At the Becker-Posner blog, Richard Posner offers some ideas for amending the entitlements programs that are “threatening the long-term solvency of the federal government”:
Which leads me to the first of the only two practical ideas that occur to me for slowing the increase in entitlement expenditures relative to the size of the economy: a shift in emphasis in medical research from length of life to ability to live independently. Independent living means living without home care (whether by relatives, thus taking time from them that they could use more productively in other activities, including paid employment, or by paid care—paid by the government in many cases) and being able—and wanting—to work. Independent living can be fostered by focusing medical research on problems of vision, musculoskeletal problems (which impair mobility), obesity, and dementia, in preference to research on curing and preventing cancer, heart disease, and stroke.
We get a lot of e-mails with requests/suggestions for podcast and writing topics. These days, the most popular request by far is for Bitcoin. I am still not sure we’ll do it but I’m thinking about it. If so, what do you want to know? Please be specific. Also: do you really care? It strikes me that, at the moment, Bitcoin is one of those things that a small number of people care about hugely but that most people couldn’t care less. (Freakonomics readers aren’t, of course, “most people.”) The rapid spikes and drops in value of course invites lots of news coverage but that is among the least-interesting aspects of a cryptocurrency, isn’t it?
A commitment device forces you to be the person you really want to be. What could possibly go wrong?
As the economics of high-end journalism continue to worsen, it is interesting — and, if you’re a fan of journalism, encouraging — to see how much non-profit journalism is being created. NPR is of course the most famous model but there’s also ProPublica, Pierre Omidyar‘s First Look Media, and a lot of other foundation- and philanthropist-funded projects.
Add to this list The Marshall Project, a “not-for-profit, non-partisan news organization dedicated to covering America’s criminal justice system.” It’s being launched by Neil Barsky, a former journalist, hedge-funder, and most recently film director. (He’s also a friend of mine, but don’t hold that against him.)
Here’s the rest of the Marshall Project’s mission statement:
Thank you, Politico (the Magazine), for taking a look back at various predictions for 2013 to see how they worked out.
In our “Folly of Prediction” podcast, we discussed how the incentives to predict are skewed. Big, bold predictions that turn out to be true are handsomely rewarded; but predictions that turn out to be false are usually forgotten. With the cost of being wrong so low, the incentives to predict are high.
In his Politico piece called “Crystal Balderdash,” Blake Hounshell doesn’t let us forget the bad predictions. A few examples:
This week’s episode of Freakonomics Radio takes a look at Pope Francis’s critique of the free-market system in “Evangelii Gaudium” (“The Joy of the Gospel”), his first apostolic exhortation.
The underlying point of everything we’ve ever written about baby names is that the name is essentially the parents’ signal to the world of what they think of their kid — whether it’s a signal of tradition, religion, aspiration, affiliation, or whatnot.
Here is a very pure example of that principle: a baby named Colt .45 Stratemeyer. It’s via Jim Romenesko, from a birth announcement in the Tillamook (Oregon) Headlight-Herald:
Colt .45 Stratemeyer was born Nov. 26, 2013 at Tillamook Regional Medical Center. He weighed seven pounds, two ounces. He joins his older brother, Hunter Allen Stratemeyer, 3. Baby Colt’s parents are Joshua and Rebekah Stratemeyer of Toledo.
I assume the announcement is legitimate, though I can’t say for certain. I am guessing there are fiction writers out there who could write a short story or maybe even a novel with no more inspiration than this birth announcement.
We are setting up a new series of interviews for Freakonomics Radio in which we’ll identify interesting/accomplished/prominent people and ask them a series of Freakonomics-ish questions, ranging from their professional accomplishments to personal quirks. I am eager to hear your suggestions on both:
1) The people you’d want to hear from; and
2) What kind of questions you’d like to hear them asked.
No idea is too big/small, outlandish/traditional, etc.
Thanks in advance.
More than 1 million people die worldwide each year from traffic accidents. But there’s never been a safer time to drive.
From a Freakonomics Radio listener named Luke Charley:
I am a 21-year-old male college student in Bismarck, ND. I listen to your podcast quite a bit, and I found the one about the energy saved by houses — I believe it was in the podcast titled “Riding the Herd Mentality.” Well, the weight room I frequent often had plates not racked back up after people were done working out. They would just leave them on the floor and it bothered me quite a bit. So I decided to write a sign saying, “Everybody else racks their weights, please do the same.” In the past two weeks since I have done that, every day when I have been in there, there were no weights on the floor! Applying what you learn on a podcast to a weight room is quite invigorating.
Way to go, Luke! Delighted this worked out (so far, at least) …
It’s time to do away with feel-good stories, gut hunches, and magical thinking.
A new working paper (abstract; PDF) by James Heckman and Tim Kautz looks at the relationship between “character” and student achievement as measured by test scores. Long story short: achievement tests don’t necessarily measure what will often matter most once students hit the real world.
This paper reviews the recent literature on measuring and boosting cognitive and noncognitive skills. The literature establishes that achievement tests do not adequately capture character skills–personality traits, goals, motivations, and preferences–that are valued in the labor market, in school, and in many other domains. Their predictive power rivals that of cognitive skills. Reliable measures of character have been developed. All measures of character and cognition are measures of performance on some task. In order to reliably estimate skills from tasks, it is necessary to standardize for incentives, effort, and other skills when measuring any particular skill.
Character is a skill, not a trait. At any age, character skills are stable across different tasks, but skills can change over the life cycle. Character is shaped by families, schools, and social environments. Skill development is a dynamic process, in which the early years lay the foundation for successful investment in later years.
Spontaneous order is everywhere if you know where to look for it.
The online universe doesn’t have nearly as many rules, or rulemakers, as the real world. Discuss.
Aaron Pilkington, an officer trainee at Air Force Officer Training School in Montgomery, Ala., writes to say:
I was driving down the road the other day with a fellow trainee, pointing out to him that the particular road along which we were driving always has police officers hiding out and catching people speeding. Just as I said that, sure enough, we saw a police car pull out with lights on and pull someone over. My friend, Bill, said that he wondered if the song “Sweet Home Alabama” would work in Alabama. I asked him to elaborate.
My friend, who is from Rhode Island, explained that a couple of years ago he was speeding and got pulled over by a police officer. He said that the song “Sweet Home Alabama” was on the radio and that somehow the officer let him off on a warning. Some time later, he was pulled over again and had the song on his iPod. In the time between being pulled over by the police officer and the officer walking up to his window, he pulled the song up on his iPod and left it on loud enough to be heard by the police officer, but not too loud. Again, success. He said this happened one more time just a couple of months ago in Florida and that he now always has at the ready a CD with the song “Sweet Home Alabama,” just in case he gets pulled over again.
American Airlines encourages passengers to pre-book their meals online:
Why “kosher,” I wonder, but “Muslim” rather than “halal”? Should the “kosher” meal be “Jewish” instead? American, it turns out, is hardly the only airline to use this terminology. Don’t know why, but unparallel nomenclature always gets my attention …
College tends to make people happier, healthier, and wealthier. But how?
In our podcast “Parking Is Hell,” we explored how the overwhelming demand for parking space has a lot of downsides. One big problem is that city centers can feel as if they’re practically held hostage by parking lots and garages. I was in Minneapolis the other day, and here are four pictures taken from the window of my hotel room. It’s not exactly a view that makes the heart skip …
Airbus this week called for an industry standard that would provide for a seat at least 18 inches wide in economy cabins, but its U.S. arch-rival Boeing says it should be for airlines to decide.
As you can imagine, there is a lot of money at stake here:
Boeing says its revamped “777X” will hold 406 people based on economy seats over 17 inches wide and set out 10 in each row.
Airbus says the competing version of its A350 will carry 350 people in 18-inch-wide economy seat laid out 9 abreast.
But it’s more than a battle between two companies. It’s a battle between the past and the present:
If you happen to be in New York on Mon., Nov. 11, you might want to come see Richard Thaler and Dean Karlan talk about “using evidence and behavioral economics to fight poverty.” The event (info here) is run by the Innovations for Poverty Action, of which Karlan is president. I will moderate the Thaler-Karlan discussion — which means I get to ask them any questions I want about whether and why it is a good idea to fight poverty by giving cash directly to poor people rather than the traditional means of directing aid toward institutions and hoping that it trickles down fruitfully. (There are, of course, more options than just those two.)
In our recent podcast called “Would a Big Bucket of Cash Really Change Your Life?,” we looked at whether a windfall helps a family across the generations. The short answer, at least in the case of the 19th-century land lottery that we discussed: no.
What’s a college degree really worth these days?
As a topic, “shadow insurance” may have a certain MEGO quality — that’s “My Eyes Glaze Over” — but a new paper called “Shadow Insurance” (abstract; PDF) by Ralph S.J. Koijen and Motohiro Yogo is well worth a look:
Life insurance and annuity liabilities of U.S. life insurers were $4,068 billion in 2012, which is substantial even when compared to $6,979 billion in savings deposits for U.S. depository institutions (Board of Governors of the Federal Reserve System 2013). However, there is little research on life insurer liabilities, especially in comparison to the large banking literature. The reason, perhaps, is the traditional view that life insurer liabilities are safe (and boring) because they are more predictable, longer maturity, and less vulnerable to runs. Hence, all of the interesting action is on the asset side, where life insurers take on some investment risk. This paper shows that developments in the life insurance industry over the last decade shatters this traditional view. As a consequence of changes in regulation, life insurers are now using reinsurance to move liabilities from operating companies that sell policies to less regulated and unrated shadow reinsurers. These shadow reinsurers are captives or special purpose vehicles in U.S. states (e.g., South Carolina and Vermont) or offshore domiciles (e.g., Bermuda, Barbados, and the Cayman Islands) with more favorable capital regulation or tax laws. In contrast to traditional reinsurance with third-party reinsurers, there is no risk transfer in these transactions because the liabilities stay within the same holding company.
Callum Linley, an 18-year-old reader from Melbourne, Australia, writes to say:
So why aren’t there companies lining up to advertise on homeless people?
My guess is it’s an image problem – not wanting to be associated with the “failure” of being homeless. But wouldn’t that be compensated by the fact you could put forward the idea that you are a socially responsible and sympathetic company who cares for the less fortunate?
Well, the world already has given us Bumvertising and homeless people as wi-fi hotspots, and I wouldn’t be surprised if homeless advertising has shown up on TV (hey Simpsons and Family Guy and South Park fans etc., let us know). But how would you answer Callum’s question? Does it fall into the category of:
a) Questions that are so obvious that they don’t need an answer; or
b) Questions that should be asked more often, but aren’t; or
c) Something else entirely.
Between the N.S.A./Merkel mess and the ObamaCare mess, it seems a good time to ask a question we’ve asked in the past: just how much does the President of the United States really matter? Our original podcast on the topic came out in 2010; we overhauled the episode in 2012, adding interviews with Donald Rumsfeld and Austan Goolsbee.
As Jon Stewart puts it so well in the video below, if the President is out of the loop on Merkel eavesdropping and his namesake healthcare law, just what loops is he in? I do not mean to cast aspersions on President Obama himself (although you are free to cast away). I mean to highlight the possibility that we assign way too much weight to the role of the President generally.
What are the odds that you agree with my argument? Who knows. What are the odds that, even if you do agree, you will disagree once it’s time to elect the next President, and we get caught up once again in our Great Man Theory of Voting?
Our “Folly of Prediction” podcast made these basic points:
Fact: Human beings love to predict the future.
Fact: Human beings are not very good at predicting the future.
Fact: Because the incentives to predict are quite imperfect — bad predictions are rarely punished — this situation is unlikely to change.
A couple of recent cases in point:
The National Oceanic and Atmospheric Administration predicted a particularly bad Atlantic hurricane season this year but, thankfully, were wrong, as noted by Dan Amira in New York magazine. It is hard to imagine that many people are unhappy about that.
Here, as noted by Ira Stoll in the New York Sun, are the picks by ESPN experts at the start of the 2013 baseball season. How bad were their picks?
We are in the midst of a nationwide search for a single magic bullet in education. But the more evidence that is gathered, the more obvious it becomes that no such single magic bullet exists.
That said, a new study (abstract; PDF) on school size — not class size, but school size — is worth a look. Here’s the abstract; I have bolded the most relevant conclusions:
One of the most wide-ranging reforms in public education in the last decade has been the reorganization of large comprehensive high schools into small schools with roughly 100 students per grade. We use assignment lotteries embedded in New York City’s high school match to estimate the effects of attendance at a new small high school on student achievement. More than 150 unselective small high schools created between 2002 and 2008 have enhanced autonomy, but operate within-district with traditional public school teachers, principals, and collectively-bargained work rules. Lottery estimates show positive score gains in Mathematics, English, Science, and History, more credit accumulation, and higher graduation rates. Small school attendance causes a substantial increase in college enrollment, with a marked shift to CUNY institutions. Students are also less likely to require remediation in reading and writing when at college. Detailed school surveys indicate that students at small schools are more engaged and closely monitored, despite fewer course offerings and activities. Teachers report greater feedback, increased safety, and improved collaboration. The results show that school size is an important factor in education production and highlight the potential for within-district reform strategies to substantially improve student achievement.
From a reader named Kevin Murphy (alas, not the Kevin Murphy):
The Economist just reported on what you covered in the “The Downside of More Miles Per Gallon” podcast in February. It’s looking like Oregon is leading the way in possibly charging per mile: “A bill that would have applied a VMT fee to all new vehicles doing 55mpg and above died in the last legislative session; instead, 5,000 volunteers will join a new VMT scheme in July 2015. They will be charged at 1.5 cents per mile rather than paying the state petrol tax (30 cents per gallon).”
A reader named J.D. Peralta is asking for your help:
For about the last six years I have developing a theory about how marriage should be legal social contracts. I feel that legal marriage (not marriage by the church) should be treated more like employment agreements. These “marriage contracts” should bring with them a term that ranges from 3-5 years. The term of the contracts will be developed by both parties but I feel that they should include things like expectation, key areas of responsibilities, etc.
I have been working on this in my spare time but I am currently taking a management class for my bachelor’s degree and I have the opportunity to really put some muscle behind this theory. That is where I need your help. I have been researching this topic for the last two weeks but I have found very little data that could be considered as legitimate sources to support my argument. I am hoping that you can point me to some reference that help me to complete my argument. Any assistance you can provided me would be greatly appreciated.
A bit more about Peralta. He is 32, works as an accountant for a public accounting firm in Los Angeles, was born in El Salvador but has lived in the U.S. since 1986. His parents have been married for 39 years; he has two older brothers. “In case you are curious I do have a girlfriend,” he writes, “and we have been together for almost 5 years. I have discussed my theory with her and she finds the concept reasonable.”
Japan’s under-40s appear to be losing interest in conventional relationships. Millions aren’t even dating, and increasing numbers can’t be bothered with sex. For their government, “celibacy syndrome” is part of a looming national catastrophe. Japan already has one of the world’s lowest birth rates. Its population of 126 million, which has been shrinking for the past decade, is projected to plunge a further one-third by 2060.
And:
The number of single people has reached a record high. A survey in 2011 found that 61% of unmarried men and 49% of women aged 18-34 were not in any kind of romantic relationship, a rise of almost 10% from five years earlier. Another study found that a third of people under 30 had never dated at all. (There are no figures for same-sex relationships.) Although there has long been a pragmatic separation of love and sex in Japan – a country mostly free of religious morals – sex fares no better. A survey earlier this year by the Japan Family Planning Association (JFPA) found that 45% of women aged 16-24 “were not interested in or despised sexual contact.” More than a quarter of men felt the same way.
The article contains a number of speculations as to cause, well worth reading. At least the Malthusians will be happy.
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