This theory is well illustrated by S Levitt. The typical prostitute earns more than an Architect. It may not seem that she should. The architect would appear to be more skilled and better educated. But little girls dont grow up dreaming of becoming a prostitute so the supply is limited. Added to this the job is unpleasant and forbidding therefore they are hard to replace. None of these factors are in play for Architects which manifests in their pay.
Now lets look at lotto. The $10 bucks you spend on your ticket is easily replaced combined with the allure of the $10 million prize blinds you to the fact that you have a 1 in 8 million chance of winning.
Where there is a disconnect between the pay and the replaceability makes those jobs highly vulnerable to shifts in markets.
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