Felix Salmon recently proposed an interesting new profit source for newspapers like The New York Times. Citing the Times‘s recent expose on Walmart and the resulting drop in the company’s share price, Salmon wonders why the company doesn’t charge companies for early access to big stories:
[S]houldn’t the NYT, which can always use a bit of extra revenue, take advantage of the fact that its stories can move markets so much? Not directly: I’m not suggesting that the New York Times Company should start buying out-of-the-money put options on Mexican corporates in advance of its own stories. But how much would hedge funds pay to be able to see the NYT’s big investigative stories during the trading day prior to the appearance of the story? It’s entirely normal, and perfectly ethical, for news organizations, including Reuters, to give faster access to the best-paying customers.
A new study claims that traffic pollution “is more than twice as deadly as traffic accidents.” Scientists Steve Yim and Steven Barrett “estimate that combustion exhausts across the U.K. cause nearly 5,000 premature deaths each year,” writes Roland Pease. “The pair also estimate that exhaust gases from aeroplanes cause a further 2,000 deaths annually.” The study also points out that pollution travels:
Of the 19,000 annual U.K. deaths estimated, 7,000 are due to pollutants blown in from the continent. In London, European pollutants add 960 deaths each year to the 2,200 caused by U.K. combustion fumes.
But the international trade in deaths goes both ways. More than 3,000 European deaths can be attributed to U.K. emissions the authors say.
Yim and Barrett estimate that premature deaths are costing the U.K. billions of dollars a year, and suggest reducing black carbon and nitrogen oxide emissions and investing in public transportation.
(HT: Naked Capitalism)
1. Interview with Abhijit Banerjee, author of Poor Economics.
2. Infographic: record number of concussions in the U.S. Army last year.
3. What’s going on between Stanford and Silicon Valley?
4. New study shows no relationships between produce availability and obesity.
5. The world’s top spammer? India.
6. How many wives should a CEO have? Two is good, but three is too many.
Anglicare, a Tasmanian welfare agency, has submitted a proposal to the Australian government’s inquiry into problem gambling that would require pokies (the Aussie version of a slot machine) players to stand up while playing. “We don’t want to punish people, but there are things we can do to assist problem gamblers to get a break in play,” said Chris Jones, the CEO of Anglicare. “If they want a break, they can sit elsewhere, but they don’t need to take a seat in front of a machine.”
In a new article for Vox, Karla Hoff, a senior research economist at the World Bank, presents an argument for affirmative action. Hoff argues that stereotypes can be self-fulfilling, and affirmative action represents an important tool for changing stereotypes and correcting inequality in the long-term:
For economists to ignore the factors that affect how we process information as part of the interpretation of economic change would be as wrong as to ignore the evolution of technology itself. Ideology shapes what we see and how well we perform. Ideology can give rise to “equilibrium fictions.” In our framework, changes in power, technology, and contacts with the outside world matter not just directly but because they can lead to changes in ideology.
Hoff highlights a natural experiment in India that changed perceptions of female leadership over the course of ten years:
If you’ve heard our podcast “The Upside of Quitting,” you’ll know that we think that strategic quitting has its place. A new paper looks at the peer effects of quitting. From the introduction:
Quitting is an important issue but its determinants have not received extensive research. Quitting lets an individual benefit from alternative opportunities but it usually also has costs, either monetary or moral, or both. There are also many reasons to believe that quitting is affected by social interactions and by observing others’ quitting decisions. This is particularly the case when thinking about quitting addictive behavior.
The researchers paid 104 undergrads to work for up to 75 minutes: a compulsory 15 minute followed by 60 minutes in which the participant could stop working at any time. Researchers Julie Rosaz, Robert Slonim, and Marie Claire Villeval found that if workers are not alone and allowed to interact with each other, they are more prone to quit at the same time:
Inflation is a term most often employed to describe prices. A too-high inflation rate results in a devalued currency. But what about the inflation of other things in our world? The Economist reports on this trend:
Price inflation remains relatively subdued in the rich world, even though central banks are busily printing money. But other types of inflation are rampant. This “panflation” needs to be recognised for the plague it has become.
Take the grossly underreported problem of “size inflation”, where clothes of any particular labelled size have steadily expanded over time. Estimates by The Economist suggest that the average British size 14 pair of women’s trousers is now more than four inches wider at the waist than it was in the 1970s. In other words, today’s size 14 is really what used to be labelled a size 18; a size 10 is really a size 14.
Writing in Foreign Policy, James Manyika, Jaana Remes, and Javier Orellana of the McKinsey Global Institute argue that cities in general and particularly smaller cities will power the new U.S. economy:
It is America’s large cities, and particularly the broad swath of middleweights, that will be the key to the U.S. recovery and a key contributor to global growth in the next 15 years. Large cities in the United States will contribute more to global growth than the large cities of all other developed countries combined. We expect the collective GDP of these large U.S. cities to rise by almost $5.7 trillion — generating more than 10 percent of global GDP growth — by 2025.
Chris Turner explores Cuba’s current economic situation through the lens of a Canadian tourist:
Canada is probably the second most important economic ally Cuba has after Venezuela, which supplies more than 60 percent of the island’s oil. (China exports more stuff to Cuba, but the Chinese don’t show up daily by the multiple charter-flight-loads to hand out gifts and pour hundreds of millions of dollars into the Cuban economy.) Cuba is our largest trading partner in the whole of Central America and the Caribbean. We export a range of commodities to Cuba — sulphur, wheat, copper wire — and we are the second-largest buyer of Cuban exports, particularly sugar, nickel, fish, citrus fruits, and tobacco. That’s over $1 billion in total trade.
Brian Palmer of Slate reports that cocaine prices have dropped significantly in the past three decades due to economies of scale. As drug traffickers have become more organized (in processing, transport, and retail networks), the price of cocaine has plunged:
Since [the end of the 1980s], the price has dropped more slowly, down to approximately $140 for a gram of pure cocaine in 2007. (That’s almost 80 percent less than it cost in 1982.)
Here’s a new study to keep in mind if you go to see the 3D rerelease of James Cameron’s Titanic. Economist Mikael Elinder and Oscar Erixson analyzed data from 18 maritime disasters from 1852 to 2011, and found that the old wisdom of “women and children first” isn’t quite what happens. From the abstract:
Our results provide a new picture of maritime disasters. Women have a distinct survival disadvantage compared to men. Captains and crew survive at a significantly higher rate than passengers. We also find that the captain has the power to enforce normative behavior, that the gender gap in survival rates has declined, that women have a larger disadvantage in British shipwrecks, and that there seems to be no association between duration of a disaster and the impact of social norms. Taken together, our findings show that behavior in life-and-death situation is best captured by the expression ‘Every man for himself.’
New research indicates that people may be more likely to lie when a charity benefits from their dishonesty. A group of researchers led by Alan Lewis at University of Bath investigated this in their paper “Drawing the line somewhere: An experimental study of moral compromise” (ungated here). From the paper’s abstract:
In a study by Shalvi, Dana, Handgraaf, and De Dreu (2011) it was convincingly demonstrated that psychologically, the distinction between right and wrong is not discrete, rather it is a continuous distribution of relative ‘rightness’ and ‘wrongness’. Using the ‘die-under-the-cup’ paradigm participants over-reported high numbers on the roll of a die when there were financial incentives to do so and no chance of detection for lying. Participants generally did not maximise income, instead making moral compromises.
A disheartening new study by Catherine Riegle-Crumb and Melissa Humphries finds that teachers discount the math skills of white females, even when girls’ grades and test scores indicate a comparable level of skill. Here’s the abstract:
This study explores whether gender stereotypes about math ability shape high school teachers’ assessments of the students with whom they interact daily, resulting in the presence of conditional bias. It builds on theories of intersectionality by exploring teachers’ perceptions of students in different gender and racial/ethnic subgroups and advances the literature on the salience of gender across contexts by considering variation across levels of math course-taking in the academic hierarchy. Analyses of nationally representative data from the Education Longitudinal Study of 2002 (ELS) reveal that disparities in teachers’ perceptions of ability that favored white males over minority students of both genders are explained away by student achievement in the form of test scores and grades.
Reader Thomas Barker writes in about a bar called D Street in Encinitas,CA. that prices its drinks based on demand:
I was recently at a bar for 25-cent wing night that I had not gone to in a while and saw something I thought you guys would be interested in. It was a drink price index ticker and they had them on TV’s all over the bar. It seemed that if a drink wasn’t ordered in a 15-minute time span the drink would go down a few cents. When we showed up my friend had his eye on an irish car bomb which was over $5 at the time, in the hour or so we were there it went down to his target range of about $3.75. As soon as his was ordered it jumped back up over $4.
There’s a gas station near the Watergate Hotel in Washington, D.C. that famously sells very expensive gas. Reporters flock there for the standard sky-high gas price story, and residents have long suspected that the station doesn’t actually want to sell gas.
According to a Washington Post article, those residents have the right idea. Apparently, the pricing puzzle at this gas station boils down to a dispute between two gas moguls trying to oust each other.
A new paper by Aaron Shaw and Yochai Benkler looks the differences between left- and right-wing political blogs during the summer of 2008. From the abstract:
An examination of the top 155 political blogs reveals significant cross-ideological variations along several dimensions. Notably, the authors find evidence of an association between ideological affiliation and the technologies, institutions, and practices of participation. Blogs on the left adopt different, and more participatory, technical platforms, comprise significantly fewer sole-authored sites, include user blogs, maintain more fluid boundaries between secondary and primary content, include longer narrative and discussion posts, and (among the top half of the blogs in the sample) more often use blogs as platforms for mobilization.
We’ve blogged in the past about the college tuition inflation. Now some students think they may have a solution. FixUC, a student organization based at UC Riverside, wants the university to stop charging tuition and instead take 5 percent of students’ yearly salaries for the 20 years after graduation. “Charging students when they don’t have money doesn’t make sense,” says Chris LoCascio, the group’s leader. “In 20 years, our plan would double the amount of money coming into the UC system.”
It seems that the stereotype of the “thinking liberal” may have some truth. New research (summarized in the BPS Digest) finds that “low-effort” thinking about a given issue is more likely to result in a conservative stance. Here’s the abstract:
The authors test the hypothesis that low-effort thought promotes political conservatism. In Study 1, alcohol intoxication was measured among bar patrons; as blood alcohol level increased, so did political conservatism (controlling for sex, education, and political identification). In Study 2, participants under cognitive load reported more conservative attitudes than their no-load counterparts. In Study 3, time pressure increased participants’ endorsement of conservative terms. In Study 4, participants considering political terms in a cursory manner endorsed conservative terms more than those asked to cogitate; an indicator of effortful thought (recognition memory) partially mediated the relationship between processing effort and conservatism.
Our podcast “The Power of Poop” explored a variety of uses of human waste, including fecal bacteriotherapy (or a “transpoosion”), a poop-powered car, and homes heated with human waste.
Now there’s another use. From Israel’s Ynetnews:
Dr. Refael Aharon of Applied CleanTech has developed a system capable of turning stinking sewage into a renewable and profitable source of energy. How?
About 99.9% of the drainage which comes out of our homes and flows through pipes is water. The remaining 10% are comprised of solid substances which can be used for the production of cellulose, which is used to produce paper.
Channeling some of the logic in our “Health of Nations” podcast, Peter Marber argues in World Policy Journal that it’s time for a “brave new math.” Marber takes issue with economists’ ongoing reliance on old measures of economic health — GDP, inflation, and unemployment:
Traditional measures point to an American economy that’s up even when Americans are feeling down. Across Europe and in Japan, there is also a sense of confusion over current economic directions—a universal sense that the numbers that have been our staples are increasingly meaningless to everyday people.
Newspapers, radio, and television routinely spout headlines about key statistics on GDP, inflation, and employment—astonishingly influential indicators computed in the United States by the government’s Bureau of Labor Statistics and in capitals around the world. Most seem to have little correlation with the realities on the street.
Eva Vivalt, an economist, is looking for financial backers to fund her book on Kickstarter. Along with a group of students from Georgetown and GWU, Vivalt is conducting meta-analyses of various aid programs. Here’s her project summary:
Have you ever wondered whether aid programs actually work? Wouldn’t it be useful to know how effective programs are in achieving their objectives (e.g. reducing poverty, improving health, improving education)? This book will review the quantitative evidence on the effectiveness of aid programs in a very thorough and rigorous way, using meta-analysis. After explaining this method and its merits, each of ten chapters will apply it to a different type of aid program. Throughout, the lessons that we can draw from these analyses will be discussed using plain English.
A new working paper (ungated here) by Joseph J. Doyle, Jr., John A. Graves, Jonathan Gruber, and Samuel Kleiner exploits the random assignment of ambulances to emergency care patients to determine whether higher-cost hospitals achieve better outcomes. From the abstract:
Ambulances are effectively randomly assigned to patients in the same area based on rotational dispatch mechanisms. Using Medicare data from 2002-2008, we show that ambulance company assignment importantly affects hospital choice for patients in the same zip code. Using data for New York state from 2000-2006 that matches exact patient addresses to hospital discharge records, we show that patients who live very near each other but on either side of ambulance-dispatch boundaries go to different types of hospitals. Both strategies show that higher-cost hospitals have significantly lower one-year mortality rates compared to lower-cost hospitals. We find that common indicators of hospital quality, such as indicators for “appropriate care” for heart attacks, are generally not associated with better patient outcomes. On the other hand, we find that measures of “leading edge” hospitals, such as teaching hospitals and hospitals that quickly adopt the latest technologies, are associated with better outcomes, but have little impact on the estimated mortality-hospital cost relationship. We also find that hospital procedure intensity is a key determinant of the mortality-cost relationship, suggesting that treatment intensity, and not differences in quality reflected in prices, drives much of our findings. The evidence also suggests that there are diminishing returns to hospital spending and treatment intensity.
The authors conclude that their results “should give policy makers some pause before assuming that spending can be easily cut without harming patient health, at least in the context of emergency care.”
A small town in Wyoming is going up for auction today. Buford, Wyoming, has just one resident — Don Sammons — and he’s putting the town up for sale. From the official auction description:
The Buford, Wyoming, auction represents a unique opportunity to acquire an entire town, along with the Buford Trading post, an income-producing convenience and fuel store. Included in the auction are 10+/- acres of land, five buildings, United States Post Office P.O Box, liquor license, inventory, furnishing, tools, plow and 3 vehicles. There is also a Union Wireless cellular tower with lease, and parking area previously used by an overnight shipping company for night time trailer switches.
The online auction starts at 2 p.m., E.S.T. The opening bid has been set at $100,000, with a required deposit of $50,000.
(HT: Katherine Wells)
An article published in the American Journalism Review last week by Paul Farhi argues that despite the popular narrative, America’s schools aren’t doing so badly. He writes:
Some schools are having a difficult time educating children – particularly children who are impoverished, speak a language other than English, move frequently or arrive at the school door neglected, abused or chronically ill. But many pieces of this complex mosaic are quite positive. First data point: American elementary and middle school students have improved their performance on the Trends in International Mathematics and Science Study every four years since the tests began in 1995; they are above the international average in all categories and within a few percentage points of the global leaders (something that few news reports mention). Second data point: The number of Americans with at least some college education has soared over the past 70 years, from 10 percent in 1940 to 56 percent today, even as the population has tripled and the nation has grown vastly more diverse. All told, America’s long-term achievements in education are nothing short of stunning.
The press and the streets in the U.S. are buzzing today about the world record $640 million lottery jackpot that will be drawn tonight at 11pm in Atlanta, GA.
This excitement is what economists call “skewness.” The odds of winning have been quoted as 175 million to 1 — yet all of us are hoping to be that one. We explained the irresistible appeal of skewness (and the lottery) in our Freakonomics Radio podcast “The No-Lose Lottery.” In that episode, we also introduced a new financial product called Prize Linked Savings accounts — an idea that utilizes skewness for saving. We also explained why lottery commissioners would probably hate it.
What do girls think when they see their favorite soccer start posing in Sports Illustrated in a bikini instead of a soccer jersey? A new study, summarized by the BPS Research Digest, surveyed girls after they viewed five images of either “female athletes in a sporting context in their full sporting attire,” “female athletes in a sexualized context,” or “bikini-clad magazine models given random names.” Here’s the BPS Digest:
The key finding is that the girls and undergrads who viewed the sexualized athlete images tended to say they admired or were jealous of the athletes’ bodies, they commented on the athletes’ sexiness, and they evaluated their own bodies negatively. Some also said they found the images inappropriate. The participants who viewed the bikini-clad glamour models responded similarly, except they rarely commented on the inappropriateness of the images, as if they’d come to accept the portrayal of women in that way…
Foreign Policy examines America’s role as a training ground for those who would plot coups around the world. For example, Yahya Jammeh, current president of the Gambia, reportedly attended a military police training course in the U.S. prior to his 1994 bloodless coup:
Jammeh promised that his would be a “coup with a difference” and that he would stand down “as soon as we have set things right.” Eighteen years later, he is still in power.
One of our earliest Freakonomics Radio podcasts wondered whether the NFL might someday sell ads on players’ game-day uniforms (there is already sponsorship on practice jerseys). After all, it’s common practice in soccer, even in the U.S.
As Bloomberg Businessweek reports, the NBA might beat the NFL to the punch:
What’s not so certain is what a jersey deal is really worth. Front Row Marketing Services, whose parent company, Comcast-Spectacor, runs 11 regional sports networks and owned the Philadelphia 76ers until last fall, figures the annual cost to companies to place their logos on uniforms would range from $1.2 million to $7.5 million per year, depending mainly on the market where the team plays.
A study by Horizon Media last year put the annual value of the television exposure of the space across an NBA jersey’s chest in a range from $4.1 million for the L.A. Lakers to $300,000 for the Minnesota Timberwolves. [David] Abruytin [sic], whose IMG arranged the partnership deal between the NBA and its official automotive partner Kia Motors, says those numbers are probably low. He estimates the Lakers could fetch $10 million to $15 million per year.
Retirement ages have been trending up, as governments struggle to deal with escalating financial burdens. That might be sad news for would-be retirees — but maybe they’ll change their mind if they look at this new research from Andreas Kuhn, Jean-Philippe Wuellrich, and Josef Zweimüller. They examine the effects of early retirement on a sample of Austrian blue-collar workers:
We find that a reduction in the retirement age causes a significant increase in the risk of premature death – defined as death before age 67 – for males but not for females. The effect for males is not only statistically significant but also quantitatively important. According to our estimates, one additional year of early retirement causes an increase in the risk of premature death of 2.4 percentage points (a relative increase of about 13.4%; or 1.8 months in terms of years of life lost). In line with expectations, we find that IV estimates are considerably smaller than the simple OLS estimates, both for men and for women. This is consistent with negative health selection into retirement and underlines the importance of a proper identification strategy when estimating the causal impact of early retirement on mortality. Our results also indicate that the causal effect of early retirement on mortality for females is zero, suggesting that the negative association between retirement age and mortality in the raw data is entirely due to negative health selection. There are several reasons why male but not female blue-collar workers suffer from higher mortality (eg women may be more health-conscious and adopt less unhealthy behaviours than men; they may be more active after permanently exiting the labour market due to their higher involvement in household activities).
The male-female wage gap narrowed considerably during the 1980s and 1990s, thanks to increased educational attainment among women and an influx of women into high-earning fields. Factors such as the Women’s Movement and the 1964 Civil Rights Act are often cited as the drivers of this shift, but economists are also narrowing in on another influence: the Pill. Economists have linked the Pill to “delays in marriage (among college goers) and motherhood, changes in selection into motherhood, increased educational attainment, labor-force participation, and occupational upgrading among college graduates.” Now, a new working paper (ungated version) by Martha J. Bailey, Brad Hershbein, and Amalia R. Miller examines the effect of the Pill on the male-female wage gap.
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