Syllabus: Risky Business

By Mary K. Zajac

In Sex, Drugs, and Dynamic Optimization: The Economics of Risky Behavior, discussion topics range from addiction and domestic violence to risky sex and HIV and prostitution. If this doesn’t sound much like an economics class, consider that the field of microeconomics is concerned with how people make decisions, says Nicholas Papageorge, Broadus Mitchell Assistant Professor of Economics, who teaches the class. “Risky behavior is a useful way to understand economics because we think explicitly about dynamic decisions,” explains Papageorge.

Thirty or 40 years ago, this kind of work in economics would still have been novel. But in the ensuing decades, economic studies of topics such as health and education have become more mainstream, says Papageorge. “I think what ties it all together is that we’re trying to think about inequality—not just inequality around incomes, but a full range of differences in the sorts of outcomes that people exhibit.”

“The idea of decisions and outcomes is really the center of economic analysis, and I think that’s why it’s not terribly strange or much of a stretch for us to be thinking about behavioral disparities,” he says.

The class evolved both from Papageorge’s own research around a variety of topics including domestic violence and risky sex behavior amidst HIV breakthrough drugs and his desire to teach his students how to dig in to the technical and complex arguments presented in economics research papers. (He refers to the course as a “humanities-style class in economics.”) The class imitates a seminar, and during the semester, students are responsible for leading discussion, graduating eventually to formulating and analyzing their own formal mathematical models of behavior, the latter a rarity in undergraduate economics courses. Occasionally, Papageorge surprises students with the chance to engage with the authors of their reading assignments, as he did during a discussion on prostitution, when he introduced them to Baylor University economist Scott Cunningham via Skype.

Papageorge says his research suggests that, in many cases, people are quite rational in their decision-making. “People understand the costs and benefits of their actions,” he explains. “And sometimes they decide that the benefits today are worth the costs tomorrow. And the way to change that, maybe, is to make people’s lives better in the future.”

Through analyzing and disseminating economic research on risky behaviors, Papageorge hopes that his students will come to understand that people who are doing things that, at first glance, may appear to be bad choices are sometimes making the best decisions they can, given their circumstances. He also wants students to understand that good policy comes from understanding people’s motivations. Papageorge’s main goal, however, is to teach students to think critically about the world around them, and, he says, “to leave the class a little less judgmental about people who make seemingly self-defeating decisions, not because they’re somehow making a mistake, but because they’re facing a tough set of tradeoffs.”