Even after a decent jobs report earlier this month, unemployment is still over 9%. The underemployment rate? That’s 16%, and includes part-time workers who’d rather be full-time, plus people who’ve simply stopped looking for a job. So what are we doing with all that extra free time?
A new study by economists from Princeton and the University of Chicago breaks it down. The bulk of foregone market work time during the recent recession, they say, is spent on leisure.
Here’s the abstract:
A new study by German researchers apparently shows that “sniffer dogs” can reliably smell lung cancer on the breath of patients. The finding could significantly improve early detection methods of the disease, which is the deadliest form of cancer worldwide. The research was published in European Respiratory Journal. Here’s the abstract:
Patient prognosis in lung cancer (LC) largely depends on early diagnosis. Exhaled breath of patients may represent the ideal specimen for future LC screening. However, the clinical applicability of current diagnostic sensor technologies based on signal pattern analysis remains incalculable due to their inability to identify a clear target. To test the robustness of the presence of a so far unknown volatile organic compound in the breath of patients with LC, sniffer dogs were applied.
Exhalation samples of 220 volunteers (healthy individuals, confirmed LC, or COPD) were presented to sniffer dogs following a rigid scientific protocol. Patient history, drug administration and clinicopathological data were analysed to identify potential bias or confounders.
LC was identified with an overall sensitivity of 71% and a specificity of 93%. LC detection was independent from COPD and the presence of tobacco smoke and food odors. Logistic regression identified two drugs as potential confounders.
Recent news delivered two different verdicts on two different climate policy experiments, both of which carry lessons for California and its delayed carbon reduction plan. The first, a revenue-neutral carbon tax in British Columbia is “a winner.” So says The Economist. But the second, the Massachusetts front of President Obama’s green jobs initiative, is a failure. What else to conclude from this week’s bankruptcy filing by Evergreen Solar, a recipient of millions in federal stimulus dollars and state subsidies?
There are lessons in both stories for lawmakers in the U.S., especially our environmental policy frontiersmen in California, who in 2013 will impose the only carbon policy outside Europe to rival that of our northern neighbor in its seriousness and aggressiveness.
This week, the fastest human-like robot, why the government just bought $40 million of chicken, an iPhone app to keep you from hitting the snooze bar, the environmental upside of cloud computing, and a scientific explanation of the phenomenon known as Beer Goggles.
Let’s face it: things aren’t great right now. The economy is on its back. Our political system is a mess. The South is stuck in a record-breaking drought. And Tiger Woods has apparently forgotten how to play golf. Clearly, the apocalypse is upon us.
Where to turn in such dark times? How about Barter Village. Located in a tiny castle (yes, castle) in northeast Arkansas, Barter Village is an “experimental educational project” where people who’ve been particularly hurt by the down economy can go to learn survival skills such as organic farming, sewing and, yes, bowhunting. Villagers hunt, fish and learn to dress their own game.
After providing for their own needs, Barter Village residents take their excess produce, meats, and handmade goods to the nearby castle market. Items sold there generate a meager income to help cover the costs of their stay at Barter Village. Any excess is divided evenly among the villagers to help fund their own survival community.
I’m back to inviting readers to submit quotations whose origins they want me to try to trace, using my book, The Yale Book of Quotations, and my more recent researches. Enter your name asked:
“I’d like to know the origin of the statement, ‘You are entitled to your own opinions, but not to your own facts.’ I’ve seen a version of it attributed to Daniel Patrick Moynihan, but it would be fun to know if he’s the origin, or if he quoted someone else.”
This week we solicited your questions for Dan Hamermesh, a regular Freakonomics contributor, and author of the new book Beauty Pays: Why Attractive People Are More Successful.
A lot of you chimed in with thoughtful questions about the relationship between success and beauty. Hamermesh has obliged by answering a great many of them, which you’ll find below. As always, thanks to everyone for participating.
For our latest podcast, “The Economist’s Guide to Parenting,” (you can download/subscribe at iTunes, get the RSS feed, listen live via the media player, or read a transcript here) we turned to some of our favorite economists for advice on how to raise children. It’s safe to say you won’t find much of what you hear in any “expert’s” guide to parenting (which was of course the point) but it was a thought-provoking exercise in applying economic principles to one of life’s most perplexing and stimulating activities. As a supplement to the podcast, we thought it would be fun to convene a Freakonomics Quorum and ask some of our contributors, not for their best moment as a parent, but for their worst. The specific question we asked was:
What is the worst mistake you ever made as a parent?
Good sports that they are, they obliged with some lighthearted anecdotes of how sometimes the best intentions of rational, unemotional economists often run face-first into something called kids.
So this morning, Abercrombie and Fitch reported solid earnings for the second quarter. Its revenue was up 23% off strong international sales, and its net income rose 64% to $0.35 a share, beating Wall Street estimates of $0.29. So how come its stock price closed down nearly 9% today?
If you believe the knee-jerk mythology of the Internet, the answer’s simple: The Situation. Here’s the story: On Tuesday, the market closed with Abercrombie stock above $70 a share. That night, the Ohio-based company released a statement (strangely dated Aug. 12) titled “A Win-Win Situation,” in which it announced that it had “offered compensation” to Michael “The Situation” Sorentino to “cease” wearing its clothes. Here’s the entire statement:
We are deeply concerned that Mr. Sorrentino’s association with our brand could cause significant damage to our image. We understand that the show is for entertainment purposes, but believe this association is contrary to the aspirational nature of our brand, and may be distressing to many of our fans. We have therefore offered a substantial payment to Michael ‘The Situation’ Sorrentino and the producers of MTV’s The Jersey Shore to have the character wear an alternate brand. We have also extended this offer to other members of the cast, and are urgently waiting a response.”
Generally speaking, narcissists tend to do well in life. Which is strange, since we usually look down on traits such as arrogance and inflated self-image. And yet, for all the reasons we hate them, society usually rewards narcissists in one crucial category: leadership. For some reason, even though we claim to see through all the trappings of self-love and big egos, we tend to think that narcissists make good leaders, and in group settings, consistently lift them to positions of power. Apparently, we’ve been duped. While narcissists may look like good leaders, according to a new study by a group of psychology researchers from the University of Amsterdam, they’re actually really bad at leading.
The study is due to be published in the October issue of the journal Psychological Science. Here’s the abstract:
Along with its current sovereign debt issues, Europe has been facing a declining birthrate for the last couple decades- something that becomes a particular problem when welfare systems don’t have enough young contributors to support the old. But according to a recent RAND research brief, European fertility rates appear to be bouncing back.
Many European governments have been concerned about falling fertility rates, due to the welfare implications of an aging population supported by a shrinking workforce. However, ‘doomsday’ scenarios of fertility spiraling downwards and European populations imploding have not materialized; indeed, recent snapshots of indicators for childbearing suggest some recovery in fertility.
European women are still waiting longer to have children, but they’re having them at the same rate that they did a generation ago. The initial period in the 1970s and 1980s when women waited to have children left a data set that might be more of a hiccup than a permanent population change.
Is there any question that if Governor Rick Perry of Texas were a Democrat that all the left-leaning editorialists, economists, bloggers, etc., would be bending over backward to praise the Texas employment picture rather than bending over backward to belittle it?
In his discussion of the Siege of Paris 1870-71, David McCullough in The Greater Journey discusses the path of meat prices. One observer “considered cats ‘downright good eating,’ as apparently did many people. The price of a cat on the market was four times that of a dog.” Whether the price difference was really based on demand—differences in tastes for the two kinds of meat—or supply—is not mentioned in the book, but perhaps Parisians protected Fido less well than they protected Fluffy.
This illustrates a ubiquitous problem in discussing price differences: It’s easy to adduce a cause on one side of the market, but just as easy to bring up another cause on the other side of the market. I would bet on demand in this case, though, since it’s easier to protect Fido than a loose-running cat.
A new study by addiction and neuroscience researchers sheds new light on understanding how cocaine addicts make decisions, and how they value the drug against the immediate and delayed reward of other items, such as cash. The upshot is that addicts discount cocaine at a steeper rate than they do money, consistently choosing to have money now, rather than twice the value of cocaine later. Here’s how the experiment worked:
Forty-seven cocaine addicts (who were all seeking treatment) were asked to guess the number of grams of cocaine worth $1,000. They were each then given a series of choices: cocaine now versus more cocaine later; money now versus more money later; cocaine now versus money later; or money now versus cocaine later. The initial amount offered for the immediate choice has half of the full value, and the delayed amount was always the full value. Preference was almost exclusively given to the money now option, according to the study’s lead researcher, Warren K. Bickel, a psychology professor at Virginia Tech, and director of the Advanced Recovery Research Center there.
For years, we’ve been hearing from fictional alpha males like Ari Gold and Gordon Gekko that nice guys finish last. Now, according to a collection of studies soon to be released in the Journal of Personality and Social Psychology, there appears to be some truth to the axiom. While nice guys don’t necessarily finish last, they rarely finish first. Researchers Beth A. Livingstonof Cornell, Timothy A. Judgeof Notre Dame, and Charlice Hurstof the University of Western Ontario, show how “agreeableness” negatively affects monetary earnings. Moreover, their research shows that this “agreeable gap” is more pronounced in men than women, who still trail their male counterparts. Here’s a full version of the study. And here’s the abstract:
This week, we’re soliciting your questions for Dan Hamermesh about his new book, Beauty Pays: Why Attractive People Are More Successful. To stir up some ideas and discussion, here are a couple tables from the book illustrating how perceived beauty breaks down along gender, and also the income premium attractive people enjoy over their average-looking counterparts.
An upcoming article in the Journal of Consumer Research examines class, status, and power in a rather quirky environment: the metropolitan hair salons of Turkey. According to a new paper by Tuba Üstüner and Craig Thompson, getting a haircut might as well mean playing a master chess game – with more style, and a lot more status and class tension. Here’s the abstract:
Soon, new warning labels on cigarette packs will have even scarier messages, and photos too. Canada has been doing this for years. Will it reduce smoking?
Here are three quick thoughts.
1) I strongly doubt it will increase the quantity of information about smoking. Folks know it is bad for you already.
2) This does not mean it won’t work. Maybe people try to forget the health risks in that moment of passion (folks know birth control helps prevent pregnancy, but similarly, when faced with impending temptations, magically forget such trivial details). Will these photos remind them at that moment of temptation? Maybe. Or maybe it will increase how often their kids or friends give them grief for it, thus creating some social pressure to stop. Naturally there is a counter-argument, that this may enhance teenage smoking, if “being bad” makes it cooler.
It got surprisingly little press coverage given the degree to which it will affect our lives (thanks, pesky world economic meltdown), but in case you missed it, the Obama administration recently worked out a compromise with the major automakers that will dramatically raise the corporate average fuel economy (CAFE) standards.
The new regulations mandate that the mix of new cars sold in the year 2025 must achieve about 54.5 miles per gallon (though if you read the fine print you’ll see that credits for various other green innovations mean that actual fuel economy will be more like 40 MPG.) For reference, the auto fleet currently on the road gets about 27 MPG. It’s a well-done agreement that will help avoid well-done citizens as global warming accelerates.
Before proceeding, let me note that I am strongly in favor of this policy. The problem of excessive fossil fuel use in transportation is multidimensional: if the issue of global warming doesn’t move you, the thought of Hugo Chavez and Mahmoud Ahmadinejad using our own hard-earned dollars to tweak our geopolitical noses should.
However, it is worth noting that raising CAFE standards is what political scientists and economists call a “second-best” solution; we could be doing considerably better if we thought all of this through more clearly.
Last week, the World Bank blog Development Impact wrote about the influence of economics blogs on downloads of research papers. It included Freakonomics.com, as well as 5 other blogs — Aid Watch, Chris Blattman, NYT’s Economix, Marginal Revolution, and Paul Krugman. Using stats from Research Papers in Economics, it found spikes after blogs cover a paper. For us, it found a 450-470 increase in abstract views and downloads. Check out their cool graph:
The price of gold has hit all-time highs recently, touching $1,800 an ounce as the stock market swooned last Wednesday. But there’s another commodity that’s enjoying an even bigger bull market these days: rhino horns. According to a recent study by Kenya-based ivory expert Esmond Martin, and his colleague Lucy Vigne, the ivory trade is hotter than ever, fueled by booming demand in China, where it is coveted for its supposed medicinal purposes. The study found that the number of ivory items on sale in southern China has more than doubled since 2004. And most of it is traded illegally.
Beauty Pays is out!! (Princeton University Press, 2011, available from the Press, or either hardbound or Kindle version). Its central point is that beauty affects outcomes in markets because it is scarce. It details how these effects function, how large they are, and what they imply about a wide array of markets.
It includes relevant jokes, songs, etc., lots of pictures but no graphs. Despite a “chatty” tone the discussion of beauty illustrates ideas comprising almost half of an introductory micro course.
It raises a wide array of issues and questions. I’m happy to answer any questions that Freakonomics readers might have, so please ask away in the comments section below!
Here’s the table of contents:
James Barron and Sydney Ember write in the New York Times about the upcoming closure of the crown of the Statue of Liberty. If you are skeptical of how the government spends money, this article will fuel your fire.
Barron and Ember write:
Interior Secretary Ken Salazar says it [the crown of the Statue of Liberty] needs a $27.25 million renovation for additional safety improvements that he promised in 2009.
My guess is that, even by government standards, this is a project where the safety benefit per dollar spent is miniscule, or non-existent.
Could Pablo Picasso sue Claude Monet for using his signature melancholy blue color? That question was raised this week by a federal judge in New York. The suit before the judge was not actually brought by Picasso. But it did involve a trademark in a color.
As his many fans know, Christian Louboutin is an artist of the foot. His shoes are widely revered (see songstress Jennifer Lopez’s ode, “Louboutins”) and not cheap: close to four figures in many cases, and sometimes more. Louboutin shoes also feature a well-known quirk: red soles. And when the venerable fashion house of Yves St. Laurent began selling red soled shoes recently, Louboutin—who had trademarked said soles in 2008—quickly sued.
A small study published in the journal PLoS One, titled “Who’s Afraid of the Boss,” reveals key cultural differences in the way people react to their superiors. The study notes a particularly stark difference between Chinese and Americans. Researchers in both countries showed subjects a rapid series of photographs, asking them to press a button either when they recognized themselves or their boss. The abstract states:
Human adults typically respond faster to their own face than to the faces of others. However, in Chinese participants, this self-face advantage is lost in the presence of one’s supervisor, and they respond faster to their supervisor’s face than to their own.
Americans, on the other hand, are predictably different in light of a cultural emphasis on independence rather than collectivism.
For the Freakonomics Radio hour-long special “The Church of Scionology,” Stephen Dubner and producer Suzie Lechtenberg traveled to Pottsville, PA for a day to chat with CEO scion Dick Yuengling at his brewery.
Yuengling is the oldest brewery in America – currently run by Dick, who is the fifth generation to do so. One of his daughters will likely be the sixth-generation CEO, and the seventh-generation is apparently already in training. Here are some photos from the trip.
Thursday’s 423-point gain by the Dow marked the first time ever that the industrial average has posted four consecutive days of 400-point moves. Less than two weeks into August, there have already been six trading days that saw triple-digit swings this month. While the recent sell-off has been swift (the Dow is off more than 12% since July 21), it’s also been choppy. Volatility is back in a big way. The VIX Index, also known as the fear index, has shot up recently, nearly doubling over the last week. The VIX tracks the expected price of a range of protective S&P 500 options over the next 30 days.
While your average investor generally hates volatility, there are those who feed off it, namely high-frequency traders. These are the guys who use complex algorithms and super-fast computers to scour the markets for tiny price differentials, often executing trades in microseconds (one millionth of a second). The more volatile the market, the easier it is for them to make money jumping in and out of stocks across exchanges.
Now, it’s not quite fair to lump all high-frequency traders together. They don’t all necessarily do well in volatile markets. While some are killing it, there are certainly others who’ve been getting killed; it all depends on their strategy. But generally, traders need two things: 1) a price, and 2) movement. Recently, they’ve had plenty of both.
This week, why being a king is the most dangerous job in history, an etiquette group in Germany wants to ban workplace air-kissing, Jonathan Stark’s social experiment with a Starbucks card, anti-technology terrorists attack in Mexico, and why Google and Wikipedia are bad for our memory.
We’ve been having some fun recently at the expense of people who like to predict things. In our hour-long Freakonomics Radio episode “The Folly of Prediction” — which will be available as a podcast in the fall — we showed that humans are lousy at predicting just about anything: the weather, the stock market, elections. In fact, even most experts are only nominally better than a coin flip at determining a future outcome. And yet there remains a huge demand for professional predictors and forecasters.
Earlier this week, Stephen Dubner and Kai Ryssdal chatted about this on the Freakonomics Radio segment on Marketplace. The question remains: “should bad predictions be punished?”
As mentioned in the segment, the U.S. Department of Agriculture’s August crop yield report came out today. The result? Not bad actually. The corn yield forecast was revised downward by just 1.3% from its estimate last month. That’s a considerable improvement over last year’s big miss, when the August corn yield report had to be revised downward by almost 7%.
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