John J. Siegfried

Empirical studies of entry and exit: A survey of the evidence

Over 70 empirical studies of entry and exit patterns covering eleven different countries generally support the expectation that entry is more frequent in more profitable, rapidly growing industries, and slower where the absolute costs of capital required to build a minimum efficient scale plant are imposing. Scale economies, excess capacity, and limit pricing receive little empirical support as entry impediments. The evidence concerning the effects of advertising and R&D intensity is confusing.Exit is faster where profits are lower, and slower where durable specific (sunk) capital costs are more important. Exit and entry are strongly correlated, probably due to displacement (of incumbents by more efficient entrants) and vacuum effects (in which entrants are enticed by the prospects of selling to uncommitted customers abandoned by a recent exit).

The Status and Prospects of the Economics Major

The objects, methods of instruction, content, and accomplishments of the undergraduate major in economics at institutions of higher education within the United States are discussed. Recommendations are provided for teaching students to “think like economists.”

Economic Power and Political Influence: The Impact of Industry Structure on Public Policy

Political scientists have devoted considerable attention to the ways in which economic power can be translated into political influence. Yet there has been little empirical research capable of confirming or denying general hypotheses about the political implications of various aspects of economic structure. This article seeks to begin filling this gap by first identifying five aspects of economic structure likely to affect an industrys political influence (firm size, industry size, market concentration, profitability, arid geographic dispersion) and then testing these aspects by analyzing how well they account for variations among industries in their success at securing public policies of benefit to them, especially in two policy arenas: federal corporate income taxes and state excise taxes. What emerges most clearly from this analysis is an empirical confirmation of the popular hypothesis linking firm size to political influence with respect to both federal corporate tax policy and state excise tax policy. Beyond that, we find reasonably strong negative relationships between political influence and market concentration, profitability, and industry size – the latter lending interesting support to Mancur Olsons argument about the political disabilities of large groups. In the process, the article suggests a potentially fruitful new way to get beyond the case study approach in studying the impact of economic power on political influence, and thus a way to bring to bear more powerful methodological tools on this central issue of modern democracy.

Male-Female Differences in Economic Education: a Survey

Many researchers have found that males and females perform differently on economics tests, with the females often achieving lower scores. This phenomenon has puzzled and troubled economic education specialists for well over a decade. In this article Siegfried summarizes many studies that have included student gender as a variable. This in itself would be a valuable contribution to the literature, but Siegfired goes further and deals with questions of the adequacy of research designs and other factors that must be taken into account. Thus, this piece should provide useful guidance to researchers who wish to include the gender variable in their designs.

Thinking about Competitive Balance

Simon Rottenberg long ago noted that the nature of sports is such that competitors must be of approximately equal ability if any are to be financially successful. In recent years, sports commentators and fans, Major League Baseball itself, and even some economists have expressed growing concern about the widening disparities between team expenditures and the growing concentrations of postseason contenders and championships. In this article, the authors compare different concepts of competitive balance, review the theoretical and empirical scholarship on competitive balance and the relationship between payrolls and performance, describe the natural forces and institutional rules and regulations that contribute to observed distributions of playing performances, and evaluate the likely effect of several popular proposals—payroll and salary caps, luxury taxes, and increased revenue sharing—on competitive balance. Although the focus is on baseball, frequent comparisons are made to other sports leagues including collegiate athletics and individual sports.

The demand for minor league baseball

ConclusionsOverall our model explains 80 percent of the variation in attendance at minor league baseball games for 27 teams over the 1973–77 seasons. This is a remarkable proportion of the variance to be explained by a pooled cross-section-time-series model with 86 observations. Demmerts model explained 58 percent of the variation in per capita attendance in major league baseball over the 1951–69 period and Nolls model explained 69 percent of the variation in absolute attendance at major league baseball games during 1970–71. The F-ratio indicates that our overall model is statistically significant.Our empirical estimation of the demand for minor league baseball attendance supports the general hypotheses one derives from the theory of consumer demand. As expected, the quantity demanded is negatively related to price; the elasticity of demand is less than one. Per capita income has little effect on attendance, but the quality and excitement of play seem to be important to fans. Surprisingly, winning has no effect on attendance. Promotional efforts appear to be effective in generating attendance, but paid advertising seems to be wholly ineffective.

Entry and exit in United States manufacturing industries from 1977 to 1982

Since the late 1960s, the focus of industrial organization research and antitrust analysis has shifted steadily away from the number and size distribution of seHers and toward the condition of entry. Although the enthusiasm of Baumol, Panzer, and Willig (1982) for exclusive reliance on entry conditions to evaluate market competition has not settled in as the dominant paradigm (Shepherd, 1984), entry has occupied a growing role in market analysis in each succeeding decade since World War II (see, e.g., Geroski et al., 1990).

Teaching and Publishing as Determinants of Academic Salaries

Having examined the reward structure at the University of Wisconsin, Siegfried and White report on the relative rewards for teaching and research in the Economics Department. The variables included in their model of salary determination are years of experience, publications, teaching productivity (based upon teaching evaluation scores), and administrative duties. The authors question the hypothesis that good researchers make good teachers, and analyze the relative merits of concentrating upon research, teaching or administrative work. Finally, they discuss the implications of their findings for economic education.

A Note on the Local Economic Impact of Sports Expenditures

Public subsidies for sports stadiums and arenas are often justified as a means to boost the local economy. The argument relies on historical local economic impact multipliers that misrepresent the effect of consumer expenditures on professional sports. Sports expenditures are subject to extraordinary consumer substitution away from other local expenditures, and they suffer unusually large first round leakages from the local economy because, inter alia, players export their earnings to the locale of their permanent residence. This note illustrates the extent of such leakages using information about the permanent residence of players in the National Basketball Association. While 93% of average employees live in the area where they work, only 29% of NBA players do the same. The illustration shows that a standard local economic impact multiplier exaggerates the stimulative effect of sports expenditures by over 400%.

Long-Run Trends in Economics Bachelor's Degrees

Although shocks to the number of economics bachelors degrees have persistent effects, the series eventuallv reverts to a stationarv mean, which has been about 2.2 percent of the bachelors degrees in the United States from 1948 to 1993.