Blame it on the rain (on open day), or campus tour weather and university choice

The University of Waikato Open Day is coming up next month. We'll have thousands of prospective students on campus for most of the day, learning about their study options, attending mini-lectures, talking to current staff and students, and collecting lots of free stuff that we give away. Many people question the value of these open days. Do they make a difference to students' choice of university? Undoubtedly, for some students at the margin they will make a difference. And from my experience, open days can affect some students' subject choice.

One thing that open days provide prospective students is a 'vibe' for their potential study location. This is where I might criticise open day, because it really is almost nothing at all like a 'normal' university day, so it doesn't give prospective students any idea what university is really like. The 'vibe' might also be affected by elements beyond the university's control, like the weather. How important is the weather? This recent NBER Working Paper by Olivia Feldman, Joshua Hyman, and Matthew McGann (all Amherst College), provides some idea. They look at the effect of weather on the day that a student undertakes a campus tour at an unnamed "institute of higher education" (IHE) on whether the student subsequently applies and/or enrols at that IHE, finding that weather affects applications but not enrolment. The campus tour is a more limited version of our open day:

Tours are typically given by current students and involve the guide walking the participants around campus for about an hour while sharing information about the institution, academics, student life, campus dormitories, academic buildings, dining halls, and sports and recreational facilities.

Feldman et al. use administrative data on all campus tours between summer 2016 and fall 2024, along with hourly weather data from The Weather Channel, and data on where each student subsequently enrolled from the National Student Clearinghouse. They report that overall:

28.8 percent of participants apply to the institution, and 2.2 percent ultimately enroll.

In their main analysis, Feldman et al. apply a simple OLS regression model, with application (or enrolment) at the focal IHE as the dependent variable, and weather variables (cloudy, rainy, and several temperature ranges to capture hot and cold days) as the explanatory variables of interest. They find that there is:

...a 1.7 percentage point (5.9%) lower application rate when the tour is cold, a 2.3 point (8.0%) lower rate when the tour is warmer, and a 2.9 point (10.1%) lower rate when the tour is hot. Further, cloudy tours reduce the application rate by 1.4 percentage points (4.9%), and tours with precipitation reduce it by 2.4 points (8.3%).

Those effects on applications are quite large in context. However, when Feldman et al. look at the effect on enrolment (rather than just application) they find statistically insignificant effects (albeit using several different composite variables for 'bad weather' as the explanatory variable of interest, rather than individual weather variables as in the earlier analysis).

My takeaway from this paper is that students’ choice of university is fairly resilient to the effects of weather on the day of their campus tour. While poor weather may reduce the chances that a student applies to a particular university, it doesn’t seem to have much effect on whether they ultimately enrol there. Of course, this is evidence from a single US institution, and may not easily translate to the New Zealand context. Still, extending these results to open days suggests that while the ‘vibe’ on the day might affect whether a student applies to the University of Waikato, and the weather contributes to that vibe, it probably isn’t an effect that we should worry too much about.

University enrolments fluctuate from year to year, and there are lots of variables that affect them. One thing this study suggests is that, while rain on open day might dampen spirits, it probably isn't the major cause of low enrolments. So, if the numbers are down, we needn’t blame it on the rain (on open day).

[HT: Marginal Revolution]

The short-run impact of the Russian invasion of Ukraine on the euro-ruble exchange rate

When Russia invaded Ukraine in February 2022, one of the immediate consequences was a reduction in financial flows between Russia and the rest of the world due to international sanctions and Russia's own emergency capital controls (see here). Among other effects, this led to a decrease in the demand for euros and other foreign currencies (from Russians) and a related increase in the demand for rubles. Those changes should be observable in the data on the euro-ruble exchange rate. We should expect to see an appreciation of the ruble relative to other currencies.

Indeed, that is what this recent article by Sagiru Mati (Near East University) and co-authors, published in the Journal of Policy Modeling (sorry, I don't see an ungated version online), reports. They use a time series econometric model and data on the euro-ruble exchange rate from 1 January 2020 to 11 October 2022, testing for a change in the exchange rate after 24 February 2022 (when Russia invaded Ukraine).

Mati et al. don't find a step change in the level of the euro-ruble exchange rate. However, they do find a change in the rate of appreciation/depreciation in the exchange rate. Before the conflict, the ruble was losing value (depreciating) at an average rate of 0.04 percent per day. However, after the conflict, the ruble appreciated at an average rate of 0.21 percent per day (this averages out an initial steep decline in the exchange rate, followed by a rapid depreciation. This is shown in Figure 3(a) from the paper (although note that this graph shows the exchange rate in terms of the number of rubles per euro, so an appreciation of the ruble is a decline in the graph, while a depreciation is the reverse):

In other words, as expected the ruble began appreciating after the conflict, presumably due to an increase in the demand for rubles. The consequences of this appreciation include that Russian exports become more expensive for foreigners to buy (if priced in rubles, because more euros would be required for the same purchase) or less profitable for Russian exporters (if priced in euros, because the same quantity of euros would convert to fewer rubles). On the other hand, imports become less expensive for Russian consumers (if priced in euros, because fewer rubles would be required for the same purchase) or more profitable for exporters to Russia (if priced in rubles, because the same quantity of rubles now converts to more euros). Of course, sanctions on Russia extended to trade flows, so those potential changes were mostly moot.

International markets, including exchange rate markets, are frequently shifted by geopolitical shocks. Here is a case where the shock (the Russian invasion of Ukraine) had a largely predictable effect on the exchange rate.

Book review: Cloud Empires

The libertarian ideal of the internet was that it was a place without borders, without gatekeepers, and without government control. However, the modern internet falls well short of that ideal. In the physical world, it is typically governments that make and enforce the rules. However, online it is increasingly large and undemocratic platform firms that make the rules and enforce them. That is the general idea underlying Vili Lehdonvirta's 2022 book Cloud Empires, which I just finished reading.

Lehdonvirta tracks in detail how we ended up in the current situation, noting that:

The Internet was supposed to free us from powerful institutions. It was supposed to cut out the middlemen, democratize markets, empower individuals, and birth a new social fabric based on self-organizing networks and communities instead of top-down authority. "We will create a civilization of the mind in Cyberspace... more humane and fair than the world your governments have made before."... This is what Silicon Valley's visionaries promised us. Then they delivered something different - something that looks a lot like government again, except that this time we don't get to vote.

Lehdonvirta outlines how the platform firms have essentially replicated the process by which governments established rules, because of the same underlying necessity to maintain control. He uses numerous examples including Amazon, eBay, and cryptocurrencies such as Bitcoin and Ethereum, to illustrate his points. These case studies demonstrate the challenges, and the close corollary between the economic institutions established by the platform firms and those established by governments. Lehdonvirta notes that the key difference between governments and platform firms is in the political institutions. Platform firms lack the accountability that is inherent in political systems, and there is little prospect of overturning the 'government' of a platform. Even the most autocratic state risks revolution in a way that is to a large extent impossible for users to achieve within a platform environment.

While Lehdonvirta does a great job of outlining the issues, where the book falls short is in terms of the solutions. The subtitle of the book promises to tell us, "how we can regain control". Lehdonvirta's solution is a 'bourgeois revolution', of the kind that western countries experienced through the late Middle Ages. The growing urban middle class ('burghers') developed significant resources and gradually pushed back against the local lords, helped by powerful allies in the Church and often the monarchy as well. These coalitions led to more devolution of political power and authority, and eventually to the modern political institutions we observe today.

Lehdonvirta notes that, with some creative licence, it is possible to imagine a similar dynamic playing out on the platforms. However, while he devotes a great deal of effort in explaining the problems and linking them to real-world case studies, he doesn't expend the same effort on his proposed solution. The reader receives a few, almost cursory, observations about how a 'bourgeois revolution' may play out in certain situations. I felt like the book needed a more detailed explanation, linking the solution to embryonic real-world efforts and charting a path forward for them. Although speculative, a 'road map' for advocates of returning some power to the platform users would have added significant value to the book.

Aside from that small gripe, I really enjoyed this book, and it was a good follow-up to reading the more textbook treatment of platforms found in The Business of Platforms (which I reviewed last week).

This week in research #121

Here's what caught my eye in research over the past week (a quiet week, as I have been travelling in Europe):

• Three articles published in the prestigious journal Nature by Miske et al., Aczel et al., and Tyner et al., investigate the replicability of research results in social and behavioural sciences (a very important set of papers that have garnered a lot of attention)
• Mišák (open access) investigates the impact of temperature on soccer team performance, and finds that attacking efficiency is enhanced in warmer conditions, leading to increased goal productivity and improved shot conversion rates, defensive performance appears to weaken in warmer conditions, with a decrease in defensive pressure and passing accuracy, and player aggression follows an inverted U-shaped pattern in relation to temperature