Market Power

College Athletic Graduation Data

2009-11-20T14:34:00-06:00

Here's an NCAA database on the athlete graduation rates released in 2009. Here are links to past reports. Both were linked to in this USA Today article on graduation rates. USA continues to be an excellent source for raw data and links to other data. If any of my readers have been involved in gathering this data, thanks!

Graduation Levels Up in College Athletics

2009-11-20T13:26:00-06:00

USA Today is reporting that graduation levels are up in college athletics.

Nearly four of every five athletes — 79% — who entered Division I colleges and universities from 1999 to 2002 got their degrees within six years, according to an NCAA study released Wednesday. That's up a percentage point from a year earlier.

As it is with any random variable, there are highs and lows.

More than a quarter of the 320-plus men's hoops programs in Division I graduated fewer than 50% of the players who arrived from 1999 to 2002. That includes No. 3 Texas (47%), No. 5 Kentucky (31%) and 10 more of the 25 teams in this week's USA TODAY/ESPN Coaches' Poll.
Texas also lagged in football, where the unbeaten Longhorns are pointed toward the Bowl Championship Series title game. Their grad rate was 49% in the sport. Last year's BCS runner-up, Oklahoma, had a 45% rate.
One in six Division I baseball programs came in under 50%, including the winners of the last six national championships: LSU (48%), Fresno State (45%), Oregon State (44%), Texas (37%) and Cal State-Fullerton (29%).
Also among the NCAA findings:
• Schools doing the best job of graduating all their athletes were Notre Dame and Colgate (both 99%) and Navy (98%).
• Schools doing the worst job were Division I newcomer Utah Valley (28%), Chicago State (38%) and Florida A&M (41%).

Of course the NCAA has set new penalties for programs that don't graduate enough players. It's unclear what efforts schools have put in place to drive the positive numbers reported in USA Today. But I'm confident that information will come out in time.

What's Up With all the Football Posts? And a Couple of Mangino Cheap Shots

2009-11-20T12:26:15-06:00

You've probably noticed that I've been writing more and more on college athletics in general and college football in particular. There's an app a reason for that. I have been reading up on the professional economic literature on college sports for a big project that I am working on. Whenever I start a new project, I dive into the professional literature. That's pretty standard in any field. Because I am not as familiar with the literature on college sports as I am with other papers in sports economics, I have had to do a bit more diving. I've also started writing on the subject.

I'll still be blogging on all the fun topics brought to you by the world of economics, but if you see me blogging sporadically and blogging a bit more on college football or college sports, it's not that I've given up on the rest of the science. I've just immersed myself in one tiny little part of the vast Oceania Economica and am thinking about it a lot. Thanks for bearing with me and, especially, for taking the time to read my blog.

By the way, Jason Whitlock's tweet about the need for a sturdy hotseat to hold Kansas' Mark Mangino and Notre Dame's Charlie Weis was pretty ripe. My cheap shot tweet was that Kansas can't throw Mangino under a bus because he wouldn't fit. They'd need at least a monster truck.

The Reason Why We Have Prerequisites

2009-11-20T07:41:00-06:00

Any construction contractor who would build a house by putting up the walls and ceilings before a solid foundation is constructed is asking for trouble.

Yet every semester I run across at least one student who wants to take classes concurrently although one is a prerequisite before the other. Prerequisites should be taken as being some kind of foundation, not as some silly little inconsequential hoop that must be jumped through.

Three on Belichick's Decision

2009-11-19T11:30:43-06:00

Brian Goff.

Stacey Brook.

Greg Mankiw.

The consensus: examining a decision based solely on the outcome of the decision is not the best way to judge.

Homeless, But Living in Luxury

2009-11-19T11:16:00-06:00

Thanks to the NBA:

The crisis has even reached into luxury suites, many of which have remained dark for months – either strapped buyers walked away from their deposits or they simply decided to cut their losses and save on finger food and drinks. But while the suites are dark, not all are unoccupied. According to Brian Weathers, a league official, squatters have been found living -- quite comfortably -- in luxury suites at arenas around the country.
“We’ve found entire families living in luxury suites around the league,” said Weathers. “Some have been there, undisturbed for weeks. They stock the refrig, use the facilities, and hang their clothes out to dry. You kick them out, but they re-appear in another empty suite the next day. And they’re not just your garden variety homeless types – we’ve seen former bank managers, loan officers, financial planners and car salesmen with no where else to turn. Our official position is that luxury suites are not to be used as homeless shelters. Unofficially, we welcome the additional body count – have you been to a Clippers or Grizzlies game lately? It’s like a morgue in there…we’ll take warm bodies any way we can get them.”

Via the comments to this post at TSE.

Stadiums are Wonderful Investments - NOT!

2009-11-19T09:07:00-06:00

The Pontiac Silverdome, built in 1975 at a cost of $56 million (over $200 million in today's dollars), was sold at auction yesterday for $583,000. Folks, houses in your neighborhoods sell for more than that!

The city of Pontiac played host to the Detroit Lions in the Silverdome for just shy of three decades. Yet judging by the picture in this article, the economic development spurred by the stadium largely consisted of parking spaces, which now sit empty. Moreover, they've been spending $1.5 million a year on upkeep for the empty facility, in a period when city budgets are a disaster. Apparently, they are relieved to "to shed the costly structure." Surely there is a message in this saga for public bodies with thoughts of taking the stadium plunge.

The story does recall a junket to Mexico for "a Pontiac councilman," two business associates and "three female companions."

It's not the only stadium that's surrounded by nothing. Arrowhead comes to mind.
View Larger Map

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So does Dodger stadium. That's Skip at TSE. Maybe this is why teams put up such a fuss to get public funding.

Football and Family Violence

2009-11-19T07:06:54-06:00

Do you get a little testy when your team doesn't perform as well as you should? You are not alone:

Family violence is a pervasive and costly problem, yet there is no consensus on how to interpret the phenomenon of violence by one family member against another. Some analysts assume that violence has an instrumental role in intra-family incentives. Others argue that violent episodes represent a loss of control that the offender immediately regrets. In this paper we specify and test a behavioral model of the latter form. Our key hypothesis is that negative emotional cues – benchmarked relative to a rationally expected reference point – make a breakdown of control more likely. We test this hypothesis using data on police reports of family violence on Sundays during the professional football season. Controlling for location and time fixed effects, weather factors, the pre-game point spread, and the size of the local viewing audience, we find that upset losses by the home team (losses in games that the home team was predicted to win by more than 3 points) lead to an 8 percent increase in police reports of at-home male-on-female intimate partner violence. There is no corresponding effect on female-on-male violence. Consistent with the behavioral prediction that losses matter more than gains, upset victories by the home team have (at most) a small dampening effect on family violence. We also find that unexpected losses in highly salient or frustrating games have a 50% to 100% larger impact on rates of family violence. The evidence that payoff-irrelevant events affect the rate of family violence leads us to conclude that at least some fraction of family violence is better characterized as a breakdown of control than as rationally directed instrumental violence.

Once again, economists answer a question a sociologist should explore. It's economic imperialism. Via TSE.

Reinvesting Revenues From a New Stadium? One More Comment

2009-11-17T15:19:14-06:00

Regarding my last post, I made some remarks on whether stadiums and athletic/coaching talent were complements in production. If this is indeed the case, then we need to keep in mind that a team only plays half of its games at home. It's not like a new football stadium will improve the productivity of an NFL team for 16 games but, instead, for 8 games at the very most.

Reinvesting Revenues From a New Stadium?

2009-11-17T13:38:33-06:00

This is a common claim made by teams, but I'm skeptical.
According to economic theory, the value of any given player/coach/trainer on a profit-maximizing team is what that person contributes at the margin to the team and what fans are willing to pay for that marginal contribution. If, for example, Adrian Peterson contributes 1.5 wins to the Vikings and Viking fans are willing to pay $3,000,000 for each extra win, then AP is worth $4,500,000 to the Vikings.
In a profit-maximizing world, the only reason a team would use "money generated by the stadium" on the team is if the stadium enhanced the team's talent or if it increased fans' willingness to pay for the product on the field.
I think that it's likely that a new stadium would enhance fans' willingness to pay overall, but it's not clear that they are willing to pay more to see the action on the field per-se. They may be willing to pay more to enter a new stadium to experience the "newness" of the facility, to sample new concession items, or to experience something else that has little or nothing to do with the action on the field (like a huge scoreboard (like in Arlington, Tx), a giant pirate ship (as in Tampa), or nice views of the surrounding city/geography (as in so many facilities around the country)).
Consider a simplified numerical example. Suppose that the average fan, in an old stadium, is willing to pay $50 to watch the game and an additional $25 for stadium amenities. This fan would be willing to pay as much as $75 for a ticket to the game.
Now suppose that the same fan is willing to pay $50 to watch a game per-se in a new stadium and an additional $50 to experience the new stadium's amenities. This person would be willing to pay as much as $100 for a ticket to a game, a $25 increase. But his/her willingness to pay for the action on the field is unchanged, so the team has no incentive to spend the additional $25 it receives on "competitiveness."
The interesting question from my perspective is "are stadiums and talent complementary?" I think stadiums can be designed to impact the action on the field to improve the chance the home team will win. Here's a blog post I wrote over at The Sports Economist a year and a half ago on this subject. In that post I cite one paper in a professional economic journal that has looked at this question (this one). The paper finds little evidence that a new stadium improves the performance of the home team on average.

That's my response (edited for typos that I found later and with links embedded in the text) to a question posed to me by a reporter writing a story on the Vikings' quest for a new stadium. What I was referring to in the first sentence above was the common claim that because of the small size of the Vikes' market, money generated by a new stadium has to go towards investing in the team.

I touched on the question of whether stadiums and talent are complementary, but there is one other facet that I feel I should point out, and that's the question of do owners of professional teams (or AD's at colleges) maximize profits. I think that the answer is a resounding "yes" in American sports, but I do not doubt that some owners have run their teams as philanthropic organizations to some extent (Ewing Kaufmann, late owner of the Kansas City Royals, comes to mind) and some owners simply enjoy owning teams, much like I enjoy watching a college football game.

Lasagna Classico

2009-11-16T08:29:27-06:00

This lasagna recipe went over well in our house last night. The kids even ate the mushrooms. It's based on this classic lasagna recipe from the always excellent Allrecipes.com and submitted by Allrecipes user Barb R. I changed the ingredients a little bit based upon my personal (and family's) preferences and based upon some of the comments of the recipe's reviewers. I describe my changes below the ingredients.

Ingredients

9 lasagna noodles
4 tablespoons olive oil
1 pound ground beef
1 pound bulk Italian sausage
1 (8 ounce) can sliced mushrooms, drained
3 cloves of fresh garlic, crushed
1/2 cup of fresh onion, minced
1 teaspoon fresh or dried oregano
1/2 teaspoon dried thyme
1/4 teaspoon fresh or dried sweet basil
1 29 oz can crushed tomatoes
1 15 ounce can tomato sauce
1 6 ounce can tomato paste
salt and pepper to taste
1 (15 ounce) container ricotta cheese
3 eggs, beaten
1/2 pound grated Parmesan cheese
1 pound shredded mozzarella cheese

The original recipe called for the use of garlic salt, but I prefer to use fresh garlic. It also called for 16 ounces of mushrooms, but my kids don't care for mushrooms. I figured I could get 8 ounces past them without them complaining too much, but not 16 ounces. I also added olive oil and fresh minced onions to the sauce. I used freshly grated Parmesan. Lastly, I added more Parmesan to the cheese mixture and on top of the final product.

Directions (my directions, while based on it, are slightly different than those at the original recipe; the main difference is the ordering of the steps which, I think, are slightly more efficient time-wise relative to those given on the original recipe):

Heat 3 tablespoons of olive oil in a large frying pan and cook the ground beef and sausage over medium heat; drain. Stir in the onions, mushrooms, garlic, oregano, thyme, basil, and tomato products. Season with salt and pepper to taste; simmer 30 minutes.*
While the meat sauce is simmering, bring a large pot of lightly salted water to a boil. Add the lasagna noodles and olive oil; cook until al dente, 8 to 10 minutes; drain.
Meanwhile, preheat the oven to 350 degrees F. Also at this time, mix together the ricotta cheese, eggs, and about 2/3 of the Parmesan cheese in a bowl. Set aside the remaining Parmesan.
Ladle enough of the meat sauce into a 9x13 inch baking dish to cover the bottom in a thin layer. Form a layer atop the sauce with 3 of the lasagna noodles. Spread about 1/4 of the ricotta cheese mixture over the noodles. Sprinkle about 1/3 of the mozzarella cheese over the ricotta cheese mixture and then ladle about 1/3 of the meat sauce over the mozzarella cheese. Repeat layering twice more. On the last layer, do not add the remaining mozzarella cheese.
Cover with tinfoil and bake in a preheated oven 70 minutes. After the 70 minutes are finished, remove the foil and spread the remaining mozzarella and the remaining Paremesan over the top of the lasagna. Replace uncovered in the oven and bake for an additional 8-10 minutes.
Allow to sit 10 minutes before serving.

The result was a flavorful lasagna, better than most I've had at restaurants. Make sure that when you cook this, begin approximately 2 hours and 15 minutes before your meal.

*If you like a spicier sauce, you can add red pepper flakes or some paprika to the sauce in the first step. You can also keep some of the grease from the frying of the meat to add a little extra flavor to the sauce. I reserved about 2 tablespoons of grease for this purpose.

College Football Links

2009-11-15T17:03:00-06:00

How did former Kansas State Coach Ron Prince end up with a double-secret, super-stealthy $3.2 million buyout? The Shadow knows, but the KC Star examines the issue.

Steven Wieberg at USA Today describes the latest findings of an NCAA survey on athlete gambling.

More from USA Today: the good folks there have gathered together a lot of useful information on NCAA football head coaching salaries. Economists like myself made (and continue to make) great use of their baseball salary data. I'm sure the same will be true of the coach contract database.

For whom the belle tolls: how men at Southern university fraternities divvy up their tickets to football games.

One more from USA Today: a story on NCAA football head coaching salaries with lots of attention given to the Mizzou football program.

Iowa's dream season won't end in the Rose Bowl. Yesterday's loss to the Ohio State University ensured that. But here's the Wall Street Journal on "Why Iowa is Good for College Football."

You can buy stock in the Boise State athletic department.

On Sabbaticals

2009-11-11T15:29:00-06:00

There's a bit of a flap in my state university system, the Minnesota State College and University system (MnSCU - pronounced "Min-skew"), over a news piece on sabbaticals in the system. The gist of the piece is that sabbaticals are paid vacations and faculty do little more than sit on their butts and sip tropical drinks. Here's King Banaian, a fellow economist and MnSCU brother at St. Cloud St.:

I'm in my 26th year of service at SCSU, and so far have had one year (back when it was 2/3 pay for a year-long sabbatical rather than 80%.) My work that year and two more years, during which the university did not pay me but expected me to return to repay my sabbatical -- more on this below -- lead eventually to a third year away to work as an adviser at the National Bank of Ukraine and to my first book. I'd vehemently disagree with the idea that I 'took time off'. Indeed, the KSTP report cannot deny that these faculty members on sabbatical were in fact improving themselves. Sabbatical is not vacation. In 2007-08, throughout our system, here's what the sabbaticals were used for:

Professional development 26%

Curriculum development 32%

Education 18%

Research 22%

I am currently on sabbatical. Many people will go to another university to teach or do research during their sabbaticals. They do so to immerse themselves in a different academic culture, to get different ideas, and to broaden themselves in their discipline. I chose not to go anywhere because I have two young boys that my wife and I are raising. I don't want to be away for a long time at this point in their lives. You know the old saying: they grow up fast.

It's important to realize that a sabbatical is part of the overall compensation package and faculty are supposed to give something in return for their compensation. Here's King again.

So here's the real point, if you want to get to the dollars. If you tell me I have to do this job and never take a sabbatical, I would like to be compensated for giving up that right. Suppose my union and the state negotiate a 10% wage increase in return for the lost right. If I'm only guaranteed sabbatical every ten years, I only get one reassigned semester a decade. The state pays someone to replace me for that semester, and probably will not pay 50% of my salary, since that person is likely to be a lower-paid instructor (a young person just out of graduate school.) Are you better off or worse off, taxpayer-dollar-wise? And in the long-run, am I a better or worse instructor for having that time of rest, reflection and retraining?

MnSCU is contractually obligated to give faculty a chance at sabbaticals. In order to get a sabbatical, a faculty member must apply for one, an application that includes a proposal which describes the faculty member's intended activities. I proposed to do something that I have wanted to do for a long time: dig deep into the professional economic research on college sports. I have published 8 papers in professional journals at this time (my most recent publication is in this issue of Applied Economics) and I have several working papers in various stages of production. All but two of my papers have dealt with Major League Baseball in one way or another and I wanted to branch out.

In my proposal, I said I would write four research papers on college sports with the hope of turning the research into a book. I usually end up writing one or two papers during an academic year, so I'm using my sabbatical time to do more research than normal.

My university was contractually obligated to allow me to apply for sabbatical. It followed through on its end of the bargain and granted me leave. I am now contractually obligated to follow through on my proposal, something that when all is said and done, I will also do.

Merle Hazard on That Old Time Recession

2009-11-11T13:56:47-06:00

HT Greg Mankiw.

The "Teen Job Scene"

2009-11-11T12:45:00-06:00

Like the rest of the labor force, times have been awfully rough for teens. Almost 28% of the teen labor force is unemployed which puts a serious dent in not only their current prospects but their long term prospects. Ironman discusses recent statistics on this part of the labor force.

Being Bon Jovi

2009-11-11T12:12:00-06:00

An article about the "band and the brand."

Doc Profiled at NormBlog This Week

2009-11-11T11:59:00-06:00

My friend John Palmer of the University of Western Ontario, and the brains and brawn behind Eclectecon, is being profiled at NormBlog.

Railroad Entrepreneuers and Railroads, Then and Now

2009-11-11T10:54:00-06:00

Stephen Karlson at Cold Spring Shops has some thoughts on the WSJ article on railroads that I linked to the other day.

Entrepreneurs on the College Football Field: Good Bye, Spread Offense?

2009-11-11T09:13:14-06:00

In business, entrepreneurs look for opportunities. Whether the opportunities are in the form of creating new products, serving new customers, or cutting costs, entrepreneurs exploit them at the cost of the competition. But in the end the entrepreneur's customers and the entrepreneur himself gain. This is capitalism.

So it is in sports. Coaches and players (and athletic administrators*) search for opportunities posed to them by their opponents. In recent years the spread offense, an offense in which the offensive linemen are are set with a large gap between them, became the sexy offense. The idea was to spread the defense farther out in order to open more passing lanes.

Mizzou installed the spread in 2005 after having recruited a young quarterback named Chase Daniel, a stocky QB out of Southlake Carroll in Texas. Daniel, shunned by the powerhouse colleges because of his height, ran a version of the spread in high school that was created by his HS coach Todd Dodge (n ow the head coach of North Texas). Mizzou installed that version of the spread and Daniel and his offensive teammates lit up the scoreboard like a frat boy at a tailgate over the next few years.

But, at some point, we'd expect the spread to lose favor. For those of us who don't play the game and who don't have the keen eye that the coaches and the players have, it's usually a hunch we have. Things change.

But coaches and the players, like the entrepreneurs in markets, are always looking for an opportunity to win an extra game. So they develop some new wrinkle in their offense or defense and try it out. If it's successful, they try it again. And the beat goes on.

So when is the spread offense going to be phased out? Well, according to J. Brady McCollough of the KC Star, the time may be now.

But Mangino and his staff can’t help but notice the different way other Big 12 North teams are winning games during KU’s current four-game losing streak. Last weekend, Kansas State ran the ball 43 times, threw it 16 times and beat Kansas, which threw it 41 times. Later on, Nebraska ran it 43 times, threw it 14 times and beat Oklahoma, which threw it 58 times.

The Wildcats and Huskers, with their ground-oriented offensive philosophies, are now the frontrunners to win the North in what had become during the past two seasons a wild, point-crazy Big 12. KU and Missouri, with their high-tech spread attacks, are both cellar-dwellers at 1-4.

“More and more, teams in our conference are slowly but surely fading out of the spread offense,” Mangino said. “I think it goes back to the old adage that coaches want to run the ball, control the clock and play great defense. What did Woody Hayes say? ‘When you throw the ball, a lot of bad things can happen.’”

Woody probably would not have understood what was happening in 2007 and 2008. Teams took risk after risk and didn’t pay for it very often as defenses sat back on their heels and tried to react to what offenses were showing them. In 2007, the Jayhawks were out in front of it all with their no-huddle scheme, which allowed players to line up and look to the sideline for play calls. For most of two years, KU’s offense played dictator.

When Mizzou lost games during the Chase Daniel era, it was usually to teams that had a strong defensive line. They lost to Nebraska in 2006, Oklahoma, twice, in 2007, and Texas and Oklahoma, again, in 2008. There were other losses of course, but that was a pattern that cropped up. If a team is able to get adequate pressure on the QB with 3 or 4 lineman, it allows them to keep 7 or 8 back in coverage. If the linemen are strong enough, it can force the offense to keep a RB or a TE in to help block, leaving fewer receivers to be covered downfield. Even a QB with the field vision and arm accuracy of Chase Daniel has a hard time when 4 or 5 receivers are being covered by 7 or 8 opposing players.

So are we witnessing the death of the spread? One season won't tell the story. But if the passing stats fall over the next couple of years, we can point to 2009 as the year the spread died.

*For evidence of the dynamics of entrepreneurship in athletics, one need only point out the fine book Moneyball by Michael Lewis. Hakes and Sauer (2006) examined MLB data and found that the opportunity found by the Oakland A's was soon exploited by other executives in MLB.

Principles of Economics Test Question

2009-11-11T03:30:00-06:00

Christmas is the busiest time of year for most retailers. The demand for retail goods spikes after Thanksgiving and then settles to more of a typical pattern after Christmas. But retailers also run many sales during this time period, suggesting that prices, on average are no higher than at other times of the year. In fact, the prices of many goods may be lower. What is the economic rationale behind this?

Meat and Carbon Emissions

2009-11-11T01:30:00-06:00

Prof. Whitehead notes a post that says that the claim that meat production generates 51% of greenhouse gas emissions is based on "addled" conclusions.

By the way, why does nobody mention beer (or any adult beverage, for that matter) along with greenhouse gasses? There's a reason they call those little bubbles in beer "carbonation." Plus, yeast produces two byproducts when it noms on fermentable sugars: alcohol (yeast pee, basically) and carbon dioxide (yeast farts).

Makes you wanna go out and knock back a cold one, no?

Why Did Mizzou Lose to Baylor?

2009-11-10T18:22:00-06:00

With all due respect to the Bears, the Mizzou loss to Baylor almost defies explanation. A 14-point underdog that had scored 34 points in 4 previous Big XII games, all loses, Baylor had only won one previous Big XII road game in the history of the league. After the stunning round kick to the teeth with a knife strike to the crotch, Mizzou is reeling. What happened? From Dave Matter on Sean Weatherspoon, the heart and soul of the Mizzou defense, who suggests it's the youth of the team:

“We got beat in the last 48 hours,” he said. “That’s the thing. A lot of people don’t think that has anything to do with it, when you’re in the hotel and getting prepared mentally and getting your mind right to go into a war. … But you have to be in a certain mind-set to go play that game. The preparation was there. We did what we needed to do all week in practice. It was a sense of not having your mind right to go out and do it on Saturday. That was flabbergasting to me.”
The afternoon before home games, MU players are transported to a local hotel where they hold various meetings throughout the evening. That’s when Weatherspoon said he could sense trouble brewing.
“You’ve got to be mature,” he said. “You can’t have guys joking around and having a good time on Friday night. You’ve got to wake up ready to play football. We had some guys joking around, having a good time and laughing. Coach Stec said it’s probably the loudest he’s seen the defense before we do our ritual that night. It kind of showed on the field and that’s how the game went.
“It was really loosey-goosey, just goofing around. And that’s what you can’t do if you want to get your mind right to play a game.”
Weatherspoon credited defensive coordinator Dave Steckel with settling down the antics and getting the team refocused Friday night, but, he said, “I think the damage had already been done.”
Some of the goofing continued on Sunday, when the team gathered for meetings and the mandatory practice that always follows a loss, Weatherspoon said.

Spoon thinks it is the result of Mizzou being such a young team (only 7 players on the two-deep roster are seniors). We can only hope. But if this doesn't get straightened out, these players will be able to goof around when they could be bowling.

College and the Fallacy of Composition

2009-11-10T14:06:45-06:00

Fallacy of composition: whatever is true for the individual is also true for the whole. Example: if I stand at a football game, I get a better view if I'm the only one who stands up. If everyone stands up*, my view is probably no better or, quite possibly, worse.

Arnold Kling:

Guess who said :
Going to college is a lot like standing up at a concert to see better. Selfishly speaking, it works, but from a social point of view, we shouldn't encourage it.

Answer here.

*Of course, if I continue to sit when everyone else stands, my view is certainly worse. Standing up under that condition is rational.

Testing for Twitter Part Deux

2009-11-10T13:59:27-06:00

I'm still checking some Twitter connections with my Typepad account. I apologize for any annoyance that this might cause.

Testing for Twitter

2009-11-10T13:11:47-06:00

I am changing how I send my blog posts to Twitter. Please disregard this post.

Mark Cuban Interested in Buying the Dodgers

2009-11-10T13:06:00-06:00

Mark Cuban was kept out of the running for the buying of the Chicago Cubs, but he's still interested in buying an MLB team. From the LA Times.

Mark Cuban, the high-profile owner of the NBA's Dallas Mavericks, said Monday he would consider adding the Dodgers to his portfolio.

As the unusually public Dodgers' divorce saga plays out, Cuban said he has heard from many Dodgers fans appealing to him to buy the team.

"More than I can count," Cuban wrote in an e-mail.

MLB had little interest in him as a buyer of the Cubs, so I don't know why they would be interested in having him as a member of their country club as the owner of the Dodgers.

You've Got to Be Kidding Me!

2009-11-10T11:54:00-06:00

How does this happen?

Mizzou’s women’s soccer team became the first regular-season champion in the Big 12 Conference to be excluded from the NCAA Division I tournament.Mizzou failed to secure one of the 34 at-large bids in the 64-team field.
The Tigers (13-6-3, 7-1-2) won the regular-season title but missed out on the conference’s automatic bid Saturday when they lost to Oklahoma State 3-2 in a Big 12 tournament semifinal.

How does the regular season champion of a major conference get snubbed?

The Wreck of the Edmund Fitzgerald

2009-11-10T10:46:37-06:00

HT to Kip.

Does Mizzou Have Some Cancers on Its Football Team?

2009-11-10T10:39:00-06:00

Baylor beat Mizzou this weekend in a 40-32 punch in the teeth and kick in the mouth. Not only had the Bears only scored 34 points in their previous 4 Big XII games without star QB Robert Griffin, they had only won one other Big XII road game EVER. That loss coupled with some alarming trends, most notably the fact that the Mizzou offense, through 5 Big XII games, has not scored a touchdown after half, was the driving force behind a closed door team meeting. From the KC Star:

But according to senior defensive end Brian Coulter, some deep concerns were discussed, first by Weatherspoon and Gregory, and later by individual coaches in the gathered darkness of the practice field.
“Maybe there are some people here that really don’t want to be here,” Coulter said Monday. “Maybe they have a problem with the coaching staff, or maybe some other players.”
Coulter said those exact words, or at least that specific message, came up from both defensive coordinator Dave Steckel and in another way, coach Gary Pinkel.
“ ‘Y’all know the ones I’m talking to,’ ” Coulter recounted.
“Once the season is over with, maybe they need to do an evaluation of who all they’ve got coming back and who really wants to be here and who really doesn’t want to be here,” Coulter said, stating his own position on the matter. “The ones who don’t are going to continue to be the same old problems.”

Team chemistry gets destroyed by losing. Perhaps that's what's going on here. In any case, Mizzou beat writer Mike Dearmond wonders if it sounded worse than it actually is. I hope so.

The Tigers are a shaken team getting ready to play a KSU team that is as disciplined as any in the league. It has about the same amount of talent that it had in the past three years when Mizzou beat them handily. Of course Mizzou had some extraordinary talent and leadership of their own in those games. But the Wildcats are playing under coach Bill Snyder who has them playing as disciplined as any team in the league. That has helped them make up for any talent deficiency they may have. Moreover, Snyder is a coach that Mizzou coach Gary Pinkel has never beaten, even when the talent was on GP's side. Mizzou has the talent to beat KSU, but it needs a confidence stimulus before it gets to Manhattan.

Eugene Fama Defends his Efficient Markets Hypothesis.

2009-11-10T10:35:00-06:00

Link here. Money Quote.

Most investing is done by active managers who don't believe markets are efficient. For example, despite my taunts of the last 45 years about the poor performance of active managers, about 80% of mutual fund wealth is actively managed. Hedge funds, private equity, and other alternative asset classes, which have attracted big fund inflows in recent years, are built on the proposition that markets are inefficient. The recent problems of commercial and investment banks trace mostly to their trading desks and their proprietary portfolios, and these are always built on the assumption that markets are inefficient. Indeed, if banks and investment banks took market efficiency more seriously, they might have avoided lots of their recent problems. Finally, MBA students who aspire to high paying positions in the financial industry have a tough time finding a job if they accept the EMH.

Via Doc and Craig Newmark.

NBER Study: The Minimum Wage and the Body Mass Index

2009-11-10T09:16:00-06:00

From David Meltzer and Zhuo Chen (HT Greg Mankiw):

Growing consumption of increasingly less expensive food, and especially “fast food”, has been cited as a potential cause of increasing rate of obesity in the United States over the past several decades. Because the real minimum wage in the United States has declined by as much as half over 1968-2007 and because minimum wage labor is a major contributor to the cost of food away from home we hypothesized that changes in the minimum wage would be associated with changes in bodyweight over this period. To examine this, we use data from the Behavioral Risk Factor Surveillance System from 1984-2006 to test whether variation in the real minimum wage was associated with changes in body mass index (BMI). We also examine whether this association varied by gender, education and income, and used quantile regression to test whether the association varied over the BMI distribution. We also estimate the fraction of the increase in BMI since 1970 attributable to minimum wage declines. We find that a $1 decrease in the real minimum wage was associated with a 0.06 increase in BMI. This relationship was significant across gender and income groups and largest among the highest percentiles of the BMI distribution. Real minimum wage decreases can explain 10% of the change in BMI since 1970. We conclude that the declining real minimum wage rates has contributed to the increasing rate of overweight and obesity in the United States. Studies to clarify the mechanism by which minimum wages may affect obesity might help determine appropriate policy responses.

So a decrease in minimum wage, which decreases unemployment when it's an effective price floor, leads to a higher BMI. This has to be a coincidence. It's hard to see the theoretical rationale for this. A change in the minimum wage really represents nothing more than a transfer of money from one group to another.

For instance, short run studies of the elasticity of low skilled labor suggest that its demand is inelastic. That means an increase in the minimum wage, even though it will reduce the level of employment of low skilled workers, will increase the income of low skilled workers taken as a group. But where does that money come from? It doesn't grow on trees. It comes from business profits and from consumer pocketbooks (through price increases). So some groups realize an increase in their money flow while others see a decrease. But they find a negative relationship.

Moreover, the authors find that the effect is significant across income groups. I would expect there to be no effect in the highest income groups. It is most likely a coincidence and what they've found is a simple correlation.

Silly Quote by Dick Armey

2009-11-10T08:15:33-06:00

Harvard has one of the most reputable Economics departments in the nation and the world, so Dick Armey's comment about Harvard (and Larry Summers) is just plain ludicrous. Greg Mankiw:

Okay, this has got to be one of the goofiest comments from a major political figure in recent weeks:
"I don’t consider Larry Summers a serious economist," [Dick] Armey said. “You can get a Ph.D. from Harvard without ever having seriously considered the subject.” (Source).
If Dick Armey wants to criticize Larry Summers or the economic policy of the Obama administration, there is no shortage of ammunition and easy targets. But saying that Larry is not a serious economist, or that a PhD from one of world's preeminent economics departments doesn't mean much, makes Mr Armey look more than a tad ridiculous.

A Profile of Schell's Brewery

2009-11-10T02:36:00-06:00

From the Fairmont (Mn.) Sentinel].

The Marketplace of Ideas in a Socialist Academics' Paradise

2009-11-09T21:45:29-06:00

Abraham Lincoln (August 24, 1855):

When it comes to this, I shall prefer emigrating to some country where they make no pretense of loving liberty - to Russia, for instance, where despotism can be taken pure and without the base alloy of hypocrisy."

Full quote here (2nd gray block, 4th quote). Washington University, 2009.

The students set up a gulag complete with prisoners, guards and barb wire on the Wash U campus.
Students constructed a memorial to the victims of socialism as a stark reminder of the horrors of socialism, and of its victims.
“We’re hoping to elevate the thinking of students about the connection between socialism, tyranny, and murder. Too often, we tend to think about state control in the abstract. This event is an opportunity to show the student body what socialism really is,” said junior Dirk Doebler, student leader of Young Americans for Liberty and lead organizer of the event. “We’re just twenty years away from the collapse of the Soviet Union’s despotic enslavement of hundreds of millions of people, yet everyone seems to forget that socialism killed over 150,000,000 people in the 20th century. All that gets lost in the convenient narrative our professors would have us believe. With this event, we’re striking down false notions. We’re speaking truth to power.”
YAL leader John Burns reported on the event today.
The university shut it down… It was too offensive.

Full post with video here. Via Glenn Reynolds.

I weep for the marketplace of ideas.

"The Man Who Predicted the Depression"

2009-11-09T15:07:00-06:00

A profile of Ludwig von Mises.

R.I.P Anniversary Berlin Wall

2009-11-09T12:04:00-06:00

R.I.P. = Rest in Pieces. The WSJ editorial staff on "why the Berlin Wall fell."

The Fall of the Berlin Wall: Winds of Change

2009-11-09T11:45:00-06:00

Growing up in the potential firing line between the US and the USSR, the members of the metal band the Scorpions had special reason to celebrate the fall of the Berlin Wall. Here is a video of their classic ballad Winds of Change which is about this historical event.

Here is the original video.

It's important to remember that this song, recored in 1990, is about this moment in history written from that moment in history. It is a song about hope and the dismantling of the the dark shroud that destroyed the hope of millions of people in Eastern Europe: the Iron Curtain.

What Does Warren Buffet Have in Common with Cornelius Vanderbilt?

2009-11-09T11:01:00-06:00

They are both railroad moguls, in a sense. Here's an interesting history of American railroads. It answers the question: what profit opportunity does Buffett see in the Burlington Northern - Santa Fe?

The First College Football Game

2009-11-09T10:00:24-06:00

"You men will come to no Christian end!" Rutgers vs. Princeton 140 years ago on Nov. 6th 1869, Allen Barra lays out a nice story on the first college football game ever played.

Note how the rules of the game were set.

Here's something I didn't know. Mr. Magoo, in a video below pitching Stag Beer, was possibly based on one of the student fans at the game.

Here is another account of that first game.