成年人深夜福利在线观看

Everyone Loves Economics Podcast Series

Episode 4: Markets and Medicine Transcript 

Underwood: Hi everyone, thank you for listening to this episode of Healthcare and Economics. Today, we will be discussing the economic dilemma that is present in the FDA regulations and the introduction of new drugs on the market. I am here with Dr. Ferdinand DiFurio, who is an economist who studies Health and Healthcare Economics here at 成年人深夜福利在线观看 Tech. Tell them a little bit about yourself and what sparked your interest in the economics of healthcare, Dr. DiFurio. 

DiFurio: Thank you, Jenna. I think that I like teaching, so I started teaching economics and then an area of research that was interesting to me was regional economics mixed in with healthcare economics. 

Underwood: Awesome, thank you. I follow a similar interest to Dr. DiFurio in Healthcare Economics, specifically with the pharmaceutical industry. I would say the largest question I have to ask today is, can fewer FDA regulations save more lives? 

DiFurio: That鈥檚 a really good question. I think it depends. Many have argued that historically, the FDA has been overly concerned with introducing a drug to the market that could hurt people. So what the FDA has done is put new drugs under longer clinical trials. And so now the argument is that people don鈥檛 have access to drugs as quickly as they should. So there may be some relevance to that, to your question, in that possibly, quite possibly. 

Underwood: I do believe that the FDA being so highly regulated can pose a risk of necessary drugs not being able to be introduced on the market, especially for those who live with terminal illnesses that may not have access to adequate care due to a lack of medications available. Through this discussion, you can see that there is a fine line between regulation for the sake of being safe and excessively safe regulation. 

Difurio: I agree. This has been a problem for many decades, and I would even point you towards the movie that came out called the 鈥淒allas Buyers Club鈥�, which addressed this very issue that the FDA was putting drugs, potentially, to help people with AIDs, under intense scrutiny, and they didn鈥檛 get access to those drugs. So the characters in those movies, in that movie, were trying to find ways to get around the FDA and get people life-saving drugs. But yeah, so I like that assessment you gave. 

Underwood: On the topic of under-regulation versus over-regulation, an important piece to discuss is the sheer cost of clinical trials. I have reviewed an academic source, Handbook of Health Economics, that says, 鈥淭he average clinical development cost per NDA had escalated to $48 million in 1987.鈥� It appears that this number has climbed drastically, meaning it is no cheaper to produce drugs than it was 30 years ago. What are your thoughts on the cost of drug trials and manufacturing? 

DiFurio: It鈥檚 probably a twofold thought in that we want to put drugs under intense scrutiny. Maybe in an efficient manner, maybe not necessarily just longer. At the same time, the production costs rise for firms seeking out new drugs. It does cause an impediment for people to get access to those drugs. Actually, the research and development required to get a new drug to market is a difficult process; many people may not know this, but it鈥檚 highly challenging. 

Underwood: I agree. I agree for sure, and with rising drug costs, people are less incentivized to create and manufacture new drugs just for the sheer cost of clinical trials and testing. And we know that testing new drugs and ensuring safety is costly, especially when we see the overregulation in the United States so often with different drugs, whether that be just a simple pain medicine, up to chemotherapy, or other drugs designed to treat terminal illness. And so behind this, we see a term used to describe this called drug-lag. Would you be able to offer some more insight into what affects drug lag in the pharmaceutical industry? 

DiFurio: From the pharmaceutical companies' point of view, any kind of restriction on the time it takes for them to do business, the time it takes for them to do research and development, is an increase in cost to them. So they have to be able to have certainty and some predictive power in the introduction of a new drug. The approval of a new product can be detrimental to the company鈥檚 business. So the other side of the story is that we, of course, want to make sure the drugs are safe. So there are two sides to the coin, there. 

Underwood: Right, and at the end of the day, drug companies are a business, and they will not put millions of dollars into manufacturing something that they鈥檙e going to lose millions of dollars in manufacturing for. So I completely agree. Also, from some of the sources I reviewed, there was an interesting piece of information given that said that the United States is falling behind other nations in making the most up-to-date therapies available to its consumers. I think this raises some alarm, as the U.S. has fallen behind with such a high population. And when it comes to pricing, with the U.S. not being a manufacturing powerhouse, do you think that we will see more mass-imported drugs come to the states that might not fall under the same strict regulations that we have? 

DiFurio: Hard to say. I would argue that probably not anytime soon. Although I think that鈥檚 generally a positive step in the right direction. But with the Food and Drug Administration being the single entity of oversight for drugs, the oversight that it has is so important. I doubt that we鈥檙e going to head down that road anytime soon, with allowing drugs to come in not being under the same scrutiny. 

Underwood: I agree. I鈥檝e seen some cases where there are foreign drugs imported from the EU and Germany that have been used to treat more aggressive cases of different types of illnesses and parasitic infections that we鈥檝e been able to see in the most recent years. A very common economic model that I鈥檝e seen in my Principles of Microeconomics class is the idea of competition and specialization. So if the United States is falling behind in the area of drug manufacturing, this could cause countries to import medications for higher than the U.S. consumers would have paid had they been manufactured here. Do you think this is a real risk if the FDA continues with strict regulatory policies? 

DiFurio: It could be in the long run. I think that other countries are still adhering to some of the same oversight and restrictions that the FDA establishes, just to establish a benchmark for themselves. So I think there are still rules that they look at, and so I don鈥檛 know if it would become a huge problem, but that could be a long-term issue, right? 

Underwood: And with specialization, we see the economics that a country will spend money to specialize in things that they know will make them money. So that鈥檚 a very important perspective to keep when you鈥檙e discussing the pharmaceutical industry. If we see that one country does better manufacturing and medication than the United States, why not specialize in something else that could benefit us? 

DiFurio: That's the correct question to ask. And it takes time for that to work itself out in the economy. So, because you have such large pharmaceutical companies that already exist in the US, it will take time for them to become new companies and then invest in new areas other than what they're doing. And then to those other countries that would seemingly have the comparative advantage, it would take time also in their countries to establish this dominant position for drug manufacturing. 

Underwood: And as we continue on the topic of cost, I wanted to touch on the barriers that could be making it difficult to lower drug prices here. I know that simply the cost of trials alone is enough to disincentivize people to produce, but when they do produce, those drugs are produced at a cost of a couple of hundred dollars to tens of thousands of dollars, and that cost is now borne by the consumer. So I wanted to see what barriers you think are causing drug costs. 

DiFurio: They have the potential to impose significant barriers to bringing down drug costs. Regulation typically will do that. The question becomes whether or not those regulatory things in place are necessary or if they're just doing and doing stuff to the production costs. I would argue that any kind of reduction in barriers is generally good for consumers; it becomes tricky when you start to talk about commodities and health care, because then you get into discussions about whether it's a right or a privilege. So, Jenna, it's a hot topic in political circles. 

Underwood: Sure. Some of the barriers that I've thought about more recently have been the research and development cost, which is labeled R&D, that are the costs of clinical trials that we've touched on recently. But one thing I hadn't thought of until recently would be the limited price regulation we see in the United States. I did a little bit more research on this topic, and I noticed that the US does not generally have price ceilings on drugs like other countries, such as France, Germany, and the United Kingdom. Why do you think we haven't followed the curve and implemented price ceilings on medications in the US? 

DiFurio: I believe it's this back and forth between what's appropriate for consumers and what's appropriate for the political element. So, on one hand, you have the price being regulated. And if you do start regulating prices to be below a certain amount, then you're going to start restricting companies and what they can do in terms of their production process flexibilities. So it has this trickle-down effect. So it sounds nice to keep drug prices as low as possible, and by having the government do that, in theory. But there are all sorts of consequences that come along with that. 

Underwood: I agree. I've also seen just the sheer cost of medication, such as chemotherapy and insulin. And if there were a price ceiling implemented on these drugs, people wouldn't have access to these therapies that they would need, which could be life-saving for them. I want to pivot now to a different economic approach and discuss what impacts economists can have on the influence of the drug market and pricing. What do you suggest economists can do to aid in the wide world of Big Pharma? 

DiFurio: I think information is probably the first thing, just getting across the idea of economic literacy and explaining what the impacts could be of regulating drug prices. So on one hand, we don't want to create a barrier for people who need access to those drugs because prices are too high, but then also explaining to them that when you do keep prices from getting too high, there can be these unintended consequences. So there are two sides to a story, as usual. 

Underwood: I agree. An interesting aspect that I encountered was the policy design that economists can take when the time comes around to write new bills and legislation that could be considered in the political realm. I know that economists can speak with politicians, lawmakers, and the big pharmaceutical companies regarding legislation to kind of try to push them in one way or the other. They can suggest many policies, some of which are entrance barriers for companies wanting to join the market. Budget impact analysis, country comparisons with other countries, the manufacturing industry, and the list can go on. What models do you think are beneficial for economists to follow to make a difference in the pharmaceutical industry? 

DiFurio: There are probably several. I think that traditionally, there's been the universal health care versus the competitive market system. So I think that one way economists can improve that argument or that conversation is to break down the competitive model and explain that it could have beneficial outcomes for citizens and patients in the long run, but also explain to them what the pros and cons are, say, of a universal system as well. 

Underwood: Sure. As mentioned previously, I wanted to create a cost-benefit analysis of whether or not FDA regulation was too over the top or not enough. We've seen that if the FDA overregulates, the drugs may take too long to enter the market and could cost lives due to the lack of availability. On the other hand, we see that if the process is rushed, we take the large risk of the drug not being safe and then being released to the public and harming people. It seems like a double-edged sword when you say it out loud. How is there a winning or middle ground in this situation? 

DiFurio: It's hard to say where that winning position or middle ground is because the FDA is the single existing entity to do oversight on drugs. So there is no alternative system for that. So the very existence of it will impose barriers. I would say that. It's the traditional observation of the seen versus the unseen. The FDA may be overly concerned with being seen as making a mistake and introducing a drug that could hurt people. And then the unseen portion of that was what you mentioned, that delaying a drug too long can also hurt people. 

Underwood: Absolutely, I agree. And one point that I'd like to bring up is that the FDA now has an acceleration system in place for drugs, kind of like a fast-track program. This system for review is used to deem life-saving medications for life-threatening conditions. So these medications are more fast-tracked through the trial process to get them on the market quicker. And ultimately, the economic thing to do in this situation is to weigh the costs and benefits. And if the costs outweigh the benefits, such as side effects and pricing, then the drug economically shows no benefit to the market. If the drug can be lifesaving with few side effects and a manageable price point, we would say that the drug is economically beneficial to the market. 

DiFurio: Yeah, I like that commentary. I think that there's always that debate that happens with the FDA. So, introducing new drugs and having the FDA do the oversight is seemingly the right thing to do. But as we've mentioned a few times, there are always two sides to the story. And so on one hand, you have the potential benefits that come to people having access to fast-track drugs. And on the other hand, there could be mistakes being made. 

Underwood: Absolutely. And as we've been able to see, there's a delicate checks and balances process in which pharmaceuticals are challenged. I foresee in the future a better process through an economic model that can further assist in the exploration of the FDA regulations and the pharmaceutical industry. Well, Dr. DeFurio, that is all that I have for you today. I want to give a big thank you for coming and talking today in your field of expertise. You offer some great insight in this conversation. I want to thank everybody for tuning in and learning more about health care economics. 

DiFurio: Thank you, Jenna. I appreciate the questions; they鈥檙e very good. 

Underwood: Thank you. 

Works Cited 

Garthwaite, Craig. 鈥淭he Economics of Drug Development: Pricing and Innovation in a Changing Market.鈥� NBER, 4 Oct. 2018, www.nber.org/reporter/2018number3/economics-drug-development-pricing-and-innovation-changing-market. 

Scherer, F.M. 鈥淕overnment Regulation of New Drug Introductions.鈥� Handbook of Health Economics, vol. 1, pp. 1308鈥�1325. 

Sertkaya, Aylin, et al. 鈥淐osts of Drug Development and Research and Development Intensity in the US, 2000-2018.鈥� JAMA Network Open, U.S. National Library of Medicine, 3 June 2024, pmc.ncbi.nlm.nih.gov/articles/PMC11214120/. 

Miller, Roger, et al. 鈥淒eath by Bureaucrat.鈥� The Economics of Public Issues, 20th ed., Pearson, New York, NY, 2018, pp. 3鈥�9. 

Everyone Loves Economics Podcast Series

Episode 3: People and Profits Transcript 

Newman: Welcome back to 成年人深夜福利在线观看 Technological University鈥檚 Honors Principles of Microeconomics podcast. I am your host, Brooke Newman, and in this episode, we will be diving into the world of Labor Economics as we explore how salaries and jobs can be affected by transparency.

Maybe you have heard of the congresswoman advocating for a bill that would require employers to add salary ranges to job listings? What about the Connecticut lawmakers creating 鈥淓qual Pay Day鈥� and pushing for salary transparency bills? Both of these events have occurred in recent weeks, and we are expecting to see much more like it. But what is it?

Well, salary transparency, commonly known as pay or wage transparency, is the practice of openly communicating compensation with employees or potential candidates (Heloski, 2023). The idea of salary transparency creates a question for many. How will it affect job prospects? To get some answers to these questions, I am joined by our special guest and labor economist, Dr. Steve Isbell. Dr. Isbell is a labor economist teaching at 成年人深夜福利在线观看 Technological University with over 40 years of teaching experience. Dr. Isbell, thank you for joining us today.

Isbell: You are welcome. I am glad to be here. 

Newman: With the help of Dr. Isbell and his background in Labor Economics, we will explore how salary transparency can potentially affect job prospects and outcomes for people who are looking for employment. One of the most common places for interactions with salary is when it comes to job listings. How does the representation of salary increase the incentive to apply to these job listings? Going off of that, what are the costs and benefits of applying to jobs?

Isbell: So, basically, it's about benefits and costs. So, any time the benefit exceeds the cost, then the action is a positive thing. So, people look at job listings, and what they are trying to do is look at all of the benefits that go with the job, and then consider the cost of making an application. So, you know, if it looks like the benefits, potential benefits, exceed the costs, then go ahead and make the application.

Newman: I completely agree. I think the basic cost and benefit analysis for anyone trying to find a job is important so that they understand if the job is right for them. Now, let鈥檚 take a look at the leverage available when salary transparency is in place. Many skeptics of salary transparency claim that the power of negotiation will only decrease when salary transparency is in effect. But, how do we really know how salary transparency will affect the power of negotiation?

Isbell: So, part of this job match process is this negotiation that might go on, you know, once the interview process has been initiated. And so, one of the things about the negotiation process is that there is asymmetric information. So, the employer has some information about the job that might not appear in the job listing, and they know this. And one of those things might be pay. So, they know the salaries they are paying now, and they are not going to make an offer that is the highest that they are willing to make right away. Right? That would be foolish on the part of the employer. So, they are going to make an offer that might be less than that, something that they might think you would accept. But they also have information about things that are not obvious, the work environment, for example. Is it stressful? Is it a high-performance type of atmosphere? They know that their employees typically work 60 hours per week, and they are not necessarily revealing that. 

There is asymmetric information on the part of the employee, too. So, they know a lot of things about themselves that they might not reveal to the potential employer. They might, you know, they are not going to let the employer know the minimum amount that they are going to be willing to work, to take this job for. They also know that, you know, they might be inherently lazy or something, and they are not going to reveal that to the employer, as well. They may realize that they are only going to be working here for two years, and so they are not going to tell the employer that. 

And so, the pay transparency does, in some way, reduce some of the asymmetric information. But it might make some of those other aspects of the job more important.

Newman: I agree. I want to build off that. Prior to salary transparency, the power of pay negotiation was a large part of the hiring process for applicants. However, with the implementation of salary transparency, experts say that the knowledge of pay range will only increase applicants鈥� power of compensation. In an article written by Jennie Johnson, the business consultant states that 鈥淭ransparent salary practices can help level the playing field by providing employees with the information they need to effectively negotiate their compensation鈥� (Johnson, 2024). With more applicants leaning more toward salary-transparent postings, more corporations are trying to push towards a transparent workplace. According to a study done by Self, Inc., more than 62.2% of corporations have adopted wage-transparent policies or have intentions to do so. While this number represents a small majority of corporations, it still lies 20% lower than the number of adults who encourage transparency in their workplace, which is 82.6% (Self-Financial, 2023). This study, though small in sample size, represents the larger issue at hand: Employees want transparency on compensation. [NB1] When it comes to identifying how to reach this goal, it鈥檚 important to ask the question of why these policies are not currently in place. What costs do employers have when deciding if they want to be salary transparent? In a similar concept, how do these costs affect the employees of the company?

Isbell: As an economist, you would want to have perfect information. You are trying to make these job matches, so knowing about salaries and so on is like a good thing. The really cool thing about Labor Economics is that labor is one of the resources that, you know, you list all of those resources that firms employ to produce a product, and you know, people are different from hammers. Hammers do not care how they are used. People do. So, they bring with them all kinds of emotions and personalities, and so on, to the job. Whereas no other kind of resource does that. So that is what makes Labor Economics special. So, you know, if you have absolute price transparency about hammers, that is a wonderful thing. About people, I am not so sure. 

You know, when I give an exam, the students always have a couple of questions. The first piece of information they want is, 鈥淲hat did I make on the exam?鈥� So you can look. The second question they have, though, is, 鈥淲hat is the average made for the class?鈥� And, so, what are they doing? They are comparing their grade to the average. Sometimes, they will ask, 鈥淲hat was the highest grade made in the class?鈥� And, if I tell them, 鈥淲ell, one student had a perfect score,鈥� what happens? 

Newman: Well, they would feel bad about them having the lower score. 

Isbell: Or, if you are that person, that person never reveals himself or herself as the person who made the highest score. Why is that? Because everyone is going to resent him. 鈥淗ey, I am bragging about this.鈥� Or, 鈥淗ey, that is the person who blew the curve!鈥� Right? SO everyone is kind of resentful of that person. I do not want to be that person, so I am not going to tell everybody, 鈥淗ey, I made the high score.鈥� If you made the lowest score, how would you feel?

Newman: I am also not going to tell anybody. 

Isbell: Right! I am not going to brag about that, right? So, what kind of incentives does that create, too? You can imagine the reaction that students would have to that. And then, you think about what incentives are created when you do that? Does it create an incentive for the person who made the lowest grade to work harder on the next exam? Maybe or maybe not. They are so embarrassed that it creates this self-doubt. They start doubting their abilities and so on. Maybe they drop out. I don鈥檛 know. 

What does it do to the guy who made the highest? You know, so well, 鈥渕aybe I shouldn鈥檛 try so hard. Maybe I should fit in better,鈥� or something. So the same thing might happen if there is pay transparency. So you don鈥檛 know really what the result would be. 

Newman: There are, in fact, numerous costs to establishing salary transparency in business, but for many, these costs are minimal in comparison to the maximum benefits. For corporations, the decision to become transparent is subject to the company and its individual goals and standards. Likewise, for people applying to positions, the practice of transparency can also be subjective, as they must weigh the costs and benefits of working in a transparent corporation. Let's look at the opposite of these costs and identify what benefits corporations could have that exceed the costs.

Isbell: The reason for doing this, or for the government to be interested in imposing a rule that says we need to pay transparently, is to reduce pay disparities between men and women, by race, and so on. So, you know, that would be a good thing 鈥� maybe. You know, I don鈥檛 know.

Newman: I mean, things like this aren鈥檛 really in effect just yet. Maybe in other countries, but other countries do not necessarily have the same dynamic that the U.S. does.

Isbell: Right. So, we do have some experience with it, a little bit. 

Newman: It is cheaper for both employers and employees. But the best way to identify if salary transparency is the right move for the specific company or applicant is to complete a cost/benefit analysis. When it comes to young adults and students, people often agree that knowing the salary of future jobs or career fields is important information to have when deciding what career field they would like to get into. Likewise, people often ask themselves how pay transparency can affect the choice of one鈥檚 college major or one鈥檚 occupational ambitions.

Isbell: Yeah, so, probably most students are not really thinking about 鈥� unless you are graduating this semester, right? 鈥� probably not thinking in a lot of detail about specific jobs, and so on. You are just trying to get done. So, you know, then do the job search thing. But, I think it is important that this job transparency in pay, if it reveals what typical salaries are for certain occupations, that might be a very good thing. If you choose a major based on some sort of passion only, then you might be making a big mistake if, you know, that passion does not lead to an occupation that pays what you would really, you know, really want or expect, you know, from that job. So, you know, based on that, and it is all a trade-off within a person, you know, how strongly you feel about being an artist and how strongly you feel about making money.

Newman: To recap, the question of how salary transparency will affect your future job prospects has been shown to be a subjective concept. For some people in the labor market, the benefits of having a clear pay range available to them outweigh the pay compression and potential limitations on negotiation power. For others, the costs of working for corporations with transparent salaries can exceed the potential gain of pay visibility. 

Isbell: Sure. We have been talking about this idea of pay and employment, and making job applications, and all of those things. And those are serious things. And you should think a lot about them. But don鈥檛 think too much about them. It is not the most important thing, you know, in your life. There are other things that can be more important than just what you do for a job. I like the old phrase or quote 鈥� I am not sure who said it 鈥� but it is like, 鈥淭here is a difference between making a living and making a life.鈥�

Newman: Well, that鈥檚 all we have for you today, folks. Big thanks to our special guest, Dr. Steve Isbell, for joining us on the episode. Make sure to tune in next week for your next insight into recent economic dilemmas. I鈥檓 your host, Brooke Newman, and I鈥檒l catch you next time on [NB2] 鈥淓verybody Loves Economics.鈥�

References

Helhoski, A. (2023, March 14). What is pay transparency and which states require it? NerdWallet. https://www.nerdwallet.com/article/finance/pay-transparency-laws  

Johnson, Jennie. "The Power of Transparency: How Open Salary Discussions Can Benefit Both Employers and Employees." Jennie Johnson, www.jenniejohnson.com/bestjobs/the-power-of-transparency-how-open.

Self Financial. "Salary Transparency Survey." Self-Financial, 2023, www.self.inc/info/salary-transparency-survey/.

Everyone Loves Economics Podcast Series

Episode 2: The Hidden Costs of Innovation Transcript 

Larkin: Welcome to today鈥檚 episode: 鈥淭he Hidden Costs of Innovation: How Engineers Are Paying the Price for Progress.鈥�  I鈥檓 your host, Kate Larkins, and this is Everybody Loves Economics. Imagine this: engineers are celebrated for their groundbreaking ideas, pushing the limits of technology, and solving some of the world鈥檚 biggest problems. But behind every new invention, there鈥檚 a side we don鈥檛 often see鈥攖he hidden costs. These costs are the unexpected financial struggles that arise as engineers push the boundaries鈥攍ike project delays, budget overruns, and unforeseen risks.

Now, you might be thinking, why should this matter to you? Well, here鈥檚 the twist: these hidden costs don鈥檛 just impact engineers; they ripple out and affect all of us. From the prices you pay at the store to the jobs that are created or lost in your community, the economic struggles behind innovation shape the world around us. Whether you're buying the latest tech, waiting for faster services, or navigating the job market, understanding these hidden costs gives you insight into why progress can feel slow and why the costs of new ideas often show up in surprising ways.

As technology evolves faster than ever, engineers are under immense pressure to create cutting-edge solutions. But it鈥檚 not just about creativity, it鈥檚 about balancing that creativity with the reality of keeping costs in check. In this episode, we鈥檒l uncover the key financial risks engineers face when working on innovative projects, and how those risks don鈥檛 just affect engineers; they impact all of us. Stick with us, because by the end of this episode, you鈥檒l have a clearer picture of the hidden costs of innovation and how they鈥檙e shaping the world we live in.

Now, imagine this: Back in 2009, the UK government introduced HS2, an ambitious high-speed rail system meant to connect London to the north of England, aiming to reduce travel times and boost economic growth. The initial estimated cost? $45 billion鈥� and it seemed reasonable for such a transformative project.

However, as construction progressed, unforeseen challenges emerged. Engineers faced difficult ground conditions, complicating excavation and inflating costs. Inflation also played a role, pushing up labor and material prices beyond initial estimates. What began as a manageable project soon ballooned in complexity, driven by design changes, political pressure, and environmental concerns, further driving up costs.

By 2023, the estimated cost of HS2 had skyrocketed to over $120 billion, far surpassing the original estimate. The government had no choice but to scale back the project, canceling parts like the Birmingham to Manchester leg.

So, what went wrong? Was it poor planning or were these hidden costs always lurking beneath the surface? The truth is, a combination of factors鈥攗nexpected ground conditions, rising inflation, and an ever-expanding project scope鈥攍ed to this runaway cost increase. The HS2 saga is a powerful reminder that even the most ambitious projects can veer off track when the true costs of innovation remain hidden, until it's too late.

Consider Nokia, once the dominant force in mobile phones. Despite its well-engineered products, it was eventually overshadowed by the iPhone. This shift highlights a hidden cost engineers face: market competition. Even the most technically advanced products can fail if they don鈥檛 align with evolving consumer preferences or the competitive landscape. While Nokia focused on hardware features, Apple prioritized user experience, showing that simply adding more features doesn鈥檛 always create value. Consumer needs are ever evolving, and what was once considered an innovation may no longer meet market demand. Engineers must also balance scalability and production efficiency- a well-designed product can still struggle if mass production isn鈥檛 cost-effective.

Innovation isn't just about new technology- it's about navigating the hidden costs of intellectual property, public perception, and regulation. Take agricultural biotechnology as an example. Technology may be groundbreaking, but behind the scenes, innovators face battles over intellectual property. In places with weak protection, a product can be vulnerable to theft, risking years of effort and investment.

Public resistance also plays a critical role. Despite the scientific evidence supporting genetically modified organisms, consumer fears make them a tough sell. To overcome this skepticism, companies must invest in labeling and marketing, turning what should be a breakthrough into a costly challenge.

Then there鈥檚 regulation. The approval processes for new technology, especially in biotechnology, are long and costly, often stalling progress. Whether in agriculture, engineering, or other fields, innovators must navigate these invisible forces.

So, how many innovations have never seen the light of day because of these obstacles? Would we have more groundbreaking technology if these hidden costs didn鈥檛 exist, or are they an inherent part of the progress we strive for? 

Today, I鈥檓 sitting down with Dr. Tim Roberson, an economist whose work focuses on the financial risks tied to engineering innovation- especially in the energy sector. He works closely with engineers to analyze the economic side of new technologies, helping companies and policymakers understand the real price of progress. In industries where one financial misstep can mean the difference between success and failure, his expertise is invaluable. Dr. Roberson, thanks for joining me.

Roberson: Thank you for having me.

Larkins: Before we dive deeper, I鈥檇 love for our listeners to hear a bit about your background. Could you tell us a little more about what drew you to this intersection of economics and engineering?

Roberson: So I was always interested in engineering growing up. I had a very analytical mind growing up, so I was always interested in engineering style questions, but I got interested in economics in college.

So that led me to the field of environmental economics, which led me to electricity production. Because obviously, producing electricity causes a lot of pollution. That led me to work a lot with data on electricity markets and kind of the theory on how electricity markets work, which led me after my Ph.D. to get my first job at the University 成年人深夜福利在线观看 Knoxville working under a grant from the TVA, after two years in Knoxville, I went to New England, where I worked for the New England Independent System Operator And so, I was there for two years, helping them design auctions for electricity before I came back to academia. I came back to 成年人深夜福利在线观看 Tech last year.

Larkins: Yeah, and I mean, that鈥檚 such a cool path鈥攕tarting with engineering questions and ending up shaping how electricity markets work. You鈥檝e really had a front-row seat to see how the technical and financial sides connect.

It seems like engineers are great at tackling technical problems, but the financial constraints can be just as tricky. In your experience, what are some of the hidden costs that engineers and companies don鈥檛 always see coming when they鈥檙e working on new innovations?

Roberson: Well, I wouldn鈥檛 call them so many financial constraints as I would call them people problems. Engineers are great at thinking analytically about technical questions. But a lot of questions may not seem technical on the surface鈥攕o I find that a lot of engineers apply their minds to thinking about people's problems in the right way. So, for instance, 鈥淲hat is the best way to hold a meeting?鈥�, 鈥淲ho should speak and in what order?鈥� I鈥檝e been in a lot of meetings with engineers that ended up lasting for several hours and that were very disorganized and occasionally very emotional. 

I give this advice in my class, and it鈥檚 kind of flippant鈥攊f you鈥檙e an engineer, the only thing you need to remember about economics is that the demand curve slopes down. Because, if you鈥檙e trying to launch a product that people can鈥檛 use- it鈥檚 not going to be successful. So, there鈥檚 not really financial problems鈥攊t鈥檚 more people problems, but it鈥檚 really- that鈥檚 more what economists think about.

Larkins: That makes a lot of sense 鈥� if the people side isn鈥檛 working, it鈥檚 easy for everything else to get off track too. And sometimes that鈥檚 where the real financial trouble sneaks in. A lot of people think cost overruns just mean someone messed up the budget, but even solid plans can blow up. What are some of the unexpected ways projects run into financial trouble?

Roberson: I mean, there鈥檚 always uncertainty about how long something is going to take or how much money it鈥檚 going to take. One of the things I try to keep in mind is that when starting a new project, there might be one or two really difficult hard problems you want to solve with pen-medium difficulty problems, and then maybe a thousand tiny problems. You might think, 鈥淲ell I鈥檓 going to spend all of my time getting over this difficult step鈥�. But really if you make small mistakes on the simple seeming problems鈥攖hen that鈥檚 going to set you back a long time. Like if you forget to carry through a negative sign in an equation and don鈥檛 see it for several months鈥攖hat鈥檚 a tiny mistake on a trivial portion of the problem, but it can create a big setback. So often, what I see when people are planning projects is that they don鈥檛 budget time for the tiny mistakes that they don鈥檛 know they鈥檙e going to make. I think that element of human nature鈥攋ust ignore the things that you almost always get right but sometimes don鈥檛 will lead to underestimating how difficult things become.

Larkins: That鈥檚 a great point鈥攖hose small, overlooked mistakes can have a big impact. When it comes to long-term projects, especially in the energy sector, there鈥檚 a lot of uncertainty. What financial risks do engineers and companies face when working on innovations that might take years to become commercially viable, like nuclear energy?

Roberson: For an individual engineer, I think the risk you personally face is kind of disconnected from the risk your company faces. So, for example, right now, a lot of people are very invested in getting nuclear energy restarted. But if you鈥檙e a nuclear engineer, you鈥檙e not really bearing a lot of that risk if you go work for the TVA and start thinking about how we can build nuclear energy without costing an enormous amount of money. And that鈥檚 kind of because, for these really big, complicated projects, they require really big, sophisticated organizations, and you as an employee of that organization won鈥檛 bear a lot of that risk yourself. You鈥檒l draw a salary for quite a while and if the investments don鈥檛 pan out then after many years, you鈥檒l have to find鈥攜ou鈥檒l eventually have to find something else to do but you personally won鈥檛 be financially ruined if the nuclear investments don鈥檛 pan out. Uh you compare that to maybe being a software engineer working for a startup. Whatever the startup is, it might not be the biggest, most sophisticated project, but if it鈥檚 just your company and you put all of your time into it and it fails, well, you鈥檙e at risk for that. You could鈥檝e worked, maybe for Google, for that entire time and made a lot of money, and instead you put in the exact same work or more into a startup, which didn鈥檛 pan out.

Larkins: Yeah, the personal stakes are definitely different depending on where you are. It鈥檚 one thing to be part of a big system that can absorb the loss, and another to be out on your own.
I'm curious, though鈥攚hen it comes to those big projects, like nuclear energy, where mistakes are expensive and hard to walk back, how does that impact future research, especially when it comes to financing new, riskier innovations?

Roberson: Well, this actually gets directly into some of my subject matter knowledge in electricity and electricity markets. So, if you think about the TVA, if they make a big investment and that investment proves to be much more costly than they anticipated, they鈥檙e not going to scrap that plant and build another one. They are going to keep using it, and those costs are going to be passed onto consumers eventually. If you live in an area with a deregulated power market, like uh, Texas, or California, or New England or, frankly most of the world at this point. What happens is private companies choose what to invest in. They raise financing, either through selling shares of their project or by borrowing money. They build their project. And then if generating out of that facility proves to be much more expensive than they thought, then they won鈥檛 be competitive in the market and they鈥檒l fail, but the cost of that will never be passed onto the consumer. Whether the project is profitable or not, the profits are going to go to the investors.

Larkins: That鈥檚 an interesting point. So, when engineers rely on outside funding, it can definitely influence how they approach their projects. The balance between the speed of repayment and long-term growth must be tricky to navigate. How do financial pressures change depending on whether engineers are relying on loans versus selling shares in their company?

Roberson: It kind of depends on the type of outside investment and the project. So, if you鈥檙e working for one of these big companies, ultimately, you鈥檙e probably just drawing a salary and you鈥檙e probably not worried about how you鈥檙e salary is financed. It really becomes an issue if you have an idea and you want to start your own company, so there are various tradeoffs. You can try and sell a share of your company to them in return for financing. 鈥淲hat if you take out a loan from a bank?鈥�. Well, the advantage of that is you get a lot of money now, and the bank never owns a share of your company. The disadvantage is you鈥檒l have payments to make on that loan. So, you take out a million-dollar loan to start a company, there鈥檚 a lot of pressure to make money quickly to start paying off that loan. Now, some projects might take 10 years before they make money. I think Amazon.com famously took 15 years before they ever turned a profit. So, if they had tried to finance that startup solely with borrowed money, they would鈥檝e been in a lot of trouble just because they wouldn鈥檛 have been making enough to cover their debt payments. Now, if you go to a venture capitalist or maybe your rich neighbor and try to sell a share of your idea, the advantage is that if your company fails, you don鈥檛 have to pay them back anything. So, what鈥檚 best to do kind of depends on the time horizon. If you think you won鈥檛 be profitable for 5 or 10 years, it鈥檚 often better to sell shares of your idea. 

Larkins: It sounds like engineers really have to think carefully about how they structure their funding, depending on how quickly they expect their idea to take off. Since financial decisions can have such a big impact down the road, is there any other advice you鈥檇 give to engineers who want to avoid falling into financial traps early on?

Roberson: 1) You鈥檙e all smart people- use your minds to think about organizing people, not just building things. So, take how to schedule the most efficient meetings, how to send the best emails, how to manage projects- take those things seriously. The next big piece of advice I will give is never let your skills slip, and that means taking a little bit of time to make sure that your math skills are still sharp, you know. If you get a job where you鈥檙e not doing calculus, you鈥檙e not doing statistics every day, you don鈥檛 want to forget how to do calculus and statistics. Don鈥檛 shy away from the technical side of things just because you work in a technical job. And I think you鈥檒l find over the course of your career that a lot of the most successful people, maybe aren鈥檛 necessarily the ones that started as the smartest, but they鈥檙e the ones who didn鈥檛 fall into the trap of just getting a job and repeating the same things forever and eventually after a long period of time not having the skills that were competitive with newer engineers fresh out of college. Because if you get laid off in a recession in thirty years, you don鈥檛 want that to be the end of your career. You want to still have the skills to go somewhere else.

Larkins: Today, we explored the hidden costs of engineering innovation鈥攖he financial challenges that often surface only after major projects are underway. From rising expenses in the HS2 rail project to market shifts like Nokia鈥檚 downfall, even well-planned innovations can face unexpected hurdles. Dr. Roberson highlighted how managing cost and risk is just as important as creativity, with impacts reaching beyond engineers to consumers and job markets alike.

A special thank you to Dr. Roberson for sharing his insights, and to Dr. Chelsea Dowell and Ms. Debe Yu for their help in making this episode possible.

So, as we look to the future, remember: the next great innovation may come with a hidden price鈥攚hat steps can we take to ensure it鈥檚 one we can afford?I'm Kate Larkins, and this is The Hidden Costs of Innovation on Everybody Loves Economics. Thank you for listening, and we鈥檒l see you next time as we continue exploring the world of engineering and innovation.

Everyone Loves Economics Podcast Series

Episode 1: Who Owns Your Voice Transcript

Hamm: Hi everyone, and welcome to "Everyone Loves Economics" and this episode, "Who owns my voice?" I鈥檓 your host, Melina Hamm, a student here at 成年人深夜福利在线观看 Tech, and this podcast is part of a series of episodes created by 成年人深夜福利在线观看 Tech Honors students. This episode is going to look at some questions that have arisen since AI has become a frequently used tool in our modern world, as well as in the music industry. All of which ultimately leads to the big question: Who owns my voice?

The Beatles鈥� Grammy-winning song, 鈥淣ow and Then鈥� was produced with the help of AI technology. Everyone is aware that we are living in a world where AI is becoming increasingly relevant and more and more fields are being overtaken by the artificial works of AI. And the fine arts, like music and art, are no exception here. The music industry, especially, finds itself at a crucial turning point where AI is either making a revolutionary difference or threatening to dominate the industry.

AI is already able to produce new music and help speed up recording processes through the access of online databases (Ovsiienko, n.d.). The best example of this is the last Beatles song 鈥淣ow and Then,鈥� which was published in November 2023 (Semancik, 2025). The track made use of AI in the production process and won the first-ever Grammy for a record produced with the help of AI. All of this sounds great so far; however, because of this rapid evolution, the legal ground is nowhere near being clearly established. In the specific case of vocal recordings, AI can replicate the voices of famous artists by using different mechanisms to write and publish new music. As an example, in 2023, TikTok user Ghostwriter977 was able to produce the song 鈥淗eart on the Sleeve鈥� featuring the voice of The Weekend and Drake (Semancik, 2025). With the help of AI, the vocal recordings replicated the unique sound of the popular artists鈥� voices.

This caused a lot of questions to arise: Can this be legally justified? Who owns the music and the rights to publish it? And, do we still own our voice? Most of these AI-generated projects are created without the consent of the owner of the voice, which allegedly violates the copyrights of millions of singers and artists whose music is being sampled. Current copyright regulations do not cover most of these questions, leaving artists and producers unprotected and potentially unemployed in the future.

So, do we still own our own voice? And how can artists' copyrights be protected while AI-generated music is making use of their voices? Looking at some recent data and studies that have been published regarding the issue, it becomes obvious that AI-generated music and copyright regulations are turning into a pressing matter. For example, a study conducted by the International Confederation of Societies of Authors and Composers in 2024 predicts a 25% decline in income for the music industry because of AI (CISAC, 2024). Another study by the French and German music societies 鈥淪ociety of Authors, Composers and Publishers of Music鈥� (SACEM) and 鈥淕esellschaft f眉r musikalische Auff眉hrungs- und mechanische Vervielf盲ltigungsrecht鈥� (GEMA) supports the urgency of the matter as it reports that over 70% of musicians are concerned with the developments and the implementation of AI into the industry (GEMA, 2024). However, the same study also 5 showed that 35% of those surveyed are already incorporating AI in various aspects of their music production (GEMA, 2024).

So, it is obvious that AI is already a big part of the industry and is creating changes that cannot be undone. Therefore, the question now should be how to deal with the consequences and how to make sure that AI is not going to damage the industry but actually help to improve it instead.

To answer some of these questions, I am joined today by Dr. Sean Alley, who is a professor here at 成年人深夜福利在线观看 Tech. Thank you for joining me, Dr. Alley. Before we start, maybe you could just introduce yourself.

Alley: I am Sean Alley. I am an economist. I am the Department Chair in Economics, Finance, and Marketing at Tech. I have a PhD in Economics, and I went to law school after that. So I have some interest in both of those fields, in Law and Economics.

Hamm: Alright, so the first question I have is: Who should own the copyright to AI-generated songs?

Alley: Well, who should own it? Probably depends on where you stand on those issues depends on where you sit. If you are an artist, I am sure you think you. It is my understanding that the way we currently do it, and this sounds about right to me, is that if it is entirely AI-generated, it is in the public domain, and no one owns it. So, anyone can use it if it is entirely AI-generated. If it was done by a human with some help from AI, then the person owns it.

Hamm: So, it seems that the problem we are facing right now is that AI is incapable of producing songs, and those songs have already been published, but there is still this gray area when it comes to the legal rights. So, could we say that right now no one really owns the right to these songs?

Alley: Well, this is an issue that often occurs when social institutions evolve. Our legal institutions are not ready for it, so the law takes a while. In the United States, this is done. The law develops when there are lawsuits, and there aren鈥檛 any lawsuits until after there is a problem. And so, when you have something new like AI that may upend an industry, certainly it is going to cause some transition in the music industry, which they have dealt with a lot during my lifetime. You know, the music industry has had to reorganize itself many times, and this is probably going to be one of those times. But you are right. If we have purely AI-generated things, the way the law is currently, then no one owns them.

Hamm: So, what you are saying is that we basically need these lawsuits right now to draw more attention to the issue, so that in the future we will have clearer regulations regarding the copyright issues.

Alley: Definitely. Yes. That is sort of the way the common law works here is that, like when there is a particular dispute, the court will decide that dispute, and then that is the law going forward. And so a lot of times the actual details of how exactly these things work out 鈥� so the way Law and Economics scholars consider the law is that the law is out there and we all understand what the law is and when there are disputes, then that causes us socially to discover what the law is and write it down so everybody knows what to do going forward. So, yeah, these lawsuits will be a big issue.

Hamm: So, what do you think needs to change in the future so we can ensure that artists own the property rights to their own songs, and that there are still going to be incentives for them to produce original works?

Alley: I don鈥檛 know. We will have to see how it develops. I am not sure that there is anything wrong with the way it is. So, if you were involved and you used AI鈥檚 help, then I think it should belong to you. If AI did it all by itself, then maybe it shouldn鈥檛 belong to anyone. But, that being said, there are things that AIs wouldn鈥檛 be allowed to do just like you wouldn鈥檛 be allowed to do it. So, if I recorded a song that no one would ever want to hear, but if I recorded a song of me singing and published it, so it is written down in a fixed thing that is copyrightable. My voice is not copyrightable, but the recorded thing is copyrightable. So, you鈥檙e not allowed to just go grab that and tell AI to make another song out of it because I have a property interest in that recording. Your voice is not copyrightable because for it to be copyrightable, it has to be a fixed thing. But the law deals with stuff like that in other ways. It is not intellectual property so much as it is intellectual property-related. Like, in the United States, we have had a lot of issues in this area with athletes being used in video games and stuff. It is the same kind of thing. So, there are non-copyright legal protections for your name, image, and likeness, and those would cover you being able to just have AI mimic my voice, which would get you in trouble with that part of the law.

Hamm: Alright. Thank you so much for joining me today, Dr. Alley, and for the interesting insight on the topic.

So, as Dr. Alley was saying, the current situation is going to bring changes to the music industry. The fact that there are lawsuits and artists being scared for their future is going to put more urgency on the matter. AI has developed faster than the legal framework, but it is time for these laws to catch up. I would claim that the whole situation is going to get to a point where having clearly established copyright laws is going to be necessary to incentivize creativity by giving creators ownership over their work. Because if AI-generated music is not accredited to a human creator, it could undermine these incentives, as there would be less control and potential financial rewards. If AI companies or developers own the rights to every AI-generated music, this could centralize ownership in the hands of large corporations, possibly taking out any competition from smaller creators or independent artists. However, attributing copyright to the creators of the AI might also incentivize innovation and creativity. As mentioned earlier, there are several possible solutions, all of which involve more clarity regarding the legal groundworks, whatever they might look like.

Thank you so much for tuning in and listening! Make sure to listen to the other episodes of 鈥淓veryone loves Economics鈥� as well, and don鈥檛 forget to listen to some good music today!

References

Berger, V. (2025, January 3). AI鈥檚 impact on music in 2025: Licensing, creativity and industry survival. Forbes. https://www.forbes.com/sites/virginieberger/2024/12/30/ais-impact-on-musicin-2025-licensing-creativity-and-industry-survival/

Carrero, E. (2024, July 16). Voice Deepfake: Is it possible to detect a fake voice? Mobbeel. https://www.mobbeel.com/en/blog/voice-deepfake/

GEMA. (2024, January 30). Study: AI and music. https://www.gema.de/en/news/ai-study

Ijiga, O. M., Idoko, I. P., Enyejo, L. A., Akoh, O., Ugbane, S. I., & Ibokette, A. I. (2024, February 28). Harmonizing the voices of AI: Exploring generative music models, voice cloning, and voice transfer for creative expression. World Journal of Advanced Engineering Technology and Sciences. https://doi.org/10.30574/wjaets.2024.11.1.0072

International Confederation of Societies of Authors and Composers (CISAC). (2024, December 2). Global economic study shows human creators鈥� future at risk from generative AI. https://www.cisac.org/Newsroom/news-releases/global-economic-study-shows-human-creators-future-risk-generative-ai

Ovsiienko, V. (n.d.). Unleash the power of AI-generated voices in music production. Voice Cloning Software for Content Creators. https://www.respeecher.com/blog/ai-generated-voices-music-production#:~:text=AI%20voices%20can%20significantly%20reduce,speeding%20up%%2020the%20production%20cycle

Pujari, V., & Wilson, B. (2023, December). Copyright and authorship in AI-generated music. Journal of Emerging Technologies and Innovative Research. https://www.jetir.org/papers/JETIR2312540.pdf

Semancik. (2025, February 4). How AI is transforming the creative economy and music industry. OHIO Today. https://www.ohio.edu/news/2024/04/how-ai-transforming-creative-economymusic-industry  

Sturm, B. L. T., Iglesias, M., Ben-Tal, O., Miron, M., & G贸mez, E. (2019, September 6). Artificial Intelligence and music: Open questions of copyright law and engineering praxis. MDPI. https://doi.org/10.3390/arts8030115