Tuesday, July 3, 2012

Evidence Economists Influence the NBA but not Safeway

A recent paper by Price and Wolfers showed that in the NBA " that more personal fouls are awarded against players when they are officiated by an opposite-race officiating crew than when officiated by an own-race refereeing crew. " The paper got quite a bit of press and another paper showed you could make money betting on teams that had a higher percentage of players the same race as the referees. So did the paper have any effect on the NBA. First the NBA claimed their referees weren't bias and that they didn't do anything to address the issue since there wasn't an issue. Now a new paper presented at the Westerns Economics Association Meetings with Pope, Price and Wolfers shows that "that racial bias continued to exist in the NBA prior to the media coverage, but then completely  disappeared during the four years thereafter" So not proof that the NBA listened to Price and Wolfers, but it is consistent that they did.

Now this morning I was out trying to buy ice, because my house hasn't had power since Friday (it's Tuesday). I go to 7-11, the gas station and Safeway and all are sold out of bags of ice. The worst was Safeway still had signs up advertising a sale on ice. Typically economists suggest when demand for a product rises due to outside forces (like say ones that knock out power for 1 million people) ice prices should go up. Some people call this gouging. In fact many did in Silver Spring. I say raise the price so people only buy the ice that is necessary. 

I also did ice arbitrage. I filled up large soda cups with ice that only cost 25 cents and brought them home instead of a bag of ice. Of course now I've got the Power (back)

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