Faculty Profile: David Anderson

David Anderson
Paul G. Blazer Associate Professor of Economics

Maximizing Happiness
Prolific economics professor has wide-ranging interests

Name a trendy issue—dating, the death penalty, ethics and the environment—and David Anderson, Blazer Associate Professor of Economics, probably has something to say. In fact, he’s probably written a paper about it. Perhaps even a book. His approach to scholarship is a bit like a liberal arts education: wide-ranging.

Take dating, for example. Now, one might wonder what insights a practitioner of the Dismal Science could provide to the interactions of the opposite sex, but it turns out there’s at least one. According to a mathematical model Anderson developed with Japanese economist Shigeyuyki Hamori, your mom was right: For best results, play hard to get.

“Our theory suggests that people use ‘social prices’—how easy people are to attract—as a measure of what’s inside,” says Anderson, who uses the example of an inexperienced consumer buying wine to elaborate on his point. “You don’t know what’s in the bottle, so if you want the best wine you’ll buy the more expensive one, because price is a signal of quality. Price is your best proxy for what you really want.”

Although their research appeared in a scholarly journal (Japan and the World Economy, 2000), it gained a lot more attention when it hit the popular press, including an article in Psychology Today (February 2003) and a newspaper article that was picked up by papers across the country. (As for that Japanese connection, the two were graduate school roommates at Duke and continue to collaborate regularly.)

Anderson’s research on crime and punishment—based on interviews with almost 300 inmates—convinced him that the death penalty is not an effective deterrent to violent crime. It also earned him a slot on CNN as one of three panelists discussing the death penalty before a high-profile execution.

And his first college textbook—Environmental Economics and Natural Resource Management, published earlier this year—includes chapters on a number of hot topics, including alternative energy resources, sustainability, and ethics.

Is it usual to cover ethics in a economics text? Perhaps not, but he believes the two go hand in hand.

“It reflects my thought that we need to expose students—the more the better—to goals other than profit maximization,” he says. “Bad ethical decisions have tanked our economy. Bad ethical decisions are pillaging our environment.

“I firmly believe that the best things in life are free, and if we really wanted to maximize profits—that’s a standard in economics textbooks—we’d work 24 hours a day, we’d have black skies from soot and pollution, and we wouldn’t be happy. We wouldn’t be maximizing happiness by maximizing production.”

It took a stint in the corporate world for Anderson to realize that the combination of academe and economics was a way to maximize his happiness. After graduating from the University of Michigan, he took a job as a manager at Macy’s. Before long, however, he began to regret selling his undergraduate economics books.

“I was working 70 hours a week, but what was I accomplishing?” he says. “I was encouraging people to buy clothing that they didn’t really need. It wasn’t accomplishing anything for anyone. I thought if I’m going to work that hard, I could accomplish a lot more as a teacher and a scholar.”

And so he has. Since joining the Centre faculty in 1992, he’s written on topics as varied as dispute resolution, active learning techniques, and classroom technology, and the economics of child birth, crime, and social insurance. His research has been cited in the Economic Report of the President and in briefs for a case before the U.S. Supreme Court.

A serious runner, he also coached Centre’s cross-country team for a couple of years. But with two young children at home, his running now is generally limited to an early morning outing with friends.

“It’s a doctor, a lawyer, and a businessman,” he says, “which sounds like the beginning of a joke. But we run and debate and argue and solve the world’s problems. They humble me and make me realize that my solutions aren’t always as perfect as I thought they were before I tried them out on the panel.”

—D.F.J.

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