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gruezyesterday at 6:21 PM1 replyview on HN

That might be true but that doesn't mean the effect is false in the aggregate. The classic example given in Baumol's paper was a violinist[1]. Sure, playing a violin might be more enjoyable than working in HVAC or churning out enterprise CRUD apps, and some people might even accept a paycut[2] to be a violinist, but that doesn't mean the effect isn't real. Despite zero productivity growth in being a concert violinist, wages for it has still risen, thanks to productivity growth elsewhere. People might be willing to take a pay cut to be a violinist, but not a arbitrarily large paycut.

[1] https://en.wikipedia.org/wiki/Baumol_effect

[2] https://en.wikipedia.org/wiki/Compensating_differential


Replies

lesuoracyesterday at 6:43 PM

I'm still amazed at how Baumol got his name on something already named [1].

[1]: https://en.wikipedia.org/wiki/Opportunity_cost