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Archive for 2012

The Hidden Cost of False Alarms (Ep. 69)

Our latest Freakonomics Radio on Marketplace podcast is called “The Hidden Cost of False Alarms.” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)  

The central facts: between 94 and 99 percent of burglar-alarm calls turn out to be false alarms, and false alarms make up between 10 and 20 percent of all calls to police.

There are at least three things to consider upon learning these facts:

1. If a particular medical screening had such a high false-positive rate, it would likely be considered worse than worthless; but:

2. With more than 2 million annual burglaries in the U.S., perhaps it’s worth putting up with so many false positives in service of the greater deterrent; as long as:

3. The cost of all those false positives are borne by the right people.

Can you already figure out whether No. 3 is in fact the case?


Ron Paul Answers Questions From Freakonomics Readers (Encore)

Back in 2008, shortly after the Presidential election, we solicited reader questions for Congressman Ron Paul, who had run for President that year. He happens to be running again this year and, in light of his strong third-place showing in the Iowa caucuses last night, I thought it might be interesting to republish his replies. They are well-considered and interesting throughout, and it is especially interesting to read them four years later in light of how political circumstances have shifted (or haven’t).

Q.What was your first thought when you found out McCain chose Palin as his running mate?

A. At first, I thought it was a pretty savvy choice from a political perspective. I also knew that she had said some nice things about me in the past. At the same time, I knew that to be on the ticket, she would have to toe the line on foreign policy and the war, so that tempered a lot of my enthusiasm.

Q. Who in Congress would you consider to be your closest peer(s)?

A. There are a lot of members who I work with on a variety of different issues. Walter Jones is a good friend and works with me on foreign policy. Often on spending, if there is a 432-3 vote, the other two congressmen voting with me are Jeff Flake and Paul Broun. A lot of times, I work with Democrats on civil liberties issues. I guess my point is that people from all over the political spectrum can side with liberty and the Constitution. The goal is to get a majority to vote that way most of the time.


Credit Scores: Do Nice Guys Finish Last?

A new study takes advantage of the increasing (and somewhat controversial) use of credit scores as a tool for evaluating job candidates to examine whether scores are affected by how nice you are. Jeremy Bernerth, Daniel Whitman, Shannon Taylor and H. Jack Walker found that while there is a positive relationship between “conscientiousness and FICO scores, there is a negative relationship between agreeableness and FICO scores”:

The finding that credit scores accounted for a substantial proportion of variance in externally rated performance variables gives some credence to the practice of using credit scores as a screening tool. However, null findings between credit scores and workplace deviance call into question claims that employees with poor credit will engage in behaviors intended to harm the organization (Gallagher, 2006; Oppler et al., 2008).


Less Work Time = More TV, Grooming Time

What would we do with our time if we suddenly didn’t have to work as much but were just as healthy and had the same income? This question is ages-old, was posed by Keynes in 1930, but is very hard to answer: sudden, permanent drops in work time that change nothing else are very rare. They did occur in Japan in the 1990s and Korea in the 2000s, when their governments induced employers to cut work hours. In a recent paper Jungmin Lee, Daiji Kawaguchi and I use time diaries from before and after the changes to see what happened. In Japan, almost half the free time was devoted to additional TV-watching, while in Korea, much was devoted to increased personal care, particularly grooming. But in neither was there any increase in home production — child care, cooking, gardening, etc. I like to think the same would occur in the U.S. — that we would use permanent cuts in work time to enjoy ourselves and take more care of ourselves. Regrettably in the workaholism champion of the Western world, these cuts don’t seem likely any time soon.


In Defense of the Christmas Tree Tax that Isn't a Tax at All

Millions of Christmas trees will be hauled away this week — some will enjoy a useful life after death and many others will end up in the dumps. But record numbers of Christmas trees will also be boxed up and stored in closets till next year. And that has many Christmas tree growers feeling in the dumps, ever more so after anti-tax crusaders trashed a plan to rescue their declining industry by labeling it “Obama’s Christmas Tree Tax.”

The $0.15 fee on the sale of fresh Christmas trees hardly seems like the stuff of political scandal. But announced in November—just days before many Americans would make the trip to tree farms in search of the perfect tree—and branded by conservatives as an assault on Christmas and a sign of government overreach, the story quickly gained traction, with the Drudge Report driving nearly a million visitors to the Heritage Foundation, which broke the story. Before long, mainstream news outlets were reporting that the administration had caved to conservative backlash and decided to delay the “Christmas tree tax” indefinitely.


TSA Chronicles, Cream Cheese Edition

Alan Pisarski, a transportation scholar featured in our podcast about the disappearance of hitchhiking, writes in to say:

My niece was back home in Milwaukee visiting family and stocked up on bagels, lox, and cream cheese to take home to Kentucky (forget for our purposes the madness of thinking that Milwaukee has a clue about bagels etc. – she is right – at least they have heard of them in contrast to KY). Anyways, the wonderful folk at TSA said she could take the bagels on board and the lox, but the cream cheese was out! But being proud civil servants – an oxymoron if ever there was one — they agreed that it would be okay, and she could bring it on board, if the cream cheese was spread on the bagels. Please write this down for future reference.


A Rose By Any Other Distance (Ep. 73)

Our latest Freakonomics Radio on Marketplace podcast is called “A Rose By Any Other Distance.” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)

With Mother’s Day coming up, we thought it’d be interesting to look at the cut-flower industry. Americans spend about $12 billion a year on them. Mario Valle, a wholesaler at the L.A. Flower District, tells us that Mother’s Day is easily his biggest day of the year: “It’s 30 percent of my year. Everyone has a mother!”


"Football Freakonomics": Incentives

Today’s question on “Football Freakonomics” is a tricky one. Which incentive is stronger for an NFL player: landing a big contract or winning the Super Bowl?

It can be devilishly hard to find out what truly motivates people to do what they do. There are a lot of reasons for this. Different people have different preferences; an incentive that works for a while may wear off over time; and it’s dangerous to rely on what people say about their motivation, since most of us are concerned about saying “the right thing.”

It’s better, therefore, to measure actual behavior – in this case, for instance, how players perform before and after signing a big contract.