In fact, Americans’ grasp of concepts such as investment risk and inflation has weakened since the recovery began in mid-2009. Research released last week shows that on a five-question test (take the test here), respondents did worse in 2012 than in 2009. The average number of correct answers fell to 2.9 in 2012 from 3.0 on the test in 2009.
Unfortunately, the research indicates that most people aren’t aware of their own shortcomings:
Although many respondents were short on financial education, they didn’t lack confidence about managing their books. Researchers said they found “a disconnect between self-perceptions and actions in day-to-day financial matters.” Many people who gave themselves high marks for managing their finances also were using non-bank borrowing methods, such as payday loans, or had overdrawn their checking accounts.
On the plus side, more respondents indicated they were able to cover their monthly expenses (40 percent as compared to 36 percent in 2009).
An article in Science by Nicola Lacetera, Mario Macis, and Robert Slonim summarizes their research on economic incentives and blood donation (abstract; PDF). Contrary to previous studies, the researchers found that various incentives, from gift cards to a day off, increased blood donation:
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Overall, 18 of the 19 distinct incentive items offered in observational and field experimental studies increased blood donations, and the effects were larger for items of higher monetary value; only one reward offer, a free cholesterol test, had no effect. When data were available (for 15 of the items), no effect on blood safety was detected. Finally, although temporary rewards might affect long-term motivations, no post intervention effects on donations were found, including any negative effects deriving from potential motivation loss.
Silicon Valley heavyweights like Facebook co-founder Chris Hughes and Google have a new favorite charity: GiveDirectly, an organization that makes direct transfers (via M-Pesa) to poor people in the developing world. From Forbes:
“Instead of building hospitals, why don’t we just give poor people money? Research shows it’s effective,” [Hughes] said. Hughes, who purchased The New Republic magazine in early 2012 and serves as publisher, also joined the board of GiveDirectly.
Backing up Hughes’s point was Jacquelline Fuller, Director of Giving at Google. She told the crowd Thursday night that one of her superiors at Google was extremely skeptical when Fuller first suggested that Google back GiveDirectly. “I was told, ‘You must be smoking crack,’ ” Fuller recalled. But GiveDirectly had exactly what Google wanted: lots of data on how the recipients of cash used it to improve their nutrition, their health and their children’s education. After looking at the data, Google donated $2.5 million to GiveDirectly.
GiveDirectly stems from economist Paul Niehaus‘s research in India, where to limit corruption the government makes direct cash transfers via mobile phones. “A typical poor person is poor not because he is irresponsible, but because he was born in Africa,” says Niehaus, adding that GiveDirectly’s transfers have had positive impacts on nutrition, education, land, and livestock — and haven’t increased alcohol consumption. The charity is also No. 2 on Givewell’s list of recommended charities.
(HT: Marginal Revolution)
This is a transcript of the Freakonomics Radio podcast “Should Tipping Be Banned?” [MUSIC: Pearl Django, “Bohéme Auberge” (from New Metropolitan Swing)] Stephen J. DUBNER: Uh, hey Levitt? Steven LEVITT: Hey Dubner. DUBNER: When I say the word tipping, what do you think of? LEVITT: I think of discomfort. DUBNER: Discomfort […] Read More »
This is a transcript of the Freakonomics Radio podcast “Baby, You Can Program My Car.” Kai RYSSDAL: Time now for a little Freakonomics Radio. It’s that moment every couple of weeks we talk to Stephen Dubner, the co-author of the books and blog of the same. The hidden side of everything is what he does. Hey […] Read More »
In our podcast “Waiter, There’s a Physicist in My Soup!,” we talked to Pablos Holman at Intellectual Ventures about food printers (we’ve also blogged about organ printers and meat printers). Now NASA is funding an Austin, Tex., company that is working on a pizza printer. From CNET:
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Systems and Materials Research recently received a $125,000 grant from NASA to make a pizza. OK, it’s a little more complicated than that. Contractor already created a proof-of-concept printer that can print chocolate onto a cookie. His next goal is to print out dough and cook it while printing out sauce and toppings.
In the L.A. Times, Elizabeth Dunn and Michael Norton highlight some of the more interesting recent findings in the field of happiness research. Two surprising examples from the article:
1. “A study of women in the United States found that homeowners were no happier than renters, on average. And even if you’re currently living in a cramped basement suite, you may find that moving to a nicer home has surprisingly little impact on your overall happiness. Researchers followed thousands of people in Germany who moved to a new home because there was something they didn’t like about their old home. In the five years after relocating, the residents reported a significant increase in satisfaction with their housing, but their overall satisfaction with their lives didn’t budge.”
2. “[D]ozens of studies show that people get more happiness from buying experiences than from buying material things. Experiential purchases — such as trips, concerts and special meals — are more deeply connected to our sense of self, making us who we are. And while it’s anyone’s guess where the American housing market is headed, the value of experiences tends to grow over time, becoming rosier in the rearview mirror of memory.”