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Government Safety Regulation: Kind Mother or Big Brother?

Jeff Mosenkis, a freelance producer with Freakonomics Radio, holds a Ph.D. in psychology and comparative human development.
Government Safety Regulation: Kind Mother or Big Brother?
By Jeff Mosenkis
On the same day last week, news stories broke about two different parts of government demonstrating two different ideological approaches to regulating consumer safety. In the first, the FDA came out with rules standardizing the labeling of sunscreen, after 33 years of deliberation.
Presumably, the reasoning behind making sure the claims on sunscreens are clear and uniform across different products (like the standardized nutrition information on food packaging) is to allow consumers to make better decisions for themselves. Let’s call this the Kind Mother approach.We are given information that strongly hints at which is the right choice, but ultimately are still able to decide for ourselves.
At the same time, the Consumer Product Safety Commission (CPSC) has directed its staff to draft regulations governing the safety of table saws. An estimated 40,000 people are injured every year when hands, fingers or other body parts find their way into the path of a table saw blade.


What Chess Tells Us About the Value of Perception

As a physics student, I found that I could solve most of the problems simply by looking at derivations and listening carefully to my reactions to the equations. A soft voice inside me would say, “No, that term just doesn’t seem right. Go and find out what went wrong there.” Or, “Ah, these terms hang together and the result feels right. It must be okay.” And it almost always worked out. My piano teacher would do the same when playing an unfamiliar piece of music. She could play it just by making sure it sounded right.
Were these just party tricks? Or was a more fundamental process going on?


Does Privatizing Retail Alcohol Sales Increase or Decrease Consumption?

If you’ve ever bought alcohol in Pennsylvania, you know what a weird, controlled system it has. As 1 of 19 “alcoholic beverage control” states in the U.S., Pennsylvania has some of the more strict, if not bizarre, laws regulating the retail sales of booze. Wine and spirits are sold only by state-owned stores, which don’t even have names; they’re designated by call numbers instead. Prices are kept uniform in all locations. Many of the stores operate at a loss. If you’re under 21, you’re not even allowed inside, and until recently, you couldn’t buy alcohol on a Sunday. Oh, and check out its “Kafka-esque” system of grocery store wine vending machines.
This may all be about to change. Pennsylvania is debating whether to privatize its liquor sales as a way to raise money and bridge its budget gap.


Wife Sales: "An Efficiency-Enhancing Institutional Response"

Peter Leeson, Peter Boettke, and Jayme Lemke, all of George Mason University, have issued a new paper called “Wife Sales” (abstract here; PDF here):

For over a century English husbands sold their wives at public auctions. We argue that wife sales were indirect Coasean divorce bargains that permitted wives to buy the right to exit marriage from their husbands in a legal environment that denied them the property rights required to buy that right directly. Wife-sale auctions identified “suitors” – men who valued unhappy wives more than their current husbands, who unhappy wives valued more than their current husbands, and who had the property rights required to buy unhappy wives’ right to exit marriage from their husbands. These suitors enabled spouses in inefficient marriages to dissolve their marriages where direct Coasean divorce bargains between them were impossible. Wife sales were an efficiency-enhancing institutional response to the unusual constellation of property rights that Industrial Revolution-era English law created. They made husbands, suitors, and wives better off.

(HT: Tomas Simon)


Will Today's Working-age Women Be Tomorrow's Grandparent Baby-Sitters?

A social norm in Italy appears to be grandparents spending the day taking care of their pre-school grandchildren. Even grandfathers can be seen pushing infants around in carriages and entertaining them in public squares, something very rarely seen in the U.S. But social norms don’t just happen—they can be created and later altered by purely economic incentives. Italy has now increased its retirement age substantially, at the same time that the labor-force participation rate of women ages 25-54 has increased by over 20 percentage points. When today’s middle-aged Italian women have grandchildren it is unlikely that they will retire from their long-time careers, and thus unlikely that they will be available to care for grandchildren full time. The social norm of grandparent care is unlikely to exist in Italy in 25 years.


Breakthrough Batteries?

The more time you spend talking with smart people about the energy future, the more you hear about the holy grail: great batteries. To that end, a couple of recent developments in BatteryLand are encouraging news. The first battery of interest comes from MIT:

A radically new approach to the design of batteries, developed by researchers at MIT, could provide a lightweight and inexpensive alternative to existing batteries for electric vehicles and the power grid. The technology could even make “refueling” such batteries as quick and easy as pumping gas into a conventional car. The new battery relies on an innovative architecture called a semi-solid flow cell, in which solid particles are suspended in a carrier liquid and pumped through the system. In this design, the battery’s active components — the positive and negative electrodes, or cathodes and anodes — are composed of particles suspended in a liquid electrolyte. These two different suspensions are pumped through systems separated by a filter, such as a thin porous membrane.


Why Economics Falls Down in the Face of Fatherhood

I’ve been a dad now for a little less than two years, and I’m still trying to figure out how it is shaping my approach to economics. I think the answer is: A lot.
I learned economics in my twenties, before I became a dad. You know the drill: We learned hard math and complex models. Forget the Greek letters, they are just complicated ways of exploring the basic idea informing economics—that people are purposeful, analytic decision makers. And this idea just seemed entirely natural to me. I had always believed in the analytic self; I was rational, calculating, and tried to make smart decisions. Of course real people don’t use math, but I figured that we’re still weighing costs and benefits just as our models say. Or at least that was my understanding of the world.
Today, I’m not so sure.


Why Does the South Still Commemorate the Civil War, But Not the North? Peter Coclanis Answers Your Questions

Last week we took stock of the Civil War commemoration situation: namely that the South seems to be taking more pride than the North in commemorating the 150th anniversary of the war’s start. We wondered why that was, particularly when it was the South that was left so economically devastated by the war. For some answers, we turned to Peter Coclanis, a professor of economic and business history at the University of North Carolina, whose research focuses on the American South in the eighteenth and nineteenth centuries. Coclanis offered some intriguing thoughts on the economic legacy of the Civil War in the South, and why many southerners are still so keen to remember it. We also solicited your questions for him. Now, Coclanis gives you his answers.


FREAK-est Links

This week: Why life expectancy for women is decreasing in some parts of the U.S. Iceland crowdsources its new constitution. How brain scans of teenagers can predict future pop hits, and may even be able to determine whether they’ll grow up to be a criminal.


Seeing Red: Why L.A. Needs to Keep its Traffic Light Cameras

Thus far I’ve tried to avoid weighing in on the issue of red light cameras (RLCs) in an effort to keep my comments section free of any more angry posts than I normally get, and my email free of complaints from friends and relatives (you know who you are) who’ve been caught in the past. However, my hand has been forced by the Los Angeles City Council’s decision to consider a measure to eliminate our RLC program.
RLCs are not particularly popular. In fact, I have found that many people vehemently hate them. To give an example, the Chicago Tribune conducted a poll in 2009 showing that 53 percent of voters supported the cameras, while 41 percent opposed them. These percentages basically flipped when voters were asked if they wanted RLCs in their own neighborhood. This is a bit reminiscent of Monty Python’s proposal to “tax foreigners living abroad.”


The Often Misquoted

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.
Aaron asked:

I’ve heard that Ben Franklin was misquoted when he said ‘Jack of all Trades, Master of None,’ and that he actually said ‘Jack of all Trades, Master of Some.’ Is there any truth to this?

I believe neither of these sayings appears in Benjamin Franklin‘s writings.


What Drives Obesity? An Economist Takedown of The Economist

Is higher obesity due to the rise in driving? Perhaps. It’s an intriguing hypothesis. But our friends at The Economist should know better than to report nonsensical correlations. Here’s the evidence they cite (drawn from this entirely unconvincing research paper published in Transport Policy):

Looks impressive, right? (Well, apart from putting the explanatory variable on the vertical axis.) But before concluding that there’s anything here, let’s try a different variable, instead—my age:


Today in Sports-Induced Violence

So, yesterday I wrote about the handful of studies that have been done showing that large sporting events do not lead to higher rates of hospital visits, or for that matter, deaths or public violence. The latest study comes from Canada, and showed that during the 2010 Olympic gold medal ice hockey match between the U.S. and Canada, that emergency room visits declined by 17 percent in Canada. I thought it was a pretty good indication of how much Canadians love ice hockey, and also of the tranquility with which they seem to consume it. I imagined an entire country transfixed by the game on their TV sets, peacefully watching their countrymen beat the world in their most-beloved sport.
But then I saw this: “Vancouver Fans Riot After Stanley Cup Loss” And read this:

Rioting hockey fans clashed with police officers, set vehicles ablaze, smashed windows and looted stores and set several fires in downtown areas here on Wednesday night moments after the Vancouver Canucks lost Game 7 of the Stanley Cup finals to the Boston Bruins.
Local hospitals reported eight people treated for stab wounds, according to Alyssa Polinsky, a spokeswoman for Vancouver Coastal Health, the regional hospital authority.


Freakonomics Radio Live on Stage: St. Paul in Pictures

Last week, Freakonomics Radio took to the stage for a live event at the historic Fitzgerald Theater in St. Paul, Minn. Not only is St. Paul the home of Freakonomics Radio co-producer American Public Media, but Steve Levitt also grew up in the Twin Cities. So the live event had a good deal of “this is your life” stuff in it, including a Quiz Bowl competition between Team Levitt (Steve, his sister Linda Jines, and their father Michael) against the current team from St. Paul Academy, where both Steve and Linda starred on the Quiz Bowl team in their day.
We’ll release a podcast next week drawn from the live event, including the Quiz Bowl competition. In the meantime, who do you think won?


Need to Go to the ER? Not Until the Game's Over!

Sports fans are nuts, right? Prone to erratic, irrational behavior when their team is playing. You’d think that during the Big Game, violent behavior would spike, and maybe lead to higher rates of emergency room visits and even deaths? Not true. A number of studies show that big sporting events do not increase the number of patients admitted to emergency rooms, and in some cases, hospital visits and even heart attack rates have been shown to decrease during a major sporting event. Unless, of course, your team is losing.
The latest study in this vein, published this week in the Journal of Open Medicine, comes from Canada, where researchers examined emergency room visits during the 2010 Olympic gold medal ice hockey game between the U.S. and Canada. The game ended in a 3-2 overtime win by Canada and was seen by roughly half the country, some 16.6 million people, making it the most popular TV broadcast in Canadian history. The study found that the rate of total emergency room visits during the game decreased by 17 percent, compared with corresponding hours for 6 control days.

This effect extended throughout Canada’s largest province, amounted to a decrease of about 136 fewer patients per hour, appeared accentuated for adult men living in rural locations, and was most evident for those with milder triage severity scores presenting with abdominal pain, musculoskeletal disorders, or traumatic injuries.


Dear Yankees: I Am a Bad-Luck Charm

Ever since writing a post last fall asking what Derek Jeter is worth to the Yankees, I’ve been sent a number of requests asking how to best forecast the date when Jeter would get his 3,000th hit so as to be present for that special game.
Sorry, but I put very little thought into this problem. Why? Mostly out of self-interest: for me, this problem wasn’t much of a problem. I live in New York so if I wanted to try to see that game, I’d just wait until Jeter got fairly close and then buy tickets for an upcoming game. I had no travel or other issues to work around.


How to Best Incentivize Organ Donations?

Organ donation is a familiar topic around here. Back in December, we discussed whether there should be a legal market for organs in a podcast episode called “You Say Repugnant, I Say… Lets Do it!” A few weeks ago, we blogged about whether the idea of a legal organ market is losing its stigma. So we were immediately intrigued by news that emerged earlier this month from China, about a 17-year-old boy who had sold his kidney for $3,392 to buy a new iPad 2. From the BBC:

The 17-year-old, identified only as Little Zheng, told a local TV station he had arranged the sale of the kidney over the internet. The story only came to light after the teenager’s mother became suspicious. The case highlights China’s black market in organ trafficking. A scarcity of organ donors has led to a flourishing trade.

The story turned out to be perfect fodder for Michele Goodwin, who has embarked on a three-part series on organ transplantation over at the Chronicle of Higher Education. Goodwin argues that the organ transplant market is far too restrictive, and makes the case for creating better incentives for organ donors in order to undercut the black market.


Cracking the F&#%ing Humor Code

Jeff Mosenkis, a freelance producer with Freakonomics Radio, holds a Ph.D. in psychology and comparative human development.
Cracking the F&#%ing Humor Code
By Jeff Mosenkis
Just in time for Father’s Day, imagine rocking your little one to sleep with the lines:

“The windows are dark in the town, child
The whales huddle down in the deep
I’ll read you one very last book if you swear
You’ll go the F–k to sleep.”

The lines are from the new “kids” book Go the F**k to Sleep, by Adam Mansbach, which became a runaway hit after a PDF of the book was circulated online widely. It’s fully illustrated and written like a kids’ bedtime book, except for the exasperated expressions most kids might not quite understand. If you know anybody with kids, you probably got the e-mail (if not, refresh — it’s probably there by now). Months before publication, it shot up to No. 1 on Amazon, prompting its tiny publisher to move up its publication date.
As of this writing, it’s still ranked No. 2 overall on Amazon, and first in both humor and parenting & families sections. The movie rights have been optioned.
It might seem like a long shot that a profanity-laced purported kids book from a niche publisher should be such a runaway hit, but one clue why might come from humor researchers at the University of Colorado Boulder Leeds School of Business.


Why Do We Fail to Do What's Right? Bring Your Questions for Authors of Blind Spots

We recently published a guest post on the ethics of the decision-making that led to the 1986 Challenger shuttle disaster. That post was adapted from a new book called Blind Spots: Why We Fail to Do What’s Right and What to Do about It. The authors are Max Bazerman, a professor at Harvard Business School, and Ann Tenbrunsel, a professor of business ethics at Notre Dame.
Blind Spots looks into the gap between our intended and actual behavior; why we often overestimate our ability to do what’s right; and how we convince ourselves to do what we want rather than what we should. The authors tie their theory to a string of recent blowups, including: baseball’s steroid scandal, Enron’s collapse, Bernie Madoff‘s fraud, and corruption in the tobacco industry.
Brazerman and Tenbrunsel have agreed to answer your questions, so fire away in the comments section. As with all our Q&A’s, we’ll post their answers in short course.


Immigrants Are Getting More Education

A Brookings report shows that for the first time, the share of working-age immigrants in the U.S. who have college degrees (29.6%) exceeds the share without a high school education (27.8%). In 1980, there were more than twice as many low-skilled immigrants living in the U.S. as high-skilled ones.
The report focuses on demographic trends in the 100 biggest metropolitan areas of the country over the past 15 years. While the Southwest and Great Plains remain destinations for low-skilled immigrant labor, much of the Northeast and Rust Belt now attract more immigrants with college degrees than those without.


Will the Cashless Revolution Wipe Out Panhandling?

A reader named John Neumann writes:

Guys, I had a thought today as I was walking to work in the sweltering D.C. morning heat: As the U.S. has increasingly become a cashless society with the rise of debit- and credit-card use, has there been a decrease in panhandling, busking, and homelessness? Obviously, fewer people carrying cash or change means panhandlers, buskers, and the homeless will have fewer and fewer people giving them money on the street. Would busking and panhandling become extinct if we do eventually become a completely cashless society? Is that already happening?

Great questions, John!
I don’t know the answers, but I might now seek them out. If we do ever get truly cashless, presumably you could transfer money from your digital wallet to a panhandler’s digital wallet. Might it be hard for a panhandler in possession of a digital wallet to appear needy? Probably not: if they are ubiquitous, the cost of a digital wallet itself would likely be near (or even below?) zero.
John’s questions raise two other thoughts:
+ I wonder if the appeal of going cashless might wane in light of so much high-profile financial hacking going on.
+ If/as we do get more cashless, what are the other unseen ramifications? Personally, I’d be happy to do away with the stuff. It’s dirty, inefficient, and produces a lot of troublesome by-products.


Self-Controlled Vacations

A week in a condominium in the Tuscan hills—all courtesy of the exchange of our own time share unit. Is this a good economic deal for us? In a narrow sense, no: the exchange fee, plus the annual fee in the “time share bank,” plus the taxes and upkeep on our own time-share unit almost equal what it would cost to rent the Tuscan unit for a week.
But: having an unused time-share week being wasted imposes psychic costs on us—and that forces us to take a one-week vacation. Also, the time-share bank provides information on a pre-selected set of vacation units, thus saving us search costs. We’re quite happy to pay for a self-control mechanism and pay to reduce the transaction costs of arranging a vacation.


Is Extra Maternity Leave Bad for Child Cognitive Development?

Back in March we wrote about a Norwegian study which showed that an increase in maternity leave led to lower high-school dropout rates for the children of those moms. But a new working paper about maternity leave in Canada (abstract here) highlights some possible negative effects of extra maternity — specifically on a child’s cognitive development at ages 4 and 5. At issue isn’t the extra time a mother spends with her child, but the timing of when she returns to work, and the abrupt change it causes.
Michael Baker of the University of Toronto and Kevin Milligan of The University of British Columbia focused their research on a Canadian law passed at the end of 2000 that extended maternity leave from 6 months to a full year. As a result, the timing of the return to work changed from an average of just under 6 months to nearly 9 months:

We find that the expansion of parental leave — and the resulting extra time mothers spent with their child in his/her first year of life—had no positive impact on indices of children’s cognitive and behavioral development; this despite the fact it had substantial impacts on the maternal care and non-licensed non-parental care children received in their first year, as well as how long they were breastfed. For our behavioral indices we can rule out all but very modest improvements. For our cognitive measures the estimated impact of the reform is small, negative and statistically significant for PPVT and Who Am I? This latter result highlights the relatively neglected issue of how changes in maternity leave laws affect the timing of the mothers’ return to work. Specifically, it is consistent with the hypothesis that some ages are better than others for abrupt changes in the parent-child relationship.


The Cost of Eating Organic Food; or: Will E. Coli Increase Our Appetite for Irradiated Food?

We’ve been preparing a Freakonomics Radio piece on the hidden or overlooked costs of eating organic food. (Hint: living creatures that might be deterred by pesticides might not be deterred without pesticides.) In the meantime, a massive example has arisen in Europe, where the recent deadly E. coli outbreak has been traced to organic bean sprouts grown in northern Germany. In his Wall Street Journal column, Rational Optimist Matt Ridley makes a fervent argument that such an outbreak needn’t have happened:

A technology that might have prevented contaminated produce from infecting thousands of Germans with E. coli was vetoed—by Germany—11 years ago for use in the European Union. Irradiating food with high-voltage electrons is a process that can kill bacteria on or in solid objects, just as pasteurization can kill them in liquid foods.
When the European Commission proposed in 2000 that irradiation be allowed for a greater range of foods and at a higher dose, the German government vetoed the measure. In the U.S., food irradiation is used for various products, including ground beef, but most retailers resist the practice, lest the word “irradiated” on the label scare off customers.

In case you think the argument for irradiation is part of a vast right-wing conspiracy, consider this Huffington Post article by the A.P.’s Lauran Neergaard, titled “Is Irradiation The Future Of E. Coli Prevention?”


The Rich vs Poor Debate: Are Kids Normal or Inferior Goods?

Are you likely to have more kids if you are rich or poor? Or to put this in econo-jargon: Are kids normal or inferior goods? (Reminder: When you get rich you buy more of a “normal good,” and less of an “inferior good.” And yes, the language of economics can be a bit cold.)
This is a question that’s central to a debate between Betsey Stevenson and Bryan Caplan. Recall, Bryan is the guy who argues that having kids needn’t be as expensive or time-consuming as we make them. Fair enough. But he then makes the leap to arguing that we should all have more kids. In her response, Betsey noted:

Caplan is entirely focused on the substitution effect: having kids becomes cheaper relative to buying TVs. So he says buy more kids, and fewer TVs. But what about the income effect? As people become richer, they tend to “buy” fewer children, not more. So there’s an offsetting income effect.

In a follow-up, Bryan runs some regressions that he thinks suggest that Betsey is wrong to say that the rich have fewer kids than the poor. It’s a brave person who debates Betsey on the data. And I think he’s tying himself in regression knots, rather than getting at the issue.


FREAK-est Links

This week: Does having a full bladder help you make more rational decisions? A survey of the best Civil War facial hair; why wheat beer is good for marathoners; and whether the Consumer Financial Protection Bureau is the largest field study ever in behavioral economics.


Newt's Not the News: Prediction Markets Double Rick Perry's Chances for GOP Nomination

OK, so Newt Gingrich’s senior staff have quit. But Newt’s not the news. At least according to the political prediction markets. The real news is that Texas Governor Rick Perry is likely to enter the Republican nomination race. The connection, of course, is that many of the staffers who quit have close ties to Governor Perry.
The figure below tells the story. (Click inside for graph). Since yesterday’s announcement, you can see the markets have re-evaluated Perry’s chances of winning the nomination from around 5%, up to 11%. There’s a tip here for newsgatherers: Focus on the details, and you’ll notice that the Perry’s prediction market rally began just after 11am. But the story broke three hours later, just before 3pm.


A Grain of Salt

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.
Jamie asked:

‘Take it with a grain of salt’ is one I always have trouble with – do you know the origin?

The Yale Book of Quotations has the following entry:
 

“Addito salis grano
With the addition of a grain of salt.
Pliny the Elder, Historia Naturalis bk. 23, sec. 149. Usually quoted as ‘Cum grano salis’ (with a grain of salt). The reference is to salt being added to Pompey’s antidote to poison.”
 


Why Ranking Charities by Administrative Expenses is a Bad Idea

How does one know whether a charitable donation will make an impact? For this we need a simple formula (easy to write, hard to apply):

Idea X Implementation = Bang for your buck

When I give talks about aid effectiveness, people often comment that they too think this is important. And to make sure they are supporting good charities, they always hone in on the charities’ finances to see how much goes to administrative and fundraising expenses. Charity Navigator, for example, scrubs these numbers and doles out stars to charities that don’t spend “too” much on operations.
Given the title of my book with Jacob Appel, More Than Good Intentions, many assume that they are speaking my language, and that I admire such focus on those numbers too.
But I do not. Those numbers do not tell you what is really happening.


Google Makes a Bad Economist

I love Google. But it’s not a very good economist. Type “unemployment rate,” and here’s what it yields:
The first of these links is from Google, and it tells you that the unemployment rate is 8.7%. The second is to the Bureau of Labor Statistics, which tells you that it is 9.1%.
Technically, both are correct. But you are better off not relying on the Google number. You see most economic discourse is about seasonally-adjusted data—the unemployment rate adjusted to take account of the usual seasonal ups and downs. But Google links instead to the non-seasonally-adjusted data, which virtually no one pays attention to. And this is why its little graph wiggles up and down so much.