Miller-McCune reports on University of Texas sociologist, Arthur Sakamoto’s new report on paying top dollar for the best service providers. Sakamoto cites the example of a top-rated prostate surgeon in the country having a potentially negligible difference from his colleague ranked 50th, while the difference in cost could be staggering. This, Sakamoto argues, is an example of how individuals seeking services will pay top dollar for a formally or informally ranked provider because of a lack of expertise on the part of the consumer.

“‘The top people in their fields are getting much higher salaries than they used to get,’ he said. ‘That’s most obvious among lawyers and doctors. But it also applies to the person who gave John Edwards his $200 haircut.’
Sakamoto believes that star-power phenomenon is one important reason economic inequality is growing within occupations — the subject of the just-published paper he co-wrote with ChangHwan Kim of the University of Minnesota. Usually, the term “wage inequality” brings to mind headlines about chief executive officers — unions like the AFL-CIO ruefully note that the average S&P 500 CEO averaged $15 million in total compensation in 2006. Sakamoto agrees the disparity between white-collar and blue-collar salaries is very much a reality, citing a 2002 study that reports the wage gap between high school graduates and college graduates increased 15 percent from 1979 to 1999.”