Tuesday, April 23, 2013

The furtive tax

Great: a lawyer who understands tax incidence and horizontal equity!

On the other hand, I don't agree with her implied criticism of pay-as-you-go social insurance schemes. She should read a few economic papers on, say, Bismarckian vs Beveridgean pension systems...


The Furtive Tax

APRIL 15 is dreaded as the deadline for filing income tax returns, but in fact every day is tax day for most working people. That’s because more than half of all Americans pay more in payroll tax than in income tax. That includes nearly everyone in the bottom half of the income distribution.
We don’t file annual payroll tax returns because payroll taxes have one rate and they aren’t adjusted for individual differences that affect taxpaying ability. Your bill remains the same regardless of how many children you support, your medical or education expenses, or your charitable contributions. No standard deduction or personal exemption either: payroll taxes apply to the first dollar.
Since they were introduced in 1937, payroll taxes have risen from two cents to more than 15 cents for every wage dollar earned. Although the tax is technically split between employers and employees, economists agree that workers suffer the whole cost of the tax. Without it, workers could expect to have higher wages, not just lower taxes.
The social insurance rhetoric surrounding the payroll tax might lead you to think that you are paying for your future retirement benefits. That’s not how it works, though: current taxes pay for current benefits. The Social Security “trust fund”? That’s an accounting mechanism, not an actual pot of money.
Workers saw their take-home pay rise for two years on account of a partial payroll tax holiday, but that expired at the end of 2012, when there was virtually no support in the fiscal cliff negotiations for extending it, even though it was good for the economy.
Payroll taxes produce 40 percent of total federal revenue, but they are largely invisible. This is unfortunate because they play an important role in the overall balance of the federal tax burden, which falls much more heavily on income from work. Income from investments is not subject to the payroll tax, and it is also more lightly taxed than wages under the income tax.
Because people with high incomes earn a much greater percentage of their total income from investments — and, crucially, because much of that investment income is wealth accumulation that has not been liquidated — tax law favors the rich far more than most people realize. The money that has been gained on investments that have appreciated but have not yet been sold is not taxed and may permanently escape tax under current law.
This might sound reasonable — why should I pay taxes before I cash out? — but it is actually where the tax system is especially inequitable. Poor people with no savings cannot benefit from the tax preferences for investment, and middle-income workers often pay tax at a higher rate than rich investors, a problem made famous by Warren Buffett.
The ideal level of progressive taxation in our federal system is a vexing issue of philosophy and economics, and reasonable people can (and certainly do) differ about how graduated the rates should be. But even if we cannot agree about what would be fair, we should still be troubled by the substantial disparity in the taxation of individuals at the same income level. At every income level, workers pay significantly more tax than their counterparts who earn an equal amount through their investments.
At $70,000 total income, the worker pays almost $20,000 in federal taxes, roughly half in payroll tax and half in income tax. The investor with $70,000 in capital gains pays less than a fifth of that. This is not just an abstract discussion; it means that the 25-year-old trust funder is paying less in tax than his counterpart who fixes computers for a living.
Tax fairness depends on overall burdens, not just who does and who doesn’t pay how much income tax. The federal tax system has become overwhelmingly skewed to burden work. Why? Because the link between payroll taxes and retirement security is political fiction. The average person retiring today cannot expect to collect in Social Security what he paid in taxes.
Removing or raising the $113,700 earnings cap over which you do not have to pay payroll taxes would reduce the tax’s regressivity, but it would not address our unequal treatment of earners with different sources of income.
April 15 is as good a time as any to think about how we can readjust the federal tax burden so that both workers and investors pay their fair share to finance the many and varied federal programs — including retirement security — that we deem worthy of our tax dollars.
Linda Sugin is a law professor at Fordham University.
© 2013 The New York Times Company.

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Reinhard & Rogoff

Incredible: this is one of the most cited paper published in a top 5 economic journal last years, and nobody ever checked what the authors did with the data? Really, can't economists as a profession do better than that? This is really embarrassing for our profession...

Researchers Finally Replicated Reinhart-Rogoff, and There Are Serious Problems.

APR 16, 2013Mike Konczal

In 2010, economists Carmen Reinhart and Kenneth Rogoff released a paper, "Growth in a Time of Debt." Their "main result is that...median growth rates for countries with public debt over 90 percent of GDP are roughly one percent lower than otherwise; average (mean) growth rates are several percent lower." Countries with debt-to-GDP ratios above 90 percent have a slightly negative average growth rate, in fact.

This has been one of the most cited stats in the public debate during the Great Recession. Paul Ryan's Path to Prosperity budget states their study "found conclusive empirical evidence that [debt] exceeding 90 percent of the economy has a significant negative effect on economic growth." The Washington Posteditorial board takes it as an economic consensus view, stating that "debt-to-GDP could keep rising — and stick dangerously near the 90 percent mark that economists regard as a threat to sustainable economic growth."

Is it conclusive? One response has been to argue that the causation is backwards, or that slower growth leads to higher debt-to-GDP ratios. Josh Bivens and John Irons made this case at the Economic Policy Institute. But this assumes that the data is correct. From the beginning there have been complaints that Reinhart and Rogoff weren't releasing the data for their results (e.g. Dean Baker). I knew of several people trying to replicate the results who were bumping into walls left and right - it couldn't be done.

In a new paper, "Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff," Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst successfully replicate the results. After trying to replicate the Reinhart-Rogoff results and failing, they reached out to Reinhart and Rogoff and they were willing to share their data spreadhseet. This allowed Herndon et al. to see how how Reinhart and Rogoff's data was constructed.

They find that three main issues stand out. First, Reinhart and Rogoff selectively exclude years of high debt and average growth. Second, they use a debatable method to weight the countries. Third, there also appears to be a coding error that excludes high-debt and average-growth countries. All three bias in favor of their result, and without them you don't get their controversial result. Let's investigate further:

Selective Exclusions. Reinhart-Rogoff use 1946-2009 as their period, with the main difference among countries being their starting year. In their data set, there are 110 years of data available for countries that have a debt/GDP over 90 percent, but they only use 96 of those years. The paper didn't disclose which years they excluded or why.

Herndon-Ash-Pollin find that they exclude Australia (1946-1950), New Zealand (1946-1949), and Canada (1946-1950). This has consequences, as these countries have high-debt and solid growth. Canada had debt-to-GDP over 90 percent during this period and 3 percent growth. New Zealand had a debt/GDP over 90 percent from 1946-1951. If you use the average growth rate across all those years it is 2.58 percent. If you only use the last year, as Reinhart-Rogoff does, it has a growth rate of -7.6 percent. That's a big difference, especially considering how they weigh the countries.

Unconventional Weighting. Reinhart-Rogoff divides country years into debt-to-GDP buckets. They then take the average real growth for each country within the buckets. So the growth rate of the 19 years that the U.K. is above 90 percent debt-to-GDP are averaged into one number. These country numbers are then averaged, equally by country, to calculate the average real GDP growth weight.
In case that didn't make sense, let's look at an example. The U.K. has 19 years (1946-1964) above 90 percent debt-to-GDP with an average 2.4 percent growth rate. New Zealand has one year in their sample above 90 percent debt-to-GDP with a growth rate of -7.6. These two numbers, 2.4 and -7.6 percent, are given equal weight in the final calculation, as they average the countries equally. Even though there are 19 times as many data points for the U.K.

Now maybe you don't want to give equal weighting to years (technical aside: Herndon-Ash-Pollin bring up serial correlation as a possibility). Perhaps you want to take episodes. But this weighting significantly reduces the average; if you weight by the number of years you find a higher growth rate above 90 percent. Reinhart-Rogoff don't discuss this methodology, either the fact that they are weighing this way or the justification for it, in their paper.

Coding Error. As Herndon-Ash-Pollin puts it: "A coding error in the RR working spreadsheet entirely excludes five countries, Australia, Austria, Belgium, Canada, and Denmark, from the analysis. [Reinhart-Rogoff] averaged cells in lines 30 to 44 instead of lines 30 to 49...This spreadsheet error...is responsible for a -0.3 percentage-point error in RR's published average real GDP growth in the highest public debt/GDP category." Belgium, in particular, has 26 years with debt-to-GDP above 90 percent, with an average growth rate of 2.6 percent (though this is only counted as one total point due to the weighting above).

Being a bit of a doubting Thomas on this coding error, I wouldn't believe unless I touched the digital Excel wound myself. One of the authors was able to show me that, and here it is. You can see the Excel blue-box for formulas missing some data:
This error is needed to get the results they published, and it would go a long way to explaining why it has been impossible for others to replicate these results. If this error turns out to be an actual mistake Reinhart-Rogoff made, well, all I can hope is that future historians note that one of the core empirical points providing the intellectual foundation for the global move to austerity in the early 2010s was based on someone accidentally not updating a row formula in Excel.

So what do Herndon-Ash-Pollin conclude? They find "the average real GDP growth rate for countries carrying a public debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0.1 percent as [Reinhart-Rogoff claim]." [UPDATE: To clarify, they find 2.2 percent if they include all the years, weigh by number of years, and avoid the Excel error.] Going further into the data, they are unable to find a breakpoint where growth falls quickly and significantly.

This is also good evidence for why you should release your data online, so it can be properly vetted. But beyond that, looking through the data and how much it can collapse because of this or that assumption, it becomes quite clear that there's no magic number out there. The debt needs to be thought of as a response to the contingent circumstances we find ourselves in, with mass unemployment, a Federal Reserve desperately trying to gain traction at the zero lower bound, and a gap between what we could be producing and what we are. The past guides us, but so far it has failed to provide evidence of an emergency threshold. In fact, it tells us that a larger deficit right now would help us greatly.

[UPDATE: People are responding to the Excel error, and that is important to document. But from a data point of view, the exclusion of the Post-World War II data is particularly troublesome, as that is driving the negative results. This needs to be explained, as does the weighting, which compresses the long periods of average growth and high debt.]

[UPDATE: Check out the next post from this blog on Reinhart-Rogoff, a guest post by economist Arindrajit Dube. Now that 90 percent debt-to-GDP is no longer a cliff for growth, what about the general trend between the two? Dube finds significant evidence that reverse causation is the culprit.]

The World's 100 Top Airports

I am weary of rankings, but I have found the following interesting. It is based on a survey of travelers.  It confirms my (European) experience: German airports are especially well ranked, and Paris CDG is at a dismal 82nd place...

2013

2012
1
Singapore Changi Airport
2
2
Incheon International Airport
1
3
Amsterdam Schiphol Airport
4
4
Hong Kong International Airport
3
5
Beijing Capital International Airport
5
6
Munich Airport
6
7
Zurich Airport
7
8
Vancouver International Airport
9
9
Tokyo International Airport (Haneda)
14
10
London Heathrow Airport
11
11
Frankfurt Airport
15
12
Auckland International Airport
13
13
Central Japan International Airport
10
14
Kuala Lumpur International Airport
8
15
Helsinki-Vantaa Airport
22
16
Narita International Airport
17
17
Copenhagen Airport
12
18
Kansai International Airport
19
19
Shanghai Hongqiao International Airport
16
20
Abu Dhabi International Airport
18
21
Brisbane Airport
34
22
Cape Town International Airport
27
23
Gimpo International Airport
23
24
Taiwan Taoyuan International Airport
29
25
Lima Jorge Chavez International Airport
30
26
Durban King Shaka International Airport
35
27
Dusseldorf Airport
36
28
Johannesburg OR Tambo International Airport
31
29
Melbourne Airport
43
30
Cincinnati/Northern Kentucky Intl Airport
24
31
Sydney Airport
20
32
Istanbul Atatürk Airport
57
33
Dubai International Airport
26
34
London City Airport
37
35
London Gatwick Airport
45
36
Denver International Airport
44
37
Cologne / Bonn Airport
53
38
Bangkok Suvarnabhumi Airport
25
39
Barcelona El Prat Airport
21
40
San Francisco International Airport
39
41
London Stansted Airport
42
42
Guangzhou Baiyun International Airport
52
43
Hamburg Airport
28
44
Haikou Meilan International Airport
64
45
Guayaquil International Airport
56
46
Toronto Pearson International Airport
47
47
Madrid-Barajas Airport
38
48
Hartsfield-Jackson Atlanta International Airport
59
49
Moscow Domodedovo International Airport
40
50
Vienna International Airport
41
51
Athens International Airport
33
52
Gold Coast Airport
46
53
Porto Francisco Sá Carneiro Airport
55
54
Dallas/Fort Worth International Airport
49
55
Bahrain International Airport
58
56
Oslo Airport
48
57
Billund Airport
50
58
Halifax Stanfield International Airport
68
59
Shanghai Pudong International Airport
32
60
Stockholm Arlanda Airport
51
61
Prague Václav Havel Airport
54
62
Seattle-Tacoma International Airport
71
63
New York JFK International Airport
74
64
Christchurch International Airport
70
65
Hyderabad Rajiv Gandhi International Airport
77
66
Brussels Airport
69
67
Lisbon Portela Airport
61
68
Doha International Airport
63
69
Delhi Indira Gandhi International Airport
62
70
Manchester Airport
66
71
Minneapolis-St Paul International Airport
65
72
Malta International Airport
60
73
Bengaluru International Airport
67
74
Panama Tocumen International Airport
72
75
Muscat International Airport
89
76
Nice Côte d'Azur International Airport
73
77
Adelaide Airport
75
78
Perth Airport
80
79
Detroit Metropolitan Wayne County Airport
76
80
Houston George Bush Intercontinental Airport
83
81
Keflavik International Airport
84
82
Paris Charles de Gaulle Airport
78
83
Montréal-Pierre Elliott Trudeau Intl Airport
79
84
Chicago O'Hare International Airport
86
85
Luxembourg Findel Airport
87
86
Raleigh-Durham International Airport
82
87
Charlotte/Douglas International Airport
88
88
Boston Logan International Airport
94
89
Moscow Sheremetyevo International Airport
98
90
Berlin Tegel Airport
81
91
Birmingham Airport
95
92
Fukuoka Airport
92
93
Newark Liberty International Airport
96
94
Salt Lake City International Airport
99
95
Dublin Airport
104
96
Geneva International Airport
105
97
Pittsburgh International Airport
90
98
Sanya Phoenix International Airport
91
99
Berlin Schönefeld Airport
106
100
Tel Aviv Ben Gurion Airport
101

Tuesday, April 16, 2013

All Aboard Rescued After Plane Skids Into Water at Bali Airport

From the airline which has ordered 200+ Airbus planes last month. They may need to order one more now ...


Sunday, April 14, 2013

Comment modérer les prix de l'immobilier (en France)?

C'est le titre d'une note d'Alain Trannoy et Etienne Wasmer pour le Conseil d'Analyse Economique, disponible ici. Les propositions en matière de dépenses fiscales et de taxation ont évidemment attiré mon attention: mettre progressivement un terme aux aides à la pierre (qui, en solvabilisant la demande, sont captées par les propriétaires sous forme de hausse des prix) et taxer la détention plus que la transaction. Rien que du bon sens, même si la taxation de la détention pose des problèmes qui ne sont pas mentionnés par les auteurs (quid des propriétaires qui n'ont pas les ressources pour acquitter les taxes sur des biens dont la valeur de marché a augmenté, ou de ceux qui vendent à un moment où les prix sont en décrue, et ont payé comme détenteurs une taxe sur une valeur fictive qu'ils n'ont jamais réalisée?)

Plus généralement, au moment où le gouvernement s'intéresse à la politique familiale, j'espère qu'il va également se pencher sur la politique du logement, et notamment sur les dispositifs d'aide à la pierre et de défiscalisation qui, comme l'écrivent les auteurs de la note, "coûtent cher pour une efficacité peu évidente"...

Good news for France (?)

According to Krugman:

France Has Its Own Currency Again


Joe Weisenthal draws our attention to a development that may surprise many people: French borrowing costs are plunging. (Don’t tell George Osborne — he thinks that low British rates are a unique personal achievement). Here’s the chart for French 10-years:
But wait– wasn’t France supposed to be the next Italy, if not the next Greece?
Well, Joe has what I agree is the right explanation: markets have concluded that the ECB will not, cannot, let France run out of money; without France there is no euro left. So for France the ECB is unambiguously willing to play a proper lender of last resort function, providing liquidity.
And this means that in financial terms France has joined the club of advanced countries that have their own currencies and therefore can’t run out of money — a club all of whose members have very low borrowing costs, more or less independent of their debts and deficits.
Welcome to the club, France. Now, why are you doing all this austerity?

Saturday, April 13, 2013

Macro I can understand from Paul Krugman



The Price Is Wrong

But which price — that is the question.
It’s a slow morning on the economic news front, as we wait for various euro shoes to drop, so I thought I’d share a meditation I’ve been having on the diagnosis and misdiagnosis of the Lesser Depression. It’s not really different from what I’ve been saying all along, but maybe coming at it from a different angle is somewhat enlightening.
So, start with our big problem, which is mass unemployment. Basic supply and demand analysis says that things like that aren’t supposed to happen: prices are supposed to rise or fall to clear markets. So what’s with this apparent massive and persistent excess supply of labor?
In general, market disequilibrium is a sign of prices out of whack; and most people commenting on our mess accept the notion that one or more prices are for some reason not adjusting. The big divide comes over the question of which price is wrong.
As I see it, the whole structural/classical/Austrian/supply-side/whatever side of this debate basically believes that the problem lies in the labor market. (I know, the Austrians will deny it — but it doesn’t matter what you say about their position, any comprehensible statement leads to angry claims that you don’t understand their depths). For some reason, they would argue, wages are too high given the demand for labor. Some of them accept the notion that it’s because of downward nominal wage rigidity; more, I think, believe that workers are being encouraged to hold out for unsustainable wages by moocher-friendly programs like food stamps, unemployment benefits, disability insurance, and whatever.
As regular readers know, I find this prima facie absurd — it’s essentially the claim that soup kitchens caused the Great Depression. But let’s stick with the economic logic for now.
So what’s the alternative view? It’s basically the notion that the interest rate is wrong — that given the overhang of debt and other factors depressing private demand, real interest rates would have to be deeply negative to match desired saving with desired investment at full employment. And real rates can’t go that negative because expected inflation is low and nominal rates can’t go below zero: we’re in a liquidity trap.
There are strong policy implications of these two views. If you think the problem is that wages are too high, your solution is that we need to meaner to workers — cut off their unemployment insurance, make them hungry by cutting off food stamps, so they have no alternative to do whatever it takes to get jobs, and wages fall. If you think the problem is the zero lower bound on interest rates, you think that this kind of solution wouldn’t just be cruel, it would make the economy worse, both because cutting workers’ incomes would reduce demand and because deflation would increase the burden of debt.
What my side of the debate would call for, instead, is a reduction in the real interest rate, if possible, by raising expected inflation; and failing that, more government spending to increase demand and put idle resources to work.
So how can you tell which side is right? Well, these differing views make differing predictions. If you believe that the problem is excessive wages, you believe that the economy is fundamentally suffering from a supply-side constraint. In that case government borrowing is competing with the private sector for a limited quantity of resources, so big budget deficits should lead to soaring interest rates; meanwhile, because the supply of goods is limited, large increases in the money supply should lead to soaring inflation. Oh, and cuts in government spending should, if anything, be expansionary, because they both release resources to the private sector and make life tougher for workers who try to live on public benefits.
If, on the other hand, you believe that the problem lies in a shortfall of demand due to the zero lower bound, you believe that government borrowing needn’t drive up rates, because it puts unemployed resources to work; that monetary expansion won’t be inflationary, because the money will just sit there; and that fiscal austerity will be strongly contractionary.
I leave the adjudication of these competing claims as an exercise for readers.
Oh, and one more thing: no, you can’t say “Well, there may be truth to both views”. Either the economy is supply-constrained or it’s demand-constrained. Of course even the most ardent demand-siders will admit that there are supply constraints in there somewhere, that if we had an economic boom we would, after some period of time, enter a regime where printing money is inflationary and government borrowing drive up interest rates. But not here, not now.
So yes, the price is wrong — but it’s a terrible, disastrous mistake to focus on the wrong wrong price.

Tuesday, April 9, 2013

To my students ;-)


Teacher Knows if You’ve Done the E-Reading

SAN ANTONIO — Several Texas A&M professors know something that generations of teachers could only hope to guess: whether students are reading their textbooks.

They know when students are skipping pages, failing to highlight significant passages, not bothering to take notes — or simply not opening the book at all.
“It’s Big Brother, sort of, but with a good intent,” said Tracy Hurley, the dean of the school of business.
The faculty members here are neither clairvoyant nor peering over shoulders. They, along with colleagues at eight other colleges, are testing technology from a Silicon Valley start-up, CourseSmart, that allows them to track their students’ progress with digital textbooks.
Major publishers in higher education have already been collecting data from millions of students who use their digital materials. But CourseSmart goes further by individually packaging for each professor information on all the students in a class — a bold effort that is already beginning to affect how teachers present material and how students respond to it, even as critics question how well it measures learning. The plan is to introduce the program broadly this fall.
Adrian Guardia, a Texas A&M instructor in management, took notice the other day of a student who was apparently doing well. His quiz grades were solid, and so was what CourseSmart calls his “engagement index.” But Mr. Guardia also saw something else: that the student had opened his textbook only once.
“It was one of those aha moments,” said Mr. Guardia, who is tracking 70 students in three classes. “Are you really learning if you only open the book the night before the test? I knew I had to reach out to him to discuss his studying habits.”
Students do not see their engagement indexes unless a professor shows them, but they know the books are watching them. For a few, merely hearing the number is a shock. Charles Tejeda got a C on the last quiz, but the real revelation that he is struggling was a low CourseSmart index.
“They caught me,” said Mr. Tejeda, 43. He has two jobs and three children, and can study only late at night. “Maybe I need to focus more,” he said.
CourseSmart is owned by Pearson, McGraw-Hill and other major publishers, which see an opportunity to cement their dominance in digital textbooks by offering administrators and faculty a constant stream of data about how students are doing.
In the old days, teachers knew if students understood the course from the expressions on their faces. Now some classes, including one of Mr. Guardia’s, are entirely virtual. Engagement information could give the colleges early warning about which students might flunk out, while more broadly letting teachers know if the whole class is falling behind.
Eventually, the data will flow back to the publishers, to help prepare new editions.
Academic and popular publishers, as well as some authors, have dreamed for years of such feedback to direct sales and editorial efforts more efficiently. Amazon and Barnes & Noble are presumed to be collecting a trove of data from readers, although they decline to say what, if anything, they will do with it.
The predigital era, when writers wrote and publishers published without a clue, is seen as an amazingly ignorant time. “Before this, the publisher never knew if Chapter 3 was even looked at,” said Sean Devine, CourseSmart’s chief executive.
More than 3.5 million students and educators use CourseSmart textbooks and are already generating reams of data about Chapter 3. Among the colleges experimenting this semester are Clemson, Central Carolina Technical College and Stony Brook University, as well as Texas A&M-San Antonio, a new offshoot.
Texas A&M has one of the highest four-year graduation rates in the state, but only half the students make it out in that time. “If CourseSmart offers to hook it up to every class, we wouldn’t decline,” said Dr. Hurley, the dean.
At a recent session here of a management training class, Mr. Guardia addressed how to intervene efficiently with underperformers. The students watched a video of a print shop manager chewing out an employee without knowing the circumstances. The moral: The manager needed better data.
Then Mr. Guardia discussed with his students the analytics of their own reading, which he had e-mailed to them. The students suggested that once again better information was needed. Several said their score was being minimized because they took notes on paper.
Others complained there were software bugs, a response Mr. Guardia has heard before. The student who was cramming at the last minute said, for example, that he had opened the textbook several times, not just once. Perhaps these are the digital equivalent of “the dog ate my homework.” CourseSmart said it knew of no problems with its software.
The start-up said its surveys indicated few privacy concerns among students or colleges, and this was borne out by the class. “Big Brother,” said one student, but that was a joke, and everyone snickered. Being watched is a fundamental part of the world they live in.
“Amazon has such a footprint on me,” said Carol Johnson, 51, who works in the tech industry. “It knows more than my mother.”
Chris Dede, a professor of learning technologies at Harvard’s Graduate School of Education, is more apprehensive. He believes analytics are important in the classroom, but they must be based on high-quality data.
The CourseSmart system has other potential problems; students could easily game the highlighting or note-taking functions. Or a student might improve his score by leaving his textbook open and doing something else.
“The possibilities of harm are tremendous if teachers are naïve enough to think these scores mean anything for the vast majority of students,” Professor Dede said.
CourseSmart says the data it collects now is a beginning. “We’ll ultimately show how the student traverses the book,” Mr. Devine said. “There’s a correlation and causality between engagement and success.”
There is also correlation, the students are learning, between perception and success.
Hillary Torres, a senior, is a good student with a low engagement index, probably because she is taking notes into a computer file not being tracked. This could be a problem; she is a member of the Society for Human Resource Management, whose local chapter is advised by Mr. Guardia. “If he looks and sees, ‘Hillary is not really reading as much as I thought,’ does that give him a negative image of me?” she wondered. “His opinion really matters. Maybe I need to change my study habits.”
After two months of using the system, Mr. Guardia is coming to some conclusions of his own. His students generally are scoring well on quizzes and assignments. In the old days, that might have reassured him. But their engagement indexes are low.
“Maybe the course is too easy and I need to challenge them a bit more,” Mr. Guardia said. “Or maybe the textbooks are not as good as I thought.”
© 2013 The New York Times Company.

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