Disequilibrium in the Market for Economics Reporting?
An interesting finding from a recent Gallup poll, reporting on, well, reporting. There appears to be substantial excess demand for insightful reporting on economic issues:
Why haven’t savvy journalists (or their editors) arbitraged away the different returns across topics?
I’ve got five possible stories:
- The Business Cycle: This is only a temporary phenomenon, reflecting the fact that the economy is particularly interesting right now. If this were true, one might expect circulation numbers for the Financial Times, the Wall Street Journal or The Economist to be particularly high right now. Are they?
- Barriers to entry: Writing about economics requires specific, and difficult-to-acquire, knowledge. Those barriers definitely exist. But economics reporting just doesn’t seem that hard, relative to writing about health, war or terrorism.
- Quality versus Quantity: These data speak to the quality of economic journalism, not the quantity. It’s easy to increase quantity; it is quality that is inelastically-supplied, by the few handful of journalists who actually understand what is going on.
- Insider-Outsider dynamics: It’s actually easy to supply more high quality economics reporting-hire some of those unemployed PhD. economists. But the insiders-the employed journalists in other departments-object, and instead, the usual norm is to move workers. When one beat needs more reporting, you typically move journalists from another area. Again, quantity can rise, but not quality.
- Revealed versus stated preferences: Reading about the economy is like eating vegetables. We all say we should do more of both. But we don’t actually do much of either. And so farmers don’t grow extra vegetables, and newspapers don’t produce more economics reporting.
I think number five rings true. I would be interested in data on number one (are circulation numbers for the Financial Times, the Wall Street Journal or The Economist currently particularly high?). Numbers two or three might be part of the story, but each of these only works if the dynamics of number four are part of the story.
Or perhaps you have a better explanation. Comments are open.