This week’s podcast is a rebroadcast of our episode called “Should Tipping Be Banned?” (You can download/subscribe at iTunes, get the RSS feed, or listen via the media player above. You can also read the transcript; it includes credits for the music you’ll hear in the episode.)
As we all know, the practice of tipping can be awkward, random, and confusing. This episode tries to offer some clarity. At its center is Cornell professor Michael Lynn, who has written 51 academic papers on tipping. Read More »
Unlike its natural rivals—San Diego, San Francisco, and Seattle—Los Angeles is a rotten place for a port. But that hasn’t stopped the city known for inventing and reinventing itself from becoming the busiest container traffic hub in the US. The story of how L.A. transformed itself into one of the world’s great shipping centers is rife with corruption, power politics, double-dealing, bribery, and betrayal. It’s a story that could only have dripped from the pen of one of the city’s Hollywood hacks–if it weren’t true.
Despite its worldwide association with sand and surf, Los Angeles began life as an inland community. Its original port was at San Pedro, roughly 25 miles to the south. But San Pedro had been cursed by nature. There was no shelter from waves and wind; it was far too shallow to accommodate shipping; and its bottom was mudflats, making construction of heavy piers or breakwaters difficult. Bringing cargo ashore meant transferring it to longboats from ships anchored several miles out at sea, rowing it ashore, and then hauling it by hand across a rocky beach and up a steep slope. The only alternative to this difficult operation was to beach the ship, an even more challenging undertaking. Writing in his 1834 account of his time as a sailor on a ship plying the California coast, Two Years Before the Mast: And Twenty-Four Years After, Charles Henry Dana called San Pedro a “hated… thoroughly detested spot.” Read More »
Season 4, Episode 5
The practice of tipping is one of the most irrational, un-economic behaviors we engage in. It’s not in our economic best-interest to tip; essentially we do it because it’s a social norm — a nicety. In this episode of Freakonomics Radio, Stephen Dubner looks at why we tip, what kinds of things can nudge tips upward, and what’s wrong with tipping overall. In the end, we wonder whether or not the practice of tipping should be eliminated altogether. Research shows that African American waiters make less in tips than people of other races, so tipping is a discriminatory practice. Later in the hour: if your parent has the gene for Huntington’s disease you have a 50% chance of getting it yourself. Huntington’s is a debilitating fatal disorder. People can do genetic testing to see if they will fall ill, yet only 5% of people choose to do so. Stephen Dubner talks to University of Chicago economist Emily Oster about her research on Huntington’s genetic testing, and the value of not knowing your fate.
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)
Our latest podcast is called “Should Tipping Be Banned?” (You can download/subscribe at iTunes, get the RSS feed, or listen via the media player above. You can also read the transcript; it includes credits for the music you’ll hear in the episode.)
As we all know, the practice of tipping can be awkward, random, and confusing. This episode tries to offer some clarity. At its center is Cornell professor Michael Lynn, who has written 51 academic papers on tipping. A few examples:
“Are Christian/Religious People Poor Tippers?”
“Sweetening the Till: The Use of Candy to Increase Restaurant Tipping”
“Determinants and Consequences of Female Attractiveness and Sexiness: Realistic Tests with Restaurant Waitresses”
“National Personality and Tipping Customs”
Because Lynn has largely built his career around tipping, it came as a bit of a surprise when Stephen Dubner asked him what he would change about the practice:
Read More »
LYNN: You know, I think I would outlaw it.
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)?
Amidst another scandal surrounding U.S. News and World Report’s college rankings, economists Christopher N. Avery, Mark E. Glickman, Caroline M. Hoxby, and Andrew Metrick have proposed another option: rankings based on students’ revealed preferences. Here’s the abstract:
Read More »
We present a method of ranking U.S. undergraduate programs based on students’ revealed preferences. When a student chooses a college among those that have admitted him, that college “wins” his “tournament.” Our method efficiently integrates the information from thousands of such tournaments. We implement the method using data from a national sample of high-achieving students. We demonstrate that this ranking method has strong theoretical properties, eliminating incentives for colleges to adopt strategic, inefficient admissions policies to improve their rankings. We also show empirically that our ranking is (1) not vulnerable to strategic manipulation; (2) similar regardless of whether we control for variables, such as net cost, that vary among a college’s admits; (3) similar regardless of whether we account for students selecting where to apply, including Early Decision. We exemplify multiple rankings for different types of students who have preferences that vary systematically.
The outgoing leader of China, Hu Jintao, has made fighting corruption one of the centerpieces of his party’s agenda. Perhaps because of that, my corruption antennae were working overtime while I was in China.
In Beijing, it seemed like our tour guide was perhaps a little corrupt. For example, we attended an acrobatic show one night. Included in the tour package were regular tickets to the show. There were also two more expensive classes of tickets available, we were told, that would afford a better view. The difference in price was not that great – maybe an extra $10 per person for the best tickets, and $5 more for intermediate tickets. We gave the tour guide the extra $10 per person and told him to upgrade us to the most expensive tickets. Our seats were indeed not bad, roughly the twentieth row of a theater that had perhaps 60 rows. The back of chair was emblazoned with the letters “VIP.” But here is the thing: almost every seat in rows 16 to 20 was filled. Rows 3 to 15 were completely empty (as were rows 40-60…it was not a big crowd on hand). Rows 1 and 2 were completely full. The only logical conclusion I could draw was that within each price range, the theater filled seats from front to back, and that our tour guide had taken the extra $10 per person, pocketed half of it, and bought us tickets in the intermediate price range. Had the theater not been so empty, his scheme wouldn’t have been at all obvious – we would have thought it was just bad luck that we were in the back of the VIP section, but the empty rows gave him away. Read More »