CSMGEP Profiles: Caroline Hoxby, NBER
A Comparative Advantage
Scott and Donya Bommer Professor of Economics, Stanford University; Program Director, Economics of Education, National Bureau of Economic Research, Cambridge, MA
Caroline Hoxby’s interest in economics began in the 8th grade when she was working on a project about school finance in her economics class. Hoxby says, “Of course, I would have written a better paper if I had learned graduate public finance before embarking on the project, but what is an 8th grader to do?” She continues, “Suffice it to say that I was already a convert to economics at about the age of 13, having precociously read Adam Smith, Hume, Ricardo, J.S. Mill, Alfred Marshall, Galbraith, and others.”
Hoxby grew up in Shaker Heights, Ohio, a suburb of Cleveland, during the late 1970s and early 1980s. During this time, her father, Steve Minter, was Under Secretary for the U.S. Department of Education under the Carter administration. Both of Hoxby’s parents believed it was important to expose her to issues of welfare, anti-hunger, and other anti-poverty programs. Hoxby says, “Their idea of tourism in Detroit was going to see the exact location where the riots started!” Her background therefore gave her a deep interest in poverty and its manifestations.
After graduating from high school, Hoxby went on to graduate summa cum laude from Harvard. She attended Oxford on a Rhodes Scholarship and graduated with the “Best Master of Philosophy” thesis. Then she came back to the States and earned her doctorate from MIT. From 1994 to 2007, she was on the faculty at Harvard. She became the Morris Kahn Associate Professor of Economics and later the Allie S. Freed Professor of Economics. During her Harvard years, Hoxby was the only African-American economics professor with tenure. In 2007, Hoxby moved to Stanford where she is now the Scott and Donya Bommer Professor of Economics.
Hoxby has received multiple honors since 1993, including a Ford Foundation Fellowship, an Alfred P. Sloan Research Fellowship in Economics, and being named a Carnegie Scholar. In 2006 she was awarded the Phi Beta Kappa Prize for Excellence in Teaching and in 2014 was appointed the John and Lydia Pearce Mitchell University Fellow in Undergraduate Education (Stanford’s highest teaching honor). Among many other affiliations, Hoxby was a visiting professor at the Paris School of Economics and a research associate at the National Bureau of Economic Research where she is now Director of the Economics of Education Program.
In fact, economics of education is one of her main areas of focus. Her initial research in this area demonstrated that most talented high school students from low income backgrounds did not even apply to selective colleges, despite these schools actually being cheaper from them owing to very generous financial aid. Hoxby and her co-authors then went on study how to give such students information on their full range of college opportunities, the net prices they would actually pay, and how to negotiate the application process. In the end, Hoxby developed a packet that is customized for every student and that went to tens of thousands of low-income high achievers in a massive randomized controlled trial. The trial shows that, when disadvantaged students are better informed, they are almost 80 percent more likely to gain admission to a very selective school with rich instructional resources—one that they can often attend for free. An article in the Smithsonian Magazine, published in December 2013, states “The information packet, which grew out of two landmark studies she [Hoxby] published in the last year, is the crowning achievement of her two decades as the country’s leading education economist.…In a world where poverty and inequality seem intractable, this may be one problem on the way to being solved.”
While the article also says that Hoxby “almost single-handedly created the field of educational economics,” she claims her interests go beyond that arena. She says, “I am about equally interested in the economics of education, public economics (taxes and spending), and labor economics (wage determination, labor supply, discrimination, etc.) At the end of the day, however, I mostly write on the economics of education and local public finance because these two subjects are my comparative, if not my absolute, advantage.”
If you ask Hoxby about the most rewarding part of her career, she’ll likely tell you that she is thrilled when she finds a new result or method. As for what she likes about economics specifically, Hoxby says, “I love answering questions with data and theory. I love the science that is economics.”
On the subject of how race might affect her research, Hoxby says that it doesn’t have much of an impact. As to how it affects her professionally, she reports “I do not dwell much on this because I am big believer that sunk costs are sunk,” she says. “My goal is to ensure that younger people do not face the challenges that I faced. I do not even want them to know much about the existence of these challenges because they ought to focus on economics as a science.”
As for her advice to economics graduate students, Hoxby encourages them to work on topics for which they have a special acumen and not to follow the crowd. She states, “Here is my logic: EVERYONE who makes it to a PhD program in economics is extremely good at economics. Therefore, you can only distinguish yourself by being insightful about something among these extremely good people. It is not plausible that you have equally important insights in every area of economics, so if you work on something other than your own ‘bent,’ you will find it very hard to distinguish yourself.”
By going with her “bent” or comparative advantage, Hoxby has made an impact, not only in the field of economics, but also in fighting poverty and some of its effects on the next generation of scholars and their families.
A salon and parlor game of the 19th century, made most famous by Marcel Proust's answers, the Proust Questionnaire (adapted here) gets to the heart of things....
- What is your idea of a perfect day?
Drink extremely good expresso for breakfast. Go to a museum. Eat a picnic lunch on a sunny hillside meadow. Have a vigorous walk all over an archeological site or beautiful, culturally interesting town. Have a light dinner at a truly good restaurant. Go to a Handel, Mozart, or Monteverdi opera. Eat gelato afterwards on the main piazza. Did I mention that all this is probably in Italy and certainly with my husband Blair?
- What’s on your nightstand?
A book on the painter Nicholas Poussin. The Waters of Rome by H.V. Morton. 1066 and All That by Sellar and Yeatman. (Everyone ought to have the last of these on his or her nightstand.)
- Whom do you most admire?
Definitely my cats. Within the human species, I admire people who are true to themselves and who exhibit fortitude.
- What trait do you deplore in others?
- What could the world do without?
If we could, without imposing any suffering or economic hardship, have a human population that was much smaller, the world environment would be under much less pressure.
- What's your most annoying/bad habit?
I wake up much earlier than other people--so much so that it would annoy anyone but a saint (i.e. my husband).
- What was the last book you read?
The Decline and Fall of the Roman Empire (No kidding. It is fabulous. What a writer!)
- Which words or phrases do you most overuse?
analytic, analysis, analytical
- What’s your favorite sport?
I do not know whether ballet qualifies as a sport, but if it does then it is my favorite. I love to see it, and it is the only form of exercise I truly enjoy. Otherwise, tennis (I love it but I am horrible at it), rowing (I understand it well because I was a cox), college football (obviously, I am just a spectator!).