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Freakonomics Blog

More Predictions, From Bad to Worse

Our “Folly of Prediction” podcast made these basic points:

Fact: Human beings love to predict the future.

Fact: Human beings are not very good at predicting the future.

Fact: Because the incentives to predict are quite imperfect — bad predictions are rarely punished — this situation is unlikely to change.

A couple of recent cases in point:

The National Oceanic and Atmospheric Administration predicted a particularly bad Atlantic hurricane season this year but, thankfully, were wrong, as noted by Dan Amira in New York magazine. It is hard to imagine that many people are unhappy about that. 

Here, as noted by Ira Stoll in the New York Sun, are the picks by ESPN experts at the start of the 2013 baseball season. How bad were their picks?


In Praise of Smaller Schools

We are in the midst of a nationwide search for a single magic bullet in education. But the more evidence that is gathered, the more obvious it becomes that no such single magic bullet exists.

That said, a new study (abstract; PDF) on school size — not class size, but school size — is worth a look. Here’s the abstract; I have bolded the most relevant conclusions:

One of the most wide-ranging reforms in public education in the last decade has been the reorganization of large comprehensive high schools into small schools with roughly 100 students per grade.  We use assignment lotteries embedded in New York City’s high school match to estimate the effects of attendance at a new small high school on student achievement. More than 150 unselective small high schools created between 2002 and 2008 have enhanced autonomy, but operate within-district with traditional public school teachers, principals, and collectively-bargained work rules.  Lottery estimates show positive score gains in Mathematics, English, Science, and History, more credit accumulation, and higher graduation rates.  Small school attendance causes a substantial increase in college enrollment, with a marked shift to CUNY institutions.  Students are also less likely to require remediation in reading and writing when at college.  Detailed school surveys indicate that students at small schools are more engaged and closely monitored, despite fewer course offerings and activities.  Teachers report greater feedback, increased safety, and improved collaboration.  The results show that school size is an important factor in education production and highlight the potential for within-district reform strategies to substantially improve student achievement.


Losing Is Not a Winning Strategy in the NBA

The NBA season is beginning this week and fans of each team are, of course, optimistic. At this point, everyone can hope a title is possible come next summer. 

Although everyone could theoretically have dreams of a title in 2014, it is clear that every NBA fan isn’t actually hoping their team is successful in 2014. Some NBA fans are actually dreaming of an event that happens just after the conclusion of the NBA Finals.  For fans of a few teams, the focus is already on the 2014 draft.  For example, some fans of the Philadelphia 76ers seem convinced that not only are the Sixers not trying to win this year, but that this is actually the best course of action for this franchise.

Proponents of “tanking” dream of such number one picks as Shaquille O’Neal or LeBron James. Each of these players were selected number one and went on to win multiple NBA titles.  Of course, other number one picks – like Yao Ming, Michael Olowokandi, Allen Iverson, Joe Smith, Glenn Robinson, Chris Webber, Larry Johnson, etc. –  played their entire careers and never won an NBA title.


A Quick Summary of the 21st Century So Far

From a reader named Kevin Murphy (alas, not the Kevin Murphy):

The Economist just reported on what you covered in the “The Downside of More Miles Per Gallon” podcast in February. It’s looking like Oregon is leading the way in possibly charging per mile: “A bill that would have applied a VMT fee to all new vehicles doing 55mpg and above died in the last legislative session; instead, 5,000 volunteers will join a new VMT scheme in July 2015. They will be charged at 1.5 cents per mile rather than paying the state petrol tax (30 cents per gallon).”


Is Texas Our Future?

In last week’s TIME cover story, the prolific Tyler Cowen argues that “Texas Is Our Future”:

So why are more Americans moving to Texas than to any other state? Texas is America’s fastest-growing large state, with three of the top five fastest-growing cities in the country: Austin, Dallas and Houston. In 2012 alone, total migration to Texas from the other 49 states in the Union was 106,000, according to the U.S. Census Bureau. Since 2000, 1 million more people have moved to Texas from other states than have left.

As an economist and a libertarian, I have become convinced that whether they know it or not, these migrants are being pushed (and pulled) by the major economic forces that are reshaping the American economy as a whole: the hollowing out of the middle class, the increased costs of living in the U.S.’s established population centers and the resulting search by many Americans for a radically cheaper way to live and do business.

The full article is gated, but here’s a good summary of Cowen’s arguments. 


Should Marriage Be More Like an Employment Contract?

A reader named J.D. Peralta is asking for your help:

For about the last six years I have developing a theory about how marriage should be legal social contracts.  I feel that legal marriage (not marriage by the church) should be treated more like employment agreements. These “marriage contracts” should bring with them a term that ranges from 3-5 years. The term of the contracts will be developed by both parties but I feel that they should include things like expectation, key areas of responsibilities, etc.

I have been working on this in my spare time but I am currently taking a management class for my bachelor’s degree and I have the opportunity to really put some muscle behind this theory. That is where I need your help. I have been researching this topic for the last two weeks but I have found very little data that could be considered as legitimate sources to support my argument.  I am hoping that you can point me to some reference that help me to complete my argument.  Any assistance you can provided me would be greatly appreciated.

A bit more about Peralta. He is 32, works as an accountant for a public accounting firm in Los Angeles, was born in El Salvador but has lived in the U.S. since 1986. His parents have been married for 39 years; he has two older brothers. “In case you are curious I do have a girlfriend,” he writes, “and we have been together for almost 5 years. I have discussed my theory with her and she finds the concept reasonable.”


In Praise of Big Prizes

An honors course of 150 students at the University of Texas requires short written assignments each week.  The instructor had given prizes of $,1500, $1,000 and $500 to the top three papers at semester’s end. He abandoned this prize structure and now gives prizes of $100 to the three best papers each week.

The instructor, an English professor, is unfamiliar with tournament models and the idea that larger top prizes and a steeper prize gradient will elicit more effort than a flatter gradient, one with more prizes of smaller amounts (Lazear and Rosen, 1981).  My guess is that he wants to be fair rather than confer such unequal prizes; but he would get better written work if he went back to the old system, just as Tiger Woods is better motivated by a big winning prize for a whole tournament than he would be by small prizes for having the best score in a particular round. Alternatively, combine equity and efficiency by offering two $100 prizes each week, then one $1,000 prize at the semester’s end.

(HT: L.C.)


Not So Dismal After All

John List and Uri Gneezy have appeared on our blog many times. This guest post is the last in a series adapted from their new book The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life. List appeared in our recent podcast “How to Raise Money Without Killing a Kitten.”

Pay-what-you-want is a bit of an oxymoron for economists. After all, if you had the choice of how much to pay, wouldn’t you always pick $0? But as we’ve found time and again, people are a lot more complicated than typical economists have assumed.

Case-in-point: in 2007 Radiohead made their album In Rainbows downloadable online for whatever price customers wanted to pay. Precise statistics are hard to come by, but one thing is clear: a lot of people paid a good amount of cash for the album. In fact, it was so successful that other acts have followed suit. Heck, even corporations like Panera have gotten into the act, setting up cafes in St. Louis and Chicago where customers pay what they can for certain menu items. 

What got us curious, though, was trying to answer why people were paying more than $0. In particular we wanted to know what sorts of levers could we pull that would induce people to pay more or pay less in an economic environment like Radiohead’s website? Luckily, right around this time we started working with Disney Research, and they were just as interested in these questions.


If Your Parents Drove a Ford, Do You?

Most adults have vivid memories of the cars of their childhoods — the wood-paneled station wagons (with backwards-facing rear seats, no less) or the boxy minivans in which they were driven to school or church.  But how much do those memories affect people’s car-buying decisions in adulthood?  That’s the question asked in a new paper (draft PDF; abstract) by Soren T. Anderson, Ryan Kellogg, Ashley Langer, and James M. Sallee:

We document a strong correlation in the brand of automobile chosen by parents and their adult children, using data from the Panel Study of Income Dynamics. This correlation could represent transmission of brand preferences across generations, or it could result from correlation in family characteristics that determine brand choice. We present a variety of empirical specifications that lend support to the former interpretation and to a mechanism that relies at least in part on state dependence. We then discuss implications of intergenerational brand preference transmission for automakers’ product-line strategies and for the strategic pricing of vehicles to different age groups.


Does Early Education Reduce the Achievement Gap?

John List and Uri Gneezy have appeared on our blog many times. This guest post is part a series adapted from their new book The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life. List also appeared in our recent podcast “How to Raise Money Without Killing a Kitten.”

The past 60 years in the U.S. has seen dramatic policy changes to the public-education system. The ‘50s, ‘60s, and ‘70s saw desegregation and affirmative action, and since the ‘80s there have been efforts to increase school funding, the introduction of voucher systems, and the creation of countless charter schools. In between we’ve seen efforts to reduce class sizes, introduce technology into classrooms, improve teacher credentialing, and a massive attempt to leave No Child Left Behind. 

What do we have to show for all this? That’s hard to say. Even though many programs have a high price tag, they were never implemented with an eye towards assessment. The data we do have shows that not much has changed over the past 30 years. The figure attached shows how the racial achievement gap in test scores has persisted for white and black Americans since the late 1970s. 

If you don’t like the breakdown by race, then consider that the high school dropout rate among high-income families in 1972 was 2% and in 2008 it was still at 2%. For low-income families, though? In 1972 it was 14% and in 2008 it was still at 9%. This sort of trend (or lack thereof) is manifested in dozens of measures of academic achievement, all of which suggest that the past 60 years of educational reform has very little to show for itself.


Why Are the Japanese No Longer Interested in Sex?

From the Guardian:

Japan’s under-40s appear to be losing interest in conventional relationships. Millions aren’t even dating, and increasing numbers can’t be bothered with sex. For their government, “celibacy syndrome” is part of a looming national catastrophe. Japan already has one of the world’s lowest birth rates. Its population of 126 million, which has been shrinking for the past decade, is projected to plunge a further one-third by 2060.

And:

The number of single people has reached a record high. A survey in 2011 found that 61% of unmarried men and 49% of women aged 18-34 were not in any kind of romantic relationship, a rise of almost 10% from five years earlier. Another study found that a third of people under 30 had never dated at all. (There are no figures for same-sex relationships.) Although there has long been a pragmatic separation of love and sex in Japan – a country mostly free of religious morals – sex fares no better. A survey earlier this year by the Japan Family Planning Association (JFPA) found that 45% of women aged 16-24 “were not interested in or despised sexual contact.” More than a quarter of men felt the same way.

 The article contains a number of speculations as to cause, well worth reading. At least the Malthusians will be happy.


And the Financial Institution Most Likely to Be Late Responding to a Consumer Complaint Is . . .

One day last spring, I saw in a Google alert that the Consumer Financial Protection Bureau (CFPB) had announced that it was for the first time making public a consumer complaint database.  At the time, I was teaching a course in Empirical Law & Economics at Yale and decided to call an audible.  I came into class that day and projected the raw data (which you can see for yourself by clicking here) and asked the class how we might make use of the information.

With incredible dispatch, Jeff Lingwall and Sonia Steinway merged the complaint data with other datasets and together we started to put together an initial draft analyzing the complaint information.  When the CFPB made the database public, they actively encouraged “the public, including consumers, analysts, developers, data scientists, civic hackers, and companies that serve consumers, to analyze, augment, and build on the public database to develop ways for consumers to access the complaint data or mash it up with other public data sets.”  This paper is our attempt to respond to the Bureau’s call to action.


The Real Fake

Last week, we described how the famed U.K. street artist Banksy had set up a stand in New York’s Central Park selling real Banksy pieces – stenciled figures spray-painted on canvas – for $60. The art was worth a lot more than that, yet almost no one bought any. We asked how that could be – and got a lot of great reader responses in the comments. Thanks!

It turns out that there’s a second part to this story. One week after Banksy tried and failed to sell his art, a bunch of unrelated artists set up a stand selling fake Banksys for $60. The pieces were exact replicas of the ones Banksy had tried to sell in his stand.  But this time the artists told shoppers very clearly that the pieces were fake. And yet they sold out their stock in an hour.


What Makes People Do What They Do?

John List and Uri Gneezy have appeared on our blog many times. This guest post is part a series adapted from their new book The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life. List appeared in our recent podcast “How to Raise Money Without Killing a Kitten.”

Money is important. For a long time, economists thought that it was the only thing that mattered. And, in fact, if you want people to do what you want, money can be incredibly useful. Out to entice the best workers? Pay more. Want to sell a product? Discount it, a lot. Want to discourage a bad behavior? Impose a monetary fine.

It seemed a little silly to us though (as well as to other behavioral economists doing work back in the 1990s) to think that money was the only thing that mattered. So we set out to learn exactly when and how monetary incentives work. Along the way, we discovered some environments where incentives don’t work at all. 


Sure, "Saving Our Grandchildren From Climate Change" Sounds Nice…

You want to know what the biggest obstacle to dealing with climate change is? Simple: time. It will take decades before the carbon dioxide we emit now begins to have its full effect on the planet’s climate. And by the same token, it will take decades before we are able to enjoy the positive climate effects of reducing carbon-dioxide emissions now. (Even if we could stop emitting all CO? today, there’s already future warming that’s been baked into the system, thanks to past emission.)

That is the lead of Bryan Walsh‘s excellent Time article called “Why We Don’t Care About Saving Our Grandchildren From Climate Change.” It covers much of the ground we covered in SuperFreakonomics but probably does a better job in laying out the inherent conflicts of climate change — long-term problem vs. short-term incentives — without enraging people.


The Unsustainable Economics of Cancer Drugs

In New York magazine, Steve Hall lays out the good, bad, and the ugly of cancer-drug economics. Warning: it is mostly bad and ugly.

The pharmacist e-mailed the numbers, and Saltz stared at the figures on his computer screen. Zaltrap, the drug that was extremely similar to Avastin, cost roughly $11,000 a month. (And because that extra 42 days wouldn’t be possible without taking the drug for, say, seven months before—which was roughly what was happening in clinical trials—the price for that six-week life extension could be as high as $75,000.)

“Wow,” he said to himself, “that’s a deal-changer for me.”

That may not seem like a heretical statement, but the unspoken rule in American health care is that doctors should never consider the cost of a medicine that might be beneficial to patients. When the FDA approves a new cancer drug, it analyzes safety and effectiveness only. Medicare is obliged to reimburse payment for the drug, and private insurers in most states must cover the cost. Any doctor who considers cost—or the value of a costly drug—risks being accused of “rationing” health care.


How to End (Price) Discrimination

John List and Uri Gneezy have appeared on our blog many times. This guest post is part a series adapted from their new book The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life. List appeared in our recent podcast “How to Raise Money Without Killing a Kitten.”

The passage of the Americans with Disabilities Act was a landmark civil rights bill. It afforded the disabled protections against discrimination that were similar to earlier landmark civil rights bills. In particular, the bill targeted two types of discrimination. One type was the discrimination against the disabled motivated by hatred or disgust. For example, one provision targeted employers that denied employment opportunities to those that truly qualified. Other parts of the bill focused on ensuring a level playing field for the disabled, like one requirement for businesses to make readily achievable retrofits to their businesses to afford the disabled access.

When economists think about the causes of discrimination, they tend to lump them into these two categories. The first is called animus discrimination, which is the type of discrimination we tend to associate with the treatment of African-Americans in the early 20th century. The second is called statistical discrimination, which is discrimination motivated by statistical trends associated with groups. For example, women tend to pay less for auto insurance because they are safer drivers. 


How Does that Steak Frites Happen?

If you want to remind yourself what a really good magazine article can be, check out Willy Staley‘s N.Y. Times Magazine piece “22 Hours in Balthazar.” Balthazar is a SoHo restaurant that’s been around long enough to be an institution but is still good enough to inspire devotion from scene-setters, tourists, and locals alike. How?

That’s the question the article (and photographs) answer, in an elegant and fact-filled manner. For instance:

For now, everything is quiet at Balthazar. The last guests from the night before left just a few hours ago, and the nighttime porters are still finishing their thorough scrub of the restaurant. But the delivery trucks are starting to arrive all over again, idling on Crosby. Men in lifting belts wheel hand trucks stacked high with food from across the globe: 80 pounds of ground beef, 700 pounds of top butt, 175 shoulder tenders, 1 case of New York strips, all from the Midwest; 5 pounds of chicken livers, 6 cases of chicken bones, 120 chicken breast cutlets; 30 pounds of bacon; 300 littleneck clams, 110 pounds of mussels from Prince Edward Island, another 20 pounds from New Zealand, 50 trout, 25 pounds of U10 shrimp (fewer than 10 pieces per pound), 55 whole dorade, 3 cases of escargot, 360 Little Skookum oysters from Washington State, 3 whole tunas, 45 skates, 18 black sea bass, 2 bags of 100 to 120 whelks, 45 lobster culls. That’s just the fish and meat order.


The Nobel Prize in Physics and Traffic Priority at Roundabouts

The 2013 Nobel Prize in Physics was recently awarded for symmetry breaking and its consequence, the Higgs boson—a particle so well known that, according to the president of the American Physical Society, “[i]f you’re a physicist, you can’t get in a taxi anywhere in the world without having the driver ask you about the Higgs particle.” Teaching the symmetry unit in my own course this semester, I couldn’t help wondering about symmetry as I drove through an apparent example of symmetry: roundabouts or traffic circles.

Roundabouts use two complementary systems for controlling traffic flow: (1) Traffic in the roundabout has priority, or (2) traffic entering the roundabout has priority. The choice seems so symmetric, like choosing right- or left-hand traffic. In the United Kingdom, traffic in the roundabout has priority. In contrast, on many Massachusetts roundabouts, including one on my commute, entering traffic has priority.


Economists Needed in the Music Business!

For the first time, Austin City Limits, one of the two biggest music festivals in town, is running on two weekends instead of just one.  Unfortunately, the price for a pass for the second weekend on Craigslist is now down to half the festival sponsor’s original asking price.  Why?

1. The asking price for the second weekend was the same as for the first—not smart when you’re doubling the number of offerings; and the headliners are identical on the two weekends. The amount supplied is double in quantity, but no different in quality or even in variety; double supply, no change in demand.

2. Demand is almost certainly lower on the second weekend, since that is the weekend of the UT-Oklahoma game in Dallas.

It was probably a bad business decision to price the second weekend the same as the first. 

(HT: KM)


A Unified Theory of Why Women Earn Less

When it comes to the year 1991, history books will undoubtedly focus on the first Gulf War and the dissolution of the Soviet Union, but at least domestically, the biggest change was one you probably never heard about: 1991 was the first year that women overtook men in college attainment, a trend that has only gained steam since. Today 37.2% of women between the ages of 25 to 29 have a four-year college degree or higher versus just 29.8% for men.

Yet for all the academic achievement by women, men still earn a higher wage for equivalent jobs and continue to dominate the highest ranks of society. Senior management positions? Only one in five are held by women. Fortune 500 CEOs? Just 4% and fewer than 17% of the seats in Congress are held by women. 

Scholars have long theorized about the reasons why women haven’t made faster progress in breaking through the glass ceiling. Personally, we think that much of it boils down to this: men and women have different preferences for competitiveness, and at least part of the wage gaps we see are a result of men and women responding differently to incentives.


Some Evidence on the Relationship Between Copyright and Profit

How do copyright laws affect creativity? Do stronger laws increase profitability — and, therefore, do they increase creativity? If musicians/filmmakers/authors/software designers/etc. etc. etc. don’t have the strong incentive of copyright protection, will they create less or inferior work?

These question are both broad and long; many great minds have wrestled with them, and will continue to do so. Our recurring guest bloggers Kal Raustiala and Chris Sprigman regularly discuss copyright; Levitt touched on it here, and we discussed copyright protection in this podcast.

Now, in a new working paper (abstract; PDF) called “Copyright and the Profitability of Authorship: Evidence from Payments to Writers in the Romantic Period,” Megan MacGarvie and Petra Moser take up the argument: 

Scott Turow, President of the American Authors’ Guild, warned that regimes that weaken copyright, such as digital piracy may cause the “slow death of the American author” (Turow 2013). Empirical analyses of file sharing, however, reveal no significant effects on the quantity or quality of recorded music (Oberholzer-Gee and Strumpf 2009; Waldfogel 2013), which suggests that the importance of copyright protection may be overstated.


When a Fake Banksy Is a Real Banksy

Many news outlets this week carried the story that Banksy, the celebrated British street artist, had set up an innocuous-looking booth near Central Park that offered original signed works for $60 each—despite their value being much closer to $60,000 apiece.  Even with this astounding discount, only a handful were sold—as the video in the post, from Banksy’s website, shows.

What’s interesting to us is what this says about art and the role of copies. While copying is a huge concern in many art forms—especially music and film—in fine art, it is comparatively insignificant. In China, there are whole villages full of artisans devoted to copying the great masters of Western art, and certainly fakes and frauds are well known in the West as well. Yet there is not a thriving black market in Banksy knockoffs—or, for that matter, in the work of other major contemporary artists.  Why is that?


How Can We Save Ourselves From Ourselves?

John List and Uri Gneezy have appeared on our blog many times. This guest post is part a series adapted from their new book The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life. List also appeared in our recent podcast “How to Raise Money Without Killing a Kitten.”

It’s a late-September afternoon in 2009 and the students of Fenger High School on Chicago’s South Side are crossing a vacant concrete lot. Some live in the Altgeld Greens housing project. Others live in a part of Chicago’s rough Roseland neighborhood (also called “The Ville”).  Some of the students from these areas have developed fierce antipathies toward each other, though the groups are more like cliques than gangs.

As the teenagers cross the lot, a fight breaks out. Someone pulls out a cell phone and starts recording a video of 15 to 20 kids fighting. Around a minute into the video, someone discovers a couple of two-by-fours lying in the empty lot. Eugene Riley, sporting a red motorcycle jacket, takes one of the big pieces of wood from a pal and swings it like a baseball bat into the back of 16-year-old honor student Derrion Albert’s head.


Homosexuality Is Undercounted; So Is Homophobia

That is the argument made in a new paper (abstract; PDF) by Katherine Coffman, Lucas Coffman, and Keith Marzilli Ericson, entitled “The Size of the LGBT Population and the Magnitude of Anti-Gay Sentiment Are Substantially Underestimated”:

Measuring sexual orientation, behavior, and related opinions is difficult because responses are biased towards socially acceptable answers. We test whether measurements are biased even when responses are private and anonymous and use our results to identify sexuality-related norms and how they vary. We run an experiment on 2,516 U.S. participants. Participants were randomly assigned to either a “best practices method” that was computer-based and provides privacy and anonymity, or to a “veiled elicitation method” that further conceals individual responses. Answers in the veiled method preclude inference about any particular individual, but can be used to accurately estimate statistics about the population. Comparing the two methods shows sexuality-related questions receive biased responses even under current best practices, and, for many questions, the bias is substantial. The veiled method increased self-reports of non-heterosexual identity by 65% (p<0.05) and same-sex sexual experiences by 59% (p<0.01). The veiled method also increased the rates of anti-gay sentiment. Respondents were 67% more likely to express disapproval of an openly gay manager at work (p<0.01) and 71% more likely to say it is okay to discriminate against lesbian, gay, or bisexual individuals (p<0.01). The results show non-heterosexuality and anti-gay sentiment are substantially underestimated in existing surveys, and the privacy afforded by current best practices is not always sufficient to eliminate bias. Finally, our results identify two social norms: it is perceived as socially undesirable both to be open about being gay, and to be unaccepting of gay individuals. 


Is There a Glass Ceiling in Corporate Crime?

Our podcast “Women Are Not Men” looked at a variety of gender gaps, including the fact that the vast majority of violent crime is committed by men. A new paper by Darrell J. Steffensmeier, Jennifer Schwartz, and Michael Roche in the American Sociological Review finds that women are less likely to be involved in corporate crime as well:

Typically, women were not part of conspiracy groups. When women were involved, they had more minor roles and made less profit than their male co-conspirators. Two main pathways defined female involvement: relational (close personal relationship with a main male co-conspirator) and utility (occupied a financial-gateway corporate position). Paralleling gendered labor market segmentation processes that limit and shape women’s entry into economic roles, sex segregation in corporate criminality is pervasive, suggesting only subtle shifts in gender socialization and women’s opportunities for significant white-collar crimes. Our findings do not comport with images of highly placed or powerful white-collar female criminals.

“Men lead these conspiracies, and men generally prefer to work with men,” Steffensmeier told the Washington Post. “If they do use women, they use them because they have a certain utility or they have a personal relationship with that woman and they trust her.”


Charity and the Beauty Effect

John List and Uri Gneezy have appeared on our blog many times. This guest post is part a series adapted from their new  book The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life. List appeared in our recent podcast “How to Raise Money Without Killing a Kitten“; the post below offers a fuller description of an experiment discussed in that podcast.

On a chilly Saturday afternoon in December, 2005, Jeanne, a bright, energetic junior at East Carolina University (ECU), trotted up the walk of a suburban home in Pitt County, N.C. Jeanne wore a shirt emblazoned with the name “ECU Natural Hazards Mitigation Research Center.” She also wore a badge with her photograph, name, and solicitation permit number on it. She knocked, and a middle-aged man opened the door. 

“Yes?” he said, eyeing her. 

“Hi,” she said, smiling brightly. “My name is Jeanne. I’m an ECU student visiting Pitt County households today on behalf of the newly formed ECU Natural Hazards Mitigation Research Center. Would you like to make a contribution today?” It’s probably safe to say that the last thing the middle-aged man had on his mind was the possibility of Jeanne being a double agent. Yes, she was really trying to raise money for the center. But she was also part of a bigger experiment involving dozens of college students knocking on the doors of 5,000 households in Pitt County. 


When the Store Gets Crowded, the Shopper Buys Safety

A new research paper (abstract; PDF) by Ahreum Maeng, Robin J. Tanner, and Dilip Soman looks at how a shopping environment affects buying patterns. From the press release:

New research by Ahreum Maeng, an assistant professor in the KU School of Business, finds that socially crowded environments lead consumers to be more conservative. Specifically, Maeng finds that consumers in crowded settings prefer safety-oriented options and are more receptive to prevention-framed messages than promotional messages — for example, preferring a toothpaste offering cavity protection over a toothpaste promising a whiter smile. Maeng also finds consumers in crowded settings are less willing to make risky investments. 

“Consumers in crowded environments get conservative and safety-focused,” Maeng said. “We believe this is because people in socially crowded settings activate an avoidance system that results in a more prevention-focused mindset. This, in turn, makes socially crowded individuals more likely to choose options that provide prevention-focused benefits.” 

Maeng points out that the research has important implications for retailers as well as policymakers.  “For example, our findings indicate a store would benefit by selling and marketing products differently on a crowded Saturday during the holidays versus a Tuesday morning in August,” she says. “And even within the same day, stores might consider changing their signage or product placement to account for different levels of crowding.”


Are You Male, With a Job in Finance or Economics, and Want to Get on a "Wilderness Experience" TV Show?

Then today is your lucky day. Here’s a request we received from friends at a TV production company:

We’re casting the first season of Enter the Wild, an inspiring documentary series for a major cable network.  In the show, a diverse group of real people takes an outdoor survival course taught by one of the country’s most acclaimed wilderness experts.

It’s not a competition show. It’s not Survivor. The series will follow participants as they engage in a fully immersive, three-week course.  Our hope is that everyone will walk away not only with life-saving skills, but a new perspective on their lives and their relationship with nature.

We’d love to include a the point of view of a male with a work background in financial markets or economics in this wilderness experience. You can apply or get more information at our website.

A “casting treatment” from the company gives further information about the types of characters they are looking for. If I were a young anthropology researcher, I would be all over this thing — for what it says about the people who make, watch, and appear on modern TV. Here are a few of my favorites: