Entertainment utility from skill and thrill
(Job Market Paper -- Current Version).
This paper uses revealed preference methods to estimate demand for non-instrumental information in entertainment. I do this by examining the "thrill" associated with the trajectory of an event, which includes both suspense and surprise, and the "skill" of performers in an event. I apply the theory presented in Ely et al. (2015, JPE) to conduct an empirical analysis that examines the effect of thrill on consumer attention. I extend the Ely et al. (2015, JPE) framework by examining spectator preferences for characteristics of the performers themselves, which I call "skill." I use game-specific, high-temporal frequency television ratings data from the National Basketball Association (NBA) to measure spectator responses to skill and thrill. First, I find that a doubling of skill present in a game leads to an approximately 11% increase in initial viewer turnout, while the expected thrill of a game has no statistically significant impact. Next, I show that thrill during a game increases viewership by 7-30%, while a doubling of skill on the court during a specific portion of a game leads to a 1.9-2.4% increase in viewership, depending on specification. Interestingly, I find a negative interactive effect between suspense and skill, suggesting that heightened suspense leads to differentially higher viewership with lower skill on the court. The findings suggest that skill of information-conveying agents primarily impacts viewership on the extensive margin (across games), while thrill is highly time-dependent and primarily impacts viewership on the intensive margin (within games). These findings have important implications for entertainment media companies, including leagues and television broadcasters, and advertisers.
The Economic Value of Popularity: Evidence from Superstars in the National Basketball Association (Current Version).
Many industries are impacted by "superstars," where a select few individuals add tremendous economic value. This paper estimates fan willingness-to-pay for superstars in the National Basketball Association, and, in particular, distinguishes between demand for player skill versus player popularity. Using microdata from an online secondary ticket marketplace and plausibly exogenous player absence announcements, I find 4-16% ($7-$42) reductions in prices when superstars are announced to miss games. Additionally, LeBron James and Stephen Curry exhibit even larger impacts when isolating away game absences--21% ($75) per ticket for LeBron and 18% ($55) per ticket for Curry. The results suggest popularity is a more significant determinant of willingness-to-pay than skill, and in line with previous literature on superstars, popularity predicts price impacts convexly. This paper provides a novel methodology to estimate superstar value, and has implications for players, leagues, franchises, and ticket companies.
Estimating worldwide benefits from a genetically improved banana: The use of CRISPR-Cas9 to control Fusarium Wilt Tropical Race 4
(with Felipe de Figueredo Silva, Freddy Magdama, Matthew D. Potts, Ramon Leonardo Espinel Martinez, and David Zilberman).
Working paper available upon request. Revise and Resubmit at American Journal of Agricultural Economics.
A big challenge to agricultural research is enhancing plant resistance for new plant diseases. Plant pathogens emerge sporadically and are a major source of crop production losses. In this paper, we develop a methodology to assess the economic benefits and impacts of developing and commercially introducing a genetically improved crop for an emerging plant disease. This framework incorporates both the dynamics of the spread of the disease as well as the diffusion of the solution in deriving the resulting expected net benefit, as well as its impact on farmers, producers who are affected by the disease, and producers who are not affected. We consider the time lag between the emergence of a disease and the availability of the new technology, which may be affected by regulatory and technical uncertainty. We apply our framework to the global market for bananas, which continues to be heavily impacted by Fusarium oxysporum f.sp. cubense Tropical race 4 (FocTR4). One possible solution to this problem is to use CRISPR-CAS9 gene modification technologies to develop disease-resistant varieties, yet timing of availability is uncertain due to both technological and regulatory uncertainties. We simulate welfare losses in the global market for bananas under different scenarios of disease and adoption of a solution. Our results indicate that without adoption of a solution, welfare losses range from US$ 40-83 billion, but depending on how quickly a solution is adopted, these losses can be reduced by 71-94%. The expected benefit of adopting a solution is equal to $45.37 billion dollars.
The political economy of COVID-19
(with Jacob Lefler and David Zilberman). Revise and Resubmit at Applied Economic Perspectives and Policy.
Our analysis suggests that strict shelter-in-place measures introduced in the U.S. were reasonable based on initial estimates of risk to life. Using U.S. and global data, we find that mortality risk tends to be higher in locations with older populations, higher population densities, colder winter weather, and higher travel rates. Our estimation and examination of the raw data suggest that some developing countries have lower mortality risks than developed countries. These findings lead us to question the draconian social isolation policies in India, and other developing countries and suggest that political economic considerations may rationalize these policies. We also find that there has been underinvestment in prevention and mitigation that could have reduced the cost of adaptation and suggest that there is a lesson for climate change policies.
Works in Progress
The impact of environmental quality on recreation: Evidence from secondary ticket marketplace microdata for outdoor professional sporting events
(with Hal Gordon).
The impact of Bay-Area sugar-sweetened beverage taxes on consumption and nutrition
Are consumers willing to pay to avoid price uncertainty? Evidence from the vehicle leasing market