From Phishing for Phools1 on reputation mining:

If I have a reputation for selling beautiful, ripe avocados, I have an opportunity. I can sell you a mediocre avocado at the price you would pay for the perfect ripe one. I will have mined my reputation.

...If [the avocado-buying public] could not themselves tell apart the good avocados from the mediocre, and in some cases, truly rotten, the new-avocado growers had little incentive to produce good new avocados. They could, more cheaply, produce bad new avocados

...a grower of delicious avocados would be unable to compete. He would have to sell his perfect avocados at the price of the overrated mediocre ones. If the costs for producing perfect ones were greater than the costs for producing mediocre ones, his orchard could be put to more profitable use.

Compare the above with this article from The Atlantic2 about the state of higher education in the United States (long snippet alert):

In 1969, almost 80 percent of college faculty members were tenure or tenure track. Today, the numbers have essentially flipped, with two-thirds of faculty now non-tenure and half of those working only part-time, often with several different teaching jobs.

...Administrators at these institutions of higher learning argue that they need to use adjuncts because it is the only way to keep tuition from rising even faster than it has.

...If the rationale for using low-wage professorial labor is affordable college, however, it hasn’t worked ... public universities cost three times what they cost in 1980, private universities twice as much ... but the student-teacher ratio remains the same as it was in the past.

...Even while keeping funding for instruction relatively flat, universities increased the number of administrator positions by 60 percent between 1993 and 2009, 10 times the rate at which they added tenured positions ... vice presidents, associate vice presidents, assistant vice presidents, provosts, associate provosts, vice provosts, deans, deanlets, and deanlings, all of whom command staffers and assistants ... So while college tuition surged from 2003 to 2013 by 94 percent at public institutions and 74 percent at private, nonprofit schools, and student debt has climbed to over $1.2 trillion, much of that money has been going to ensure higher pay for a burgeoning legion of bureaucrats.

As administrators make more and more faculty positions part-time, allegedly for cost savings, they don’t apply that same logic to themselves. While the part-time professor is now the norm, the percentage of part-time administrators has actually gone down. Their salaries, too, unlike those of professors, continue to go up, increasing by 50 percent between 1998 and 2003 even while tuition was going up and faculty numbers were going down.

...In 2013, colleges and universities devoted less than a third of their revenue to instruction ... One adjunct teacher, JJ, posting a comment online, calculated his/her pay as an adjunct as $65 per student per semester, adding up to the princely sum of $2,000, noting that “each student paid $45,000 in tuition and took about 4 classes a semester. ... I think their parents would be rather upset to learn that only $65 of the $45,000 went to pay one professor for an entire semester.”

Kinda sounds like college is being reputation mined doesn't it? Price has gone up but quality has almost universally gone down. That article was from 2015 and I think things have only gotten worse. But the memes have gotten better, in 2017 we were laughing about this image in a chat room:


which lead to this conversation between me and a friend:

FRIEND: The truth is that all markets yearn for equilibrium. If there is a fixed value associated with any asset, the cost of that asset will ultimately match the value.

ME: what a rational view 😊

I would look at it more as reputation mining, college was such a good deal for so long that it built a great reputation, that reputation has been taken advantage of by people who are willing to raise the price past all rationality, relying on past reputation to take advantage of a quirk in people

eventually though the reputation will crash and the bubble will be reset to the true mean of the value of the asset, the sad part here is that can take years, if not decades, which is why we get bubbles

And here's one more meme image:


Even if the numbers in the image aren't factually accurate (I have no idea) I think they are directionally correct. College costs a lot more now.

I had a conversation with a mentor right before I got my undergrad degree about whether I should attend law school, he talked about how a law degree was such a valuable degree, how he never regretted his, best money he ever spent, and other such things.

The big difference between him and me though was law school cost him about $10k total, and his first job out of law school paid more than that, so it really was a great deal. Law school was going to cost me over $200k, and I wasn't going to make anywhere close to that on my first job, so it wasn't as good of a deal for me, and that fact weighed heavily in my decision not to attend.

I'm starting to hear about more and more people deciding that college might not be that great of deal for them and I can't help but wonder if college's reputation has finally been completely mined? That's the tricky thing about reputation mining though, when it appears we all benefit from the lie it's tough to finally see the truth.

Supplementary Material

This just made me laugh:


Morgan Housel on Twitter:

Interesting point by @Jesse_Livermore on the speed of reputation change:

"If the education standards at Ivy League schools dropped, it would take a long time to undo the perception that people who go to Ivy Leagues are smarter than those who don't."

Ben Jealous on Twitter:

When my grandfather went to University of Maryland School of Law in the late 1950’s the tuition was about $200 per year.

By 1970 it was about $400.

Today if it had kept up with inflation it would be about $2,600.

It’s actually more than $31,000.

Students deserve better.

And finally, The Master's Trap 1 and The Master's Trap, Part Two via a Mathew Yglesias tweet:

There’s a lot of people complicit in a pretty rotten system


  1. Akerlof, George A.. Phishing for Phools (p. 23, 24, 34). Princeton University Press. Kindle Edition. 

  2. I just stumbled on it recently via this tweet