Ben Bernanke’s reappointment as Chair of the Federal Reserve Bank remains in the hands of the U.S. Senate. Many are calling for a negative vote. I (and Ed Glaeser in the linked piece below) beg to differ and would like to point out that central bankers are not and should not be in charge of solving all the ills of the economy nor can they create all such ills.

http://economix.blogs.nytimes.com/2010/01/25/in-defense-of-bernanke/#more-49539

You beat me to it. The video is both fun and illuminating.

Uwe Reinhardt, in today’s New York Times Economix Blog argues that Americans do not have a good sense of balance in terms of understanding the role of government. In short, they want incredible security, especially with regard to health care, but want someone else to pay for it.

http://economix.blogs.nytimes.com/

Have you ever wondered how much a sports team is worth to the community? Many people think about direct benefits in terms of jobs, sales of novelty headwear, Economists typically find that on net, such benefits aren’t very big, or are even negative.

One thing that has been tough to measure is the value that individuals place on having the team, and a recent piece in the Southern Economic Journal has done just that for the Minnesota Vikings. According to a piece in the Wall St Journal,

Sports teams sell their facilities as economic-development projects that create jobs and generate tax revenue. But a slew of studies have shown that publicly subsidized stadiums–usually paid for by selling bonds and paying the cost and interest with tax revenue-rarely return the money governments put into them. Teams continue to argue, often successfully, that they are worthy of subsidies because they are a source of civic pride and purpose.

But what is that worth? Economists Aju Fenn and John Crooker tried to answer the question in a study published in July 2009 in the Southern Economic Journal.

The two used “contingent valuation methodology,” which is a nerdy way of saying they surveyed people and used statistical models to turn the answers into an average price Minnesotans place on the Vikings.

The result: The Vikings’ “welfare value” is $702,351,890– $530.65 for each of the roughly 1.32 million households in Minnesota.

The study was conducted in 2002, and the figures are not adjusted for inflation (or for the recent acquisition of quarterback Brett Favre)

The contingent value method was pioneered by environmental economists, trying to get at the value of non-market amenities, from clean air to a day of fishing to preserving the Arctic from oil development. It relies on, of all things, estimates of the compensated demand curve. So for those of you laboring through Econ 300 right now, this is one application of that whole “prices rise and we give you just enough income to keep you on the same indifference curve” business.

One of the major criticisms of the method is that it’s easy to talk the talk about what you’d be “willing to pay,” but it’s a much different thing to actually plunk down the cash.