Read Blogs Written by Gulzar Natarajan

Regular readers must be sick and tired of hearing me say this, I suppose, but please: read blog posts written by Gulzar Natarajan!

Especially so if you happen to be a student of economics. The art of taking a complex topic, asking simple questions about it, marrying them to the appropriate economic concepts that will help in the analysis, and reaching a cogent, well argued conclusion is a rare, rare skill. And Gulzar Natarajan possesses it in spades!

Consider the post titled The Demand Supply Gap in Medical Education.

The demand supply gap is stark. About 1.6 million students appeared for the National Eligibility cum Entrance Test (NEET) in 2021, of which only 88,120 make it to the 562 public and private medical colleges. That’s 19 applicants for every seat. Those numbers are now 89,875 and 596.
How do you analyse this market? What will be the impact on seat prices due to supply changes of medical seats? How will the supply side react to this situation of large numbers of Ukraine returned students? What will be the profile of supply side?

These are not hard questions to frame. In fact, I would argue that most of us will be able to frame these questions even without having studied economics formally. But that being said, framing them this simply and concisely takes years of practice.

He identifies four main problems that we need to deal with:

  1. The major constraint is the source of quality faculty
  2. Private supply of medical colleges is unlikely to make up the shortfall (he explains why in the post, and I tend to agree)
  3. As he puts it, “In an acutely supply deficient market, the limited marginal supply is likely to bid up the medical seat prices even more”. I would only add one word to this sentence, between the words marginal and supply: quality. It’s not so much about the supply going up as it is the degree to which high quality supply goes up.
  4. Ah, but alas, that brings us to an even more difficult question: quality as it truly exists, or quality as perceived by prospective students and by society? I studied in Fergusson College in Pune, so I have a moral right to ask this question. And that’s what he means by the phrase “lemon problem“. If you’re wondering why this is known as a lemon problem, take a look at this.

His preferred solution is having the government step in to augment the supply, using government district hospitals and some area hospitals. This, he says, is preferable to the public-private-partnership (PPP) model. I don’t dispute the assessment of the PPP model, and its shortcomings. But I’m curious about why he would say that government institutions are always going to assure a certain basic minimum assured quality. Is this necessarily true, even in a relative sense? And if so, why?

And the concluding paragraph is at once depressing and optimistic:

Finally, this is a teachable example on the reality that though many problems have no immediate solutions, we try to solve them. Part of it is about wanting to do something and also be seen doing something. This is a human reflex and a political economy compulsion. Bridging the demand-supply gap in medical education is one such problem. Given our context and constraints, it’s very unlikely that we can bridge this gap in the foreseeable future. Like with other similar problems like affordable housing, agricultural productivity, or traffic congestion, we can only create the conditions required for its mitigation and gradual easing.

Depressing because, as he says, it is unlikely to be solved any time soon. Optimistic because creating the conditions is easier said than done, but it is achievable.

What might these conditions be? How does one go about creating them? If you’re interested in the answers to these questions, you are, like it or not, now a student of economics and public policy.

P.S. And the answers themselves require many more blogposts, but please, feel free to search around on this blog for some of ’em! 🙂

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