Pay day loans

Hello. My name is Kostas Economides and I am a lecturer in the Department of Economics at the University of the South of England (USE for short). Well, actually that is not true really as the names of individuals and institutions in this blog have been changed to protect the innocent - and the guilty!

There has been quite a lot of the discussion in the cafe these last few days about pay day loans. As has been widely reported in the media the Archbishop of Canterbury, Justin Welby, has proposed that, rather than being outlawed, pay day loan companies such as Wonga should face competition from credit unions. He has promised that up to 15,000 churches could be used by credit unions as locations from which to operate.

Unfortunately for him the Archbishop then discovered that the Church of England Commissioners, who look after the church's pension fund and investments, has been indirectly putting money into Wonga through a US venture capital firm called Accel. In a way this doesn't matter as the extra publicity has keep the story going, and it is virtually impossible for any investment, however ethical, to be completely without indirect complications of this sort.

The discussion has several strands. First there is the question of whether pay day loan companies should be more tightly regulated, or even banned. Should the interest rate, which on an annualized rate is 5853% at Wonga,be capped?

In the cafe we all agreed that banning these companies would not be a good idea as they would likely just be replaced by less visible and more obnoxious loan sharks.

The question of an interest rate cap was more contentious. Mike Rowe and some others argued that any attempt to impose a cap would just distort the market. They went along with the Archbishop's view which is that the best way to approach the problem is to offer a viable competitive alternative. A few others though argued that the real problem was the automatic rollover of debts each month so that they became impossible to pay back. So their answer was not so much a cap on the interest rate as a limit on the number of months over which a debt could be accumulated. Mike said that unfortunately this would introduce an element of moral hazard. If a debtor knew that the debt would be frozen after a certain number of months then this would reduce, or maybe even remove completely, the incentive to pay it back before then.

This point led us on to discuss ethical rather than straight economic aspects of the situation. In some religions the idea of interest itself is considered unacceptable. As Giles Fraser in his Loose Canon column in the Guardian said, at one point Christians had declined to become money lenders themselves, leaving it to the Jews who they then persecuted for it.

As economists we recognise the need for interest payments on opportunity cost grounds. If a lender makes funds available for someone else to use then they are unable to use the money themselves. But why should interest rates reach such ridiculously high levels? "Normal" rates of 5% or even 10% seem to be acceptable but of course certain groups are more likely to default on the loan which means the lender will want an additional premium to cover this risk.

Is the real problem that the ordinary high street banks have just not been willing to make loans available to low income families? Decision processes have become too automatic and less personal. In the old days the local bank manager would know his customers and would help them to arrange a suitable pay back plan.

It will be interesting to know how this will develop. Will the government feel that it has to do something and intervene in some way? Or will credit unions operating from churches provide a competitive alternative to companies like Wonga?

MSc supervision

Hello. My name is Kostas Economides and I am a lecturer in the Department of Economics at the University of the South of England (USE for short). Well, actually that is not true really as the names of individuals and institutions in this blog have been changed to protect the innocent - and the guilty!

Although it is now vacation time for the undergraduate students we still have the postgraduate MSc students here working on their dissertations, which means regular supervision duties.

In some cases this is quite straightforward as the students are enthusiastic and well-prepared. But in others the students find the whole thing rather daunting which also makes it hard work for the supervisor. They just don't seem to know how to go about the process of identifying a topic, formulating relevant hypotheses, collecting suitable data and applying appropriate tests. Even producing a literature review seems beyond them. This year two of the four students assigned to me appear to be in this category.

Both are Chinese and I have some sympathy with them. Neither had to write a dissertation or complete any independent research as part of their undergraduate degrees that they did in China. However they have both completed the Research Methods module here at USE which should have given them some idea about how to go about things.

In supervising dissertations it is always difficult to know exactly how much help to give the student. Really our job is to help them achieve their own chosen project, not to do any of the work for them. We have been provided with guidelines concerning how much help we should give and how often we should see them. However it appears that not all supervisors provide the same amount of assistance to students. You do hear students complaining that while some supervisors give very little help (and may not be that easy to get hold of) others are much more generous with their time and advice.

One problem for us supervisors is the students' choice of topic. It can be easier to supervise a student who has chosen a topic with which you are familiar. Unfortunately this can't always be the case, especially as a lot of our students seem to want to work on finance and banking topics and we are not all experts in that area.

So somehow I have to get these students going. My first meetings with them were quite difficult but we have tried to agree a timetable for completing the various stages of the work. Rather than have a clear formulation of the aims and objectives of their work for our next meeting in two week's time I have suggested that they prepare a draft literature review (and given them some guidance about what this will require). With any luck they will then be able to get a clearer idea about what to do in specifying an exact title and getting on with their investigation of it.

Lunchtime games

Hello. My name is Kostas Economides and I am a lecturer in the Department of Economics at the University of the South of England (USE for short). Well, actually that is not true really as the names of individuals and institutions in this blog have been changed to protect the innocent - and the guilty!

When I arrived at the cafe last Friday I found Gus and Bob engaged in a competitive word game. Each of them was calling out the name in turn of a pop group or band that was either a food or a drink.

Each of them had a list in front of them of the names they had come up with up to that point. Some were familiar to me - The Jam, Cream, Hot Chocolate, the Red Hot Chilli Peppers, Black Eyed Peas, Bucks Fizz. Others were obviously before my time or ones that never made it to Greece - Vanilla Fudge, Half Man Half Biscuit, Prefab Sprout.

Each of the competitors had a supporter - Sian for Bob and Jack for Gus. And when they came up with their next name they didn't just say it but yelled it out loud loud with a whoop and a high -five with their supporter. It was all very noisy and exuberant. Not what you might expect form two guys now both well into their sixties.

Not surprisingly this had attracted a crowd of onlookers who also cheered at each new name.

Richard was there acting as time-keeper and judge. Each competitor had a maximum time of one minute to come up with their next group name. I was told that the loser would be the first of them to fail to respond in time. Richard would also decide if a name was acceptable or not - for example he ruled out Def Leppard on the grounds that even if the spelling had been different humans don't eat leopards! Apparently competitors were able to try these unacceptable names as stalling devices pending Richard's ruling. Richard had with him his mobile phone so that he could check names on the Internet if necessary.

On this occasion it was eventually Gus who was the winner with Bob failing to get a new group name in time. There were cheers all round and then Richard explained to me what it was all about.

After lunch, as happens at the end of term on a Friday or at some other times in the vacation, Gus, Bob and the others go to the pub - the Ship where we go after staff seminars. The loser has to buy the drinks.

In the pub Gus told me that the tradition had originated from a time some years ago where Bob and he were trading names of footballers who had played for England. Other contests followed, initially still with a sporting theme - Test cricketers from around the world, tennis grand slam winners. Then they had moved on to musical topics - record titles containing girls' names, record titles containing place names, records featuring the saxophone. Gus and Bob now relied on Richard to choose the topic so that neither competitor could gain an advantage by preparing answers beforehand.

After a few drinks in the pub Bob remembered a few more suitable group names - but it was too late. I wonder what topic Richard will choose for them next time?

SmartEcon

Hello. My name is Kostas Economides and I am a lecturer in the Department of Economics at the University of the South of England (USE for short). Well, actually that is not true really as the names of individuals and institutions in this blog have been changed to protect the innocent - and the guilty!

I don’t know if I have mentioned him before but one of our less frequently seen members of department is Keith Heathfield. The reason we don’t see much of him is mainly because he doesn’t really play a role in teaching on our degrees. Nor does he do any research as far as I can see. In fact most of his time goes to giving lectures and seminars for the non-specialist introduction to economics module given to the students of accounting, business studies and hospitality management in the faculty. Another role that he has is as our key contact with our partner institution in Bulgaria and Keith is often over there for meetings or giving guest lectures.

Both these activities have led Keith to develop some wonderful online resources, including some sponsored by Hefce and supported by the Economics Network in Bristol. It all started a few years ago. Due to the large numbers of students who have to take the Introduction to Economics module Keith found that he had to give his double lecture twice each week – there just wasn’t enough room for all the students even in our biggest lecture theatre.

One of the problems that this caused was that most students preferred to attend one of the scheduled lectures, rather than the other which was on a Thursday evening. Despite each student being allocated to one lecture only it was difficult to stop them turning up at the other time.

Keith decided that he would get his lectures on video. This would not only have the advantage of taking the pressure off students to attend the lecture in person, but would also give students who had been at the lecture an opportunity to go over the material again afterwards at their own pace. In the actual lecture they could just listen to what Keith was saying without the need to jot down notes at the same time. Keith also decided to make these lectures available to the students in Bulgaria via the Internet.

Keith’s lectures proved very popular. He is a natural communicator and we found that even some students taking our own departmental courses had discovered them and were finding them useful. Encouraged by this Keith successfully applied for a grant from the university’s Learning and Teaching Fund to develop additional videos and supporting learning materials.

Keith put together a set of videos filmed on location to explain and illustrate various basic economic concepts such as supply and demand, price elasticity, marginal analysis, price discrimination and inflation. After these had been seen by people at the Economics Network they helped Keith to put together a bid to get money from Hefce to develop them further. He was also able to start on a second set of videos relating to introductory statistics for economists and other social scientists.

This wonderful material has now come to the attention of our famous and successful alumni Simon Smart. When he was down here recently for the Graduation prizes he had discussions with Keith and Mike Rowe about plans he has for Keith to develop a range of short clips on economics that he can use for a set of mobile phone apps that will be known as SmartEcon. He is willing to pay for Keith to work for him one day a week, giving the department money to employ part-time lecturers to take his seminars. Keith is very happy with the plan, especially as it appears that he has been promised a personal share of the profits from the apps. Maybe Learning and Teaching activities can provide a good supplementary income if you are good enough at them!

Royal baby

Hello. My name is Kostas Economides and I am a lecturer in the Department of Economics at the University of the South of England (USE for short). Well, actually that is not true really as the names of individuals and institutions in this blog have been changed to protect the innocent - and the guilty!

What is it about you British and the Royal family? When I got to my office yesterday morning Kylie the cleaner was there smiling with joy. "Oh, isn't it wonderful Kostas. Kate and William have had a lovely baby boy".

I said that I was very happy for them but wasn't a bit too much fuss being made about it. The BBC news had reporters at the hospital, outside Buckingham Palace and even in Kate's home village. It seemed to me that about eighty per cent of the 10 o'clock news the previous night had been devoted to the birth with all the other important news just squeezed in here and there. Even the Guardian was full of stuff about the birth.

Kylie said that I shouldn't be such a misery. The royal birth was a happy event, uplifting for everyone during these difficult economic times. Kate and William were a lovely couple. I said that I didn't disagree with that. It was just that the coverage was over the top and a helpful distraction for the government from their policies for the economy, the health service, education,and the hiving off to the public sector of most of the probation service. Kylie appeared not to take any of this in but carried on with her cleaning humming what sounded like "Happy Birthday".

As you might expect opinion in the cafe was not quite so enthusiastic, although the women behind the counter were all going on about it in happy voices. Some of my colleagues though took a different view. Gus turned up with a copy of the latest issue of Private Eye which had a simple front cover with the words "Woman Has Baby. Inside:Some other stuff".

Somebody mentioned that a recent poll had revealed that over 70% of the British population is in favour of the monarchy, with only 17% wanting the country to be a republic. Someone else said that this might be true while the Queen was alive but that it could easily change after that with Charles on the throne. It was well known that he has tried on a number of occasions to influence the government with his private letters that we have not been allowed to see. He most probably had already influenced some policies - there were hints that he had got a favourable outcome in relation to the tax status of his estates and had also influenced the development plans for the area around the Chelsea barracks.

Some people joked with me saying that as a Greek I should be celebrating the birth as, after all, his great-grandfather the Duke of Edinburgh is a member of the Greek royal family. "More Schleswig-Holstein" was my reply!

A visit from Denise

Hello. My name is Kostas Economides and I am a lecturer in the Department of Economics at the University of the South of England (USE for short). Well, actually that is not true really as the names of individuals and institutions in this blog have been changed to protect the innocent - and the guilty!

Gus mentioned last week that we would be getting a visit from Denise Cooper some time this week. Denise used to be a lecturer here at USE before I arrived. But she married Simon, an Australian researcher also working in the department at the time and about four years ago they moved to Australia where they are now both Professors. They now also have a young son, Evan, and Denise and Evan are over here in the UK for a couple of weeks to visit Denise's parents. Unfortunately Simon couldn't come with them due to work commitments, but Denise and Evan are having a fine old time in England visiting most of the London tourist spots like the Tower of London, the London Eye, London Zoo and Madame Tussauds.

But Denise also wanted to find time to come down to USE and see some of her old colleagues, especially Gus and Bob Bunn. And so it was that yesterday she and Evan arrived here for lunch in the cafe. Gus and Bob invited me to join them too.

Denise was really pleased to see Gus and Bob and they were soon reminiscing about the old days. Denise had started in the department as a young lecturer - her first lecturing job in fact. But she had steadily worked her way through successive promotions, even having a stint as one of the Associate Deans before the offer of high profile jobs in Melbourne had lured Simon and her down under. They were now very happy there, she said, especially now that they had young Evan.

The conversation moved on to other topics such as the REF and similar processes adopted in Australia and the low numbers of women professors in the profession. Understandably Evan showed signs of boredom and I accepted the role of baby minder so I missed much of the rest of the discussion. Evan is a delightful young lad and I read to him a bit from the book that he had with him. Then we went outside and threw a ball he had to each other until it was time for them to leave. There were hugs all round. It is good to know that colleagues who have moved on still value what the department gave them and the friendships they made.

Graduation

Hello. My name is Kostas Economides and I am a lecturer in the Department of Economics at the University of the South of England (USE for short). Well, actually that is not true really as the names of individuals and institutions in this blog have been changed to protect the innocent - and the guilty!

Yesterday was Graduation Day for our students - undergraduates, and postgraduates including PhD students. The undergraduates have only recently completed their studies, taking final examinations in May. But the Masters students finished their taught courses last year, then worked on their dissertations until September. So, apart from the two of them who started PhDs with us we haven't seen them since September (or in some cases since before then) so it was nice to see them, and in some cases their parents too.

It is always great to see students on Graduation Day, dressed up in suits and posh dresses. Some of them are unrecognisable at first glance having spent most of their student days appearing before you in t-shirts, shorts and flip-flops. And it can be painfully funny watching the girls tottering along the cobbled streets in their high-heels .

This year it was very hot in the hall. I'm told that it was the hottest day of the year so far with temperatures outside reaching nearly 34 degrees. It seemed much hotter inside despite the air conditioning, but then we were also in suits and gowns. A couple of staff had to leave during the ceremony as they were feeling unwell.

Victor Crispin was there for his last ever Graduation Day. During his speech, which thankfully was shorter than usual, he talked about the fact that he would be retiring, and said that the university, like all the graduates, was well prepared for the future. That was his theme.

There was just one Honorary Degree awarded yesterday, to a member of the local NHS Trust who had also been involved in nurse training with the university, as well as a lot of local charity work. Well deserved I think. So no celeb sportsmen or entertainers this year!

After the ceremony we went for a buffet lunch and for the presentation of the prizes. It has been a bumper year again with more Firsts and Upper Seconds than ever before. Simon Smart was there to handover the newly renamed and now rather more generous award for the best final year performance. He also took the opportunity to chat to all the prize winning students as he is looking to offer jobs to some of them.

The university photographer seemed to take an age while taking pictures of all the prize winners. The room we were in seemed to have very ineffective air-conditioning and after several glasses of champagne I was getting very sleepy. So it was a relief to get outside even if it was hot and very still there too.

The Graduation Ceremony kind of marks the official end to the academic year, although we still have his year's Masters and PhD students to supervise through the summer. That reminds me, I must make some appointments with the Masters students I am supervising for next week or things will get behind schedule.