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Freakonomics Blog

What Happens When You Put a Bounty on Houseflies?

Our recent podcast “The Cobra Effect” continues to draw listener/reader mail, with further examples of bounties-gone-wrong. This one, from Dan Banks in Indiana, may be my favorite:

How about a failed bounty on houseflies?

I run a group home for criminal youth.  They are generally manipulative and not too smart.  We have a “point” system where they do work to earn points that they can spend on various tangibles and intangibles.  It’s a great system as we print all the “currency” we want and exchange it for labor.

One summer we seemed to always have houseflies in the home.  A frustrated staff offered 5 points for every fly carcass that was brought in and handed out flyswatters to the kids.


When Women Don't Negotiate

The unwillingness of women to negotiate their salaries is often blamed for the persistent male-female wage gap.  A new paper (abstract; pdf) from Freakonomics favorite John List (and coauthor Andreas Leibbrandt) uses a  field experiment to explore the issue:

By using a natural field experiment that randomizes nearly 2,500 job-seekers into jobs that vary important details of the labor contract, we are able to observe both the nature of sorting and the extent of salary negotiations. We observe interesting data patterns. For example, we find that when there is no explicit statement that wages are negotiable, men are more likely to negotiate than women. However, when we explicitly mention the possibility that wages are negotiable, this difference disappears, and even tends to reverse. In terms of sorting, we find that men in contrast to women prefer job environments where the “rules of wage determination” are ambiguous. This leads to the gender gap being much more pronounced in jobs that leave negotiation of wage ambiguous.


Can Mass Transit Save the Environment? Right Wing or Left Wing, Here's a Post Everybody Can Hate

A major rationale — perhaps the major rationale — touted by supporters of mass transit is that by reducing our output of greenhouse gases and other pollutants, transit can help save the environment. The proposition seems intuitive and even obvious: by no longer encasing each traveler in thousands of pounds of difficult-to-move metal, surely transit is more energy-efficient. Plenty of analyses prove this. But then again, Aristotle, who was revered as the infallible font of truth for more than 1,000 years, proved that heavier objects fall faster than lighter ones and that women have fewer teeth than men. Might studies that demonstrate transit is greener be similarly wrong?

They might. The reason is that many studies of energy efficiency by mode often make questionable and — depending on the author’s point of view — self-serving assumptions. The main trick is to look at autos with but one passenger and compare them to transit vehicles in which every seat is full. (For example, see this.)

But in the real world, this is emphatically not the case.


Dear Marijuana and Crime Researchers: Start Your Engines

Yes, it could all go up in smoke — legal challenges, including from the Federal government, and all that — but among the interesting developments from last night’s election (do yourself a favor and look at this map) is the news that Colorado and Washington voters chose to legalize marijuana. Here’s how the issue was phrased on the Colorado ballot:

Shall there be an amendment to the Colorado constitution concerning marijuana, and, in connection therewith, providing for the regulation of marijuana; permitting a person twenty-one years of age or older to consume or possess limited amounts of marijuana; providing for the licensing of cultivation facilities, product manufacturing facilities, testing facilities, and retail stores; permitting local governments to regulate or prohibit such facilities; requiring the general assembly to enact an excise tax to be levied upon wholesale sales of marijuana; requiring that the first $40 million in revenue raised annually by such tax be credited to the public school capital construction assistance fund; and requiring the general assembly to enact legislation governing the cultivation, processing, and sale of industrial hemp?


Neighborhood, Race, and CPR

An New England Journal of Medicine article looks at the probability of a bystander performing CPR based on neighborhood characteristics including income and race:

Among 14,225 patients with cardiac arrest, bystander-initiated CPR was provided to 4068 (28.6%). As compared with patients who had a cardiac arrest in high-income white neighborhoods, those in low-income black neighborhoods were less likely to receive bystander-initiated CPR (odds ratio, 0.49; 95% confidence interval [CI], 0.41 to 0.58). The same was true of patients with cardiac arrest in neighborhoods characterized as low-income white (odds ratio, 0.65; 95% CI, 0.51 to 0.82), low-income integrated (odds ratio, 0.62; 95% CI, 0.56 to 0.70), and high-income black (odds ratio, 0.77; 95% CI, 0.68 to 0.86). The odds ratio for bystander-initiated CPR in high-income integrated neighborhoods (1.03; 95% CI, 0.64 to 1.65) was similar to that for high-income white neighborhoods.


Another Look at an Unorthodox Hurricane-Prevention Idea

Very interesting backgrounder on Stephen Salter, the British scientist who, in the course of trying to turn ocean waves into electric power, discovered a potential way to prevent, or at least limit, the impact of hurricanes:

Devastating tropical storms of the kind that battered the U.S. last week could be weakened and rendered less deadly using a simple and cheap technology based on a surprising component – old car tyres.

One of Britain’s leading marine engineers, Stephen Salter, emeritus professor of engineering design at Edinburgh university and a global pioneer of wave power research, has patented with Microsoft billionaires Bill Gates and Nathan Myhrvold the idea of using thousands of tyres lashed together to support giant plastic tubes which extend 100m deep into the ocean.

Wave action on the ocean surface would force warm surface water down into the deeper ocean. If non-return valves were used, he says, the result would be to mix the waters and cool the surface temperature of the ocean to under 26.5C, the critical temperature at which hurricanes form.

This is the same hurricane-prevention invention we discussed in a brief Freakonomics Radio segment and in greater depth in SuperFreakonomics:


Who Owns a Link? Google Vs. European Publishers

The New York Times published an interesting article last week about an ongoing dispute in Europe between Google and European newspapers (and their supporters in government). The issue is whether Google must pay for the privilege of linking to those sites, or should be able to link for free. Of course, at stake is who gains the revenue that comes from aggregating and compiling links.

As the Times notes:

Google got rich by selling a simple proposition: The links it provides to other Web sites are worth a lot of money, so much that millions of advertisers are willing to pay the company billions of dollars for them.

Now some European newspaper and magazine publishers, frustrated by their inability to make more of their own money from the Web, want to reverse the equation. Google, they say, should pay them for links, because they provide the material on which the Web giant is generating all that revenue.


Germany Agrees that Poker Is a Game of Skill

A German court has ruled that poker is a game of skill, as Levitt has argued before (and which a U.S. court has recently confirmed).  The ruling is in response to poker player Eduard Scharf‘s claims that his poker winnings shouldn’t be taxed because poker is a game of chance, and “anyone can win a game of poker.”  The court disagreed, ruling that “[H]e had to pay income tax on his winnings saying they counted as commercial income as they were linked to his personal skills.” (HT: Sven Seuken)


Candy We Still Believe In: A Halloween Experiment

Instead of trick or treat, how about treatment or control? We conducted two new studies on my porch this year for Halloween. Unfortunately, the mayor of New Haven recommended that people delay trick-or-treating post-Sandy even though the neighborhood was in good shape. This caused lots of confusion, and a turnout of half of the normal turnout of 600 or so kids. So sample size is down, standard errors up.

Alas, two nice results. Both written up in one-page one-graph papers.


When Do 60 Rats = 1 Cellphone?

Our recent podcast “The Cobra Effect” explored the unintended consequences of bounty programs. The episode was inspired by a visit to South Africa not long ago, where I was told about a rat problem in the Johannesburg township of Alexandra. For whatever reason, that story didn’t make the episode. But now the Guardian comes to the rescue, reporting on Alex’s efforts to fight off the rats by offering a cellphone for every 60 rats caught:

[C]ity officials have distributed cages and the mobile phone company 8ta has sponsored the volunteer ratcatchers.

Resident Joseph Mothapo says he has won two phones and plans to get one for each member of his family. “It’s easy,” he told South Africa’s Mail & Guardian newspaper, wielding a large cage containing rats. “You put your leftover food inside and the rats climb in, getting caught as the trap door closes.”

But there were signs that the P.R. stunt could backfire, as animals rights activists criticised the initiative on social networks.

Will this lead to rat farming or other shenanigans? The Guardian reports that owls have also been distributed to help hunt down the rats.

(HT: Joe Sternberg)


How to Maximize Your Halloween Candy Haul (Ep. 99)

A few weeks ago, we got an e-mail from a reader Vishal Dosanjh, who lives in St. Louis:

My daughter asked me this morning why the fancy neighborhoods are the best places to go trick-or-treating. It puzzled me for a moment and then realized it was an economic question. I gave her an answer about disposable income and societal expectations. Anyway I thought it might be up your alley, and I wonder if it’s even true. Do wealthy neighborhoods/people actually give out better candy? She’s 8 by the way.

We set out to answer Vishal’s question in our latest Freakonomics Radio on Marketplace podcast.


Scooby-Doo Arbitrage

A student writes that she understood arbitrage at age seven.  She brought Scooby-Doo Fruity Snacks from her grandmother’s house (no charge to my student) to her Vacation Bible School class.  She was a monopolist in the class—nobody else brought snacks; and since the demand was quite inelastic, she was able to sell her Fruity Snacks for a good price.  Regrettably, her business was shut down because, as the teacher said, she was engaging in “uncharitable exploitation of [her] peers.”  She was also invited not to return to Bible School, showing that clever economic behavior may only  pay monetarily. (HT: CAP)


Is Tuition by Major a Good Idea?

A Florida state task force on education has just released a recommendation to adjust tuition, by major.

“Tuition would be lower for students pursuing degrees most needed for Florida’s job market, including ones in science, technology, engineering and math, collectively known as the STEM fields,” writes Scott Travis of the South Florida Sun-Sentinel.  Students in other majors — psychology and the performing arts, for example — would pay more.  “The purpose would not be to exterminate programs or keep students from pursuing them. There will always be a need for them,” Dale Brill, the task force chair, told Travis. “But you better really want to do it, because you may have to pay more.”

Here‘s how Alex Taborrak (of Marginal Revolution) sees the plan:


An Alternative to Democracy?

With the U.S. presidential election nearly here, everyone seems to have politics on their mind.  Unlike most people, economists tend to have an indifference towards voting.  The way economists see it, the chances of an individual’s vote influencing an election outcome is vanishingly small, so unless it is fun to vote, it doesn’t make much sense to do so.  On top of that, there are a number of theoretical results, most famously Arrow’s Impossibility Theorem, which highlight how difficult it is to design political systems/voting mechanisms that reliably aggregate the preferences of the electorate.

Mostly, these theoretical explorations into the virtues and vices of democracy leave me yawning.

Last spring, however, my colleague Glen Weyl mentioned an idea along these lines that was so simple and elegant that I was amazed no one had ever thought of it before.  In Glen’s voting mechanism, every voter can vote as many times as he or she likes.  The catch, however, is that you have to pay each time you vote, and the amount you have to pay is a function of the square of the number of votes you cast. 


One More Thing to Worry About: Underfunded Public Pensions

If there is one thing that politicians love to do it’s to promise people things now and not worry about how we will pay for those promises until sometime far into the future, when some other politician is on the hook to balance the budget. 

We see this all the time in the form of budget deficits in the federal government, and also with the accounting tricks used on the Social Security Trust Fund.

These sorts of shenanigans get less press at the state and local level because many state and local governments are required to have balanced budgets (this paper by my thesis adviser Jim Poterba lays out some of the details).  There are, of course, ways for states to get around the balanced-budget provisions.  The method that currently casts the greatest shadow over the future is underfunded pensions.  State governments promise generous retirement packages to state employees, but use accounting tricks to avoid recognizing the full value of what taxpayers will owe in the future to cover those debts.


The Oklahoma City Thunder Stumble While Following the Oklahoma City Thunder Plan

Much has been made of the plan the Oklahoma City Thunder followed in building a title contender.  Here are the basic steps the Thunder supposedly followed:

1.Lose a bunch of games across a few seasons, which allows a team to accumulate lottery picks
2. Draft “stars” with lottery picks
3. Sign “stars” to long-term contracts
4. Win a title (or more)

The Thunder did well with step one.  Starting with their last two seasons in Seattle in 2006-07, this franchise had three seasons where it won 31 games, 20 games, and 23 games. 

These performances primarily led to the following four high picks in the draft:


Election Addiction

From mid-July to mid-October, I became addicted—to the Presidential election. By October 20, I was looking at the FiveThirtyEight blog at least four times a day, and was constantly checking Google News and other websites.  This was a classic addiction—after three or four searches each time, I stopped because my marginal utility was diminishing.  But after another hour without my “fix,” I had to search again and got tremendous pleasure from that first search.  The addiction was interfering with my work.

The theory of rational addiction suggested a solution—go cold turkey.  So I vowed not to look at the FiveThirtyEight blog—and I’ve now been “clean” for 6 days.  To mitigate my withdrawal symptoms, watching the NLCS and the World Series has served as my methadone. Watching baseball for me has the virtue that it’s self-contained—I’ve not developed any addiction and only watch the games.  And if I can stay clean through Nov. 6, my problem will be solved!


You Really Are What You Eat

In a new working paper (PDF; abstract), economists David G. Blanchflower, Andrew J. Oswald, and Sarah Stewart-Brown argue that you actually are what you eat:

Humans run on a fuel called food.  Yet economists and other social scientists rarely study what people eat.  We provide simple evidence consistent with the existence of a link between the consumption of fruit and vegetables and high well-being.  In cross-sectional data, happiness and mental health rise in an approximately dose-response way with the number of daily portions of fruit and vegetables. The pattern is remarkably robust to adjustment for a large number of other demographic, social and economic variables.  Well-being peaks at approximately 7 portions per day.  We document this relationship in three data sets, covering approximately 80,000 randomly selected British individuals, and for seven measures of well-being (life satisfaction, WEMWBS mental well-being, GHQ mental disorders, self-reported health, happiness, nervousness, and feeling low).

One major note: the researchers caution that reverse causality may be an issue. That is, rather than fruit and vegetables causing well-being, it may be that well-adjusted people prefer eating a lot of fruit and vegetables. The authors recommend additional “randomized trials to explore the consequences for mental health of different levels of fruit-and-vegetable consumption.”


The All-Star Game Incentive?

The Tigers (bravo!) and Giants are in the World Series, with possibly 4 of 7 games to be played in San Francisco. The majority of games will be played there because the extra game (if necessary) goes to the team representing the league that won the All-Star Game. The purpose of the rule (adopted in 2003) is to offer players and managers an incentive to provide more effort in the All-Star Game. I’m doubtful that this incentive matters much. First, with large teams each player is to some extent a free-rider — why risk injury, why strain yourself, if your efforts have little effect? That is especially true if by July you realize that your team has no chance of making it into the Series. Second, and even more important, I doubt that any player or manager’s effort is very responsive to this kind of incentive.


Please Submit Your Nominations for a Freakonomics Hall of Fame (and Hall of Shame, Too)

We are working on a Hall of Fame project that will pay tribute to people who have used a “freakonomical” way of thinking to better the world in some way large or small. Since a lot of people have a lot of interpretations of what it means to “think like a Freak,” we will leave the criteria up to you. It may have something to do with a creative use of data, or understanding incentives, or challenging the conventional wisdom.

The person you nominate for this Hall of Fame might be prominent or totally obscure. You may know them personally or perhaps you’ve only read about them. They might work in academia, sports, medicine, philanthropy, entertainment, development — or even politics!

We have tried to feature such people on the blog over the years but now we need your help in coming up with the best pool possible. Please send this request to everyone you know!


The End of Men Author Hanna Rosin Answers Your Questions

We recently solicited your questions for Hanna Rosin, author of the new book The End of Men (and the Rise of Women). Here now are her replies, which include an explanation of the book’s title and possible solutions to the wage gap. Thanks to everyone for playing along, and especially to Rosin for fielding so many of your good questions. 

Q. What do you think about the feminization of higher education; that is, more female faculty and administrators resulting in more policy creation by women or influenced by them? –Gary

A. This has been the conservative explanation for why boys are having trouble in schools. It was advanced, for example, by Christina Hoff Sommers in her 2000 Atlantic story “The War Against Boys.” I think it’s a valid but somewhat limited explanation. For one thing, it’s not new. Psychologist G. Stanley Hall began promoting this theory in 1908 in his influential essay “Feminization in School and Home.” The problem with it is it implies a kind of coordinated conspiracy by women to influence young minds. The truth is that women have taken over teaching because, as has happened often in our economy, once women start to enter a profession the men tend to flee. That’s really the men’s problem, as I see it, not the women’s. It would be fabulous and solve a lot of problems if more men would become teachers. It also has to do with the fact that teaching is one of the rare profession in the U.S. that allows for enough flexibility for a parent to be able to spend a reasonable amount of time with his or her family, both on a weekly basis and on summer vacations.  That’s the fault of the American workforce, which is so resistant to flexible working and a reasonable amount of vacation time. 


Wine: Very Liquid

Wine Spectator includes a feature (subscription required) on Nicolás Catena, who received the magazine’s Distinguished Service Award for 2012.  His online bio states, “One year, Domingo [Nicolás’ father] realized that it would cost him more to harvest than to leave the fruit on the vines. He asked his twenty-two-year-old son Nicolás, a recent Ph.D. graduate in economics, what to do about such a dilemma. Nicolás advised him not to harvest.”  You don’t need a Ph.D. to see the sense of Nicolás’ advice — if price is too low to cover average variable cost, shut down.  Sadly, “Domingo could not follow his son’s advice with a clear conscience and picked anyway.”  No doubt the family vineyard lost even more money than if Domingo had listened to his son.


What's Wrong With Punishing Bad Predictions?

In the heat of a Presidential campaign, it can be hard to pay attention to other news. But a small-seeming story out of Italy yesterday has, to my mind, the potential to shape the future as much as a Presidential election.

As reported by ABC, the BBC, the Wall Street Journal, the New York Times, and elsewhere, an Italian court has convicted seven earthquake experts of failing to appropriately sound the alarm bell for an earthquake that wound up killing more than 300 people in L’Aquila in 2009. The experts received long prison sentences and fines of more than $10 million.(Addenum: Roger Pielke Jr. discusses the “mischaracterizations” of the verdict.)

There is of course the chance that the verdict will be thrown out upon appeal, discredited as an emotional response to a horrible tragedy. 


Time Between Tests

A new working paper (abstract; PDF) by Ian Fillmore and Devin G. Pope examines whether “cognitive fatigue” has any impact on exam results. The researchers looked at the number of days students had between AP exams, and found that resting time matters:

In many education and work environments, economic agents must perform several mental tasks in a short period of time. As with physical fatigue, it is likely that cognitive fatigue can occur and affect performance if a series of mental tasks are scheduled close together. In this paper, we identify the impact of time between cognitive tasks on performance in a particular context: the taking of Advanced Placement (AP) exams by high-school students. We exploit the fact that AP exam dates change from year to year, so that students who take two subject exams in one year may have a different number of days between the exams than students who take the same two exams in a different year. We find strong evidence that a shorter amount of time between exams is associated with lower scores, particularly on the second exam. Our estimates suggest that students who take exams with 10 days of separation are 8% more likely to pass both exams than students who take the same two exams with only 1 day of separation.


Good Intentions and Recycling Fraud

A recent Freakonomics radio podcast focused on the unintended consequences of bounties. Here’s another great example: California’s recycling redemption program no doubt seemed like a great idea when it was initiated, but an L.A. Times article suggests the system is being gamed. Last year, it appears that nearly 100 percent of recyclable cans sold in California were returned, and 104 percent (!) of plastic containers:

Crafty entrepreneurs are driving semi-trailers full of cans from Nevada or Arizona, which don’t have deposit laws, across the border and transforming their cargo into truckfuls of nickels. In addition, recyclers inside the state are claiming redemptions for the same containers several times over, or for containers that never existed.


What Will the Smartphone Kill?

Today’s smartphone, it is often said, has more computing power than an Apollo rocket.

So it should not be surprising that is it disrupting daily life left and right. Every day or two I seem to notice another common item whose usage is plummeting, perhaps bound for oblivion.

I will likely never buy an alarm clock again since my phone can handle the job better. Are clocks and wristwatches on the way out? Has anyone bought a road atlas lately — or even a dedicated GPS system for your car?


The Cobra Effect, Continued

Quite a few readers and listeners have written in with their own versions of “the cobra effect,” as described in our recent podcast of the same name. Here’s one particularly entertaining one, from Eblyn Miguel Angel:

I would like to bring a comment that came to mind when I heard your podcast on the “Cobra Effect,” in particular when Levitt mentions that for any scheme presented a government must come to the realization that there will be schemers who will break the system or get around it.

I bring this up because my family is Dominican and growing up my father told me a folk tale of something very similar to this involving electric meters in his home country.


Penicillin as an Aphrodisiac?

An interesting new paper (abstract; PDF) by the Emory economist Andrew M. Francis explores penicillin’s role in shaping modern sexuality:

It was not until 1943, amid world war, that penicillin was found to be an effective treatment for syphilis. This study investigated the hypothesis that a decrease in the cost of syphilis due to penicillin spurred an increase in risky non-traditional sex. Using nationally comprehensive vital statistics, this study found evidence that the era of modern sexuality originated in the mid to late 1950s. Measures of risky non-traditional sexual behavior began to rise during this period. These trends appeared to coincide with the collapse of the syphilis epidemic. Syphilis incidence reached an all-time low in 1957 and syphilis deaths fell rapidly during the 1940s and early 1950s. Regression analysis demonstrated that most measures of sexual behavior significantly increased immediately following the collapse of syphilis and most measures were significantly associated with the syphilis death rate. Together, the findings supported the notion that the discovery of penicillin decreased the cost of syphilis and thereby played an important role in shaping modern sexuality.

(HT: Marginal Revolution)