From a Freakonomics Radio listener named Luke Charley:
I am a 21-year-old male college student in Bismarck, ND. I listen to your podcast quite a bit, and I found the one about the energy saved by houses — I believe it was in the podcast titled “Riding the Herd Mentality.” Well, the weight room I frequent often had plates not racked back up after people were done working out. They would just leave them on the floor and it bothered me quite a bit. So I decided to write a sign saying, “Everybody else racks their weights, please do the same.” In the past two weeks since I have done that, every day when I have been in there, there were no weights on the floor! Applying what you learn on a podcast to a weight room is quite invigorating.
Way to go, Luke! Delighted this worked out (so far, at least) …
A new working paper (abstract; PDF) by James Heckman and Tim Kautz looks at the relationship between “character” and student achievement as measured by test scores. Long story short: achievement tests don’t necessarily measure what will often matter most once students hit the real world.
Read More »
This paper reviews the recent literature on measuring and boosting cognitive and noncognitive skills. The literature establishes that achievement tests do not adequately capture character skills–personality traits, goals, motivations, and preferences–that are valued in the labor market, in school, and in many other domains. Their predictive power rivals that of cognitive skills. Reliable measures of character have been developed. All measures of character and cognition are measures of performance on some task. In order to reliably estimate skills from tasks, it is necessary to standardize for incentives, effort, and other skills when measuring any particular skill.
Character is a skill, not a trait. At any age, character skills are stable across different tasks, but skills can change over the life cycle. Character is shaped by families, schools, and social environments. Skill development is a dynamic process, in which the early years lay the foundation for successful investment in later years.
Aaron Pilkington, an officer trainee at Air Force Officer Training School in Montgomery, Ala., writes to say:
Read More »
I was driving down the road the other day with a fellow trainee, pointing out to him that the particular road along which we were driving always has police officers hiding out and catching people speeding. Just as I said that, sure enough, we saw a police car pull out with lights on and pull someone over. My friend, Bill, said that he wondered if the song “Sweet Home Alabama” would work in Alabama. I asked him to elaborate.
My friend, who is from Rhode Island, explained that a couple of years ago he was speeding and got pulled over by a police officer. He said that the song “Sweet Home Alabama” was on the radio and that somehow the officer let him off on a warning. Some time later, he was pulled over again and had the song on his iPod. In the time between being pulled over by the police officer and the officer walking up to his window, he pulled the song up on his iPod and left it on loud enough to be heard by the police officer, but not too loud. Again, success. He said this happened one more time just a couple of months ago in Florida and that he now always has at the ready a CD with the song “Sweet Home Alabama,” just in case he gets pulled over again.
American Airlines encourages passengers to pre-book their meals online:
Why “kosher,” I wonder, but “Muslim” rather than “halal”? Should the “kosher” meal be “Jewish” instead? American, it turns out, is hardly the only airline to use this terminology. Don’t know why, but unparallel nomenclature always gets my attention … Read More »
In our podcast “Parking Is Hell,” we explored how the overwhelming demand for parking space has a lot of downsides. One big problem is that city centers can feel as if they’re practically held hostage by parking lots and garages. I was in Minneapolis the other day, and here are four pictures taken from the window of my hotel room. It’s not exactly a view that makes the heart skip … Read More »
Airbus this week called for an industry standard that would provide for a seat at least 18 inches wide in economy cabins, but its U.S. arch-rival Boeing says it should be for airlines to decide.
As you can imagine, there is a lot of money at stake here:
Boeing says its revamped “777X” will hold 406 people based on economy seats over 17 inches wide and set out 10 in each row.
Airbus says the competing version of its A350 will carry 350 people in 18-inch-wide economy seat laid out 9 abreast.
But it’s more than a battle between two companies. It’s a battle between the past and the present: Read More »
If you happen to be in New York on Mon., Nov. 11, you might want to come see Richard Thaler and Dean Karlan talk about “using evidence and behavioral economics to fight poverty.” The event (info here) is run by the Innovations for Poverty Action, of which Karlan is president. I will moderate the Thaler-Karlan discussion — which means I get to ask them any questions I want about whether and why it is a good idea to fight poverty by giving cash directly to poor people rather than the traditional means of directing aid toward institutions and hoping that it trickles down fruitfully. (There are, of course, more options than just those two.)
In our recent podcast called “Would a Big Bucket of Cash Really Change Your Life?,” we looked at whether a windfall helps a family across the generations. The short answer, at least in the case of the 19th-century land lottery that we discussed: no. Read More »
As a topic, “shadow insurance” may have a certain MEGO quality — that’s “My Eyes Glaze Over” — but a new paper called “Shadow Insurance” (abstract; PDF) by Ralph S.J. Koijen and Motohiro Yogo is well worth a look:
Read More »
Life insurance and annuity liabilities of U.S. life insurers were $4,068 billion in 2012, which is substantial even when compared to $6,979 billion in savings deposits for U.S. depository institutions (Board of Governors of the Federal Reserve System 2013). However, there is little research on life insurer liabilities, especially in comparison to the large banking literature. The reason, perhaps, is the traditional view that life insurer liabilities are safe (and boring) because they are more predictable, longer maturity, and less vulnerable to runs. Hence, all of the interesting action is on the asset side, where life insurers take on some investment risk. This paper shows that developments in the life insurance industry over the last decade shatters this traditional view. As a consequence of changes in regulation, life insurers are now using reinsurance to move liabilities from operating companies that sell policies to less regulated and unrated shadow reinsurers. These shadow reinsurers are captives or special purpose vehicles in U.S. states (e.g., South Carolina and Vermont) or offshore domiciles (e.g., Bermuda, Barbados, and the Cayman Islands) with more favorable capital regulation or tax laws. In contrast to traditional reinsurance with third-party reinsurers, there is no risk transfer in these transactions because the liabilities stay within the same holding company.