Search the Site

Freakonomics Blog

Why Cell Phone Networks Crash During an Emergency

Maggie Koerth-Baker of BoingBoing interviews Brough Turner, a phone system expert, about why it’s hard to make cell phone calls during an emergency. Turner addresses the mechanics and limitations of cell phone networks and points out that, nostalgia notwithstanding, the pre-cell phone era faced its own technical problems:

Well, say you’d have an earthquake in California. This was for the old Bell system. The national long distance routing has a set of standard, predefined routes and it had network control centers in New Jersey and other places. Things would get overloaded and they would manually intervene by putting access restrictions on new calls coming into the area that was congested. In the 60s, 70s, and 80s they would let through one out of every five call attempts. They were doing that manually and just arbitrarily to reduce congestion.

(HT: The Big Picture)


Terminal Illness: Readers' Best and Worst Airports

Thanks to those who participated in our call to sound off about your favorite and least favorite airports. The results: 

At the top of the list of best airports, by a long way, was Amsterdam’s Schiphol. I have not flown into Schiphol myself, but I’m not at all surprised by this ranking, as the Dutch are genius urban planners. Schiphol has a branch of the Rijksmuseum art museum, displaying actual old masters, and a shopping mall which is open to the public as well as travelers.

  • “Great options to suit everyone – awesome baby & kids facilities, casinos for dad and plenty of decent shopping as well as food options. It really made for an easy 6hr layover with baby.”—Cam

No, there are no “coffee shops,” in Schiphol, so don’t be attributing the glowing reviews to anything but the quality of the airport. (Perhaps the same cannot be said for Managua, Nicaragua, which reader ephman ranks as his favorite because “you can buy Oxycontin in the waiting area without a prescription to entertain yourself for the long flight to wherever you’re going.”)


Why Doesn't the Government Fix Sporting Events?

This blog has clever readers. One of them, Corey Forbes, writes in to say:

We know that point shaving, game throwing, match fixing and referee scandals have existed in professional and college sports since as long ago as the 1919 Chicago White Sox. Knowing this, why doesn’t the U.S. Government just fix a sporting event(s) to pay off its debts … or are they doing this already?

I love the “or are they doing this already?”

Anyway: why not indeed (other than the potential p.r. and financial disasters)?


Help Wanted. No Smokers Need Apply (Ep. 123)

Our latest podcast is called “Help Wanted. No Smokers Need Apply.”  (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript.)

In many states (21, to be precise), it is perfectly legal for an employer to not hire someone who smokes. This might seem understandable, given that health insurance is often coupled to employment, and since healthcare risks and costs are increasingly pooled. And so: if employers can exclude smokers, should they also be able to weed out junk-food lovers or motorcyclists — or perhaps anyone who wants to have a baby?


Parking Isn't Always Hell

On the heels of our “Parking Is Hell” podcast, we received an email from Alicia Hickey — a data analyst at ParkatmyHouse.com, a website that matches drivers with homeowners who have unused parking spaces in their driveways or garages. According to Hickey, ParkatmyHouse gets more than 10,000  visits a day and has 15,000 spots worldwide, the majority in the U.K. She  explained the pricing model to us:

If you look at parking near, say, Harvard University, a ParkatmyHouse space costs as little as $2/hour or $24/day. One-hour parking at a nearby garage costs $9 for the first hour. Three hours parking at that garage will cost you $24 (the 12-hour rate). That’s $18 more than what the ParkatmyHouse space would cost for that same amount of time. It’s difficult to give the average price of a parking space; it depends on the location and the property owner, but parking with ParkatmyHouse will always be cheaper than parking with a meter or in a commercial car park.

Hickey also told us about a few big success stories:


The History of Taxes

If you’re still fuming over taxes this year, take a look at Mike Duncan and Jason Novak‘s (slightly biased) cartoon explanation of the history of taxes. The income tax really got its start in 1913:

Congress immediately passes the Revenue Act of 1913, creating the first permanent income tax.  No one really notices because the vast majority of incomes are taxed at just 1%.  The mustache twirling robber barons get pretty grumpy, though.  Then Wilson plunges us into WWI and unleashes the awesome potential of the new income tax.  The top end rate jumps to 77% and revenue increases 635%.

(HT: The Big Picture)


Trojan Horse Slaughter

As Americans watch Europeans condemn the discovery of horsemeat in their Ikea meatballs, we can take some solace in the fact that, for once, we’ve sidestepped an industrial food-related travesty. Our complacency, however, could be short-lived. Although less dramatic than horse DNA adulterating ground beef, another horse-related scandal is about to implicate U.S. citizens in a scheme that will send tainted horsemeat into foreign markets while enriching U.S. horse slaughterers with taxpayer dollars.  

The last U.S.-based horse slaughterhouse closed in 2007. The phasing out of horse slaughter in the United States ended the exportation of U.S.-produced horsemeat to Canada, Europe, and Japan. This development, among other accomplishments, spelled the decline of a niche business that profited from a product that American taxpayers financially supported (through USDA inspection of horse slaughterhouses) but were loathe to consume (plus, it’s illegal to sell horsemeat in the U.S.). 


Please Don't Pee Here — or Anywhere

Yesterday, Sanjoy Mahajan wondered why signs that encourage hand-washing are at the sinks, where hand-washing avoiders may not see them. What do you think of the placement of the sign below, reportedly in Bangalore?

(HT: Michael Diamond)


When Hacking Is the Smaller Crime

Here’s a fascinating article in the Yale Journal of International Affairs, by Paul Rexton Kan of the U.S. Army War College, about cyberwar between non-state agents — in this case, Anonymous versus Los Zetas, the Mexican drug cartel. Read the whole thing; here’s the first paragraph:

In the fall of 2011, two clandestine non-state groups—a hacktivist collective and a Mexican drug cartel—stared each other down in the digital domain, with potentially fatal real world consequences for both sides. Los Zetas, a Mexican drug trafficking organization composed of former members of Mexico’s Special Forces, kidnapped a member of Anonymous, the global hacking group, in Veracruz on October 6th. In retaliation, Anonymous threatened to publicize online the personal information of Los Zetas and their associates, from taxi drivers to high-ranking politicians, unless Los Zetas freed their abductee by November 5th. The release of this information on the Internet would have exposed members of Los Zetas to not only possible arrest by Mexican authorities, but also to assassination by rival cartels. Unconfirmed reports suggest that Los Zetas then attempted to “reverse hack” Anonymous to uncover some of its members and to threaten them with death. As a consequence, a few members of Anonymous sought to call off the operation and disavowed those members who wanted to go forward. With time running out and locked in a stalemate, Los Zetas released their kidnap victim on November 4th with an online warning that they would kill ten innocent people for each name that Anonymous might subsequently publicize. Anonymous called off its operation; each side appeared to step back from the brink.

(HT: LTC Scott Kelly)


Why Are Restroom Hand-Washing Signs By the Sinks?

All over America, restrooms for the public (for example, in restaurants or public parks) have signs warning and exhorting us that “Employees must wash hands before returning to work” or “Hand-washing stops the flu!” These are useful public-health messages. However, in almost every restroom I’ve been to, the sign stares at you from the mirror behind the sinks. What is the point of reminding the already hygiene-conscious to wash their hands?

But in the San Francisco airport a few days ago, I finally found a “Clean hands, good health!” sign at the restroom exit door. I don’t know whether it ever caused someone to U-turn and head for the sinks, but at least it isn’t carrying coals to Newcastle.


A Story About Names Never Fails to Get Our Attention

Our recent podcast “How Much Does Your Name Really Matter?” generated a lot of response. Here are a few interesting ones. First, from F.D. Stein of Tennessee:

Loved this podcast; sorry you guys did not find the developer my company worked with in the 1980’s. He was from Oklahoma; his name was Never Fail. His brother was named Will Fail. Never (and his son Never Fail Jr.) were quite successful, and dashing examples of real estate developers at the time. 

I feared this one was too good to be true, but Mr. Google backs up Mr. Stein here, here, and here. Stein later wrote in with a further bit of comment:

They were the developer of Waterford Place Apartments in Chattanooga. Bill Severins was their project manager, former Kansas City Royals baseball player. Never Fail looked like Peter Grant of Mission Impossible; striking, tall, white hair perfectly groomed. The 1986 tax law killed them as real estate developers.

We also heard from Tim Harling, who shared his parental naming criteria:


Crowdsourcing Economics

An interesting approach to economics, from UC Berkeley economists William Fuchs, Brett Green, and David Levine: crowdfunding.

But first, some background, because this is fascinating stuff. The typical household in rural Africa is “off the grid.” With no electricity, such households spend a significant fraction of their income on kerosene for lamps. Yet for about $20, they can buy a solar light, which provides a superior source of light and charges their cell phones. (Yes, cell phone use is common, even in rural households with no electricity; they simply walk to the nearest town and pay to charge their phones.)  Given that the light pays for itself in about 6 weeks and lasts for about 3 years, purchasing one seems like a no-brainer. Yet few households have done so.  These intrepid economists are trying to figure out why, and want to see whether the barriers to adoption can be overcome in a profitable way. In order to do so, they are running controlled experiments in rural Ugandan villages using various combinations of incentives and financing arrangements.


Where to Find the Music in Freakonomics Radio Podcasts?

A few times a week, we get an e-mail like this one, from Oliver Breidenbach:

Hi guys,

I love the music you choose for the background of the podcast. Can you post a playlist on your site or let me know where I can find the music? I think many fans will enjoy that.

One reason we get this question so often is that the music in our podcasts is so good. So is, IMHO, the entire audio soundscape. All of that is primarily the doing of one man, David Herman, who is Freakonomics Radio’s sound engineer/technical director/trivia repository — and more.

As for where to learn about the music: we list it in each show’s transcript, which accompanies the blog post that is published with each episode. Our podcast archive page is here. Enjoy!


The Cost of Hunting Witches

We’ve blogged before about witches — mainly with respect to how economic conditions affect witch hunting. Writing for Worldcrunch, Rodrigue Mangwa investigates the practice and explains the economics of witch trials in the Congo:

It should be noted that the witchcraft trials are not free, and are an important source of revenue for the tribal chief. Before the dispute can be brought to the court, each party has to pay a mandatory fee of $200 – the price of a cow – whether they can afford it or not.

The headmaster of a primary school situated in Rubanga, 10 kilometers from the village of Lemera, says the witchcraft trials are just a way to exploit the local poor farmers in order to generate revenue for the tribal chief. “It would be naïve to think this is a real test of witchcraft. The tribal judges, who are pawns of the Mwami, are bribed to hand out false verdicts,” he says.

(HT: Marginal Revolution)


The Economics of Toilet Paper

You never know what kind of useful information will turn up in your in-box. From a reader named Darin Haselhorst:

Steven and Stephen,

Thought this might be right up your alley.  An analysis only a true cheapskate could love.

I get very frustrated trying to compare prices on “paper products” at my local supermarket, Safeway.  They have various marketing terms meant to confuse the average consumer, regular, double, mega etc., making nearly impossible to compare prices on the spot.  So, I threw together a little spreadsheet (attached).

The price as Safeway was not all that surprising until you compare it to the price for which Amazon is willing to deliver it to your front door.  The Amazon Subscribe and Save program is about 30% cheaper than going to the store.  Not too bad.  If you have Amazon deliver 5 items on automatic delivery, they will take an additional 20% off the entire delivery.  A deal any true economist simply cannot pass up.

Its surprising to me that Amazon is willing to deliver to your door for approximately half the price Safeway has on their shelf.


Pay Your Weight to Fly

Our recent Freakonomics Radio podcast “100 Ways to Fight Obesity” looked at some of the social costs of America’s increasing rate of obesity. One airline in Samoa is experimenting with defraying some of those costs. It will soon start charging passengers by the kilogram. From The Sydney Morning Herald: 

Samoa Air has become the world’s first airline to implement “pay as you weigh” flights, meaning overweight passengers pay more for their seats.

“This is the fairest way of travelling,” chief executive of Samoa Air, Chris Langton, told ABC Radio. “There are no extra fees in terms of excess baggage or anything – it is just a kilo is a kilo is a kilo.”


An App for Names

Our latest Freakonomics Radio podcast is called “How Much Does Your Name Matter?” A listener named Mark Edmond wrote in to tell us about Nametrix, a names app he created:

I’m a new dad who was researching baby names and whipped up an app in spare moments over the last year that tells you stuff like this:

It turns out that Ellen is a disproportionately common name for:

  1. psychotherapists
  2. librarians
  3. activists

Ellens also overwhelmingly lean toward the Democrat party and have tended to be most popular in the northeastern part of the U.S.

You can also see names ranked within professions, e.g., these are the top three names for guitarists:

  1. Trey
  2. Rusty
  3. Sonny

I have no idea how good Nametrix works on these dimensions. Having seen a lot of bogus names “data,” I am always a bit leery — especially because it is easy to mistake certain naming patterns for destiny while ignoring the more basic indicators like age, income, education, race, etc. I asked Mark how he assembled his data; here’s his reply:


A Rental Car Puzzle

Have you ever noticed that whenever you rent a car, when they give you the keys to the vehicle, there are always two sets of keys?  But the two sets of keys are attached to the same key chain, and no matter how hard I’ve tried, I have never figured out a way to detach one set of keys from the other.

What could possibly be the point of giving customers two sets of keys that can’t be separated?  The downside is that if the keys get lost, two sets of keys are gone.  Also, the keys are much bulkier in my pocket than otherwise would be the case.

The only possible explanation I can see is that since no one carries around two attached sets of keys to the vehicle they own, people are less likely to confuse their own car keys with those of the rental vehicle.  It just doesn’t seem like that could be the logic, however.

So can anyone explain to me the real reason rental car companies do this?


Equal Opportunity Greed

One of the President’s budget proposals treats tax deductions as if a person’s marginal tax rate were 28 percent, rather than the actual possibly 39.6 percent.  This would bring in substantial extra tax revenue, yet it wouldn’t violate the Republicans’ strong distaste for higher marginal tax rates on the grounds that they allegedly stifle incentives of the rich.  Despite that, they are complaining loudly.

The President is finally proposing indexing Social Security benefits by the chained CPI, a more correct measure of price inflation than the current measure.  Using it would reduce benefit growth and make indexation fairer to taxpayers and recipients.  Yet I have already been deluged by liberal groups’ email petitions objecting to this change.

The only good thing about this sorry spectacle is that it is nice to know there is no shame on any side.


Did Something I Do Actually Have an Impact on Public Policy?

I have spent the last 20+ years of my life doing academic research and popular writing on economics.  I’ve been lucky, and my work has gotten a lot of exposure.  I certainly have had a lot of fun along the way.

But, I think I can honestly say that no government has ever changed a law or a public policy as a result of my work.  Sometimes politicians cite my research in pushing an agenda but having talked to these politicians, it is clear they had the agenda first, and then they went looking for research – any research – that would support their position.  When I’ve taken unpopular stances (like saying children’s car seats don’t work well), there has never been even a sliver of political movement on the issue.

Finally, however, I think I may be on the verge of my first policy victory.


Mourning Thatcher in Estonia

An Estonian Public Broadcasting news article about the death of former British prime minister Margaret Thatcher noted her efforts to help Estonia’s early independent government break with Soviet-era policies. It also included the following:

Of the three, it was Thatcher’s economic policies in particular that were often cited by Mart Laar, the country’s prime minister who came to power after the first post-independence parliamentary elections, as the blueprint for his free-market reforms.

In 2010, Laar told the Freakonomics Radio podcast: “The flat tax I got on my first meeting with Margaret Thatcher, who I admired very much and who was a great admirer of Milton Friedman. I met her first when I had been prime minister I think for some months and so on, and when I told her what I am planning to do, she looked at me with these big eyes and said ‘you are one brave young man.’ And then a little bit introduced me on the realities of the Western world on which I was not very well informed. But I didn’t stop.”

Freakonomics podcast listeners may recall that Laar appeared on one of our earliest podcasts “What Would the World Look Like if Economists Were in Charge?“


Who Steals Healthcare Insurance?

What happens when a firm starts a “dependent verification” program designed to make sure that its employees are carrying only legitimate dependents on their health insurance? The economists Michael Geruso and Harvey Rosen ask that question in a new working paper called “Fraud in the Workplace? Evidence from a Dependent Verification Program” (abstract; PDF). A few key sections are bolded below:

In recent years many employers, both in the private and public sectors, have implemented dependent verification (DV) programs, which aim to reduce employee benefits costs by ensuring that ineligible persons are not enrolled in their health plan as dependents. However, little is known about their efficacy. In this paper, we evaluate a DV program using a panel of health plan enrollment data from a large, single-site employer who implemented it several years ago. We find that relative to all other years, dependents were 2.7 percentage points less likely to be reenrolled in the year that DV was introduced, indicating that this fraction of dependents was ineligibly enrolled prior to the program’s introduction. These disenrollment effects were especially large for same-sex partners and older children. We show that the program did not induce employees to leave the employer’s plan and (say) put themselves and their dependents on the spouse’s plan. We also show that disenrollment occurred because dependents were actually ineligible, not because of compliance costs that might be associated with providing documentation. The DV program saved about $46 per enrolled employee. A considerable fraction of these cost savings came from removing older children who didn’t meet additional criteria. Therefore, the dependent coverage provision of the Affordable Care Act of 2010, which essentially renders all children up to age 26 eligible in all employer health plans, will substantially limit the future cost saving potential of such programs. Hence, as the state governments and private employers that have implemented DV programs adapt to the new regulatory environment, the popularity of dependent verification programs may well diminish.

The next time you’re counting up all the reasons why employer-based healthcare insurance is a bad idea, you can include this one, too.


Kerwin Charles, Erik Hurst, and Matt Notowidigdo on the U.S. Labor Market

Three of my colleagues and friends at the University of Chicago — Kerwin Charles, Erik Hurst, and Matt Notowidigdo — recently presented some new research that aims to understand the ups and downs in the U.S. labor market.  It’s more serious and important than the usual stuff we deal with on the blog, but every once in a while we deviate from trivialities when something really good comes along. 

They’ve been kind enough to put together a layperson’s version of the research below.  For those looking for the full-blown academic version, you can find that here.

A Structural Explanation for the Weak Labor Market
By  Kerwin Charles, Erik Hurst, and Matt Notowidigdo

In the aftermath of the Great Recession, the labor market has remained anemic.  Between 2007 and 2010, the employment-to-population ratio of men between the ages of 21 and 55 with less than a four-year degree fell from 82.8 percent to 73.8 percent.  As of mid-2012, the employment-to-population ratio for these men remained depressed at 75.6 percent.[1] 

In our new working paper (abstract; full PDF), we show that the recent sluggish labor market in the U.S. – particularly for prime age workers without a college degree – can be traced back to the large sectoral decline in manufacturing employment that occurred during the 2000s.  After decades of relative stability, total manufacturing employment in the U.S. fell by 3.5 million jobs between the beginning of 2000 and the end of 2007 (see chart below).  These manufacturing jobs were lost even before the Great Recession started.  During the recent recession, another 2 million manufacturing jobs were lost.  While there is talk of a recent manufacturing rebound in the U.S., the recent increase is only a tiny fraction of the total manufacturing jobs lost during the 2000s.


How to Fix College Coaching?

Rutgers University fired Mike Rice – the head basketball coach – last Wednesday. This firing came about after ESPN released a video that showed Rice abusing his players. Such a video had already been seen by Rice’s boss at Rutgers in November, but until the video was shown to the public, Rutgers did not feel compelled to fire Rice.

Former NBA player Paul Shirley (author of Can I Keep My Jersey?) observed the following about the Rutgers case in a recent interview at HuffPost Live (around 13:30):

The thing that people don’t want to hear, but which is true, is that this is probably closer to the norm than not. 

Shirley goes on to note that he doesn’t think many coaches are actually hitting players. But he does note that coaches do tend to have a certain approach in conveying information to players (an approach Shirley describes in the interview).

Is this general approach to coaching effective?  To date, I am not aware of any study of the effectiveness of college coaching.  A study I co-authored with Mike Leeds, Eva Marikova Leeds, and Mike Mondello and published in the International Journal of Sport Finance (full PDF here) looked at 62 NBA coaches across thirty years of data. Across this sample, only 14 coaches were found to have a statistically significant and positive impact on player performance. So most NBA coaches do not appear to make their players more productive.


Pay After You Go?

We’ve blogged extensively about pay-as-you wish pricing schemes. Springwise reports that a Spanish concert promoter is now experimenting with post-concert pay-as-you-wish pricing:

Spanish promoters Caravana de Emerxencia have recognized this problem and addressed it through their upcoming gig, where attendees can decide the price of the ticket when they leave.

The concert is taking place on April 4 at Sala Capitol in Santiago, northern Spain. Four bands will be playing on the night – Skarallaos, Chotokoeu, Skarnivals and Swingdigentes. At the end of the evening attendees can pay whatever price they think the event deserves.

How do you like this plan? How do you think you would respond?


Does a "Baby Bonus" Mean More Crime?

That’s the question asked by an Australian reader named Peter Gartlan:

In 2004, the Australian government introduced a $4,000 lump sum payment for having a baby, known as the Baby Bonus. [Note: it was judged to be somewhat effective.]

The anecdotal evidence is that this instantly created a huge wave of young unmarried teenage mothers from lower socioeconomic communities who saw the BB as a great big “free money” sign.  At the time it was also referred to as the “Plasma TV” bonus. Anyway, many teenage mothers had many babies, and received many payments. But obviously the motivation was money, not family. And $4,000 does not go very far when bringing up kids, as you know.

So after I read your “Abortion Reduces Crime” study, I wondered whether the BB would demonstrate the inverse scenario.

As you will note in this article from my local newspaper, it appears there is now evidence of the beginnings of a new juvenile crime wave.

It is easy to see how a baby bonus, like a variety of bounties we’ve explored, can have unintended consequences. It is a good research question, to be sure. (Australia is hardly the only country to have tried this.)


Adventures in Ideas: Sex Workers of the World, Unite! An Interview With Maxine Doogan

Freak Readers, It is my distinct pleasure to introduce Maxine Doogan, from the Erotic Service Providers Union. I won’t offer a lengthy introduction —I’d embarrass Maxine! — because her words below say it all. Maxine has taught me a lot about prostitution and the sex trade in general. She has been instrumental in helping me craft my own research. Together, we hope to launch the first multi-city comprehensive research study of the sex economy. In a subsequent post, I’ll ask you for some feedback on that project. For now, I want to share her insights about the sex economy today. 

Q. Our readers might be interested in understanding exactly what you are seeking that might improve the economic conditions of sex workers? By the way, how you do you define “sex worker”?  

A. To improve one’s economics is to improve their lives and the larger communities. 


The Tax Man Nudgeth (Ep. 121)

Our latest Freakonomics Radio on Marketplace podcast is called “The Tax Man Nudgeth.”  (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript.)

The U.S. tax code is almost universally seen as onerous and overly complicated. There is always talk in Washington about serious reform — Michigan Reps. Dave Camp (R.) and Sander Levin (D.) are currently working on it — but, Washington being Washington, we probably shouldn’t hold our breath.

So in this podcast we decided to take a look at the tax code we’re stuck with for now and see if there are some improvements, however marginal, that are worth thinking about. We start by discussing the “tax gap,” the huge portion of taxes that simply go uncollected for a variety of reasons. We once wrote about a clever man who helped close the gap a bit. In this episode, former White House economist Austan Goolsbee tells us why the government doesn’t try too hard to collect tax on all the cash that sloshes around the economy.

You’ll also hear from Dan Ariely, who has an idea for turning the act of paying taxes into a somewhat more satisfying civic duty.


To Test or Not to Test

Many folks always ask me what the impact of randomized trials are on development. We at Innovations for Poverty Action and the M.I.T. Jameel Poverty Action Lab are dedicated to randomized trials to help push forward evidence-based policymaking. Yet what is the evidence that evidence shifts views? Not always so easy to do. I’ve done some work on the donor side, which I’ve reported on here before.  Here is a meta-study that uses two of my studies that found fairly different results. One found that access to credit in South Africa led to increased income, the other found that access to credit in the Philippines had no discernible impact on income.

The researchers sent off about 1,500 mailers to microfinance institutions around the world, telling them about the positive study, the negative (or non-positive, technically) study, or a placebo (no mention of a study), and asked them if they wanted to participate in a randomized trial to measure the impact of their organization.  They then saw which microfinance leaders responded, and whether they responded favorably or negatively.