How can we at Freakonomics help you during the holidays? Here’s a few ideas: 1. We can provide inspiration for gifts for the “homo economicus” in your life. 2. When you’re making your year-end donations, we can help you consider the evidence for which programs work, and which don’t. 3. No matter how far away you roam, we can entertain . . .
A while back, we tried out a new idea on a special edition of Freakonomics Radio — a game show we called Tell Me Something I Don’t Know. You might remember it. It was so much fun that we decided to launch a whole new podcast series. It’s been in the works for a while and it’s finally here! A preview . . .
When Stephen Dubner’s new podcast Question of the Day launched in August, it immediately shot to No. 1 on the iTunes chart. Last month it was selected as one of iTunes “Best of 2015.” (You can subscribe here.) Now you can come see a live taping of the show on Thursday, January 14, at The Bell House in Brooklyn. Join Dubner, his Question of the Day co-host, James Altucher, and their special guest Negin Farsad for an evening of conversation that will run from the ridiculous to the sublime (and occasionally both).
One of the best things about being a journalist is getting to ask questions. Stephen Dubner has been doing this for years, accumulating fascinating bits of knowledge, hidden insights, and wild stories. By now he knows at least a little bit about a lot of things.
In celebration of the 10th anniversary of Freakonomics comes this curated collection from the most readable economics blog in the universe. When Freakonomics was first published, its authors, Steven D. Levitt and Stephen J. Dubner, started a blog — and they’ve kept it up. The writing is more casual, more personal, even more outlandish than in their books. In When to Rob a Bank, they ask a host of typically off-center questions: Why don’t flight attendants get tipped? If you were a terrorist, how would you attack? And why does KFC always run out of fried chicken?
From a podcast listener named Jessica Graham in Sydney, Australia: My name is Jess and for most of my adult life I have been afflicted by various forms of sleeplessness. Would I call it insomnia? I don’t know if it could be classified as clinical insomnia, but all I can say is up until a few months ago I did . . .
We’re working on an episode about behavior change — essentially, how to get yourself to do the things you should be doing but often don’t. It revolves around the fascinating research of Katy Milkman at Penn. For example, she and her colleagues have noted a “Fresh Start Effect”:
Bloomberg reports that Italy will now begin including its shadow economy in the country’s GDP, in an effort to reduce the national deficit:
Italy will include prostitution and illegal drug sales in the gross domestic product calculation this year, a boost for its chronically stagnant economy and Prime Minister Matteo Renzi’s effort to meet deficit targets.
Drugs, prostitution and smuggling will be part of GDP as of 2014 and prior-year figures will be adjusted to reflect the change in methodology, the Istat national statistics office said today. The revision was made to comply with European Union rules, it said.
Last week, we offered some Think Like a Freak swag to the reader who came up with the best answer to the question “What Are the Three Hardest Words to Say?” Your answers were so good (and plentiful!) that we decided to choose three winners, each of whom can have their pick of a signed copy of our new book or a Think Like a Freak t-shirt. (If you didn’t win, there’s another contest going on right now.)
Winner No. 1 is Kris Fletcher, the first (of many) to provide the same answer we provide in the book: “I don’t know.”
Winner No. 2 is Bob S., who plainly gets the spirit of the Levitt-Dubner collaboration, with “Good point, Dubner.”
And Winner No. 3 is Jake. While a lot of people answered “I was wrong,” Jake had a similar take but opted for “I’ve no excuse,” making a case for why that’s even tougher than “I was wrong”:
“I was wrong” seems to be a common phrase people are mentioning, but I think admitting you are wrong is easy if you don’t have to admit that your inner processes were wrong. All the time, you hear people say something like, “Oh, I was wrong about that, but I didn’t have the data I needed at the time.” Very rarely do you hear someone take full blame for their actions without at least assigning partial blame elsewhere. Admitting that you and you alone were in the wrong is much harder.
It can be found here
In one of the many wonderful moments in Think Like a Freak, Steven Levitt and Stephen Dubner ask the question: Who is easier to fool—kids or adults? The obvious answer, of course, is kids. The cliché is about taking candy from a baby, not a grown man. But instead of accepting conventional wisdom as fact, the two sit down with the magician Alex Stone—someone in the business of fooling people—and ask him what he thinks. And his answer? Adults.
Stone gave the example of the staple of magic tricks, the “double lift,” where two cards are presented as one. It’s how a magician can seemingly bury a card that you have selected at random and then miraculously retrieve it. Stone has done the double lift countless times in his career, and he says it is kids—overwhelmingly—who see through it. Why? The magician’s job is to present a series of cues—to guide the attention of his audience—and adults are really good at following cues and paying attention. Kids aren’t. Their gaze wanders. Adults have a set of expectations and assumptions about the way the world works, which makes them vulnerable to a profession that tries to exploit those expectations and assumptions. Kids don’t know enough to be exploited. Kids are more curious. They don’t overthink problems; they’re more likely to understand that the basis of the trick is something really, really simple. And most of all—and this is my favorite—kids are shorter than adults, so they quite literally see the trick from a different and more revealing angle.
Our latest podcast compared the costs of marijuana use to the costs of alcohol use. A new study in the current issue of The Journal of Neuroscience argues that casual use of marijuana affects the developing brain. Jason Koebler, writing for Vice, summarizes the findings:
High-resolution MRI scans of the brains of adults between the ages of 18-25 who reported smoking weed at least once a week were structurally different than a control group: They showed greater grey matter density in the left amygdala, an area of the brain associated with addiction and showed alterations in the hypothalamus and subcallosal cortex. The study also notes that marijuana use “may be associated with a disruption of neural organization.” The more weed a person reported smoking, the more altered their brain appeared, according to the Northwestern University and Harvard Medical School study, which was published in the Journal of Neuroscience.
The finding already has the study’s authors calling for states to reconsider legalizing the drug. Hans Breiter, the lead author, said he’s “developed a severe worry about whether we should be allowing anybody under age 30 to use pot unless they have a terminal illness and need it for pain.
(HT: The Daily Dish)
We have blogged and written extensively about the gender pay gap, much of which is not attributable to discrimination, as is commonly invoked. President Obama has taken up the cause; he recently signed two executive orders aimed at closing the gap. Business Insider recently posted a state-by-state breakdown of the gender wage gap. It is interesting to look at but keep in mind the non-discriminatory factors that contribute to the gap, and therefore consider these numbers with some skepticism:
Wyoming has the biggest pay gap — the median male full-time worker made $51,932, and the median female full-time worker made $33,152. The male worker thus made 56.6% more than the female worker.
Washington, D.C. had the smallest gap — there, men make 11.0% more than women. Among the states, Maryland and Nevada had the smallest gaps, both at 17.2%.
BBC News reports the story of Arunachalam Muruganantham, a school dropout in rural India who invented a technology that could vastly improve reproductive health for women. The user-friendly technology relies on simple machines to produce sanitary pads at a low cost, a boon for women unwilling or unable to pay for the higher-priced sanitary pads in stores.
[Muruganantham] discovered that hardly any women in the surrounding villages used sanitary pads – fewer than one in 10. His findings were echoed by a 2011 survey by AC Nielsen, commissioned by the Indian government, which found that only 12% of women across India use sanitary pads.
Muruganantham says that in rural areas, the take-up is far less than that. He was shocked to learn that women don’t just use old rags, but other unhygienic substances such as sand, sawdust, leaves and even ash.
Women who do use cloths are often too embarrassed to dry them in the sun, which means they don’t get disinfected. Approximately 70% of all reproductive diseases in India are caused by poor menstrual hygiene – it can also affect maternal mortality.
A new working paper (abstract; PDF) by Eli Berman, Michael Callen, Clark Gibson, and James D. Long looks at the effects of election interventions in fragile states, specifically Afghanistan. The results are encouraging:
International development agencies invest heavily in institution building in fragile states, including expensive interventions to support democratic elections. Yet little evidence exists on whether elections enhance the domestic legitimacy of governments. Using the random assignment of an innovative election fraud-reducing intervention in Afghanistan, we find that decreasing electoral misconduct improves multiple survey measures of attitudes toward government, including: (1) whether Afghanistan is a democracy; (2) whether the police should resolve disputes; (3) whether members of parliament provide services; and (4) willingness to report insurgent behavior to security forces.
Racked interviews entrepreneur and professional line-sitter Robert Samuel. Samuels started his line-sitting venture, Same Old Line Dudes (SOLD Inc.), as the iPhone 5 was launched:
I was an employee at AT&T, and I lost my job. I wanted to supplement my income because I used to sell iPhones, and this time I wasn’t going to be able to sell them and make a big commission check. I live a few blocks from the Apple store on 14th Street, so I said, “Let me wait in line for somebody else and make them happy.”
The guy that hired me cancelled and said he wasn’t going to use me—he was just going to get it online but that he was still going to pay me. He paid me $100 and I resold the spot and made another $100, and then I called my friends and told them to come on down, because I just made $200 standing in one spot on a weekday afternoon.
A new paper by graduate students David Broockman and Josh Kalla tackles an eternal, oft-debated question: does money buy influence? Here’s the abstract:
Concern that lawmakers grant preferential treatment to individuals because they have contributed to political campaigns has long occupied jurists, scholars, and the public. However, the effects of campaign contributions on legislators’ behavior have proven notoriously difficult to assess. We report the first randomized field experiment on the topic. In the experiment, a political organization attempted to schedule meetings between 191 Members of Congress and their constituents who had contributed to political campaigns. However, the organization randomly assigned whether it informed legislators’ offices that individuals who would attend the meetings were contributors. Congressional offices made considerably more senior officials available for meetings when offices were informed the attendees were donors, with senior officials attending such meetings more than three times as often (p < 0.01). Influential policymakers thus appear to make themselves much more accessible to individuals because they have contributed to campaigns, even in the absence of quid pro quo arrangements. These findings have significant implications for ongoing legal and legislative debates. The hypothesis that individuals can command greater attention from influential policymakers by contributing to campaigns has been among the most contested explanations for how financial resources translate into political power. The simple but revealing experiment presented here elevates this hypothesis from extensively contested to scientifically supported.
The Economist analyzes the microeconomics of Uber’s controversial “surge” pricing model, in which users are charged significantly higher prices during high-demand times:
There is some evidence Uber’s surge pricing is improving taxi markets. The firm says drivers are sensitive to price, so that the temptation to earn more is getting more Uber drivers onto the roads at antisocial hours. In San Francisco the number of private cars for hire has shot up, Uber says. This suggests surge pricing has encouraged the number of taxis to vary with demand, with the market getting bigger during peak hours.
However, the inflexibility of Uber’s matchmaking fee, a fixed 20% of the fare, means that it may fail to optimize the matching of demand and supply. In quiet times, when fares are low, it may work well. Suppose it links lots of potential passengers willing to pay $20 for a journey with drivers happy to travel for $15. A 20% ($4) fee leaves both sides content. But now imagine a Friday night, with punters willing to pay $100 for a ride, and drivers happy to take $90: there should be scope for a deal, but Uber’s $20 fee means such journeys won’t happen.
A new working paper (abstract; ungated PDF not available) by Richard Wright, Erdal Tekin, Volkan Topalli, Chandler McClellan, Timothy Dickinson, and Richard Rosenfeld analyzes the effects of delivering welfare benefits via Electronic Benefit Transfer (EBT) instead of checks (which are easily converted to crime-fueling cash):
It has been long recognized that cash plays a critical role in fueling street crime due to its liquidity and transactional anonymity. In poor neighborhoods where street offenses are concentrated, a significant source of circulating cash stems from public assistance or welfare payments. In the 1990s, the Federal government mandated individual states to convert the delivery of their welfare benefits from paper checks to an Electronic Benefit Transfer (EBT) system, whereby recipients received and expended their funds through debit cards. In this paper, we examine whether the reduction in the circulation of cash on the streets associated with EBT implementation had an effect on crime. To address this question, we exploit the variation in the timing of the EBT implementation across Missouri counties. Our results indicate that the EBT program had a negative and significant effect on the overall crime rate as well as burglary, assault, and larceny. According to our point estimates, the overall crime rate decreased by 9.8 percent in response to the EBT program. We also find a negative effect on arrests, especially those associated with non-drug offenses. EBT implementation had no effect on rape, a crime that is unlikely to be motivated by the acquisition of cash. Interestingly, the significant drop in crime in the United States over several decades has coincided with a period of steady decline in the proportion of financial transactions involving cash. In that sense, our findings serve as a fresh contribution to the important debate surrounding the factors underpinning the great American crime decline.
Last week, we solicited your questions for Dalton Conley, NYU sociologist, father, and author of Parentology: Everything You Wanted to Know about the Science of Raising Children but Were Too Exhausted to Ask
Q. Why should we consider your limited sample size “study” to be anything more than anecdotal? How do you justify it as “science” and not simply “story telling”? –Matti
A. As Dubner and Levitt of Freakonomics did in their fabulous book, my accounts of my “do(n’t) try this at home” parenting interventions—bribing my kids to do math, not teaching them to decode words on the page, exposing them to sewage to build up their immune systems and so forth—are meant to be a way in to talk about the existing research that is based on large samples, randomized controlled trials and cutting-edge econometric analysis. But would you rather read pages about whether or not the exclusion restriction is violated in a particular instrumental variable model of divorce? Or relegate that to endnotes so that you can hear about how my crazy family lived—like the Isaac Bashevis Singer tale—with a house full of animals to prevent childhood allergies? Ok, maybe don’t answer that.
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
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.
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.
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.
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).
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.
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.
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)
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:
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)
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.
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