Anything that interests me: Reading Up Before University

I was asked quite important questions, so here's a quick answer to them.

On economics at NUS, I am most familiar. For Chem Engin, I am not so sure. However I can tell you for sure that if you are a good student - like me - you would have long prepared for university already. I read up on the history of economics before even coming to the LSE, for instance, and you can see the link on the right hand sidebar under Backhouse's Penguin History.

The answer is yes, prepare for school. That separates good students from the average joes. Average people do what they are told only - good students go ahead and learn more, or read around the subject.

For NUS economics, I recommend - but this is only my opinion -

http://courses.nus.edu.sg/course/ecswong/wongweikang.htm

I also recommend

http://jc-economics-essays.blogspot.com/ (hahahaha an instance of "asymmetric information", of course I'd recommend it, since I created it :p :p)

However, those are quite varied. Mine is easier as it's A level revision (which is basic) and WWK is a professor. So one last site I'd recommend (other than my own of course):

Mankiv's site is really good... but for the generalist: http://gregmankiw.blogspot.com/

So in a nutshell to those who wrote on my tagboard recently,

yes, better start. Go look at the NUS syllabus. Go read around the subject. Revise your A level stuff.

All the best!

Anything that interests me!

Tongue in cheek : Now, may I retire in peace? Hahahaha I still get the same volume of fanmail even though I've retired from blogging!! But I am flattered. Thanks. I hope I help. But read my blogs. They've got everything.

Early Retirement! :)

Dear readers, friends, fans, and passers-by,

This is my goodbye notice!

I have written on various topics here at my favourite blog, Anything that Interests Me! and it's time to say goodbye.

Two months ago, I gave an early warning of my early retirement from blogging, and now here it is. Initially I was thinking of retiring once I had completed my MSc, but now I figure I'll just end it earlier. I've had an interesting experience, from answering many queries about how to do well in exams, from fighting off trolls (see, I can use technical words!) such as a snobbish Snob and an NBA loving, inflammatory post-posting troll, and so on. I've written on far more topics than my initial "mandate", on economics, psychology, mentalism, magic, philosophy, and the like -and have written also about general topics, government, politics, my life, London, Manchester, the UK and so much more.

However, all good things come to an end. I will still check my emails for your comments, notices and questions. My inbox is open for my fans and dear readers. I will check back once every fortnight or so though, so if you do send me an email it's going to be a two week reply timeline. Well... well. Hope you don't mind! :)

Life is very precious and there is so much in life to be appreciative about. I always think of how lucky I am, and how blessed I've been. Occasionally I grumble and complain - like any good Singaporean - but mosttimes I do realise that I have been really lucky to live in a country without natural disasters, which rewards hard work (albeit in studies and CCA, which I happen to be good at), which has given me so many opportunities and chances to see the world.

I have been really lucky also at having such good friends, people who have helped me in my econometrics and my honours thesis, and also an excellent family that have been my support and help. I have been exceptionally fortunate.

I sometimes wonder why some kids in schools are so rebellious - their parents have given them life, given them all their material goods that they have, and so on. Do they really think that they deserved all that they got? Or that if they were born in Africa, as Buffett says, "losing" the Ovarian Lottery, they would have all the good things they have? They should be thanking their lucky stars and working hard in school! Instead, they bother their teachers and classmates, and are rude to their parents. Whenever my teacher friends tell me of those rude kids, I say: Incredible!

I also wonder why some people keep on complaining about our government. Sure, they have made mistakes, and they have some flaws. I agree. But constructive criticism is better. Remember, it wasn't too long ago that we were poor, backward, and a small colony in a large empire. That was barely 70 years ago; there are people who have lived through it.

Today we take for granted that we will live past 70, perhaps past 80. We take for granted that the government will maintain racial harmony. We take for granted the political stability that other countries have shown us is never easy to come by, such as Libya and Egypt. We take peace for granted, despite the millions killed in armed conflict worldwide. We take our safe environment for granted; just last week, someone robbed someone I know of an iphone in London, and I was told that this is common.

I know even I have taken for granted that my health and energy will last. But I am extremely aware of our inherent mortality, and of the fact that health can be taken away at any time, either by capricious fortune or God. Just a major sickness and life is irreparably ruined.

This isn't a negative message; it's a reminder to be happy, contented, and always appreciative of what we have already. We can aspire for more; but be alert that life consists of more than what we want. It doesn't always give us what we want. So the fact that we can have good things is cause for celebration.

On that note - be appreciative and don't take things for granted - thanks for reading and cheers!

Goodbye, and all the best to you and me!

Take care :)

Yours truly.

Anything that interests me!

PS The other blogs, on travel, finance, universities, German, etc. will most likely be taken over by other people. Thanks for reading and cheers!

Anything that interests me! Cost of Living via the CPI

OK, this is going to be a quickie, because I've got lots of work to do; also, this is fairly simple, so let's get it over and done with.

I saw the following old post on someone's blog. (It's Mr Wang Says So. I also checked his site, apparently he's a poet, so he's not an economist.)

Yesterday, Mr Lim cautioned against 'interpreting a rise in the headline CPI as necessarily reflecting an increase in the cost of living'.

It depends on the individual household's spending. 'Switching to cheaper products can reduce the cost of living despite a rise in the CPI,' he added.

But of course a rise in the CPI reflects an increase in the cost of living. After all, the CPI is meant to track the cost of living. If the CPI does not track the cost of living, then what would you want it for?

As for individual households switching to cheaper products, well, in fact, they have to. That’s the effect of inflation - your dollar has less purchasing power. Therefore with the same amount of dollars, you can only buy cheaper products.

Minister Lim must be confusing “cost of living” with “standard of living”. Cost of living means the cost of maintaining a certain standard of living. In turn, standard of living refers to the quality and quantity of goods and services generally available to a certain class of people (for example, average Singaporeans).

Instead of saying that “switching to cheaper products can reduce the cost of living”, Minister Lim would have been more accurate to say, “switching to cheaper products can lower the standard of living”. For example, instead of living in a 5-room HDB flat, you can live in a 1-room HDB flat (a cheaper product). Instead of having chicken rice and vegetables for lunch, you can just eat plain porridge (a cheaper product).

Living in a 1-room HDB flat and eating plain porridge constitutes a lower standard of living. So yes, by switching to cheaper products, you can lower your standard of living. And a lower standard of living does cost less to maintain.

Standard of living is not measured by CPI.

Although I am not a world-leading economist and only have an undergraduate degree, it puzzles me to think that some people criticised the Singapore government for mixing up the cost of living and the standard of living.

Standard of living is traditionally measured by real income, or real GDP, or real NNI. Fair enough; CPI comes in because we can use that to calculate real income or GDP or NNI. But where have all these people been, in the last few years?

Recently it's been fashionable in economics to measure standard of living by HDI (human development index) and other Amartya Sen-like capabilities. Thus, switching between goods DOES NOT lower your standards of living.

So, no CPI measures nothing of the sort.

However, the Minister happens to be right. The CPI might overstate true inflation because it does not account for the substitution effect, which means that people buy other things. Now, let's look carefully at it.

For example, instead of living in a 5-room HDB flat, you can live in a 1-room HDB flat (a cheaper product). Instead of having chicken rice and vegetables for lunch, you can just eat plain porridge (a cheaper product).

The substitution effect isn't generally about this, not all the time. Wang would be mentioning a fairly atypical case. (Trust me, I'm an economist.) Let's say for the CPI, you measure X, Y, and Z. Let's say that Z has a close substitute, Z1, which is also priced the same as Z. So in Wang's words, it's Hainanese chicken rice and well, chicken rice.

The CPI in my example thus only takes Hainanese chicken rice into account and ignores the other one. So it's X to Z.

If Z rises in price, it would appear that there is massive inflation. 1/3, come on!

But, what happens is that people generally will just eat chicken rice instead of the Hainanese version and this "inflation" in the cost of living never happens.

(You can think of one toilet roll vs another; one toothpick vs another. It's NOT a car compared to a football, or high class food to low class food as Wang suggests.)

Sorry - but it's true. Economics is economics: the Minister is right! The cost of living is overstated because of the substitution effect, which occurs naturally.

What then, is the use of the CPI?

It's a proxy, perhaps; it's an indicator perhaps; but it isn't a direct measure of any kind of standards of living and a conditional, indirect measurement of inflation.

PS I haven't included the complicated bits such as the different accounting methods, the index number problems, and so on. But the thing is I've only ever seen one person criticising the index number problem in an anti-PAP article. So I figure ... one economist among thousands. So that's why I wrote this - to teach basic economics.

Anything that interests me!