Stephen J. DUBNER: All right, so Levitt, it’s time to field some questions from listeners and readers, some Freak-quently asked questions. How do you feel about that? You’re ready?
Steven LEVITT: I’m ready to go.
DUBNER: This is your favorite part of life, isn’t it?
LEVITT: Well, I do like being able to just jabber for 30 seconds about something I don’t know that much about, and then move on to the next thing.
DUBNER: That’s why we’re here. Alright, here’s one from a reader named Sebastian Savoie. Sebastian writes to say, “Is it safe to sneeze with your eyes open?”
LEVITT: That’s the best question we can get from a reader?
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DUBNER: Alright, so let’s start with a reader named Alex Daley. And Alex, he or she, I’m not sure which, wants to know how to drive like an economist. Quote, “As I slowed down to a crawl by what turned out to be rubbernecking on a highway last week, I was leaving a very large cushion to keep traffic flowing, but invariably someone would tailgate me or cut in front. Is there anything we can do about this?” Levitt, you have any thoughts?
LEVITT: Well, I will say that there are few instances in our society where individuals are able to impose such large externalities on other individuals through their behavior as it is on the roads, so through aggressive driving, and drunk driving, and simply from being on the roads period, it turns out that other people driving impose huge costs on me as a driver. If no one else was on the roads, I could speed along at whatever speed I want. I would never had to worry about crashing into another car; life would be good. But between congestion, and accidents, and the insults that come when people cut you off, roads are the place where as an economist you always think about externalities. And the obvious solution to externalities are usually prices. That we should be charging people on the roads.
DUBNER: Now, last time I was out there with you a couple weeks ago I realized that you and I have something in common that I think most men don’t have in common. Do you know what I’m talking about?
LEVITT: Yeah, admitting that we’re terrible drivers.
DUBNER: Yeah! I mean, I wouldn’t say terrible about you or me. I mean, I think you’re actually okay.
LEVITT: Oh, I’m so bad. I used to judge…
DUBNER: You did make that one u-turn by the Dairy Queen. That was crazy.
LEVITT: I used to judge my progress as a driver by how many miles I would go in between rear-ending someone on the freeway. And if I went more than 500 miles before I slammed into someone from behind on the freeway I judged that to be a success. But I haven’t done that in over a year.
DUBNER: You’re very cautious.
LEVITT: No, I’m not cautious.
DUBNER: Maybe worried, then, is the right word? Because you’re constantly saying, “Oh god, I’m going to hit something, is that guy going to hit me?”
LEVITT: But that’s because I have data. I have data that I know…. You saw my car. My car is so covered with dents…
DUBNER: Your car does look a little bit like a demolition derby car. So you and I both being admittedly not the best drivers in the world, we probably should be promoting or at least wishing for the next great invention. You thinking what I’m thinking?
LEVITT: The driverless car.
DUBNER: Yeah, the driverless car. I badly want the driverless car. I would be so happy if starting tomorrow there were never another driver in a car.
LEVITT: I mean, the driverless car is an unbelievable invention, I think. The question is how much would people pay to be able to do other things they enjoy like reading the newspaper, or watching TV, or being on the internet when they’re riding in a car instead of having to drive. And I think the answer to that is people would pay a lot of money. And that’s just a start. That even ignores the fact that, presumably, we aren’t going to let driverless cars be on the road unless they’re a lot better at driving than cars that have humans driving them. So, the biggest gain might even be in the reduction of fatalities. Maybe, who knows, fifteen, twenty thousand fatalities a year in the U.S. alone, and worldwide, I mean…
DUBNER: I think thirty, I think we’re still at about thirty.
LEVITT: Right, so I’m still thinking that driverless cars are occasionally going to hit things and kill people.
DUBNER: So how much better, how much safer, just on a pure fatality level, let’s say, how much safer do you think driverless cars would have to be for people to accept them, or would it be that even one driverless car death is too many for people because they don’t like to cede control?
LEVITT: That’s a great question. My guess is that if driverless cars have even a tenth as many fatalities as cars with drivers there will be no public acceptance of them, maybe even a twentieth. And part of that is just the strangeness of the human psyche and the fact that being out of control is costly, that people like to feel the sense of control that comes with being behind the wheel. But part of it I think is rational in the sense that if I am a safe driver, my likelihood of being in a crash is much, much lower than the average fatality rate. So if I’m just driving in the middle of the day and driving well, my chance of dying on the roads are extremely small because I’m not driving drunk, because it’s not late at night, because I’m not having a one-car crash, going off the road. So, consequently, I think it isn’t crazy for people to demand that driverless cars be very, very safe because of the heterogeneity in the current safety attributes of drivers in the population.
DUBNER: Alright, here’s a question from a reader named Eric who says — I think even I know the answer to this question — Eric says, “I’ve never really understood why nightclubs run ladies nights. Why do you think the nightclubs target women?” I think I know the answer to that, and I’d be curious to know if my obvious answer is maybe wrong. Do you have any thoughts, Levitt?
LEVITT: I’ve never heard an easier question than that. What’s Eric thinking? Has Eric ever been to a nightclub?
DUBNER: All right, well I will tell you this though, did you know that ladies’ nights discounts have been struck down in various states as being unlawful gender discrimination against men?
LEVITT: That sounds like a great undergraduate thesis to see what impact the natural experiment of a law change has on whatever outcome that creative undergraduate can find to explain.
DUBNER: Well, let me ask you this, if some states decide to strike down ladies’ night on the grounds that it’s gender discrimination against men, what about a senior discount for instance, or a kids’ discount? Let’s say a movie theater, right? A senior citizen and a child are consuming the same amount of product at a movie theater as a non-senior or kid, right? They’re all watching the same movie. What is that point of offering a senior discount?
LEVITT: Everything in pricing is about the elasticity of demand. And if it turn out that it costs you the same to provide a seat to a senior as it does a regular-aged person at the movie theater, but the seniors are more sensitive to pricing, then you want to charge the seniors lower if you can. It’s what economists call price discrimination. And it’s the basis of much of what creative companies are trying to do to maximize their profits.
DUBNER: Okay, so that makes sense, but let’s say I like to go to early-bird showings of movies where there’s a senior discount. And let’s say I’m forty years old and let’s say the guy next to me is fifty-five years old and he’s just gotten his AARP card, and he gets a senior discount. I want the senior discount too. How is that fair? How is price discrimination not the kind of discrimination that we don’t allow?
LEVITT: So, fairness isn’t really the question, the question is how do companies make the most money? I mean, companies would love to charge different prices to different people. They pay a price for it though because it makes consumers angry when they find out that they’re the ones who have paid the higher price. But, you know, when you go online, whenever I buy anything online, there’s always a little slot at the checkout page that says coupon, or coupon code, and I never, ever have one. And every time I see it I feel bad about myself because I think: what kind of special deal is out there that I’m not getting? Now I guess in many cases there’s probably no special deal, but it actually always induces sadness on my part to know that these companies are engaging in price discrimination and I’m the odd man out.
DUBNER: And do you ever say, you know what, if I’m not getting the coupon or the discount, forget it I’m just not going to buy it?
LEVITT: No, because I’m not a very price-sensitive buyer. I just try not to look at prices and I just try to enjoy life.
DUBNER: So, here’s a reader named Quinn who wants to know, “To either or both of you, what’s the most embarrassing mistake you’ve ever published?”
LEVITT: Published… oh, I thought they were going to say did. You’ve got some great ones, Dubner.
DUBNER: What, that I did?
DUBNER: Or published?
LEVITT: Yeah, When I’m with you…. Well, you embarrass yourself sometimes, pretty…. Can you tell them, can you tell the Bill Gates story?
DUBNER: Oh my god, I don’t think I can. That is too painful.
LEVITT: I think you have to. That was one of the funniest stories ever.
DUBNER: That was so bad I couldn’t believe it was really happening. Alright, so, all right, so you and I… so Levitt and I were, we were somewhere about to give a lecture, it was some big conference of some kind somewhere.
LEVITT: Software programmers probably.
DUBNER: Okay, as I recall, we were having a conversation in like the green room beforehand with another guy who was, like, the MC maybe of the event?
LEVITT: Exactly, he was the MC of the event.
DUBNER: Okay, and then he said that, “You know, I’m acting as an MC but actually I’m a standup comic.” And I said, ”Oh man, I said, I love comedy, I truly love comedy but it looks so friggin’ hard. It just looks like, you know, if I watch professional sports I understand that that’s hard, and I know that I couldn’t quite, I can’t hit a ninety-mile-an-hour fastball, but I can kind of get it. But with comedy it just looks like incredibly, so easy to fail.” And I started telling this guy about this situation that I’d seen that I thought was the most spectacular failure of any comedian, which was at another conference where I spoke, and the act before me was a comedian who had made a whole show impersonating Bill Gates. And, like, that was his act. For forty-five minutes, it was like a comedy routine for software audiences where he was impersonating Bill Gates. And I was there for this one, and I watched it, and it was dreadful. So, I described to this comic that we’re standing with that day how bad it was, and that I felt terrible for the guy, that he was plainly working really hard, but like from minute two it was plain that his Bill Gates impersonation act sucked and there was no way it was going to get better. And then you’ve got like five thousand people in the audience and this dynamic of them having to sit through the whole thing and him having to go through the whole thing while knowing the next forty-two, three minutes were going to be terrible. And I just described it, and described it, and described it, and this guy’s getting like this smile on his face, this comedian as I’m describing it to him. And then I finish and he said, “Yeah, that was me.” I said, “No. You’re just — you’re messing with me, there’s no way.” He said, “No, that was me.” And he starts to do the act. And that was him! And he’d been dressed up in Bill Gates clothes so I hadn’t recognized him now. And he turned out to be, like, the nicest guy, and, you know, a really good comedian. And you know what I thought was the nicest thing about him is he totally forgave me. He said, “You know, you’re right, that act was terrible, I tried it out, you know, I killed it, and there it goes.”
LEVITT: So the worst thing we’ve done in print, though… I’m sure I’ve done many things to embarrass myself in print on the blog.
DUBNER: Oh! All right, so here’s what I remember about one of yours. After our first book came out and we had our blog going, and the blog was kind of, you know, turned into something bigger than we planned for it to be. And then The New York Times offered for us to put our blog on The New York Times site, which was, you know, pretty cool. And so they asked if I would do a couple interviews with newspapers that wanted to write feature stories about it, like right the day it was coming. And one of them was for The New York Observer. And they asked me, why does the Times, you know, trust you guys, basically outside bloggers? And I said, I used to work at the Times, I adhere to those standards, Levitt is, you know, academic, University of Chicago. And I said it’s not like we’re going to issue some fatwa against somebody on our blog. And then the very first day of the blog, your first blog post is, “Can anyone give me some really good ideas, if I were a terrorist how would I want to attack the United States?” That was your…
LEVITT: It wasn’t just that. I also gave them my best idea of how I would attack the United States.
DUBNER: And the comments starting melting down the Times’s software, like they couldn’t, they moderated comments, they couldn’t moderate them fast enough. And then they shut off the comments because they felt like it was kind of turning into a kind of cesspool hate war. The hate was mostly against you from what I recall.
LEVITT: Oh yeah, it was all against me.
DUBNER: When we come back, we’ll shift gears and talk to Steve Levitt about someone who was very important to him — and to Freakonomics.
LEVITT: She went into my mother’s closet, and my mother for some unknown reason had these big, blond, 1970s wigs. And my sister put that big, blond wig on me and I was transformed into Emily Vanderpool.
DUBNER: That’s coming up, on Freakonomics Radio.
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DUBNER: As Levitt and I were answering your questions for this podcast, our conversation drifted to something much sadder — the recent death of his sister, Linda Levitt Jines, who was only 50 years old. She died of cancer.
LEVITT: So, Linda was an incredibly influential person on my life. And in many ways I can thank my sister, Linda, for who I turned out to be. If you go back to a time when I was maybe twelve years old you have to imagine what I was like. I was incredibly reserved, quiet, shy. My only thing I liked to do was when I came home from school was to sit in my room and play by myself. You can imagine my horror in seventh grade when every student at the school I went to, St. Paul Academy, was required to participate in what was called the declamation contest. And this required you to go and find some piece of poetry or literature and to stand in front of the class and to recite it from memory. I mean, absolutely my worst nightmare. And so I went to my sister, Linda, who at that time was in twelfth grade. I asked her what I should do about the declamation contest, and she said, “I’m going to take care of it for you.” So she picked out a passage, and the passage was from a short story by Jean Stafford called “Bad Characters.” And the only shortcoming of this otherwise very entertaining passage is that it was written from the perspective of a girl. And it’s amazing how much of this still sticks with me so many years later.
Emily Vanderpool was the name of the narrator. And that’s the person whose persona I had to take on. So all of this seemed fine and it was going well until the eleventh hour when, as I practiced it, my sister Linda said, “It’s just missing something. We haven’t got it all there.” And she said, “I think I have an idea.” And she went up and she got one her jumpers out of the closet, the school uniforms that they had to wear when they were younger. And she put me in one of her school uniforms. And she said, no, we’re still not there. And she went into my mother’s closet, and my mother for some unknown reason had these big, blonde, 1970s wigs. And my sister put that big, blonde wig on me and I was transformed into Emily Vanderpool. And maybe others would have done differently, but I got up in front of the class, and I gave the speech. And the worst possible thing happened. They liked it so much that I won the class representation contest, which meant that I had to go and give the same speech in front of the entire school body, which was really my worst nightmare. And I got up there. And I think, in part, because of the fact that I was in drag it was somehow easier to do than if I wasn’t in drag. And against all odds, I won the entire seventh grade declamation contest. And I think it really did put my life on a different path than the one I otherwise would have headed down.
LEVITT: It’s interesting because it wasn’t the only time when I turned to her. Really, my sister, Linda, was unusual in the sense that she was the very best at what she did. When it came to words and creativity, and jingles, and titles, I literally have never met in my entire life anyone who even came close to her.
DUBNER: Well, Levitt, in fact, there was one word that she made up that was particularly important to us. Do you remember that night a few years ago, I was visiting you in Chicago, and we were up in your attic with Linda, and she told us the story of that particular word?
LEVITT: I do remember that, I remember that well.
Linda JINES: So I’m on vacation, and Steve hands me a sheaf of papers and he tells me, “I’ve written a book. I’ve gotten a tremendous amount of money for doing it. I’m feeling a little guilty, because really all that’s going to happen is it’s going to end up on the remainder tables of college bookstores across America. So, to make me feel a little less guilty, let’s give this book a chance. If you could take your creative powers and give it a really imaginative name, I could sleep at night.” So of course I was happy to do that. And I was happy to read the manuscript, which I thought was very good. And pretty much the minute I was done reading it, the name “Freakonomics” came to me. When Steve called me to see if I had anything, and I said, “I’ve got a few things, but I’ll tell you the leader is Freakonomics.” He said, “That is brilliant, thank you.” I said, “Oh, it’s alright, it only took me ten minutes.”
DUBNER: So Levitt, do you remember the publisher’s response to the title “Freakonomics?”
LEVITT: Oh, they hated the title “Freakonomics.” I mean, I think what they said to us was, “We gave you way too big an advance to call this book ‘Freakonomics.’”
DUBNER: I dug up some old emails, let me read you a couple. So this is one, this is from our editor at the time, our editor on Freakonomics. She wrote, “Dear Stephen and Steven, I just presented the book to our sales department.” That means where the editor kind of talks to the sales department about what the book is and how they’re going to market it. “And they were over the heels in love with it.” I don’t know that phrase, I guess head over heels in love with it. Blah blah blah, “However,” all capitals, “HOWEVER, they are a bit uneasy with the title. They felt that while it was catchy, it did not indicate what the book was about. They asked for something like, ‘The Tipping Point.’ I pointed out to them that unfortunately that title was already taken. What do you guys think?”
LEVITT: Now the funny thing about that is, in publishing speak, when she says they were uneasy, that means they hated it more than anything. Because no one in publishing will ever tell you the truth. I’ve never heard one word of bad news conveyed honestly in publishing.
DUBNER: Finally, we went back to Linda and said, “Look, the publisher — we think Freakonomics is great, but the publisher hates it. Can you come up with another list? And she did. Now, I’ll read you a few. Tell me what you think of these — these were Linda’s second or third or maybe even fourth list. Economics Gone Wild, I guess like Girls Gone Wild?
LEVITT: Not so good. Not so good.
DUBNER: Not so good? Dude, Where’s My Rational Expectation? Bend It Like Veblen.
LEVITT: That gets some clever points. I mean, it’s not really a title, but that’s very clever.
DUBNER: Then there were a few late entries. Do you remember the late entries?
LEVITT: I remember one of your gems. E-Ray Vision.
DUBNER: E-Ray Vision. That was so bad.
LEVITT: I always liked that. I thought that wasn’t bad.
DUBNER: E like economist. That was dreadful. And then, finally, September of 2004, here is the final note from them. “OK, we have finally decided to go with Freakonomics.”
LEVITT: You know, if things had turned out differently, this wouldn’t be the Freakonomics podcast, this would be the Bend It Like Veblen podcast. What do you think of that?
DUBNER: I daresay that if the book had been Bend it Like Veblen, there wouldn’t have been a podcast. But what do I know?
DUBNER: So Levitt, I remember something you once said that really stuck with me. It was about your first child, your son, Andrew, who died very young around his first birthday, is that right?
LEVITT: Yeah, nine days after his first birthday.
DUBNER: And I remember you saying — this was when I first got to know you — I remember you saying that most people didn’t ask or say anything about Andrew and about his death because they think that you won’t want to talk about it, but in fact that you are the one that does want to talk about it, and in fact they’re the ones who don’t want to talk about it.
LEVITT: I think that a lot of people don’t want to talk about the death of someone else’s loved one because they fear that it will bring up bad feelings and memories for the bereaved. But if you’ve ever been bereaved, you know that you feel the weight of the loss all the time. It’s always in your mind. It’s not that you forget that your son died or forget that your sister died. So it’s crazy to think that by bringing up the name of the person who’s died, or story about the person who’s died that you’re dragging someone back to a place, because they’re always in that place.
DUBNER: Is the same thing true with the death of your sister, Linda, now? That you are kind of, I don’t know about happy or eager to talk about it, if those are the right words, that you want to talk about it, as opposed to people who might know but would shy away from asking about it thinking that you don’t?
LEVITT: Yeah, maybe I’m unusual, but I love to talk about my son, Andrew. I love to talk about Linda. And really Linda in her own way was so special and so alive, really it’s a strange thing. She was really a homebody, like me, tremendously antisocial. She would much rather be at home than actually talking to people. But, unlike me, she had this amazing gift where every time she entered the room, she became the center of attention. I really cannot think of a time when she was in a room where she didn’t become the focal point of everything that was happening. And I think that aliveness that she had really lends itself to be talked about.