Archives for



Try Your Hand at Economic Forecasting

Think you can do a better job at predicting the economic future than all those economists and pundits?  Here’s your chance to prove it:

Members of the public are being encouraged to take on the Bank of England by betting on the U.K.’s future inflation and unemployment rates.

Free-market think tank the Adam Smith Institute on Wednesday launched two betting markets in an attempt to use the “wisdom of crowds” to beat the Bank of England’s official forecasters. Punters can place bets on what the rate of both U.K. inflation and unemployment will be on June 1, 2015.

Sam Bowman, the research director of the Adam Smith Institute, believes the new markets will “out-predict” official Bank of England predictions.  “If these markets catch on, the government should consider outsourcing all of its forecasts to prediction markets instead of expert forecasters,” he said.



A New Way to Deal With Telemarketing Calls

A man in the U.K. is charging telemarketers for calling him. From BBC News:

A man targeted by marketing companies is making money from cold calls with his own higher-rate phone number.

In November 2011 Lee Beaumont paid £10 plus VAT to set up his personal 0871 line – so to call him now costs 10p, from which he receives 7p.

The Leeds businessman told BBC Radio 4’s You and Yours programme that the line had so far made £300.

Phone Pay Plus, which regulates premium numbers, said it strongly discouraged people from adopting the idea.

Beaumont says that he’s following the rules of premium numbers by informing all telemarketers exactly how much they’re being charged for calling him, and suggesting they email him if they don’t like the charges.

(HT: James Kraft)



Who Are the Most Successful Immigrants in the World? Full Transcript

 This is a transcript of the Freakonomics Radio podcast “Who Are the Most Successful Immigrants in the World?“ [MUSIC: Soulglue, “Steve McQueen” (from Arboretum)]   Stephen J. DUBNER: Once upon a time, I was on a plane with Nassim Taleb. He is a philosopher of sorts, and he writes fascinating books – most recently The […] Read More »



How Many Years Does It Take to Learn to Be a Lawyer?

President Obama recently proposed an interesting solution to the skyrocketing cost (and declining popularity) of law school: make it shorter:

“This is probably controversial to say, but what the heck, I’m in my second term so I can say it,” Obama said during a stop at the State University of New York at Binghamton. “I believe, for example, that law schools would probably be wise to think about being two years instead of three years because [….] in the first two years young people are learning in the classroom.”

In the third year, he said, “they’d be better off clerking or practicing in a firm, even if they weren’t getting paid that much. But that step alone would reduce the cost for the student.”

The Daily Dish reports on various responses to Obama’s suggestion.  For example, law professor Matt Bodie wonders if the change would really decrease costs: Read More »



Paying Less … Without Health Insurance

Writing for the Wall Street Journal, Jeffrey Singer describes a patient who came in for a “simple outpatient surgical procedure” and discovered it was cheaper to just ignore his “low-cost ‘indemnity’ type of health insurance policy.”  The patient’s estimated costs had he used his health insurance plan: approximately $20,000 (out of the estimated hospital charge of $23,000).  After speaking to the patient, Singer realized that he wasn’t bound by a “preferred provider” contractual arrangement and offered the patient a solution that saved him $17,000:

I explained that just because he had health insurance didn’t mean he had to use it in every situation. After all, when people have a minor fender-bender, they often settle it privately rather than file an insurance claim. Because of the nature of this man’s policy, he could do the same thing for his medical procedure. However, had I been bound by a preferred-provider contract or by Medicare, I wouldn’t have been able to enlighten him….

Most people are unaware that if they don’t use insurance, they can negotiate upfront cash prices with hospitals and providers substantially below the “list” price. Doctors are happy to do this. We get paid promptly, without paying office staff to wade through the insurance-payment morass.

So we canceled the surgery and started the scheduling process all over again, this time classifying my patient as a “self-pay” (or uninsured) patient. I quoted him a reasonable upfront cash price, as did the anesthesiologist. We contacted a different hospital and they quoted him a reasonable upfront cash price for the outpatient surgical/nursing services. He underwent his operation the very next day, with a total bill of just a little over $3,000, including doctor and hospital fees. He ended up saving $17,000 by not using insurance.

(HT: Jason Hirschhorn)



FREAK-est Links

1. Do calls to prison cost too much?

2. History of the world — in one 1931 map.

3. The boomerang generation: “Some 21.6m Americans aged 18 to 31—36% of the total—still languish in the parental home.” (HT: Chakrit Achava-amrung)

4. The pricing truth behind season tickets. (HT: V. Brenner)

5. Bullying in the army: will dismissing bad leaders make the organization more “efficient”?



Do Recessions Increase Productivity?

During recent recessions, worker productivity has actually risen — but economists have been unsure if the result is driven by a changing workforce composition (i.e. more productive workers retaining their jobs) or an increase in effort and productivity on the part of individual workers. In a new paper (gated; working version here), called “Making Do With Less: Working Harder During Recessions,” economists Edward P. LazearKathryn L. Shaw, and Christopher Stanton find that it’s the latter.  Here’s the abstract:

There are two obvious possibilities that can account for the rise in productivity during recent recessions. The first is that the decline in the workforce was not random, and that the average worker was of higher quality during the recession than in the preceding period. The second is that each worker produced more while holding worker quality constant. We call the second effect, “making do with less,” that is, getting more effort from fewer workers. Using data spanning June 2006 to May 2010 on individual worker productivity from a large firm, it is possible to measure the increase in productivity due to effort and sorting. For this firm, the second effect—that workers’ effort increases—dominates the first effect—that the composition of the workforce differs over the business cycle.



Women, Men, and Cooperation

Women are not men, as we firmly established in a podcast earlier this year.  A new working paper (abstract; PDF) by economists Peter J. Kuhn and Marie-Claire Villeval suggests one more difference between the sexes — women may be more drawn to cooperation. Here’s the abstract:

We conduct a real-effort experiment where participants choose between individual compensation and team-based pay. In contrast to tournaments, which are often avoided by women, we find that women choose team-based pay at least as frequently as men in all our treatments and conditions, and significantly more often than men in a well-defined subset of those cases. Key factors explaining gender patterns in attraction to co-operative incentives across experimental conditions include women’s more optimistic assessments of their prospective teammate’s ability and men’s greater responsiveness to efficiency gains associated with team production. Women also respond differently to alternative rules for team formation in a manner that is consistent with stronger inequity aversion.