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Freakonomics Blog

What Are the Economic Consequences of the Japanese Disaster? A Guest Post by Anil Kashyap and Takeo Hoshi

From a loss-of-life standpoint, the Japanese earthquake/tsunami may well be at least five times more severe than 9/11. While natural disasters in the past have claimed more lives, it’s extremely rare for a developed country to suffer this kind of catastrophe. While the economic losses no doubt take a distant back seat to the human suffering, nonetheless there are many important economic questions to be answered. I can’t think of a better pair of people to do so than Anil Kashyap and Takeo Hoshi.


A Classic Public/Private Clash

My mom passed away recently, and we’re planning a memorial service in her home city, where none of us three offspring lives. There are lots of expenses: the service; food afterwards; planes and hotels for all of the children, grandchildren and any great-grandchildren who can come.


World Water Day: Nudges for Safe Water

What if a simple ‘nudge’ could massively increase the use of safe water in poor countries?
Today is World Water Day, a day to raise awareness for something we take for granted in America: clean water. Normally I yawn at Hallmark-meets-poverty-program type publicity stunts. Reminds me of many a microcredit “awareness” campaign that paraded superstar microentrepreneurs on a stage, ignoring the need for rigorous evidence to find out if microcredit actually works.


Economic Research Wants to Be Free

The marginal cost of accessing an academic journal article is pretty much zero. The research has been written, the type has been set, and the salaries have already been paid. So the socially optimal price is: free.


Japan's Nuclear Worry Produces, Among Other Reactions, a Salt-Buying Panic in China

The Three Mile Island nuclear-power accident in 1979 coincided almost perfectly with the release of The China Syndrome, a Hollywood film about a nuclear meltdown. As we once wrote, this pairing helped gel American sentiment against nuclear power. Several other nations, meanwhile, kept on building nuclear-power plants, Japan among the leaders. Now, how will the earthquake/tsunami-damaged nuclear plant in Fukushima . . .


Chebyshev Is Ready for her Close Up

In this second installment of my three BizIntelligence TV episodes, you can see my dog, Chebyshev (named after the mathematician who derived Chebyshev’s inequality), and learn what she has to do with Carrots and Sticks.


What to Do With Down-on-Their-Luck Churches?

There are a growing number of churches in the U.S. that can no longer afford their upkeep, as costs are outpacing collections. In Europe, some churches have turned into techno-dance clubs. Would that work here?


Stay-at-Home Mom Knows Best?

More time with Mom can lead to lower high school drop out rates later on, particularly among children whose mothers do not have a lot of education themselves.


Pricing Chicken Wings

I stopped by a local fried chicken joint, Harold’s Chicken Shack, the other day. Just to give you a sense of what sort of restaurant this is, there is a layer of bulletproof glass separating the workers and the customers. They don’t cook the chicken until you order, so I had five or ten minutes to kill waiting for my food.


Pricing Fancy Cheese

Ah, lunch at Fortnum & Mason in London — without doubt, the most posh place we ever have lunch at. By the time we get to dessert, we only have enough stomach room to split a piece of chocolate torte.


Let Teams Choose Their NCAA Bracket Position

Nate Silver has (another) truly insightful post demonstrating the possible perverse advantage of receiving an 11th seed instead of an 8th seed in the NCAA tournament.
He explains: “[An average] team like Arizona would have a considerably better chance — about two-and-a-half times better, in fact — of winning its second round game and advancing to the Round of 16 as a No. 12 seed than as a No. 8 or No. 9 seed. This, of course, is because it has not yet had to face the No. 1 seed.”


Macro Insights from the Brookings Panel

Today, I’m off at the spring meeting of the Brookings Panel on Economic Activity.  And for any serious student of the economy, it’s a great line-up of papers.  (Full disclosure: David Romer and I are the editors.  We commissioned the papers, so of course we love ‘em.) Rather than write about the papers, I figured it might make more sense . . .


When Estimating Is Dangerous

A recent article in The New York Times offers a worrying application of street-fighting reasoning methods. The article describes the deterioration of the Lake Isabella Dam in California. This dam, the article reports, is one of 4,400 considered “susceptible to failure” (out of the 85,000 dams in the country). I’ll pass over lightly the statement early in the article that the repair costs would be “billions of dollars,” and note only that this figure seems like a massive underestimate.


Quotes Uncovered: Pardon My French

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 research.


Japan: To Give or Not to Give?

In the wake of Japan’s tragic earthquake and tsunami, Felix Salmon argues against donating to the cause. Salmon cites concerns about the hobbling effects of earmarked funds, uncoordinated NGOs, and Japan’s wealth.


Wine, Movies and Love

Back in January, on the day of one of the year’s particularly crippling blizzards, I was scheduled to travel to New York City to tape a segment of BizIntelligence TV with Bruno Aziza. The trains that day were running massively late, and I somewhat sheepishly called to cancel. For me, this was a non-discretionary snow day. But Bruno wouldn’t accept defeat. He heroically spent several hours with his camera crew and came to New Haven. They ended up taping three episodes at various places in my house.


The Latest in NBA Data Analytics

If you’re the kind of sports stat-head who loves that the Bill James movement has become mainstream in baseball, and you wonder why basketball doesn’t pay more attention to analytics, you may be pleased to read this article and this one about the annual Sports Analytics Conference at MIT Sloan.


Taking a Course From Gary Becker

Up until now, the only way to take a course taught by Gary Becker was to be a student at the University of Chicago.
Thanks to the heroic efforts of three students –Dana Chandler, Salvador Navarro Lozano, and Jorge Garcia — that has changed.


The Travel Time Budget

Is our need to travel innate? Last time, I wrote about the intriguing theory of the universal Travel Time Budget (TTB), which states that humans have a built-in travel clock. Perhaps a product of some primeval need to balance exploration and conquest with hanging around the cave and vegging, the universal TTB is said to drive us all to spend about 1.1 hours per day on the go, regardless of nationality, culture, economic system, or era.


Does "No Child Left Behind" Contribute to Obesity?

That’s the question posed in a new working paper by Patricia M. Anderson, Kristin F. Butcher, and Diane Whitmore Schanzenbach. What would the mechanism/s be? “Schools facing increased pressures to produce academic outcomes may reallocate their efforts in ways that have unintended consequences for children’s health. For example, schools may cut back on recess and physical education in favor of increasing time on tested subjects.”


Somali Pirates Practice Inventory Management

Somali pirates are apparently getting more sophisticated in their business practices: “A group of Somali pirates announced Sunday that they’re cutting their asking prices for hostages by 20 percent — to speed up the negotiation process, make room for more hostages and take in more cash,” reports Wired.


Measuring Peer Effects

A new study from psychologists Jamil Zaki, Jessica Schirmer, and Jason P. Mitchell relies on brain scans to evaluate the effects of peer influences. “Participants rated the attractiveness of faces and subsequently learned how their peers rated each face. Participants were then scanned using fMRI while they rated each face a second time,” explain the authors. “These second ratings were . . .


The Secret to Japan's Family Firms

As we’ve written here before, family firms in which a founder hands the business off to the next of kin tend to perform worse than equivalent non-family firms. This isn’t very surprising: what are the chances that the best person to succeed the founder just happens to be his/her son or daughter?


The Next Alternative Energy Source?

If you’re looking for the next big alternative energy craze, look no further than your toilet. Gerardine Botte, a biomolecular engineer at Ohio University, has developed a “technology to generate hydrogen fuel from urine.”


Gary Player in His Own Words

I idolized a lot of golfers growing up, but for some reason Gary Player was not one of them. That is kind of strange, because we have some similarities. We are both diminutive. We both fall all over the place on our golf follow-throughs. And the same thing that was said about him and golf has often been said about me and economics: he did more with less talent than just about anyone else.


An Offshore Airport for New York? Bring Your Airline Questions for Captain Steve

For some time now, Captain Steve, a pilot with a major U.S. airline (and one of the nicest humans you’ll ever meet), has been answering your questions about flying. He has commented on everything from cabin air to maintenance problems and ticket prices. It’s been a while since we had him here, however, and since there’s no shortage of airline headlines — including an eventful winter for weather interruptions — we thought it was time to bring him back for another round of questions.


Coase Goes to War

A “Smart Bribe” can be a lot cheaper than a “Smart Bomb.”