Adriel Ong 11607769

ECONONE Essay
Dr. Tereso Tullao, in his book Ekonomiya, Tao, Mundo, at ang Ekonomistang
Guro, wrote an article detailing what is arguably the hardest part of the discipline of
Economics: the utilization of various analytical models. As a social science, it would
seem that Economics would have no need of the use of various mathematical tools
such as equations, models, and statistics. It is foreseeable that people will ask why
Economics requires the use of such tools that other social sciences would barely
touch. Economics, however, has a strong scientific aspect to it in that it has
scientific methods of observation and analysis. Because of its ever-reaching number
of concepts, a strongly logical and exact language such as mathematics is required
to explain them correctly. The Economist, a magazine that reports on the latest
developments in the field, had published an article detailing the receipt of an award
by an Economist who had used the aforementioned analytical models in his work
detailing the Economics of news and opinion. Dr. Matthew Gentzkow, an economist
in the University of Chicago, points out that recent research shows that the struggle
of newspapers in recent years to remain profitable is not entirely due to the falling
readership of physical newspapers. What is noteworthy is that while it is true that
the average reading time of newspapers fell in the recent decade, the largest drop
came in the previous century, well before the internet was popular. However, a
sharp fall in advertising revenue hit newspapers the hardest; from 2008-2012,
advertising revenue fell by half, bringing back the amount of revenue back to 1953
levels (adjusted for inflation). On a positive note, online advertising revenue for
newspapers increased in the same period.
Kenneth Boulding once said that Mathematics brought rigor to Economics.
Unfortunately, it also brought mortis. While the use of analytical models has greatly
increased the difficulty of pursuing Economics, they are arguably necessary for the
purpose of Economics, the allocation of scarce resources to fulfill mans unlimited
wants and needs, requires the use of a method that is exact, efficient, and most
importantly, logical. It is true that human behavior cannot be accurately determined
by a simple model; many variables are lost when it is translated into a series of
equations. However, one can accurately determine the gist of an entire group by
that same model; while each person has unique traits that will make them act
differently, their actions are governed by the need to act prudently for a good
outcome. Thus, one can foresee how a group a whole will act by a model that has
been calibrated to fit its purpose.
The use of various analytical models has been very helpful to Economists
everywhere. Dr. Gentzkows work in the economics of news shows a general trend
that has been prevailing in newspaper organizations across America. In the early
days of the internets popularity, news organizations had to decide how to make the
best use of the new technology. As many thought, the free nature of some news
websites had detracted from the readership of physical news media. Those who
required payment for people to view their websites saw a higher retention for their
physical media. Dr. Gentzkow points out, however, that advertising revenue suffered
the most in the age of the internet; news organizations would do well to take

advantage of what little time online news readers take to read the news.
Enlightened by this new information, the leaders of the said organizations will now
be able to make the best decisions for the future of their respective groups.