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Archive for October, 2011

Should I Quit My Job?

In our latest Freakonomics Radio podcast, “The Upside of Quitting,” we talk about strategic quitting. You can download/subscribe at iTunes, get the RSS feed, or read the transcript here.
One of the hardest things in life to quit is probably a career: what if you were great at your job, making decent money, but it’s just not what you want?
Dubner talks to a very interesting woman who was faced with such a choice, and how she came to her decision to just quit.
From the Freakonomics Radio live show in St. Paul, MN earlier this year (part of which was another podcast earlier this year), here’s the interview with Allie – with an animation by the talented Benjamin Arthur.


A Dad-or-Daughter Songwriting Contest

My daughter, Anna, spent a bunch of time this past summer writing songs. One thing led to another and we ended up coauthoring a song together. I have more than 50 academic coauthors, but this is the first time I’ve ever tried writing music with someone.
Is it easy for people to tell the difference between songs she wrote by herself and a song where I wrote most of the lyrics? Is it possible for a 52-year-old lawyer/economist to emulate the lyrics of a 14-year-old Gleek? I think a lot of people would have a surprisingly hard time. But the question is testable.
So today I’m announcing a contest where you could earn a chance of winning an iTunes gift card worth somewhere between $50-$500. To play, just click through and listen to these three songs – Friend Zone, Longer, & Your Way, and then leave a comment to this post or as a YouTube comment to one of the three songs saying: i) which of the three songs you think I coauthored; ii) identifying a line in that song you believe I wrote; and iii) identifying a line in that song you believe Anna wrote. Here they are:


Denmark Levies the World's First Nationwide Fat Tax

This week, Denmark begins a large-scale incentives trial of sorts by becoming the first country to impose a nationwide fat tax. From now on, foods in Denmark with saturated fat content above 2.3% will be taxed 16 Danish kroner ($2.87) per kilogram of saturated fat; which works out to a tax of about $1.28 per pound of saturated fat. The tax was reportedly preceded by weeks of Danes stocking up on items like butter, red meat and pizza.
The issue of taxing fatty or sugary foods (and more broadly, the effectiveness of behavioral nudges) has been a topic of repeated discussion on this blog. James McWilliams posted last December on studies which indicate that while taxing sugary sodas reduces consumption, others have shown soda taxes to be ineffective at reducing obesity rates. Proof, McWilliams argues, that taxing specific food items is ultimately ineffective, since consumers can simply substitute sugar from other non-soda sources.


How Will Peanut Price Hike Impact Related Items?

General equilibrium ain’t just peanuts. With the tremendous shortfall in the peanut harvest (a decline of 17%) due to the unusually dry weather in peanut-growing states, people are expecting a rise in the price of this main input of peanut butter to cause supply to shift leftward. Jif peanut butter expects to raise its price by 30% starting in November.
I doubt that its sales will go down much—I think the demand for peanut butter is fairly inelastic. But what about related markets? If everyone likes peanut butter and mayonnaise sandwiches as much as I do—if peanut butter and mayonnaise are complements—then we’ll see a leftward shift in demand for mayonnaise, and its price will decline. Have I held too much of the ceteris paribus, or not enough? Where should one stop?


Banana Arbitrage

Bananas are a popular topic on this blog. In February, a reader wrote in with this odd banana stand pricing phenomenon. And in 2008, Dubner explored the potentially tenuous economics of the far-flung fruit.
I’ve recently run across something similar to the banana stand case: the Starbucks closest to my apartment now sells bananas at the counter for $1 each, while right outside the door, a fruit stand sells them for 25 cents each, or 5 for $1. And the fruit stand bananas are always better looking than the ones at the Starbucks register.


News for Dieters: Old Habits Die Hard

If you’re trying to lose weight, making a small change might help. A new study (summarized by the BPS Research Digest) finds that using the non-dominant hand can significantly reduce the kind of habitual eating that many indulge in without even noticing.
Psychologists invited 158 subjects to watch movie trailers in either a movie theater or a university department meeting room and provided participants (some habitual popcorn eaters, some not) with either stale or fresh popcorn. They found that “in the cinema setting the habitual popcorn eaters ate just as much of the popcorn when it was stale as when it was fresh.


FREAK-y Stat of the Day: It's 2008 All Over Again

This Freaky stat comes courtesy of reader Benjamin Bias, who brought to our attention this oddity, as noted by Joe Weisenthal at Business Insider:
Yesterday, Oct. 3, 2011, the S&P 500 closed at 1,099.23.
Exactly three years ago, on Oct. 3, 2008, the S&P 500 closed at 1,099.23.
As if investors needed anymore reason to be nervous these days.


Do Lower Wages and Higher Unemployment Increase Voter Turnout?

A recent study by Kerwin Kofi Charles and Melvin Stephens Jr argues that increases in wages and employment reduce voter turnout in gubernatorial elections, though not in presidential contests.
From the abstract:

This paper argues that, since activities that provide political information are complementary with leisure, increased labor market activity should lower turnout, but should do so least in prominent elections where information is ubiquitous. Using official county-level voting data and a variety of OLS and TSLS models, we find that increases in wages and employment: reduce voter turnout in gubernatorial elections by a significant amount; have no effect on Presidential turnout; and raise the share of persons voting in a Presidential election who do not vote on a House of Representative election on the same ballot.


Author Steven Pinker Answers Your Questions

Last week we solicited your questions for author and Harvard psychology professor Steven Pinker on his new book, The Better Angels of Our Nature: Why Violence Has Declined. You responded quickly with more than 50 questions. Now, Pinker is back with his answers to 10 of them. The result is a fascinating discussion (exactly the kind we like to have around here) on the roots of violence, the rationale for wars of the past and what a decrease in violence says about modern society. As always, thanks to everyone for participating.

Q Any thoughts on the negative side effects of decreased violence? Overpopulation? More sedentary populations? Decreased role for survival of the fittest? Not to say that violence is preferable, just wondering about the downsides of peace. – BL1Y


Predicting the Nobel Prize

Next Monday, the Nobel Prize Committee will announce the recipient(s) of the 2011 Nobel Prize in Economic Sciences. If you think you know who’s going to score this year’s prize, head on over to Harvard’s Nobel Pool, “the world’s most accurate prediction market.”
Each entry will cost you $1; all entries and bets must be received by 11:59 PM on Sunday, October 9th. If you’re looking for inspiration, past predictions can be found here. And if you haven’t already, listen to our Freakonomics Radio podcast, “The Folly of Predictions,” to find out where we stand on the whole notion of predictions.
So Freakonomics readers, who are you betting on?


New Blog Explores Economics of Digital World: Digitopoly

Our friend Joshua Gans, along with some colleagues, has launched a new blog devoted to the economics of digitization called digitopoly.org. Here, in a guest post, he explains the origins of the site, and what it’s all about.
 
Digonomics
By Joshua Gans
Some of the most popular blogs are tech blogs (Gizmodo, Engadget, TechCrunch) or blogs that place a tech perspective on social commentary (e.g., BoingBoing). And, as we know, economics blogs also tend to be popular. What was missing though was a blog devoted to the economics and competitive issues that arise in the digital age. What’s more, thanks to the NBER’s new Program on the Economics of Digitization (funded by the Sloan Foundation), there is a wealth of new research in this area. That’s how we came to setup a blog devoted to digital issues from an economics perspective.


School Bus Ads: Good Use of Space, or Crass Commercialization?

Facing a combined budget deficit of more than $100 billion for fiscal year 2012, a lot of states are cutting education budgets to make ends meet: laying off teachers, reducing hours and services. But recently, a handful of states have found a creative way to raise revenue from public education by putting advertisements on school buses.
Seven states, the latest being New Jersey, now allow school districts to sell ads on the sides of public school buses. Florida is currently considering it. So is Guam apparently. There are even two companies, Alpha Media and Steep Creek Media (both in Texas), that specialize in nothing but school bus advertisements.


Goodbye, Turkey Sandwich

Last week, I was out in Chicago for a couple of days working with Levitt. We had lunch at the Booth School cafeteria (with its great soda design) — or at least we tried to have lunch. There was a nice-looking case of sandwiches, and I asked the guy behind the counter for one of the turkey-cranberry sandwiches.
“No,” he said. “I can’t sell it to you.”
“Why not?” I asked.
“We’re closing. I can’t sell it to you.”
It was about 2:32 p.m. on a weekday afternoon. The sandwich I was eyeing was one of maybe 15 or 20 in the case. And then the guy behind the counter drags over a big trash can and throws my sandwich into it, and then all the other sandwiches too. It might have been my imagination — or maybe just hunger — but he seemed to take delight in throwing away the food for which I was ready to pay full price.


Study: Early Bedtimes Keep Kids Slimmer

A new study out of Australia shows that children who go to sleep early and wake up early are less likely to be obese. The results, published in the Oct. 1 issue of the journal Sleep, indicate that it’s not so much the amount of sleep kids get, but the times at which they get it that has the biggest impact on their weight.


Getting Married? Then Get Ready for Price Discrimination

A reader named Elliot Millican writes in to say:

At one point in SuperFreakonomics you mentioned a particular brand of hair clippers that are offered for humans and for pets. You noted that the human clippers carried a higher price even though they appeared almost identical. You went on to say that the pricing scheme is a simple result of the consumer’s willingness to pay more for their clippers than they would their dog’s. [Yes indeed: this is known as price discrimination.]
These hair clippers reminded me of something I experienced when my wife and I were engaged (8 years ago). Let me quickly give the background: due to limited wedding budget, we had our wedding at church and a reception at the church with cake, punch, and light food. This allowed us to invite as many people as we wanted because the church was free and the cake/food prices weren’t terribly expensive. But we had a second reception just for family and wedding party at a hotel (for about 60 people). This second reception was more like your traditional wedding reception… open bar, sit-down dinner, and a DJ. In short, it was expensive, but affordable with only a fraction of the guest list.


The Fixed Costs of Retailing Bourbon

The Bourbon Outfitter in Lexington, Kentucky sells souvenirs and paraphernalia related to bourbon distilling and drinking. Its only physical retail outlet is a kiosk in a shopping mall; and its selling season is the Christmas shopping period. Its difficulty is that the mall will only rent kiosk space in three-month intervals—the kiosk is a fixed cost to The Outfitter, which has come up with the following solution: It rents the kiosk from November through January, and opens on November 1, sufficient time before Black Friday to make an impression on shoppers. It stays open until New Year’s and then closes down.
The owner tells me that this is a profit-maximizing policy, since the variable cost of remaining open after New Year’s Day far exceeds the trickle of revenue that might flow in.
[HT to BK]