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Archive for 2011

Did Risk of Divorce Drive Boomer Women to Increase Their Education?

A new working paper from authors Raquel Fernandez and Joyce Cheng Wong highlights the stark differences in the lives of two generations of American women: those born in 1935 and those born just 20 years later in 1955. The authors found that education, wage structure and divorce were the main causes to changes in labor force participation.

From the abstract:

Women born in 1935 went to college significantly less than their male counterparts and married women’s labor force participation (LFP) averaged 40% between the ages of thirty and forty. The cohort born twenty years later behaved very differently. The education gender gap was eliminated and married women’s LFP averaged 70% over the same ages… We find that the higher probability of divorce and the changes in wage structure faced by the 1955 cohort are each able to explain, in isolation, a large proportion (about 60%) of the observed changes in female LFP.


Are We Really Losing 1% of GDP Due to Poor Health? Also, a Poll on Polling

We’ve been writing a lot about obesity recently. First, it was this study about projected future obesity rates, then we covered Denmark’s saturated fat tax, which Steve Sexton then criticized for being inefficient. So, if you’re tired of reading fat-related posts on our blog, I get it. But as long as reports like this one from Gallup keep coming out, we’re going to keep writing about them, especially when they include so many interesting conversation points.

Here are the top-line numbers:

About 86% of full-time American workers are above normal weight or have at least one chronic condition. These workers miss a combined estimate of 450 million more days of work each year than their healthy counterparts, resulting in an estimated cost of more than $153 billion in lost productivity per year. That’s roughly 1% of GDP.


How Will Sean Payton's Injury Affect the Saints' Offense?

On Sunday, in a game against the Tampa Bay Buccaneers, New Orleans Saints head coach Sean Payton tore his MCL and fractured his knee when one of his own players was tackled out of bounds and crashed into him on the sideline. You can watch the replay here if you have a thing for gruesome knee injuries.

Payton is the rare NFL head coach who still calls the offensive plays, so the injury presented a pretty big problem for the Saints, especially since it happened early in the first quarter. Rather than going to the training room, Payton gutted it out on the sideline and kept calling plays while trainers tended to his knee. By halftime though, with the Saints trailing 20-10, Payton had had enough and passed play-calling duties over to his offensive coordinator Pete Carmichael.

It’s tough to say what effect the injury had on the Saints’ offense Sunday; they lost 26-20. By the numbers, the Saints’ output was fairly even through the first to second half.


International Aid and Mobile Cash Transfers

We’ve blogged before about the many applications of mobile phone technology in developing countries, especially when it comes to mobile banking. In much of the developing world, particularly in Africa, mobile phones are thriving in remote villages, while access to electricity, clean water, schools and government services is weak at best; yet cellular service is strong.

A new research paper by Jenny C. Aker, Rachid Boumnijel, Amanda McClelland and Niall Tierney analyzes the effectiveness of yet another mobile application gaining strength in the developing world: cash transfer programs. After a drought in Niger in 2009 and 2010, Concern Worldwide, an international NGO, provided “unconditional cash transfers to approximately 10,000 households during the ‘hungry season,’ the five-month period before the harvest and typically the time of increased malnutrition.”

Instead of distributing cash in the usual way, the NGO conducted a randomized experiment: one-third of targeted villages received a monthly cash transfer through a mobile system called zap; another third received manual cash transfers, and the remaining third received manual cash transfers plus a mobile phone.


Did Blackberry Outages Cut Abu Dhabi Traffic Accidents by 40 Percent?

A three-day Blackberry service outage last week in parts of the United Arab Emirates once again demonstrates the value of “distracted driving” laws. According to an article in The National, an English-language paper in Abu Dhabi, traffic accidents in Dubai last week fell 20 percent from average rates on the days when BlackBerry users were unable to use its messaging service. In Abu Dhabi, the number of accidents last week fell 40 percent, and there were no fatal accidents. According to the article, on average there is a traffic accident every three minutes in Dubai, and a fatal accident every two days in Abu Dhabi.

Abu Dhabi recently launched a campaign against cell phone use while driving and plans to use electronic evidence in traffic cases.


Marriage: More Money, More Problems

We included this in last week’s FREAK-est Links, but thought it was worth a full blog post. A recent study of 1,734 married couples in the U.S. finds that money, indeed, can’t buy you love. According to an article about the study, couples who don’t value money very highly score “10 to 15 percent better on marriage stability and other measures of relationship quality than couples where one or both are materialistic.”

“Couples where both spouses are materialistic were worse off on nearly every measure we looked at,” said Jason Carroll, a professor at BYU, and the lead author of the study. “There is a pervasive pattern in the data of eroding communication, poor conflict resolution and low responsiveness to each other.” Interestingly, materialistic couples’ perception of their finances seems to matter more than their actual financial status: “Though these couples were better off financially, money was often a bigger source of conflict for them.”


Call It a Comeback: Why Performance Increases When We're Losing

If you were a New York Knicks fan in the mid 1990’s, you surely remember a certain 1995 playoff game in which Reggie Miller scored 8 points in under 9 seconds (two back-to-back three pointers, and two foul shots) to rally the Indiana Pacers to a last-second win over the stunned Knicks. It was a truly sad moment for New Yorkers, made all the worse when the Knicks lost the series in seven games. For whatever reason, some players seem to play better from behind. Reggie Miller certainly did.

A recent study by Jonah Berger of Wharton and Devin Pope of the University of Chicago highlights how being slightly behind is often an advantage. The authors devote a large part of their research to studying 18,000 NBA and 45,000 college basketball games. They also conducted an experiment in which people played competitive games and were given feedback halfway through.


More Research on Why Nice Guys Lose

A couple months ago, we wrote about a study by researchers from Notre Dame and Cornell that showed how “agreeableness” negatively affects monetary earnings, particularly for men. Translation: it pays to be a jerk. Well, not exactly, but it apparently doesn’t pay to be overly nice.

Now, a recent paper from a host of researchers (from Stanford, Northwestern and Carnegie Mellon) fleshes out this notion by showing why nice guys who watch out for others generally fail to become leaders. The study looks at how contributing to the public good (i.e. taking care of outsiders, and even others in a group setting) influences a person’s status on two critical dimensions of leadership: prestige and dominance. People who shared resources with their group were seen as prestigious, while those who protected their resources and even sought to deprive members of another group were seen as dominant.


The "Being Swindled" Demand Curve Shifts Left

A recent headline in The Onion reads, “Boardwalk Con Men Hit Hard By Sharp Decrease in Chumps.” Even though it’s a fake story, we can still have some fun with the economic principles it illustrates. According to the piece, the weak economy has reduced people’s willingness to be swindled— the demand for being swindled has shifted left. It’s gotten tough for swindlers, with one complaining, “In a stagnant economy like this, I can’t get no one interested in the same old grift.”

Not surprisingly, in this competitive industry (presumably entry/exit into/out of swindling is fairly easy), it is likely that some swindlers will leave the industry. The story notes that, unless the economy improves, many will, “…pull up stakes and take it down to Florida, where the chumps are a dime a dozen.”

That exit should restore normal profits for the swindlers who remain on the boardwalk.


The Freakonomics Guide to Hitchhiking: A Contest

Our latest Freakonomics Radio podcast “Where Have All the Hitchhikers Gone?” has a pretty obvious premise. You can download/subscribe at iTunes, get the RSS feed or read the transcript here.

What may not be super obvious to everyone out there is the meaning of the graphic above. So let’s play name that reference and throw in some swag for good measure!

We haven’t forgotten that your preferred method of giveaway is “random,” and we’ve had a contest before on this blog where the prize is contingent on your comment number. So here’s how it’s going to work this time: the 42nd comment will win if it bears the correct answer. If comment 42 has the wrong answer, the winning number doubles and the 84th comment will win — but again, only if the answer is correct. The winning number will triple, quadruple, etc. until we get a winner.

So tell us, what does 42 signify and where is it from? Hint: the title of this post.


How the Internet Is Restoring the Market for Hitchhiking

In our latest Freakonomics Radio podcast, “Where Have All the Hitchhikers Gone,” we looked at how hitchhiking is essentially a market. Specifically, as Levitt puts it, it’s a “matching market” where supply (a person who’s willing to give a ride) matches up with demand (a person who needs a ride) in natural equilibrium. Over time, that equilibrium, as facilitated by people thumbing on the sides of roads, eventually vanished.

But the supply remained; actually it increased — as the average number of passengers in a car during the work commute went from 1.3 in 1977, to 1.1 today. (Click here for more data.) And as gas prices have steadily risen, and the economy flat-lined, the demand has seemingly come back. Enter the Internet as the new facilitator.

As many of you have pointed out in emails and comments, an entire online ecosystem of ride-sharing ventures has cropped up in the last few years. So here are the highlights:


Political Football

I’m back to inviting readers to submit quotations whose origins they want me to try to trace, using my book, The Yale Book of Quotations, and my more recent researches.

John machlachlan asked:

When did surgery start being called a ‘procedure’?

The Oxford English Dictionary quotes usage of the term “surgical procedure” from the medical journal Lancet in 1853, and “Osteoclasis is a simple procedure” from E. H. Bradford and R. W. Lovett, Treatise on Orthopedic Surgery (1890).

John also asked:

Was the secretary of defense ever called anything else such as the secretary of offense?

The answer is: Secretary of War.


Research Retractions Rising

There’s a new trend emerging in academic research: more retractions. According to a recent article in Nature by Richard Van Noorden, “[i]n the early 2000s, only about 30 retraction notices appeared annually. This year, the Web of Science is on track to index more than 400 (see ‘Rise of the retractions’) — even though the total number of papers published has risen by only 44% over the past decade.”

The article suggests that the increase is a result of ‘an increased awareness of research misconduct” and “the emergence of software for easily detecting plagiarism and image manipulation, combined with the greater number of readers that the Internet brings to research papers.”

While scientists and editors support the change, they point to various problems with the system: policy inconsistencies across journals, “opaque” explanations for retractions, ongoing citation of retraction papers and the stigma surrounding retraction. “[B]ecause almost all of the retractions that hit the headlines are dramatic examples of misconduct, many researchers assume that any retraction indicates that something shady has occurred,” writes Van Noorden.


How to Be Sure Your Waiter Brings You Decaf (And Thwart Tiger Attacks Too!)

You’ve just finished a dinner at a nice restaurant and you order decaf coffee instead of regular so that you won’t have trouble falling asleep. A few minutes later, your server brings you a steaming cup of Joe. You want to drink, but you’re worried it might have caffeine. At this point, I normally ask something like “Are you sure this is decaffeinated?”

But my friend (and newly tenured colleague) Yair Listokin tells me that Oprah suggests that we ask instead: “Is this regular coffee?” Or, “Are you sure this is regular coffee?”

It’s not fool proof, but asking “is it regular” will let you find out whether the waiter is willing to say “yes” to any question, possibly to avoid the extra work of having to go get a replacement? Framing the question doesn’t work if the restaurant follows the “after 8 p.m. or so, all the coffee is decaf” convention.


FREAK-est Links

This week, a new study says materialism ruins marriages; Italian PM Berlusconi thinks drugged-up stock traders cause market volatility; a scientist says memory, not practice, matters for success; does impatience make us fat? Russia’s coming population crisis; and an $18 million sunken treasure.


New Statistics About American Veterans

Sure, serving in the military long-term will likely make you a decent living, but what about the other effects military service has on veterans today? A new research paper from the Pew Research Center takes a look at the attitude of and challenges to American veterans returning from the wars in Iraq and Afghanistan. A total of 1,853 veterans were surveyed, and the poll shows some surprising things.


A Study in Child Cooperation: Sweden vs. Colombia

The behavior of children continues to be of interest for both economists and Freakonomics. Back in May, we looked at research by the German economist Martin Kocher showing that young children are generally less risk-averse than adults.
Now, a working paper by Juan-Camilo Cardenas, Anna Dreber, Emma von Essen and Eva Ranehill at the Stockholm School of Economics compares the cooperative behavior of Swedish children and Colombian children using the Prisoner’s Dilemma game, which explores how two parties cooperate in the absence of communication.


Surprise: Money Still Beats Goodwill as Incentive for Organ Donors

If you’re a regular reader of this blog, you know we write a lot about organ donation and incentives. Like whether registered organ donors should get priority when it comes time to get in line themselves. Or whether the transplant market is too restrictive.

A recent Bloomberg column by Virginia Postrel highlights the difference between goodwill and cold hard cash as incentives to donate, not to mention the legal limits that exist to prevent transplants going to the highest bidder.


Freakonomics Radio Tops the iTunes Charts; and a Contest: Which Episodes Do You Most Love (or Hate)?

With the help of our latest podcast, “Where Have All the Hitchhikers Gone?”, Freakonomics Radio has jumped to No. 1 on iTunes.

This happens once in a while, but is still rare enough to be a big treat. (Ira Glass — who once gave us some podcast advice — has pretty much taken up permanent residence on No. 1 iTunes Place; the rest of us mortals camp out down the street.)

If you visit iTunes this week, you’ll see a lovely promotional banner (below) for our program. That certainly helped with the No. 1 ranking. But so did you! Thanks to all of you for listening, downloading, and spreading the word. We have a great lineup of new episodes coming this fall, and our podcast has just gone weekly.

If you feel like letting us know your favorite (and/or least favorite) episodes in the comments below, that’d be helpful. Good feedback is valuable, in life and in art, but it can be devilishly hard to come by. So we’ll give you an incentive: we’ll send some Freakonomics swag to whoever writes the most interesting positive review and whoever writes the most interesting negative review as well.


Does Fingerprinting Food Stamp Recipients Save Money?

What do New York City and Arizona have in common? No, this is not a trick question; there is one thing: currently, they are the only jurisdictions in the country that require food stamp recipients to register their fingerprints in an electronic database. California and Texas recently lifted their fingerprinting requirements.

Not surprisingly, this has touched off a debate over social utility and costs in New York. Proponents say that the resulting fingerprint database saves the city millions of dollars a year in duplicate fraud. Last year, the Human Resources Administration said it found 1,900 cases of duplicate applications for 2010, with savings of nearly $5.3 million.

Detractors claim this estimate is unproven and that fingerprinting keeps a certain amount of needy people out of the system through intimidation.


Why Do Only Top MBA Programs Practice Grade Non-Disclosure?

Last spring while I was finishing my fellowship at Columbia Business School, much of the student body was busy trying to overturn the school’s grade disclosure policy. Back then, Columbia was one of the few top MBA programs that did not practice grade non-disclosure, meaning recruiters were allowed to ask Columbia students about their grades. By the end of the year, the issue had passed a student referendum, and this semester Columbia became the latest business school to have a grade non-disclosure policy, which encourages students not to disclose their grades to employers until they’ve been hired.

Grade non-disclosure policies are a quirk of MBA programs. You won’t find them in medical or law school. In fact, the only place you do find them is among top business schools. Of the 15 most selective MBA programs, 9 of them have some form of a grade non-disclosure policy. But of the schools ranked from 20 to 50, none do.

A new paper from a pair of Wharton economists examines why this is.


When Young People Need the Elevator

An e-mail from Brazil:

My name is Mauricio Castro, I have a social communications degree and teach interface design and multimedia systems.
I have a story I’d like to share with you guys.
I live in a nice neighborhood in the city of Vitória, Brazil. Being close to the beach, the city code forbids tall buildings in order to maintain sunlight in the sand all time. The maximum floor number is three.
So it’s only natural that most buildings here don’t have elevators. Even some new ones are presented only with stairs, especially those built for the younger customers.
So I went to the health clinic the other day and the nurse was telling me about the rising numbers of youngsters suffering from strokes. There are lots of explanations for these numbers rising, but mostly lifestyle and drug abuse.


Incentivizing the School Commute

We’ve written about bribing kids to get better grades. But what about bribing them to walk or ride their bike to school?
A new working paper examines a program in Boulder, Colorado that attempted to incentivize kids to bike or walk to school over a span of several years. The program began with a $10 cash prize for the first two years, but then switched over to a $10 bike store coupon thereafter. One lucky student who rode and walked to school every day during a “prize period” won the coupon.
Even considering the small, non-cash winnings, biking and walking to school increased 16 percent during the prize period. Here’s the abstract:


Security Overkill, Diaper-Changing Edition

I’ve been thinking a bit lately about security overkill. This includes not just the notion of “security theater” — security measures meant to inspire comfort by mere show of force/complexity — but the many instances in which someone places a layer of security between me and my everyday activities with no apparent benefit whatsoever.
My bank would surely argue that its many and various anti-fraud measures are valuable but in truth a) they are meant to protect the bank, not me; and b) they are cumbersome to the point of ridiculous. It’s gotten to where I can predict which credit-card charge will trigger the bank’s idiot algorithm and freeze my account because it didn’t like the Zip code where I used the card.
And security overkill has trickled down into the civilian world. When the class parents at my kids’ school send out a list of parent contact info at the start of each school year, it comes via a password-protected Excel spreadsheet. Keep in mind this list doesn’t contain Social Security numbers or bank information — just names, addresses, and phone numbers of the kids’ parents. I can imagine the day several months hence when someone actually needs to use the list and will find herself locked out by the long-forgotten password.


What Happens When Nobody Is Better Off? Pareto Deterioration

A tenured senior professor at another university, one of his department’s top researchers and best teachers, asked his department chairman for a temporary one-course teaching reduction for this Fall. The chairman refused but offered a terminal three-year appointment that included this reduction for all three years, at the same salary as if this professor taught a full load each year.
The professor accepted the deal, as he desperately wanted the teaching reduction this Fall, figuring he could get a teaching job elsewhere after three years. But he tells me he would have been happier teaching a full load over the next two years, and would rather not have to search for a job in two years. He is worse off. The department and university are also worse off, since they lose his courses in each of the next two years, and thereafter will not get the benefit of his teaching and his research/publication luster; and students are worse off too.
Is this really a Pareto deterioration—a new economic phrase denoting a change in which at least one person is worse off, and nobody better off? And is the phrase Pareto deterioration the best name for this unusual phenomenon?


Economist Allen Sanderson Answers Your Questions on Taxing College Football

Last week, we posted an essay by University of Chicago economist Allen R. Sanderson on why he thinks a “sin tax” should be levied against Division I college football. His basic point is that student-athletes essentially serve as unpaid labor, and since most of them never make it to the NFL (or end up out of the league after just a few years), the extra tax revenue should go toward supporting them in their effort to finish their education.
You responded quickly with a variety of comments and opinions; though not so many direct questions. So Allen has written a response that’s broadly aimed at some of the points brought up by a number of readers. Overall, it’s a good (and provocative) read that focuses on the bizarre economics of Division I college football.
Taxing College Football
By Allen Sanderson
First of all, thanks for all the great comments, suggestions and complaints. Good conversations!
In terms of Alex’s comment about “where’s the harm” (or the negative externality), I think the best way to look at it is not unlike the Antebellum South and slavery. To be sure, today’s Division I college athletes are not slaves, nor were they drafted; they volunteered, and expected to benefit more by playing football for Big State University than from their next best alternative.


The Agreeable Power of Sugar

New research (summarized in the BPS Research Digest) confirms an old cliche: you are what you eat. A team of psychologists recently found that not only are sweets-lovers perceived as more agreeable, but they may actually be more agreeable:

Students who rated their own personality as more agreeable also tended to have a stronger preference (than their less agreeable peers) for sweet foods and drinks. Among a different set of students, a stronger preference for sweet foods correlated positively with their willingness to volunteer their time, unpaid, for a separate unrelated study – considered by the researchers as a sign of prosocial behavior.


What Should Be Done About Violent Crime in Mexico?

A reader named Rodolfo Ostolaza writes in with a most heartfelt plea about violence in Mexico. He would welcome all suggestions.

I live in Mexico City and, although the wave of violence in my country has not yet fully reached this area, I’m worried because we are living a state of terror, with bloody attacks, and a lack of humanity. That is why I am requesting your help.
What do you think we can do to change this? According to the chapter on crime reduction in Freakonomics, a judge’s decision was more influential than a change in public policy and law enforcement bodies in reducing crime in the U.S. I wish we could apply this “recipe” (allowing abortion throughout Mexico, which is currently legal only in Mexico City) to keep the hope that, in the future, things will be brighter. However, considering the Mexican idiosyncrasy, with strong influence of the Catholic Church, I believe that this measure would have, at best, a marginal impact.
I want you to share this question with your readers. Give us suggestions, ideas, different perspectives to analyze the problem. What follows are some thoughts and questions of how, I think, the problem should be analyzed.
First we must understand precisely the problem itself. It is true that the violence began to grow exponentially after President Calderón declared war.


Harvard Shuts Down its Nobel Prize Pool

Last week we posted about Harvard’s Nobel Prize Pool, where people could place bets predicting this year’s winner of the Nobel Prize in Economics for $1 per entry. The Harvard economics faculty ran the site for a few years, dubbing it, “the world’s most accurate prediction market.” Apparently, Harvard wasn’t too keen on the idea, as the following notice now appears on the site:

Unfortunately, we have been advised by Harvard University to immediately shut down the Nobel pool due to legal reasons, and we have decided to comply with this request. We will fully reimburse the money of all participants, and we apologize for any inconvenience this creates for you. All participants will be contacted by email.

For anyone who watched the site closely over the last week, do you remember the odds for the actual winners, Thomas J. Sargent and Christopher A. Sims?