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The Hog-Cycle of Law Professors

Author

Listed:
  • Christoph Engel

    () (Max Planck Institute for Research on Collective Goods, Bonn)

  • Hanjo Hamann

    () (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

The market for law professors fulfils the conditions for a hog cycle: in the short run, supply cannot be extended or limited; future law professors must be hired soon after they first present themselves, or leave the market; demand is inelastic. Using a comprehensive German dataset, we show that the number of market entries today is significantly negatively correlated with the number of market entries 8 years ago. This is quite precisely the time young scholars on average take to prepare for the market. To get this estimate, we detrend the data, and we control for the size of student cohorts when these candidates enter university. This control variable mediates the effect of birth cohorts when candidates are born, which themselves exhibit negative autocorrelation, with a lag of some 20 years. Using our statistical model, we make out of sample predictions for the German academic market in law until 2020.

Suggested Citation

  • Christoph Engel & Hanjo Hamann, 2012. "The Hog-Cycle of Law Professors," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2012_08, Max Planck Institute for Research on Collective Goods.
  • Handle: RePEc:mpg:wpaper:2012_08
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    References listed on IDEAS

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    1. Stahl Dale O. & Wilson Paul W., 1995. "On Players' Models of Other Players: Theory and Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 10(1), pages 218-254, July.
    2. Antoni Bosch-Domènech & José G. Montalvo & Rosemarie Nagel & Albert Satorra, 2002. "One, Two, (Three), Infinity, ...: Newspaper and Lab Beauty-Contest Experiments," American Economic Review, American Economic Association, vol. 92(5), pages 1687-1701, December.
    3. Stein, Jerome L, 1992. "Cobwebs, Rational Expectations and Futures Markets," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 127-134, February.
    4. Wilbur R. Maki, 1962. "Decomposition of the Beef and Pork Cycles," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 44(3), pages 731-743.
    5. Shonkwiler, J. Scott & Spreen, Thomas H., 1986. "Statistical Significance and Stability of the Hog Cycle," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 18(02), pages 227-234, December.
    6. Matthew T. Holt & Lee A. Craig, 2006. "Nonlinear Dynamics and Structural Change in the U.S. Hog—Corn Cycle: A Time-Varying STAR Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 215-233.
    7. Dermot J. Hayes & Andrew Schmitz, 1987. "Hog Cycles and Countercyclical Production Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(4), pages 762-770.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Cobwebs on the law professor market
      by Economic Logician in Economic Logic on 2012-06-12 19:56:00

    More about this item

    Keywords

    market for law professors; hog-cycle; time series; out of sample prediction;

    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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