Category Archives: Falling outside economics

Technology and a running breakthrough

On one weekend in October, Kip Kipchoge ran the first sub-two hour marathon, and Brigid Kosgei broke the women’s record. These races, and a spate of others, were won with versions of the Nike Vaporfly that apparently adds at least a carbon fiber plate and returns 4% to 5% more energy to a runner’s stride. (I have a particular interest in this sport, having set a some school records and trained with an Olympic medalist.) The media reaction has generally been to call for some sort of limitation on the use or development of the shoes.

I view these shoes as just another technological innovation on the continuum in track & field that stretches back to the first spiked shoes to starting blocks in the 1930s (Jesse Owens dug holes in the track) to fiberglass poles (that work much like these shoes) to synthetic tracks (which catalyzed the world record onslaught in Mexico City). We can’t imagine the sport today without these innovations. Of course, there also has been the unwelcome use of performance enhancing drugs (PEDs – think steroids) that threaten athletes’ health. The question is how should we decide what innovations are acceptable and which go to far or give an unfair advantage.

I propose that we use two criteria (which are consistent with the IAAF’s current rule):

  1. Is the innovation widely available at an affordable cost? While some of the past innovations had limited availability, that usually was for a short period. Most were available to all competitors as a specific competition and spread from there.
  2. Can the innovation create physical harm, either immediately or at a future date? PEDs are the most salient example of an innovation that fails this test. In the case of PEDs, that certain individuals decide to take on the health risk forces other athletes to take on the same risks if they want to be competitive.

Swimming faced a similar existential question when the LZR suits a decade ago. FINA effectively banned that innovation, on the basis that the suits added undue buoyancy.

The Vaporfly doesn’t appear to add any outside aid–it just makes the shoe more effective at returning the energy put into it. It’s just a step further in the long trail of new tracks and shoes that have made runners faster. At the heart of improving athletic performance is new technology, sometimes in new products and sometimes in new training methods. So on that basis the new shoe should be allowed.

But the other key question remains–will the technology be widely available at a reasonable cost? Nike holds the patent and has not announced whether it will license it to other manufacturers. If Nike decides that it will only allow runners that sign agreements with the company can wear the shoes, then the shoes should not be allowed. Such exclusivity clauses can lead to damaging the sport in other ways, such as narrowing the sponsorship base.

This issue highlights a larger problem in our world economy–the rise of the dominance by intellectual property owners. Patent and copyright laws are a core cause of the undue accumulation of wealth that has characterized the last four decades. It’s not clear why Walt Disney’s great grandchildren should still be benefiting from Fantasia 80 years later. Drug patents block important innovations, and may even be suppressing research and development. Does such longevity really incent innovation?

Nike’s control of this new running technology, while in a seemingly frivolous pursuit, highlights this issue as a society-wide problem.

Two parts to these questions: First, do you think that this technology breakthrough should be barred from running competition, and why? Second, do you think that current intellectual property protections are too strict and lead to undue accumulations of wealth? Let us know your thoughts and add any useful references.

 

 

Who says economists aren’t funny…

Willingness Toupee

norwoodscale

David M. McEvoyO. Ashton Morgan and John C. Whitehead

No 19-01, Working Papers from Department of Economics, Appalachian State University

Abstract: In this paper we tackle the hairy problem of male pattern baldness. We survey balding men and elicit their willingness to pay to move from their current sad situation to a more plentiful one. Then we comb-over the results. What’s the average willingness to pay to move from a glistening cue ball to a luscious mane? About $30,000.

Key Words: mullet, skullet, comb-over, ducktail, Beatlemania, buzz cut, whiffle, pageboy, attribute non-attendance

The sole reference: Carilli, Anthony M., “Scarcity, Specialization, and Squishees,” Chapter 1 in Homer economicus: The Simpsons and economics. Joshua Hall, ed., Stanford University Press, 2014.

Some sample footnotes:

  1. As is standard in the discipline, author order is determined by reverse Norwood Baldness Scale.
  2. The “stone piece” was a block of dark slate tied around the head to achieve the appearance of a full head of hair. While there are no sources of any such thing actually taking place, the authors imagine that it must have happened.
  3. “In ‘Simpson and Delilah,’ Homer attempts to pursue an executive position in which he doesn’t have a comparative advantage. Mr. Burns confuses Homer with a young go-getter and promotes him to an executive position after Homer has managed to scam himself some Dimoxinil–a miracle cure for baldness–and grow some hair.” (Carilli 2014, p. 11)
  4. It is important to note that the authors did not even bother looking for other studies.

7. Both of these models can be found in the NLogit manual (www.limdep.com) or via Google Scholar. They’re legit but we really don’t want to add any references besides the Simpsons book.

9.Referee #2 may try to claim that you cannot estimate WTP from a mixed logit model with a price parameter distribution that includes negative values because these respondents’ WTP will be undefined. Since distributions that constrain WTP to the positive realm do not perform as well statistically as the normal (we didn’t really check this) and (likely) generate goofy WTP estimates, we choose to present WTP estimated with the mean coefficients. The gullible, er, reasonable, reader will just go along with it since the MXL WTP number is so close to the ECLC WTP estimate and this lends reliability to our data.

Repost from Environmental Economics: Standing by ‘An Economic View of the Environment’

Rob Stavins is a leading environmental economists at Harvard. His blog was hacked after a post critical of Trump last fall. This is a repost of Stavins’ explanation.

Source: Environmental Economics: Standing by ‘An Economic View of the Environment’