Monday, May 11, 2009

Armchair Predictions

My colleague Art Carden has a post up at Division of Labour in which he mentions how increased diversity of food is a hidden benefit of immigration. It's a benefit of immigration because more people from more places means that there is a large enough mass of people with different tastes to support new kinds of ethnic restaurants, and that means new food for people to try. It's a hidden benefit because increased product diversity doesn't show up in GDP numbers. If I spend $10 on ten different kinds of food, I am probably happier than if I had little choice but to spend $100 on one kind of food.

This reminds me of another related prediction that I have made: The increased availability of online information about restaurants online should lead to a reduction in the popularity of chains and an increase in the number and diversity of independent restaurants, ceteris paribus. The reason that chains became popular was that they provided reliable, consistent quality of food regardless of where you were. When car travel became affordable and easy for most Americans, they travelled all over, but finding good food can be difficult if one is in a strange place. A place like McDonalds becomes valuable because everyone knows what to expect there. A Big Mac is the same everywhere; McDonalds relies on reputation to attract customers who want something safe.

The internet changes this. Now travelers can simply hop on Google and check to see how the locals rate restaurants nearby (they could do this before by polling locals, I suppose, but that is time consuming and therefore costly). This should result in an increase in the number and diversity of independent restaurants. Chains will have to step up their quality and diversify their menus to compete, and I think that is exactly what they are doing. And finally, a third effect that reinforces these other two is that we are getting wealthier, which probably means that we begin to value quality and diversity of calories more and more; food quality and food diversity are normal goods.

Art has another prediction about which I do not think he has blogged. He thinks that the availability of DVDs as a convenient way to buy entire seasons of television shows should lead to an improvement in the quality of television, particularly in regard to well-structured story arcs. This is because networks need not rely on advertising alone to pay for shows; a show can have a long life after it is off the air in DVD sales. The old model was that a network would push the creators of a successful show to keep making new episodes until their creative juices ran dry and the show descended into crap (e.g., Fonzie jumping the shark), in order to extract the maximum possible advertising revenue.

Now, however, a show that descends into crap will suffer reduced DVD sales. It makes more sense to let the show's creators create a story arc with a clear ending, because these are more satisfying, and lead to increased DVD sales. LOST is a great example of this. Battlestar Galactica is a not-quite-as-good example, as (in my opinion) the end of the show was a disaster of incredibly poor planning and writing. Still, it would have been worse if they'd just kept making new episodes until the network lost interest. DVD sales of Battlestar Galactica are likely quite good. The availability of online sales of TV shows through iTunes should have a similar effect.