College admissions: deadlines and congestion

One modern convenience for high school seniors applying to college in 2008 is the Common Application, which lets them cut down on the number of times that they have to type in their social security numbers and middle names. But, as the end-of-2008 application deadline approaches, the fact that many people wait for the deadline combines with the fact that many now use the Common Application to create some congestion, the NY Times reports: Applications for Colleges Clog System

"On Tuesday, from 6:30 to 6:50 p.m., and on Wednesday from 9:45 to 10:45 a.m., there was a slowdown at the Common Application Web site, which handles online applications for some 350 colleges and universities. With the clock ticking toward a Jan. 1 deadline, the briefest delay can feel like a full-blown crisis to panicky high school seniors. ...

"More than a million high school seniors use the Common Application. Last year, the organization said that more than 171,000 applications were filed in the 72 hours from Dec. 30 through Jan. 1., 75,000 of them on Dec. 31.
Seth Allen, dean of admission at Grinnell College and president of the Common Application, said many students worked on their applications for weeks but waited until the deadline to submit them.
“I think having an online application has exacerbated waiting till the last minute,” Mr. Allen said, “and if they’re getting timed out on the site, on New Year’s Eve day, that’s certainly going to make them nervous.” "

Marriage Market among a slice of the wealthy

The NY Times reports on the International Debutante Ball at the Waldorf-Astoria: Glamour Still Rules, but With Fewer Debutantes .

"...shortly before midnight, the young debutantes, each flanked by a civilian and military escort, ascended the stage for a deep curtsy."

The "introduction" or "coming out" of young women as debutantes at 18 used to be the announcement in a certain part of high society that they (the young women) were old enough for first marriage.

Market for honey: "honey laundering"

'Honey laundering' beats US tariffs on Chinese food products (I couldn't resist a new criminal activity with such a great name...)

"As the name suggests, honey laundering involves disguising drums of the sticky stuff from China by selling it to a third party—usually a distributor in another part of the world—then re-packaging it and re-exporting it, so that its source remains unknown. ...
As harmless as honey laundering might sound, health officials say that unless something is done, the problem could result in a repeat of the tainted baby milk and pet food scandals that dominated headlines this year—this time with honey. The reason dates back to 1997 when Chinese bee hives were almost wiped out by a bacterial epidemic. Instead of destroying the hives, beekeepers treated them with chloramphenicol, a toxic antibiotic... The practice has since been outlawed by China’s Ministry of Agriculture, but even today, some Chinese honey remains tainted—hence the fact that random checks on shipments are carried out at US ports. "

Marriage market in Iran

The marriage market in Iran is not proceeding as planned, the Guardian reports: Premarital sex on rise as Iranians delay marriage, survey finds

"The survey also revealed that the average marrying age had risen to 40 for men and 35 for women, a blow to the government's goal of promoting marriage to shore up society's Islamic foundations."

The rise in age of marriage might be a result of religious barriers being raised to courtship between unmarried men and women. But there are other hypotheses to consider:

"Many blame economic circumstances for their failure to marry, citing high inflation, unemployment and a housing shortage along with cultural traditions that expect brides' families to provide dowries and husbands to commit themselves to mehrieh, an agreed cash gift."

"However, Hojatoleslam Ghasem Ebrahimipour, a sociologist, told Shabestan news agency that the trend was due to the availability of premarital sex, and feminism among educated women. "When a woman is educated and has an income, she does not want to accept masculine domination through marriage," he said."

Pawn shops attracting wealthier customers

The WSJ has a story whose title and subtitle sum it up: People Pulling Up to Pawnshops Today Are Driving Cadillacs and BMWs : Well-to-Do Turn to Last-Resort Lenders; Putting Up Diamonds, Dumpsters as Collateral

Not only are the number of customers for loans increasing, so are the number of defaults:
"This year, the number of first-time pawnshop users is up 10%, according to Mr. Adelman of the pawnbroker trade group. Owners say the rate at which people are coming back to retrieve property and pay off loans has fallen about 10%. That leaves the store on the hook to sell the goods."

So pawn shops may be a place where a larger variety of goods than in the past will be recycled in the continuing credit crisis.

Eminent domain

A story in the NY Times has a striking photo of a private home in Seattle located in a niche in a large commercial building. The large building had to be built around the small one after developers were unable to convince the owner to sell them the last piece of land they needed to build a conventional, rectangular building.

Governments, unlike private developers, have the right of eminent domain, which allows them to compel landowners to sell their land for public purposes. The idea is that some public projects, like highways, would be difficult or impossible to complete if each plot of land on the proposed route would have to be acquired on the private market before a road could be built. Eminent domain is meant to solve the coordination problem involved in assembling a large landholding (since there are seldom large, road-shaped plots of land vacant where new roads would be useful in populated places). It is also meant in part to solve the "holdup problem" associated with the fact that, once a large tract of property has been assembled, the missing pieces have very high marginal value, so that the last properties needed for a large project would become especially difficult or costly to acquire.

Governments can use eminent domain for private projects that they take to be in the public interest, e.g. not just highways, but privately owned railroads also. Recently the State of New York agreed to use eminent domain to acquire the last plots of land for Columbia University to expand its campus north of its current Manhattan location, on land that Columbia had mostly assembled over years of private acquisition.

Harvard acquired land in the Allston neighborhood of Boston in the 1990's, without eminent domain, by buying lots secretly, through a third party, as they became available. The thought was that the last lots would have become very expensive if it became known that Harvard was purchasing land for a large project.

Update: Steve Leider urges me to include the recent expansion of eminent domain authority to include more strictly private projects. He writes:

"You probably ought to mention the Kelo decision (http://en.wikipedia.org/wiki/Kelo_v._City_of_New_London ) which substantially expanded what counts as "for a public purpose" in terms of using eminent domain for a private project - basically increased tax revenue counts. The decision is very controversial, since it basically allows ED for just about anything, and many are worried that developers will try to wield influence with lawmakers to get ED invoked. There was lots of discussion at the time on law blogs like volokh.com (here are some of their recent posts on the subject http://volokh.com/posts/chain_1201469127.shtml )"

Market for used books

The easy availability of internet shopping for used books hasn't just affected used book stores, it is having an effect on the sale of new books as well, much like internet downloading of music affects sales of recorded music. Here's a story from the NY Times: Bargain Hunting for Books, and Feeling Sheepish About It . It makes the point that people can (and do) now sell relatively new books once they have read them, and that this impacts stores that sell new books, and of course authors, since neither get a share of resales. Increasing the thickness of the used book market increases the 'velocity' of a book, i.e. the rate at which new books change hands. Each copy of a book gets more readers, but each title sells fewer new copies.

"A book search engine like ViaLibri.net can knit together 20,000 booksellers around the world offering tens of millions of nearly new, used or rare books."

"Andy Ross, the former owner of Cody’s, told me that buying books online “was not morally dubious, but it is tragic. It has a lot of unintended consequences for communities.”
Mr. Ross said he realized that Cody’s was doomed when he noticed that in the last year he hadn’t sold a single copy of that old-reliable for undergraduates, Kant’s “Critique of Pure Reason.” Students presumably were buying it online. Sales of classics and other backlist titles used to be the financial engine of publishers and bookstores as well, allowing them to take chances on new authors. Clearly that model is breaking. Simon & Schuster, which laid off staffers this month, cited backlist sales as a particularly troubled area. "

New York City Middle School Choice

New York City has a centralized school choice process for high schools, but middle schools are another story. The New York Times reports: New York’s New Choices Raise Stakes for Middle School

"Over the past two years, the city has taken steps to standardize middle-school admissions, organizing fairs in each district, printing directories to clarify options and creating a uniform timeline. Applications preprinted with each fifth grader’s test scores and attendance record were distributed this month and are due, with choices ranked, on Jan. 9. For the first time, the applications will be processed using a $9.7 million system being developed by Vanguard Direct for prekindergarten through high school admissions.
But these changes have also highlighted how wildly admissions policies vary between schools and districts.
For example, of the 16 middle schools in District 2, which covers the Upper East Side and much of Lower Manhattan, one, Greenwich Village Middle, considers grades, interviews, writing samples, teacher recommendations and “group problem-solving tasks,” while another, Middle School 131, weighs attendance and punctuality, among other factors.
In District 12 in the Bronx, 14 middle schools select students randomly or with preference for certain addresses, while five others are open only to students in certain neighborhoods. Two Queens districts do not use the city’s applications, simply placing students by geography (though some schools within them have their own applications).
In fact, there remain middle schools scattered throughout the city that have been allowed to keep their own separate processes, including seven in Manhattan that accept children from across the city."

Charity at a price

Nicholas Kristof's NY Times column on Christmas day, The Sin In Doing Good Deeds, begins with the question about repugnant transactions:

"If a businessman rakes in a hefty profit while doing good works, is that charity or greed? Do we applaud or hiss? "

He writes, of a book by Dan Palotta on the subject:
"Mr. Pallotta’s frustration is intertwined with his own history as the inventor of fund-raisers like AIDSRides and Breast Cancer 3-Days — events that, he says, netted $305 million over nine years for unrestricted use by charities. In the aid world, that’s a breathtaking sum.
But Mr. Pallotta’s company wasn’t a charity, but rather a for-profit company that created charitable events. Critics railed at his $394,500 salary — low for a corporate chief executive, but stratospheric in the aid world — and at the millions of dollars spent on advertising and marketing and other expenses.
“Shame on Pallotta,” declared one critic at the time, accusing him of “greed and unabashed profiteering.” In the aftermath of a wave of criticism, his company collapsed. "

Kristof later touches tangentially on a lively debate among development economists:
"There are lots of saintly aid workers in Rwanda, including the heroic Dr. Paul Farmer of Partners in Health, and they do extraordinary work. But sometimes, so do the suits. Isaac Durojaiye, a Nigerian businessman, is an example of the way the line is beginning to blur between businesses and charities. He runs a for-profit franchise business that provides fee-for-use public toilets in Nigeria. When he started, there was one public toilet in Nigeria for every 200,000 people, but by charging, he has been able to provide basic sanitation to far more people than any aid group. "

Aside from debating the merits of non-profit versus profit making organizations in fostering development, development economists have become interested in the question of whether it might further the goals of charity to charge a small price for some goods (water purifiers, or mosquito nets), rather than giving them away for free. Aside from the issue of how such supplies are financed, the question has been raised about whether charging for such goods might better put them in the hands of those who would actually use them, or even might make people more likely to use them.

Two randomized trial field experiments have reached different conclusions on this subject, in two countries, for two different goods.

The first of these, by my colleague Nava Ashraf, and James Berry, and Jesse M. Shapiro is "Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia."
They find that, for a home water purification product, in Zambia "...higher prices screen out those who use the product less," i.e. that when a price is charged, more of the product ends up being actually used.

The second paper, which uses the Ashraf et al. experimental design to study the distribution of insecticide-treated mosquito nets in Kenya, is
"Free Distribution Or Cost-Sharing? Evidence From A Randomized Malaria Prevention Experiment" by Jessica Cohen and Pascaline Dupas. They conclude
"... our results suggest that in some settings free distribution might be as
cost-effective as cost-sharing, if not more."

Markets and fraud

You can't read the news these days without thinking about fraud, and how market designers should think about it. I don't just mean headline grabbing Ponzi schemes of unprecedented proportions either, but run of the mill misbehavior. Part of the answer involves regulation, legislation, law enforcement, and the profession of accountancy. There's even an Association of Certified Fraud Examiners.

Scott Kominers (an aspiring market designer who is applying to grad schools this year, and looks like a hot prospect) draws my attention to a case that might fall under the heading of environmental activism: Bidder said it was easy to rig government auction.

Scott writes:
"Apparently, "Tim DeChristopher, 27, a University of Utah economics student and environmental activist," infiltrated the government oil and gas parcel auction. 'He snapped up 22,500 acres of parcels between Arches and Canyonlands national parks that he doesn't plan to develop or even pay for. He also drove up prices on other bids by hundreds of thousands of dollars.' Proof that those who do not practice safe market design are doomed to be beaten by economics students."

Lifesharers: organ donation as a club good rather than a public good

My earlier post today drew a comment from the executive director of an organization, LifeSharers, with an interesting approach to promoting deceased organ donation. In economist-speak, they want to increase organ donation by changing it from a public good to a club good.

Deceased organ donation is a public good in the sense that everyone is better off in expectation if everyone else is willing to donate their organs when they die, but no one receives any direct benefit from donating his organs after death (and there must be perceived costs to donation, since not everyone is a donor).

Economists often worry about how to provide public goods (which is one reason for the invention of taxes: the fellow who mows the lawn in a public park is likely a city employee, but there's no problem in getting people to maintain their own, private lawns...)

In between public and private goods are "club goods," like a park or country club that is funded by members, and is only open to members and their guests. The idea of LifeSharers is that organ donation can be a club good: members indicate that they are willing to donate their organs, giving first preference to other members.

The LifeSharers site has references to some of the many articles that discuss this or similar ideas favorably in the context of organ donation. (I can't put my finger offhand on an unfavorable reference, but I recall seeing some arguments in the medical ethics literature that question whether you should always be happy giving preference to a club member in favor of a non club member, when there might also be many other features that distinguish them...)

As a practical matter, there are obviously obstacles to making a voluntary club good out of a public good that only benefits a member with very low probability. The LifeSharers FAQ includes the following:
Q. How many LifeSharers members have died and donated organs?
A. We have not yet had a member die in circumstances that would have permitted recovery of his or her organs.

Whatever your views on the market design issues, the holidays are a good time (when families are gathered) to let yours know that you would like to be an organ donor, so that they will be able to act on your wishes if it comes to that.

Incentives for organ donors, continued

Two eminent transplant docs, Drs. Frank Delmonico and William Harmon, have sent me an open letter expressing their concerns about proposed legislation described in a recent WSJ editorial (which I blogged about here). Dr. Delmonico, a transplant surgeon, is a man of many parts, including being past president of UNOS, and a founder of the New England Program for Kidney Exchange, and one of the most active speakers on the "against" side of the debate about compensating organ donors. Dr. Harmon, a transplant nephrologist, is the Chief of the division of Nephrology and a Professor of Pediatrics at Children's Hospital in Boston. Here is their letter:

The recent Wall Street Journal (WSJ) editorial “Wait Listed to Death” portrays an unrealistic picture of organ transplantation in the United States and proposes a change in our national policy that the rest of the world considers unethical and repugnant. The WSJ is recommending a market for organs which is the basis of legislation now proposed by Senator Specter of Pennsylvania.

Senator Specter’s legislation would lift NOTA’s restrictions on the payment of “valuable consideration” for organs from any “actions” by any level of government (from federal to tribal) that aim to increase the number of organs for transplantation. These “actions” could include authorizations for organizations—whether for-profit or nonprofit—to run incentive programs, different from one state to another, with no federal regulatory oversight.

Thus, the Specter legislation introduces a radical change after more than 50 years of transplantation that has always considered donated organs to be a gift. Benefits such cash equivalents would be permitted that could include stocks, bonds, housing, motor vehicles, tuition, funeral costs, tax incentives, etc. These “benefits” are no different than cash in soliciting individuals to be organ donors.

We commend Senator Specter’s concern about the imbalance of organ donors and candidates awaiting transplantation; but the WSJ editorial exaggerates that imbalance by citing statistics that are not true: a large proportion of those who die “while waiting” are not really active candidates and would not be helped by a system of financial incentives for organ donation. Moreover, approximately 40% of those that are dying on the list are in need of hearts, livers and lungs that will not be affected by markets for living unrelated donors. An eBay offer for lung donors, as the WSJ misrepresents, is not the issue; but a market for kidneys is an international concern.

These markets have been tested in many parts of the world. The single consistent result of those experiments has been the abuse of human rights. For that reason, the international transplant community was recently convened in Istanbul to combat organ trafficking and transplant tourism. The result was the Declaration of Istanbul that condemns transplant commercialism, because it targets the indigent and impoverished and inevitably leads to inequity and social injustice.

The Istanbul Declaration is now having success by regulatory authorities closing rogue transplant centers and prosecuting unethical doctors.

Importantly, in the United States, volunteer efforts such as the “Collaborative for Organ Donation” initiated by Secretary Thompson, have resulted in a major increase in deceased organ donors by appropriately educating both professionals and donor families. The expansion of these voluntary efforts has not yet reached its maximum potential.

Legislation can also support live donors by programs that do not currently exist. Federal protections for live donors to have job security, assured donor leave, and health and life insurance for donation-related events, would provide donor care and remove obstacles for those who wish to be organ donors.

Legislation must also consider provisions for organ failure prevention. The National Kidney Disease Education Program is an initiative of the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), National Institutes of Health (NIH), and the Department of Health & Human Services (DHHS) that can perform blood pressure screening and an inexpensive urine analysis to detect patients with hypertension and kidney dysfunction and treat them before the necessity of dialysis or transplantation.

Please join us in supporting legislation that will be a model testimony for the rest of the world. Otherwise, the legacy of transplantation is at risk if the United States endorses market programs that permit payments for organs; it will immediately and irreversibly open the door to a resumption of human rights abuses in many parts of the world.



NB: here is the 2008 Istanbul Declaration to which the letter refers.

The market for economics: what should economists study?

The Boston Globe has a story in today's Ideas section about whether academic economists will and should redirect their energies to focus more on events like the current crisis (and less on the "luxury goods" of more academic or more microeconomic topics): Paradigm lost--Economists missed the brewing crisis. Now many are asking: How can we do better?

It's always good for individual economists to think about how they want to direct their efforts. A big crisis like the current one will surely cause some people to redirect their work to the new (and old) questions that it raises, and the new opportunities it presents for studying them.

But I am reminded, at times like these, that science is an incremental business with its own internal agenda. We don't always make the most progress by studying the most important problems directly. We often choose problems to study by some combination of their importance and their tractability. That is, sometimes we choose subjects to study because the tools (or the data) have gotten to the point where we can make progress on them, not because they have grown in importance.

I recall reading similar articles during previous crises. One that sticks with me was by an author who had looked at a recent issue of the American Economic Review, and complained that none of the articles were relevant to the stagflation we were then experiencing. Economists ignored important questions, he complained, and concentrated on small beer. I remember casually thinking of writing a reply along the lines of "I just looked at a recent issue of the Journal of the American Medical Association and noticed that all the articles are about relatively small scale problems, none of them directly addresses how to cure the major problem of medicine, which is Death."

My advice to young economic researchers is to keep your eye on the important questions you would like economics to be able to solve, but don't feel you have to take the steepest path up the mountain, feel free to look for ways to make the ascent step by step.

Marriage market: dowries

The previous post got me thinking about dowries and their role in marriage markets: the paper I like best is "Why Dowries?" American Economic Review 93, no. 4 (September 2003): 1385-98, by Maristella Botticini and Aloysius Siow.

They argue that dowries make the most sense in agrarian societies in which daughters move to their husband's family upon marriage, while sons stay and invest in the family business. Thus parents who wish to support both sons and daughters give dowries to daughters and bequests (inheritances) to sons (instead of bequests to both, which would give sons less incentive to invest in running the family business...). As societies become less agrarian, and sons become less likely to remain in the family business, it becomes more efficient to treat sons and daughters more similarly and e.g. invest more in human capital by sending them both to college, etc...

Marriage market: Middle East

Head of Palestinian clan offers Iraqi shoe-throwing journalist a bride

"The head of a large West Bank family wants to reward the Iraqi journalist who lobbed his shoes at President George W. Bush by sending him a bride. 75-year-old Ahmad Salim Judeh says if journalist Muntadhar al-Zeidi is interested the family is willing to take one of its eligible daughters to Iraq along with her dowry. ... Al-Zeidi has become something of a folk hero since throwing his shoes at President Bush at a Sunday press conference."

Repugnant gambles

Justin Wolfers has a blog post at Freakonomics in which he observes that the Australian Federal Treasurer regards bets about the recession repugnant if placed on a book making site, although fine if placed in options markets. (This even though the bettors on the bookmaking site apparently are of the opinion that Australia will avoid a recession...)

Competition among airports

London's Heathrow, Gatwick, and Stansted airports are presently run by BAA Ltd, which also runs the Edinburgh and Glasgow airports in Scotland. The Telegraph reports on the decision of the British Competition Comission to dismantle this monopoly by requiring BAA to sell two of the three London airports and one of the Scottish ones: Delays could be cut by BAA sell-off of Gatwick, Stansted and Edinburgh airports

The Competition Commission reports, together with BAA's replies and other comments are here.

Incentives for Organ Donors

Apologies for this unusually long post: to make sense of this you have to look at bits of Federal legislation. The one sentence summary is that Senator Arlen Specter is preparing to propose an amendment to the National Organ Transplant Act to allow States to offer some (limited) incentives for organ donation...

The Wall Street Journal has an editorial today on incentives for organ donors: Wait-Listed to Death: Improving incentives for organ donations.
It is written in support of an amendment to the National Organ Transplant Act of 1984 being proposed by Senator Arlen Specter, part of which famously stated:

"TITLE 111-PROHIBITION OF ORGAN PURCHASES
SEC. 301. (a) It shall be unlawful for any person to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce."

The WSJ editorial observes that under current interpretation of the Act,
"Kidney transplant recipient Sally Satel has noted that burial and cremation expenses can be provided when a body is donated to science -- as long as it isn't used to save the life of a current patient."

Because the phrase "valuable consideration" could include much more than cash payments, the NOTA has already been amended to make clear that it does not preclude kidney exchange. The Charlie W. Norwood Living Organ Donation Act [Public Law 110-144] signed into law in December, 2007, amends the sentence of the NOTA quoted above by saying
"Section 301 of the National Organ Transplant Act (42 U.S.C.274e) is amended—(1) in subsection (a), by adding at the end the following:‘‘The preceding sentence does not apply with respect to human organ paired donation.’’"
(Note: the phrase "paired donation" is used in official circles to avoid the use of the word "exchange" in kidney exchange, to further separate it from any involvement with "valuable consideration.)

The amendment to be proposed by Senator Specter includes a further amendment of that sentence. (I don't think the proposed bill is on the web yet, this is a quote from a preliminary version that crossed my desk.)
"Section 301 of the National Organ Transplant Act4 (42 U.S.C. 274e) is amended—5 (1) in subsection (a), by striking the last sentence and inserting ‘‘The preceding sentence does not apply with respect to human organ paired donation or a government incentive to increase the supply of donated human organs.’’" (emphasis added). The proposed amendment also increases penalties for non-governmental buying and selling of organs for use in transplantation.

The WSJ notes that the amendment is motivated in part by the fact that
"After Pennsylvania passed a pilot program in 1994 to pay burial expenses for organ donors, state employees refused to implement the law for fear of federal prosecution."

However the italicized portion of the amended sentence is arousing some opposition because it seems to open the door to other sorts of government incentives, of a kind recently opposed by Pope Benedict and by the National Kidney Foundation.

Debate over the proposed bill looks likely to be a public forum in which issues of repugnant transactions will play a visible role.

Partly in anticipation of this (and after I posted the above), Sally Satel informs me that I've been working from an early draft of the proposed amendment. The new draft includes a summary stating
"A BILL
To prohibit human organ trafficking, to prohibit the misuse of immigration and government identification documents in furtherance of organ trafficking, to prohibit attempted organ trafficking, to mandate restitution for victims of organ trafficking, to create a civil remedy for victims of organ trafficking, and to clarify that laws that honor and reward organ donation are not preempted by Federal criminal law and acceptance of such government benefits is not criminal." (emphasis added)

The relevant parts of the bill (see para 3 below) now appear to rule out cash transfers even from government programs (although I'm not a lawyer...)"

"‘‘(2) GOVERNMENTS ENCOURAGING ORGAN DONATION.—This section and section 301 of the National Organ Transplant Act (42 U.S.C. 274e) shall
not—
‘‘(A) apply to actions taken by the Government of the United States or any State, territory, tribe, or local government of the United States to encourage organ donation; or
‘‘(B) prohibit acceptance of such a government benefit.
‘‘(3) CERTAIN STATE LAWS.—This section shall be construed to preempt any State law that authorizes the payment of cash to induce organ donation or otherwise authorizes the sale or purchase of a human organ for use in human transplantation.’’"

Academic marketplace: Recession at Yale

Yale's president, economist Richard Levin, has written a sensible letter to the Yale community about dealing with the sharp drop in Yale's endowment, in which he takes a long term view of faculty hiring:

"Second, we will continue to recruit faculty. Authorized searches in the Faculty of Arts and Sciences will proceed, and the deans in each of the professional schools will work with the Provost to strengthen their faculties. We do not want to lose the momentum of recent years, and we believe that it will be to Yale’s long-run advantage to continue to recruit outstanding and diverse faculty. This said, we will need to be judicious in authorizing new positions and filling vacancies, and departments will have to make a strong case for searches that are not yet authorized."

Bankruptcy

Contracts are shaped in part by the legal framework that determines what happens when contracts break down. The long time scholar of bankruptcy Michelle White has a timely new NBER working paper "Bankruptcy: Past Puzzles, Recent Reforms, and the Mortgage Crisis." (It is a revised version of her 2008 Presidential Address to the American Law and Economics Association.)

One arresting sentence:
"By the early 2000’s, more people were filing for bankruptcy each year than were graduating from college, getting divorced or being diagnosed with cancer."