May Day has already brought some rioting to San Francisco, and as Dashiell Bennett‘s Atlantic Wire piece points out, New York is bracing for the same:
Tensions are likely to be pretty high, especially in New York City, [where] some leading organizers were reportedly visited at home by New York police and FBI agents yesterday who interviewed them about their plans. (The high temperatures and 80% chance of rain won’t help either.)
Via the Globe & Mail: it used to be that when you wanted to cut class, you’d have to get a friend to sign you into class, or you’d have to beat your parents home to delete any incriminating messages on the answering machine. But those methods are bush league compared to a recent California initiative. United Press International reports that 50 high school students were caught colluding with a school administrator in an attendance scam:
In the last minutes before we depart to the airport, our clothesdryer breaks down, potentially leaving our housesitter high but not dry. Murphy’s Law states: “Anything that can go wrong will go wrong.” This well-known aphorism ignores the crucial fact that things go wrong at different times, and that the opportunity cost of our time varies. I don’t mind if things break down when I have time to worry about and solve the problem. But that doesn’t happen.
Maybe my computer thinks I am in China (but I am not; I am in New York).
Maybe a Chinese hacker is just having a laugh (it has happened before).
Maybe the Chinese have bought all of our stock markets (although I seriously doubt it).
Or maybe, for whatever reason, Yahoo! Finance is simply some coding issues. Because when I checked the markets this morning, they seemed to have been renamed:
New research finds that it’s alarmingly easy to create false memories for people, even when they know an event didn’t happen. Psychologists Andrew Clark, Robert A. Nash, Gabrielle Fincham, and Giuliana Mazzoni conducted a three-stage experiment:
In Session 1 participants imitated simple actions, and in Session 2 they saw doctored video-recordings containing clips that falsely suggested they had performed additional (fake) actions. As in earlier studies, this procedure created powerful false memories. In Session 3, participants were debriefed and told that specific actions in the video were not truly performed. Beliefs and memories for all critical actions were tested before and after the debriefing.
Felix Salmon recently proposed an interesting new profit source for newspapers like The New York Times. Citing the Times‘s recent expose on Walmart and the resulting drop in the company’s share price, Salmon wonders why the company doesn’t charge companies for early access to big stories:
[S]houldn’t the NYT, which can always use a bit of extra revenue, take advantage of the fact that its stories can move markets so much? Not directly: I’m not suggesting that the New York Times Company should start buying out-of-the-money put options on Mexican corporates in advance of its own stories. But how much would hedge funds pay to be able to see the NYT’s big investigative stories during the trading day prior to the appearance of the story? It’s entirely normal, and perfectly ethical, for news organizations, including Reuters, to give faster access to the best-paying customers.
A new study claims that traffic pollution “is more than twice as deadly as traffic accidents.” Scientists Steve Yim and Steven Barrett “estimate that combustion exhausts across the U.K. cause nearly 5,000 premature deaths each year,” writes Roland Pease. “The pair also estimate that exhaust gases from aeroplanes cause a further 2,000 deaths annually.” The study also points out that pollution travels:
Of the 19,000 annual U.K. deaths estimated, 7,000 are due to pollutants blown in from the continent. In London, European pollutants add 960 deaths each year to the 2,200 caused by U.K. combustion fumes.
But the international trade in deaths goes both ways. More than 3,000 European deaths can be attributed to U.K. emissions the authors say.
Yim and Barrett estimate that premature deaths are costing the U.K. billions of dollars a year, and suggest reducing black carbon and nitrogen oxide emissions and investing in public transportation.
(HT: Naked Capitalism)
1. Interview with Abhijit Banerjee, author of Poor Economics.
2. Infographic: record number of concussions in the U.S. Army last year.
3. What’s going on between Stanford and Silicon Valley?
4. New study shows no relationships between produce availability and obesity.
5. The world’s top spammer? India.
6. How many wives should a CEO have? Two is good, but three is too many.
Several years ago, Felix Oberholzer-Gee, Joel Waldfogel and Matthew W. White, published a fascinating empirical article about the prisoner’s dilemma game embedded in the short-lived U.S. game show “Friend or Foe.” Their core findings:
Using data from two seasons of a television game show, we provide evidence about how individuals implement conditionally cooperative preferences. We show that (1) contestants forgo large sums of money to be cooperative, (2) players cooperate at heightened levels when their opponents are predictably cooperative, and (3) players whose observable characteristics predict less cooperation fare worse (monetarily) over time, as opponents avoid cooperating with them.
I always thought it might be nice to update the study to test to see whether different kinds of “cheap talk” were more or less effective in establishing cooperation.
Anglicare, a Tasmanian welfare agency, has submitted a proposal to the Australian government’s inquiry into problem gambling that would require pokies (the Aussie version of a slot machine) players to stand up while playing. “We don’t want to punish people, but there are things we can do to assist problem gamblers to get a break in play,” said Chris Jones, the CEO of Anglicare. “If they want a break, they can sit elsewhere, but they don’t need to take a seat in front of a machine.”
About a year ago, I blogged about how odd the pattern of chicken wing prices was at my local Harold’s Chicken Shack. Here was what they were charging for their wings:
2-wing meal $3.03
3-wing meal $4.50
4-wing meal $5.40
5-wing meal $5.95
6-wing meal $7.00
It is quite odd because they gave you a big discount on the fourth and fifth wings, but charged you a lot for the sixth wing. There were many incongruities throughout the menu.
Since that time, Harold’s has invested in a fancy new menu up on the wall above the bulletproof glass that protects the workers from the customers. I’ve also invested in a fancy new phone that actually takes pictures, unlike the phone I carried a year ago. So this time, instead of having to write down all the prices, I just snapped a photo.
In a new article for Vox, Karla Hoff, a senior research economist at the World Bank, presents an argument for affirmative action. Hoff argues that stereotypes can be self-fulfilling, and affirmative action represents an important tool for changing stereotypes and correcting inequality in the long-term:
For economists to ignore the factors that affect how we process information as part of the interpretation of economic change would be as wrong as to ignore the evolution of technology itself. Ideology shapes what we see and how well we perform. Ideology can give rise to “equilibrium fictions.” In our framework, changes in power, technology, and contacts with the outside world matter not just directly but because they can lead to changes in ideology.
Hoff highlights a natural experiment in India that changed perceptions of female leadership over the course of ten years:
If you’ve heard our podcast “The Upside of Quitting,” you’ll know that we think that strategic quitting has its place. A new paper looks at the peer effects of quitting. From the introduction:
Quitting is an important issue but its determinants have not received extensive research. Quitting lets an individual benefit from alternative opportunities but it usually also has costs, either monetary or moral, or both. There are also many reasons to believe that quitting is affected by social interactions and by observing others’ quitting decisions. This is particularly the case when thinking about quitting addictive behavior.
The researchers paid 104 undergrads to work for up to 75 minutes: a compulsory 15 minute followed by 60 minutes in which the participant could stop working at any time. Researchers Julie Rosaz, Robert Slonim, and Marie Claire Villeval found that if workers are not alone and allowed to interact with each other, they are more prone to quit at the same time:
Time magazine has a poignant story (which is gated) and video (which is available) on Dr. Peter Goodwin, one of the advocates who helped get assisted suicide laws in place in Oregon and Washington.
Goodwin himself, at the time of the interview, suffered from a degenerative disease that was in the process of killing him and had to decide whether he wanted to take his own life.
The interview is the last one he gave before his death.
We are installing over 30 solar panels on our roof. The City of Austin currently offers a rebate up to $15,000 of 60 percent of the cost, and the federal government gives a 30 percent credit on the remainder. With those subsidies the rate of return on our own investment is 17 percent, making this is a superb deal for us.
A neighbor in the Netherlands has 4 solar panels on his roof, a strangely small number. I asked why. His answer: The Dutch government pays up to €1500 if you install a solar installation. Each solar panel costs him €450, with a fixed cost of about €200 for the installation. Thus his average rate of return on his 4 panels is about 25 percent, a great investment.
Blog reader Becky Roser sent an interesting email recently:
My father pointed out something interesting the other day – almost no one runs out of gas anymore. When gas was $0.60 a gallon, he maintains it happened all the time. Now that it’s $4.00, you almost never see it. I have vague memories of my father running out of gas when I was very young, but I’ve never done it. What changed?
Inflation is a term most often employed to describe prices. A too-high inflation rate results in a devalued currency. But what about the inflation of other things in our world? The Economist reports on this trend:
Price inflation remains relatively subdued in the rich world, even though central banks are busily printing money. But other types of inflation are rampant. This “panflation” needs to be recognised for the plague it has become.
Take the grossly underreported problem of “size inflation”, where clothes of any particular labelled size have steadily expanded over time. Estimates by The Economist suggest that the average British size 14 pair of women’s trousers is now more than four inches wider at the waist than it was in the 1970s. In other words, today’s size 14 is really what used to be labelled a size 18; a size 10 is really a size 14.
Writing in Foreign Policy, James Manyika, Jaana Remes, and Javier Orellana of the McKinsey Global Institute argue that cities in general and particularly smaller cities will power the new U.S. economy:
It is America’s large cities, and particularly the broad swath of middleweights, that will be the key to the U.S. recovery and a key contributor to global growth in the next 15 years. Large cities in the United States will contribute more to global growth than the large cities of all other developed countries combined. We expect the collective GDP of these large U.S. cities to rise by almost $5.7 trillion — generating more than 10 percent of global GDP growth — by 2025.
Last week, we solicited your questions for economist Daron Acemoglu and political scientist Jim Robinson, who just published a new book called Why Nations Fail: The Origins of Power, Prosperity, and Poverty
Their thoughtful responses below cover everything from robber barons to the artificial construction of African nations to whether the race of a country’s leaders determines its success. A big thanks to Daron, Jim, and all our readers for another great Q&A.
First, a note from Daron and Jim: “We thank everybody for these excellent questions and comments. We had to pick a few to be able to provide detailed answers.
I have been lucky enough to visit the secret lair at the NFL’s headquarters where each year a crew of industrious people try to come up with an NFL schedule that pleases every team, player, TV network, fan, mayor, police department, religious official, and sports pundit in America.
This is of course impossible.
But they do try their best, and in today’s Times there’s a nice article by Judy Battista about how this year’s schedule was made by the NFL’s Howard Katz and his team.
After you look over the 2012-13 schedule, you might also want to take a look at the latest Football Freakonomics video we’ve done for the NFL Network. It considers the “body clock” factor on teams’ schedules:
We’re working on a new Freakonomics Radio piece about what might best be called “retail etiquette.” It was inspired in part by this blog post, about how the quantity and quality of employees affects a company’s bottom line; and by this e-mail from a listener named Dawn Nordquist:
I’ve noticed that, at the beginning of the podcasts, a short banter between the two of you is included regarding thanking the listening audience. Thanking the listening audience aside, what are your thoughts/observations on thanking in commercial transactions? I have recently been struck by how often I am not thanked when purchasing something.
Chris Turner explores Cuba’s current economic situation through the lens of a Canadian tourist:
Canada is probably the second most important economic ally Cuba has after Venezuela, which supplies more than 60 percent of the island’s oil. (China exports more stuff to Cuba, but the Chinese don’t show up daily by the multiple charter-flight-loads to hand out gifts and pour hundreds of millions of dollars into the Cuban economy.) Cuba is our largest trading partner in the whole of Central America and the Caribbean. We export a range of commodities to Cuba — sulphur, wheat, copper wire — and we are the second-largest buyer of Cuban exports, particularly sugar, nickel, fish, citrus fruits, and tobacco. That’s over $1 billion in total trade.
I watched a Law and Order SVU re-run last night, remarkably one that I hadn’t seen before. In the episode, an infant dies of measles contracted from another child whose parents refuse to vaccinate her. (Infants are not vaccinated against measles.) This is a classic case of whether concerns about potential negative externalities outweigh the desire to keep the government from dictating private behavior (vaccination). We already permit both approaches: we mandate vaccines for children to enter public school, and allow parents (as in this TV show) the choice of not vaccinating pre-schoolers.
Brian Palmer of Slate reports that cocaine prices have dropped significantly in the past three decades due to economies of scale. As drug traffickers have become more organized (in processing, transport, and retail networks), the price of cocaine has plunged:
Since [the end of the 1980s], the price has dropped more slowly, down to approximately $140 for a gram of pure cocaine in 2007. (That’s almost 80 percent less than it cost in 1982.)
Chances are, you’re going to spend tonight finalizing your taxes, making sure that you ferret every last deduction. And probably pretty pleased to be getting these deductions; but when you dig in a bit deeper, you may not be so sure — at least that’s what Betsey Stevenson and I argue in our latest column.
In fact, tax breaks are no different from either government handouts, or federal mandates, whether evaluated in terms of your finances, the government’s finances, or incentives:
Instead of looking at all the breaks for mortgage interest, health care, retirement savings and so on as deductions, picture the government writing you a check for each item. This equivalence between tax deductions and government spending leads economists to call them “tax expenditures.” Reformers have hit on an even more pointed description: spending through the tax code.
Jennifer Colosi runs a San Francisco executive search firm with a concentration in finance. Here’s what she wrote in to say about our analysis of the persistent female-male wage gap:
Agreed with all you wrote about wage gaps between women and men.
Why yes, women do love kids!
You are exactly right – a higher wage isn’t as important to some woman – because it comes at a “household” cost.
Here’s a new study to keep in mind if you go to see the 3D rerelease of James Cameron’s Titanic. Economist Mikael Elinder and Oscar Erixson analyzed data from 18 maritime disasters from 1852 to 2011, and found that the old wisdom of “women and children first” isn’t quite what happens. From the abstract:
Our results provide a new picture of maritime disasters. Women have a distinct survival disadvantage compared to men. Captains and crew survive at a significantly higher rate than passengers. We also find that the captain has the power to enforce normative behavior, that the gender gap in survival rates has declined, that women have a larger disadvantage in British shipwrecks, and that there seems to be no association between duration of a disaster and the impact of social norms. Taken together, our findings show that behavior in life-and-death situation is best captured by the expression ‘Every man for himself.’
Since putting email back in its corral, I’ve turned some recovered time to reading actual books in print — the latest being Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers
Retirement Heist is, as one blurb describes, a “meticulously researched and gripping as a crime thriller.” Each chapter explains, with detailed research data and outrage-generating examples, yet another method corporations use to steal retirement benefits and mask the theft behind accounting shenanigans. It is one of the few books (since Cadillac Desert
New research indicates that people may be more likely to lie when a charity benefits from their dishonesty. A group of researchers led by Alan Lewis at University of Bath investigated this in their paper “Drawing the line somewhere: An experimental study of moral compromise” (ungated here). From the paper’s abstract:
In a study by Shalvi, Dana, Handgraaf, and De Dreu (2011) it was convincingly demonstrated that psychologically, the distinction between right and wrong is not discrete, rather it is a continuous distribution of relative ‘rightness’ and ‘wrongness’. Using the ‘die-under-the-cup’ paradigm participants over-reported high numbers on the roll of a die when there were financial incentives to do so and no chance of detection for lying. Participants generally did not maximise income, instead making moral compromises.
A disheartening new study by Catherine Riegle-Crumb and Melissa Humphries finds that teachers discount the math skills of white females, even when girls’ grades and test scores indicate a comparable level of skill. Here’s the abstract:
This study explores whether gender stereotypes about math ability shape high school teachers’ assessments of the students with whom they interact daily, resulting in the presence of conditional bias. It builds on theories of intersectionality by exploring teachers’ perceptions of students in different gender and racial/ethnic subgroups and advances the literature on the salience of gender across contexts by considering variation across levels of math course-taking in the academic hierarchy. Analyses of nationally representative data from the Education Longitudinal Study of 2002 (ELS) reveal that disparities in teachers’ perceptions of ability that favored white males over minority students of both genders are explained away by student achievement in the form of test scores and grades.