Spring 2024 Senior

ECON 140: Econometrics by Ben Faber (Senior, Spring 2024)

TLDR: Econometrics is essentially finding out if X causes Y (does higher temperature cause increased ice cream sales). We use data analysis, R coding, and reasoning. Correlation does not equal Causation. It’s a fun course finding out the relationship between two variables. The only con is you are limited by the amount of data you have. If you don’t have enough data, you can’t prove anything because of small sample size and larger margin of errors.

Econometrics = using math logic and statistics to justify/support economic theories

In econometrics, we are finding the relationship between two variables. For example, let the X variable be a high school teacher's annual salary. Y variable will be the average test scores of students from the high school. We are testing for the relationship on how changes in X affect changes in Y.

For example, we get data and we see a positive correlation between X and Y. Positive correlation means they move together in the same direction. When teacher salary goes up, student test scores go up as well. When teacher salary goes down, student test scores go down as well.

However, correlation doesn't equal causation. There could be other factors at play causing this result. One can be reverse causation. It could be that Y is changing X and not the other way around (student test scores determine teacher salary).

Another is omitted variable bias (OVB). There is another variable (Z) that affects both X and Y together. It could be the (Z) neighborhood average income. Instead of teacher salary causing higher grades, the neighborhood average income determined both teacher salary and student grades. Reasoning: richer families pay more property tax for school funding and richer families have more resources such as tutoring and extracurriculars to invest in their children's education.

There are some solutions to OVB.

1. Instrumental Variable (IV).
To fix omitted variable bias, we have to use an instrumental variable. An instrumental variable directly affects X without directly affecting other variables. An IV can be the end-of-year bonuses for teacher salaries. Instead of using data values of X variable, we use data values of our IV to create predicted X variables based on our IV regression model. We then use that to find the causation relationship between X and Y.

2. Difference in differences
Let our subjects be mcdonald's in two different state: California and Texas.
y is workers hired
Canon event: California increases it's minimum wage by $2 in 2010.
In diff in diff, we compare the difference in workers hired between California and Texas. We get the difference before 2010 and we get the difference after 2010. We subtract the two to find the effect of the canon event.
Diff in diff assumes that everything stayed same over time except the canon event. Any changes in the difference of workers hired between the two states is due to to the new law. If California hired 1 million workers more than Texas before 2010, but they hired 3 million workers more than Texas after 2010. The law increased workers hired by 2 million.

3. Randomized Controlled Trial
You randomly choose subjects and give them treatment and placebo (50/50). You compare the two groups and any difference in results is due to the treatment. Any differences between test subjects before the experiment is cancelled out by randomization of their group status.

ECON 151: Labor Economics by Ryan Edwards (Senior, Spring 2024)

There are many important lessons in labor economics. Overall fun class learning about current events and how income affects people's choices. We are trying to quantify things such as leisure time to maximize our overall wellbeing.

1. The more labor there is available, the lower the wages will be. If McDonald's need 10 workers but 100 people apply, McDonald's has more power in paying less wages compared to if only one person applies (then they have to increase their wage to get more applicants).

2. Money is important, but so is leisure. To optimize our wellbeing, we try to maximize both. For example, I work 50 hours a week for $24 per hour (20 hours of free time). If I get a promotion and earn $30 per hour, I might work 60 hours because I get more money for working more. However, instead of a wage increase, I get a $10,000 bonus every year, I might work less and spend more time on leisure.
If you are working 70 hours a week, each hour of leisure is more valuable compared to if you were only working 30 hours a week. We want both money and leisure. If we have less of something, we value it more compared to the other.

3. Greedy jobs. Some jobs pay a lot of money but they are inflexible. For example: doctors. They have to work 60+ hours (sometimes weekends as well), and be on call for any medical emergencies. If he/she has a family, usually their spouse would quit their job to take care of the house and the kids. Riskier jobs also pay more such as tower wiring technicians.

ECON 157: Health Economics by Ryan Edwards (Senior, Spring 2024)

Looking back on my notes: Professor Edwards told us that the magical words for a doctor to hear is "I feel short of breath".
During mid-July of 2024, I did have some trouble breathing and heart palpitations for 4 days. When I told this to the triage nurse on the phone, her tone changed very quickly into sounding more grave. She sounded extremely worried and told me to go to the nearest ER immediately to get it checked out. Usually a shortness of breath is a sign of stroke, heart attack, etc.

1. We try to quantify being healthy into money to optimize wellbeing. If a healthy year gets you $100,000 in income but each day you are sick, you make half. By health economics theory, a person should be happier being sick 24/7 if they received $60,000 extra (on top of their $50,000 income) compared to $100,000. This only works if they value only money. Even then, how much is a healthy day worth? Would you be fine being bedridden and under a fever a whole day if you got $200 for it. If you make almost no money, then it would be an obvious yes. If you are working full-time and make 6 figures (money is not an issue), you might say no.

2. Health insurance is mandatory. Healthy people end up losing money because they don't need as many health services but sick people gain money as they don't have to pay extremely high costs for medical procedures since it's covered by their insurance (which is paid by all the recipients of health insurance).

3. Discount factor. The higher the discount factor, the more the person cares about the future. For example, if the discount factor is 0.9. The $100 you receive tomorrow will feel like getting $90 today. $100 in 3 days will feel like getting $73 today.
This becomes very important when choosing career paths. Medical students have to put 10+ years into extra education before they start receiving a doctor's salary. If you have a high discount factor, being a doctor will be appealing. However, if your discount factor is low and you want to enjoy more now than later, the medical career path will suck.
When it comes to health, discount factors also play a role. People who care about the future are more likely to exercise, sleep well, have a good diet, etc because they want to remain healthy in the future compared to somebody who binge parties every Friday night.

4. Grossman PPF Model. In this model, we try to maximize well-being which is decided by our health and our home goods/enjoyment (leisure, money, etc, anything we like that isn't being healthy). When we have 0 health, we also have zero enjoyment. When you are bedridden, you can't play video games or party outside. As you get healthier, you can have more fun. Both of them can increase together until a certain point where you can only increase one further at the expense of the other. For example, you are relatively healthy already and have two options: eat a salad, or eat a hamburger. Salad increases health but decreases enjoyment, the other one does the opposite. In this scenario, time becomes a major factor: use that one hour to exercise or use that one hour to play video games.

5. A fun fact: Hispanics have the highest life expectancy, then non-Hispanic whites, and non-Hispanic blacks last. Despite them having less education and lower earnings on average due to large % being immigrants, they have healthier habits which boosts their life expectancy. Immigrants boost the life expectancy of the United States.

PSYCH 198: Adulting by Cindy Chen (Senior, Spring 2024)

I took an adulting class in Spring 2024. I am currently 23 years old. I often ask myself, what does it mean to be an adult? Or in other words, what makes somebody an adult?
There are many possible answers to this. According to the law, being 18 years old makes you an adult. You are old enough to do most things except for drink alcohol (21 years old). Others would say 21 years old because many people have graduated college and entered the workforce by then.
For me, being an adult is about making your own decisions and dealing with the consequences of your actions. If somebody is constantly blaming others for their own mistakes, I don't think that's a very adult thing to do. Essentially being an adult means being responsible.
I can't call myself an adult yet. I am living by myself and am going to be working full-time soon in less than a year. Yet, I don't feel like an adult. I make my own decisions, but a part of me acts immature and irrational at times. It's that part of me that missed out on being a carefree kid or teenager because he was too scared to make new friends after being bullied and moving to the United States. I never had an actual girlfriend until very recently. I didn't go to parties or socialize that much as a teenager. All I did was school and video games.
Now, I am just trying to make up for my lost childhood by trying to "live life". I am going outside more, being more social, working out, asking out girls, traveling to different countries, things I missed out on.
Until I make up for those things, I can't confidently call myself an adult because I never got to fully grow up.

Notes:
1- easy way to stay focus: organize your workspace.
1.5- Pomodoro technique to stay focused
(increases clarity and less distractions: easier to stay in flow)
2- Berkeley Career Network
(find referrals from connections)(9 times more likely to get job)
3- The day before important events such as competitions or exams(prioritize recovery)
4- I am currently an avoidant dismissive attachment style because of my narcissistic personality
5- People who trust their partner on good judgement (give them the benefit of the doubt) have better relationships overall

LS110: Brilliance of Berkeley: Carol Christ (Senior, Spring 2024)

Overall, this was an interesting class getting to hear from faculty (some noble prize winners) from various departments ranging from Economics to English poetry. One thing that ties in all of them is research. They are all trying to solve problems whether its sickle cell disease or the relationship of U.S. with other cultures and discrimination.
My favorite one was Ken Ueno. His lecture overall was confusing. I did not understand at all what he was trying to say. However, one thing did stand out. At the end, he asked us, the audience, what makes something beautiful? He told us that we all should decide that instead of letting others decide for us? When I think about it, from an artist's perspective, it's a very important question. Beauty standards have changed over time in fashion, arts, etc. We all have a choice whether to conform to modern beauty standards or try to create our own based on what we believe in.

Notes:
1- Sleep Tips: Dark and Cool, Destress before sleep (Meditate and Journal),
1.5- Mental Walk to a peaceful place (real or imaginary), walk slowly, and immerse yourself while engaging the five senses. The more immersed you are, the more effective it will be.
2- Go visit nature and be amazed by it
3- artifical intelligence engineers also have to code in human utility models so robots can predict how humans will react and use that to their advantage.
For example: a robot can (legally) cut you off in traffic because it knows a rational human driver will slow down to avoid crashing into the robot-driven vehicle
4- Ken Ueno (music): Who decides what's beautiful or successful? Why can't we decide for ourselves what makes something beautiful?
5- Our eyes are seeing multiple objects at any given time but we can only think about one thing at a time. That's why whenever a pretty girl passes by, my eyes magnet towards her even if I wasn't looking towards her initially.
6- Prof. Doris Tsao: Same as (5), our subjective reality (what we are thinking about) and our physical reality (the world) are different
7- Housing is no longer just a place to live. It's now an investment as well.
8- CRISPR gene therapy: remove patient cells, edit cells, insert cells back in (over time and repeatedly)
8.2- If edited non-sex cells (sperm or egg), genetic changes aren't passed down. If sperm or egg are genetically edited, the babies will receive the genetic changes
8.5- What makes something a religion: If the IRS recognizes it and gives it tax
exemption.
10- People who live through financial crises have trauma. Taking financial wellness courses aren't enough to convince them to invest. Emotions are involved and the solution is Cognitive Behavioral Therapy. In addition to finance courses, people with financial trauma have to slowly expose themselves to whatever scares them. They slowly start investing small amounts over time instead of a large lump sum. From there, they increase their investment contributions until they reach their goals.
11- Hate speech is protected by the 1st amendment. In europe hate speech is banned. In U.S. hate speech is legal unless it directly harms someone or incites violence.
13- Prof. Cathy Park Hong (English Poetry): felt like an investment from parents (they tell us that they came to America for us. They want us to succeed. They compare us to other kids and get upset when they do better than us).
14- Think of artificial intelligence learning the same way babies learn. Robots can easily learn how to pass a law exam but its very hard to teach them how to walk (which took millions of years of evolution)