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Archive for 2014

What is “Parentology”? Bring Your Questions for Dalton Conley

Last year, we talked to NYU sociologist Dalton Conley and his two children, E and Yo, on our podcast “How Much Does Your Name Matter?” Their names — E Harper Nora Jeremijenko-Conley and Yo Xing Heyno Augustus Eisner Alexander Weiser Knuckles Jeremijenko-Conley — are a bit of an experiment:

CONLEY: Of course it’s hard to separate out cause and effect here until Kim Jong-Un allows me to randomly assign all the names of the North Korean kids…but my gut tells me that it does affect who you are and how you behave and probably makes you more creative to have an unusual name.

Conley’s approach to naming his kids is certainly interesting (and highly unusual), to say the least. As it turns out, Conley has the same approach to parenting. He chronicles his unorthodox, research-inspired parenting in his new book Parentology: Everything You Wanted to Know about the Science of Raising Children but Were Too Exhausted to Ask. The book is out today, and Conley has agreed to answer blog reader questions about the book, so ask away in the comments section below. As always, we’ll post his answers in short course.


The Problem of Dominated Funds

This is the second in a series of posts about the problem of excess fees charged to defined contribution retirement plans.

Retirement regulations have largely been successful in giving worker/participant defined contribution plans the opportunity to diversify.  Most plans nowadays give participants a sufficient variety of investment options that it is possible to allocate investments so as to diversify away most idiosyncratic risks.

However, the 1974 Employment Retirement Income Security Act’s (ERISA) emphasis on diversification has diverted attention from the problem of excess costs.  Courts evaluating whether plan fiduciaries have acted prudently have tended to just ask whether the plan offered a sufficient number of reasonably-priced investment opportunities.  For example, in Hecker vs. Deer & Co. (7th Cir. 2009), the 7th Circuit found it was “untenable to suggest that all of the more than 2500 publicly available investment options had excessive expense ratios.”


The Economic Value of 3D Printing?

On a visit to the London Science Museum, my oldest grandson explained to me how 3D printing works.  I expressed doubt about its economic value, but he pointed out this sign.  “Aha,” I said, “here is a clear-cut case of a technological change that should reduce long-run average cost (by saving on materials).”

And despite the last sentence of the picture, this saving will eventually be passed onto consumers in the form of lower ticket prices, but probably not fully in the oligopolistic aircraft manufacturing industry.

(HT: JCH)


Making It

In 2009, I published a post on this blog about Sarah Dooley, which ended with the words:

I predict she is going to make it big. I’m not sure how, but remember you heard it here first.

A couple of months later, I received a letter out of the blue from a legit movie producer who said he was writing to thank me for that post because from it he learned how talented Sarah is.  He wrote that he had just signed a contract with her to develop a screenplay.

Fast forward to the present, and while I can’t find any movies made with Sarah’s scripts, I was happy to hear this NPR interview with her about an album she just released.  The album is called “Stupid Things.”  My favorite song, “Gym Looks Nice,” is a school dance tone poem that is characteristically moving.  My daughter tells me that at one point, it made it into the top twenty downloads on iTunes.  Sarah’s also released a music video of her song “Peonies.”


Pricing at the British Library

At the British Library, the special exhibition about Georgian England has a concession (old folks) price of ₤7, but also a listed concession (gift) price of ₤8. With the latter, one gets a receipt and can deduct the ₤8 from one’s income at tax time. If one is in the 20 percent bracket (taxable income from almost nothing up to ₤32,000), the net admission price is ₤6.40. So the incidence of the subsidy is typically shared nicely by the library and the taxpayer. But for the highest-income visitors — tax rate of 40 percent — the overwhelming share of the benefit goes to the taxpayer. I’ve never seen this double-pricing scheme made so explicit — and the sharing of the gains made so clear — in the U.S.


Democracy: Should We Bother?

What could be less controversial than the principle that the public should be consulted about transportation policy? In future posts, I’m going to write about why puppy dogs are despicable and why we should all root for the Miami Heat, but for today I’m going to question this seemingly unquestionable proposition.

There is good reason that one of modern transportation planning’s most fundamental precepts is that the public should be consulted on policies large and small, from constructing a new subway line to changing a humble bus schedule. This is the product of very real abuses, particularly during the creation of the Interstate Highway System. At that time, government had virtual carte blanche to displace residents and bulldoze neighborhoods. For example, for Los Angeles’s Harbor Freeway in the late 1940s, the condemnation resolution for the right-of-way was approved by the court the day after it was filed by the state. The following day, every piece of property along the route was posted with a fifteen day notice to vacate. And less than three weeks after the filing of the condemnation resolution, the Division of Highways began clearing the property.


Does Breastfeeding Reduce Childhood Disability?

A new (gated) NBER paper looks at the relationship between breastfeeding and childhood disability.  The author, George Wehby, finds that a longer duration of breastfeeding is associated with a slightly lower risk of child disability:

Little is known about whether breastfeeding may prevent disabilities throughout childhood. We evaluate the effects of breastfeeding on child disability using data from the National Survey of Family Growth merged to the National Health Interview Survey for a large nationally representative sample of children aged 1 to 18 years from the U.S. including over 3,000 siblings who are discordant on breastfeeding status/duration. We focus on a mother fixed effect model that compares siblings in order to account for family-level unobservable confounders and employ multiple specifications including a dynamic model that accounts for disability status of the prior child. Breastfeeding the child for a longer duration is associated with a lower risk of child disability, by about 0.2 percentage-points per month of breastfeeding. This effect is only observed on the intensive margin among breastfed children, as any breastfeeding has no effect on the extensive margin. We conclude that very short breastfeeding durations are unlikely to have an effect on reducing disability risk.


A Herd-Mentality Nudge on the Singapore Subway

Our “Riding the Herd Mentality” podcast argued that one surprisingly effective way to encourage pro-social behavior is to simply tell people that everybody else is already doing it.

A reader named Freek Rijna — “Jep, that’s my real name and it’s typically Dutch. :-)” — sends in this example from the Singapore subway. “Thought you might enjoy it,” Freek writes. “Not sure about the penguins though …”

I see Freek’s point. Also, I might have to stop for a minute to think whether “alighting” means getting off or getting on …


The Relationship Between Hearing and Memory

We’ve blogged before about how easy it is to create false memories. A new psychology study explores which of our senses are generally more influential in imprinting memory. “As it turns out, there is merit to the Chinese proverb ‘I hear, and I forget; I see, and I remember,” says James Bigelow, a graduate student at the University of Iowa who is lead author of the study.

From Pacific Standard:

The study consisted of two experiments that focused on short-term memory. Participants were exposed to different pictures, sounds, and objects to touch (shielded from view), and then asked to distinguish each thing from a similar item or identify it among a larger group. Sometimes participants’ memories were tested after only a matter of seconds, but in other instances the study stretched the time before recall to a day or even a week. While the accuracy of the participants’ memories declined across the board as time went on, the accuracy of their auditory recall plummeted more rapidly than that of the the other two senses.


If You Care About Costs . . .

This is the first in a series of posts about the problem of excess fees charged to defined contribution retirement plans, a subject I’ve been researching with Quinn Curtis.  Our findings about the pervasiveness of excess fees spurred me to reassess my own retirement investments.  I was embarrassed to find that, among other things, my old Stanford University 401k was invested in “CREF Stock Account,” which uses a combination of “active management, enhanced indexing and pure indexing” and charges 49 basis points (.49%) as its “Estimated Expense Charge.”  Now 49 basis points is not an outrageously high fee, but it is substantially higher than the fees charged by a low-cost index. 

So I called TIAA-CREF and asked for help in rolling over my Stanford account to a Fidelity IRA.  The TIAA CREF rollover specialist asked why I wanted a rollover, we had the follow brief exchange:


How Does Pollution Affect Productivity?

A new NBER working paper (abstract; PDF) by Tom Chang, Joshua Graff Zivin, Tal Gross, and Matthew Neidell looks at how outdoor air pollution affects the productivity of indoor workers. They studied the effect of PM2.5, “a harmful pollutant that easily penetrates indoor settings,” on employees at a pear-packing factory in California, and the potential cost savings of eliminating such pollution:

We find that an increase in PM2.5 outdoors leads to a statistically and economically significant decrease in packing speeds inside the factory, with effects arising at levels well below current air quality standards. In contrast, we find little effect of PM2.5 on hours worked or the decision to work, and little effect of pollutants that do not travel indoors, such as ozone. This effect of outdoor pollution on the productivity of indoor workers suggests a thus far overlooked consequence of pollution. Back-of-the-envelope calculations suggest that nationwide reductions in PM2.5 from 1999 to 2008 generated $19.5 billion in labor cost savings, which is roughly one-third of the total welfare benefits associated with this change.


Old-Fashioned Matchmaking as an Antidote to Modern Dating Dilemmas

We recently put out four Freakonomics Radio episodes that developed an arc of a theme: “Reasons to Not Be Ugly,” “What You Don’t Know About Online Dating,” “Why Marry? (Part 1)” and “Why Marry? (Part 2).” These episodes prompted a lot of interesting listener/reader replies. Here is a particularly interesting one, from a woman we’ll call R.:

I recently listened to your podcast on online dating and found it fascinating — not so much because of the economics of dating, but more how it contrasted and compared with the economics of the dating world I live in: the Orthodox Jewish semi-arranged marriages.

I grew up in upstate New York, in a village that is almost only Haredi Orthodox. The world I live in is sort of like Jane Austen, very marriage-oriented. Every girl (and boy for that matter) wants to get married, and does so in her early twenties. The systems at play to get everyone married off must fascinate an outsider. Out of my class of about sixty, about 95% got married within the first five years out of school. So far, only one girl is divorced. It’s hard to quantify happiness in all these marriages but from what my friends tend to tell me, most seem very happy in their relationships. I know that the Orthodox Union has done research into the area. They collected a lot of data by surveying thousands of Orthodox couples, including Haredim, with in-depth online questionnaires. While I have not examined their data (and what a treasure trove that must be to an economist!) I think that this success in matching quickly, efficiently, and happily is due to changing the incentives you talk about in your podcast. The entire process seems to have been designed to reduce outer beauty from being the main incentive in a marriage market.


Does Eccentricity Raise the Value of Art?

Artists may often be eccentric, but does eccentricity increase the worth of an artist’s work?  That’s the question asked by psychologists Wijnand van Tilburg and Eric Igou in a new paper on eccentricity and art. Here’s a summary from BPS Research Digest:

Wijnand van Tilberg and Eric Igou tested these ideas across five studies. In the first, 38 students rated a painting by Van Gogh more positively if they were first told about the ear-cutting incident. In two other studies, dozens more students rated paintings by a fictional Icelandic artist more positively and estimated it to be more valuable if they were told he had an eccentric personality, or if they saw a photograph showing him looking eccentric, unshaven with half-long hair (as opposed to seeing a photo showing him looking conventional, with short hair and neat clothing).


Brain Trauma in Soccer

Our very first Freakonomics Radio podcast focused on brain trauma among NFL players, and its link to chronic traumatic encephalopathy. Researchers now believe they’ve identified the first case of C.T.E. in a soccer player; from The New York Times:

Chronic traumatic encephalopathy, the degenerative brain disease linked to repeated blows to the head, has been found posthumously in the brain of a 29-year-old former soccer player, the strongest indication yet that the condition is not limited to athletes who played violent collision sports like football and boxing.

The researchers at Boston University who have diagnosed scores of cases of C.T.E. said Patrick Grange of Albuquerque represents the first named case of C.T.E. in a soccer player. On a four-point scale of severity, his was considered Stage 2.


Does Online Dating Save You Money?

Our recent podcast, “What You Don’t Know About Online Dating,” offered an economist’s guide to dating online. Here’s one more perk: a report by CovergEx Group estimates that online dating is more cost-efficient than traditional dating. From Business Insider: 

The ConvergEx folks, using data from statisticbrain.com, note the average courtship time for “off-line,” traditional dating ahead of a marriage runs around 42 months – or two years longer than the 18.5-month, average dating-to-marriage cycle for people who meet online.

And using that data, they came up with a formula.


Exploitation-Neutral Consumption

Watching The Wolf of Wall Street was a guilty pleasure for me.  It wasn’t that the movie valorizes Jordan Belfort’s crimes, which defrauded victims of more than a hundred million dollars, but I felt uneasy about being entertained by a work of art indirectly derived from the pain of others – especially since it wasn’t clear that the injured parties were participating in the movie’s profits.

The movie literally and figuratively kept the victims of Belfort’s fraud outside the frame. In only a few scenes do we hear even the disembodied voices of the defrauded investors.  But imagine what it would be like to watch the movie in the presence of one of Belfort’s 1,500 real-life victims, whose ranks included architects, engineers, insurance agents, real estate appraisers, and other middle-class professionals.

The movie repeats Belfort’s claim that his firm only targeted the super-rich. The idea is that we needn’t worry so much about who was hurt by these crimes, because these investors were so wealthy that they wouldn’t be as impacted by the loss of a few dollars. But some of his victims’ families tell a very different story: “My father lost practically a quarter-million dollars,” said one man, whose father, an engineer, was cold-called at home by a Stratton broker. His father suffered a stroke under the stress of his losses. As another investor puts it: “I’m not a rich guy, and I’ve been paying for it ever since.”


Sure-Fire Baby Names

Abby Haglage reports in The Daily Beast of an apparent uptick in firearm-inspired baby names.

In 2002, only 194 babies were named Colt, while in 2012 there were 955. Just 185 babies were given the name Remington in 2002, but by 2012 the number had jumped to 666. Perhaps the most surprising of all, however, is a jump in the name Ruger (America’s leading firearm manufacturer) from just 23 in 2002 to 118 in 2012. “This name [Ruger] is more evidence of parents’ increasing interest in naming children after firearms,” Wattenberg writes. “Colt, Remington, and Gauge have all soared, and Gunner is much more common than the traditional name Gunnar.”

Okay, that’s all well and good, but if parents really want to show their gun bona fides, how about going all-out and naming your kid Colt .45?

(HT: Marginal Revolution)


What Does the Mt. Gox Meltdown Mean for Bitcoin? Maybe Not Much

Due to popular demand, we are working on a podcast about Bitcoin. Last night, I interviewed Marc Andreessen on the subject. His v.c. firm has invested roughly $50 million in Bitcoin-related companies, including CoinBase, and they are looking for more. It was a fascinating interview, in part because Andreessen has been personally involved in so many major digital events of the past 20 years. 

In light of today’s news about the meltdown of Mt. Gox, the most prominent Bitcoin exchange to date, here is a preview of a section of last night’s interview with Andreessen. His view is vigorously contra the notion that the end of Mt. Gox would mean the end of Bitcoin; in fact, he would take that as a sign of progress:


How the New Model of Marriage May Drive Income Inequality

Our last two podcasts, “Why Marry?” (Part 1 and Part 2) explored the broad and deep changes in the institution of marriage. One theme was that the old marriage model of “production complementaries” has shifted to one based on “consumption complementarities.” Here’s Justin Wolfers on the subject:

We have more time, more money, and so you want to spend it with someone that you’ll enjoy. So, similar interests and passions. We call this the model of hedonic marriage. But really it’s a lot more familiar than that. This is just economists giving a jargon name to love. So you want someone who’s actually remarkably similar to you or has similar passions that you do. So it fundamentally changes who marries who.

But is this change also related to income inequality? Wolfers briefly referenced that idea a few years back; in a recent article for Vox, the economics Jeremy Greenwood, Nezih Guner, Georgi Kocharkov, and Cezar Santos further the argument:


Take an Econ Class With “Fabulous Fab”

Fabrice Tourre, better known as “Fabulous Fab,” has had a busy few years.  While Tourre’s employer, Goldman Sachs, settled with the S.E.C. (to the tune of a $550 million penalty), the trader refused to settle and fought the suit, while simultaneously  pursing a Ph.D. in economics at the University of Chicago.  Last year, a federal jury found the trader liable on six counts of securities fraud.  The Chicago Maroon reports that undergraduate students in the University of Chicago’s economics department can take a class with Tourre this spring:

With spring quarter class bidding opening next week, Economics students have the option to take the honors section of Elements of Economics Analysis 3 taught by Economics Ph.D. student Fabrice Tourre.  While students might not be calling him “Fabulous Fab” in the classroom, he is notable in the financial world as the former Goldman Sachs trader found liable this past August on six of seven counts of securities fraud for misleading investors in a complex investment product linked to mortgages.

(HT: SP)


Not Quite Alcohol-Free: A Mystery

The picture below is of a “beer” I drank at a friend’s house this past weekend.  It actually tasted pretty good; but why 0.5 percent alcohol, which surely added to the cost of production, but couldn’t, I think, have added to the taste? Including the minuscule amount of alcohol would certainly exclude teetotalers from consumption; and to get any kind of buzz a real beer drinker would need to drink at least several gallons.


Online Dating in Thin Markets

A recent podcast, “What You Don’t Know About Online Dating,” discussed how online dating has changed the process of finding a mate in traditionally “thin” markets.  Writing for FP, Bethany Allen explores the role of dating sites catering to young Chinese Muslims:

The men’s photos show them clean-shaven, wearing T-shirts or sweaters, while the women are mostly without headscarves, some showing off their bare shoulders. In other words, they appear heavily Sinicized. That’s because the site caters to Hui Muslims, many of whom are virtually indistinguishable in speech and dress from millions of ordinary young men and women in urban China.

That doesn’t mean they aren’t different: Many Hui still seek to marry within their ranks, despite the fact that they are widely dispersed across China, numbering only 10 million out of a population of 1.3 billion. But the Internet is coming to the rescue, as online Hui dating sites have arisen over the past few years to help some of China’s urban Muslims find their matches. “The Internet links major Hui communities in every city,” said Haiyun Ma, a professor at Frostburg State University in Maryland specializing in Muslims in China and a Hui Chinese himself. As a result, “it is easier for young Hui to find spouses” than it used to be.


An App for a New Kind of Holiday

In 2009, while watching the closing credits of Invictus, the film about Nelson Mandela’s first years as South African president, I heard Yollandi Nortjie sing “9000 days were set aside / 9000 days of destiny / 9000 days to thank Gods wherever they may be.”  Mandela spent 9,000 days in prison (about 24.7 years).

For some reason, I started thinking about the power of expressing the passage of time in alternative incremental units, and after playing around on Excel, I figured out that my spouse and I would soon have the opportunity to celebrate our “ten millionth marriage minute” (a little over 19 years). 

It struck my fancy that this was a length of time worthy of observing in some way – even if just as an excuse to share a nice bottle of wine.  For whatever reason, I loved discovering these additional, arbitrary moments of celebration and I decided it would be pretty easy to alert people when an unusual holiday was about to occur. 


Do Ceasefires Kill?

When violent conflicts erupt, the international community inevitably calls for a cease-fire.  But is it possible these ceasefires actually worsen later violence?  Yes, according to John A. Stevenson, a political science doctoral candidate at the University of Chicago.  Here’s an excerpt of Stevenson’s recent article for Slate:

My research on all 174 of the internationally recognized new states that have emerged since 1900 and scores of mass killings reveals that international involvement to temporarily address the symptoms of the violence—the mass death of civilians—increases the likelihood of greater violence and destruction. That is because cease-fires do nothing to eliminate the root causes of violence against civilians. Instead, both sides use the pause in killing to solicit diplomatic and military aid while planning and preparing their next wave of attacks.

According to the 2012 Human Security Report, between 1950 and 2004, 62 percent of cease-fires succeeded with no resumption of conflict in the next five years. The success of two-thirds of cease-fires would seem to support their use. Yet, in the civil wars that begin in new or young states, cease-fires typically succeed only after many that do not. In the interim, the belligerents busy themselves rooting out or killing their civilian rivals.

(HT: The Daily Dish)


Diversity in Research

A new NBER paper by Richard B. Freeman and Wei Huang looks at the ethnic diversity of research collaborators. They find that papers with more authors in more locations tend to be cited more:

This study examines the ethnic identify of the authors of over 1.5 million scientific papers written solely in the US from 1985 to 2008. In this period the proportion of US-based authors with English and European names fell while the proportion of US-based authors with names from China and other developing countries increased. The evidence shows that persons of similar ethnicity co- author together more frequently than can be explained by chance given their proportions in the population of authors. This homophily in research collaborations is associated with weaker scientific contributions. Researchers with weaker past publication records are more likely to write with members of ethnicity than other researchers. Papers with greater homophily tend to be published in lower impact journals and to receive fewer citations than others, even holding fixed the previous publishing performance of the authors. Going beyond ethnic homophily, we find that papers with more authors in more locations and with longer lists of references tend to be published in relatively high impact journals and to receive more citations than other papers. These findings and those on homophily suggest that diversity in inputs into papers leads to greater contributions to science, as measured by impact factors and citations.


Happiness and Marriage

Last week’s podcast was “Why Marry, Part 1“; Part 2 will be released tomorrow (well, we usually release new episodes around midnight, so depending on where you live, Part 2 may be released today.) In Part 1, Justin Wolfers explained how marriage has shifted from a model of “production complementarities” to a model of hedonic marriage. Psychology professor Eli J. Finkel writes in The New York Times that we’re also in an age of “all-or-nothing” marriages — where expectations of happiness in marriage are high:

Consider, for example, that while the divorce rate has settled since the early 1980s at around 45 percent, even those marriages that have remained intact have generally become less satisfying. At the same time, consider the findings of a recent analysis, led by the University of Missouri researcher Christine M. Proulx, of 14 longitudinal studies between 1979 and 2002 that concerned marital quality and personal well-being. In addition to showing that marital quality uniformly predicts better personal well-being (unsurprisingly, happier marriages make happier people), the analysis revealed that this effect has become much stronger over time. The gap between the benefits of good and mediocre marriages has increased.


A Safe Hitchhiking Model?

Our podcast called “Where Have All the Hitchhikers Gone?” got a listener named Jenny O’Brien thinking. Here’s what she wrote us:

Here’s the back story: I live in a rural area in Northeast Kansas, where there is no bus, so I am forced to drive all the time.  After I heard your podcast, I started thinking about how to make hitchhiking safe, easy and reliable so I and other rural residents can use it as a public transportation option. I figured that all the hitchhiker really needed was a credential, way to signal her destination, and a system to record who she is riding with for safety.

O’Brien is now in the process of founding a ride-sharing service called Lawrence OnBoard:


The Legality of “Dumb Starbucks”

By now, pretty much everyone has heard about how Comedy Central star Nathan Fielder opened his personal version of a Starbucks in an L.A. strip mall. Fielder’s “Dumb Starbucks” looked just like a real Starbucks – same logos, colors, store layouts, and similar products and menu. With the exception that everything was preceded by the word “dumb”, including the “Dumb Blonde Roast” coffee and the “Dumb Norah Jones” CDs on sale by the register.  Also, the coffee was free.

Fielder kept his involvement under wraps at first. But by Monday he revealed his ownership, and by Tuesday the L.A. County Board of Health had shut him down for operating without a license. And yet, while Dumb Starbucks lived, it created a sensation, with lines snaking down the street and Fielder invited onto Jimmy Kimmel to talk about his adventure.

Starbucks itself was not amused. “We are aware of this store, and it is not affiliated with Starbucks. We are evaluating next steps, and while we appreciate the humor, they cannot use our name, which is a protected trademark.” Starbucks spokeswoman Laurel Harper said in a statement. When pressed on whether Starbucks intends to take legal action, she replied, “That may happen. We’re not sure at this point.”


Why Do People Fear G.M.O.’s?

Genetically modified food (or G.M.O.’s) continue to provoke heated debates about safety and labeling, even though scientific evidence indicates they’re safe.  Why?  A new article in Cosmos by David Ropeik explores the psychology behind people’s G.M.O. fears. Here is Ropeik on why man-made risks “feel” scarier than natural risks.

Beyond those heuristics, several specific emotional characteristics also make G.M.O.’s feel scary. These “fear factors” have been identified in pioneering research in risk perception by Paul Slovic at the University of Oregon, Baruch Fischhoff at Carnegie Mellon University, and others. You can hear them pop up as the young man explains his fears. “It’s just not natural to take the gene from one species and put it in another. It’s just not natural!”