Freakonomics in the Times Magazine: Unintended Consequences

In their Jan. 20, 2008, “Freakonomics” column, Dubner and Levitt explore one of the most powerful laws in the universe: the law of unintended consequences. They tell three seemingly unrelated stories – about a deaf woman in Los Angeles, a first-century Jewish sandal maker, and a red-cockaded woodpecker – that illustrate how well-meaning laws can end up hurting the very people (or animals) they were created to protect. Here is some of the research that went into the column.

1. The Americans With Disabilities Act was passed to give disabled people better opportunities in the labor market, in transportation, healthcare, and other arenas. But the economists Daron Acemoglu and Joshua Angrist found that the A.D.A. actually worsened the job opportunities for disabled workers. Their seminal paper is called “Consequences of Employment Protection? The Case of the Americans With Disabilities Act.”

2. The ancient Jewish sabbatical law called for debts to be forgiven every seventh year (Deuteronomy 15:1) and for the land to lie fallow, with the poor allowed to eat whatever still grew (Exodus 23:10). Although the debt relief was meant to help the poor, creditors responded by making credit scarce when the sabbatical year grew near. The sage Hillel came up with a solution, known as prosbul. For a look at how prosbul melds the religious and legalistic, see Solomon Zeitlin‘s 1947 paper “Prosbol: A Study in Tannaitic Jurisprudence.” Another loophole, meanwhile, called heter mechira, was developed in response to the fallow-land portion of the law.

3. The Endangered Species Act is one of the most controversial U.S. laws ever passed. A paper by the economists Dean Lueck and Jeffrey Michael, “Preemptive Habitat Destruction Under the Endangered Species Act,” argues that the E.S.A. has actually hurt the plight of the red-cockaded woodpecker by incentivizing property owners to make their land uninhabitable to the bird. More recently, the economists John List, Michael Margolis, and Daniel Osgood found a similar dynamic in their working paper, “Is the Endangered Species Act Endangering Species?” Their animal of concern was the cactus ferruginous pygmy owl.