Saturday, September 17, 2011

Learning By Doing

Learning by Doing could refer to a particular class of models in the Macro literature, or it could just describe what humans do when they do stuff....  The last few days I've been preoccupied with the importance of, for lack of a better word, starting. 

Think of the time value of money and compounding interest.  It's important to start a retirement account as early as possible so that you can earn compounding interest over that time.  But money is not the only thing that behaves like this.  I generally expect things to be easy.  That is, because I find something conceptually easy, I often expect the details to be similarly easy; a silly assumption.  Example: planning a budget.  Seems easy, right?  It is, conceptually, but there are quite a few assumptions you have to make.  Do you count income earned in August, but paid in September as September or August income.  Not that this is too difficult, but you have to decide or things get confusing.  Also, when you project your financial positions 1, 3, or 5 years into the future, there is a bit of error.  You have to go back and plug in actual values in place of your estimations, and you have to recognize that this is what you are doing.  Again, not a complicated task, but it can make your spreadsheets look messy. 

My point is this: you may not know the optimal way to build your spreadsheet on day one, because you don't anticipate all the information you will need at future dates.  Building the optimal spreadsheet for your needs takes practice, time, and repetition.  If I had started budgeting on my 18th birthday, I would have a pretty solid understanding of how to build my optimal spreadsheet by now.

What other activities fall under this category?  Well....just about every activity a human undertakes, right?  The more complex the task, the greater the importance of starting early.  This train of thought led me to ask questions regarding where one chooses to live and economic growth.

I'm sure more rigorous thinking would lead me to abandon this line of thought, but let's entertain it.  The best way to develop expertise is to practice a specific task or occupation over and over.  The variety of tasks available for individuals to choose from is greater in urban areas than in rural.  Society's resources are optimized when every person specializes in something they have the lowest opportunity cost in pursuing (i.e., do the most valuable thing you are good at).  Growing up in a rural area limits the exposure one has to various occupations.  Consequently, one may not find that task that they have the lowest opportunity cost in doing, and thus society's resources may be allocated less than optimally.  But, does this mean we should encourage relocation to urban areas?  Does this happen naturally (small towns decline as economic opportunities decline)?  I'll leave the discussion for now, there is certainly much more to say and consider.  Readers' thoughts are encouraged.

24 comments:

Anonymous said...

Depending on ur specialty will depend on if you need to move to a urban area or not. Take dietetics. This is a new feild of science and so only the more educated will hire a dietetian most likely. Also like any business the more customers you have access to the more your business will grow. A job like Starbucks in retail is the same no matter what area you are in so you would most likely not have to move to a urban area. Torie Fuller

Anonymous said...

There are a lot of cultural differences between rural and urban communities. In urban areas there is a wider variety of opportunities available, however; rural communities tend to be rather social. Someone who has lived in a rural area for any amount of time has probably developed some sort of skill or developed relationships with other people in the community that may provide some sort of personal economic benefit. This could mean you would have a higher opportunity cost to move. A growing rural area, like many of those surrounding OKC, may provide economic opportunity, or an opportunity cost if considering to move.

-Jacob Clark

Erick Holzhausen said...

What we specialize in usually helps determine where we will be living. Like Torie said about dietetics, it is a growing field normally seen in more urban areas compared to rural areas. That being said though, a dietician who is willing to move to a rural area in need of their service tends to be paid more like a small town dentist or lawyer. I think some of the new advancements in the career field has allowed the rural areas to reap more benefits. I think rural areas are beginning to see more economic benefits that are starting to spill over from urban economic development such as health and in the technology world. When Boone Pickens puts wind powered turbines or windmills out in rural western Oklahoma someone will have to specialize in knowing how to run and maintain them. Whether the person is educated in an urban area or rural area, the technology behind it creates economic benefit for both areas.

Andrew Schadegg said...

I have been dealing with this question since I graduated highschool which was a while back. I was always rebellious about going to college because so many college students get a degree and move back into there parents house and deliver pizzas. I used to it call a paper degree, meaning that it only looked good on paper, but what can a college student do with it without any experience out in the field. I still have strong feeling towards both because i do believe practice makes perfect, and if you start a good job when you are 18 and work hard for ten years, by the time you are 30 you know the company like the back of your hand and may possibly be running it at that point. College students spend all there time reading and studying to get this amazing paper degree then when they are faced with reality they don't know how to react. This may sound harsh, but I also believe in a strong education, and that being educated can vault you ahead of the next guy as well. I am studying for that paper degree now in my thirties with a lot of experience as well. Depending on you global location or family upbringing I would recommend either path.

Timothy Swonger said...

I think it all depends on what people's preferences are. Some people enjoy living in urban areas and some rural areas. Along with that, I don't believe that everyone is after money either. The cost of living in a rural area is usually cheaper than living in an urban area, so that person living in a rural area, even though he probably makes less money than the person in an urban area, could still live comfortably. But, I would encourage relocating to an urban area if that person knew that he or she wanted to pursue a career that wasn't currently available in his or her rural area. That person could make an even bigger impact on the rural economy by moving back after acquiring new skills and expertise and putting them to use in that town.

Danielle Verdin said...

Growing up in rural areas might have an effect. But the more of the rural areas are starting to be on the edge of urban areas so some things spill over. Not to mention the Internet can help with the whole idea of knowing what is really Out there.
I think personally that the population fluctuation happens on it's own. If something isn't available in the area that some one is in currently they will go where it is available most of the time.

KristinK said...

I have to agree with the comment about technology and how it will maximize the opportunity with both rural and urban areas. If someone is not so great at a certain task in the rural area, once technology comes their way, anyone will be able to do it with practice, practice, practice. And everyone will benefit from that in the rural and urban communities.

Eng Hong Sin said...

Personally I think that we should not encourage relocation to urban areas. The variety of tasks available for individuals to choose from is greater in urban areas than in rural. But, the competition in urban areas is greater than in rural too. Most of the times, the fresh graduates have to compete with each others to survive in urban areas. Also, rural areas provide some opportunites that urban areas could not provide. For example, there is no much space to operating a farm in urban area. However, we can operate the farm in rural area and sell the production to urban area. Therefore, I don't think the rural areas would decline.

Nikki said...

I do believe that the best, tried and true, method of perfecting anything is doing it, repetitively. As you begin to master a process, you can build upon it. I look at it like a puzzle. Once you get the edges done, the middle goes together a lot faster. When you've learned something well, you can usually make reasonable assumptions about something you're less knowledgeable in, building upon what you already know.
As for living in a rural or urban community, I believe both are faced with very similar predicaments, but potentially different catalysts. For instance, specialty shops and even food service in a rural community is not likely to succeed. Now, this could also be true in an urban community, but often due to other factors. In a rural community, there are naturally fewer opportunities to stay close to home and earn a large income. Therefore, discretionary spending will be limited, and often times a family resorts to eating at home, rather than eating out. Also, as someone mentioned, everyone kind of knows everyone, and if you're an outsider within the community trying to succeed in business, you will face obstacles with people supporting your cause. The urban communities could see their businesses fail, but I believe it would be a cause of bad service, too much competition, or too little business (revenue) to support expenses (cost of operating is most likely higher). I live in a rural community, and my husband once a business owner in this community, which struggles with supporting it's businesses. Often times I've had people amazed that I (as a mom) work outside of the home. The post office has operating hours of 9-4, and shuts down for an hour lunch!? And yes, it's much cheaper to buy a house in a rural community, but when your daily commute is 60 miles, closest Wal-Mart is 30 miles,you have to be sure to consider the cost of living so far out, compared to forking up the cash in the beginning to live closer to where you need to be.

Lauri Hess said...

It all depends on what you like - living in urban area or rural area. You can still work in urban area and live in rural. There are people that just have to live in the urban area and then there are some that cannot and have to live in rural. But the rural areas are declining because so many people are moving to the urban areas. However, with the advances of technology and working from home sometimes it does not matter where you work - just where you are comfortable and at peace to live!

Amy said...

i feel that encouraging relocation from rural to urban ares won't really have the desired effect that small towns can hope for...specialization in fields can be acquired from urban ares and applied in rural ares to maximize and encourage economic potential. i agree that it depends on your specialty for your location. i also agree that practice makes perfect and specializing in something by starting early can allow someone to get ahead of the game and maximize the opportunity cost they sacrificed to gain that specialty.

Shirley Paris said...

Not everything has to be complicated. When planning if you take the time to really think about what needs to be done you will find a solution. I does not really matter where you live or work to determine you. You could live or work somewhere because there is no other options for you at the moment. This does not mean you are stuck in that situation forever, and does not detemine you as a person.

C'Anne Reichert said...

I think it happens naturally because of the type of occupation you have. If you are a nurse, you can get a job in small towns or in big cities. If you are a singer and plan on making a decent living, you may want to consider moving to an urban area if the local bar isn’t paying enough. Urban areas offer more variety of occupations and typically higher pay, which draws many people to them for this reason. However, urban areas are also more expensive to live in and if your occupation doesn’t require the urban area you may be better off not moving to one. My occupation is considered a luxury item to its consumers and therefore does much better in an urban area- like Los Angeles, New York, Dallas, etc. - if I were to live in a small town I would be shooting myself in the foot. In order for someone like myself to specialize in my field, I must live in an urban area. I think for this reason that naturally people leave small towns when they are faced with the choice of pursing the career that offers them the least opportunity cost.

Mary Beth Renz said...

Specialization and occupation at some instance might define where you should and have to be living. That is obvious that in a rural community where an occupation is not seen as necessary but it is necessary in an urban area would not do well. Growing up in Oklahoma, I feel that the urban areas and the rural communities are completely different. Just by going to college, you see the cultural differences between the two. People do adapt however. At one point, or another if your specialization does not provide economic benefit in either area you may need to change areas, i.e., it is where you can find a fit for you personally. We should not necessarily encourage relocation to urban areas however it does happen naturally because small businesses are losing out to larger businesses. It is all due to specialization at a lower opportunity cost and some of those smaller businesses cannot compete.

Faith Evans said...

Sounds similar to the "we all benefit from trade." If people living in rural areas specialize in something that others need and will pay for, such as livestock, farming, etc. then they should stay not move to urban areas. And vice versa for people living in urban areas that can provide services for those in rural areas. In the long run, like Jacob pointed out about the areas surrounding OKC, these rural cities will benefit from this and there will be opportunities for economic growth.

Anonymous said...

Profession and personal preference decide whether one will need to move to an urban area or a rural area. Some jobs are more commonly done in cities, and others can bring more benefits from working in rural areas. It is possible to live in a rural area and commute to a job located in an urban area. It's possible to commute to a job in a rural area if you live in an urban area. It just depends on where the biggest opportunities lie for you.- Arianna Findlay

Ahmed AL Hassan said...

Every culture, nation, or even a country has different method o planning. I meant by that, in Saudi Arabia, you can only survive after retirement by think ahead of other business that you can start early. Not talking about the real job you have like an engineer, doctor, or other official jobs. For example, my brother is manager on a bank and after retirement he starts a business in selling lands and property he bought when he is working with the bank! That's, I think a very simple example about how we can survive after retirement.

Madeline Newton said...

I do believe there are more economic/employment opportunities in urban cities then in rural areas depending on a few key characteristics like, the industry you are working in, experience, education, personal preference.
I do think depending on the type of work you do and the industry you work in play a major role in where you will be able to live and work. I think there is a spill over into rural areas now as opposed to 10 years ago. If you have to education and experience you could go into business in a rural area if you do you homework and your industry could bring benefits tot he community you would be other only provider for this certain service/business and do well. But again only if you are able to benefit the rural community and have enough experience to utilize your limited resources to the fullest extent to run your business otherwise its back to the urban area where the resources are much more readily available and customer demand is easy access.

Melinda Spitzmiller said...

I don't think we need to encourage people to do anything. Jobs and technology are constantly changing. People go where the work is that requires their skills or where the job is they want. If people need to learn better skills or be trained in a field they will naturally migrate to the area where they can get the experience needed. Also these days people can run an entire business out of their home causing them to never have to decide, Is rural or urban better?

Dana Bartels said...

Most definately agree with your comment "The best way to develop expertise is to practice a specific task or occupation over and over". Take a step back in time, 9 years ago I didn't have a clue about medical billing or what it was. My drive to learn and share knowledge, having the willingness to learn, and be a problem solver I worked my way up the corporate ladder to now my current position as a Business Services Manager in the medical billing field. Working in this highly dominate urban career doesn't force me to move my family into the urban neighborhood. We enjoy living in the outskirt of town where our neighbors are few and far between. If someone is raised in a rural area doesn't mean they are limitd to the careers in small town, USA. People who live in the urban areas might only travel 10 miles to work but because of more vehicle traffic and red lights it can take this person up to 20 minutes to get to work. With our large cities in Oklahoma there is always an urban location for a career close to a rural area. It depends on one's individual lifestyle on which type of neighborhood to live in.

Chris Yang said...

I don't think we need to encourage people to do anything that they not specialized in. Jobs and technology are constantly changing. People go where the work is that requires their skills or where the job is they want. If people need to learn better skills or be trained for something, then they would have to go acquire the skills from a certified place or person.

Vickie Snell said...

I grew up in a rural area that has not change much since I left 20 years ago. I left the rural area for better opportunties in the city. I know that if I would have stayed in the rural area, I would have had the opportunity for education or jobs.

Andrew S. said...

The reason we an specialize in cities is because of high population, if small towns had the population capacity of the
Large ones they would specialize as well. Small towns tend to have people doing multiple jobs to function as the large towns do.

Ryan Schick said...

I agree that it depends on your specialty for your location. I am going to school to be a marketing major that is the field that i would like to specialize in, more than likely more for an urban area, however i am not sure of what kind of job i will get or where it could be. When i first moved to edmond i would have considered it a rural area, then more and more people came and made it an urban area. I am not opposed to relocate, I feel like it is a good thing to branch peoples specialties to smaller communities, or the other way around.