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37 votes
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Why do celebrities get high wages?

If you ask yourself how much a potential employer would have to pay you to convince you to work for him, the answer is probably something like "at least as much as I could earn by doing the same job ...
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34 votes

Did real incomes drop significantly since the 1950s?

Most of the US real earnings data which go only as far as mid 60s. According to the statista data presented in this article by world economic forum the evolution of real hourly earnings in the US for ...
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23 votes

Did real incomes drop significantly since the 1950s?

Average standard of living is massively higher today compared to the 1950s, primarly due to technological progress. Even a cheap low end car today is much better than the big cars of the 1950s, it is ...
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22 votes
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Why are real median household incomes stagnant?

The metric of median household income is also used by others to argue the presence of income inequality: https://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#Causes However, it seems ...
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18 votes

Why do celebrities get high wages?

I suggest to learn more about the Economics of Superstars. Within the economics field, the "superstar" term is "...used to refer to extreme wage outliers (Adler, 1985; Rosen, 1981). These outliers are ...
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15 votes

Did real incomes drop significantly since the 1950s?

The book “The Two Income Trap” (2003) by Elizabeth Warren (recent Democratic presidential candidate) and Amelia Warren Tyagi discussed this. They looked at spending breakdowns in the 1970s and when ...
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12 votes
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Econometrics: Is elasticity meaningful in my, or any, regression?

The answer to the question is yes, it is indeed meaningful (at least mathematically speaking). If you estimate the linear equation $$ W = \beta_0 + \beta_1 PTR, $$ then $\beta_1=\frac{\partial W }{\...
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10 votes
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In the US, do high wages in regions like New York and California offset the high cost of living?

TL;DR Wages offset the high cost of living in most states. In NY and CA specifically, wages are insufficient to offset the high cost of living. In New York City specifically, wages do not even come ...
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9 votes
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Causes of income inequality in the US

The reason you bring forward belongs to technological directed change, which is regarded one of the main explanations for wage growth differentials. Keep in mind it's not exactly the way you're ...
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9 votes

In the US, do high wages in regions like New York and California offset the high cost of living?

A bit dated, but here are Real Personal Income and Regional Price Parities for States and Metropolitan Areas, 2008–2012. The BEA takes per capita personal income by state and normalizes it by a cost ...
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9 votes
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When countries industrialise, why do jobs from agriculture shift to manufacturing?

This is a common area of study in Development Economics. There is for example the Dual-sector model, first developed in 1954. It is very well explained in the link provided, but basically: [the] ...
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8 votes

Econometrics: Is elasticity meaningful in my, or any, regression?

Like people have said in the comments, log-log is commonly used. It amounts to estimating a constant elasticity model $Y = \alpha X^\beta$, which is a commonly used functional form within economics. ...
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8 votes

Minimum Wage effects on Adjacent Cities

A very famous study in this direction is Card and Krueger (1994). They look an increase in the minimum wage in New Jersey in 1992. While New Jersey raised the minimum wage from USD 4.25/h to USD 5.05/...
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7 votes

Econometrics: Is elasticity meaningful in my, or any, regression?

Alright, the other respondents have covered the logic behind a log-log regression pretty well, so I'm just going to add some practical tips. If you want to check whether your specification is ...
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6 votes
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Minimum wage vs wage subsdies

We could distinguish between two kinds of "wage subsidies": A) The government pays to the firm part of the wage cost, usually social security fees. B) The government pays to the employee a markup ...
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6 votes

Why are real median household incomes stagnant?

Three points - one which has already been raised much better by denesp: Are household sizes the same (we see the answer as no)? How about amount of earners per household? What about the amount of ...
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  • 161
6 votes

Who really benefits from economic growth?

I suppose that it depends on the time scale you are considering. Over the very long run the poor seem to have benefited far more than the rich from growth. See for example Robert J. Samuelson in the ...
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6 votes

Productivity vs real earnings in the US -- what happened ca 1974?

Here is one explanation, albeit focusing on the wider economy, and comparing median wages. Still the method applies: This is taken from Bivens and Mishel (2015). In essence, they decompose labour ...
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  • 8,437
6 votes

When countries industrialise, why do jobs from agriculture shift to manufacturing?

A schematic picture is as follows: Industrialization also means industrialization of Agriculture. This kills land-related jobs in the sector while at the same time it increases output. Inceased ...
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6 votes

What's the logic behind dividing rental price of capital and wage rate by price level?

Price level is the general level of prices in an economy. It is a variable that indicates what is the purchasing power of money (see Blanchard et al. Macroeconomics: a European Perspective). You can ...
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5 votes

Why do celebrities get high wages?

The other answers already give a good explanation about how actors are not easily replaced. But I'd like to highlight a flaw in the premise of your question: namely that you are cherry-picking data. ...
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5 votes
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Putting a Price on Happiness

There are several approaches to this problem, none of them accurate as the human happiness is internal subjective experience and thus not verifiable by people other than the afflicted (it is not ...
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  • 452
5 votes

Nonlinear Least-Squares Estimation in Practice

Suppose the relationship between $y_{i,t}\equiv\log w_{i,t}$ and $z_{i,t}\equiv\left(s_{i,t},j_{i,t},e_{i,t},x_{i,t}\right)^{\top}$ is given by $$y_{i,t}=g\left(z_{i,t}\right)+\varepsilon_{i,t},$$ ...
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4 votes

Why do celebrities get high wages?

They are both irreplacable and cause the people to work for to earn lots of money. Celebrities, by definition, are personalities with mass appeal and are therefore known by a large number of people. ...
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  • 159
4 votes

Econometrics: Is elasticity meaningful in my, or any, regression?

I would say that your model in this case doesn't seem meaningful if your "goal was to see which variable most affected teacher salaries in any given county of my state". You have just shown what the ...
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  • 253
4 votes

Econometrics: Is elasticity meaningful in my, or any, regression?

The other answers covered the main issues, I would like to respond to the "Edit" made by the OP in the question: Edit: One of my bigger fears is that I should have used a non-linear model to show ...
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4 votes

Why do rich countries remain rich?

The first answer of presented in the list is wrong. GDP is measure of current production not of past inherited wealth. Even though the existing capital plays a part, the lowest of deprecation rate is ...
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  • 436
4 votes

When countries industrialise, why do jobs from agriculture shift to manufacturing?

Aside from the economic arguments, a big difference was the amount of autonomy for the workers. Consider agriculture and similar rural employment (as servants etc) in the UK, even as recently as 1900....
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