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Archive for 2011

Prohibition and the Transformation of American Food

In our latest Freakonomics Radio on Marketplace podcast, “How American Food Got Bad,” Tyler Cowen gives some specific, surprising reasons why food got so bad. (You can download/subscribe at iTunes, get the RSS feed, or read the transcript here.)

One big historical factor: Prohibition. Restaurants that relied on alcohol sales closed their doors, often replaced by diners, soda fountains, and candy shops. This new breed of restaurant served hot dogs, hamburgers, chop suey, and what we now know as classic American fast food. We traded quality for speed and convenience. Here are some photos of that transformation, when cheap food outlets popped up to meet the demands of our growing consumer society.


What Do the NFL and Girl With the Dragon Tattoo Have in Common?

Answer:

They are both reliant on the talents of the Rooney and Mara dynasties.

The Pittsburgh Steelers are majority-owned by the Rooney family. The late Art Rooney (“the Chief”) ran the club for many years, ultimately giving way to son Dan, who has since given way to son Art Rooney II.

The New York Giants are 50 percent owned by John Mara. The late Tim Mara ran the club for many years, ultimately giving way to his son (and John’s father) Wellington; there have been a variety of other Maras involved in the team.


Good Climate News: The "Methane Time Bomb" Apparently Isn't

“At least one nightmare scenario can be safely crossed off worst-case climate list,” Andy Revkin writes by e-mail. “Even with intense ocean warming through this millennium, thawing won’t reach the big subsea methane deposits. There were ample signs this was overblown but new work goes farther.”

He has the full story on his Dot Earth blog:

Given that methane, molecule for molecule, has at least 20 times the heat-trapping properties of carbon dioxide, it’s important to get a handle on whether these are new releases, the first foretaste of some great outburst from thawing sea-bed stores of the gas, or simply a longstanding phenomenon newly observed.

If you read the Independent of Britain, you’d certainly be thinking the worst. The newspaper has led the charge in fomenting worry over the gas emissions, with portentous, and remarkably similar, stories in 2008 and this week.

If you read geophysical journals and survey scientists tracking past and future methane emissions, you get an entirely different picture. …:

[T]he authors found that roughly 1 meter of the subsurface permafrost thawed in the past 25 years, adding to the 25 meters of already thawed soil. Forecasting the expected future permafrost thaw, the authors found that even under the most extreme climatic scenario tested this thawed soil growth will not exceed 10 meters by 2100 or 50 meters by the turn of the next millennium. The authors note that the bulk of the methane stores in the east Siberian shelf are trapped roughly 200 meters below the seafloor… [Read the rest.]


A New Way to Think About Sports Injuries?

In a recent essay about NFL injuries for our “Football Freakonomics” series on NFL.com, I concluded:

If I were an NFL owner, GM, or coach, I’d set aside a little pot of money to try to answer some of these questions empirically. There is a lot of advantage to be gained by keeping even a few more players per season off the injured reserve list — to say nothing of the fact that it’s the right thing to do.

This prompted an interesting e-mail from Ryan Comeau:

Dynamic Athletics is a biomechanics company focused on athletes and people recovering from orthopedic injuries. Our technology has been in development for 8 years but we’ve only had our doors open for 7 months now. We process 3D motion-capture files in a way that deliver the full palate of kinematic & kinetic data (without force plates). This immense amount of data collected about an athlete’s ability to move & how exactly they produce their movement, if managed properly, becomes a valuable time capsule for the athlete or those managing a team.


The Slightly-Bright Side for Boomers in the Recession

A new working paper (full version here) by Alan L. Gustman, Thomas L. Steinmeier, and Nahid Tabatabai examines the impact the Great Recession has had on the wealth and income of Baby Boomers nearing retirement. It finds, somewhat surprisingly, that their aggregate wealth decreased very little over the past few years:

The retirement wealth held by those ages 53 to 58 before the onset of the recession in 2006 declined by a relatively modest 2.8 percentage points by 2010. … Very few in the population nearing retirement age have experienced multiple adverse events. Although most of the loss in wealth is due to a fall in the net value of housing, because very few in this cohort have found their housing wealth under water, and housing is the one asset this cohort is not likely to cash in for another decade or two, there is time for their losses in housing wealth to recover.


Home Sales Even Worse Than Reported Says the Primary Agency That Reports Them

Far fewer homes have been sold over the past five years than previously estimated, the National Association of Realtors said Tuesday.

That’s from a CNNMoney.com report by Blake Ellis.

While NAR hasn’t revealed exactly how big the revision to home sales will be, the agency’s chief economist Lawrence Yun said the decrease will be “meaningful.” …

Yun said the database NAR uses to track existing home sales, the Multiple Listing Service (MLS), has led the real estate agency to over-count existing home sales for several reasons.

The MLS database only includes home sales listed by realtors, and excludes homes listed by owners, providing a very narrow view of the market. And because more people are using realtors to list their homes instead of selling them independently, realtor-listed sales numbers have become artificially inflated, said Yun.

I cannot make sense of that last paragraph; can anyone else?

FWIW, back in 2007 we ran a Quorum on this blog asking the question “Is it time to believe in the housing bubble?” Lawrence Yun was one of the respondents:


The Dollar Coin is Done. Onto the Penny?

In June, NPR’s Planet Money reported on the billion-dollar stash of unused dollar coins piling up at the Federal Reserve. At the time, there were $1.2 billion worth of dollar coins bearing the likeness of U.S. presidents, the result of a 2005 Congressional mandate aimed at getting people to switch from dollar bills to coins. Obviously, that didn’t work. The program, which cost some $300 million, is finally ending.

According to the Wall Street Journal, the pile of unwanted dollar coins has grown to $1.4 billion — enough to meet demand for the next decade. More than 40 percent of all coins have been returned to the government, according to the Treasury Department. The program was supposed to run through 2016, and stamp the likeness of every U.S. president onto a dollar coin.


To Ask or Not to Ask: Experiments in Charitable Giving

Our recent podcast “What Makes a Donor Donate?” features economist John List, who has concentrated his research on the science of philanthropy. In short, when it comes to convincing people to give, some ways are better than others. But what about just directly asking them?

A new study from authors James Andreoni, Justin M. Rao, and Hannah Trachtman examines the way people behave when solicited for donations by bell-ringers from the Salvation Army Red Kettle Campaign. The authors designed an experiment where bell-ringers were sent to a grocery store in suburban Boston, and positioned at either one or both of the store’s entrances.


The Reminiscence Bump: Who's Your Favorite Footballer?

Memory is a funny thing, as evidenced by a new experiment from Steve M. J. Janssen, David C. Rubin and Martin A. Conway. The BPS Research Digest blog summarizes:

Six hundred and nineteen people (aged 16 to 80) took part in the study online, conducted in Dutch and hosted on the website of the University of Amsterdam. Participants were presented with the names of 190 all-time leading football players and asked to name their judgment of the five best players of all time. They could either select from the list or choose their own.

The researchers calculated the mid-career point of the 172 players named by the participants and compared this against the participants’ age at that time. Participants overwhelming tended to name players whose career mid-point coincided with participants’ teens and early twenties. The modal age (i.e. the most common) of the participants at their chosen players’ mid-career was 17 years.


Christmas Gift Spending by Country

The Economist features an interesting chart this week, showing the correlation between a country’s wealth, and the average amount its citizens spend on Christmas gifts. Note the two outliers, the Netherlands and Luxembourg.

Despite their considerable wealth, the Dutch have clearly maintained their minimalist austerity chic. Not the case in Luxembourg, which has the highest GDP per capita in the EU, and the third highest in the world.


What's the Story With Shark Fin Soup?

A reader named Chuck Armitage writes in with a question about which I know nothing but which I’d like to know much more.

So what do you say, readers? What do you know, and think, and what can you tell us?

Here is my question… Why is shark fin soup still popular?

Ostentation is not a trait that is normally associated with Chinese culture and yet that is what shark fin soup represents. The more expensive it gets, the more it proves that your host honors you by serving the soup. And the more the West vilifies the barbarian finning practices of the shark fisherman, the more the Chinese seem to dig in their heels and say look at your own barbaric practices before you racially attack us. There is a huge disconnect between what are normally considered admirable traits of civilized Chinese society and what is going on with this tradition.

Are the activities of the ecology activists helping or hurting their cause? How do you change the sentiments of a seemingly positive tradition when the act is causing such an ecological disaster? Is seal clubbing or factory farming as bad as shark-finning?

It is a burning issue right now and many species of sharks will go extinct if it is not solved. No matter what we do in North America, the real issue is in Asia. Even if we ban the import of shark fin here, the growing wealth in China will end the shark as we know it in our oceans.

How can this be positioned in a way that will be championed by the Chinese populace?


NBA Players' Union Decertification As Owner Opportunity: What if Mark Cuban Had Gone Maverick?

David Stern ran roughshod over owners during the recent NBA lockout negotiations. He was willing to levy stiff fines for any public comments that might undermine an image of management unity.

But the league’s power to control dissident owners possibly changed on Nov. 14, when the union representing NBA players formally dissolved. The league treated dissolution as a bad faith bargaining ploy by the players to gain bargaining power. You see, sports leagues can engage in collusive conduct that would otherwise violate the Sherman Antitrust Act – so long as the collusion takes place as part of a collective bargaining agreement. By disbanding the union, the players were threatening to expose the league to massive antitrust liability.

The league treated the players’ dissolution as though it had no impact on its control of team behavior. But imagine for a moment that one of the team owners took the players decertification seriously.


Skeptic Michael Shermer Answers Your Questions

Last week, we solicited your questions for Michael Shermer, founding publisher of Skeptic magazine, and executive director of the Skeptics Society. He was featured in our recent podcast “The Truth Is Out There…Isn’t It?”. He now returns with answers to some of your questions. As always, thanks to everyone for participating.

Q. How would you suggest one prioritize beliefs to examine? -Cor Aquilonis

A. All of our beliefs are influenced by our own priorities, but obviously some are more important than others. My rule of thumb is figuring out to what extent something affects your life. It doesn’t really matter if you read your astrology column in the newspaper for amusement. The important thing is: does it affect your job; your marriage; your close relationships, your family? That’s the criteria we use for our personal lives, as well as for society.


The Perfect Gift for the Health Care Buff in Your Family

Searching for the perfect gift for the health care reform junkie in your family? A new graphic novel by Jonathan Gruber (out on Dec. 20) may be just what you’ve been looking for. The book, Health Care Reform: What It Is, Why It’s Necessary, How It Works, has been gestating for awhile, and aims to explain the complicated legislation. Here’s an excerpt from the Amazon book description:

You won’t have to worry about going broke if you get sick.
We will start to bring the costs of health care under control.
And we will do all this while reducing the federal deficit.

In the interest of full disclosure, it should be noted that Gruber served as an Obama advisor during the 2008 campaign and may not be the most unbiased of observers.

(HT: Marginal Revolution)


The Unusual Suspects: A Good Cryptographer Is Hard to Find

Earlier this year, the structure of an enzyme in an HIV-related monkey virus was solved in three weeks by internet gamers. It was a feel-good victory of human intelligence over disease, and a reminder of the awesome power of the internet.

The New York Times published a similar article a few days ago. In a slightly controversial move, British spy agency Government Communications Headquarters posted a puzzle online and directed people who solved it to apply for a job at GCHQ. It’s reminiscent of the Bruce Willis movie Mercury Rising and seems like an elegant solution to a hiring problem – the GCHQ can’t offer as much money to their cryptographers as private firms. Also, code breaking skills can’t be that easy to find. The Times reports on what happens after you break the code:

“So you did it,” says the congratulatory message. “Now this is where it gets interesting. Could you use your skills and ingenuity to combat terrorism and cyberthreats? As one of our experts, you’ll help protect our nation’s security and the lives of thousands.” Those interested are then invited to submit a formal job application, leading to interviews for a total of 35 jobs next spring.


Cockpit Confidential: Debunking the Autopilot Myth

This is a guest post by commercial airline pilot Patrick Smith, who writes about the hidden side of the airline industry. You can read his writing for Salon.com here.

Cockpit Confidential: The Autopilot Myth
By Patrick Smith

One evening I was sitting in economy class when our jet came in for an unusually smooth landing. “Nice job, autopilot!” yelled some knucklehead sitting behind me. Several people laughed. I winced. It was amusing, maybe, but was also wrong. The touchdown had been a fully manual one, as the vast majority of touchdowns are.

I’ve been writing about commercial aviation for nine years – a job that entails a fair bit of myth-busting. Air travel is a mysterious realm, rife with conspiracy theories, urban legends, wives’ tales and other ridiculous notions. I’ve heard it all, from “chemtrails” to the 9/11 “truthers.” Nothing, however, gets under my skin more than myths and exaggerations about cockpit automation — this pervasive idea that modern aircraft are flown by computers, with pilots on hand as little more than a backup in case of trouble. And in some not-too-distant future, we’re repeatedly told, pilots will be engineered out of the picture entirely.


Organ Donation Supply and Demand

My wife is helping with a local drive to get people to register to donate organs. We thought that, as a cancer survivor, she herself would not be allowed to register. Wrong. Anyone under age 85 can register, so long as their cancer is not active and they do not have a systemic infection of any kind.

The doctor who informed us says this increases the potential supply of transplantable organs. If the demand is high enough, and the patients sick enough, the doctors will choose to use a donated organ even if the transplantation risk from the particular organ is substantial. Thus, while fortunately the price system is not used explicitly in the transplantable organ market, the choice to allow more people to register and to compare the demand to the increased supply suggests economics is currently present in this market.


We Are Shocked — Shocked! — to Learn that College Football Coaches Exhibit a Conflict of Interest When Rating Teams

File under “Not Surprising But Still Interesting.” A new working paper by Matthew Kotchen and Matthew Potoski makes these claims:

Using individual coach ballots between 2005 and 2010, we find that coaches distort their rankings to reflect their own team’s reputation and financial interests. On average, coaches rank teams from their own athletic conference nearly a full position more favorably and boost their own team’s ranking more than two full positions. Coaches also rank teams they defeated more favorably, thereby making their own team look better. When it comes to ranking teams contending for one of the high-profile Bowl Championship Series (BCS) games, coaches favor those teams that generate higher financial payoffs for their own team. Reflecting the structure of payoff disbursements, coaches from non-BCS conferences band together, while those from BCS conferences more narrowly favor teams in their own conference. Among all coaches an additional payoff between $3.3 and $5 million induces a more favorable ranking of one position. Moreover, for each increase in a contending team’s payoff equal to 10 percent of a coach’s football budget, coaches respond with more favorable rankings of half a position, and this effect is more than twice as large when coaches rank teams outside the top 10.

 


"Football Freakonomics": How Much Do Injuries Hurt?

The following is a cross-post from NFL.com, where we’ve recently launched a Football Freakonomics Project.

It doesn’t take a genius to argue that injuries can have a massive effect on an NFL team’s fortunes. This season, we may be living through the most heightened example in history of that fact. The Indianapolis Colts, with Peyton Manning sidelined since Week 1 with a neck injury, currently stand winless at 0-12. Over the previous five seasons with Manning in charge, the Colts have gone 61-19 during the regular season.

How can the absence of one player, even a star quarterback, have such an impact? As Aaron Schatz of Football Outsiders contends in the latest episode of Football Freakonomics: “Not only were they built around him offensively, but the defense was generally built around them getting the lead and then having defensive ends just tee off on the opposing QB while the other team has to pass to try to catch up.”

The Manning-less Colts are losing off the field too – attendance is down, Manning jersey sales are down, and some Colts fans have jumped on the “Suck for Luck” campaign, figuring that if the Colts are going to be bad they might as well be bad enough to snare Andrew Luck with the top pick in the draft.


Answer to Our Nudge Photo Contest

The results are in from the nudge photo contest we posted on Monday. Thirty-six out of 103 responses got it exactly right: to stop folks from urinating on the wall. Many also wrote that it was to prevent grafitti, so close but not (as I’ve been told) the exact motivation.

The first to answer correctly was, Skyjo, whose response was third overall.

Of the 36 correct answers, we randomly chose comment #63 by ann, “So that people won’t urinate on the wall as a sign of respect.”

Nudges aren’t just for humans. Here is a photo, also from Jan Chipchase, of a similar nudge with the same exact goal of reducing public urination. This time the target is dogs, not humans.


The Economics of Chicken Feet… and Other Parts

Our latest podcast, “Weird Recycling,” featured Carlos Ayala, the Vice President of International at Perdue Farms. Stephen Dubner‘s interview with him centered on chicken feet — or chicken paws, as they’re called in the industry. Until about 20 years ago, paws were close to value-less for a U.S. chicken company. But thanks to huge demand in China, paws have become big profit centers. The U.S. now exports about 300,000 metric tons of chicken paws every year. Perdue alone produces more than a billion chicken feet a year, which according to Ayala brings in more than $40 million of revenue. In fact, Ayala says that without the paw, chicken companies would be hard-pressed to stay in business:


Inside the Banana Market

A great reported essay by Nicola Twilley about a banana distribution facility in the Bronx. Excerpt:

[I]n order to be a global commodity rather than a tropical treat, the banana has to be harvested and transported while completely unripe. Bananas are cut while green, hard, and immature, washed in cool water (both to begin removing field heat and to stop them from leaking their natural latex), and then held at 56 degrees — originally in a refrigerated steamship; today, in a refrigerated container — until they reach their country of consumption weeks later.

What this means is that ripening must then be artificially induced, in a specialized architecture of pressurized, temperature- and atmosphere-controlled rooms that fool the banana into thinking it is still back on the plant in tropical Ecuador. New York City’s supermarkets, grocers, coffee-shops, and food cart vendors are served by just a handful of banana ripening outfits — one in Brooklyn, one in Long Island, a small facility inside the main Hunt’s Point Terminal Market, and our field trip destination: Banana Distributors of New York, in the Bronx.

You should at least read her whole essay before you chime in with “There’s always money in the banana stand.” More banana reading here; and Rich Cohen has a forthcoming book called The Fish That Ate the Whale: The Life and Times of America’s Banana King — a.k.a. Samuel Zemurray.


More Collateral Damage From the 9/11 Attacks

In SuperFreakonomics, we catalogued some of the collateral costs of the 9/11 terrorist attacks, including roughly 1,000 extra traffic deaths in the U.S. in the three months after 9/11, the result of so many people driving instead of flying:

Such trickle-down effects are nearly endless. Thousands of foreign-born university students and professors were kept out of the United States because of new visa restrictions after the September 11 attacks. At least 140 U.S. corporations exploited the ensuing stock market decline by illegally backdating stock options. In New York City, so many police resources were shifted to terrorism that other areas — the Cold Case Squad, for one, as well as anti-Mafia units — were neglected. A similar pattern was repeated on the national level. Money and manpower that otherwise would have been spent chasing financial scoundrels were instead diverted to chasing terrorists— perhaps contributing to, or at least exacerbating, the recent financial meltdown.

The Wall Street Journal now reports on a most unlikely unintended consequence of the attacks and the ensuing hunt for Osama bin Laden:


Does Dodd-Frank Have You Reaching for Your Cash?

In a society steadily moving toward a cashless future (if not yet a penniless one), we may be seeing a return to cash transactions in some cases, for a surprising reason:

A new law that was supposed to reduce costs for merchants that accept debit cards has instead sent Mr. Scherr‘s monthly processing bills much higher and forced him to reassess the way he does business.

That’s from an interesting Wall Street Journal article about an unintended consequence of the Dodd-Frank financial-overhaul legislation.Vendors used to pay on a sliding scale for debit-card transactions; Dodd-Frank set a flat fee, which can lead to higher payments on small transactions:

Many business owners who sell low-priced goods like coffee and candy bars now are paying higher rates — not lower — when their customers use debit cards for transactions that are less than roughly $10. … “Overnight, the variable costs of a transaction have tripled,” says Mr. English, who runs a marketing company that devises payment programs for vending machines. Some machine operators will raise prices and offer 25-cent discounts for cash starting in January, he says.


Question of the Day: What Boomerangs in Value?

Our latest podcast, “Weird Recycling,” is about the unlikely reuse of cast-off items. A reader named Gavin Castleton just happened to write in with an appealing riddle in the same vein:

Has there ever been a good/product whose value was reduced to zero, but somehow rose again? If so, could you shed any light on the market dynamics or social catalysts that revived it?

To put my question in context: I’m researching the music industry’s rocky transition from goods to services (download/physical goods to streaming music subscription services). Journalists, industry folk, and consumers are all quite fond of declaring “Music will be free. It’s obvious and inevitable.” But I started to wonder if it really was all that inevitable. So I started looking for other examples of a product that lost its monetary value completely, but somehow returned from the dead.


How to Guess Better on an SAT

A nice analytic giblet from a Times profile of new Nobel economists Thomas Sargent and Christopher Sims:

Because of his father’s College Board connections, Mr. Sims got hold of an old SAT exam, which he and Mr. Willoughby used to conduct a statistical analysis. They found that on multiple-choice questions in English and social studies, the “longer answers tended to be correct.” In math, they determined that the number that was “closest to all of the other numerical choices” was probably the right one.

I do wonder if those patterns still hold true in standardized tests. Of course, you can always pay someone else to take the test for you.


Is Climate Change Affecting When People Visit National Parks?

Last year, 281.3 million people visited America’s national parks, down 4.2 million from a year earlier. With parks such as Glacier likely to be glacier-less sometime around 2030, or sooner, authors Lauren B. Buckley and Madison S. Foushee (PDF here) track differences in attendance habits since 1979 to ask if climate change is affecting relatively mundane human activities such as park visitation:

Climate change has driven many organisms to shift their seasonal timing. Are humans also shifting their weather-related behaviors such as outdoor recreation? Here we show that peak attendance in U.S. national parks experiencing climate change has shifted 4 days earlier since 1979. Of the nine parks experiencing significant increases in mean spring temperatures, seven also exhibit shifts in the timing of peak attendance. Of the 18 parks without significant temperature changes, only 3 exhibit attendance shifts. Our analysis suggests that humans are among the organisms shifting behavior in response to climate change.