University of Arizona economist Price Fishback, who has been on this blog before, is one of the leading scholars of the economics of the New Deal. He has a great new set of insights to share on the U.S. mortgage mess. He’s also the co-author of the forthcoming book Well Worth Saving: How the New Deal Safeguarded Home Ownership, with Jonathan Rose and Kenneth Snowden.
The Folly of Eminent Domain Takings of Failing Mortgage Loans
By Price Fishback
Several cities around the country are considering using eminent domain to take control of troubled mortgages in their cities. An Associated Press example of how the proposal will work calls for the city to use eminent domain to force the lender to accept $150,000 for a $300,000 mortgage on a home that has a current market value of $200,000. The city would then refinance the loan while cutting the principal owed by the borrower to $190,000.
Eminent domain requires a public purpose for the taking of an asset. The public purpose claimed here is that property values and property tax revenues can be boosted by preventing a mass of foreclosure sales. Real estate studies do show that increasing numbers of foreclosure sales are associated with lower housing values in nearby neighborhoods. However, the spillover benefits of preventing foreclosures, tend to be focused on houses in nearby neighborhoods. Read More »
I was at a restaurant the other day which had an interesting feature: the two menus they gave us listed different prices for the same items. One menu quoted $12 per margarita and the other offered the exact same drink for $11.
For a split second I wondered whether the restaurant was carrying out some sort of pricing field experiment. I’m pretty sure, though, that wasn’t the case. Just regular old incompetence, I suspect.
I wouldn’t usually pay $11 or $12 for a margarita, but I was so curious in this circumstance that I went ahead and ordered one. (Well, actually, I ordered three by the time I was done.)
What was the true price? Strangely, it turned out not to be $12, or even $11. They charged me exactly $7.94 per drink.
Luckily, I didn’t know that in advance or I might have had a fourth margarita, which definitely would have been a bad idea.
If you have a tough decision to make, wander on over to FreakonomicsExperiments.com. So far we’ve helped more than 20,000 people make decisions, and the preliminary results look great.
As an incentive to get people who tossed coins at FreakonomicsExperiments to complete follow-up surveys, we promised to give away prizes via lottery. As evidence we kept our word, the complete list of winners is here. Read More »
A while back we held a contest for the new popular economics book written by Uri Gneezy and John List. The authors and their publishers picked some of their favorite title suggestions and then we ran a beauty contest to determine which title was most popular among blog readers. The deal was that the person who proposed the winning title would get $1,000. Another $1,000 was to be split between randomly selected beauty contest participants.
Before I tell you which title won, let me tell you about the naming of Freakonomics. We had such an impossibly hard time coming up with a good name until my sister Linda came up with “Freakonomics.” To make a long story short, the publishers hated that name for a long time, but finally gave in. The rest is history. Of course we were all just guessing — it would have been nice to have data, the way Uri and John did.
So what do the data say? The winner of the beauty contest, with 33 percent of the votes, was The Carrot that Moved A Mountain: How the Right Incentives Shape the Economics of Everyday Life. Congratulations to Ivy Tantuco who proposed that title and collected the $1,000 prize.(Congratulations also to Jenna Dargie and Melinda Reiss, who were the randomly chosen beauty contest winners and pocketed $500 each.) Read More »
Last week, we solicited your questions for economist Emily Oster, a Freakonomics favorite and author of the new book Expecting Better: Why the Conventional Pregnancy Wisdom Is Wrong-and What You Really Need to Know. Oster’s answers are below and address everything from how fertility declines with age to whether pregnant women can still safely indulge in caffeine, fish, and transatlantic travel. A big thanks to Emily — and to all of you for your excellent questions. Read More »
If you’ve ever been pregnant, or been close to someone who is pregnant, you know how many prohibitions there are. You can’t smoke or drink. Shellfish are to be avoided. In my house, conveniently (for the pregnant woman), scooping the cat litter was absolutely out of the question. Of course, there are also a large number of things you have to do when you are pregnant or are thinking of getting pregnant, like take folic acid.
Is there any evidence to support all these pregnancy rules? My good friend and colleague Emily Oster (whose research has been featured in SuperFreakonomics and many times on the blog), has just written the definitive book on the subject, entitled Expecting Better: Why the Conventional Pregnancy Wisdom Is Wrong-and What You Really Need to Know. She has generously agreed to answer blog reader questions, so fire away in the comments section below and, as always, we’ll post her answers in good time!
Here’s the Table of Contents to get you started: Read More »
A couple weeks ago, Uri Gneezy and John List asked our blog readers to come up with titles for their new book. And our readers did not disappoint! There were over 400 suggestions, many of them brilliant.
The authors and their editors have now narrowed it down to five choices, and they once again are asking for your help in deciding on the final title. There is no better way to solicit that input than — you guessed it — a field experiment. To get you interested, they are putting up another $1,000 in prizes to participants.
The rules are simple: You go here and answer two simple questions.
First, you will be asked to choose which of the five titles you think will be the most popular among all the respondents. They don’t want to know your favorite title, they want to know the title you think other people will like best. Read More »
Let’s see if I can do it again.
All eyes are on Orb and Oxbow, the winners of the first two legs of the Triple Crown. Those two horses are likely to be heavy betting favorites in the Belmont. And according to my model, they look okay, but not attractive at the odds they will go off at.
Instead, my numbers suggest a trio of long shots are the place to put your money: Palace Malice, Overanalyze, and Golden Soul. Each of those horses should pay about 15-1 if they were to pull off an upset victory. Read More »