The wealthy's slice of income pie holds steady
High-income Canadians' share of the country's total income held steady in 2011, Statistics Canada reported Monday. The highest-earning 5 per cent of all tax filers accounted for 23.8 per cent of all income, unchanged from 2010. The top 1 per cent of earners accounted for 10.6 per cent of earnings, the top 0.1 per cent generated 3.7 per cent of earnings, and the top 0.01 per cent of earners produced 1.3 per cent of all earnings, it said – all unchanged from 2010.
Statscan noted that the high-earners' share of the country's income had actually fallen in each of 2007, 2008 and 2009, before stabilizing in 2010 and 2011.
Nationally, the top 50 per cent of tax filers accounted for 83 per cent of all income in 2011. The top 10 per cent of tax filers earned 35.1 per cent of income.
Oil money seems to be a factor in tilting the scales in favour of high earners. In Alberta, the top 5 per cent earned 36.7 per cent of all income in 2011, while the top 1 per cent earned 17 per cent of all income – tops among provinces. And Alberta and Newfoundland were the only provinces where all the highest-earning categories (5 per cent and up) saw their share of total income grow in 2011.
Ranking Canada's economics departments
Trying to identify the "best" economist or economics department in the country is a bit like trying to say "which is the greatest fruit in the world?" There's so much variety, it's near-impossible to find a fair measure on which to compare them. (Well, okay, the strawberry is obviously the best fruit. Bad example.)
Still, that doesn't mean it isn't fun, and informative, to try. A study posted in IDEAS, an online economics research database hosted by the Federal Reserve Bank of St. Louis, analyzed data from the more than 1.4 million research papers in the database to determine which Canadian economic researchers and institutions generated the most bibliographic citations, and produced the most popular papers. (The idea being that if your work is well-read and frequently quoted, it must be good. Not unreasonable.)
The Vancouver School of Economics at the University of British Columbia placed at the top of the study's rankings, followed (in descending order) by the economics departments at the University of Toronto, Queen's University and the University of Western Ontario. Here's a look at the top 10:
1. Vancouver School of Economics, University of British Columbia
2. Department of Economics, University of Toronto
3. Department of Economics, Queen's University
4. Department of Economics, University of Western Ontario
5. Rotman School of Management, University of Toronto
6. Department of Economics, Simon Fraser University
7. Bank of Canada
8. Sauder School of Business, University of British Columbia
9. Department of Economics, University of Calgary
10. Department of Economics, McMaster University
Among individuals, the top-ranked economist was Western's John Whalley, followed by Thomas Lemieux of the Vancouver School of Economics and James MacKinnon of Queen's. Here's the top 10:
1. John Whalley, Economics Department, University of Western Ontario
2. Thomas Lemieux, Vancouver School of Economics, UBC
3. James MacKinnon, Economics Department, Queen's University
4. Michael B. Devereux, Vancouver School of Economics, UBC
5. Christian S. Gourieroux, Department of Economics, University of Toronto
6. Walter Erwin Diewert, Vancouver School of Economics, UBC
7. Randall Morck, School of Business, University of Alberta
8. Keith Head, Sauder School of Business, UBC
9. Jean-Marie Dufour, Economics Department, McGill University
10. Shouyong Shi, Economics Department, University of Toronto
Misunderstanding behavioural economics
It's always a bit tricky to define what behavioural economics is – it's that fuzzy area where economics and human psychology/sociology interact, where emotions disrupt apparently rational economic choices and decision-making. Or something like that.
Maybe it's a little simpler to clarify what behavioural economics isn't. In a recent essay published by the Center for Global Development, economists Matthew Darling, Saugato Datta and Sendhil Mullainathan of ideas42 (a U.S. behavioural economics think tank) sought to clear up some common public misconceptions of what this field is all about. Or, rather, isn't all about.
They point out, first of all, that behavioural economics isn't all about controlling people's behaviour – to discover ways to convince them to make economic decisions that they otherwise wouldn't make. Rather, they say, the goal is to discover ways for people to avoid poor economic decisions unintentionally.
Second, they say, behavioural economics is neither liberal nor conservative. Prominent people on both sides of the political spectrum, from President Obama on the left to Mike Huckabee on the right, have been strong proponents of behavioural economics. Rather, they say, the field appeals to "pragmatists and realists," because it makes for relatively low-cost policy solutions.
Third, they say that behavioural economics does not argue that humans are routinely and collectively irrational. This misconception has come from the fact that the field of study has been used to try to explain the gaps in actual economic behaviour and what supposedly "rational" economic models would have predicted. The behaviour is only "irrational" in a purely mathematical sense; human participants are still making their own rational choices based on the context in which they are operating. In short, behavioural economists are not implying that we're all a little crazy – although they might suggest that some "rational" models from traditional economics are.