I stumbled across this data from ESPN which lists college athletic expenses and revenues for 2008. There are two things that stood out for me, one is that some schools spend over a $1 million in recruiting costs (that seems high even by today’s standards). Secondly, you may think that spending a lot is necessary in order to get greater revenues (yes and no). Some teams will fill their stadiums even if the team is just alright, Notre Dame sells out all of its games and Michigan seats over 100,000 most of which is sold out whether they’re playing Michigan State or Appalachian State (sorry had to put that in). For these big programs it’s not the ticket revenues that the wins are for, it’s the donations to the school. Donations tend to go up when the teams are winning because people want to be associated with a winning program. For schools such as Alabama, Florida, or Oklahoma State the money given in donations exceeds revenue from ticket sales. Take a look at some of the numbers in the files below, if anything seems interesting to you please let me know.
At the time of writing this post, the missing Malaysian Airlines plane is still missing. If you think you can help, there’s an excellent crowd sourcing campaign currently underway to help identify parts of the plane, give it a look and see if you can help: http://digitialglobeblog.com.
In the days following the plane’s disappearance the major “breakthrough” that was leaked to the press was that two passengers were flying on stolen passports. Immediately, this created fears of terrorism and hijackings, etc. These fears were allayed when it was revealed that the two individuals were intending to seek asylum (hence they wanted to live). The long run consequences are more gradual, what this means is that passports will be checked and rechecked, we may even see a need to share more and more information about ourselves in order to verify that we are who we say we are. After the September 11th attacks what we experienced (and are still experiencing) is increased security and screening to make sure we’re not carrying anything dangerous. Now we’re going to be screened to make sure we’re not carrying anything dangerous AND we are who we say we are. What this means is that more and more honest and well intentioned customers will incur the greater cost of waiting in lines and having their unmentionables sifted through while they’re questioned about where they grew up. For customers that don’t want to incur that cost they do have a choice, the choice is to get “pre-screened”. This involves background checks and personal interviews, a higher and more invasive form of screening. However, customers are going to pay to give up their privacy, the reason is that they have a cost imposed on them that they view as worse than giving up their privacy (the cost being increased lines at the airports).
So now that authorities have to screen customers for dangerous items AND verify identities the demand for pre-screening will grow and the amount of privacy will decrease.
By now you’ve probably heard about that millions of Target customers may have had their credit and/or debit card information stolen If you haven’t heard then I suggest you take a look at this article by the Washington Post. As one of those who may have had their information stolen, the consequences are fairly scary but the impact will be felt by more than just those who had their information stolen. The breach has created a situation where the same person can be both a bad customer and a good customer. If someone has stolen my info then there is a bad Kashef Majid out there that will attempt to fraud not only me but other retailers as well (the real Kashef Majid is the good anti fraud type). To differentiate the good customers from the bad customers retailers such as Target are going to ramp up their security systems which will be financed by higher prices and they’ll impose greater emphasis on us to demonstrate who we really are. Have you ever tried calling your bank only to be denied service because they couldn’t verify that you really are you? To differentiate good customers from bad customers, retailers will have to expend more money and that increased cost will be passed on to consumers. Luckily it’s not a situation that will spiral downwards, over time customers will choose credit card companies and retailers that offer them greater security and in doing so we will all benefit from decreased “bad customers” in the long run.
At UMW we have an honor code and we take it fairly seriously. The honor code acts as a signal in the marketplace that a UMW grad has a code that they abide by. I was talking to a colleague of mine who had found out that a student had cheated on a minor assignment and subsequently my colleague had reported the student to the honor council. The student was upset, being caught didn’t upset her as much as the perceived disproportionate response by the professor. The assignment was only worth a few marks, was it really worth jeopardizing the student’s entire academic career over one small assignment? There are people who can use a moral, ethical, or even philosophical argument to say yes. I can’t speak intelligently on any of those subjects so I’ll make an economic argument. The professor isn’t trying to harm the student that cheated, he’s trying to protect the students that didn’t cheat. Here’s how this works.
At some point the student that cheated will either go to grad school or find other gainful employment. Two things can happen now. Firstly, if the student can break the rules in college and get away with it then this increases the probability that the student will engage in similar behavior after they graduate. Secondly, the student hasn’t actually learned the material that they claim to know. Let’s assume a couple of things at this stage, in regards to businesses and grad schools 1) they don’t want people that break the rules, and/ or 2) they want people that know what they say they know. The challenge for businesses and grad schools is how to differentiate the good (honest) grads from the bad (dishonest) ones. An honor code can differentiate a UMW grad because it’s a signal that this student has spent four (or more) years abiding by a code where they acted honestly and admirably. In a market where so many people only do what’s in their own personal best interest it’s hard to find those who will do honorably even when they can benefit by not acting honorably. If this signal that is the honor code is going to become a student’s advantage then we have to enforce it rigorously. If a student can cheat at a school that values the honor code then really we’re losing a big advantage over schools which take a more lenient stance to cheating and/ or which do not have the honor code that we do. In today’s market where grad schools and jobs are increasingly competitive wouldn’t it be great if students had a competitive advantage simply by acting honorably? This can and does happen but it only works if we take a stand against those that would violate it.
National Signing day represents a unique market. In no other market do buyers do so much to signal their quality. Colleges are buying the services of football recruits (who are selling their services). If you’re a college graduate you’re a seller, you are trying to sell your services to a buyer (a potential employer). In the realm of college football it is multimillion dollar college programs that are trying to convince buyers (football recruits) to allow them to sell them their football scholarships in exchange for their services.
