Archives for decision-making



Is Learning a Foreign Language Really Worth It? A New Freakonomics Radio Podcast

Our latest podcast is called “Is Learning a Foreign Language Really Worth It?” (You can subscribe at iTunes, get the RSS feed, or listen via the media player above. You can also read the transcript, which includes credits for the music you’ll hear in the episode.) We produced the episode in response to a question from a listener named Doug Ahmann, who wrote in to say:   

I’m very curious how it came to be that teaching students a foreign language has reached the status it has in the U.S. … My oldest daughter is a college freshman, and not only have I paid for her to study Spanish for the last four or more years — they even do it in grade school now! — but her college is requiring her to study EVEN MORE! 

What on earth is going on? How did it ever get this far?

In a day and age where schools at every level are complaining about limited resources, why on earth do we continue to force these kids to study a foreign language that few will ever use, and virtually all do not retain?

Or to put it in economics terms, where is the ROI? 

Great question, Doug! We do our best to provide some answers. Read More »



With Age Comes (Economic) Wisdom

A new study seems to confirm the adage that older means wiser, at least when it comes to making decisions about economic matters. From ScienceDaily:

To conduct their research, [Ye] Li and his colleagues recruited a group of 336 people — 173 younger (ages 18 to 29) and 163 older (ages 60 to 82) — and asked them a series of questions that measured economic decision making traits. They also administered a battery of standard fluid and crystallized intelligence tests.

These traits included temporal discounting (how much people discount future gains and losses), loss aversion (how much the valuation of losses outweigh gains of the same magnitude), financial literacy (understanding financial information and decisions) and debt literacy (understanding debt contracts and interest rates).

They found the older participants performed as well or better than the younger participants in all four decision-making measures. The older group exhibited greater patience in temporal discounting and better financial and debt literacy. The older participants were somewhat less loss averse, but the result did not reach standard levels of significance.

“The findings confirm our hypothesis that experience and acquired knowledge from a lifetime of decision making offset the declining ability to learn new information,” Li said.

(HT: R.E. Riker)



Freakonomics Experiments Lottery Winners

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 »



Do You Really Want to Know Your Future? A New Freakonomics Radio Podcast

Our latest podcast is called “Do You Really Want to Know Your Future?” (You can download/subscribe at iTunes, get the RSS feed, or listen via the media player in the post. You can also read the transcript; it includes credits for the music you’ll hear in the episode.) 

If you could take a test that would foretell your future – at least your medical future – would you? And if you did, how would that affect the way you live your life?

The economist Emily Oster wondered how people at risk for the neurological disease Huntington’s answer those questions. Huntington’s is genetic: the children of a person with the disease have a 50 percent chance of carrying the mutation themselves. Symptoms usually surface in one’s 30s or 40s, worsen over time, and end in death. Oster wanted to know how people with the gene respond to the prospect of a shortened lifespan. Read More »



Would You Let a Coin Toss Decide Your Future? A New Freakonomics Radio Podcast

Our latest Freakonomics Radio podcast is called “Would You Let a Coin Toss Decide Your Future?” (You can download/subscribe at iTunes, get the RSS feed, or listen via the media player above. You can also read the transcript below; it includes credits for the music you’ll hear in the episode.)

In it, Stephen Dubner grills Steve Levitt about a new project called Freakonomics Experiments. (Levitt blogged about it here and stopped by Marketplace last week.) The basic idea is to learn more about how people make decisions, especially when they’re on the margin. So: if you’re struggling with a decision, large or small, you can bring your question to FreakonomicsExperiments.com, where a random coin flip will help solve your dilemma. You also become part of the scientific experiment by taking follow-up surveys and letting the research team know how the decision turned out.

The idea originated from the flood of emails Dubner and Levitt received in response to our “Upside of Quitting” podcast. Many listeners said the show had emboldened them to quit something they no longer wanted to do. In this podcast, you’ll hear from two of those quitters: former racecar driver Daniel Herrington and ex-runner Serra Mentessi. Read More »



Introducing “Freakonomics Experiments”: A New Marketplace Podcast

Our latest Freakonomics Radio on Marketplace podcast is called “Introducing ‘Freakonomics Experiments.’” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player in the post, or read the transcript below.)

In it, Steve Levitt tells Kai Ryssdal about a new website we’ve just launched that will help you make tough decisions in life while also taking part in academic research. And there’s Freakonomics swag to be had, too.

So if you or someone you know has a tough decision to make, head over to FreakonomicsExperiments.com. You can read about  the experimental design and check out the FAQ. For instance:

Q: Just what is Freakonomics Experiments?

A: Freakonomics Experiments is a set of simple experiments about complex issues — whether to break up with your significant other, quit your job, or start a diet, just to name a few.

Sometimes in life you face one of these decisions, and you just don’t know what to do. In the end, whatever you decide will essentially be a flip of a coin. Freakonomics Experiments helps you make the decision by flipping that coin for you. Over the next few months, we’ll then check in with you with surveys and other materials. In turn, you’ll help further scientific research. Unlike most games of chance, participating in this experiment is win-win.

Read More »



Having Trouble Making a Big Decision? We Can Help

We all face big choices from time to time.  Which college to choose?  Should I break up with my girlfriend?  Should I quit my job?  Should I dye my hair blond?

Sometimes the decisions are easy and obvious.  Other times, no matter how much you think about it, no clear answer emerges.  Your life might be very different depending on what path you take, but you just can’t tell which choice will leave you better off.

If you find yourself in that kind of bind, we are launching a new website today, www.FreakonomicsExperiments.com, that just might be your savior. Read More »



Americans Inconsistent on Financial Risk

A new paper in the American Economic Review (abstract; PDF), summarized here, finds that Americans aren’t very consistent when thinking about financial risk. Liran Einav, Amy Finkelstein, Iuliana Pascu, and Mark R. Cullen, analyzing how people choose health insurance and 401(k) plans, found that “at most 30 percent of us make consistent decisions about financial risk across a variety of areas.”  Their data set includes 13,000 Alcoa employees:

Because employees were making decisions in both the health-care and retirement domains, the researchers had the opportunity to see how the same individuals handled different types of choices. Or, as Finkelstein puts it, the economists could ask: “Does someone who’s willing to pay extra money to get comprehensive health insurance, who doesn’t seem willing to bear much financial exposure in a medical domain, also tend to be the one who, relative to their peers, invests more of their 401(k) in [safer] bonds rather than stocks?”

Read More »