Sunday, December 19, 2010

Of Wine and Experts

"I mean, S&P, Moody’s, Fitch, these people all rated securities that apparently completely tanked. So there’s obviously something in the demand for expertise, the imprimatur, which is not really about the fact that they do a good job. By the way, those organizations are not transparent either, just as the Wine Spectator isn’t. So there’s some similarity here that I think probably gives us a little insight into things that are much broader than wine and food."
That is Orley Ashenfelter of Princeton University, quoted by Stephen J. Dubner in a recent Freakonomics column in the NYT.  Experts have shown themselves to be no better than regular people in terms of guessing the price (and presumably, quality) of wines in blind taste tests.  Professor Ashenfelter argues that the same phenomenon extends into many other arenas.