Internships are overrated

I’m continuing my series on how to stand out as an economics students. Last week I did a video on my vision of building while you’re in school. Then on Wednesday I posted a video where I demonstrated researching an economic puzzle: Why did Twilight Eclipse make more money at the box office than Harry Potter and the Deathly Hallows Part I?

Below you can find the next video in that series. I discuss the best research questions for economics majors, giving two key principles.

Also, along with these videos, I published an essay entitled Internships Are Overrated. I outline why internships are overrated, how it came to be so, and what I think students should do instead (spoiler alert: build something).

Shampoo License Economics

Should you need a license to shampoo hair? Some New York bureaucrats think so. Many hair salons use shampoo assistants to clean hair, but such assistants have never received formal training. The bureaucrats are trying to issue a mandate that would require the assistants to get 500 hours of training, which would cost over $13,000 (not counting foregone wages during the training).

Why are they requiring this?

Let’s think through this. Who benefits from this? There haven’t been any safety or health violations connected to shampooing, so the marginal benefit to public health is small.

But what about that $13,000? New York state currently has 22,997 hair salons and 4,847 barbershops. If just one shampoo assistant from each business had to pay for training, the training programs would get $370 million. And there are only 61 beauty schools…

Large benefits concentrated in the hands of a few people, with the costs spread out over society? Sounds like public choice theory! And indeed, it is. Turns out three out of the four bureaucrats pushing for the license own beauty schools. The details are available in this report.

Epic Games vs Apple/Google

Have you seen the anti-trust case Epic, the maker of Fortnite, is waging against Apple/Google? Epic added a feature to Fortnite where players could make payments in the game. The payment system circumvented the Apple/Google payment systems, which charge 30% of all transactions. Because it tried to compete on payments, Fortnite was removed from the app stores.

This has the potential to be the Microsoft anti-trust case of this generation. Microsoft did something similar with web browsers, preventing Netscape and Opera from competing with Internet Explorer. Epic could wage a similar war and shape the internet of the future.

Importing Sand to a Desert

Saudi Arabia has vast deserts covered in sand. So why do they import sand from Australia?

It turns out Saudi Arabia has the wrong kind of sand for construction. Here’s short, fun article that demonstrate the gains from trade.