By Gretchen Mayes – New graduate Mikayla Roller (May 2017) recently completed a major research project in economics. The senior seminar course in economics requires a 40 to 50-page research paper on a topic of the student’s choice. Students are required to formulate a question and utilize an economic tool and/or theory to answer the question while also utilizing their critical thinking skills.
Mikayla’s question was, “Using an economic cost-benefit analysis, what are the optimal policies and projects that allow producers, with acute consideration to farmers, in Liberia, Sierra Leone, and Guinea to become less risk-averse?” This question came to light when she was studying abroad at Oxford last year.
During the Oxbridge program at Jewell, she took an eye-opening course on the economics of developing nations. She says, “Classical economic theory assumes humans are rational, self-maximizing actors. Yet, recent findings in behavioral economics challenge this assumption and find that humans often seek to minimize their losses instead of maximizing their gains; findings in neuroscience show how humans’ brains are wired to hate the feeling of losing. In the developing world, producers, especially farmers and casual laborers, are subjected to many more acute shocks to their income and consumption than producers and consumers in the developed world. For instance, a bad crop can be the difference between feeding their families or not. Thus, to avoid risks and minimize such tragic losses in the short run, the developmental literature highlights how farmers will engage in risk-averse behavior that actually constrains their ability to elevate themselves out of poverty in the long run. For example, farmers will diversify their crops or their employment so that they have other income to rely on in case of floods or droughts. Yet, this causes farmers to lose out on the growth that stems from specialization. Therefore, international organizations and governments have formulated schemes to help transfer and reduce risk in the developing world so that farmers in developing nations will be more likely to specialize and adopt riskier but more growth-inducing fertilizers and other practices. These schemes include crop insurance, expanding access to micro finance, and institutional support.” The literature she studied at Oxford talked about addressing risk-aversion behavior and focused on weather-related agriculture shocks. Throughout her research at Jewell she looked through the findings to isolate the most cost-effective projects to reduce risk-aversion to another aggregate shock faced by the developing world: pandemics.
One professor that has greatly influenced her here at Jewell is Dr. Cook. He taught Mikayla how to reason through the dominant theory of macroeconomics while also challenging mechanisms of those dominant theories. Mikayla says, “His intermediate macroeconomics course remains one of the most challenging courses I took at Jewell. I am a better thinker because of him.”
Mikayla’s plans after Jewell include traveling to Malaysia to teach English for one school year as she was awarded a Fulbright Scholarship. She says, “I’m excited to be on the front-lines of diplomacy, immersed in a country that has rapidly transitioned to an upper-middle income country over the past 50 years. I hope to acquire more community-development and language skills while I’m there (I’ll be schooled in Malay!).”