I’m pretty excited to say that last week I committed to attending Princeton University’s Economics PhD program this fall. Obviously I have a lot of people to thank for their advice and influence, but here is not the best forum for that.
I do hope to write a bit more here about my experience in the application process, perhaps as a guide to students applying from non-research or lesser-known universities.
Just bragging a bit, but here’s some of the crap I’ve sold on eBay recently:
- My broken Zune MP3 player (sold for parts), which stopped working months ago: $50.
- My crappy point-and-shoot Kodak Z712 camera, which I bought for $105 refurbished off eBay four years ago: $58.
- My idle three-year old HTC myTouch 3G: $82.
I certainly didn’t make a profit on anything here, but without the magic of eBay exposure they would have been left decaying in my closet until they were worthless. Also magical is the fact that all of these have been functionally replaced by my smartphone.
If you’ve taken a look at the Academy Award Best Picture Nominees for 2011, you might have noticed that none of them were smash hits at the box office. In fact, according to the worldwide gross data available at www.boxofficemojo.com, we find that this year’s highest ranking nominee, The Help, managed only 32nd place in 2011. This is a historic low:
Best Picture Nominee Worldwide Box Office Grosses, 1989-2011
Yearly rank of Worldwide Gross among all movies each year taken from wwww.boxofficemojo.com. For fun, I've emboldened movies that I've already seen.
|Year||Top Ranking Best Picture Nominee||Rank||Best Picture Winner||Rank
|2010||Toy Story 3||1||The King's Speech||13
|2009||Avatar||1||The Hurt Locker||93
|2008||Slumdog Millionare||14||Slumdog Millionare||14
|2007||Juno||22||No Country for Old Men||31
|2006||The Departed||14||The Departed||14
|2004||Million Dollar Baby||21||Million Dollar Baby||21
|2003||LotR: Return of the King||1||LotR: Return of the King||1
|2002||LotR: Two Towers||1||Chicago||12
|2001||LotR: The Fellowship of the Ring||2||A Beautiful Mind||12
|1999||The Sixth Sense||2||American Beauty||9
|1998||Saving Private Ryan||2||Shakespeare in Love||9
|1996||Jerry Maguire||9||The English Patient||11
|1994||Forrest Gump||2||Forrest Gump||2
|1993||The Fugitive||3||Schindler's List||4
|1992||A Few Good Men||7||Unforgiven||13
|1991||Beauty and the Beast||3||The Silence of the Lambs||5
|1990||Ghost||1||Dances With Wolves||4
|1989||Dead Poets Society||5||Driving Miss Daisy||13
That’s as far back as the data goes on the website, but my guess would be that this year’s class of nominees holds this record over the 84-year history of the Academy Awards. The ostensible trend is that the tastes of the Academy are diverging from those of the global consumer base, but this is really only a cursory glance into this notion. I just found it kind of fun to think about.
It also looks like this year’s winner will beat out 2008′s The Hurt Locker as the least profitable Best Picture by rank: The Artist, which currently stands an 84% chance of winning this year’s Best Picture according to Intrade, is ranked 104th in worldwide gross so far this year.
A couple caveats:
- There are still a few films in this year’s class which are still in theaters in some locations. Therefore, it’s possible that The Help will move up another spot or two.
- Using Worldwide box office statistics probably inflates action films and deflates the arthouse-type films which have been nominated in recent years.
And a few final thoughts:
- Has there been a study done on demonstrable effects of piracy on different strata of films? [EDIT: The answer to this, of course, is yes.] In an attempt to analyze consumer psychology, I would guess that the ability to pirate makes a consumer much less likely to purchase or rent a DVD of a marginal film that she isn’t sure she’ll like. I wonder if the increased knowledge of and availability of torrent trackers could be linked to an increasing divergence in the financial success of more predictable films (sequels, remakes, Superhero films) and more risky ones (arthouse, original screenplays, etc.).
- Among this year’s nominees I’ve seen only The Descendants, Moneyball, and The Help, and I wasn’t really impressed with any. I don’t profess to have refined tastes for film, but my favorite movies of the year have been 50/50, The Guard, and Rango. Last year I was pretty obsessed with Winter’s Bone and True Grit.
eBay is a marketplace I don’t frequent often enough to understand fully, but I’ve found it a fantastic place to peddle my junk. A recent sale of mine provides an example of the uninformed buyers that frequent it.
My listing of a brand new top-of-the-line SD card went for $33.00 on eBay, when the same item is very clearly available from a number of actual vendors for less than $30 shipped. I can’t think of any reason why an individual would prefer my sketchy listing to that of a reputable company aside from their ignorance of the various price-comparison websites.
Going with the theme of impossibly great deals, it looks like Public Chicago’s $1 Hotel deal is open for registration again. I managed to score one of these reservations the first time they tried this a few weeks ago, and apparently I was one of a lucky few. I’m looking forward to spending a birthday weekend in this luxury Ian Schrager hotel for pretty much nothing.
To have a chance at this the second time around, simply add register your email in the above link, and keep an eye out for the email when the deal goes live (came in around 9:30 AM last time).
I’m not sure where I want this blog to go yet, but I definitely want to be able to brag about one of my hobbies: getting great deals on things. In this case, it’s relevant to some national news with implications in economics.
A few weeks ago I bought a round trip ticket from O’Hare to LaGuardia on Spirit Airlines (see my itinerary/receipt). If you check Kayak for similar flights 5 weeks in advance, the best price among other competitor airlines is around $185. That’s literally three times what I paid, and the fact that I made a purchase at identical rates when I flew to NYC last December proves that this is no fluke.
How can they do it? By exploiting one of the principles of introductory economics: price discrimination. On top of a base price of $65, the Spirit Airlines fee schedule is nigh ridiculous: you’ll find yourself paying for storing bags in the overhead compartment ($45), for choosing your seat ($18), and for anything more than a dixie cup’s worth of water ($2).
The basic idea is that the company can more properly exploit the slope of the demand curve across consumers. As an admitted cheapskate, my willingness to pay for a leisure trip to New York is probably below the market price as presented by Kayak. But given the opportunity to purchase a ticket without various conveniences “priced in” to the base cost, I’m willing to make the purchase.
Spirit exploits price discrimination in many other dimensions (discounted bag fees for paying in advance online, a $9 Static Fare Club, and numerous coupons for narrow windows of travel such as the $50 codes I found for each of my purchases), and the prices distribution among eventual passengers is much wider than your average legacy airline. In the end I’m able to piggyback off those with greater willingness to pay.
Low-rate airlines are not at all new – check out this podcast for a short and entertaining explanation of the industry. But they do lead to a couple interesting lines of thought.
- As grateful as I am for Spirit, there are many others who find the broken paradigm of more finely granular prices appalling. The notion of ‘price fairness‘ is something I like to think about, and I tried to express an interest in exploring it in-depth in my NSF proposal. As Richard Thaler points out, companies could stand to put more effort into predicting consumer responses to price strategies.
- Earlier this week Spirit Airlines sent out a hilarious email, encouraging me to protest the new legislation which forces airlines to include all mandatory taxes in the advertised fare price. In the case of my ticket to New York, the actual fare price was advertised as $4, which sounds much more impressive than the eventual one-way price of $32. The new law invalidates schemes such as Spirit’s $9 Fare Club, and generally hurts the sticker shock value of all discount airlines. My potential-paper-radar is still under construction, but I don’t doubt that someone will use this as a natural experiment to measure the consequences of tax salience.