Posted Friday, Jan. 4, 2013, at 11:59 AM
I'm in San Diego for the American Economics Association's annual meeting, and so naturally I wanted to grab a cup of coffee in the hotel lobby before the 8AM sessions started. Imagine my surprise to find that as of 7:45 AM the lines were punishingly long and there was no way I'd be able to get to the session on high-skill immigration if I waited around.
Sad. And a result of a shocking lack of economics. Clearly the price charged should have been much, much higher. You only have the logistical capacity to serve so many people between 7:30 and 8:00 AM, so you ought to serve the people with the most willingness to pay. Let folks who don't care about being on time to an 8AM session just wait around and buy their coffee later after prices fall. Let those who place a strong premium on both coffee and punctuality pay through the nose. It seems so simple and yet even at a conference of economics nobody wants to apply economic ideas.
By much the same token, I rudely snuck a peak or two at some letters of recommendation I saw a professor carrying around before conducting interviews and none of them seemed to make any mention of the marginal product of the potential workers in question! It's all quite shocking.