1. Are world finances being run by an MIT fraternity?
2. A Bronx high-school teacher talks about teacher cheating.
3. Is the Mafia the biggest bank in Italy? (HT: Eric Jones)
4. Tyler Cowen‘s new Twitter feed on food, a must-follow; our related podcast is here.
5. Is more stress good for cops’ decision-making?
Supporters of stronger intellectual property enforcement — such as those behind the proposed new Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) bills in Congress — argue that online piracy is a huge problem, one which costs the U.S. economy between $200 and $250 billion per year, and is responsible for the loss of 750,000 American jobs.
These numbers seem truly dire: a $250 billion per year loss would be almost $800 for every man, woman, and child in America. And 750,000 jobs – that’s twice the number of those employed in the entire motion picture industry in 2010.
The good news is that the numbers are wrong.
Weight Watchers has ads in heavy rotation with Charles Barkley saying: “lose weight like a man.”
You can also hear him mention his success in his Saturday Night Live monologue.
Something is working. Since starting WW, he’s lost 38 pounds. But what about the Weight Watchers program that has him shedding so much weight?
Is it the group weigh-ins?
Is it the famous Weight Watchers point system?
Or is it something else?
Last spring, I jokingly (okay, maybe half-jokingly) wrote about my quest to make the Champions Tour, the professional golf tour for people over the age of 50. In that post, I made reference to the ideas of Anders Ericsson, an old friend whom Dubner and I wrote about in our New York Times column back in 2006, and whose ideas later became the centerpiece of a number of popular books. Anders is the one who thinks that talent is unimportant. Oversimplifying a bit, he argues that with 10,000 hours of the right kind of deliberate practice, more or less anyone can become more or less world-class at anything. I’ve spent 5,000 hours practicing golf, so if I could just find the time for 5,000 more, I should be able to compete with the pros. Or at least that is what the theory says. My scorecards seem to be telling a different story!
It turns out I’ve got a kindred spirit in this pursuit, only this guy is dead serious. A few years back, twenty-something Dan McLaughlin decided he wanted to play on the PGA tour. Never mind that he had only played golf once or twice in his life and had done quite poorly those times. He knew the 10,000 hour argument, and he thought it would be fun to give it a test. So he quit his job, found a golf coach, and has devoted his life to golf ever since. So far he is 2,500 hours into his 10,000 hour quest, which he chronicles at thedanplan.com.
Two French economists, Simon Porcher and Alexandre Frondizi, have been working on a paper about the economics of Paris street prostitution in the late 19th century.
In 1878, there were an estimated 23,000 unregistered prostitutes and 3,991 registered prostitutes. Gathering data from 339 arrests, the researchers found that street prostitutes were generally young, unskilled, and well-paid:
They tended to work with pimps that were from the same area and clustered in neighborhoods where they could compete with regulated brothels. Street prostitutes not only generated profits for themselves but also for a whole bunch of actors, thereby switching the whole local economy to this industry, at the expense of the formal economy.
Mitt Romney won big in New Hampshire, but his opponents are vowing to push on in South Carolina. Which means stepping up their pleas for cash. In an e-mail to supporters, Rick Santorum wrote:
We must show real progress tonight and redouble our efforts … That’s why my campaign launched the “Game On” Moneybomb, and why we need your help right now. As you already know, we are facing serious and well-funded opposition for the nomination.
That’s the kind of language that confirms one of the biggest truisms in politics: money buys elections.
But how true is that truism?
In response to our recent podcast called “Why Is ‘I Don’t Know’ So Hard to Say?,” a reader named Timothy McCollough writes in with a most interesting story. He teaches at a private international school in Santo Domingo, Dominican Republic. His courses include two sections of AP microeconomics, sociology, and “regular economics.” Because it’s a private school, he adds, “we have freer reign to set up classroom incentives and engage students as we see fit.” For instance:
In my classroom, students lose 1/4 point for wrong answers on quizzes. But for writing “I don’t know,” they get 1/4 point. (A correct answer is 1 point). The rationale is that if someone is in a medical emergency, and someone asks me what should be done, the answer “I don’t know” is much preferable to a guess. “I don’t know” leads the questioner to ask someone who hopefully is knowledgeable.
I recently visited India for the first time, spending a grand total of 30 hours there. During that time, however, my experiences ran the gamut. I spent the day in the Zakhira slum in New Delhi, and then just a few hours later, enjoyed a sumptuous dinner sitting next to former Australia Prime Minister John Howard, his wife Janette, and other luminaries.
My first impression of India was that the chaos on Indian roads was beyond belief: people walking and riding bikes on what appear to be freeways, motorcycles with three riders, open trucks crammed with people, the constant din of honking everywhere by everyone. On top of that, the people driving me never seemed to know how to get anywhere. It took over an hour to get from the airport to my hotel, a seemingly endless series of turns (including numerous u-turns) and my driver rolling down his window and yelling for directions at nearly every stoplight. I was surprised when the return trip to the airport, with a different driver, took only 20 minutes and was nearly a straight shot. I will say, however, that I saw only one cow on the trip.
We’re working on a new podcast episode about morale in the workplace, and need your help. The episode was inspired a recent blog post in which a reader posited an interesting theory: morale is higher at companies where a lot of employees park nose-in (indicating they’re eager to get to work) rather than nose-out (indicating they can’t wait to get home).
My request here is two-fold:
1. We’ve started poking into the academic literature on company morale but haven’t gotten very far, so please let us know any good leads.
2. We’re also interested in hearing stories about morale at your workplace, be it high or low, and especially any clever/strange indicators of morale and unusual methods that have been used to measure morale.
Thanks in advance!
1. A lovely obituary for a lovely singer, Cesaria Evora.
2. Nathan Myhrvold makes an appearance on Top Chef
3. Halting your newspaper delivery to thwart burglary can backfire (when the delivery guy is the burglar). (HT: MediaWire)
4. Remember our “Who Owns Trader Joe’s?” post? If you want more info, read this.
5. I am writing an essay for Jewish Jocks book, joining authors Larry Summers, David Remnick, and Buzz Bissinger.
Our latest Freakonomics Radio on Marketplace podcast is called “What’s Wrong With Cash for Grades?”
(You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)
In it, Steve Levitt talks to Kai Ryssdal about whether it’s effective to pay kids to do well in school. Levitt, along with John List, Susanne Neckermann, and Sally Sadoff, recently wrote up a working paper (PDF here) based on their field experiments in Chicago schools. Levitt blogged about the paper earlier; here’s the Atlantic‘s take.
Reader Melissa Belvadi writes in with a question about preferences on fundraiser incentives:
Here in northeastern Canada, there is a very popular form of local fundraising called the “50-50.” Basically it’s a raffle, where 50% of the total money collected is then randomly given to one of the donors (odds weighted proportionately by the donation size), and the other 50% goes to the original ’cause’ of the fundraising, whether it be a local homeless shelter, a recent victim of something, or whatever that is of interest to the local community.
This strikes me as an incredibly bad deal, but a bit complicated to explain why, as it contains two components:
- As a gamble: poor expected value. I am not sure how to calculate this, but from my experience in Las Vegas where slot machines boast being set to 97% return ratios, a gamble where 50% goes to the “house” seems unlikely to be a good EV.
- As a charitable donation: poor “program ratio” — at most, 50% of my donation will go to the “program” (charitable cause) – this is considered a very poor ratio in the philanthropic world where typically 60% is the bare minimum acceptable – the BBB requires 65%.
What do you do when the medical experts disagree? Should you have that PSA screening, or mammogram? Should you really be taking statins — and what about vitamins? On these and many other medical issues, consensus is hard to come by; individuals end up weighing the benefits and risks.
Jerome Groopman (more here) and Pamela Hartzband have written a book to address this conundrum, called Your Medical Mind: How to Decide What Is Right For You
Our most recent podcast, “Why Is ‘I Don’t Know’ So Hard to Say?,” continues to draw interesting replies. Here’s one from Erich Knobil, who works in the finance office of the Falls Baptist Church & Academy in Menomonee Falls, Wisc.:
A couple of minor notes about “I don’t know” —
Someone (a consultant) once told me the “Consultant’s Motto” was “Maybe wrong, but never in doubt.”
Someone else (female) once called it “Male Answer Disorder (MAD),” where men seem compelled to always have an answer for everything.
Anyone know of any good empirical work on whether MAD is real?
We’ve had the good fortune over the last few years here at the blog to bring you occasional nuggets from University of Arizona economist Price Fishback, whose research on the Great Depression often offers powerful insights about our current economic situation.
Price’s latest contribution to the blog, this time joint with Ken Snowden from UNC-Greensboro, discusses the Home Owner’s Loan Corporation, which bought and refinanced 1 million severely delinquent loans between 1933 and 1936. Did things works out well or poorly? You’ll have to read on to find out. And if you like what they’ve written, keep an eye out for their soon to be released book (with Jonathan Rose as a third author).
Learning from the Last Great Mortgage Mess
By Price Fishback and Ken Snowden
For the past four years, the U.S. has faced a housing crisis that shows no signs of ending. The situation was similar in June 1933 when the Home Owners’ Loan Corporation was created to address the nation’s last severe mortgage crisis. Some have suggested that a new HOLC could help resolve the current crisis, but their characterizations of the HOLC have been incomplete. Our goal here is to summarize recent research that provides a fuller picture of the HOLC and its impact on housing markets in the 1930s.
We’re working on a new Freakonomics Radio podcast about financial illiteracy, a topic we’ve visited a few times on this blog. Two guests you’ll hear from in the episode have held the same title: chairman of the White House Council of Economic Advisors.
First up is current chairman Alan Krueger, whom I asked what would improve if Americans were more financially literate:
KRUEGER: I think first and foremost, we’d probably have greater savings. People are often in a situation where they have to live paycheck to paycheck. That’s something I think we need as a country to work to improve. Most importantly I think we can improve income growth for the broad middle class. But many people who seem to have the wherewithal to save for the future find it difficult to save.
Does it make sense that we have gotten worse at making violins over the last 300 years, when we have gotten so much better at making just about everything else? Not really. Finally there is some experimental data on the subject, and it doesn’t look good for those who pay top dollar for fancy old violins.
(Hat tip to Dean Strachan)
We should probably start a Strange Name Hall of Fame at some point to chronicle all the weird, wonderful, terrible names that readers have passed along to us since we first wrote about names in Freakonomics. This one, from Joyce Wilson, would probably make the cut:
I thought of Freakonomics when I was at a St. Louis area grocery store and saw cut-out paper snowflakes taped to the window with the makers’ names on them. The name I particularly noticed? Demonica.
Levitt’s reply when he saw this e-mail: “Perhaps the little girl’s mother is just a heavy metal fan.”
The U.S. Department of Labor is proposing to end the overtime exemption of “companions” (home assistants typically employed to assist/watch the infirm elderly) employed by an agency. The exemption would remain for companions employed directly by a private individual. This rule would lead to classic results: 1) Higher labor costs through agencies, no doubt passed onto older people in the form of higher prices, leading to less employment through agencies; 2) A shift to more companions employed directly by individuals.
I’m not sure what the demand elasticity for companions is, but it is unlikely to be small.
There is an old quip, attributed to George Bernard Shaw, that if all the economists were laid end to end, they’d never reach a conclusion.
My own experience has always been just the opposite. Most economists think very much alike.
If you want to feel like the smartest person in the room, often a good way to accomplish this is to be the only economist. Frequently, the one economist will say things that make a lot of sense that no one else would ever come up with. When I am that one economist, I sometimes feel like a genius. Until a second economist enters the room, that is. Because when the second economist shows up, he or she often says all the smart things I was going to say, before I can say them. It turns out, it is not the economist who is brilliant, but rather the training we get as economists which leads us to think differently from non-economists, that sometimes makes us seem smart.
In today’s Wall Street Journal, Jared Diamond (not this
The caption reads “Bill Belichick of the New England Patriots, who was hired last week as Penn State’s new football coach.” That’s not quite right. The Bill from the Patriots who was hired by Penn State was the Patriots’ offensive coordinator Bill O’Brien, as Diamond’s article makes clear in the first paragraph. Belichick is still very much the head coach of the New England Patriots.
Our latest Freakonomics Radio on Marketplace podcast is called “The Season of Death.” The gist: Summertime brings far too many fatal accidents. But the numbers may surprise you.
(You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)
If you’re a longtime reader, you probably already have an idea of what we’re talking about. Human beings are, in general, quite bad at assessing risk. We tend to be scared of big, noisy, anomalous events – like shark attacks, which in an average year kill fewer than five people worldwide — while overlooking the seemingly quotidian reality of, say, drowning deaths (about 4,000 per year in the U.S. alone) and motorcycle fatalities (about 4,500 U.S. deaths annually). We have been exploring this idea since Freakonomics, where we asked whether a gun or a swimming pool is more “dangerous.”
Our latest Freakonomics Radio on Marketplace podcast is called “It’s Not the President, Stupid.” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.) The gist: it’s time to admit that the U.S. economy doesn’t have a commander-in-chief.
Over the years, we’ve regularly visited the question of how influential the president of the U.S. really is. This segment focuses on the president’s influence over the economy — which, if you believe polling data, will be the central concern for many voters as the 2012 election unfurls.
In this Marketplace segment, you’ll hear from Austan Goolsbee, the University of Chicago economist who has served President Obama as both campaign adviser and chairman of the Council of Economic Advisers:
GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.
A while back, a reader sent us this photo, with a warning you rarely see in the U.S.
In light of our recent podcast “The Perils of Drunk Walking,” we got in touch with Kon Scholtz, head of marketing and sales at United National Breweries, the South African company that makes the beer in question, Chibuku Shake Shake. Scholtz told us that Shake Shake is a nickname for traditional African beer made from maize and malt; it has a short shelf life (about five days), a relatively low alcohol content (3.5%) and, is meant to be shaken before consumption. It is also, according to Scholtz, very nutritional.
As for the warning on the carton, Scholtz explained.
The preliminaries are finally over. As we head into the first weekend of NFL playoffs, the conversation shifts. No longer are we talking about the long arc of the season – about working out the kinks, getting schemes in place, or jockeying for position. Now, with every game a do-or-die game, we’re talking about which team is peaking at the right time. Because no matter how good (or bad) your record may be, the final summit is in sight and it’s time to turn on the juice.
In the latest installment of “Football Freakonomics,” we look at the art and science of peaking. What’s the best way to assess a team’s peak position?
1. “Why tornadoes take the weekends off.” (HT: Michael Teague)
2. Who knew that glove-making, of all sorts, was such a Jewish field?
3. A “twin-town” in Ukraine: interesting and a little bit bizarre — especially “the terrors of grade 6.” (HT: Kelly Fawke)
4. Freakonomics in an Ohio State Univ. court case.
5. The most gracious I’ve-been-fired note ever?
In our latest podcast, “Why Is ‘I Don’t Know’ So Hard to Say?,” Levitt talked about how it is practically forbidden in the business world to say that you don’t know the answer to a question, lest you be deemed incompetent or irrelevant.
That idea has generated some reader feedback that I thought was interesting enough to share. First, from Mike Wrubel, an office manager for a medical practice in Elkhart, Indiana:
I would generally agree with the notion that people in business are very much inclined to not say “I don’t know.” I have worked in the same hospital for 20 years, and while I am very comfortable saying it, not everyone else is. I think people fear being perceived by others as they are not paying attention to their work, or being seen as incompetent, or that it’s their job to “know.”
Amtrak’s ridership and revenue has been steadily increasing over the last 10 years, and 2011 set a new ridership record with 30.2 million passengers, and $1.9 billion in ticket revenue. But, even though it took in $1.42 billion from Congress last year, it still manages to lose $1 billion annually. This is hardly a new development. Amtrak has a long and storied history of functioning at a loss despite government subsidies.
So, as we enter what appears to be a new era (maybe?) of government austerity, it seems worth asking if Amtrak can ever turn a profit without government help. We rounded up some people who pay attention to this issue and asked for their ideas to fix Amtrak, if it can be fixed at all.
1. Danny Kahneman‘s Thinking, Fast and Slow
2. Is “big data” really ready for primetime?
3. An economist (Laurence Kotlikoff) is running for President. (Did he listen to this?) His books include The Coming Generational Storm and Spend ‘Til the End: Raising Your Living Standard in Today’s Economy and When You Retire
(HT: Peter Coy)
4. Active trading — of military products! — between countries at war. (Especially interesting in light of Iran’s blockade threat.) (HT: David Wigram)
Research in Motion, the Waterloo, Ontario, company that makes BlackBerrys, has been hemorrhaging market share in North America. But a blog reader named Jon Markman, a lawyer living in Washington, D.C., has discovered a land where the BlackBerry still dominates:
I wanted to send along an interesting thing I noticed on a recent trip to the Dominican Republic to visit my in-laws.
In the past when I’ve been there, I’ve noticed that everyone uses a BlackBerry; my wife and I were the only people I’d ever seen using anything else (other than a “dumb” phone, but those are pretty rare these days everywhere!). I figured it was only a matter of time; trends and technology seem to often lag a little when making it to the island. Given that BlackBerry has fading for years, I thought, soon it would fade there, too.
