Thursday, March 27, 2014

Did UT Arlington Hold Up its Tenants?

The College Park District at UT Arlington is a 20 acre mixed use development that opened two years ago. It includes It includes our new basketball arena, student apartments, parking garages and 27,000 square feet of street-level retail space. The Star-Telegram, our local newspaper, now reports that this space was leased out to six food based on projections of attendance at games and events that were 50% higher than has materialized.
“Probably, that number was driven by an overestimation on our part as far as the ability to bring in a certain number of external events. It takes more time than we had realized,” Hall said. “I think it’s important to point out that the Dallas-Fort Worth area is a very competitive market when it comes to external events.” 

Now three of the restaurants have closed and others are behind on payments. Did they invest based on inflated customer traffic promises from the university? Maybe they needed to look ahead and anticipate being potential victims of holdup.

Monday, March 24, 2014

Why wont laid-off NY teachers take new jobs?

Its the incentives stupid:

New York is the only city in the U.S. where teachers are guaranteed pay for life even if their school closes and they no longer have a permanent job. The policy costs the DOE more than $100 million per year in salary and benefits. Those teachers go into the Absent Teacher Reserve pool, where they can be used as substitutes. The average salary for an ATR pool teacher? $82,000, with some making $100,000. Some teachers have been in the pool since 2006. 

Friday, March 21, 2014

Thwarting Innovation in Sunscreen

One consequence of strict FDA rules on drug approvals is that it is really expensive to improve sunscreen. The Washington Post has a new story titled "FDA review of new sunscreen ingredients has languished for years, frustrating advocates." The rules protect against allowing the marketing of a product that is not safe and effective, but at the expense of not allowing the marketing of some products that are safe and effective. Approvals of bad products come back to haunt an agency but denials of good products typically do not. This leads bureaucrats to tend to be over-cautious. Fortunately in this case, we can observe the product in use elsewhere.
“These sunscreens are being used by tens of millions of people every weekend in Europe, and we’re not seeing anything bad happening,” said Darrell S. Rigel, clinical professor of dermatology at New York University and past president of the American Academy of Dermatologists. “It’s sort of crazy. . . . We’re depriving ourselves of something the rest of the world has.”

Since 10,000 Americans die of melanoma every year, this delay has real consequences for consumers. How many people did the FDA kill this year?

Hat tip: Alex Tabarrok

Make the rules or your rival's will: Seattle bans ride-sharing to protect taxis

Seattle is trying to slow down innovation to protect incumbent firms
There's simply no reason for this, other than to protect the legacy taxi providers. If consumers want those app-based services, why are they being blocked? And, of course, because so few cars will be available, those services become a lot less desirable (less likely to have a car available nearby, etc.). The end result is that it sucks for everyone. People wanting to get places will have fewer options. People who might want to earn money as a driver cannot. These new innovative companies are held back. The only "winners" are the current taxi owners who have less competition.

Make the rules or your rival's will: New Jersey bans Telsa to protect car dealers

New Jersey said the electric car company Telsa, which wants to sell direct to consumers, must instead use a costly dealer network:
because these laws benefit both the politicians in charge and local dealerships, which tend to have strong lobbying power, they stay in place.

Tuesday, March 11, 2014

Some Economics of Sex

The Austin Institute has produced this short video describing some of the economics of sex. It includes a description of how how "the pill" has changed the nature of male/female relationships. To view the video in Youtube click here. (This is perfectly safe for work.)