Lately, I’ve been thinking about why people procrastinate. Hunt Allcott, a visiting professor in the Econ Department, talked about the prevalence of procrastination in his UEA Lunch. Allcott noted that procrastination seems to occur quite frequently, and that many psychological studies have shown that people prefer to procrastinate instead of smoothing work of a certain period of time. But in theory, you would expect that people would finish a constant amount of work each day, until the task is finally completed. Thus, if you have W amount of work, and have N days until you need to complete it, you would finish W/N amount of work each day.

Obviously, this doesn’t seem to be the case empirically. People procrastinate all the time, not just about long, arduous assignments, but also about quick tasks (like doing laundry). It seems, though, that people procrastinate less for quick tasks. If something can be done in a couple minutes, people tend to get it out of the way. However, people tend to really put off longer assignments, like studying for an exam (which you could conceivably have an entire semester to study for).

I came across a paper that explained many of these phenomena. For instance, it went over why people procrastinate at all when it seems in their best interests to complete work at a steady pace. The paper creates a model that incorporates the utility derived from not working. The authors, Markus Brunnermeier, Filippos Papakonstantinou, and Jonathan Parker, posit that overconfidence in one’s own ability to do a certain task leads to incorrect planning. The authors argue that people usually only view the “best case scenario” so that people drastically overestimate their ability to quickly finish a task. However, this overconfidence actually optimizes a person’s utility function. For instance, suppose a task can be completed in two time periods. If a person procrastinates, that person will have more work in the second period, and thus have lower utility during that period. However, during the first period, one’s utility is increased by multiple distinct factors. First, the person gains utility from not actually completing the task. Second, the person gains from expecting to have little work in the second period because of overoptimism. Finally, in the first period, the person has a decrease in perceived uncertainty about the amount of work required (the person thinks he/she knows exactly how much work will be required because of his/her overoptimism). The combined effect of less actual work, less expected work, and greater certainty in the first period outweighs the added work one gains in the second period. Thus, procrastination is actually optimal in terms of maximizing a person’s utility function (the paper proves this in terms of their model in Appendix B).

This paper is exciting not just because of its conclusions, although I always have wondered why people (including me) put things off for so long, but because it also shows the enormous flexibility of economics and economic modeling in particular. One can use economic analysis to explain many different phenomena, even if they do reside in the psychological or sociological realms.

Thinking about grad school? Consider taking grad classes before applying. Trust me, you won’t regret it. For one, you get a flavor of what a Ph.D. program requires of its students (math, math, math). Second, you get to view economics from a different, more formal perspective (though not entirely removed from a 14.04 or 14.32 point of view). Conditional on you succeeding in such a course, you also get to signal to the Ph.D. admissions committees that you’re tough enough to complete their program.

This past Spring, I took 14.382 and 14.387 with Professors Hausman and Angrist, respectively. By mid-semester, I was calculating asymptotic distributions in my sleep and had whole sections of Mostly Harmless Econometrics memorized. The problem sets were brutal and holistically tried my econometrics skills, from Stata and Matlab programming to probabilistic convergence theorems. After this experience, theoretical econometrics no longer features in my list of future research goals. Instead, I feel that I’ve gained an arsenal of tools to better approach applied economics fields. For example, I’m thinking of taking 14.771, a course where many of the techniques I learned this semester (e.g. diff-in-diff, Wald estimators, clustering) will come up again.

In my next post, I’ll be a bit more specific about the grad classes here at MIT and distinguish between first-year and second-year classes.

I won an NSF fellowship for graduate school this spring, and someone asked me for advice on how to apply.  The NSF Graduate Fellowship gives you a stipend of $30k for three years of study, and also contributes $10.5k to your school for each of those three years.  The NSF gave out ~40 fellowships for economics last year, and they were split between 1st- and 2nd-year students is some uneven proportion (I think you’re move likely to win one for 1st year).

The application has three essays: personal statement, prior research, and research proposal.

My prior research and personal statement were fairly boilerplate, and I wrote about what I did during UROPs and summer jobs.  I’m not sure what they like for the personal statement, but from what I found online, I did what you’re usually not supposed to do for college entrance essays: list a bunch of stuff, talk about why it’s important, link it together with what I enjoy about economics and what subfields I’d like to do research in.   Don’t be too poetic, I don’t think it’ll be appreciated.

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For the last few years, we have shed many tears
Living through a recession.
The economy’s broke and it’s not a joke,
When we talk of another depression.
Fifteen million without a job,
Foreclosures and banks that fail,
401K’s became 201K’s,
And everything’s up for sale.

How can it be? What didn’t we see
That led to all of this trouble?
There is little doubt that the proximal cause
Was a bursting housing bubble.
But other than that, who can we blame?
And what do they lament?
Millions of people contributed to
This hundred-year event.

Continued here: (http://www.pbs.org/newshour/updates/business/jan-june10/case_02-04.html)

Yes, that’s right!!

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