Tuesday, December 30, 2008

Most Beautiful Girl in The Room: The Economics of Being A Part Time Model

I have been watching Flight of The Conchords with my wife over the last few days, how did I not watch this show earlier. I’m a big fan of silly songs, but I was thinking about the song most beautiful girl in the room.

Give the song a listen for yourself, before you read on. So in the song Jemaine declares his love for the most beautiful girl at the party. As he notes she’s so beautiful she could be a “part time model”, but she would still have to keep her day job.

So why would there be part time models, part time musicians, and part time actors. One explanation is that being a model, musician or actor is like a tournament. Top members of those fields make tens of millions of dollars, while other struggle. They continue with that struggle for the hopes of the big payoff. Edward Lazear and Sherwin Rosen, 25 years ago documented this phenomenon in business where CEOs make many times more than Vice Presidents (see this Forbes Article). Similarly, Steve Levitt of Freakonomics fame showed that drug dealers earn very little (in fact below minimum wage) except for King Pins at the top who earn lots.

So people are part time models in hopes of the big payoff. Now go rent Flight of the Conchords

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1 comment:

Mark Miller said...

This is a good series; there are lessons about economics all over the place in action that one can observe. My personal favorite is the "Drive By" episode, a perfect example of a market imperfection that results from racism (in this case, against New Zealanders).