Fascinating article in today’s Times by Richard Sandomir about how the owners of the old American Basketball Association team the St. Louis Spirit are still being compensated for an agreement forged in 1976, when the Spirit were excluded from joining the NBA. Those owners, Ozzie and Daniel Silna, were given a share — in perpetuity — of future TV revenues:
In 1980-81, the first year the Silnas were eligible to get their share of TV money, they received $521,749, according to court documents filed by the N.B.A. For the 2010-11 season, they received $17,450,000. The N.B.A.’s latest TV deal, with ESPN and TNT, is worth $7.4 billion over eight years. Soon, the Silnas’ total take will hit $300 million. …
A lot of people write to us looking for work — which, sadly, we are nearly always unable to provide. But once in a while we do hear of a good opportunity for the Freakonomically inclined. To wit:
The U.K. Cabinet Office’s Behavioural Insight Team — better known as the Nudge Unit because of its allegiance to the excellent Richard Thaler/Cass Sunstein book Nudge
Successful candidates will need to show that they:
1. have a good understanding of the behavioural science literature
2. have an understanding and ideally ability to conduct randomised controlled trials to test policy interventions; and
3. are highly motivated individuals capable of developing innovative solutions to often complex policy problems.
4. are strong team playersCandidates should be prepared to work on potentially any aspect of government or wider public sector policy. For example, over the past year the team has led work on health, energy, fraud, electoral registration, charitable giving, consumer affairs, the labour market, and access to finance for SMEs [that’s Euro-speak for “small and medium enterprises“]
Our latest Freakonomics Radio on Marketplace podcast is called “Can Selling Beer Cut Down on Public Drunkenness?”
(You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)
It features Oliver Luck, the athletic director at West Virginia University, whose Top 10-ranked football team opened the 2012 season by beating Marshall 69-34. Luck himself played quarterback at West Virginia from 1978 to 1981 and, after a four-year NFL career, got into sports administration. These days, he is best known as the father of Indianapolis Colts’ rookie quarterback Andrew Luck.
As the A.D. at West Virginia, here’s what Luck saw happening at home football games:
“People drinking far too much at pre-game parties and tailgate parties before games. Sneaking alcohol into games. Leaving at halftime or any point during the game to go back out to the tailgate to drink even more and come back into the game. … They would usually drink hard liquor — ‘get their buzz back on’ and come back into the game for the third quarter. And the police again would know exactly at what point in the third quarter these ‘throw-up calls’ would start to come over the radio.”
Binge drinking is a big problem at college football games. Oliver Luck — father of No. 1 N.F.L. pick Andrew, and the athletic director at West Virginia University — had an unusual idea to help solve it.
Wowie kazowie! The Marginal Revolution blog, whose excellence is routinely noted on this blog, is launching a free, online Marginal Revolution University (MRU). From the announcement:
We think education should be better, cheaper, and easier to access. So we decided to take matters into our own hands and create a new online education platform toward those ends. We have decided to do more to communicate our personal vision of economics to you and to the broader world. …
Here are a few of the principles behind MR University:
In the forthcoming book Jewish Jocks: An Unorthodox Hall of Fame
(HT: M.T.)
Miguel Sancho, a senior producer with ABC’s 20/20, writes in with a question I’ve often wondered myself but cannot answer. Can you?
A thought – every hurricane season we see headlines ascribing blame for lives lost on a given storm. “Hurricane Irene Blamed for Five Deaths in North Carolina,” etc. Certainly when people drown, are killed by floating debris, or die because they can’t make it to the hospital, the statistic sounds logical. But it occurred to me that perhaps, in the interests of fairness and accuracy, we should also give Hurricanes “credit” for lives not lost thanks to the interruption of normal human activity. How many homicides, vehicular fatalities, or drug overdoses didn’t happen [last] week in New Orleans, for example, because people were otherwise occupied protecting themselves from Hurricane Isaac? Just wondering if anyone has ever studied this, comparing average morbidity rates in hurricane zones to the stats during the times when hurricanes roll through.
This is not to suggest that overall, hurricanes are a social good. Bastiat’s broken-windows fallacy and all that. But perhaps in this one particular metric, we aren’t seeing the whole picture.
Please don’t judge Sancho’s observation as insensitive to the death and destruction caused by the hurricane itself. I can assure you he is not.
What we know — and don’t know — about the gazillions of dollars that never show up on anyone’s books.
If you think working from home offers too many distractions, just think about what happens at the office.
If you work in an office, do you ever find yourself thinking that you could get more work done at home?
That’s the question we address in our latest podcast, “There’s Cake in the Breakroom!”
You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.
There are at least two primary perspectives on this topic:
But there’s at least one more perspective to consider. A firm might look at the office rent it pays and think it might be worth the trade-off to let employees work at home instead.
A reader in Australia named Ian Lyons, in response to our “Herd Mentality” podcast, writes to say:
At the 2012 Sydney Festival, we created a sophisticated set of interactive dashboards showing which artists were buzzing (on Twitter and Facebook) in real time, where people were coming from, interesting facts and live photos.
To my astonishment the most popular tool simply allowed you to see which show other people from your postcode were going to see. Viewed through the lens of behavioral economics, this makes perfect sense but it’s the opposite of what I would have predicted instinctively. In fact it almost didn’t get deployed because it was too simple.
I blogged yesterday about a Department of State (N.Y.) government website page that only accepts information during business hours. You offered several other similar examples (many of them government sites as well) and possible explanations. We also received, via comment and e-mail, an explanation from Edison Alban, press officer for the D.O.S. (BTW, his name could be considered a pretty good aptonym, since Albany is the capital of New York.)
He begins by objecting to the post, particularly the headline, which was “This Website Only Open During Business Hours”:
The New York Department of State’s Division of Corporation website is accessible 24 hours a day, 7 days a week. The Division of Corporation does not shut down its website during non-business hours.
No comment.
An interesting e-mail from a reader/listener named Andrei Herasimchuk about what he calls “gamification”:
It’s a word and term that drives me nuts these days. I design software, and have done so for two decades now. Everyone is trying to add gamification features to their products these days in the tech industry. Think badges, achievements, and things normally found in a game like World of Warcraft. People in this industry lately seem to believe that these sorts of things drive engagement in their products. From everything I’ve seen, and from influences of your work, I’d assume what people really want to do is find ways to design incentives into products. Incentives versus Gamification? What works better?
Andrei (and I) would love to hear what you have to say on this question. I have a few superficial thoughts:
If you happen to manage a Limited Liability Corp (LLC) in New York State and need to file your Biennial Statement, you might follow the directions sent to you in the mail and go to the state’s website for conducting such business: www.ebiennial.dos.ny.gov.
But if you try this on, say, a weekend, here is the message you’ll see:
I assume this is only a coincidence but still, it’s a good one.
Shortly after putting out the first half of our “Freakonomics Goes to College” podcast, which included a segment on the market for fake diplomas from counterfeiters and diploma mills, I got the following piece of spam. It appears to be from a Norwegian e-mail domain:
I am not sure this is as meaningful as the authors think, but still it is an interesting experiment. From a new working paper called “Letter Grading Government Efficiency” by Alberto Chong, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer:
We mailed letters to non-existent business addresses in 159 countries (10 per country), and measured whether they come back to the return address in the U.S. and how long it takes. About 60% of the letters were returned, taking over 6 months, on average. The results provide new objective indicators of government efficiency across countries, based on a simple and universal service, and allow us to shed light on its determinants. The evidence suggests that both technology and management quality influence the quality of government.
I am happy to read that final sentence but surprised it needed to be said. This paper may tickle your memory with thoughts of Stanley Milgram‘s “small-world experiment” (better known as “six degrees of separation“) and Judith Kleinfeld‘s reassessment of that experiment as told in Duncan Watts‘s excellent book Six Degrees.
From a Q&A in the Times Book Review, in response to a question about literary appetites and guilty pleasures:
I don’t believe in guilty pleasures, I only believe in pleasures. People who call reading detective fiction or eating dessert a guilty pleasure make me want to puke. Pedophilia is a pleasure a person should have guilt about. Not chocolate.
On Yahoo! Sports, the football writer Jason Cole profiles Todd Haley, the Pittsburgh native who has returned to his hometown Steelers (yeah, they’re my team too) to take over as offensive coordinator. Cole writes about Haley’s notorious “screaming jags” and wonders if Haley and Steelers quarterback Ben Roethlisberger can coexist:
Haley believes the outside world doesn’t understand the method to his madness. In previous stops, Haley was walking into rebuilding situations that required more attitude.
“The general public doesn’t know if that’s contrived or not contrived and over the years you have seen a lot of coaches who have shown emotion,” Haley said. “I take a great deal of pride in my passion for the game, but it was also what the situation dictated at the time.”
Okay, nothing so noteworthy about that. But then Haley reveals himself as a master of signaling theory:
College tends to make people happier, healthier, and wealthier. But how?
In a Yahoo! Sports column about Brooklyn Nets G.M. Billy King, writer Kelly Dwyer notes that if New York is “the city that never sleeps,” then Brooklyn is “the borough that never shaves.” This is not a wholly original phrase but pretty close, and, from personal observation, I’d have to say pretty accurate too, at least for a certain demographic. I can’t think of the last white Brooklyn male under 40 I saw without a full Grizzly Adams, a set of muttonchops, or at the very least a patch of second-cut-rough stubble. Bad borough for razor sales.
From the Onion, “Nation’s Economists Quietly Evacuating Their Families”:
As employment stagnates, manufacturing continues its slump, and overall confidence in the U.S. financial system wavers, the nation’s economists have begun abandoning their homes and sending their loved ones overseas. “We’ve noticed a trend among the leading economic thinkers, be they Keynsians, supply-siders, or students of the Austrian school—they’re putting their families on one-way flights out of the country, often leaving half-finished survival bunkers behind them,” Paul Klement, an analyst with the Brookings Institute, told reporters Tuesday.
This, meanwhile, is not a joke: Economists for Romney today announces that its statement in support of Mitt Romney for President has been signed by more than 400 economists, including Nobelists Gary Becker, Robert Lucas, Robert Mundell, Edward Prescott, and Myron Scholes.
(HT: Dave Domingo)
I saw this late yesterday afternoon when looking over the financial news.
Wait a minute, you think — I knew Groupon is a big deal (or used to be, at least), but $568 billion in revenues in the second quarter? Billion with a “b”? That would rank Groupon in the top 70 countries for GDP.
Okay, of course not. It should have read $568 million, with an “m.” Hey: people make mistakes, no biggie.
But here we are many hours later and, as I type this, the CNBC article remains uncorrected even though many commenters have pointed out the mistake (some quite kindly, others less so).
Yesterday we blogged about Mark Bittman’s acrid comment about the death of a Chick-fil-A executive. (It would make a good postscript to our “Legacy of a Jerk” podcast.) Bittman has now apologized and removed the offending language from the original article.
We know that summertime brings far too many fatal accidents. But you may be surprised if you dig into the numbers.
A few months back, Levitt and I were asked help put together a TV cop show based on the concepts of Freakonomics. The gist: a big-city police force, in crisis, hires a rogue academic (sound familiar?) to help get crime under control.
It struck us as a totally crazy but also strangely appealing idea. The concept had been hatched by Brian Taylor, a young exec at Kelsey Grammer‘s production company, Grammnet, which then partnered with Lionsgate; and the acclaimed writer Kevin Fox was brought on board. The show would be called Pariah.
A couple weeks ago, Levitt and I went to Los Angeles to help pitch the show to the TV networks. Since we know nothing about TV, we tried to not talk too much and let Kevin, Brian, and Kelsey do their thing. And they did! Here’s the news, from Deadline.com:
A reader named Gustav, a.k.a. the Modern Nomad (a nice blog, by the way) writes to say:
Hi! I’ve just left Buenos Aires after a five-month long nomadic visit there. Reflecting on my time there, I remembered something an Argentine friend told me, and I think you might like the economic spirit behind it.
Gustav is right. I do like the economic spirit behind the story he tells, and I think you will too:
In short, this is a government scheme created to discourage driving under the influence. When you and your friends drive to a disco, you enter the club as normal and pay your entry. But when you leave, the group walks up to the cashier and presents the designated driver, sober and fit for driving. Everyone in the group gets their entry fee back at that point! The club then gets the lost money back from the government who, I presume, find it cheaper to pay the entry fee for clubbers in the company of designated drivers than have them in the hospitals. To me, this is a beautiful economic point of view where the practical reality and cost of things is more important than not to be seen ‘supporting clubbers.’
We recently put out a podcast called “Legacy of a Jerk,” which deals in large part with the ancient injunction against speaking ill of the dead. For the most part, this injunction is still widely obeyed. So I was quite surprised to see what Mark Bittman recently wrote on his N.Y. Times blog:
Sysco is the latest food giant—it’s the largest food distributor in the country—to come out against gestation crate confinement of pigs. The National Pork Producers Council’s communications director was quoted in the National Journal saying: “So our animals can’t turn around for the 2.5 years that they are in the stalls producing piglets…I don’t know who asked the sow if she wanted to turn around.” Really.
Speaking of pigs, the VP of PR for Chick-fil-A dropped dead of a heart attack the week after the chain’s latest homophobia/anti-gay marriage scandal. Here’s an obit, and here’s more about him. Meanwhile, Chick-fil-A had record-breaking profits after its President, Dan Cathy, drew a line in the sand over same-sex marriage.
I read that “speaking of pigs” line three or four times to make sure I understood. At first I thought that Bittman was speaking metaphorically — that no one had in fact died. (But he did: the man’s name was Don Perry.) Then I thought maybe the Times page had been hacked, but that doesn’t seem to be the case either. FWIW, here’s a screenshot:
Here’s a fascinating new working paper from Yale economist David G. Atkin, called “Endogenous Skill Acquisition and Export Manufacturing in Mexico” (abstract here; PDF of an earlier version here). The gist:
This paper presents empirical evidence that the growth of export manufacturing in Mexico during a period of major trade reforms, the years 1986-2000, altered the distribution of education. I use variation in the timing of factory openings across municipalities to show that school dropout increased with local expansions in export manufacturing. The magnitudes I find suggest that for every twenty jobs created, one student dropped out of school at grade 9 rather than continuing through to grade 12. These effects are driven by the least-skilled export-manufacturing jobs which raised the opportunity cost of schooling for students at the margin.
It makes sense, of course, that students on the margin might happily abandon school in favor of a good job. But is that necessarily a bad thing? How should a society balance jobs and educational ambition? And who should be thinking harder about this issue — India or China? Or perhaps the U.S.?
It’s been nearly 18 months since we relaunched this website, and we continue to try to improve it. Many of the improvements were spurred on by reader suggestions — so: thanks!
Here are a few changes we’ve recently made:
1) We’ve added a Freakonomics Radio Archive page to make it easier to find or listen to any particular episode. Let us know how this page is working for you, and any further improvements we should consider. Also, on our Radio page, we have grouped our one-house specials by season. We have so far released two seasons (each with five one-hour specials), and a third is on the way this fall.
2) We have reconfigured the blog’s comments section by adding a “view all comments” button and paginating the comments so that you can skip to a particular page of coments.
3) There is now a “print” button on the blog so that you can print out individual posts.
A podcast listener named Susan Guttentag, an associate professor of pediatrics at the Children’s Hospital of Philadelphia, writes in to say:
I was compelled to email you after the following incident on our recent visit to Whitefish, Montana. My husband and I had finished a terrific bike trip through Glacier and Waterton Parks, and we were spending a couple of extra days in Whitefish, a very lovely town in the Flathead River Valley. We noticed that there was a terrific hike to the top of the local ski resort on Big Mountain and decided to venture out. Sadly, the trail starting point was a hefty distance away — too far to tack onto what proved to be a 4 h hike to the top– but the lodge did not provide shuttle service to this area. My husband suggested that we — wait for it — hitchhike! In nearly 53 years on the planet, I had never once hitchhiked but my husband is 6’3″ so I thought “why not?” I had listened to your podcast on hitchhiking and was somewhat comforted by the data.
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