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.

Biker Bob

I have to groan when I see a trite observation elevated to
"one of the most powerful laws in the universe: the law of
unintended consequences." Is this the most powerful
generalization the social scientists can come up with:
legislators sometimes fail to anticipate every contingency?
Anyway, isn't it a corollary of the more fundamental law "to
err is human"? Now a column on that law would be really


I find these columns stimulating in general, since they usually offer a different perspective on a familiar issue. But in this case, the example involving the ADA is misleading, and ends up reaffirming the conservative nugget that progressive laws "harm" business.

I showed the case to a deaf colleague of mine, and one of the first things he noticed was the exorbitant price for an ASL (American Sign Language) interpreter. Even in our small town, he said, interpreters run in the $40-50/hr range, so surely L.A. would be able to yield some better bargains. Additionally, many institutions like universities and hospitals keep interpreters on as staff, making for economies of scale. It seems like the doctor in your example is a poor businessman, failing to shop around for alternatives and instead reaching for an economic excuse for what seems to be his bias against "difficult" patients.

Also, if one assumes that the market can solve such problems on its own (which I don't necessarily assume), perhaps if more people saw ASL interpreting as a viable career, the number of interpreters would increase and their labor costs would decrease, making the problem you cite no more difficult than finding a babysitter in order to go to the doctor. (Some colleges are now allowing ASL to count towards foreign language requirements, attracting students who would not otherwise have the opportunity to be exposed to the language.)

This is not to argue against the idea of unintended consequences, but it's silly to expect a single policy (of any kind) to immediately change ingrained societal patterns. The consequences in the examples cited here assume the inevitability of human greed, but I for one would not want to see greed be the reason NOT to try to change the world. Neither policy nor human behavior is a natural law -- both are extremely adaptable (although not always in easy-to-control ways)...



D.R. Shaw: People arn't dieing from a lack of insurance. People though are dieing as a result of being sick or injured. And, people may be dieing due to health care professionals not be willing to apply their expertise to save their lives without payment. Isn't it the greedy doctors who see a person dieing and refuse assistance to keep them alive that is at fault?


The environmental laws passed in the early 1970s that held a land owner responsible for cleaning up the property, even if they had nothing to do with the cause of pollution, caused businesses and developers to shy away from potentially contaminated urban sites. The result--virgin suburban and rural land developed, and the decimation of the cities as the middle class and businesses left and the tax base eroded.

The worst possible result from the sponsoring liberals point of view.

In the same vein, the lead from a story in Sunday's Washington Post:

Most diversity training efforts at American companies are ineffective and even counterproductive in increasing the number of women and minorities in managerial positions, according to an analysis that turns decades of conventional wisdom, government policy and court rulings on their head.

Ken Miller

It was with interest that I read this, as an Oral & Maxillofacial Surgeon I have been aware that at the request of a hearing impaired individual a translator in American Sign Language is to be provided. That being the case about four years ago I contacted a local agency to provide a translator for a patient consult.
The patient and translator presented for the consault appointment and a surgical date was set. At that point the patient requested that the translator be present at the surgical visit and I asked why, as the indications for surgery had been reveiwed, as had the procedure and what would take place that day and the post operative course. I was told the patient felt more comfortable with this and two hours were scheduled.
The date of the surgery the patient presents, but the translator is nowhere to be found. The agency was contacted and we were told that the translators are only to make appointments though the agency. We attempted to reappoint the patient who some reason is mad at me and my staff ( four staff members present for a two hour general anesthetic ); he came for his records and sought treatment elsewhere.
The story continues, the agency turned my office out for collection for refusal to pay for the translators time at the consult visit and the patient recently called for an appointment for a new problem.
The question is, who is finacially responsible for those intrusted with helping us comply with ADA guidelines?


ankara evden eve

Yes, This article a good advertisement for systems dynamics I'm in.


Classic cases of the Peltzman effect.

Mark Braly

You are not wrong about the law of unintended consequences, just selective in your application of it. The marketplace also has unintended consequences, which, of course is why the laws you analyze were passed to begin with. But, as I'd expect from conventional economists, you don't apply it to the marketplace because that is guided by an impersonal invisible hand. Interfere with it and you can only make things worse. What we need to be talking about is how our political system can get better at learning from and correcting unintended consequences. A good start would be to make more visible the interests guiding the hand.

Jim Rose

One example from my past is the Draconian Rockefeller Drug laws. Juries knew that if they convicted someone of possessing even a relatively small amount of heroin or cocaine the defendant would go to prison for life. So the acquittal rate went way up.

I recall reading that the Canadian government sharply increased the tax on cigarettes to discourage smoking. All along the border with the US Canadian Mom and Pop grocery and convenience stores went broke. Canadians would come to the US to but cheap cigarettes and get their milk and bread here, too. It also increased smuggling of cigarettes into Canada and hence encouraged lawlessness and criminal enterprises. They didn't remember the unintended consequences of Prohibition--crime anf poison bathtub gin.


DanC - You bet! That and the repeal of the Glass-Steagall Act (1933-1999). And the conservatives want free of regulations and crippled us all (themselves foremost) in the resultant void. Be careful what you ask for!

Citigroup et al has mortgaged us(top-prime 11%) to Saudi's and Abu Dhabi. Usurious Moslems will feel Allahs fire for that, inshallah.


I am with Frank (comment #19). All you have to do is look at a lot of Sam's stuff and you see even better examples. One that I like is the possibility that providing aid to the poor by providing cheap tuition to all at public universities may actually reduce the total number of university students in a given state. Also the idea that increasing the likelihood that a driver will survive a car crash (say by mandating seat belts) actually transfers risk to pedestrians.


So is there an unintended consequence to anti-monopoly or cartel laws? Or consumer protection laws? Presumably yes, but does it matter? Surely we would not legislate against discrimination because some members of society would find ways of getting around it (BTW I am British so we is a bit loose)? Isn't part of the purpose of legislation purpose to reflect current mores and to encourage those who are not sure or opposed to respect them?

BTW: I don't know why economists go on about the law of unintended consequences as if they invented the concept and it was any more meaningful than Sod's law. Apart from philosophers the common law always had unforeseen consequences in mind and jury decision-making and case law/precedent were attempts to have a corrective mechanism. The problem is corrective mechanisms tends to rigidify and so you end up at square one unless you have a proper way of updating things that is consistent with current societal needs and beliefs.


Mark Weiss

re: unintended consequences. I am an ophthalmologist specializing in glaucoma. I have a lovely deaf patient who I see several times a year and she has an interpreter at each visit. I know I am required to pay the interpreter and it would be very hard to confer with the patient eexcept in writing. After each visit I get a biill for the interpreter which is more than what I can charge for the visit. Yhe charege isn't as great as that mentioned in the article so I don't lose a great deal of money but I certainly couldn't be in practice very long with a large group of similar patients. It is my duty to take care of all comers and I have any number of patients from whom I get no paynment at all so I just eat the cost.All of us can afford to help these folks but it does make you think about the unintended consequeces.

Christopher Liggett

I'm with T. Neuville (#34). Only the myth that bothers me is that somehow the ESA has harmed the red-cockaded woodpecker. I work for the U.S. Forest Service in the Southern Region and have witnessed a dramatic and steady increase in the population of this species across its range, on National Forests, military bases, and private land. On public lands we have built partnerships with environmental groups and timber companies that enable us to manage for stand conditions that simultaneously provide habitat for the birds and a steady supply of timber for the mills.

I do not doubt that some landowners have "pre-emptively" cut their trees, but if they did so before they were economically ready (the culmination of mean annual increment) then they have cut off their noses to spite their faces. As the researchers Leuck and Michael themselves observe: "Others, however, dismiss preemption as prevailing in only a few isolated, and even celebrated, cases, and they do not contend that it is a widespread phenomenon that suggests a rethinking of the ESA." At the conclusion of their paper, they also admit that "Undoubtedly the ESA has preserved some RCW habitat by preventing private landowners with existing populations from harvesting mature pines, and there is no way, given available data, to estimate how much of this protected habitat would have been destroyed in the absence of the ESA. Thus, we cannot determine whether this positive effect of locking in habitat is larger than the negative effect of preemption, and we cannot calculate the net effect of the ESA on the supply of RCW habitat on private lands during the study period."

So rather than focus on unintended consequences (which, as others have pointed out, accrue to all human actions, including free-market policy choices), perhaps the authors should look at the ultimate desired outcome - are there more RCWs now than there were in 1970? The answer is an unqualified yes.



This post is stunning in its intellectual dishonesty. Just because a law has some bad effects doesn't mean we'd be better off without it entirely.

Why don't you actually think before posting next time?


Unintended consequences is something I have been interested in since college. Title IX and it's three part test were in full force and causing schools to make decisions. With the law at its core looking to generate equality, what it had done was make smaller schools with tighter budgets make cuts.

At Providence College, where 59% of the student body was female, it meant cutting men's sports in order to have the adequate female athlete representation. Baseball, men's tennis, and men's golf were pushed out the door. And this was not the only school making these decision. George Mason University also was doing so, as was Syracuse University. The intention of the law was to generate equality. Which it did, but at a cost to male athletes. Rather than increasing the number of total athletes and looking to raise athletic budgets, schools cut budgets and athletes so as to be in compliance.

Sim Goldman

The ADA does not require that a physician automatically pay for a sign interpreter at the patient's request. It requires that there be effective communication, taking into consideration the matter at issue. In this instance it is unlikely that an interpreter would be required for any of the follow-up visits, unless there was a problem. So the interpreter cost would probably not exceed $720, assuming one follow-up "problem" visit. (this rate is also more than double the rate in upstate NY) I imagine an orthopedic surgeon in L.A. earns several hundred thousand dollars per year, and has very few deaf patients, so this is hardly an undue financial burden for him. Yet my experience as a disability rights attorney bears out the conclusion that the effect of this financial obligation is that some physicians simply reject deaf patients, especially those on Medicaid, because the per visit reimbursement rates are abysmal. This cost should be borne, at least in part, by insurers, who also have a vested interest in effective patient - doctor communication.


Michelle McGrath

This is an example of misinformation, not unintended consequences. There was full understanding when the ADA was passed, that there would be costs to businesses. This is why the law included a provision that businesses would only need to provide accommodations if doing so did not cause an undue burden on that business. Tax incentives such as the Small Business Tax Credit allow small businesses to recoup the costs of accommodations, including sign language interpreters.

Before the ADA, medical providers such as this orthopedist could set the terms and he could decide he wouldn't see people with disabilities. It is only with the passage of the ADA that this woman could even seriously request an interpreter (A reasonable request in my estimation. Wouldn't anyone want to have a back and forth discussion, not write notes back and forth, with their doctor before going under the knife?) and ensure access to him and other providers. Rather than the ADA being an example of unintended consequences, it has literally opened doors not only to medical providers but countless services and facilities for the 47 million or so Americans with disabilities.


g p burdell

"Stimulus package actually hurts economy"

"Heath care plan makes health care more expensive and scarce"

"Drug laws create more crime"

Headlines I'd like to see more of in national mainstream media.

D.R. Shaw

Did you guys even research the ADA? This is my field and I know it. The physician could have raised the defense of an undue burden to the requested accommodation, which defense would have surely prevailed if the outcome was that he spent so much on the interpreter that he would have lost, rather than made, money treating the woman. This is the kind of argument made all the time against discrimination laws, by people who don't even understand what discrimination laws say.

But I do agree that laws can have unintended consequences; for example, when thoughtless lawmakers rush to jump on the easy political haymaker of punishment for sexual predators, and end up passing laws that put 18-year olds on permanent internet watchlists for having consensual sex with their 15-year old girlfriends.

As for your thesis here, I'd suggest that we have had almost 30 years of unfettering of the "free market" and of allowing corporations and the wealthy to have it their way, and all we get are more apologists swearing if the government would just let them be, the whole country would be a shiny example of trickle-down prosperity. Well, you can't get much more business-friendly and regulation-hating than the Bush admin, and what have we got from it?

Tell it to the people whose children are dying from lack of insurance, who can't afford to move out of a rat trap motel on their minimum wage jobs, or who sleep under bridges at night because the shelters are full. Fat cats whose bellies are full every night have had a chance to try out their economic experiments for decades already, and the only ones who have benefitted are the fat cats.

But that's how it was meant to be, wasn't it boys? BTW, what are YOU having for dinner tonight?