Fashion Show Economics

I watched the Victoria's Secret fashion show a few nights ago. It was just fantastic. Here are a few interesting tidbits I picked up:

1) Heidi Klum is a good singer.

2) Only B-list celebrities appeared to be interested in actually showing up to the event. Ryan Seacrest? The Spice Girls? VS is offering this two day only promotion where any purchase of $60 dollars or more gets you a free Spice Girls CD. A neat little study for an undergraduate or intro stats class: using discontinuities in the sales promotion to identify causal effects, does the prospect of a Spice Girls CD induce more people to shop and buy at the store? Does it move the marginal $56 purchaser to buy the extra item that puts her over the top?

My priors tend towards the null on this one.

3) The most interesting feature of the show were the model biopics. Many of the models were discovered when they were 12-14 years old. I find that really amazing. How much certainty is there in forecasting whether a 13 year old will turn out to be a supermodel or not? I'm not sure where you can get data on this question, especially given the obvious selection bias - for every Selita Ebanks or Adriana Lima, there are probably 100s of others that you don't observe that don't make it.

To get around this, I thought about the compositional change in the popular clique between 7th and 12th grade in high school. The popular clique in any school is generally comprised of the "hot people," and is generally superficial enough to kick out people who move from hot to not as well as embrace people who move in the other direction. I estimate that about 68% of the popular clique in 7th grade continued to be popular in 12th grade. This larger inter-grade correlation can be explained by persistence in looks and social status as well as the bond of friendship, though its hard to pin down the relative contributions of these factors.

Even so, I think making predictions about a 13 year old is still really difficult. Of course there has to be some science to it: some people have a comparative advantage in discovering models and make a career out of doing so. Indeed, there are a lot of industry specific skills that are either innate or learned. If you've watched America's Top Model, it's easy to get a sense of this: Tyra and the other judges rate the contestants on a vector of different characteristics, where some of the elements are obvious and others not so much.

But at the end of the day, you just never know. A pharmaceutical company, for example, mines through a myriad of candidate molecules, finds the ones that are bioactive, and pushes those forward for further testing. The vast majority of these new chemical entities or compounds will fail, either to be refined or scrapped altogether. But some do make it, and the incentives are such that its worth pushing forward and leaving no stone unturned. After all, the next molecule you find might be worth billions.

I'm guessing there's a parallel to supermodels. As a model finder or agency, you don't know if your 13 year old will turn into John Abraham (the Indian one, not the guy on the Jets), on the one hand, or Atheendar Venkataramani, on the other. But you take the risk, and if it is indeed the former case, there are huge returns to be had. And, for a time, those returns might be increasing in the earlier you find the next great supermodel. Indeed, just as competitive forces push Merck and Pfizer into random jungles looking for even more random plants, the modeling industry probably evolved on a margin where those who moved first in finding younger and younger prospects were able to gain a leg up on their rivals.