The Economics of Superstardom

Labor economists use the term “superstar” very specifically, based on a wonderful paper by the late Sherwin Rosen: A superstar is one of the very top people in an occupation offering huge pay because performances are widely reproducible (through recordings, TV, movies, books, etc.). (By this definition it is hard to imagine an economist superstar!)

What matters is being the best — relatively, not absolutely. In sports events, although we make comparisons over time (Ben Hogan to Tiger Woods, for example), it’s hard to claim that there are immense differences between number one and number two; number one is just better than the contemporary number two. Last night, I realized there is one area where there is a huge absolute difference — operatic sopranos. Callas was absolutely so much better than any soprano since the 1920s! (Are there any other occupations like this?) Being absolutely the best probably helps the person’s pay; but it may hurt overall pay in a competitive occupation — who wants to watch a game if there is no doubt about the victor’s identity? Also, why watch others when you are sure you’re not seeing the best possible?


Matt B.

I don't really know anything about opera, but it seems like it's awfully hard to say someone is objectively better in a performing art, isn't it? What are you basing that on? Even if it's critical consensus, that doesn't mean that an overwhelming percentage of even enthusiasts attending performances will mean that they all enjoy the work of Callas the best.

Brent Buckner

You wrote:
(By this definition it is hard to imagine an economist superstar!)

In the first page of the Rosen paper you reference, he wrote:
Switching to more familiar territory, sales of elementary textbooks in economics are concentrated on a group of best sellers,

I think he would have counted Mankiw and Samuelson as economist superstars.

Chris

This happens sometimes in athletics. In regional boxing competitions, particularly things like the Tough Man or Bad Man contests, a fighter might be so dominant that ticket sales drop because people know they aren't going to see an even fight. This sometimes leads to the more skilled fighter having to go up a weight class or two to continue fighting, or sometimes he will get a de facto ban from the meets when promoters refuse to sign him for a fight.

Of course, when things get to the national or world level, there's always someone better.

KB

"Being absolutely the best probably helps the person's pay; but it may hurt overall pay in a competitive occupation "

Does your conjecture about pay assume that there is an absolute amount of money that goes to opera sopranos in a given year? This would create a zero sum game where if one soprano is paid more then others are paid less.

What if the existance of a superstar soprano raised the total amount of money going to sopranos in a given year? Or even the total amount of money going to the opera? While a superstar soprano is alive she may generate more interest in all of opera.

mp

Some comedians, i think jimmy pardo or doug benson, maybe carolla, have been talking on podcasts about how there used to be a lot of juggling acts, ventriloquest acts, and prop comedy acts out on the road. Now theres one juggler, one ventriloquest (jeff dunham) and one prop comic (carrot top). They make sick amounts of money and no one else even tries to compete. Pretty much exactly the phenomenon you just described.

Tristan

The one example that always stands out to me is Joe DiMaggio's 56 game hitting streak, which must be one of the least probable accomplishments of any athlete on record, and easily eclipses the next best streak by a huge margin. The next best being 45 games in a row (that same difference of 11 games covers the next 15 best.) I'd guess that the difference between getting a 45 streak and a 56 streak in pro baseball is several orders of magnitude less likely, even taking in to account DiMaggio's batting record at the time.

Of course watching an athlete who's much more reliable and consistent than anyone else isn't the same as watching someone who's 30% faster or stronger isn't nearly as exciting.

scott

Jeopardy.

Will we ever again see the like of Ken Jennings?

It's worth noting that part of the sport of Jeopardy is getting selected for the show.

Payment is roughly linearly proportional to the degree of superstardom and the length of a contestant's run.

Finally, on a given day, 2nd and 3rd place finishers get a bunch of promotional products that are a far cry in value from taking first place.

trader n

A person of any occupation (even a lowly economist) can become a superstar - if they become a media star.

Take for instance a cook. A cook has to make each dish and it gets sold and eaten. This is hard to scale.

But a chef like Gordon Ramsay is huge star, but he is a media star - not really a cooking star. How many people who know about Ramsay have actually tasted his food ? ... as opposed to say hearing Vladimir Horowitz or Jimi Hendrix ?

WholeMealOfFood

There's a whole book about this topic entitled The Winner Take All Society by Frank and Cook. I'd recommend it to anyone who is interested in this topic.

Joe

The average pay going down seems unlikely. Tiger Woods was/is almost that dominant, but ratings go way up when he enters. Huge bonus to the "supporting cast".

Jim Purdy

QUOTE:
"A superstar is one of the very top people in an occupation offering huge pay because performances are widely reproducible (through recordings, TV, movies, books, etc.)."

Is superstardom always based on huge pay for performance? What has happened to the pay-for-performance on Wall Street in recent years? Is there any correlation at all?

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Joe Fox

So who is going to be the first person to write the paper about what happens to the level of the compensation by the current golf #1 during Tiger's hiatus?

Tiger was/is more than just the best. He's the best by a wide margin. Also the majority of his gains from superstardom are not direct compensation for playing golf. He was/is making many time more in endorsements.

Vasanth

Michael Schumacher - F1 driver. He was so dominant for a 5-7 year stretch that TV ratings went down and the sport was labeled boring. The governing body had to change the points system to make the races more interesting. I doubt if there was a negative effect on the racer's incomes though.

Peter

There was an Australian Billiards player in the 1920s (I think) called Walter Lindrum.
He won so often that the governing body altered the rules of the game a couple of times so that his favourite shots were restricted.
Eventually he was forced to retire because there was quite literally no-on who could beat him. He ended his career doing demonstrations of trick shots (videos probably still exist).

Dan

You say "why watch others when you are sure you're not seeing the best possible?"

Well, seeing th best possible may be a lot more expensive than seeing someone else.

It is funny to read your comment on the superstar concept not applying to economists on the Freakonomics blog. Isn't Levitt with his book/book tour/blog/TV interviews an economic superstar? How about "development experts" like Sachs and even Hausman and Rodrik filling convention centers all around Latin America? Or Krugman with his public presence in the media? Even Friedman with Free to Choose in the 80s. No economist superstar? Really?

Tyler

@10 - Tiger Woods is not that dominant--he has won less than 30% of the tournaments he has entered in his career. Yes, that is an amazing percentage for golf, but to say it takes uncertainty out of the outcome isn't true at all.

Luca Logi

Ask any opera fan old enough: while most people were swearing for Maria Callas, there was a sizable minority convinced that Renata Tebaldi was better. The jury is still out, but Callas was at the top of her form only for a short period and Tebaldi turned out to be a much more reliable performer over a much longer time and a wider repertoire. And in no way a second choice if compared with Callas.

UC

Similar to #13--Kareem in college and the implementation of the no-dunking rule.

dormilon

Have you not seen Anderson Silva dominate the middle weight division in MMA over the past four years? It is not clear that his "absolute" dominance has significantly degraded ticket (or pay-per-view) sales; I simply have not reviewed the data. One could reasonably argue that many simply want to witness this guy's ability to destroy otherwise fierce MMA competitors...despite a tremendous certainty in the outcome.

On Callas, I am not so sure that one can easily defend her dominance relative to those other occupations that require direct competition. Her putative dominance is still highly subjective despite the preponderance of opinions. In fact, since when does the opinion of a majority constitute a certainty (despite their expertise)? If a majority of scientists opine on a particular hypothesis, does this alone constitute certainty?

In my book, watching Mr. Silva readily dispatch his opponents ABSOLUTELY defines his dominance...no subjectivity here.

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ravi dvr

Osama bin laden.

Ponder and you'll understand why.