Search the Site

Freakonomics Blog

Mike Leigh Knows Incentives

There’s a great little scene in Mike Leigh’s new-ish film Another Year, which like most Mike Leigh films, is wonderful and also rather depressing (or at least sobering). In this exchange, there’s a wife and husband named Gerri and Tom; they are late middle age, mid-middle class, extremely compatible with each another and have their heads screwed on as right as can be. Their friend Mary works with Gerri and is a sad sack, a deluded and downward-spiraling woman who’s desperate for approval and love and, well anything she can get her hands on. The excerpt from the screenplay, below, can hardly do justice to the excellent acting and direction, but it gives you a sense of what makes Leigh’s films so quietly electric. According to his Wikipedia page, Leigh has been in theater and film his whole life, but when it comes to incentives, he sure thinks like an economist.


Against (Discretionary) Snow Days

I awoke last week to another foot of snow adding a third blanket of winter to our city of Elms. I am reminded of the joy I felt as a child waiting to learn if school was canceled. Something has been lost in our age of instant information — who can forget huddling around the radio, holding your breath while the radio announcer lists the seemingly endless roster of closings? Today, we received the decidedly less romantic robo-calls at 5:33 in the morning.


Is Climate-Change Hysteria Bad for the Environment?

A new study called “Apocalypse Soon?” by the psychologists Matthew Feinberg and Robb Willer (summarized by the BPS Research Digest) finds that, for people who implicitly believe the world is fair, dire warnings about climate change may make them more skeptical about the concept.


Here's the Steelers-Packers Contest Answer

We ran a contest yesterday with a simple question: what do the Pittsburgh Steelers and the Green Bay Packers have in common? There are many correct answers, but there was one in particular I was looking for. I was worried it might be hard, and I was ready to step in and give a clue. But I was wrong to be worried. The post went up at 10:30 a.m.; the first correct answer came in at 10:31 a.m., in the very first comment.


Sumo: More of the Same

I can’t say that I am surprised by the latest sumo headline from the Associated Press.


Teach for America's Youth Is Being Served

Teach for America (TFA) recently announced it is receiving $100 million from four philanthropists to start its first endowment. The Eli and Edythe Broad Foundation, one of the “Big Three” Education philanthropists, pledged the first $25 million, which encouraged matching donations from three others. “A few years ago we embraced the priority of making Teach For America an enduring American institution that can thrive as long as the problem we’re working to address persists,” said Wendy Kopp, the founder of TFA. “I think it’s only appropriate in our country – which aspires to be a place of equal opportunity – that we have an institution which is about our future leaders making good on that promise.”


Contest: What Do the Pittsburgh Steelers and the Green Bay Packers Have in Common?

I mean beside the fact they’re both playing in the Super Bowl this Sunday, or that they’ve both won a bunch of NFL championships, or that they’ve both reached the Super Bowl in recent years as a No. 6 seed. There may be lots of other commonalities I’m not thinking of, but whoever is first to give the answer I am thinking of will get his/her choice of Freakonomics swag, which now includes the just-released Freakonomics movie DVD and a movie poster.


Mobile Banking Takes Off in Kenya

A new paper by William Jack and Tavneet Suri looks at M-PESA, a mobile-money transfer service in Kenya. Mobile banking has become particularly popular in the developing world, where safe, reliable banking has historically been limited, and often available only to the wealthy. The authors conclude that M-PESA has been wildly successful in Kenya: “We estimate that M-PESA had reached nearly 40 percent of the adult population after a little more than 2 years of operation, and that now, approaching only the fourth anniversary of its launch, is used by more than two-thirds of households.”


Did the Rooney Rule Really Work?

Last week, Tobias J. Moskowitz and L. Jon Wertheim wrote a guest post about black coaches in the NFL and the introduction of the Rooney Rule, which requires teams to interview at least one minority applicant when filling head-coaching spots. Moskowitz and Wertheim concluded that the policy change was successful: “The league achieved its aim. By 2005, there were six African-American coaches in the NFL…”


Communism and the Market

The Economist reports that the city of Shanghai has been auctioning car license plates. The average auction price has recently been $6,900, truly remarkable considering average family income in China, and even in Shanghai. The number of plates given out in 2011 will be reduced further in an attempt to reduce gridlock and pollution (both of which my experience several years ago in Shanghai suggests are world-class).


The Hidden Side of Trash in Taipei

Our recent podcast about the economics of trash featured a story about an American grad student living in Taipei. He discovered that that city had an unusual trash-collection style: instead of putting your trash out at a curb or in a dumpster, you’d have to bring your trash out at a certain hour to deposit it directly in a municipal trash truck, which might be playing Beethoven to announce its arrival.


Need to Turn Off His Sex Drive? Cry

What happens to men when women cry? A new study finds that, as in mice, human tears may serve a “chemosignaling function.” Specifically, female tears seem to reduce male sexual arousal.


The Latest in Freakonomics Swag

When we run a contest or quiz on this blog, we generally offer the winner/s some kind of prize. We’ve recently updated the old offerings. So here’s the current assortment. And remember: you can always get a free signed bookplate for either book any time you want. If you’re really feeling the spirit, you can even get some SuperFreakonomics pants, but you have to buy them yourself. (Sadly, they do nothing to stop you from walking home drunk.)


What Makes a Donor Donate? (Ep. 51)

In our latest Freakonomics Radio on Marketplace podcast, we look at the economics of charity — specifically, what works (and what doesn’t) when trying to incentivize people to give. (Download/subscribe at iTunes, get the RSS feed, listen live via the media player above, or read the transcript.)

In Australia, Dick Smith’s electronics empire has afforded him enough success to be able to donate about 20 percent of his annual income to charity. But, he says, this kind of generosity is no longer the norm:


How Women and Men Spend Their Money

Both men and women lie to their partners about their spending, but the money similarities between the genders seem to end there. Viviana A. Zelizer explores the differences in a Wall Street Journal article, writing that women in many different cultures are more likely than men to direct money toward their children’s well-being.


Marketing Privacy

Several years ago, Matthew Funk and I proposed a mechanism for moving beyond the all-or-nothing choice of the do-not-call list to a system where you also could choose how much you would like to be paid for telemarketing calls.


Bring Your Hidden-Side-of-Sports Questions to the Scorecasting Authors

Earlier this week, Tobias J. Moskowitz (a University of Chicago finance professor) and L. Jon Wertheim (a Sports Illustrated writer) contributed a guest post on black NFL coaches, which was an adaptation of their new book Scorecasting: The Hidden Influences Behind How Sports Are Played and Games Are Won. You may recall this as the book Levitt described as “[t]he closest thing to Freakonomics I’ve seen since the original,” much to his wife’s chagrin.


The "Big Three" of Education Reform

Joanne Barkan, writing in Dissent, argues that three big nonprofit foundations (the Bill and Melinda Gates Foundation, the Eli and Edythe Broad Foundation, and the Walton Family Foundation), working together, exert a “decisive influence” on public-school education.


How Paul Samuelson Really Got Rich

Over at Economic Principals, David Warsh reveals little-known facts about Paul Samuelson’s acuity as an investor and his involvement in an early hedge fund called Commodities Corp.: “Long famous for the fortune that his pioneering textbook earned him after 1948, it turns out that Samuelson may have made more money as an investor than as an author. He was both smarter and richer than is generally understood: as an investor, a bigger winner, perhaps, than the more volatile John Maynard Keynes.”


Recycling Strikes Back

I’m back in Germany, the land of serious recycling. We separate much of our excess into bio, packing, paper and everything else (“all the rest, and only that,” as the instructions in our apartment state). Of course, this doesn’t include the three types of glass – white, green and brown – that are to be carried to a set of common receptacles two blocks from our apartment.


Why Income Inequality Matters

The Economist complements this week’s print issue on rising income inequality with an online forum on the subject. Daron Acemoglu explains why we care about income inequality: “First, people’s well-being may directly depend on inequality, for example, because they view a highly unequal society as unfair or because the utility loss due to low status of the have-nots may be greater than the utility gain due to the higher status of the haves. Second and more importantly, equality of opportunity may be harder to achieve in an unequal society … Third and most importantly, inequality impacts politics. Economic power tends to beget political power even in democratic and pluralistic societies.”


Radio in Progress: One Upside of Aging

We’re working on a Freakonomics Radio episode about pain. One component is the very interesting research by Daniel Kahneman and Donald Redelmeier about how colonoscopy patients remember the pain of the procedure, and how that memory can be manipulated (to dim the memory of the pain) so that patients aren’t reluctant to return for their next colonoscopy.


Hating Economists but Loving Economics

Robert Shiller points to an interesting conflict in economics today: “We are in the midst of a boom in popular economics: books, articles, blogs, public lectures, all followed closely by the general public. Yet this boom in popular economics comes at a time when the general public seems to have lost faith in professional economists – because almost all of us failed to predict, or even warn of, the current economic crisis, the biggest since the Great Depression.”


Busting Docs Who Don't Wash Their Hands

Here’s an interesting method of combating the hand-hygiene problem discussed at length in SuperFreakonomics: “A doctor enters a hospital room to examine a patient, but neglects to wash her hands. A special badge on her lab coat turns a deep shade of red as wireless computer components in the door, the soap dispenser and near the bed immediately relay information about the unwashed hands. The doctor is busted.”


Scorecasting: A Guest Post

When my wife saw the cover of the new book Scorecasting by Tobias J. Moskowitz and L. Jon Wertheim, which was sitting on my bedside table, all she could do was shake her head.


Market Failure in Auctions?

As did its recent acquisition, Northwest Airlines, Delta is doing on-line auctions of seats that must be vacated if the plane is overbooked.