The Busara Center

Behavioral economics has a new testing ground: the Busara Center for Behavioral Economics in Nairobi, Kenya. The lab, which will be open to researchers and students from around the world, is hosted by Innovations for Poverty Action (IPA).  Here's its website blurb:

Busara is a state-of-the-art facility for experimental studies in behavioral economics and other social sciences, located in Nairobi, Kenya. The core of Busara is a pool of participants from the Nairobi slums, combined with a cluster of 20 networked computers with which researchers can investigate economic behavior and preferences. A central feature of the computer setup is that all computers have touchscreen monitors; together with specially developed paradigms, this allows for the participation of not only computer-illiterate, but entirely illiterate populations.

Johannes Haushofer, the Scientific Director of the Center, gave us a little more information:

Does Studying Economics Teach You to Lie?

new paper by Raúl López-Pérez and Eli Spiegelman investigates "truth preferences" -- i.e., preferences for being honest versus lying. Their goal was to study whether economics students lie more as a result of their education. Or do liars self-select? From the paper:

Does studying economics give people “maximizing” habits of thought, and thus cause them to  behave more in line with its own predictions, or do people already inclined towards such behavior tend to self-select into economics?

A computer test structured with a slight incentive to lie was administered to 258 students at The Autonomous University of Madrid. The screen showed two colors, and participants were paid 14 euros for declaring blue and 15 euros for declaring green to another person, regardless of the actual color shown on screen. So what happened? According to the authors, the business and economics ("B&E") majors gamed the system.

Too Much Trash? Get Rid of the Trashcans

New York City's Metropolitan Transportation Authority is trying a counterintuitive approach to cleaning up the subway by removing trash cans from some of its dirtiest stations. According to the New York Times, a subway stop in Queens and another in Greenwich Village have been entirely without trashcans for the last two weeks:

The idea is to reduce the load on the authority’s overtaxed garbage crew, which is struggling to complete its daily rounds of clearing out 40 tons of trash from the system.

But it also offers a novel experiment: will New Yorkers stop throwing things away in the subway if there is no place to put them?

Results have so far been mixed. While one bin-less station appeared relatively clean to a Times reporter, the experiment is obviously having some knock-on effects.

The Myth of Common Sense: Why The Social World Is Less Obvious Than It Seems

This is a guest post by Duncan Watts, a principal research scientist at Yahoo! Labs, and the author of Everything is Obvious: Once You Know The Answer.

The Myth of Common Sense: Why The Social World Is Less Obvious Than It Seems
By Duncan Watts

“Mankind, it seems, makes a poorer performance of government than of almost any other human activity.”
-Barbara Tuchman, The March of Folly

“This is not rocket science”
-Bill Frist on fixing health care, The New York Times

As these two quotes illustrate, there is something strangely conflicted about contemporary views on government and policy. On one hand, many people are in apparent agreement that government frequently accomplishes less than it ought to, sometimes embarrassingly so. Yet on the other hand, many of these same people are also of the opinion that the failings of government do not imply any great difficulty of the problems themselves—that they are not rocket science, as it were.

The Boss Effect: Study Shows Chinese Recognize Their Boss's Face Before Their Own

A small study published in the journal PLoS One, titled "Who’s Afraid of the Boss," reveals key cultural differences in the way people react to their superiors. The study notes a particularly stark difference between Chinese and Americans. Researchers in both countries showed subjects a rapid series of photographs, asking them to press a button either when they recognized themselves or their boss. The abstract states:

Human adults typically respond faster to their own face than to the faces of others. However, in Chinese participants, this self-face advantage is lost in the presence of one's supervisor, and they respond faster to their supervisor's face than to their own.

Americans, on the other hand, are predictably different in light of a cultural emphasis on independence rather than collectivism.

An Economist's Twitter Experiment Begins

I promised to give Twitter a real randomized trial. And so today, it begins. I woke up, flipped a coin, and it came up heads. Which means that today I’ll be tweeting. You can follow me @justinwolfers. What I do tomorrow is up to the coin.

I announced this experiment here three weeks ago, but wanted to spend some time getting used to this new medium. Here are eleven things I learned during my pre-experiment trial:

1. Twitter is fun. And addictive.

2. Information really does move at light speed. I find myself reading tomorrow’s newspaper, today. (But remember: tomorrow’s newspaper will be here in the morning.)

3. As a Twitter-virgin, I hadn’t previously realized how much more it is about sharing links than making glib statements. Hive-mind curation can be extraordinary.

Which City has the Most Dis-Honest Tea Drinkers?

According to an experiment by Honest Tea, it's L.A.

The company has placed unattended racks of its cold bottled tea on street corners in a handful of cities. A sign asks people to pay $1 per bottle, a heavy discount already. Viewers then "watched people wrestle with their conscience." Hidden cameras live-stream the action here.

So far, the citizens of Seattle are coming out as the most honest, with 97% of people paying. Atlanta, Boston, Dallas and Cincinnati are in second with 96%. L.A. is last with 87% -- they were actually at 90% earlier today, but that fell as the day went on, and the temperature went up. Here are yesterday's high temperatures for the handful of cities, in order of payment rates:

A Twitter Experiment

I’m a long-time Twitter skeptic. It’s difficult for an economist to see a 140 char lmt as a ftr. My journalist friends tell me I’m dead wrong. And a recent long and boozy evening with co-founders Evan Williams and Jason Goldman convinced me to give it a try. Is Twitter worth the hype? Let’s find out.

Today I’m beginning my Twitter Experiment. I’m now tweeting @justinwolfers. I’m going to keep this up for a couple of weeks as a “burn in” period—basically so that I can learn the ecosystem before my experiment begins. Then on the morning of August 1, I’m going to wake up, and flip a coin. Heads, I’ll open Twitter; tails I won’t. And I’ll do the same on August 2, and then every day for three months. If the coin comes up heads, it doesn’t necessarily mean that I’ll tweet, just that it will be a Twitter-aware day; I’ll consume the stream, and tweet away if I feel the need. Tails, and I’ll simply tweet “Tails, goodbye,” close the stream (unless I need it for research) and then resist the urge to tweet for the rest of the day.

Taking Lab Rats Seriously: The Case Against (Most) Animal Testing

Billions upon billions of animals are used every year for the purposes of scientific experimentation. It’s actually hard to think of another practice that’s as commonplace as it is controversial (biotechnology, perhaps?). It goes without saying that many of these experiments are a waste of time and resources. The NIH, for example, recently spent about $4 million exploring how the menstrual cycles of monkeys were influenced by cocaine, meth, and heroin. Other animal-based experiments, however, appear to have genuine utilitarian value, contributing useful information to our knowledge of Parkinson’s, Alzheimer’s, and several cancers. Delve into this issue and you’ll find that only one thing is certain: clear answers aren’t forthcoming.

I generally believe that animal experimentation is a morally flawed way to accumulate scientific knowledge. That said, I plead agnosticism when it comes to rare cases of direct benefit to human life. I’m sure that if one of my children were afflicted with a life threatening disease and experimentation on monkeys had a plausible chance of finding a cure, I’d reluctantly support that research. As much as I’d like to be consistent on this issue--as I’m able to be with, say, my diet--I’m afraid I must take convenient refuge in Emerson’s saying about foolish consistency and little minds. As I said, nothing about the morality of animal experimentation is easy.

Does Living Close to Your Destination Make You Late? A Very Small Experiment

A Freakonomics reader experiments.