≡ Menu

Henry Spearman Cracks the Case Again

In today’s Wall Street Journal, I review the fourth installment – The Mystery of the Invisible Hand – in Marshall Jevons’s economics murder-mystery series.  A slice:

The breakthrough in the case comes when Spearman’s students present the results of their research on the economics of the art market. Among the insights they offer is an analysis of the “death effect” on the value of art: When an artist dies, he or she stops producing, so prices of the artist’s existing works rise. The students’ critical insight is that the size of this effect on prices is greatest when an artist dies in middle age. Too few people care enough about the works of young, unknown artists to bid up their prices very steeply when such artists die; and the prices of the works of elderly artists already reflect the expectation that these artists will not produce many more notable works. But when a middle-aged, established artist dies unexpectedly, the market responds by bidding up the prices of the artist’s works substantially. Tristan Wheeler died at the age of 46.

Combining this economic insight with other observations and analyses, Spearman identifies the murderer. He does so by looking beyond the surface motives that occupy the police. He focuses instead on people’s actions and choices—what economists call “revealed preferences.” As “Marshall Jevons” put it in “Murder at the Margin”: “If he had to choose between two pieces of information in order to predict whether an individual was guilty or innocent, the person’s motives or the person’s choices before and after the crime, Spearman would always select the latter.”

You can buy a copy of The Mystery of the Invisible Hand here.