Sorority rush. It's a college tradition full of excitement and anxiety for recruits. For economists, it illustrates a concept that plays a huge role throughout our economy: matching markets.
JUANA SUMMERS, HOST:
By now, sorority rush has wrapped up on college campuses across the country. That's the time of year when sororities recruit new members. And it also illustrates an important economic concept - matching markets. Wailin Wong and Adrian Ma from our daily economics podcast The Indicator explain.
WAILIN WONG, BYLINE: You may have heard of sorority rush because it's made a splash on TikTok for the last two years. And it's this jam-packed week of parties and other events.
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UNIDENTIFIED PERSON: Hey, y'all. So today is the first round of sisterhood. And I'm so excited 'cause we get to wear our cute little dresses.
ADRIAN MA, BYLINE: #RushTok started with sorority women at the University of Alabama. They were posting behind-the-scenes videos and everything from their daily outfits...
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UNIDENTIFIED PERSON: My shoes are from T.J. Maxx.
MA: ...To the songs and rituals that take place during the week.
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UNIDENTIFIED GROUP: P-I, P-I, Phi, Phi, Phi, P for Phi for Beta Phi...
WONG: The TikTok posts gave a glimpse into this particular aspect of campus culture. And they inspired discussion about social hierarchies and elitism and the role of the Greek system in college life. But you know what didn't get talked about is economics.
MA: And that's where we come in because it turns out sorority rush illustrates a concept called matching markets. And matching markets are hugely important to the economy. Al Roth is an economics professor at Stanford.
WONG: If you go to a co*cktail party and someone says, Professor Roth, what do you do for a living? - and you say, well, I pioneered research in the field of matching markets, and someone says, well, what's that? - what do you say?
AL ROTH: Well, that's happened to me more than once. And I normally start by saying what it's not.
MA: What matching markets are not are markets where prices are involved. Those are called commodity markets.
ROTH: Commodity markets are markets where you don't care who you're dealing with 'cause commodities are all the same. And so what the market is supposed to do is find the price at which supply will equal demand. But in lots of markets, we're not dealing with commodities. You care who you're dealing with. There's a relationship involved. And those are matching markets.
WONG: The labor market is an example of a matching market; so is online dating and the residency matching process for medical students and hospitals.
MA: Al got the idea to look into sororities from his undergraduate students who were involved in the Greek system. Sororities were especially intriguing because they had a centralized clearinghouse to make matches. Al wanted to learn how the process worked and whether it produced what economists call stable matches.
ROTH: A match is stable if there aren't what we call blocking pairs. And a blocking pair is a pair of people not matched to each other who would both prefer to be matched to each other.
WONG: So let's say I'm doing sorority rush, and I like House Alpha the best. So I rank House Alpha No. 1 and put House Beta at No. 2. Now, House Alpha puts a bunch of other students ahead of me on their list, but House Beta puts me at the top of their ranking. The system will match me with House Beta because it's the house highest on my list that also ranked me highly. This is a stable match.
ROTH: It's the best you could get given what's available and what everyone else is getting.
WONG: So if you look at medical residency match, organ donation, high school admissions - these are all pretty high-stakes situations where Al's work on matching markets has played a big role. Sororities don't get as much attention, even though their matching process works in largely the same way.
ROTH: Sometimes people are surprised that economists study things like this. But economists study how scarce resources are allocated and how to make them less scarce, so this is a case of allocating scarce resources in a two-sided market.
MA: Maybe next installment of RushTok can be about economics instead of outfits?
WONG: Wailin Wong.
MA: Adrian Ma.
WONG: NPR News.
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