Bundling Athletics Into Higher Education

If you did not like that story about how cable companies bundle their product (so you have to pay for a bunch of channels that you wont use) you probably will not like this one. Basically we are doing the same thing in our athletic fees at universities.

The Economics of Higher Education

What should society’s role in Higher Education be? If left to the free market is the equilibrium quantity of degrees floating around in society the socially optimal amount? If society should try to increase higher education (by subsidizing it) how should that be done exactly? Pay the schools, pay the students tuition, give tax breaks, etc… (One good topic to consider for your position paper)

On a similar note how should endowments to universities work? They are often of a staggering amount. This is the case for Penn State, only the money to be used seems to be constrained so it is only used for an ice hockey team (and arena). But how can this be? Basically in the same day’s news I read about how Penn State is getting $88 million at the same time they will increase tuition next year by 5% (in an economy with no inflation). (This is another good position paper, what is the role of sports in higher education)

On another side note, I admit I have not had the time to look into the issue much but this is bound to cause problems with Penn State’s athletic department in other areas. Title IX basically says the percentage of male athletic opportunities is equal to the percentage of female opportunities. This constraint is especially significant in big football teams since there is no female equivalent. I wonder how Penn State will end up complying with Title IX. (The ‘fairness’ of Title IX is another good position paper)

The Flexibility of Economics

When I mention to people that my current research is an investigation into point shaving (in this case NCAA Basketball) I often am asked how that is done. I can tell by the look on people’s face that my explanation is not a very good one. This article explains it in lay terms far better then I can. I tip my hat to the author. He did a great job.

The actual working paper can be found in our department website here. Any comments or thoughts are most welcome (please do so in person).

A Penny's Worth

I really like this rant via Freakonomics. It is about the use of pennies in our economy. We should get rid of them, yet they remain. Why is this? The video rants about it.

Cost of Baseball Stadiums

Earlier we had a post about how professional teams cry poor in order to get financing of the stadiums which grant them enormous financial benefits. What about the costs of these stadiums to society? This is a great article. The money quote:

The old Giants Stadium, demolished to make way for New Meadowlands Stadium, still carries about $110 million in debt, or nearly $13 for every New Jersey resident, even though it is now a parking lot.

This is an excellent final position paper if this think interests you.

Paying for What You Watch?

Imagine you go to the store to buy an apple. When you get to the checkout line you are told in order to buy that apple you also have to buy three other products. You refuse and walk out the store. The next store tells you the same thing and it quickly occurs to you that in order to buy an apple you have to buy a bundle of other products. You have no choice to buy simple that apple (what is called ‘a la carte’).

This is exactly what cable is doing. They are telling us that if we want to watch the lifestyle network we also have to buy ESPN (and vice versa for people like me). What if we could buy only the channels we actually want to watch? How much would it cost us? This article gives you an idea. Congress has refused to require a la carte pricing for cable channels (probably because the cable industry is making a lot of money off of charging us money for things we do not want to watch). (this should be against anti-trust laws)

Financing of Baseball Stadiums

For those fans of MLB you may know that the teams in poor locations cry poor whenever an issue of collective bargaining comes up, and every team cries poor whenever the issue of stadium spending comes up. The arguments usually sound something like “If this city does not build this stadium for us we will not be able to remain competitive”. When collective bargaining comes about the talk sounds like “We cannot afford these players and need a cap on salaries just to stay competitive”.

The natural response is “prove it by opening your books” but no team has ever done this in the history of the leagues. Now their dirty little secrets have been leaked out to deadspin. The inside financial numbers of the Pirates, and Marlins (two of the lowest payroll, and smallest markets) among others have leaked out and show they actually make quite a bit of money (or some would say they are sitting on the money that was given to them via revenue sharing).

Now if you pay taxes that eventually went to the Marlin’s or Pirates’ stadiums (which as Pennsylvanian residence I believe many of you have) and your local government is living in these tight times wouldn’t you be demanding an investigation into why they got this money? Did they lie to get it? Did the politicians know they were financially sound and gave them the money anyway? Is the federal government justified in their investigation into if a player took steroids (or more accurately lied about taking them under oath) but not investigating the appropriation of tens, often hundreds of millions of dollars to a seemingly thriving business?

Congrats to deadspin for doing what players unions and traditional newspapers have failed to accomplish. Very impressive considering how long the unions and papers have been trying to get this info, and how short a period of time deadspin has been around.

Books as an Infant Industry

For all of my Journalist majors out there (I have quite a few in my Tuesday Thursday class) this is a post for you. Basically the issue is: how so you go from the invention of the printing press to a thriving industry for books? This is an interesting read.