Monday, 30 October 2006

Leave it to the economists to design an efficient job market

If there is a recurring fall “theme” here at Signifying Nothing, it’s my belief that the political science job market is fundamentally broken; the only candidates who are well-served by the market appear to be the 3–4 “star” ABDs every year and established scholars (the latter of whom don’t actually participate in the same job market), and the only employers who are well-served are those who ultimately get their pick of the litter from those categories. For everyone else, there’s the obscenely stupid APSA meat market that (except for the earliest-deadline institutions) really doesn’t work except as an impetus for a run on the hotel bar by candidates and search committee members alike.

Unlike political scientists, the economists have actually thought about these problems, and continue to refine their processes. A case in point: Stephen Karlson reports on the new ‘signaling’ mechanism that allows candidates to credibly indicate up to two positions that they are particularly interested in, getting around the problems of both private (every application including the boilerplate “I really want to teach at [Institution mail-merge name here]”) and public signals (the candidate declaring on his/her website what job he/she really wants, which probably doesn’t help the candidate with other job applications)* in cover letters and recommendations. Greg Mankiw and the AEA website explain the details.

Obviously getting political scientists to adopt a similar process would be like herding cats—but there is a strong case to be made that the lower-tier R1s and other schools would be best served by banding together and either getting the APSA to sponsor an AEA-like hiring event, or organizing their own event, in the November-January time frame where more serious interviews could take place than at the APSA meat market and departments would have a clearer idea of their needs and realistic prospects for attracting the top candidates.

Even absent a hiring conference, though, APSA could provide a similar credible signaling system for candidates in eJobs—if it were so inclined. Doing so, while a baby step towards a more useful market, would probably at least help a few candidates get on the shortlists they want to be on as opposed to the ones that departments think the candidates want to be on.

* As for me, I’ve made no real secret of my preferences, but if an R1 wants to pay my salary for a few years on the tenure track while I try to find a good liberal arts college that will take me I’m certainly not going to complain.

Wednesday, 4 October 2006

Adverse selection and Best Buy warranties

Tyler Cowen is the latest to observe that extended warranties are a profit center for electronics retailers. The only products I buy extended warranties on these days are laptop computers—I can fix a desktop fairly readily (and usually quite cheaply, thanks to Newegg), but if anything other than a hard drive or memory bites the dust on a laptop you’re basically screwed.

Laptops tend toward the unreliable side; with heavy use and normal levels of abuse, I’m lucky to get through 12 months without some sort of failure. I’m also a complete klutz… I’ve fried two laptops with liquids over the past four years, making an accidental repair plan pretty much a necessity.

The extended warranty isn’t a complete panacea; I’ve had repaired laptops come back with the wrong power connector and the wrong motherboard (I recently sent off my Compaq V4000T for repair with an ATI Radeon X700 graphics chip, and it came back with an Intel i915GM, a decidedly inferior part). But it beats shelling out $1000+ every 18 months.

Monday, 5 June 2006

Whole Foods as a fashion accessory

James Joyner has an interesting critique of a whiny piece from the New York Times Magazine on Wal-Mart’s entry into the organic foods market.

My general sense of the whole “organic foods” craze is that, like the $3 cup of coffee at Starbucks (or, better, the local “fair trade” coffee place), it is another way for the upper-middle class to avoid shopping with the riff-raff while proclaiming their moral superiority over those who can’t waste money on such accoutrements—in other words, the traditional conspicuous consumption of the well-to-do spackled with a thin layer of altruism.

Saturday, 1 April 2006

Pondering opportunity costs

The boss has posted a link to his latest EconLib column on opportunity costs and why people don’t seem to understand them.

Maybe a future column will explain why I find it harder to spend a gift certificate than my own money.

Thursday, 30 March 2006

George Mason: appearing in the Final Four at taxpayers' expense

I’ve already asserted that George Mason University’s basketball team shouldn’t be held up as some sort of exemplar of the triumph of classical liberalism. Another data point in this critique arrives from Indianapolis Star writer Mark Alesia, whose paper surveyed all of the public colleges and universities in NCAA Division I and found that the average public institution subsidizes its Division I athletic program to the tune of $5 million per year.

Those plucky underdog classical liberals at George Mason’s athletic department reached the Final Four on $1.1 million of “direct institutional support” and an additional $7.57 million in mandatory student fees, much of which were picked up indirectly by the taxpayer through grants or loan subsidies. Good old George would be proud. (þ: UD)

Wednesday, 22 March 2006

More revealed preferences

Prof. Karlson notes that the budgetary situation at NIU is such that “enrollment impacted” departments (that’s jargon for “all our classes are full”) cannot secure additional faculty, but nonetheless the university has found the money to do a bit of landscaping.

At Duke, meanwhile, the administration has found $240 million (yes, that’s one quarter of a billion dollars, give or take, and that’s just Phase I) to make Central really tie the whole university together, but can’t scrape together the cash for sabbatical replacements in numerous departments. As I commented to the bossman, I suppose money really isn’t fungible after all.

Sunday, 19 March 2006

A cut above

This week’s Economist has a bit of fun with the escalating stakes in the razor blade wars. (þ: Division of Labour)

Tuesday, 14 March 2006

Missing the cartel

The failure rate on the bar exam appears to be rising, although the absolute number of individuals passing the bar seems to be nearly constant nationwide over time.

Multiple-choice question: which of the following explanations for this pattern is most plausible?

  1. Although more students are graduating from law school today than a decade ago, they are nonetheless dumber, at least as measured by the bar exam.
  2. Affirmative action is churning out large numbers of law school graduates who subsequently cannot pass the bar.
  3. The body of knowledge necessary to practice law in America has substantially increased in the past decade, thus requiring greater knowledge by new attorneys; thus the bar exam has become harder.
  4. The bar exam is designed to limit the supply of lawyers, not to test whether potential lawyers have sufficient knowledge to practice law.

Free hint: the bar exam is set by existing members of the profession who have a state-granted monopoly on the practice of law.

þ: Glenn Reynolds and Amber Taylor’s comments.

The future is already here

Division of Labour links a Reuters piece that says ”[t]he day is coming when carriers will require special fees even to check a bag.” That day has already arrived in Europe, which you’d think Reuters (of all news agencies) would already be aware of.

Sunday, 5 February 2006

Hugo Chávez: Kos poster

Mind you, I’m not just using that title because the Venezuelan dictator-wannabe says President Bush is worse than Adolf Hitler. Nope, it’s because of his economic ignorance:

Chavez, a retired army paratrooper who often accuses Washington of trying to overthrow him, warned he could shut Venezuelan oil refineries in the United States and sell oil for the U.S. market elsewhere if Washington cuts off ties.

If Chávez really wants to cut off his regime’s flow of refinery profits (via Citgo) from the U.S., I suspect the administration would be more than happy to oblige him. Moreover, since any such effort on his part would surely be countered by the administration seizing Venezuela’s U.S. assets, including Citgo, I think it’s a rather empty threat from Caracas.

Saturday, 28 January 2006

Black Market (Galactica 214)

From the ashes of a Battlestar Galactica episode that even series creator Ron Moore was unimpressed with comes a discussion of the actual economics involved from Timothy Sandefur and Allen Thompson.

Sunday, 1 January 2006

Ghosts of faculty meetings past

Sunday’s New York Times carries this article about “merit aid” at liberal arts colleges that pretty much reflects a year’s worth of faculty meetings at Millsaps, the centerpiece of which was often discussion by the dean of problems with our 40-odd percent “discount rate,” which largely reflected our inability to squeeze all of retail out of parents who could afford Millsaps’ relatively light (by liberal arts college standards, at least) sticker price.

þ: Amber Taylor, who is miffed at the Times for its strategy in selecting which colleges to discuss.

Update: Lurker and forthcoming co-author Dirk points out this Daniel Gross post that takes note of a rather serious incongruity between the headline and the article in question.

Monday, 21 November 2005

The economics of hiring economists

Stephen Karlson has some thoughts that apply well beyond the economics faculty, even if the supply-demand equation in Econ World is a bit less off-kilter than in other disciplines.

Monday, 27 June 2005

Shopping Alone

Dallas Morning News columnist Rod Dreher and Clarion-Ledger columnist Eric Stringfellow both travel down nostalgia lane to sing the praises of the local market over Big Bad Evil Wal-Mart. Dreher focuses on the social fabric argument, but touches on revenues as well:

People shopped at the impersonal supermarket for years, but now many of them drive over to the next town to buy groceries at the Wal-Mart Supercenter, where the aisles are wider, the lighting brighter and the product selection more dazzling.

With them go the tax dollars that ought to be supporting my hometown but aren’t.

Why should these tax dollars be supporting his hometown? The town housing Wal-Mart bears the externalities of hosting the retailer; shouldn’t they get the tax dollars it generates? And, while the property taxes may remain local, the bulk of sales taxes are generally shipped off to the state capital and redistributed back to localities on the basis of population.

Stringfellow, on the other hand, doesn’t care that much about taxes—he just wants local ownership, although it’s not obvious to me why we should care that the folks extracting surplus are a few visible local millionaires versus the more numerous, invisible shareholders that we’d probably prefer to see in a true “ownership” society. Yes, Jitney Jungle was a local “hometown” success story—until those same locals ran it into the ground with a series of bad business decisions.

It seems to me that Dreher and Stringfellow get it backwards: Wal-Mart, Target, and the more successful “pure” grocers like Kroger have figured out that society has changed from the era when people had the time to search for goods in narrow, cramped aisles and the inclination to go elsewhere if they couldn’t find them—which was OK when we (mostly) had one-income families and a “stay-at-home” spouse had most of the day free to shop several places, prepare meals, and maintain the household. We don’t live in the Dick Van Dyke Show era any more, the Jitneys and other small retailers failed to adapt, and nostalgia isn’t going to bring that era back.

þ: James Joyner.

Saturday, 28 May 2005

Plastic of Paris

Daniel Drezner looks at the continued genius of Hardees and Carl’s Jr. in moving from “food porn” to virtual porn (by way of Paris Hilton) as a marketing gimmick in order to gain free ads from oft-quoted “watchdog” groups. I’m not one of those people who thinks Hilton is all that hot, but I guess I’m in the minority on that score.

I am surprised that H/CJ continues to keep a split brand, however… since Federated has now assimilated all of its department store holdings under the Macy’s brand, there really aren’t that many important split brands left—Edy’s/Dreyer’s and Checker’s/Rally’s are the only others that come to mind.

Friday, 20 May 2005

The American Economy

This week’s edition of The Economist is focused on the American economy. They say flatly that it’s the best in the world, but could use some improvement. They end this article (may or may not be for subscribers) as follows:

This last recommendation is one that George Bush will be especially reluctant to accept. Mr Bush is the classic instance of a conservative politician who confuses support for particular businesses with support for enterprise in general. These seemingly similar ideas are in fact directly contradictory. The way to support enterprise—American enterprise, the best in the world—is to be as unEuropean as possible. Mr President, look at France. Notice their economic policies. See how they subsidise this and protect that. Do we have to spell it out?
They list a number of areas where we neeed improvement and I agree with all of them: end the $100 billion in corporate subsidies; reform corporate governance; tax reform; and, tort reform. I can’t disagree with any of these.

Saturday, 30 April 2005

Social insecurity

Me, three months ago:

The beauty of social security is that the public was conned into having a welfare system for seniors the only way a pluralistic society can—by turning it into a handout for everyone. That social security, and its related pal Medicare (which is universal healthcare for poor seniors, packaged as a handout for everyone), are both in serious fiscal trouble is no unforseeable accident; it’s the unavoidable consequence of a system established by Democrats to ensure these two welfare schemes wouldn’t be taken away at the ballot box, like “welfare as we know it” was and Medicaid is almost certain to be [in the future].

The New York Times, tomorrow:

In choosing to preserve benefits for the less well off and not raise taxes on more affluent people, Mr. Bush sought to cast himself in the Democrats’ traditional role as a defender of the poor. In his radio address on Saturday, he said: “By providing more generous benefits for low-income retirees, we’ll make good on this commitment: If you work hard and pay into Social Security your entire life, you will not retire into poverty.”

But critics, including most Democratic lawmakers, say that such an approach would undermine a central bargain conceived during the New Deal: that Social Security is not just a welfare program for the poor but a form of social insurance that people at all income levels pay into and reap rewards from.

“Social Security is not a poverty program, it is a retirement system people have worked hard for, paid into and have earned,” said Representative Sander M. Levin, Democrat of Michigan.

If it becomes increasingly irrelevant for middle-income people, the critics warn, Social Security will eventually become little more than an empty shell.

Most intriguing. (þ: Eric Lindholm)

Monday, 18 April 2005

There's inequality and then there's inequality

I hadn’t really paid much attention to this Sunday Times piece by an American expat living in Oslo comparing Scandinavia with the United States, but this post from Brett Marston made me curious. Marston asks:

How can the New York Times get away with publishing a Week in Review piece on income in Norway and not even mention income distribution (except disparagingly), the GINI index, or the effect of income inequality on aggregate statistics?

Well, the first potential response is that it is, after all, an opinion piece, and the writer has the choice of what evidence to marshall or respond to. But I do think Marston has a point… at least to an extent.

Income inequality, of course, does bias some statistics like the mean income; comparisons of median income would be more helpful, since it is unbiased by outliers. My suspicion, however, is that median U.S. income is substantially higher than median Norwegian income, regardless.

I also think a focus on inequality (and the Gini coefficient, which is a measure of inequality) might be worthwhile… but what does inequality mean in this context. Is the poorest Norwegian better off than the poorest American? If so, that might be a problem. However, by most consumption measures, a large share of poor Americans are only “poor” relative to other Americans (consider that even many of the poorest Americans have cellular phones and cable TV, not to mention $100 tennis shoes), although certainly there are poor Americans who fall through the cracks—as, for that matter, there are poor Norwegians in the same situation.

Certainly income inequality can be viewed as a problem—consider, for example, the well-known problem of relative deprivation. I’m not sure the solution to that problem is to force rich people to have less money so poorer people feel better about themselves, which seems to be the implicit solution to the problem: giving the money the rich have to the poor, while a nice concept, probably wouldn’t materially help the poor that much—and they’d still be poor relative to everyone else, so relative deprivation would kick in again.

In other words, I don’t know that income inequality is prima facie bad; certainly, poverty is bad, and that is something most societies could do better at solving, the United States included. But I think a focus on inequality over objective conditions probably is counterproductive.

Update: Jason Kuznicki has nicer things to say about the piece, and also discusses the rather silly “constitution in exlie” piece that has all the lawprofs and law students atwitter.

Monday, 11 April 2005

Milton Friedman even provides interviews to small Mississippi papers

My department head passed along an interview by Milton Friedman for a Mississippi paper. I’m sure you’ll read the whole thing, being it’s Milton Friedman and all. I’ll have to skip it for the moment due to the torments of grad school.

UPDATE: OK, my co-blogger has informed me it's a Jackson, TN paper. I told you I hadn't read it!! Imagine all of the appropriate changes to the post being made, with TN replacing MS.

Friday, 18 March 2005


I’m glad to see I’m not the only college professor who is sick and tired of TIAA-CREF’s current advertising campaign. In particular, I’m not entirely convinced that one prof lecturing to a room of 200-plus bored undergraduates (the centerpiece of one of these ads) is “serving the greater good,” or even the individual good of anyone involved in the process. Plus, given most college faculty’s antipathy-to-outright-hostility toward Division I athletics, one suspects TIAA-CREF’s members might question the organization’s expenditure to help pay CBS’s bills for airing the tourney.

Prof. Karlson’s point about the “greater good” being served by such things as comparative advantage and a market-based economy, in addition to doctors and college professors, is also well taken.

In terms of the tournament itself, color me deeply pleased that two of America’s most overrated basketball programs, Syracuse and Kansas, both got spanked by rank outsiders today.

Saturday, 12 March 2005

How is this possible?

They wrote a report and everything!!

There’s been a lot of attention paid to this midterm meeting on the Lisbon Report, wherein the EU planned to catch up with the US on a number of economics measures. It’s apparently not working out (duh). Every time someone in the EU suggests substantial reforms, they’re shouted down as “neoliberals” (capitalists).

(þ: Tim Blair and The Professor.)

See also here, here, here and here.

Sunday, 6 March 2005

The touch, the feel of a sensible Times editorial

Sunday’s New York Times has an unsigned editorial noting the opportunity to fix America’s cotton farming subsidies as the result of an adverse World Trade Organization ruling on Thursday. As in the case of the Canadian beef case, President Bush appears to be on the right side of the issue, marking a welcome change of pace from his election-driven protectionist behavior on steel imports.

Friday, 4 March 2005

Movie theaters and price differentials

Tyler Cowen has an intriguing post on movies costing the same, regardless of popularity. As someone who’s been to literally thousands of movies, I have a couple of thoughts.

I think much of the reason for the lack of price differentials has to do with contracts from the studios. They are very protective of their profits, maybe to the point of not maximizing them, even. When the first Star Wars prequel came out six years ago, I read an article that Lucas’s contract stipulated that the movie must play in the four largest theaters (for a certain class of large multiplex) and for four consecutive weeks, regardless of attendance.

When I lived in Illinois, I frequently went to a huge multiplex and noticed that they had a number of theaters of differing sizes. I suspected then, as now, that they created the multiplexes with various theater sizes to allow some flexibility to compensate for the lack of price flexibility. That way movies like “My Big Fat Greek Wedding” can run for months on end in a small theater and generate word of mouth. Similarly, popular movies can be moved to smaller theaters as their audience declines.

Another thing I read is that for the first four weeks of a movie’s run, the studio gets around 90% of the box office. This helps account for the outrageous cost of a Coke and popcorn. If the studios allowed the theaters to vary their prices, and share an even cut of the film’s box office over its run, I suspect much of this weirdness would go away and the obsession with blockbusters would disappear. I also suspect that more movies would be profitable if the prices were allowed to vary.

Currently listening to: "Up On Cripple Creek".

Sunday, 20 February 2005

Feature, not a bug

This has got to be the quote of the day from Sunday’s Clarion-Ledger:

Tunica farmer Nolen Canon believes President Bush’s plan to slash farm subsidies could be the final straw in driving some farmers out of business.

You know, if you can’t figure out how to run your business in the black without getting $4.3 million in government handouts over a nine-year period, you probably don’t deserve to be in business in the first place.

Thursday, 17 February 2005

Correlation is not causation (volume 32 in a series)

Todd Zywicki suggests that increased advertising for legal services has increased bankruptcy filings. I tend to think that to indicate causation, Zywicki ought to at least demonstrate whether the trend in bankruptcy filings was flat before the Supreme Court found lawyers’ commercial speech constitutionally protected in Bates v. State Bar of Arizona. Unfortunately (for him, at least), Zywicki’s graph starts in 1979, two years after the 1977 ruling in Bates.

Even if he could show that, considering that this time period also corresponds with the emergence of the consumer credit card industry it would be difficult to disentangle the two effects. Slithery D is also unimpressed.

This is my entry in today’s OTB Traffic Jam.