This week in research #136

Here's what caught my eye in research over the past week:

• Baker et al. (with ungated earlier version here) find that following legalisation, sports betting does not displace other gambling or consumption but significantly reduces savings, as risky bets crowd out positive expected value investments, and that these effects are concentrated among frequent bettors and low-savings households
• Alfani (open access) summarises the state of research on social mobility and income inequality in preindustrial societies, and identifies several promising avenues for new research
• Bostwick and Nguyen (with ungated earlier version here) find that when a student enrols in a triweekly (rather than biweekly) university class, they earn lower grades and are less likely to take a subsequent course in that same field
• Kaffine and Rao (with ungated earlier version here) find that the observed distribution of satellite orbits is well explained by profit-maximising satellite operator behaviour, and that collision risk plays a key deterrent role
• Yang et al. (open access) find that having daughters slightly increases the preference for gender equality and homosexual rights, using data across 39 countries from the European Social Survey
• Di Tella, Gàlvez, and Schargrodsky (with ungated earlier version here) find, using a laboratory experiment, that two strategies often proposed to reduce political polarisation on social media, removing access to the platform and exposing users to counter-attitudinal content, do not reduce polarisation and may instead produce mild increases
• Perroni et al. (open access) find, using a sample of 40,000 job vacancies in Vietnam, that physically attractive women are offered higher salaries, whereas physically attractive men are not
• Sentana and Gómez-Bengoechea comparing the behaviour of a groups of professional soccer players and inexperienced college students when they play the same two-person zero-sum game in both a soccer stadium (the field) and a video game (the lab), and find that while both groups behave consistently with the implications of mixed strategy equilibrium in the field, their behaviour rejects the theory in the lab

Are men's and women's soccer complements or substitutes?

Both my ECONS101 and ECONS102 classes touched on the subject of complementary and substitute goods this week (in different model contexts). Two goods are complements if consumers tend to consume them together. In that case, a decrease in the price of one good would increase the quantity that the consumer buys of both goods. Two goods are substitutes if consumers tend to consume one or the other. In that case, a decrease in the price of one good would increase the quantity that the consumer buys of the now-cheaper good, but decrease the quantity that the consumer buys of the other good (which is now relatively more expensive).

Often, it is easy to tell if goods are complements or substitutes. However, sometimes it is not straightforward. Consider the example of men's and women's soccer matches. Are they complements, or substitutes? If, when faced with the choice of whether to attend a men's or a women's soccer match, or both, fans tend to choose one or the other (and not both), then the matches are substitutes. On the other hand, if fans tend to go to both, then the matches are complements. Another way of thinking about this is that, when the price of one of the matches goes up, what happens to attendance at the other. So, if the ticket price for a men's soccer match increases and attendance at women's matches goes up, then they are substitutes, whereas if attendance at women's matches goes down, then they are complements.

Ultimately, whether men's and women's soccer are substitutes or complements is an empirical question. Fortunately, this 2025 article by Galila Nasser and Christian Deutscher (both Bielefeld University), published in the Journal of Sports Economics (open access), provides us with an answer. Or rather, they provide us with an answer in one particular context, which is German soccer.

Specifically, Nasser and Deutscher use data from the 2009/10 to 2018/19 seasons of the Frauen-Bundesliga, and look at the impact on match attendance when a Frauen-Bundesliga match is played on the same day as a men's Bundesliga match. They also consider whether the effect is larger when the overlapping men’s and women’s matches involve teams belonging to the same club. Their dataset contains 1,256 Frauen-Bundesliga matches, including 851 played on the same day as a men's Bundesliga match and 118 played on the same day as a match involving the men's team of the same club.

Controlling for the day of the week, week of the season, the weather, whether a UEFA Champions League match was also being played that day, and a variety of variables capturing the popularity of the match, Nasser and Deutscher find that there is:

...an approximately 15 percentage points decrease in attendance when women’s games coincide with men’s games on the same day.

A minor quibble with the paper is that when they say a 15 percentage points decrease, they really mean a 15 percent decrease. And the effect for matches played by the same club on the same day is somewhat larger, with attendance lower by about 16 percent. So, these results are consistent with men's and women's top-league soccer matches in Germany being substitutes (fans tend to go to men's or women's games, and not both). However, we can't conclude this for certain as the results are based on observational data so they are correlations, not causal. Nevertheless, Nasser and Deutscher conclude that:

For matches on the weekend, it is essential for clubs that have both men’s and women’s soccer teams in the first Bundesliga to avoid scheduling their matches on the same day.

Given that the seasons overlap substantially, and clubs in both leagues understandably want weekend matches, another option might be to make joint attendance at both men's and women's matches more attractive. Clubs with both men’s and women’s teams could offer a combined ticket covering matches played on different days, or even arrange occasional double-headers. As I note in my ECONS101 class, this sort of bundling can be an effective pricing strategy when there is heterogeneous demand across multiple products. Provided the variation in fans' willingness to pay for the ticket to the combined event is lower than the variation in fans' willingness to pay for the tickets separately, then bundling has the potential to increase total revenue overall. And that higher total revenue can then be shared between the men's and women's teams. Whether that would work here is another empirical question. Perhaps Bundesliga clubs could indulge us by running the experiment?

Farmers can't avoid high synthetic nitrogen fertiliser prices by switching to organic fertiliser

The New Zealand Herald reported yesterday:

New Zealand farmers face hefty increases in the price of fertiliser this spring as a result of the escalating US-Iran conflict and the war in Ukraine.

The Middle East plays a big role in the global fertiliser market because of its supply of natural gas and mineral resources.

Russia is also a major supplier of fertiliser.

Renewed hostilities in the Persian Gulf – and the virtual closure of the Strait of Hormuz – have driven oil prices up to about US$90 ($154) a barrel for Brent crude, the international benchmark.

Synthetic nitrogen fertiliser is generally manufactured from ammonia created using the Haber-Bosch process. This requires hydrogen, which is often derived from natural gas (mainly methane). Since the Middle East is a major supplier of natural gas, a lot of nitrogen fertiliser is manufactured in the Middle East. The current conflict in the Middle East is constraining the transport of nitrogen fertiliser from the Persian Gulf, reducing the supply of nitrogen fertiliser.

The effect of this on the market for nitrogen fertiliser is shown in the diagram below. The market was initially in equilibrium, where demand D0 meets supply S0, with a price of P0 and a quantity of nitrogen fertiliser traded of Q0. The Middle East conflict reduces shipping of nitrogen fertiliser, which decreases supply to S1. This increases the equilibrium price of nitrogen fertiliser to P1, and reduces the quantity of nitrogen fertiliser traded to Q1.

Can farmers avoid the higher price of nitrogen fertiliser by switching to an alternative product, such as organic fertiliser (compost, or manure)? Not really. Consider what happens in the market for organic fertiliser, shown in the diagram below. Before the change in the price of nitrogen fertiliser, the market for organic fertiliser was in equilibrium, where demand DA meets supply SA. The equilibrium price was PA, and the quantity of organic fertiliser traded was QA. Since nitrogen fertiliser and organic fertiliser are substitutes, and nitrogen fertiliser is now relatively more expensive (as shown above), farmers switch to the relatively cheaper organic fertiliser. That increases the demand for organic fertiliser from DA to DB, increasing the equilibrium price of organic fertiliser from PA to PB, and increasing the quantity of organic fertiliser traded from QA to QB.

So, the effect overall is that the price of both nitrogen fertiliser and organic fertiliser increase. Farmers cannot easily avoid high fertiliser prices. We can expect that to flow through into higher prices for farm produce, as well as lower profits for farmers.

How career stereotypes shape students' choice of major

What jobs do accounting majors get? How about psychology majors? Or economics majors? If you answered, respectively, 'accountant', 'psychologist', and 'economist', you're probably far from alone. When most people think about particular fields of study, they have stereotypical jobs in mind, and they're far more likely to believe that majors get the stereotypical job than any other job. Even in the case of economics, where very few graduates will go into a job with the title 'economist' (many will go into a job with some sort of 'analyst' title, like a business analyst, market analyst, or financial analyst, etc.).

A new article by John Conlon (Ohio State University) and Dev Patel (Brown University), published in the Quarterly Journal of Economics (open access) demonstrates the extent of this stereotyping. They also show using a simple survey experiment that students' stereotypical views can be changed, affecting their choice of major.

The first part of the paper compares students’ beliefs about the careers associated with different majors with actual major-career combinations in the 2017-2019 American Community Survey. Conlon and Patel then use the CIRP Freshman Survey, covering more than nine million first-year students between 1976 and 2015, to compare students’ expected careers with the occupations subsequently observed among graduates from the same cohorts. In that, they find:

...large, systematic, and persistent differences between the careers that freshmen expect to attain and the actual occupations they go on to have... We see that twice as many students expect to become artists, counselors, and lawyers (about 5% each) than actually do (2%–3% each). Four times as many students expect to become writers and doctors (2.7% and 11.1%) than do (0.7% and 2.8%).

Interestingly, the occupations that students most overestimate themselves as having are those that are rare and representative of particular majors (like writers or artists), while those that are most underestimated are those that are common alternative occupations that many majors may later hold (like teaching or business). Conlon and Patel also show using implicit association tests that people:

...strongly and systematically associate majors with their representative careers: implicit associations are 0.30–0.36 standard deviations higher for representative major–career pairs than for nonrepresentative pairs...

This supports Conlon and Patel’s interpretation that stereotyping contributes to students’ exaggerated beliefs about the connection between majors and the corresponding representative careers. Conlon and Patel then show using a theoretical model that stereotyping can increase misallocation of labour. What that means is that, given the occupation in which a graduate eventually works, that person might have been better off studying a different field. They also present suggestive evidence that links greater stereotyping with job dissatisfaction and regrets about the chosen field of study.

The welfare loss, job dissatisfaction, and regret, then motivated a survey experiment where Conlon and Patel attempt to correct for the stereotyping. The survey experiment proceeded as follows, using students from Ohio State University:

The survey began by asking students the percent chance that they would graduate with the two majors they selected as being most likely to pursue (their “top-ranked” and “second-ranked” majors). It then asked their self and population beliefs about the likelihood of each career group conditional on these two majors. Students were randomly sorted into a control group and a treatment group. Those in the control arm answered questions about their classes so far that semester and how they had (or had not) contributed to their major and career plans...

In the treatment arm, information modules provided students with the actual distribution of careers conditional on each of their top two majors according to data from the [American Community Survey]. For each major, it told them several headline numbers about the frequency of the careers they had listed as their most likely jobs if they graduated with that major...

Conlon and Patel then looked at whether assigning a student to the treatment group, where they received accurate information about the chance their top-ranked majors would lead to particular careers, affected students' beliefs about their own chances of working in each major's 'representative career'. They found that the information partially (but not fully) corrects students' misbeliefs about the chance of attaining the representative career, and that:

...reducing students’ self beliefs about their chance of having their top-ranked major’s representative job by 10 percentage points decreases intentions toward that major by 0.11 standard deviations (about 3.5 percentage points, p < .05).

So, when accurate information lowers students' beliefs about their chances of obtaining the representative career associated with their top-ranked major, their intentions towards that major, and their enrolment in that major, decline. Interestingly though, correcting beliefs about a student’s second-ranked major can make that alternative more attractive. The response therefore depends on both the information that students receive and how much they value the different careers.

That would seem to be good news for some university majors, where the 'representative occupations' are relatively common (e.g. accounting or marketing) and bad news for other majors where the 'representative occupations' are less common (e.g. journalism or film studies).

Where does economics fit in as a major? Sadly, Conlon and Patel don't answer that question, as they combine economics with accounting, finance, marketing, and other business fields. In that broad group, 73 percent of prospective majors expected to enter a business career, compared with 47 percent of graduates who actually did so. So economics may not escape stereotyping. It may simply be stereotyped as a route into 'business', rather than more narrowly as a route to a job called 'economist'. However, we don't know for sure from these results.

Would better information help prospective economics students to make better choices? On the one hand, it might deter students who see economics as a guaranteed path to one particular career, but it might attract others by showing that economics is not tied to a single occupation. Perhaps the problem for economics is not a lack of possible career destinations, but that its many potential destinations are less vivid than the single job title of 'economist'.

[HT: Marginal Revolution, back in 2022 when it was Conlon's job market paper]