Month: October 2012

Baumol’s new book on the cost disease

It is self-recommending, here are a few points of relevance:

1. There has been a clear cost disease in most kinds of education and many kinds of medicine, but I blame institutions and laws as much as the intrinsic nature of the product.

2. I do not see the arts as subject to the cost disease very much at all.  As for the “live performing arts,” the disease seems to afflict the older and less innovative sectors, such as opera and the symphony.  There is plenty of live music these days, it is offered in innovative ways, and much of it is free.

3. Even “the live performing arts” can be broken down into underlying characteristics, many of which show a great deal of recent innovation.  For instance the supply of “musical immediacy” has been non-stagnant through YouTube, which often gives you a better glimpse of the performer than you get through nosebleed seats and giant screens.  YouTube isn’t “live,” but there is no particular reason to break down the analysis at that level and certainly it is not a sacred category for consumers.

4. In many sectors of the arts, especially music, consumers demand constant turnover of product.  Old music becomes “obsolete” — for whatever sociological reasons — and in this sense the sector is creating lots of new value every year.  From an “objectivist” point of view they are still strumming guitars with the same speed, but from a subjectivist point of view — the relevant one for the economist – they are remarkably innovative all the time in the battle against obsolescence.  A lot of the cost disease argument is actually an aesthetic objection that the art forms which have already peaked — such as Mozart — sometimes have a hard time holding their ground in terms of cost and innovation.

5. In general “cost disease” sectors do not remain constant over time.  Agriculture has been unusually stagnant for the last twenty or so years, but it is hardly obvious that this trend will continue for the next century to come and it certainly was not the case for the period 1948-1990, quite the contrary.

6. The stagnancy of one sector may depend on the stagnancy of other sectors in non-transparent ways.  “Live music” may seem like it doesn’t change much, but lifting the embargo on Cuba would boost the quantity and quality of my consumption of spectacular concert experiences, as would a non-stop flight to Haiti.

You can buy the book here.

Addendum: Matt Yglesias comments.

The Evil of Pagination

I agree with Farhad Manjoo:

Splitting articles and photo galleries into multiple pages is evil. It should stop.

Pagination is one of the worst design and usability sins on the Web, the kind of obvious no-no that should have gone out with blinky text, dancing cat animations, and autoplaying music. It shows constant, quiet contempt for people who should be any news site’s highest priority—folks who want to read articles all the way to the end.

Pagination persists because splitting a single-page article into two pages can, in theory, yield twice as many opportunities to display ads—though in practice it doesn’t because lots of readers never bother to click past the first page. The practice has become so ubiquitous that it’s numbed many publications and readers into thinking that multipage design is how the Web has always been, and how it should be.

Neither is true: The Web’s earliest news sites didn’t paginate, and the practice grew up only over the past decade, in response to pressure from the ad industry. It doesn’t have to be this way—some of the Web’s most forward-thinking and successful publications, including BuzzFeedand the Verge, have eschewed pagination, and they’re better off for it.


The authors are Richard H. Sander and Stuart Taylor, Jr., and the subtitle is How Affirmative Action Hurts Students It’s Intended to Help, and Why Universities Won’t Admit It.

Here is the book’s website, and a summary:

… law professor Richard Sander and journalist Stuart Taylor, Jr. draw on extensive new research to prove that racial preferences put many students in educational settings where they have no hope of succeeding. Because they’re under-prepared, fewer than half of black affirmative action beneficiaries in American law schools pass their bar exams. Preferences for well-off minorities help shut out poorer students of all races. More troubling still, major universities, fearing a backlash, refuse to confront the clear evidence of affirmative action’s failure.

As you may know, the Supreme Court starts hearing oral arguments on affirmative action on October 9th.  I have not much followed the empirical debate on affirmative action, but it seems to me this is likely the best recent book on the “anti” side.  On the pro side, you can read The Shape of the River, by William Bowen and Derek Bok.

Crowdsourcing the lowest fare

Travelers with complex travel plans may have noticed, however, that the search results aren’t necessarily consistent. This has created a business opportunity for Flightfox, a start-up company based in Mountain View, Calif., which uses a contest format to come up with the best fare that the crowd — all Flightfox-approved users — can find.

A traveler goes to and sets up a competition, supplying information about the desired itinerary and clarifying a few preferences, like a willingness to “fly on any airline to save money” or a tolerance of “long layovers to save money.” Once Flightfox posts the contest, the crowd is invited to go to work and submit fares.

The contest runs three days, and the winner, the person who finds the lowest fare, gets 75 percent of the finder’s fee that the traveler pays Flightfox when setting up the competition. Flightfox says fees depend on the complexity of the itinerary; many current contests have fees in the $34-to-$59 range.

Here is more, and for the pointer I thank @ArikSharon.

The New Republic covers MRU

I very much enjoyed this new article by Marc Tracy.  (The site is now up! And if we haven’t processed your registration yet it is because we are swamped with numbers, our apologies, please bear with us.)  Excerpt:

The videos, several of which were made available to me, are indeed more friendly than the stuff you typically find on Coursera, if not as viscerally captivating as, say, a TED talk. Manufactured with Microsoft PowerPoint and a $4 iPad app, they tend to last in the neighborhood of five to eight minutes—Cowen, who possesses a parody of an economist’s precision, noted on his blog, “The average video is five minutes, twenty-eight seconds long”—with segments frequently summarizing and highlighting the most interesting parts of academic papers (“Seasonal Food Prices and Policy Responses: A Narrative Account of Three Food Security Crises in Malawi”); these papers are duly credited and usually available online for free.

Narrated by Cowen or Tabarrok, the videos share the curiosity, eclectic interests, and tongue-in-cheek dryness of the blog. For example, Cowen riffs off a paper that showed that when cable television was introduced to several Indian villages, the fertility rate fell. He intones, in a studied deadpan reminiscent of Alfred Hitchcock’s belabored enunciation: “We don’t know, however, whether this is because women or families have better information about birth control, or simply that they’re exposed to alternative visions of different lifestyles on TV, and maybe want to spend their time in ways other than just having more children.”

Maybe today you should go visit

The link is here, and we thank you for your interest.  Read Alex’s opening statement for more information:

Welcome to MRU! At right you will find our first course, Development Economics. Click the + to see the videos in each section. New sections will be released at the beginning of every week and there will be bonus sections released during the middle of some weeks. Practice questions for each video provide some simple feedback.

Anyone can watch videos and take the practice questions but to truly participate by asking and answering questions, posting material, partcipating in chats and so forth you will need to register. Please do register as this will also help us to plan for future courses. There is no charge for registering.

In order to make our material as widely available as possible the videos default to low resolution, 380p, but if you have good bandwidth we recommend bumping them up to 480p which will increase video and audio resolution. You can do this on many platforms (not all) by clicking near the bottom right of the video and then clicking the settings button.

The course is designed for videos but every lecture also includes a downloadable MP3 in the section Related Materials.

The “How to Use” section (link in bar at top), includes ideas such as flipping the classroom and some basic directions for making your own videos.

In coming weeks, we will be releasing new features and announcing virtual and live chats!