Who watches a parade?, or three questions in the economics of signaling

In Palermo I saw a parade go by the major street and I saw that many people were watching.  I asked myself the obvious Hansonian question: who watches a parade?

A naive economic account might postulate that low income earners, namely those with low opportunity cost — are those who watch a parade.  Yet this was not my sense watching the watchers in Palermo.  And hey I was watching the parade and in Sicilian terms I'm relatively well off.  (Alternatively, was anyone watching "the parade" at all?)

The "signaling revolution" in economics can subvert established tradition.  For instance it overturns some notions of the relevance of opportunity cost.  People with low opportunity costs are often the same people with low expected benefits from signaling.  So how much does the opportunity cost concept really explain?

I also file Sicily, or at least Palermo, under the heading of: "regions where the poor women are at least as beautiful as the wealthy women."  Why is this sometimes true?  (And does this question about investment in beauty have the same logical structure as the one about the parade?)  It does not, in general, hold for the United States or for that matter Sweden, my current locale.

In Palermo I also saw an ugly young man, but he was very macho, haughty, and full of swagger.  He was with a very beautiful young woman.  He was wearing a designer T-shirt — presumably sold to thousands — with the single word "Rebel" emblazoned just below the neck.  She gazed at him admiringly.


Comments for this post are closed