Thursday afternoon saw NYU professor Edward Wolff (the happy guy at right) visit IAB 801 to lecture on “Long-Term Trends in The Levy Institute Measure of Economic Well-Being, 1959-2004.” Sounds complicated? That didn’t stop Bwog’s Wealth and Mad Men correspondent Emily Ahn from filing a report.

Like a book, you can’t judge a lecture by its title. Edward Wolff, a professor of economics at NYU, is the author of several books, a former Marxist economist, and overall genius. Wolff, who gave off an air of success in a crisp blue button down, belted chinos, and Sperrys with dress socks, has since abandoned Marxism, and now studies “wealth.”  This lecture was clearly not meant for your typical undergrad and, fittingly, the median age of the audience around 30 years old.

The lecture started with The Levy Institute of Economic Well-Being’s (LIMEW) definition of economic well-being, which is the command or access people have over the products produced in an economy based on consumption. With simple arithmetic as the main component to what is an intensively analytic process, the equation boils down to this:

Base Income (Gross Money Income – Government Transfers – Propositional Income + HI) + Imputed Rent (Home Wealth) + Imputed Annuity (non- Home Wealth, ex. Social Security) + Net Government Expenditure (transfers and public consumption – Taxes) + Household Production (includes childcare and fiscal value of being a house wife/husband) = LIMEW. Simple, really.

The LIMEW represents the amount of fiscal resources that one has access to. For example, Net Government Expenditure covers all the services that the government supplies and subsidizes. This includes education, sanitation, police, Medicare, Medicaid and, for New York City residents, the ever-so-useful subway system. 

There was much debate over the definition of this equation. What is the value of a babysitter for extremely poor families that had “three, or fifteen” children? What constitutes  Household Production? Does taking pleasure in gardening affect its value? Does it add to Household Production? When the conversation degenerated into a debate on philosophical sociology, the mature audience started making covert trips to the back of the room, squirreling away cookies, coffee, and milk in order to make it through the rest of the arguments.

The second part of the debate was a comparison between the LIMEW of 1959 and 2004- essentially,  versus the golden age of Mad Men. Since 1959, the growth rate has been 0.92% comparing the median levels of well being between 2004‘s $87,200 to 1959’s $57,700, assuming that the rate is adjusted for inflation. It was observed that the growth rate has remained relatively static because even though more women are entering the workforce and spending less time taking care of the home, men are accounting for this and conversely spending more time at home and decreased work in the labor market. If the trends continue, it is likely that there will be a balance of labor responsibilities between men and women. In other words, perhaps Don Draper would have been more of a sober Mr. Mom if he lived in today’s society?

Like many quantitative tales, there was no moral of the story to this lecture. What seemed, at its start, to be an discussion of anthropological trends in human consumption soon became highly quantitative, and largely irrelevant to the college student’s life. But being able to account for one’s lifestyle, income, and benefits is, is something that will be useful later in life, and, after all, a diverse education is what we are paying for here at Columbia. Plus, the raspberry tarts were quite tasty.