into a knowledge economy, as reflected in the target of 50% participation in higher education by the end of the decade. Maintaining the quality of the sector is vital for preserving its high international status and for producing high quality skilled labour for the economy.

Economic theory would suggest that if academic pay falls, relative to other similar professions, the calibre of individuals entering and remaining in the profession is likely to fall. But robust analysis of relative academic pay in the UK has been limited.

James Walker and his colleagues have analysed the size of the gap in hourly earnings between academics and graduates in a range of other comparable occupations. The study identifies the gap in hourly earnings between different occupations after taking account of a range of other differences in the characteristics of individuals who go into different professions, such as their gender, ethnicity and of course their education level.

The study concludes that after taking account of these other factors, academics still earn somewhat lower earnings than most public sector and private sector graduates and that they do particularly poorly compared with a range of comparable professions.

Of the other graduate professions considered by the authors, dentists are the best paid followed by doctors, lawyers, accountants, legal professionals, accountants, pharmacists and pharmacologists, consultants and engineers; all of whom earn considerably more then the average graduate. Indeed, of the ten groups examined, it is only the three education professions  academics, teachers in further education and secondary school teachers who are paid less then the average UK graduate.

Not only are academics relatively lowly paid compared with other professions but they also work longer hours then other graduates. While the average graduate worked around 44 hours per week in 2004, academics worked 47 hours per week. Indeed, with the exception of doctors who worked around 51 hours per week in 2004, academics work longer hours than the other ten professions.

The study was not able to consider the non-pecuniary benefits from working as an academic, such as the ability to do flexible working hours or have greater intrinsic interest in the work. Further research is needed to determine whether these non-pecuniary benefits are likely to compensate for lower wages.

The results from the study suggest that policy-makers should be concerned about the relative low pay of academics. As pay in the higher education sector is largely not determined by a free labour market, there is a risk that relative wages for academics may decline further and thereby reduce the quality of the workforce in higher education.

Notes for editors: Higher Education Academic Salaries in the UK by James Walker, Anna Vignoles and Mark Collins was presented at the Royal Economic Society’s 2007 annual conference at the University of Warwick, 11-13 April.

James Walker is at the University of Reading Business School; Anna Vignoles is at the Institute of Education.

For further information: contact Romesh Vaitilingam on 07768-661095 (email: romesh@compuserve.com).

Find more Internet resources on the issue of the economics of education at Intute: Social Sciences.