Economics 2.0

"For decades, many of the brightest graduates in economics sought their fortune in finance. In coming years, they will seek it in marketing, as the Internet gives all companies the information-rich environment once available only in financial markets."

That’s the prediction of Hal Varian, Chief Economist at Google, and economist at the University of California at Berkeley. Varian discusses why marketing is the new finance in this Wall Street Journal article from last year.

Below, Varian gives a lecture on the "Economics of Internet Search", from this year's Calit2-sponsored series, "Behavioral, Social, and Computer Sciences Seminar Series" - Friday, May 23, 2008. Following on from the last post about 'The Weather and Work', apparently "it's good for Google if the weather is bad, but not too bad..."

Students' Earnings Expectations

There is a new working paper by César Alonso-Borrego and Antonio Romero-Medina (from the Economics Department in Universidad Carlos III de Madrid) on students' earnings expectations. The authors provide evidence on the perceived economic value of higher education to college students in terms of their reported expected and shadow wages. The results show that predictions for expected wages are similar across gender and become closer to actual wages as students approach graduation. The authors suggest that this is consistent with an improvement in the quality of student information used to forecast wages.