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Freakonomics Blog

What’s a Wall Street Executive's Wins Produced?

LeBron James was recently given his 4th Most Valuable Player award by 120 sportswriters.  Well, at least 119 sportswriters agreed LeBron was MVP.  Gary Washburn – of the Boston Globe – thought Carmelo Anthony was the league’s MVP in 2012-13.

It doesn’t take much effort to establish that LeBron was more valuable than Melo.  The numbers tell us (numbers taken from theNBAGeek.com) that LeBron in 2012-13 was a much more efficient scorer from the field; and a better rebounder, passer, and shot blocker.   LeBron was also better with respect to steals and personal fouls.  Yes, Melo scored more.  But that is just because Melo took many more shots than LeBron.  Unfortunately, people tend to think that players who take many shots have a huge impact on outcomes in basketball (consequently, players have an incentive to take as many shots as their coaches and teammates will allow).

Although no other sportswriter shared Washburn’s view that Melo was MVP, 102 of the 120 voters thought Anthony was one of the five most valuable players in the league.  So Washburn was not alone in his belief that Anthony is a “great” player.  


One Small Step for Geoengineering — or Is "Ecoengineering" Better?

A reader named R.E. Riker alerts us to the progress of an experimental ocean restoration project (more here); the ringleader is one Russ George, who has proven controversial. Before your knee jerks in one direction or another, take a look:

This summer the crew has been aboard ship engaging in what is surely the most substantial ocean restoration project in history. In a large ocean eddy west of Haida Gwaii the project has replenished vital ocean mineral micronutrients, with the expectation and hope it would restore ten thousand square kilometers of ocean pasture to health. Indeed this has occurred and the waters of the Haida eddy have turned from clear blue and sparse of life into a verdant emerald sea lush with the growth of a hundred million tonnes of plankton and the entire food chain it supports. The growth of those tonnes of plankton derives from vast amounts of CO2 now diverted from becoming deadly ocean acid and instead made that same CO2 become ocean life itself. For weeks the men and women, on this village team toiled in stormy overcast weather and fog without a hint of blue sky. In mid-August the skies cleared and revealed the wonder of the mission on which they have laboured. Satellites focused on ocean health that monitor and measure plankton blooms sent back stunning images. Far offshore in these Haida salmon pastures a vast plankton bloom is revealed matching the health and vibrancy of blooms seen in rich coastal waters. The return of such blooms is “the stuff dreams are made of” for all ocean life.


It's the Weather, Stupid

We’ve written in the past about how weather can have a surprisingly strong effect on things like civil war and riots. (Short story: rioters don’t like getting rained on and droughts can start a war.)

The political scientist Peter Kurrild-Klitgaard has a new paper on the topic in Public Choice (abstract; PDF) called “It’s the Weather, Stupid! Individual Participation in Collective May Day Demonstrations.” The bolding is mine:

“We investigate the possible explanations for variations in aggregate levels of participation in large-scale political demonstrations. A simple public choice inspired model is applied to data derived from the annual May Day demonstrations of the Danish labor movement and socialist parties taking place in Copenhagen in the period 1980–2011. The most important explanatory variables are variations in the weather conditions and consumer confidence, while political and socio-economic conditions exhibit no robust effects. As such accidental or non-political factors may be much more important for collective political action than usually acknowledged and possibly make changes in aggregate levels of political support seem erratic and unpredictable.”


More on the Google AdWords Controversy

A reader named Desmond Lawrence writes from London with further commentary on our “How Much Does Your Name Matter” podcast — specifically, about Harvard computer scientist Latanya Sweeney‘s research which found that online searches for people with distinctively black names was 25% more likely to produce an ad suggesting the person had an arrest record – regardless of whether that person had actually been arrested:

So when I was listening to your podcast on “How Much Does Your Name Matter?” I was surprised to hear about Latanya and her story about these Google Ads that were being served.
 
Now as much as the company Instant Checkmate would like to say that they are not at fault here, I can guarantee that I know what has happened with their AdWords campaign.
 
When you set up an AdWords campaign you tend to do a fair bit of research. From there you will build a campaign around Broad match, phrase match or even exact match.
 
You can also do a thing called Dynamic keyword insertion. Now this is where I would suggest that Instant Checkmate went wrong. If you place the Dynamic keyword call code into an ad, it will place the keyword that has called the ad into the ad, thus increasing the effectiveness of the ad.


Would You Help Your Kids Cheat to Get a Driver's License?

A reader named Ari writes from Israel:

Recently the Israel Government voted to change the minimum age for getting a driver’s license. Here is a snippet from an article in Ha’aretz (headlined “Israel to Lower Driving Age, but Tack on Period of Mandatory Supervision”):
 
The earliest age to start driving lessons will remain 16 and a half. The period of driving accompanied by an adult will have to cover at least 50 hours, 20 of them on urban streets, 15 hours on inter-urban roads and 15 hours of driving at night. The novice driver will have to have an adult chaperone at all hours of the day during the first three months but only at night during the second three months. After the novice driver and the accompanying person sign a declaration that the accompanied driving requirement has been fulfilled properly, the new driver will be given a young driver’s license.
 
I’m curious as to how the honor system is going to work here. If my child’s license were to depend on my declaration, what are the chances that I would fudge? How would the governing agency know? It seems to be unverifiable. I assume that there will be some internet-based form with a checkbox and maybe some number to fill in (number of hours driven night / day / rain / …) I believe that forcing a person to write his own declaration would make it more difficult for him to lie.


Font Improvement

I write all my papers, letters, and exams using the typeface Times New Roman.  As a lunch-table discussion here in England revealed, the University insists on certain typefaces that are dyslexia-friendly, particularly Arial, Trebuchet, and Verdana.  It costs me or any other faculty member nothing to use one of these on exams; non-dyslexic students are not harmed by them, and dyslexic students are better off.  Henceforth, no more Times New Roman on tests — mine will all be in Arial.  A clear Pareto improvement. (HT: MS)


Guns and Peanuts

Saw this ad for peanuts in the subway this morning. It was doubly jarring. First, because I am not used to seeing the word “peanut” in public unless it is followed by the word “-free,” as in “peanut-free school,” “peanut-free party,” “peanut-free environment,” etc. And second: because the kid in the ad is holding a couple of toy guns! Many parents I know don’t let their kids play with any sort of toy gun, ever. (I happen to not be one of those parents.) As a result, their kids — their boys, mostly, to be clear — just make guns out of sticks, rulers, broomsticks, pens, fingers, etc.

I guess if you’re making an ad for one product that people are squeamish about, you might as well double down and go for the full effect.


A Fascinating, But Costly, Kentucky Derby

My condolences to anyone who bet my picks in the Kentucky Derby.  Of the four horses I liked, the best finisher was Revolutionary in third place, but even that was unimpressive because he surprised me by going off as the second favorite in the betting.  Just be glad I didn’t post my picks for the entire day’s racing at Churchill Downs…the few friends I did give those picks to are cursing me today!

The Kentucky Derby was extremely interesting, however, from a statistical perspective.  Here is a link to the results chart for the race.  If you don’t study horse racing, it will just look like gibberish.  If you know how to read a results chart, you will see a remarkable pattern jump out of the numbers.  The race is 1.25 miles long and there were 19 horses in the race.  Of the eight horses who were in the front of the pack after one-fourth of a mile, seven ended up finishing in back: 12th, 14th, 15th, 16th, 17th, 18th, 19th.   Only one horse that trailed early also finished poorly, and that horse started terribly and was way behind the field from the beginning.  In contrast, the horses who ended up doing well were in 16th, 15th, 17th, 12th, and 18th place early on in the race.  Basically, there was a nearly perfect negative correlation between the order of the horses early in the race and the order of the horses at the end of the race!


The Right Profile Lives Again (for About 15 Minutes)

A long time ago, I played in a rock band, called The Right Profile. It was a great deal of fun. We wound up getting a record deal with Arista. Here’s a picture of us with Clive Davis, who was willing to take this picture pretending we’d already gotten a gold record (I’m the guy shaking his hand):

But I quit the band about a year later. We were in the middle of making our first record. I decided I didn’t want to try to be a rock star after all, as much fun as it was. Writing suits me better.

I pretty much went cold turkey and have performed almost no music since then. But all these many years later, The Right Profile is set to ride again, if only for a few songs. We were asked to participate in a concert by the Vagabond Saints’ Society at a centennial celebration for the city of Winston-Salem, N.C., on Fri., May 7, from 7-10 pm.


U.S. Suicide Rates Rise

News reports today discuss the prevalence and rise of suicide in the U.S. We reported in depth on the topic of suicide in our 2011 hour-long podcast “The Suicide Paradox.” The episode explores the surprising numbers of suicide (it is twice as common as homicide), the “suicide belt” in America, and the racial differences (blacks are only about half as likely to commit suicide).


This Year’s Kentucky Derby Picks (And a Brand New Way to Bet on Them)

Every year I post my picks for the Kentucky Derby.  Last year I actually did well, for a change.  In a twenty-horse field, I picked three horses to do well, and two of them ended finishing first and second. The winner was 15-1.  I also made a correct prediction as to which horse would finish last.  I got that one right as well.

So here we go again…

Let me start by saying that the crystal ball (actually the computer algorithm) is a little fuzzy this year.  There are four horses that all look equally good to me: Falling Sky, Java’s War, Itsmyluckyday, and Revolutionary.  All will be longshots, I suspect, with odds between 15-1 and 25-1.

The model also kind of likes Verrazano, who might be the favorite in the race.  If I were betting, I might include him in my exotic bets.


What Does That Have to Do With the Price of License Plates in China?

Bloomberg Businessweek reports that in Chinese cities, the cost of obtaining a license plate (about $6,900 back in 2011) can now exceed the cost of a vehicle:

Shanghai is one of four Chinese cities that limit car purchases by imposing quotas on registrations. The prices paid at Shanghai’s license auctions in recent months — 90,000 yuan ($14,530) — have exceeded the cost of many entry-level cars, the stronghold of Chinese brands such as Chery, Geely, and Great Wall. While residents with modest incomes may be able to afford an inexpensive car, the registration cost is often beyond their reach. “Whenever there’s a restriction of new car purchases through the quota system, there is always a big impact on lower-price cars like the ones we make,” says Lawrence Ang, executive director of Geely Automobile Holdings, whose Panda minicar sells for 37,800 yuan.

In our podcast “The Cobra Effect,” we looked at license plate rationing in Bogota, where households purchase two cars in order to be able to drive every day of the week. In China, counterfeit military licenses plates, which allow drivers to avoid being pulled over by the police, are popular. This week, the Chinese government announced a crackdown banning military licenses for luxury vehicles.


Does Child Abuse Rise During a Recession?

How do economic conditions affect the incidence of child abuse?  While researchers have found that poverty and child abuse are linked, there’s been no evidence that downturns increase abuse.  A new working paper (PDF; abstract) by economists Jason M. Lindo, Jessamyn Schaller, and Benjamin Hansen “addresses this seeming contradiction.” Here’s the abstract, with a key finding in bold:

Using county-level child abuse data spanning 1996 to 2009 from the California Department of Justice, we estimate the extent to which a county’s reported abuse rate diverges from its trend when its economic conditions diverge from trend, controlling for statewide annual shocks. The results of this analysis indicate that overall measures of economic conditions are not strongly related to rates of abuse. However, focusing on overall measures of economic conditions masks strong opposing effects of economic conditions facing males and females: male layoffs increase rates of abuse whereas female layoffs reduce rates of abuse. These results are consistent with a theoretical framework that builds on family-time-use models and emphasizes differential risks of abuse associated with a child’s time spent with different caregivers.


It's Crowded at the Top (Ep. 125)

Our latest podcast, “Crowded at the Top,” presents a surprising explanation for why the U.S. unemployment rate is still relatively high. (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript.)

It features a conversation with the University of British Columbia economist Paul Beaudry, one of the authors (along with David Green and Benjamin Sand) of a new paper called “The Great Reversal in the Demand for Skill and Cognitive Tasks“:


Parking Is Hell: Architects to the Rescue

Inspired by our “Parking Is Hell” podcast, an ArchDaily op-ed shows how architects think about the parking problem:

The new car park in Miami is off to a good start, as it is definitively not brutalist, and has been designed and built to higher standards than its 1960s predecessors. It incorporates itself into an already walkable area, making it a success from the start. For this building and indeed any other mixed-use car parks which might be developed in cities worldwide, the lesson to take from the history of this peculiar building typology is that their success is very much dependent on the surrounding urban landscape being suited to accommodate them; much more than other building types, they are sensitive to poor planning.

Increasingly, poor parking arrangements are causing damage to our cities by occupying valuable space and contributing to congestion and pollution. The application of economics that we see in SF Park can mitigate these problems, without substantially changing anything – but wouldn’t it be better to fundamentally change our attitudes to parking, and design better spaces? We have surely learned enough from design’s history to make this a possible, and preferable, path to action.


America's Most Well-Read Cities

Amazon has just released its third annual list of the Most Well-Read Cities of America — a ranking based on per-capita “sales data of all book, magazine and newspaper sales in both print and Kindle format.”  Here are the top 5:

1. Alexandria, Va.

2. Knoxville, Tenn.

3. Miami, Fla.


Question of the Day: Should I Feel Guilty About Not Supporting Public Radio?

We recently ran a listener survey for Freakonomics Radio. Among the interesting findings: only (or should that be “only”?) 18 percent of the respondents are members of a public-radio station. A reader named Steve Cebalt wrote in to ask about the nature of public-radio membership:

So it’s pledge week at my local public radio station, when they interrupt my favorite news programs with appeals for money. Funny, I used to be on the board of directors of this station, so I have a great appreciation for it.

But I am not a member. I don’t pay. I am supposed to feel guilty, but I don’t. You know why? 

Because I am not really causing a negative externality on others — am I ?

Whether I listen or not, they’ll still broadcast right? And others contribute freely of their own volition. So is anyone harmed if I listen (or don’t listen) without donating?

I’d love to see your blog readers rip into this question from a Freakonomics perspective: 

So go ahead, people. Rip. Remember everything you’ve ever thought about free-ridership,  slippery slopes, and critical mass on issues like voting.


Benjamin Franklin on the Minimum Wage

Benjamin Franklin apparently understood the notion that input prices affect product prices, which is a problem because product demand curves are not completely inelastic.  Discussing a minimum wage, he noted, “A law might be made to raise their [workers’] wages; but if our manufactures are too dear, they might not vend abroad.” This is one of the best arguments against a minimum wage: in an open economy, which the U.S. increasingly will be at least partly passed on in the form of higher product prices, which will in turn reduce product demand—and eventually employment.   (“On the Labouring Poor,” The Gentleman’s Magazine, April 1768.)


A Psychiatrist's Take on Brother Bombers

Eugene, writing in response to our “Running to Do Evil” podcast, about the brothers Tsarnaev and Kaczynski: 

Speaking as a psychiatrist,
 
With your re-examination of the Kaczynski brothers, you captured my running hypothesis regarding the interpersonal dynamic of the two Boston Marathon bombers.  It was like you read my mind by unarchiving that interview you did so long ago with Ted Kaczynski.  Scary.
 
I’m sure you knew this as you’ve probably talked to many of my ilk during and after this interview done long ago.  But the bizarre way Ted flips the tables on his sense of victimhood, as well as many other aspects of his interview, are pretty consistent with a textbook description of narcissistic personality disorder.


Would This Really Be a Good Podcast Episode?

Andrew Francis from Madison, Alabama, writes to say:

I have what I think is a great idea for a podcast episode. I play and am a huge fan of ultimate (ultimate frisbee to most people, but Frisbee is technically a copyright of Wham-O). The sport is the perfect place for an experiment. In all games, there are no referees actively making every call. Players call all their own fouls and settle disputes between themselves on the field. If someone makes a bad call, you can argue it all you want to. If they stick with their call after the discussion and the parties can’t agree, ultimate has what I like to call the “magical do-over” that no other sport has. The disc just goes back to the person who had it prior to whatever infraction was called, and you begin play from that spot. 

In the major club and college tournaments (and now filtering down into the low-mid level tournaments), the use of observers (see the USAU definition) has become a common place. Players still call the majority of infractions, but when two players don’t agree on a call, the observers will step in and make a ruling.


Is Wikipedia Ghettoizing Female Writers?

The novelist Amanda Filipacchi (a very good writer; I happen to have gone to grad school with her) writes in the Times that female novelists seem to be getting ghettoized on Wikipedia:

I just noticed something strange on Wikipedia. It appears that gradually, over time, editors have begun the process of moving women, one by one, alphabetically, from the “American Novelists” category to the “American Women Novelists” subcategory. So far, female authors whose last names begin with A or B have been most affected, although many others have, too.

The intention appears to be to create a list of “American Novelists” on Wikipedia that is made up almost entirely of men. The category lists 3,837 authors, and the first few hundred of them are mainly men. The explanation at the top of the page is that the list of “American Novelists” is too long, and therefore the novelists have to be put in subcategories whenever possible.

Too bad there isn’t a subcategory for “American Men Novelists.”

Further details are welcome. This piece brings to mind a section of our recent “Women Are Not Men” podcast, reported by Bourree Lam, about the relative scarcity of female editors on Wikipedia — and this followup post about females posing as males online to avoid harassment.


Facebook-onomics

In a new blog post, Stephen Wolfram lays out some of the data from Wolfram/Alpha Personal Analytics for Facebook project. He looks at average network size;  how network size varies with age, gender, and location (among other things);  and, our favorite, what people talk about on Facebook at different ages:

People talk less about video games as they get older, and more about politics and the weather. Men typically talk more about sports and technology than women — and, somewhat surprisingly to me, they also talk more about movies, television and music. Women talk more about pets+animals, family+friends, relationships — and, at least after they reach child-bearing years, health. The peak time for anyone to talk about school+university is (not surprisingly) around age 20. People get less interested in talking about “special occasions” (mostly birthdays) through their teens, but gradually gain interest later. And people get progressively more interested in talking about career+money in their 20s. And so on. And so on.

(HT: Justin Wolfers) 


"Under the Medical Tent at the Boston Marathon"

That is the title of an essay by Sushrut Jangi, in the New England Journal of Medicine:

Suddenly, there was a loud, sickening blast. My ears were ringing, and then — a long pause. Everyone in the tent stopped and looked up. A dehydrated woman grabbed my wrist. “What was that?” she cried. “Don’t leave.” I didn’t move. John Andersen, a medical coordinator, took the microphone. “Everybody stay with your patients,” he said, “and stay calm.” Then we smelled smoke — a dense stench of sulfur — and heard a second explosion, farther off but no less frightening. Despite the patient’s plea, I walked out the back of the tent and saw a crowd running from a cloud of smoke billowing around the finish line. “There are bombs,” a woman whispered. My hands began to shake. …

At the tent, I stood in a crowd of doctors, awaiting victims, feeling choked by the smoke drifting along Boylston. Through the haze, the stretchers arrived; when I saw the first of the wounded, I was overwhelmed with nausea. An injured woman — I couldn’t tell whether she was conscious — lay on the stretcher, her legs entirely blown off. Blood poured out of the arteries of her torso; I saw shredded arteries, veins, ragged tissue and muscle. Nothing had prepared me for the raw physicality of such unnatural violence. During residency I had seen misery, but until that moment I hadn’t understood how deeply a human being could suffer; I’d always been shielded from the severe anguish that is all too common in many parts of the world.


Age Discrimination? Pay Your Birth-Year Rate

Canadian reader Lisa Sansom wrote to us about an interesting price promotion at Starwood hotels: 

PAY RATES EQUAL TO YOUR BIRTH YEAR 

We’re celebrating the year you were born. With this special offer for two or three night stays, you’ll receive rates equal to your birth year!

  • First night: full rate
  • Second or third night: rates equal to your birth year! (If you were born in 1948, you’ll receive your 2nd and 3rd nights at $48!)
  • Rates for second and third night stays will be confirmed at check-in upon presentation of valid ID.
  • Valid for arrivals Thursday – Saturday

The Human Zoo

If you’re a fan of behavioral economics on the radio, check out BBC Radio 4’s new weekly program The Human Zoo. It is hosted by Michael Blastland, a journalist, and Nick Chater, professor of behavioral science at the University of Warwick. Chater is also on the advisory board of the British Government’s Behavioral Insights Team (or “Nudge Unit”), which you heard about in the Freakonomics podcast “The Tax Man Nudgeth.” Human Zoo episodes are accompanied by online experiments.


Wine at the Opera

At the opera last night we pre-ordered a glass of wine for the first intermission.  We paid before the opera and the glass was at the prearranged place after Act 1.  We’ve done this many times in Germany and increasingly in the U.S.  Why do the opera houses do this?

Competitive pressure is absent—they have a monopoly on drink/food at intermission.  Despite this absence, providing this opportunity raises the house’s profits.  Without the usual long wait at intermission, more customers will buy food/drink—so revenue increases.  This policy puts less pressure on workers—they don’t have to rush during intermission to serve people; in the long run this reduces the wage the opera house has to pay for equal-skilled labor—costs are reduced.  Everybody wins—and I’m surprised this policy isn’t more widespread.


Where Are All the $100 Bills?

Planet Money reports on the surprising destination of most U.S. $100 bills:

In fact, as of 2011, roughly two-thirds of all $100 bills were held outside the U.S., according to an estimate by Ruth Judson, an economist at the Fed.

The article explains why the high demand for U.S. currency is a good thing:

As Bruce Bartlett recently pointed out, when foreigners hold U.S. dollars, they are effectively giving the U.S. government an interest-free loan.

More broadly, foreign demand for U.S. currency (and U.S. Treasury bonds) in times of crisis is a sign that people in the rest of the world still see the U.S as the home of one of the safest, most stable economies on the planet.

(HT: The Big Picture)


Discriminating Software

The Economist takes a look at the software that big companies are using to sort through job applicants. It finds that people who use Chrome and Firefox browsers are better employees, and people with criminal records are suited to work in call centers. One drawback to having a computer sort potential employees is that its algorithms may treat some variables as proxies for race, as discussed in our “How Much Does Your Name Matter?” podcast, in which the Harvard computer scientist Latanya Sweeney found that distinctively black names are more likely to draw ads that offer arrest records. 


Adventures in Ideas: Crowd Control — an Interview With Shaun Abrahamson

I recently read an engaging book on the use of crowds and crowd-based intelligence for generating innovation. Shaun Abrahamson is one of the authors of Crowdstorm: The Future of Innovation, Ideas, and Problem Solving.

I have to admit that I am not a big believer in leveraging crowds for change—I think there is a fetish of the role that masses play in idea formation. I do believe that intelligence is distributed, but I’m an old-fashioned proponent of formal organizations.

But after reading Shaun’s book, I changed some of my stubborn views. The book is a systematic (and critical) appraisal of the role that crowds can play in diverse organizational and personal settings. I think Freakonomics readers might benefit from hearing Shaun’s insights.

Q. Aristotle said that every new idea builds on something earlier by hiding/transforming it. What’s old and what’s “new” in crowdstorming? 

A. The main newness is the identification of patterns for finding and evaluating ideas. More specifically the identification of patterns that seem to deliver good or better results than if we were to working with smaller groups of people.