Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Tuesday, February 08, 2005

Gubmnt vs. Private Sector Economists
The Impact of the Hockey Lockout

Or is it just bad reporting?

On Saturday, The Trono Globe and Mail carried a story, using Statistics Canada data and reports saying that cancelation of the NHL season would reduce Canada's GDP by $170m. [That's pretty funny when you realize how little value added there is from hockey in Canada.]

Just before Christmas, Statscan estimated that the hockey freeze was costing the economy about $17-million a month, from ticket and souvenir sales and broadcast revenue. If the entire season is lost, the gross domestic product could be reduced by about $170-million.

But of course that is not all lost output. People will likely spend their money on something else:

There definitely is an 'NHL effect' " said economist Avery Shenfield of CIBC World Markets, but "what you never know is to what extent it's offset by additional spending on other items," he said.

I am guessing that the Statistics Canada report probably also notes this diversion effect and the two reporters chose to ignore it (the story leads with a tale about a bar that has lost business due to the hockey lockout).

But a different, plausible explanation is that economists who work for Statistics Canada are either not as bright as (or ask different questions than) private sector economists.
In reporting the unexpected net loss of 5,700 jobs across the country during January, Statscan suggested yesterday that the silence in NHL rinks may be behind a drop in employment in tavern and bars.

I'll let you choose.

This article was sent to me by BrianF.
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