Issue 25, Fall 2003

William A. McEachern, Editor

The Grapevine

R. Kim Craft and Joe Baker of Southern Utah University, using a national sample, found that lawyers who took undergraduate courses in economics earn more than other lawyers, other things constant. Economics is the only undergraduate field associated with earnings that differ significantly. Their research, "Do Economists Make Better Lawyers? Undergraduate Degree Fields and Lawyer Earnings," is forthcoming in the Journal of Economic Education. When it's published, it can be found at http://www.indiana.edu/~econed/

What is the relationship between schooling—particularly the cognitive skills learned in school—and labor productivity? Paul Glewwe of University of Minnesota and the World Bank reports in a survey article that cognitive skills acquired during schooling appear to be directly responsible for part, if not most, of the impact of schooling on labor income. Even after adjusting for years of schooling and innate ability, cognitive skills nearly always have a statistically significant impact on income. Innate ability does have an indirect effect on income by enabling students to acquire the cognitive skills. But innate ability seems to have no impact on income after controlling for years of schooling and cognitive skills. See Glewwe's "Schools and Skills in Developing Countries: Education Policies and Sociological Outcomes," in Journal of Economic Literature (June 2002), pp. 436-482.

To help distinguish between fixed costs and variable costs, Erik Steger of East Central University in Oklahoma, uses recreation examples. He explains that certain recreation choices involve a relatively high fixed cost—such as owning a boat or a motor home or having a golf or tennis club membership. Variable costs for these choices—such as maintaining equipment and the opportunity cost of your time-are relatively low. Other recreation choices such as movie and concert attendance involve only variable costs, like the cost of tickets and transportation and the opportunity cost of your time.

John Siegfried of Vanderbilt University finds that the decline in economics majors that occurred in the early 1990s has reversed itself. The total number of students majoring in economics has been rising in recent years through 2002. He reports these findings in "Trends in Undergraduate Economics Degrees, 1991-2002," in the Summer 2003 issue of the Journal of Economic Education. You can find it at http://www.indiana.edu/~econed/

Norman Cloutier and Dennis Kaufman of the University of Wisconsin-Parkside surveyed students to determine the most each was willing to pay for an "A" in the course. With the answers—and with other characteristics of each student—they estimated a well-behaved demand curve. "The Price of Success: The Demand for an 'A' in Economics Principles," was published in the Summer 2003 issue of the new online Journal of Economics and Finance Education, which can be found at http://www.csb.uncw.edu/ecfejournal/current.PDF.

In Economics of Popular Film, a course offered by Satya J. Gabriel at Mount Holyoke College, students view Erin Brockovich as a prelude to a discussion of the environment, Wall Street to consider corporate finance, and The Matrix to gain perspective on the way we perceive reality (http://www.mtholyoke.edu/courses/sgabriel/filmcourse.html ). Don Leet of Cal State-Fresno shows how film plots illustrate economic problems and issues. He writes of his experience in "Economics Goes to Hollywood: Using Classic Films and Documentaries to Create an Undergraduate Economics Course," which will be published this fall by the Journal of Economic Education. You can find it at http://www.indiana.edu/~econed/

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