Market Power

25 Things About Me

This "25 things about me" tag has been making the rounds over at Facebook.  I thought I'd post these 25 trivial things about me over here.

1. I wasn't a particularly good (or bad) student in high school. Academics, back then, just never tickled my fancy. Now I have a Ph.D. in economics and am a tenured professor at a state university.

2. I grew up listening to heavy metal and it's still my preferred style of music.

3. I suffered a serious knee injury (torn patellar tendon) playing softball almost 10 years ago. I spent a week in the hospital, 3 months on crutches, and several months of rehab. I missed a trip to San Diego because of the injury and my knee is still stiff, 10 years later.

4. I am a homebrewer and have been since 1993.

5. I do about 90% of the cooking and the vast majority of the grocery shopping in my household.

6. My decision to become a professor stemmed from a presentation I gave in a business class in college. I realized then that I had a talent to explain things in front of groups of people.

7. I have been playing guitar for about 30 years.

8. I played guitar for about a year and a half in a heavy metal cover band after high school. Two of my bandmates became lifelong friends. They were also my inspiration to return to college (see #9 below).

9. I started college straight out of high school, but didn't do so hot. After my freshman year I dropped out for a year and a half to do some things I always wanted to do (see # 8 above). Looking back, I realize that I was waaaayyyy too young and waaaaayyyyyy too immature to handle college that first year. I'm glad I dropped out and I'm *really* glad I went back.

10. I bought my first car when I was in my early 20's.

11. I studied trigonometry, calculus (1, 2, and 3), and linear algebra on my own the year before I went to grad school at Mizzou. I spent the entire summer of 1993 studying math in order to get ready for the Mizzou econ program. In fact, I never had a math class beyond college algebra until after I went to Mizzou (I picked up a linear algebra class as a grad student there as well as a couple of stat classes).

12. I buy all my coffee from Lakota Coffee in Columbia, Mo.

13. I've never bought anything from eBay and I've never used Craigslist.

14. I've had three papers published from my dissertation.

15. I don't know how to swim.

16. I learned how to rollerblade two years ago.

17. My wife and I will celebrate our 20th wedding anniversary this year.

18. My cat Sam is named after Sammy Sosa. I once had a dog named after Geddy Lee, the bass player for Rush. Geddy and Sam were best of friends when Ged was still with us.

19. I first went to visit my wife's family around Easter time in the late 1988. We went over to her sister's to color eggs with her family. I was so nervous that I accidentally drank Easter egg dye.

20. I helped castrate pigs on my father-in-law's farm once.

21. I helped dig a grave, using a shovel, for my wife's grandmother.

22. My family once had a beagle named Meno. My dad named him Meno after one of Plato's dialogues, a dialogue about virtue. My dad, in explaining his decision, said that he wanted a virtuous dog.

23. My first job was as a paperboy for the Des Moines Register when I was in, I think, 7th grade.

24. I've seen one tornado (the 2001 Jackson, Ne. tornado).

25. Carl Edwards (the NASCAR driver) was a student of mine at Missouri. I still have a business card he gave me when he was first getting into professional racing. At the top it says "If you're looking for a driver, you're looking for me."

Not surprisingly, everyone seems to like #19.

Harford on Solving Ties in the NFL

In my most recent post at The Sports Economist*, I write about Tim Harford's Slate article about a novel way to distribute the ball in overtime in the NFL.  He notes that the team that wins the coin toss, as currently done in the NFL, is much more likely to win the game.  He describes a "divide and choose" method and an auction method as alternatives to the coin toss.  In the divide and choose method,

The coin-toss loser would decide how far forward the offense would start—say, the 30-yard line. The coin-toss winner would then decide whether to take possession or let the coin-toss loser have the ball at the 30. The nice thing about these rules is that they would naturally adapt to the game's changing dynamics. The current system, by contrast, seems to have been fair when introduced in 1974, but as field-goal kickers became more accurate, possession has become more valuable.

Here's the auction method.

An even more elegant solution to the overtime problem was proposed in 2002 by Chris Quanbeck, an electrical engineer (and Green Bay Packers fan). Quanbeck's idea was to auction off possession of the ball in the natural currency of the game: field position. The team that was willing to begin closest to its own goal line would receive the privilege of possession.

My mind keeps going back to the 1997 Missouri vs. Nebraska game in Columbia, the so-called kicked-ball game.  Heavy-underdog Mizzou held a late 7 point lead, but Nebraska, the number one team in the land, had the ball and was driving.  They ended up scoring the tying touchdown on a pass from Scott Frost that was intended for Shevin Wiggins.  Wiggins could not gain control of the ball, but it took a fortuitous bounce towards and landed on his right foot.  He quickly kicked the ball into the air and it was caught by Matt Davidson just before it hit the ground in the endzone.  They made the extra point and the game went to OT.

Mizzou players were visibly worn down, physically and mentally.  Nebraska scored easily in OT and stuffed Mizzou in their turn.

I wonder, if there were such an auction system described by Harford above, how far back would Nebraska have taken the ball.  My guess is that they could have scored a touchdown, not to mention a field goal, from any starting point on the field.

*I completely forgot to thank John Palmer for the link to the Harford piece.  Sorry, John.

RIP Lynyrd Skynyrd's Billy Powell

Lynyrd Skynyrd's keyboardist, Billy Powell, has died.  He was 56.  Here's more on Billy from CMT.

Houston Employment Pre and Post 2004 Super Bowl

The 2004 Super Bowl was played in Houston, Tx on Febraruy 1st, 2004 (here is my earlier post on the 2003 San Diego Super Bowl).  The New England Patriots beat the Carolina Panthers 32-29.  It was also the infamous "wardrobe malfunction" Super Bowl. 

What effect did the 2004 Super Bowl have on Houston area employment?  All the data used in the following figures were obtained from the BLS website and come from the Current Employment Statistics database.  All data used were not seasonally adjusted (NSA).  While monthly state-level data for Texas is available in seasonally adjusted form, the metropolitan-level data was only available in not seasonally adjusted format.  I analyze year-ago growth rates to take out as much of the seasonal stuff as possible.

Below is a graph of the year-ago growth rates of total non-farm employment for Houston and, for comparison, the Metroplex (Dallas-Fort Worth area) and the state of Texas (click on the graphs for a larger version).  The vertical black line shows when the Super Bowl was played in Houston.  The red boxes indicate when the US economy was in recession as defined by the NBER. 

The growth of overall employment in the Houston area had little if anything to do with the 2004 Super Bowl.  Instead, it was much more closely related to general economic trends affecting the nation as a whole.   

It's not uncommon for employment growth to lag the end of recessions.  You can see that the growth rate of employment was negative following the end of both the 1990-91 and 2001 recessions.  Houston's year-ago growth rate following the 2001 recession did not become positive until after the Super Bowl, in March of 2004.  January 2004's employment level was 0.2% lower than January 2003 and Febrary 2004's employment level was 0.1% below that of February 2003.  It's unlikely that Houston's overall employment situation was improved by having the Super Bowl.

The following graph shows the NSA employment in Texas as a whole, the Metroplex, and Houston in the Leisure and Hospitality industries.

Here again it's hard to discern any positive relationship between employment growth rates and having the Super Bowl in Houston.  Growth rates in Houston and the Metroplex follow each other pretty closely. In addition, growth rates in this industry appear to lag overall economic recoveries (although they have generally been positive for Houston as a whole since late 1993).  The growth rate in employment in January 2004 was lower than that in January of 2003 (3.97% vs. 3.66% respectively) and that in February 2004 was lower than that in Febraruy 2003 (3.9% vs. 3.23%).  Employment increased in both months of 2004 relative to the year before, but the growth rates were lower.  This would be unlikely if the Super Bowl were a jobs generator, especially in the industry most-likely to feel a positive impact in the short term. 

Minimum Wage and Bus Boys

From the WSJ:

Several franchised T.G.I. Friday's locations in Wisconsin; Omaha, Neb.; and North Dakota stopped using table bussers last fall after sales started to slow. Sammy's Woodfired Pizza, which has 16 locations in California and Nevada, finished eliminating the busboy position last month after staffing restaurants with as many as three of them on busy nights.

"The busser is a luxury that, in this environment, is very difficult to justify," says Mark Godward, president and founder of SRE, a Miami consulting firm that has advised several restaurants to cut busboys.

But the minimum wage is probably a factor.

In many states, it's cheaper to keep servers on the clock than bussers because of a loophole that allows restaurants to pay servers who earn tips less than the minimum wage -- as little as $2.13 an hour. Bussers must be paid at least $6.55 an hour.

The increase in the increase in the minimum wage over the past two years is not talked about much - Ironman excepted - as one of the problems besetting our economy these days. 

HT to DOL

St. Louis Considers New Kidney Transplant Rules

Not news:  there is a shortage of kidneys.  St. Louis news:  committee discusses new rules to allocate a scarce resource.

The committee discussed three concepts that could be used in a new system to determine who gets kidneys:

— A formula that determines how long a patient can expect to live after receiving a new kidney.

— The amount of time a patient has been receiving dialysis treatments.

— A measure of the quality of the donated organ in relation to the candidate's age and health.

Market Power:  price system not even mentioned.

With apologies to Fark for the "not news" "news" and "Market Power" list.

Dennis Green and I on the San Diego Chargers - KUSI, San Diego

San Diego television station KUSI will be showing a 1-hour program regarding the future of the San Diego Chargers in San Diego.  I recently did a point-counter point segment with former Vikings head coach Dennis Green that will be included in the program.  Dennis is currently teaching in the sports management program at San Diego State University. 

The program will air locally in San Diego at 9PM Pacific time.

At this point I do not know if KUSI will stream the broadcast live nor do I know whether the segment with Green and I will be available online.  If they do make it available, I will be sure to provide a link.

2003 Super Bowl - Employment Effects in the San Diego Area

Super Bowl XLIII is being played this week in Tampa, Fl., pitting the Pittsburgh Steelers against the Arizona Cardinals.  Because it's Super Bowl week and because Super Bowls are purported to be contributors to local economic growth, I am going to do a series of posts this week looking at employment levels in  local economies in which recent Super Bowls were played.

On January 26th, 2003, the Tampa Bay Buccaneers beat the Oakland Raiders to win Super Bowl XXXVII held at Qualcomm Stadium in San Diego, Ca.  I take monthly data generated by surveys given by the US Bureau of Labor Statistics and graphically examine the employment situation in the San Diego metropolitan area before and after Super Bowl XXXVIII.  All data is seasonally adjusted. 

The following graph shows the total level of employment in the San Diego-Carlsbad-San Marcos area from January 1997 until November 2008.  The data were obtained from the Current Employment Statistics database.  In each of the graphs below, the vertical line shows approximately the time when Super Bowl XXXVII took place in San Diego.  Employment levels are given in thousands.
Total employment grew from about 1.03 million in January 1997 to about 1.29 million (estimated) in November of 2008.  In January of 2003, employment stood at 1.24 million.  Employment growth leveled off beginning in 2000 and continued leveling off until after Super Bowl XXXVII ended. 

This can be seen more readily by adjusting the vertical axis to start at 1,000. 

In the period from January 2000 to January 2001, the San Diego economy added approximately 33,000 jobs.  But from January 2001 until January 2004, the San Diego economy added approximately 37,000 new jobs. 

The following graph shows the year-ago growth rate of employment in the San Diego economy.

The growth rate of employment showed a trend of falling off from the end of 1998, leveling off in January of 2002, creeping back up starting in late 2003, leveling off starting in mid 2004, and then falling again starting in the middle of 2005. 

Part of this employment growth can be explained by general economic conditions.  The period starting in early 2000 and ending in 2003 coincided with the bursting of the tech bubble and the September 11th attacks, both of which slowed the overall economy. The following graph shows the year -ago growth rates of San Diego area quarterly employment and US Real GDP (the latter obtained from the FRED2 database).

Not surprisingly, the growth rate of employment in the San Diego area follows the growth rate of US GDP fairly closely.  Because a local mega event such as the Super Bowl is not going to have a measurable impact on national GDP, at this point there is little reason to believe that Super Bowl XXXVII had much if any impact on San Diego area overall employment.

But what about the distribution of jobs - the kinds of jobs existing at a point in time?  The next two diagrams were taken from data generated by and obtained from the BLS Quarterly Census of Employment and Wages.  This data is useful because it breaks down employment into specific industries.  Because mega events are tourist events, I focus on total employment and employment in the leisure and hospitality industry.  The graphs are for San Diego County.  The following graph shows year-ago growth rates for the leisure and hospitality industry and for total employment overall.

While Super Bowl XXXVII had little observable impact on overall employment in San Diego County (as noted above), it's readily apparent that it had an impact on the Leisure and Hospitality industry as the year-ago growth rate in January soared to over 7%. The growth rate of employment in that industry never again reached even 6%, suggesting the distributional impact was short-lived.

The following graph shows the share of total employment given by the leisure and hospitality industry in San Diego County.  Note that the graph starts at a 10% share.

Not surprisingly, the share takes on a cyclic, sawtooth form, reaching a peak each summer and reaching a trough each winter.  Over time, leisure and hospitality's share of San Diego employment increased from about 10.5% in January of 2001 to about 12.5% in June of 2008 (the last data value that I have).  But note that in every cycle but one, the share reaches its low in January.  That one exception occurred around Super Bowl XXXVII.  In that cycle, the share reached its lowest point in November of 2002.

So what does this all tell us?  It tells us that in terms of jobs, Super Bowl XXXVII did have an impact on the San Diego area economy.  But it had little, if any, impact on the overall number of jobs.  Instead, its impact was on the short-term composition of the San Diego area economy.

Public vs. Private Waiting Times for Medical Services

Captain Capitalism ran this picture recently which I found very interesting.
From his comments, the data come from here.

There ain't no such thing as free health care.

Nanny State: You Can't Name Your Kid "Q"

Story here.  Via Fark.