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Do not derail the thread with discussions about other topics like global warming. |
On March 16 2012 00:49 paralleluniverse wrote:Show nested quote +On March 16 2012 00:35 Hider wrote:On March 16 2012 00:15 paralleluniverse wrote:On March 16 2012 00:02 Hider wrote:On March 15 2012 23:45 paralleluniverse wrote:On March 15 2012 23:15 Hider wrote:On March 15 2012 22:44 TanTzoR wrote:On March 15 2012 22:38 Hider wrote:On March 15 2012 22:24 TanTzoR wrote:On March 15 2012 22:12 Hider wrote: [quote]
Like? An no the argument that educaiton --> more jobs isn't valid if you understand how the free market works. It's not only about jobs and economics. Like I said I'm not going to list them all but, for instance, with a well educated population a democracy is more likely to be successful. Less inclined to go to extremes like racism and such. Neo-nazi nowadays are rarely rocket scientists. There are lot more factors that is relevant when discussing culture, but most likely people turn to sick movements when the economy is doing bad. And obv. if people are paid to take wortheless educations then the economy will do worse. But lets say there is a movement, some people are racist. So what? Does it hurt you in any way as long as they dont violate your human rights? Or is your theory that if people don't take an education, then they will vote for the wrong politican, and hence people need to be paid for useless educations so they vote for the right guy? I feel that is an insane theory, and that can only create "voter corruption": 1 politician say "I give you a free education if you vote for me". Other politican say: "You have to pay for your own education". Obiviosuly a lot of people will vote for the first politican, and this is unfortunately why we are having such terrible economics today in almost all countries. You are judging what is worthless. A world with only engineers and workers would be sad. And for the politician thing, well if he says "free education" then since the people are educated they know it will cause the taxes to raise. If they are ok with this trade they vote for him. But if people are uneducated politicians will be able to abuse demagogic arguments and people will get even more fucked than usual. Your last statement is so wrong...look at the US and the price of their studies, look at their economic situation. As I have no evidence that free education ensures growth neither can you say "this is unfortunately why we are having such terrible economics". Worthless = You are not creating any service/product that someone is willing to pay for. US system isn't really free either, though its relatively more free than most european systems. But when people only takes an education if they think it has a positive NPV, then this will lead to higher economic growth. The only argument you can put against this, is if you think that government throgh planned economics is better at deciding what has value for each individual than the individuals them selves (planned economics/socialism). Obivously planned economics doesn't work. Free markets does (I hope this doesn't need further explanation). THe reason people think free education is good has nothing to with better economy, but with the fact that they think its a human right to take a education. But as I have pointed out: In a free society, those who are expected to have a positive NPV by taking an educaiton will be able to take an educaiton as long as they are able to convince an investor or creditor that they should take an education. Some people however can't take a (long) educaiton because it has a negative NPV. However what is wrong with that? Some people are not meant to read books all day. Maybe some people are actually meant to start working after 9th grade or after high school? People are different, and I disagree that is a human right that everybody should have a right to take an educaiton. Nobody calculates the NPV of their university education. It's simply unknowable with any sort of reasonable accuracy. To even suggest that the NPV of university education should be a consideration on the part of the student is delusional, in the sense that it is completely out of touch with how people live in the real world. There have been many studies showing that the earning potential of university graduates is much larger than that of high school graduates, so people go to university. Some people want to be lawyers, some want to be scientists, some want to be economists, so people go to university because it's a prerequisite to getting one of these jobs. This is the thought process they use, not NPV calculations which require unknowable projections of income from now until the day you die. To suggest that universities should be run on essentially a free market system is failing to understand the purpose of a university. Universities do not exist merely to maximize profits by charging high prices to students so that only students from a high income can afford it (as opposed to students with high potential but low income). Universities exist also to propagate knowledge and research, this is a public good. https://en.wikipedia.org/wiki/Public_goodTo put university education out of reach of bright students who are poor, but let in rich students, even if they are stupid, which is what will happen if unregulated, is a waste of human capital and human intelligence, and will degrade the intelligence and productivity of the general population. It's basic microeconomics that negative externalities should be taxed. It is also basic microeconomics that positive externalities should be subsidized. Education is a positive externality. 1) People make cost-benefit calculations every single day, every single time they make a decision. NPV analysis is bascially a cost-benefit calculation involving a series of expected cash flows. In the end value is destroyed if NPV = less than 0. If NPV is above 0 value is created. Of course people actually dont think in terms of discount rate or try to calculate these numbers. However they can still make a much better judgement than the government. If people are taking a high expensive education even though they don't think it has a positive NPV, but that it will still be worth in terms of cost-benefit (e.g. it gives prestige), then economic value is destroyed. The soceity as a whole is worse of in economic goods. But so what? In a free society the guy who paid for prestige is the only paying. In a public society the guy is getting the prestige for free and tax payers are paying for this prestige. 2) Today the NPV calcuations are manipulated as univisties are free. 3) Universities are supposed to operate like any other business. There are no need for other purposes. Sure I get that purposes are different today, but as I have tried to argue, this is dumb IMO. 4) Did you even read my post - I actually clearly argued why high income isn't a neccesitiy to be able to take an education (future expected income is) What's the NPV of your university education? Walk me through it. Tell me what model you used to project your income if you went to uni, and how you project it if you didn't. Now explain to me the interest rate model you used to estimate the rate at which you discount the cash flows projected in the first step. Then finally put all this together and calculate the NPV. Well assume I am 20 years old and that I plan to work till I am 70. How do you know you'll work until you're 70? Maybe you'll be disabled in an accident. Maybe you'll get hit by a bus. Show nested quote +I am considering whether to take a 5 year education. I estimate that with only a high school education I would be able to earn 50.000$ year (yeh danish wages are pretty high), Based on what? How do you know your income will always be $50,000 a year? Surely you'll earn less at the start and more as you get older. What about increases in income due to inflation? Show nested quote + and if I take that education my wage will be 80.000$ year (average number, obv. i could do it more implicated by assuming that I would have a higher income around the age of 50 than 26). Based on what? How do you know your income will always be $80,000 a year? Surely you'll earn less at the start and more as you get older. What about increases in income due to inflation? Show nested quote +If I take this education it will be relatively easy for me to get a job, and lets say for simpliciity that there are no price increases, so I use a relatively low discount rate of 5% year. Why would there be no price increases? Your assumption is wrong in the real world. A discount rate of 5%? Why always 5%? Interest rates are more like 1% now. Where did you take into account the autoregressive behavior of interest rates? Show nested quote +I know I always can get any kind of job paying 50.000$/year with a 100% certainity, and since there are no uncertainity involving taking a loan the discount rate if i do not take an education is equal to the time value of money, which we assume is 3%. No, you can't know that with certainty. What if there's a double-dip recession caused by Greece leaving the Euro and unemployment increases to 30% because of government inaction? Show nested quote +The education costs me 200.000$, which I will have to borrow. The banks look at my grades from high school, perhaps they ask me some questions about what I want to do in life, and what kind of person I am (perhaps they don't, who knows what the free market will do). Then they decide to charge me 2% in interest on those 200.000$ (since they assume that there will be no inflation forever). How do you know that's how much your education costs? What if tuition fees increase? Your assumption of 0 inflation is absurd and completely wrong. Show nested quote +I assume that starting by year 6 I will be able to pay back 10.000$/year on my debt. By year 6 total debt will be 221.000. This will take me around 30 years to pay back the debt (incl. interests). Hence for 30 years my expected income will be 70.000$ instead of 80.000$. Again, how did you pull these numbers out of your ass? Show nested quote +Annuity (not taking an education) = 1/0,03-1/(0,03*1,03^55) = 26.77. Annuity (taking an educaiton) = 1/0,05 - 1/(0,05*1,05^50) = 18.25.
PV of not taking an education = 50.000 * 26.77 = 1,338,721 Present value of taking an education = 1,277,915
Hence if above numbers are correct, taking an education has negative NPV. So the wages are supposed to be higher than 80.000$ (or not taking an education is supposed to be lower than 50.000$).
I don't expect that everyone ( in a free society ) will sit down and analyze these numbers, but they will at least consider them. Today they are not considered, and this destroys value. No. NO ONE will take these numbers seriously. These numbers are concocted and based on delusional and false assumptions. It would be laughable to take this with even a grain of salt. You would be making a colossal act of stupidity to take calculations based off invented numbers seriously, because the true values are not even remotely knowable. The GIGO principle applies. https://en.wikipedia.org/wiki/GIGOAnd where did you account for the utility of a person getting more enjoyment and happiness working as, say, a scientist, which requires university education, for $50,000 a year, than working as a factory worker for $50,000 a year?
Hmm yeh you dont understand how NPV works. Noone knows future income, or for how long time they work. COmpanies do not either. But thats why they use estimates, and discount the uncertainity by the time value of money + a risk premium. If the numbers are very uncertain you use a higher discount rate.
But the numbers aren't pulled out of my ass: One can go and check the average wage for someone having taking that education, and use those estimates. It isn't nessacarily rocket science.
And btw the inflation number was just used for simplicity (which I wrote - becasue it doesn't change how NPV works if there are price increase. It just makes it more complicated). Surprised you actually cared about the specific numbers instead of the idea behind the principle.
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On March 16 2012 01:22 Hider wrote:Show nested quote +On March 16 2012 00:49 paralleluniverse wrote:On March 16 2012 00:35 Hider wrote:On March 16 2012 00:15 paralleluniverse wrote:On March 16 2012 00:02 Hider wrote:On March 15 2012 23:45 paralleluniverse wrote:On March 15 2012 23:15 Hider wrote:On March 15 2012 22:44 TanTzoR wrote:On March 15 2012 22:38 Hider wrote:On March 15 2012 22:24 TanTzoR wrote: [quote] It's not only about jobs and economics. Like I said I'm not going to list them all but, for instance, with a well educated population a democracy is more likely to be successful. Less inclined to go to extremes like racism and such. Neo-nazi nowadays are rarely rocket scientists.
There are lot more factors that is relevant when discussing culture, but most likely people turn to sick movements when the economy is doing bad. And obv. if people are paid to take wortheless educations then the economy will do worse. But lets say there is a movement, some people are racist. So what? Does it hurt you in any way as long as they dont violate your human rights? Or is your theory that if people don't take an education, then they will vote for the wrong politican, and hence people need to be paid for useless educations so they vote for the right guy? I feel that is an insane theory, and that can only create "voter corruption": 1 politician say "I give you a free education if you vote for me". Other politican say: "You have to pay for your own education". Obiviosuly a lot of people will vote for the first politican, and this is unfortunately why we are having such terrible economics today in almost all countries. You are judging what is worthless. A world with only engineers and workers would be sad. And for the politician thing, well if he says "free education" then since the people are educated they know it will cause the taxes to raise. If they are ok with this trade they vote for him. But if people are uneducated politicians will be able to abuse demagogic arguments and people will get even more fucked than usual. Your last statement is so wrong...look at the US and the price of their studies, look at their economic situation. As I have no evidence that free education ensures growth neither can you say "this is unfortunately why we are having such terrible economics". Worthless = You are not creating any service/product that someone is willing to pay for. US system isn't really free either, though its relatively more free than most european systems. But when people only takes an education if they think it has a positive NPV, then this will lead to higher economic growth. The only argument you can put against this, is if you think that government throgh planned economics is better at deciding what has value for each individual than the individuals them selves (planned economics/socialism). Obivously planned economics doesn't work. Free markets does (I hope this doesn't need further explanation). THe reason people think free education is good has nothing to with better economy, but with the fact that they think its a human right to take a education. But as I have pointed out: In a free society, those who are expected to have a positive NPV by taking an educaiton will be able to take an educaiton as long as they are able to convince an investor or creditor that they should take an education. Some people however can't take a (long) educaiton because it has a negative NPV. However what is wrong with that? Some people are not meant to read books all day. Maybe some people are actually meant to start working after 9th grade or after high school? People are different, and I disagree that is a human right that everybody should have a right to take an educaiton. Nobody calculates the NPV of their university education. It's simply unknowable with any sort of reasonable accuracy. To even suggest that the NPV of university education should be a consideration on the part of the student is delusional, in the sense that it is completely out of touch with how people live in the real world. There have been many studies showing that the earning potential of university graduates is much larger than that of high school graduates, so people go to university. Some people want to be lawyers, some want to be scientists, some want to be economists, so people go to university because it's a prerequisite to getting one of these jobs. This is the thought process they use, not NPV calculations which require unknowable projections of income from now until the day you die. To suggest that universities should be run on essentially a free market system is failing to understand the purpose of a university. Universities do not exist merely to maximize profits by charging high prices to students so that only students from a high income can afford it (as opposed to students with high potential but low income). Universities exist also to propagate knowledge and research, this is a public good. https://en.wikipedia.org/wiki/Public_goodTo put university education out of reach of bright students who are poor, but let in rich students, even if they are stupid, which is what will happen if unregulated, is a waste of human capital and human intelligence, and will degrade the intelligence and productivity of the general population. It's basic microeconomics that negative externalities should be taxed. It is also basic microeconomics that positive externalities should be subsidized. Education is a positive externality. 1) People make cost-benefit calculations every single day, every single time they make a decision. NPV analysis is bascially a cost-benefit calculation involving a series of expected cash flows. In the end value is destroyed if NPV = less than 0. If NPV is above 0 value is created. Of course people actually dont think in terms of discount rate or try to calculate these numbers. However they can still make a much better judgement than the government. If people are taking a high expensive education even though they don't think it has a positive NPV, but that it will still be worth in terms of cost-benefit (e.g. it gives prestige), then economic value is destroyed. The soceity as a whole is worse of in economic goods. But so what? In a free society the guy who paid for prestige is the only paying. In a public society the guy is getting the prestige for free and tax payers are paying for this prestige. 2) Today the NPV calcuations are manipulated as univisties are free. 3) Universities are supposed to operate like any other business. There are no need for other purposes. Sure I get that purposes are different today, but as I have tried to argue, this is dumb IMO. 4) Did you even read my post - I actually clearly argued why high income isn't a neccesitiy to be able to take an education (future expected income is) What's the NPV of your university education? Walk me through it. Tell me what model you used to project your income if you went to uni, and how you project it if you didn't. Now explain to me the interest rate model you used to estimate the rate at which you discount the cash flows projected in the first step. Then finally put all this together and calculate the NPV. Well assume I am 20 years old and that I plan to work till I am 70. How do you know you'll work until you're 70? Maybe you'll be disabled in an accident. Maybe you'll get hit by a bus. I am considering whether to take a 5 year education. I estimate that with only a high school education I would be able to earn 50.000$ year (yeh danish wages are pretty high), Based on what? How do you know your income will always be $50,000 a year? Surely you'll earn less at the start and more as you get older. What about increases in income due to inflation? and if I take that education my wage will be 80.000$ year (average number, obv. i could do it more implicated by assuming that I would have a higher income around the age of 50 than 26). Based on what? How do you know your income will always be $80,000 a year? Surely you'll earn less at the start and more as you get older. What about increases in income due to inflation? If I take this education it will be relatively easy for me to get a job, and lets say for simpliciity that there are no price increases, so I use a relatively low discount rate of 5% year. Why would there be no price increases? Your assumption is wrong in the real world. A discount rate of 5%? Why always 5%? Interest rates are more like 1% now. Where did you take into account the autoregressive behavior of interest rates? I know I always can get any kind of job paying 50.000$/year with a 100% certainity, and since there are no uncertainity involving taking a loan the discount rate if i do not take an education is equal to the time value of money, which we assume is 3%. No, you can't know that with certainty. What if there's a double-dip recession caused by Greece leaving the Euro and unemployment increases to 30% because of government inaction? The education costs me 200.000$, which I will have to borrow. The banks look at my grades from high school, perhaps they ask me some questions about what I want to do in life, and what kind of person I am (perhaps they don't, who knows what the free market will do). Then they decide to charge me 2% in interest on those 200.000$ (since they assume that there will be no inflation forever). How do you know that's how much your education costs? What if tuition fees increase? Your assumption of 0 inflation is absurd and completely wrong. I assume that starting by year 6 I will be able to pay back 10.000$/year on my debt. By year 6 total debt will be 221.000. This will take me around 30 years to pay back the debt (incl. interests). Hence for 30 years my expected income will be 70.000$ instead of 80.000$. Again, how did you pull these numbers out of your ass? Annuity (not taking an education) = 1/0,03-1/(0,03*1,03^55) = 26.77. Annuity (taking an educaiton) = 1/0,05 - 1/(0,05*1,05^50) = 18.25.
PV of not taking an education = 50.000 * 26.77 = 1,338,721 Present value of taking an education = 1,277,915
Hence if above numbers are correct, taking an education has negative NPV. So the wages are supposed to be higher than 80.000$ (or not taking an education is supposed to be lower than 50.000$).
I don't expect that everyone ( in a free society ) will sit down and analyze these numbers, but they will at least consider them. Today they are not considered, and this destroys value. No. NO ONE will take these numbers seriously. These numbers are concocted and based on delusional and false assumptions. It would be laughable to take this with even a grain of salt. You would be making a colossal act of stupidity to take calculations based off invented numbers seriously, because the true values are not even remotely knowable. The GIGO principle applies. https://en.wikipedia.org/wiki/GIGOAnd where did you account for the utility of a person getting more enjoyment and happiness working as, say, a scientist, which requires university education, for $50,000 a year, than working as a factory worker for $50,000 a year? Hmm yeh you dont understand how NPV works. Noone knows future income, or for how long time they work. COmpanies do not either. But thats why they use estimates, and discount the uncertainity by the time value of money + a risk premium. If the numbers are very uncertain you use a higher discount rate. But the numbers aren't pulled out of my ass: One can go and check the average wage for someone having taking that education, and use those estimates. It isn't nessacarily rocket science. And btw the inflation number was just used for simplicity (which I wrote - becasue it doesn't change how NPV works if there are price increase. It just makes it more complicated). Surprised you actually cared about the specific numbers instead of the idea behind the principle. Companies don't make decisions solely based on NPV because they understand the the limitations involved. People are not robots. NPV is in fact usually only suitable for short term projects where the cash flows and interest rates can be estimated with some certainty, and only profit matters. Humans do not only value profit, but also utility.
To estimate the amount of money you make now until you die is as good as pulling a number out of your ass, and that's exactly what you did. Your NPV is absolutely and completely wrong based on the thousands of guesses that has gone into it's components.
Garbage in, garbage out.
You strike me as someone who has done a course in finance and economics involving mostly mechanical computations, while having no understanding of how theory is applied in practice. There are various other project appraisal methods in finance and a large number of qualitative considerations that matters in practice.
Indeed, while your usage of NPV is completely wrong in practice, allow me to give you an example of correctly using NPV for valuation of long term risk. NPV can be applied to life insurance contracts, because there is a well defined payout on such a contract, and the probability of death at every year can be estimated from an actuarial table. While this death rate is not representative of any particular person, it is representative of the general population, so given a large number of life insurance contracts, the ENPV, i.e. expected NPV is somewhat accurate on average.
This is a correct an useful application of NPV for long tail risk. Using NPV to measure the benefit of university education by making guesses and false assumptions at every line is utterly worthless.
Indeed, nobody does it. NPV isn't even taught in high school.
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On March 16 2012 01:22 Hider wrote: Hmm yeh you dont understand how NPV works.
Don't try to degrade his intelligence, it seems like he actually do understands NPV, especially, he understands better than you why normal people doesn't use NPVs.
This coming from someone who ALSO knows NPV/investment theory/financing/microeconomics/macroeconomics..
Although your point in theory is correct, the theory is not applicable to practise in any useful way.
On March 16 2012 01:44 paralleluniverse wrote: Indeed, while your usage of NPV is completely wrong in practice, allow me to give you an example of correctly using NPV for valuation of long term risk. NPV can be applied to life insurance contracts, because there is a well defined payout on such a contract, and the probability of death at every year can be estimated from an actuarial table. While this death rate is not representative of any particular person, it is representative of the general population, so given a large number of life insurance contracts, the ENPV, i.e. expected NPV is somewhat accurate on average.
This is a correct an useful application of NPV for long tail risk. Using NPV to measure the benefit of university education by making guesses and false assumptions at every line is utterly worthless.
Indeed, nobody does it. NPV isn't even taught in high school.
Precisely <3
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On March 16 2012 01:59 Grovbolle wrote:
Although your point in theory is correct, the theory is not applicable to practise in any useful way.
If theory involves making stuff up, then his point in theory is correct.
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So basically, who will be born clever and who will not is a largely a matter of chance. The next Einstein could be borne anywhere in the world - into any kind of economic conditions. So having high fees for education increases the chance that the next Einstein wont afford higher education. Thus, low/no fees for higher education is something that benefits everyone in the society, since only the intellect will be the measure for who gets education and who doesn't.
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I'm pretty drunk right now but wouldn't it seem like a good idea for the rich to stay rich by decreasing the amount of people with good education :p
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On March 16 2012 02:00 paralleluniverse wrote:Show nested quote +On March 16 2012 01:59 Grovbolle wrote:
Although your point in theory is correct, the theory is not applicable to practise in any useful way.
If theory involves making stuff up, then his point in theory is correct.
Yeah, if he substituted cash for utillity, then the theory would somewhat hold. Assuming lots and lots of stuff, like knowing the discount rate for utillity and a million other things.
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On March 16 2012 00:40 TanTzoR wrote:Show nested quote +On March 16 2012 00:27 RageBot wrote:On March 15 2012 23:37 FinalForm wrote: If you don't subsidize education, then the rich will pay for good education and the poor will skimp on it. Thus the rich get richer and the poor get poorer. That leads to greater social unrest such as protests.
How did those rich pepole become rich, and poor, in the first place? By luck? In the turn of the last century, more than 50% of the US's population lived under the poverty line, so it's obviously not "old money" that made most of today's rich pepole (upper decile) rich. There's a huge correlation between IQ and Economic Status these days, the pepole who were smart made good decisions and learned, and thus they earned money, stupid pepole made stupid mistakes and got poor. So far, while taking Socioeconomic status into consideration, the correlation index of Intelligence (as gauged by IQ points) stands at 0.6, this is a lot, so it seems that being smart leads to having more money in the first place. Being smart was enough before, now you need to show a piece of paper named diploma (you can always show me the case of recent "self made men" but overall that's it. So if they can't even access to uni they are screwed.
By "the last century" I meant the beginning of the 20th, my mistake, my point was that smart pepole have already detached themselves, with the education they gained in 1920-1960, so there are very few poor brilliant pepole.
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On March 16 2012 01:44 paralleluniverse wrote:Show nested quote +On March 16 2012 01:22 Hider wrote:On March 16 2012 00:49 paralleluniverse wrote:On March 16 2012 00:35 Hider wrote:On March 16 2012 00:15 paralleluniverse wrote:On March 16 2012 00:02 Hider wrote:On March 15 2012 23:45 paralleluniverse wrote:On March 15 2012 23:15 Hider wrote:On March 15 2012 22:44 TanTzoR wrote:On March 15 2012 22:38 Hider wrote: [quote]
There are lot more factors that is relevant when discussing culture, but most likely people turn to sick movements when the economy is doing bad. And obv. if people are paid to take wortheless educations then the economy will do worse.
But lets say there is a movement, some people are racist. So what? Does it hurt you in any way as long as they dont violate your human rights?
Or is your theory that if people don't take an education, then they will vote for the wrong politican, and hence people need to be paid for useless educations so they vote for the right guy? I feel that is an insane theory, and that can only create "voter corruption": 1 politician say "I give you a free education if you vote for me". Other politican say: "You have to pay for your own education".
Obiviosuly a lot of people will vote for the first politican, and this is unfortunately why we are having such terrible economics today in almost all countries. You are judging what is worthless. A world with only engineers and workers would be sad. And for the politician thing, well if he says "free education" then since the people are educated they know it will cause the taxes to raise. If they are ok with this trade they vote for him. But if people are uneducated politicians will be able to abuse demagogic arguments and people will get even more fucked than usual. Your last statement is so wrong...look at the US and the price of their studies, look at their economic situation. As I have no evidence that free education ensures growth neither can you say "this is unfortunately why we are having such terrible economics". Worthless = You are not creating any service/product that someone is willing to pay for. US system isn't really free either, though its relatively more free than most european systems. But when people only takes an education if they think it has a positive NPV, then this will lead to higher economic growth. The only argument you can put against this, is if you think that government throgh planned economics is better at deciding what has value for each individual than the individuals them selves (planned economics/socialism). Obivously planned economics doesn't work. Free markets does (I hope this doesn't need further explanation). THe reason people think free education is good has nothing to with better economy, but with the fact that they think its a human right to take a education. But as I have pointed out: In a free society, those who are expected to have a positive NPV by taking an educaiton will be able to take an educaiton as long as they are able to convince an investor or creditor that they should take an education. Some people however can't take a (long) educaiton because it has a negative NPV. However what is wrong with that? Some people are not meant to read books all day. Maybe some people are actually meant to start working after 9th grade or after high school? People are different, and I disagree that is a human right that everybody should have a right to take an educaiton. Nobody calculates the NPV of their university education. It's simply unknowable with any sort of reasonable accuracy. To even suggest that the NPV of university education should be a consideration on the part of the student is delusional, in the sense that it is completely out of touch with how people live in the real world. There have been many studies showing that the earning potential of university graduates is much larger than that of high school graduates, so people go to university. Some people want to be lawyers, some want to be scientists, some want to be economists, so people go to university because it's a prerequisite to getting one of these jobs. This is the thought process they use, not NPV calculations which require unknowable projections of income from now until the day you die. To suggest that universities should be run on essentially a free market system is failing to understand the purpose of a university. Universities do not exist merely to maximize profits by charging high prices to students so that only students from a high income can afford it (as opposed to students with high potential but low income). Universities exist also to propagate knowledge and research, this is a public good. https://en.wikipedia.org/wiki/Public_goodTo put university education out of reach of bright students who are poor, but let in rich students, even if they are stupid, which is what will happen if unregulated, is a waste of human capital and human intelligence, and will degrade the intelligence and productivity of the general population. It's basic microeconomics that negative externalities should be taxed. It is also basic microeconomics that positive externalities should be subsidized. Education is a positive externality. 1) People make cost-benefit calculations every single day, every single time they make a decision. NPV analysis is bascially a cost-benefit calculation involving a series of expected cash flows. In the end value is destroyed if NPV = less than 0. If NPV is above 0 value is created. Of course people actually dont think in terms of discount rate or try to calculate these numbers. However they can still make a much better judgement than the government. If people are taking a high expensive education even though they don't think it has a positive NPV, but that it will still be worth in terms of cost-benefit (e.g. it gives prestige), then economic value is destroyed. The soceity as a whole is worse of in economic goods. But so what? In a free society the guy who paid for prestige is the only paying. In a public society the guy is getting the prestige for free and tax payers are paying for this prestige. 2) Today the NPV calcuations are manipulated as univisties are free. 3) Universities are supposed to operate like any other business. There are no need for other purposes. Sure I get that purposes are different today, but as I have tried to argue, this is dumb IMO. 4) Did you even read my post - I actually clearly argued why high income isn't a neccesitiy to be able to take an education (future expected income is) What's the NPV of your university education? Walk me through it. Tell me what model you used to project your income if you went to uni, and how you project it if you didn't. Now explain to me the interest rate model you used to estimate the rate at which you discount the cash flows projected in the first step. Then finally put all this together and calculate the NPV. Well assume I am 20 years old and that I plan to work till I am 70. How do you know you'll work until you're 70? Maybe you'll be disabled in an accident. Maybe you'll get hit by a bus. I am considering whether to take a 5 year education. I estimate that with only a high school education I would be able to earn 50.000$ year (yeh danish wages are pretty high), Based on what? How do you know your income will always be $50,000 a year? Surely you'll earn less at the start and more as you get older. What about increases in income due to inflation? and if I take that education my wage will be 80.000$ year (average number, obv. i could do it more implicated by assuming that I would have a higher income around the age of 50 than 26). Based on what? How do you know your income will always be $80,000 a year? Surely you'll earn less at the start and more as you get older. What about increases in income due to inflation? If I take this education it will be relatively easy for me to get a job, and lets say for simpliciity that there are no price increases, so I use a relatively low discount rate of 5% year. Why would there be no price increases? Your assumption is wrong in the real world. A discount rate of 5%? Why always 5%? Interest rates are more like 1% now. Where did you take into account the autoregressive behavior of interest rates? I know I always can get any kind of job paying 50.000$/year with a 100% certainity, and since there are no uncertainity involving taking a loan the discount rate if i do not take an education is equal to the time value of money, which we assume is 3%. No, you can't know that with certainty. What if there's a double-dip recession caused by Greece leaving the Euro and unemployment increases to 30% because of government inaction? The education costs me 200.000$, which I will have to borrow. The banks look at my grades from high school, perhaps they ask me some questions about what I want to do in life, and what kind of person I am (perhaps they don't, who knows what the free market will do). Then they decide to charge me 2% in interest on those 200.000$ (since they assume that there will be no inflation forever). How do you know that's how much your education costs? What if tuition fees increase? Your assumption of 0 inflation is absurd and completely wrong. I assume that starting by year 6 I will be able to pay back 10.000$/year on my debt. By year 6 total debt will be 221.000. This will take me around 30 years to pay back the debt (incl. interests). Hence for 30 years my expected income will be 70.000$ instead of 80.000$. Again, how did you pull these numbers out of your ass? Annuity (not taking an education) = 1/0,03-1/(0,03*1,03^55) = 26.77. Annuity (taking an educaiton) = 1/0,05 - 1/(0,05*1,05^50) = 18.25.
PV of not taking an education = 50.000 * 26.77 = 1,338,721 Present value of taking an education = 1,277,915
Hence if above numbers are correct, taking an education has negative NPV. So the wages are supposed to be higher than 80.000$ (or not taking an education is supposed to be lower than 50.000$).
I don't expect that everyone ( in a free society ) will sit down and analyze these numbers, but they will at least consider them. Today they are not considered, and this destroys value. No. NO ONE will take these numbers seriously. These numbers are concocted and based on delusional and false assumptions. It would be laughable to take this with even a grain of salt. You would be making a colossal act of stupidity to take calculations based off invented numbers seriously, because the true values are not even remotely knowable. The GIGO principle applies. https://en.wikipedia.org/wiki/GIGOAnd where did you account for the utility of a person getting more enjoyment and happiness working as, say, a scientist, which requires university education, for $50,000 a year, than working as a factory worker for $50,000 a year? Hmm yeh you dont understand how NPV works. Noone knows future income, or for how long time they work. COmpanies do not either. But thats why they use estimates, and discount the uncertainity by the time value of money + a risk premium. If the numbers are very uncertain you use a higher discount rate. But the numbers aren't pulled out of my ass: One can go and check the average wage for someone having taking that education, and use those estimates. It isn't nessacarily rocket science. And btw the inflation number was just used for simplicity (which I wrote - becasue it doesn't change how NPV works if there are price increase. It just makes it more complicated). Surprised you actually cared about the specific numbers instead of the idea behind the principle. Companies don't make decisions solely based on NPV because they understand the the limitations involved. People are not robots. NPV is in fact usually only suitable for short term projects where the cash flows and interest rates can be estimated with some certainty, and only profit matters. Humans do not only value profit, but also utility. To estimate the amount of money you make now until you die is as good as pulling a number out of your ass, and that's exactly what you did. Your NPV is absolutely and completely wrong based on the thousands of guesses that has gone into it's components. Garbage in, garbage out. You strike me as someone who has done a course in finance and economics involving mostly mechanical computations, while having no understanding of how theory is applied in practice. There are various other project appraisal methods in finance and a large number of qualitative considerations that matters in practice. Indeed, while your usage of NPV is completely wrong in practice, allow me to give you an example of correctly using NPV for valuation of long term risk. NPV can be applied to life insurance contracts, because there is a well defined payout on such a contract, and the probability of death at every year can be estimated from an actuarial table. While this death rate is not representative of any particular person, it is representative of the general population, so given a large number of life insurance contracts, the ENPV, i.e. expected NPV is somewhat accurate on average. This is a correct an useful application of NPV for long tail risk. Using NPV to measure the benefit of university education by making guesses and false assumptions at every line is utterly worthless. Indeed, nobody does it. NPV isn't even taught in high school.
Do you have any source for the claim that companies do not make NPV calculations (or a similiar concept?) This will surprise me if you actually had as you didn't understand the concept before making that post.
Btw how do you think stocks are valuated? Do you think stock analyst give up as they have no idea on how to valuate the expected future cash flow for more than 5-6 years? Or do you think they come up with some kind of average number?
But your correct that we can't estimate future income in 40 years with a very high probability. But most likely your future income will be higher if you have a specific education that gives you qualificants that employeers demand.
But if the estimated income is just marginal higher and the education is very expensive, then it probably has a negative NPV. This makes the economy worse off, and unfortunately we have a ton of these educations in our current society that we would have not have if education was privatised. So whether people use hours in front of excel or just use 1 minute to think of the cost-benefit of taking that education isn't that relevant here. The point here is that people are considering the cost of the education and whether that education actually increases their future income.
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On March 16 2012 01:59 Grovbolle wrote:Show nested quote +On March 16 2012 01:22 Hider wrote: Hmm yeh you dont understand how NPV works.
Don't try to degrade his intelligence, it seems like he actually do understands NPV, especially, he understands better than you why normal people doesn't use NPVs. This coming from someone who ALSO knows NPV/investment theory/financing/microeconomics/macroeconomics.. Although your point in theory is correct, the theory is not applicable to practise in any useful way. Show nested quote +On March 16 2012 01:44 paralleluniverse wrote: Indeed, while your usage of NPV is completely wrong in practice, allow me to give you an example of correctly using NPV for valuation of long term risk. NPV can be applied to life insurance contracts, because there is a well defined payout on such a contract, and the probability of death at every year can be estimated from an actuarial table. While this death rate is not representative of any particular person, it is representative of the general population, so given a large number of life insurance contracts, the ENPV, i.e. expected NPV is somewhat accurate on average.
This is a correct an useful application of NPV for long tail risk. Using NPV to measure the benefit of university education by making guesses and false assumptions at every line is utterly worthless.
Indeed, nobody does it. NPV isn't even taught in high school. Precisely <3
No he didn't understand NPV! Because then he would be aware that all estimated future income was uncertain, and this is why I use a discount rate.
Im pretty sure he just read the first few lines on wikipedia. And tbh. NPV isn't a high level concept (high school/bachelor), so I think it's fair that before people critize me, they should make sure that they understand the concept.
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When it comes to issues such as this people tend to get bogged down in all the details. Each individual ends up advocating a policy that filters out all the elements they dont like personally. In the end this is counter productive.
I think what we have to ask is what the value of higher education is. Is it simply training for a productive career or does it have additional intangible benefits for those fortunate enough to have attended? When I was in 10th grade I took Shakespearean literature. To this day I have never taken a literature class I have liked less and so at the time I asked my teacher what the value of reading Romeo and Juliet was and he said that much of what we read in high school is important because it creates an academic connection between generations and within peer groups. We have all read Catcher in the Rye, Animal Farm and Macbeth. Just by sharing these experiences and the knowledge conferred by them makes our connection and ability to communicate stronger. I believe there is a similar quality to the higher education experience and by excluding people from it they are made not just unqualified but also alienated.
On this note, does raising the average level of education strengthen our country in a way that makes it a vested interest for everybody? I think so, but the point can be argued.
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On March 16 2012 03:01 Hider wrote:Show nested quote +On March 16 2012 01:59 Grovbolle wrote:On March 16 2012 01:22 Hider wrote: Hmm yeh you dont understand how NPV works.
Don't try to degrade his intelligence, it seems like he actually do understands NPV, especially, he understands better than you why normal people doesn't use NPVs. This coming from someone who ALSO knows NPV/investment theory/financing/microeconomics/macroeconomics.. Although your point in theory is correct, the theory is not applicable to practise in any useful way. On March 16 2012 01:44 paralleluniverse wrote: Indeed, while your usage of NPV is completely wrong in practice, allow me to give you an example of correctly using NPV for valuation of long term risk. NPV can be applied to life insurance contracts, because there is a well defined payout on such a contract, and the probability of death at every year can be estimated from an actuarial table. While this death rate is not representative of any particular person, it is representative of the general population, so given a large number of life insurance contracts, the ENPV, i.e. expected NPV is somewhat accurate on average.
This is a correct an useful application of NPV for long tail risk. Using NPV to measure the benefit of university education by making guesses and false assumptions at every line is utterly worthless.
Indeed, nobody does it. NPV isn't even taught in high school. Precisely <3 No he didn't understand NPV! Because then he would be aware that all estimated future income was uncertain, and this is why I use a discount rate.
Im pretty sure he just read the first few lines on wikipedia. And tbh. NPV isn't a high level concept (high school/bachelor), so I think it's fair that before people critize me, they should make sure that they understand the concept.
Using a 5% discount rate over a time span of 55 years.....
Seems legit..
About the part in bold, he did EXACTLY say that the estimated future income was uncertain. The discount rate has more to it than just uncertainty.
However, I don't need to teach you NPV, you seem to understand the concept, the way you use it is just overly simplistic.
And yes businesses use NPV, but the use SO MUCH MORE than just that to value an investment. This discussion seems hopeless, you are convinced that NPV is the answer to the problem, so I won't keep trying to convince you otherwise.
Edit: Also, people value utillity, not cash.
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On March 16 2012 02:53 Hider wrote:Show nested quote +On March 16 2012 01:44 paralleluniverse wrote:On March 16 2012 01:22 Hider wrote:On March 16 2012 00:49 paralleluniverse wrote:On March 16 2012 00:35 Hider wrote:On March 16 2012 00:15 paralleluniverse wrote:On March 16 2012 00:02 Hider wrote:On March 15 2012 23:45 paralleluniverse wrote:On March 15 2012 23:15 Hider wrote:On March 15 2012 22:44 TanTzoR wrote: [quote]
You are judging what is worthless. A world with only engineers and workers would be sad. And for the politician thing, well if he says "free education" then since the people are educated they know it will cause the taxes to raise. If they are ok with this trade they vote for him. But if people are uneducated politicians will be able to abuse demagogic arguments and people will get even more fucked than usual.
Your last statement is so wrong...look at the US and the price of their studies, look at their economic situation. As I have no evidence that free education ensures growth neither can you say "this is unfortunately why we are having such terrible economics". Worthless = You are not creating any service/product that someone is willing to pay for. US system isn't really free either, though its relatively more free than most european systems. But when people only takes an education if they think it has a positive NPV, then this will lead to higher economic growth. The only argument you can put against this, is if you think that government throgh planned economics is better at deciding what has value for each individual than the individuals them selves (planned economics/socialism). Obivously planned economics doesn't work. Free markets does (I hope this doesn't need further explanation). THe reason people think free education is good has nothing to with better economy, but with the fact that they think its a human right to take a education. But as I have pointed out: In a free society, those who are expected to have a positive NPV by taking an educaiton will be able to take an educaiton as long as they are able to convince an investor or creditor that they should take an education. Some people however can't take a (long) educaiton because it has a negative NPV. However what is wrong with that? Some people are not meant to read books all day. Maybe some people are actually meant to start working after 9th grade or after high school? People are different, and I disagree that is a human right that everybody should have a right to take an educaiton. Nobody calculates the NPV of their university education. It's simply unknowable with any sort of reasonable accuracy. To even suggest that the NPV of university education should be a consideration on the part of the student is delusional, in the sense that it is completely out of touch with how people live in the real world. There have been many studies showing that the earning potential of university graduates is much larger than that of high school graduates, so people go to university. Some people want to be lawyers, some want to be scientists, some want to be economists, so people go to university because it's a prerequisite to getting one of these jobs. This is the thought process they use, not NPV calculations which require unknowable projections of income from now until the day you die. To suggest that universities should be run on essentially a free market system is failing to understand the purpose of a university. Universities do not exist merely to maximize profits by charging high prices to students so that only students from a high income can afford it (as opposed to students with high potential but low income). Universities exist also to propagate knowledge and research, this is a public good. https://en.wikipedia.org/wiki/Public_goodTo put university education out of reach of bright students who are poor, but let in rich students, even if they are stupid, which is what will happen if unregulated, is a waste of human capital and human intelligence, and will degrade the intelligence and productivity of the general population. It's basic microeconomics that negative externalities should be taxed. It is also basic microeconomics that positive externalities should be subsidized. Education is a positive externality. 1) People make cost-benefit calculations every single day, every single time they make a decision. NPV analysis is bascially a cost-benefit calculation involving a series of expected cash flows. In the end value is destroyed if NPV = less than 0. If NPV is above 0 value is created. Of course people actually dont think in terms of discount rate or try to calculate these numbers. However they can still make a much better judgement than the government. If people are taking a high expensive education even though they don't think it has a positive NPV, but that it will still be worth in terms of cost-benefit (e.g. it gives prestige), then economic value is destroyed. The soceity as a whole is worse of in economic goods. But so what? In a free society the guy who paid for prestige is the only paying. In a public society the guy is getting the prestige for free and tax payers are paying for this prestige. 2) Today the NPV calcuations are manipulated as univisties are free. 3) Universities are supposed to operate like any other business. There are no need for other purposes. Sure I get that purposes are different today, but as I have tried to argue, this is dumb IMO. 4) Did you even read my post - I actually clearly argued why high income isn't a neccesitiy to be able to take an education (future expected income is) What's the NPV of your university education? Walk me through it. Tell me what model you used to project your income if you went to uni, and how you project it if you didn't. Now explain to me the interest rate model you used to estimate the rate at which you discount the cash flows projected in the first step. Then finally put all this together and calculate the NPV. Well assume I am 20 years old and that I plan to work till I am 70. How do you know you'll work until you're 70? Maybe you'll be disabled in an accident. Maybe you'll get hit by a bus. I am considering whether to take a 5 year education. I estimate that with only a high school education I would be able to earn 50.000$ year (yeh danish wages are pretty high), Based on what? How do you know your income will always be $50,000 a year? Surely you'll earn less at the start and more as you get older. What about increases in income due to inflation? and if I take that education my wage will be 80.000$ year (average number, obv. i could do it more implicated by assuming that I would have a higher income around the age of 50 than 26). Based on what? How do you know your income will always be $80,000 a year? Surely you'll earn less at the start and more as you get older. What about increases in income due to inflation? If I take this education it will be relatively easy for me to get a job, and lets say for simpliciity that there are no price increases, so I use a relatively low discount rate of 5% year. Why would there be no price increases? Your assumption is wrong in the real world. A discount rate of 5%? Why always 5%? Interest rates are more like 1% now. Where did you take into account the autoregressive behavior of interest rates? I know I always can get any kind of job paying 50.000$/year with a 100% certainity, and since there are no uncertainity involving taking a loan the discount rate if i do not take an education is equal to the time value of money, which we assume is 3%. No, you can't know that with certainty. What if there's a double-dip recession caused by Greece leaving the Euro and unemployment increases to 30% because of government inaction? The education costs me 200.000$, which I will have to borrow. The banks look at my grades from high school, perhaps they ask me some questions about what I want to do in life, and what kind of person I am (perhaps they don't, who knows what the free market will do). Then they decide to charge me 2% in interest on those 200.000$ (since they assume that there will be no inflation forever). How do you know that's how much your education costs? What if tuition fees increase? Your assumption of 0 inflation is absurd and completely wrong. I assume that starting by year 6 I will be able to pay back 10.000$/year on my debt. By year 6 total debt will be 221.000. This will take me around 30 years to pay back the debt (incl. interests). Hence for 30 years my expected income will be 70.000$ instead of 80.000$. Again, how did you pull these numbers out of your ass? Annuity (not taking an education) = 1/0,03-1/(0,03*1,03^55) = 26.77. Annuity (taking an educaiton) = 1/0,05 - 1/(0,05*1,05^50) = 18.25.
PV of not taking an education = 50.000 * 26.77 = 1,338,721 Present value of taking an education = 1,277,915
Hence if above numbers are correct, taking an education has negative NPV. So the wages are supposed to be higher than 80.000$ (or not taking an education is supposed to be lower than 50.000$).
I don't expect that everyone ( in a free society ) will sit down and analyze these numbers, but they will at least consider them. Today they are not considered, and this destroys value. No. NO ONE will take these numbers seriously. These numbers are concocted and based on delusional and false assumptions. It would be laughable to take this with even a grain of salt. You would be making a colossal act of stupidity to take calculations based off invented numbers seriously, because the true values are not even remotely knowable. The GIGO principle applies. https://en.wikipedia.org/wiki/GIGOAnd where did you account for the utility of a person getting more enjoyment and happiness working as, say, a scientist, which requires university education, for $50,000 a year, than working as a factory worker for $50,000 a year? Hmm yeh you dont understand how NPV works. Noone knows future income, or for how long time they work. COmpanies do not either. But thats why they use estimates, and discount the uncertainity by the time value of money + a risk premium. If the numbers are very uncertain you use a higher discount rate. But the numbers aren't pulled out of my ass: One can go and check the average wage for someone having taking that education, and use those estimates. It isn't nessacarily rocket science. And btw the inflation number was just used for simplicity (which I wrote - becasue it doesn't change how NPV works if there are price increase. It just makes it more complicated). Surprised you actually cared about the specific numbers instead of the idea behind the principle. Companies don't make decisions solely based on NPV because they understand the the limitations involved. People are not robots. NPV is in fact usually only suitable for short term projects where the cash flows and interest rates can be estimated with some certainty, and only profit matters. Humans do not only value profit, but also utility. To estimate the amount of money you make now until you die is as good as pulling a number out of your ass, and that's exactly what you did. Your NPV is absolutely and completely wrong based on the thousands of guesses that has gone into it's components. Garbage in, garbage out. You strike me as someone who has done a course in finance and economics involving mostly mechanical computations, while having no understanding of how theory is applied in practice. There are various other project appraisal methods in finance and a large number of qualitative considerations that matters in practice. Indeed, while your usage of NPV is completely wrong in practice, allow me to give you an example of correctly using NPV for valuation of long term risk. NPV can be applied to life insurance contracts, because there is a well defined payout on such a contract, and the probability of death at every year can be estimated from an actuarial table. While this death rate is not representative of any particular person, it is representative of the general population, so given a large number of life insurance contracts, the ENPV, i.e. expected NPV is somewhat accurate on average. This is a correct an useful application of NPV for long tail risk. Using NPV to measure the benefit of university education by making guesses and false assumptions at every line is utterly worthless. Indeed, nobody does it. NPV isn't even taught in high school. Do you have any source for the claim that companies do not make NPV calculations (or a similiar concept?) This will surprise me if you actually had as you didn't understand the concept before making that post. Btw how do you think stocks are valuated? Do you think stock analyst give up as they have no idea on how to valuate the expected future cash flow for more than 5-6 years? Or do you think they come up with some kind of average number? But your correct that we can't estimate future income in 40 years with a very high probability. But most likely your future income will be higher if you have a specific education that gives you qualificants that employeers demand. But if the estimated income is just marginal higher and the education is very expensive, then it probably has a negative NPV. This makes the economy worse off, and unfortunately we have a ton of these educations in our current society that we would have not have if education was privatised. So whether people use hours in front of excel or just use 1 minute to think of the cost-benefit of taking that education isn't that relevant here. The point here is that people are considering the cost of the education and whether that education actually increases their future income. It's laughable to claim that I do not understand NPV. I'm not the one who made a fool of myself by making up numbers to plug it into an equation that I do not understand. You've completely misused the concept of NPV, and I'm the one who showed you how to correctly use it in my example.
If you've had even a semi-decent education, you'd know that businesses are not robots that make up numbers for NPV calculations and reject if NPV is less than 0 and accept if NPV is greater than 0. Indeed, this isn't even what is taught in universities, there is a whole range of quantitative and qualitative factors that are not taken in account by NPV, like the reaction of competitors, constrains placed on your business when it undertakes certain projects, and economic utility. I didn't say businesses never used NPV, I'm saying they would likely use it correctly, i.e. for short projects or for contracts with clearly defined terms. They would also take many other factors into account. You seem like you've had your world shattered upon learning that businesses don't exclusively use NPV, as if it's inconceivable and illogical that they take into account many qualitative factors and risks too.
Using a discount rate of 5% for an investment of 55 years is lunacy. What if interests rates rise to 10% over the next 20 years? Then your "risk premium" is completely wrong. You've just pulled a 5% number out of your ass.
To even suggest that NPV be used for trading stocks just shows how little you understand. I will say this, no one who can be taken seriously uses NPV for stocks. Wall street quants use algorithmic trading, which models the behavior of stocks as a stochastic process, and uses trading strategies like delta hedging, risk arbitrage, Markowitz portfolio optimization. All of which are techniques of stochastic calculus and numerical optimization. Wall Street quants do not use first year finance. The fact that you mention NPV and stocks in the same sentence just shows how elementary and basic your understanding of finance is. Your entire financial world view is overly simplistic to the point of being completely wrong.
No one can calculate the NPV of their university education, and anyone who attempts to do so with a serious face deserves nothing but ridicule for placing weight on a made up number that is worthless in actuality.
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No, have you actually learned?
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I like the Australian HECS system. I'll pay back my student loan when and only when I earn enough to be able to do so.
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On March 16 2012 08:43 -_-Quails wrote: I like the Australian HECS system. I'll pay back my student loan when and only when I earn enough to be able to do so. Yep, essentially an interest free loan (interest rate in line with inflation to account for the time value of money).
Too many blind patriots in this thread, the USA is terrible for tertiary education, only the rich and extremely bright (top 1% may get full scholarships) make it to a University worthwhile, if you are poor but in the top 5% of all students you're simply not smart enough for a scholarship and too poor to study.
Open your eyes America.
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On March 25 2012 07:57 meatbox wrote:Show nested quote +On March 16 2012 08:43 -_-Quails wrote: I like the Australian HECS system. I'll pay back my student loan when and only when I earn enough to be able to do so. Yep, essentially an interest free loan (interest rate in line with inflation to account for the time value of money). Too many blind patriots in this thread, the USA is terrible for tertiary education, only the rich and extremely bright (top 1% may get full scholarships) make it to a University worthwhile, if you are poor but in the top 5% of all students you're simply not smart enough for a scholarship and too poor to study. Open your eyes America.
Yep, ive changed course twice and even though thats like an extra 2k in hecs, it doesnt worry me at all.
A post on the first page suggested that Teritiary education should act like a bussiness, but the opposite is ture, do we want a society where education is accesable for everyone thus expanding our knowledge, or should only the privalleged few be able to get this, and thus stunt the growth of society.
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