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Steven LEVITT: Hi, this is Steve Levitt.

Stephen J. DUBNER: And I’m Stephen Dubner. Thanks for downloading this “Freakonomics Radio” podcast.

LEVITT: When we started this a couple years ago, I never imagined we would still be making podcasts two years later.

DUBNER: And to your great chagrin, or to your great joy, we are?

LEVITT: Well, you do all the work, so it’s no problem for me.

DUBNER: Yeah, people think that you spend a lot of time in the radio studio, though.

LEVITT: Let’s keep it that way, it doesn’t hurt me to have them thinking I’m busy in the radio studio.

DUBNER: Well, division-of-labor-wise, you know, I do pick your brain a lot.

LEVITT: Yeah, that’s easy. I just don’t want to have to go places, talk to strangers, things like that.

DUBNER: Yeah, you don’t like talking to strangers too much, do you?

LEVITT: Whenever we’re together, I’m so glad that you are doing the talking so I can just mind my own business.

DUBNER: Levitt, what is your favorite thing about doing this podcast?

LEVITT: That you do all the work.

DUBNER: [laughs]

*      *      *

DUBNER: So it’s time for another round of FAQs — “FREAK-quently” Asked Questions — where we answer queries from you, our listeners and readers, and we’ve got Steve Levitt on the line.

LEVITT: Hey, Dubner.

DUBNER: You really love these, don’t you? I mean, it is incredibly fun to have people write with real questions, isn’t it?

LEVITT: Yeah, because the questions we get are so strange that you never could have made them up.

DUBNER: What do you think that says about, just, the age we live in where anybody can find anybody and write to them? Because, like, in the old, old days I used to have crazy questions for authors whose books I read, and you couldn’t get to them. But now everybody’s got our email. Do you like that idea?

LEVITT: Yeah, you know, the nice thing about email is it’s a high cost for the sender and it’s a low cost for the receiver. Like, compared to, say, talking on the phone where, if somebody calls you and you talk to them, it costs the initiator and the recipient the same amount of time and effort. But if someone wants to go and spend 20 minutes writing an email and we can respond in 30 seconds, that’s not a bad tradeoff.

DUBNER: Let me ask you this: if someone wants to write an email to you, or to us, and have a good chance of having it be answered — not necessarily on this podcast, but just, you know, via email or whatever — what’s, you know, give people some guidelines. What are the topics or the approaches that you are going to consider worth answering?

LEVITT: The hard part, I think, is just getting us to open the email, right? Because there’s just so much stuff, and you cull through, and so having a good tagline — a clever tagline that piques our interest — I think is good. Short definitely helps. Long is terrible. Because you have a theory about books: if you don’t get to the end of a book, you will never recommend it to anyone.

DUBNER: That is my theory.

LEVITT: If you don’t get to the end of an email, you can’t possibly reply.

DUBNER: That is true. Yeah, I do have this theory about books, and I have no idea whether it’s true, because I’ve looked for data and it’s really hard to find. But, you know, my view is that the way that books work best is when you read something, and love it, and tell someone else about it. And I find that I don’t often tell people about books that I read 10 pages of, even though I do that. What about you? Do you finish a lot of books and then tell people about it, versus reading a bit and telling people?

LEVITT: Well I’m not a big finisher, that’s for sure, on books. I’m a good starter and a bad finisher.

DUBNER: What share of books that you — that come into your possession, either through gift, or purchase, or whatever, stealing — what share of books that come into your possession do you finish, would you say?

LEVITT: Oh, I’d say of ones that I actively go out and get myself—.

DUBNER: One that you even — ones that you start to read, let’s say. Forget about the ones that you get them in the mail. Of books that you start to read, what share do you finish would you say?

LEVITT: I’d say 5 or 10 percent. But I don’t really think most books are meant to be read. Most books have so little content that they say the same thing over and over and over. And so, unless you’re kind of slow, there’s no point in reading chapters seven, eight, nine, 10, because they just say the same thing over and over. Now, that’s not true of all books, but certainly most business books. Now, obviously history books would be a very different story.

DUBNER: Well, novels — novels are a different model.

LEVITT: Novels you’ve got to finish, though. I do, you know — probably I finish half my novels.

DUBNER: Well, you love kind of teenage girl novels, that’s kind of your favorite.

LEVITT: I know, The Hunger Games is next on my list. I haven’t had a chance to get to that yet.

DUBNER: Yeah. So what are, like, your favorite series ever in history? Twilight would be number one, you think?

LEVITT: No, Harry Potter was way better than Twilight. I kind of had a — you know I had a love-hate relationship with the Twilight series. I was obsessed with them.

DUBNER: You ever read any romance?

LEVITT: No, I never have. Not really my thing.

DUBNER: Yeah. I haven’t either, although I’ve been reading so much about people who read romance now, because the e-book facilitates it. Because you don’t have to carry the — you know, the bodice ripper cover isn’t on the cover anymore. And so it did make me curious. I almost downloaded one the other day just to read it. But I was somehow afraid that, like — I have a shared Kindle account with my wife and kids. I didn’t know what that would lead to.

DUBNER: Uh, okay. So let’s look at some questions from readers, listeners. Here’s one from Andrew Foster. Andrew writes, “Dear Freakonomics, I have been listening to your podcast and I just started reading your book. You had a podcast about the lotto — the lottery, and savings accounts.” These were the prize-linked savings accounts that we did a piece about, about how you could encourage people to save money and still get a lottery payout by pooling their interest and giving them some. And he writes, “With the eighty-four-year-old woman who won the lottery in your episode, it got me wondering: what would you guys do with those winnings?”

LEVITT: Dubner, you know how to spend money. What would you do with the lottery winnings?

DUBNER: Why do you say I know how to spend money?

LEVITT: You live in New York — fancy upstate New York trips, and, you know.

DUBNER: Fancy upstate New York trips. Like driving into the woods.

DUBNER: So I have a little bit of a problem spending money on myself. Sometimes I do, but I have no problem spending money on my family. That’s the one thing, I would say. So if I had a lot of money, a lot more money — I mean, I feel like I have enough money, but if I had a lot more — I’d probably spend more on my family. On the other hand, I don’t know, they kind of have what they need.

LEVITT: For me, I don’t really — you know me, I don’t really want anything.

DUBNER: You have simple tastes.

LEVITT: I don’t like fancy cars. The only thing that I can imagine collecting other than wanting to have a private jet, which I would want just because — the thing I would love to buy if someone were selling it is time, because time’s the thing I’m shortest on. And a private jet, I see as a way of buying a lot of time when I travel — not having to fight the airports and the schedules and just being able to go where I want to go.

DUBNER: Also you wouldn’t have to see any other people. Because that’s kind of your thing, right?

LEVITT: Uh, yeah, that would be good too. You know what would be hard, though, is then there’d be a pilot and me. It would just be like a bad cab ride then, where you feel like you have to talk to the pilot. When there’s a lot of people, you don’t feel like you have to talk to anyone. When there’s only a couple, you feel like you gotta actually talk to them.

DUBNER: Yeah, but he’s busy flying — he or she. Actually, wait you know who your pilot would be? If you got a private plane, do you know who your pilot would be?

LEVITT: It’d be your brother.

DUBNER: My brother, Joe Dubner, who’s the world’s greatest pilot, who’s looking for a job flying planes.

LEVITT: He’s not a talker like you though, is he?

DUBNER: He is so not. You would love him.

LEVITT: Oh great.

DUBNER: He’s very quiet.

LEVITT: He’s got the job, if I can just win the lottery then.

LEVITT: There’s one other thing I would collect, if I had tons and tons of money, would probably be memberships at fancy golf clubs. Which would never, ever make sense to do if you didn’t have much money, because I wouldn’t really ever use them. But if I were purely living a life of indulgence and luxury, it would involve flying my private jet to Augusta, or some fancy place, to play golf from time to time.

DUBNER: Well, that leads very nicely to another question here from someone named Patricia who says, “Dear Dubner and Levitt, I have a very simple question. What are your current obsessions?” So I have to say, my — I am obsessed with how obsessed you are with golf. That is my obsession.


DUBNER: I love — you are — you’re nuts, Levitt. I mean, let’s face it.

LEVITT: I do love golf. I love golf more than any normal person could. But the funny thing about obsessions like golf is they’re only fun when you have a nice job and a good family. I’ve learned that, that if all I had was golf, I’d certainly want to kill myself, because golf is a painful, cruel, unpleasant, constant reminder of how terrible you are at something. And I think you need to have a good grounding to be obsessed with it.

DUBNER: I’m curious: do you think that you love golf so much, in part, because time is relatively scarce? You know, you’re busy — you’ve got a family, you work, et cetera — and golf is very time consuming. So that it’s kind of — the time scarcity means that when you get to do golf, it feels more precious, as opposed to having nothing else to do but golf, it would be not so much fun.

LEVITT: No, I think I love golf because I really wanted to be good at it as a kid, and I completely and totally failed. And much of my adult life has been devoted to trying to undo the mistakes I made as a child. And so, the reason I’ve come to love golf so much is that I have had just the tiniest little bit of success — but not very much — in undoing my failings as a child. And so it, it just is the worst kind of addictive on-and-off feedback, which drags you deeper and deeper into it. And it also has this incredible attraction to me that, while it’s physical, at the same time it’s incredibly intellectual — that trying to understand, you know, whether it’s the physics of the swing, or just the mapping between what happens in your head and what actually is going on when you look at it on video, I just, I find it incredibly enticing. And so measurable as well. I love the measurements. It’s really, it’s almost fiendishly designed to tap into every one of my quirks and make me obsessed with it.

Coming up: how do you make an economist happy? That’s easy: steal his car.

LEVITT: Instead of the dread that most people have about, “Oh no, my car’s not going to be here,” I think, “Oh my, this would be awesome.”

And, how to eat like a Freak:

LEVITT: My tastes go to things like—.


LEVITT: KFC, beef jerky.

DUBNER: Chipotle.

LEVITT: Grape Crush.

DUBNER: Dill pickles.

LEVITT: Chicken wings, I love chicken wings.

DUBNER: You do love your chicken wings.

From WNYC and APM, American Public Media, this is “Freakonomics Radio.” Here’s your host, Stephen Dubner.

DUBNER: Welcome back to “FREAK-quently” Asked Questions, where Steve Levitt and I answer queries from you, our listeners and readers.

DUBNER: All right, let’s — Here’s a question from a Jeffrey Summersill. Jeffrey Summersill writes to say, “Being in the aerial application business (crop dusting), it amazes me how much and all the different kinds of insurance we carry. Of course, this holds true to life: homeowner’s, auto, health, income, warranties, et cetera. Just because you have insurance does not always mean you’re covered, so my question is: what would the world be like without insurance? Would we be better off or worse? Would people take more care, or own junk? What effect does having insurance have on society?” So, Levitt, what do you think? How many different kinds of insurance do you think you own?

LEVITT: I have the absolute minimum insurance. I think insurance is greatly — the value of insurance is greatly exaggerated in almost all cases. Many people, I think, don’t understand the purpose of insurance. The purpose of insurance, to an economist, is to shift money to what we call states of the world, in which money has a lot of value relative to other states of the world. Okay, let me try to say that. That was like econ-speak—.

DUBNER: Yeah, that was. That was good though.

LEVITT: Okay, so before your house burns down — if you have a dollar, it’s not worth as much to you as after your house burns down. So if you could magically find a way to trade a dollar before your house burns down for a dollar after your house burns down, you’d want to put more money in the after-the-house-burns-down category — this is a world of no insurance — so that you could buy all the stuff that got burned down in your house. Okay? And that is the purpose of insurance. It’s a way of moving around money so that you have it when you need it, not when you don’t need it.

DUBNER: So why do you think so many people carry — well, I mean, there are a lot of different kinds of insurance, and some of it we have to carry. So right now, you know, there’s a debate about the health care mandate and people being forced — quote “forced” — to own health care insurance, which is a big issue. On the other hand, if you want to drive a car, you have to have insurance, right?

LEVITT: Right, so that’s to protect other people. So, the idea is that you have insurance so that when you smash your car into other people, someone will be compensated for it. Health care — I mean, there’s good reasons to have health care insurance for catastrophic things. Health care can be incredibly expensive, and it makes sense to be able to, in a pinch, have someone pay for incredibly expensive things that you can’t really afford. But the thing that people, I think, forget about insurance, is that it’s not free to administer. There’s some big insurance company somewhere with a big fancy headquarters, which is paying for all of the workers, and all of the advertising, by charging more for the insurance than it costs them to actually pay out the claims. And so, unless you’ve got a good reason to need the kind of coverage, the protection against something catastrophic, you just have to understand that people aren’t doing this out of the kindness of their heart, providing insurance. They’re doing it with a profit motive. And so—.

DUBNER: And the insurance business model, I think, I think a lot of people don’t really get it. And maybe I don’t get it either, but from what see — from what I know — the insurance business model is essentially: we sell you, obviously, this thing that we call insurance, where you give us money now on the chances that we might have to give you a bunch of money later if situation “x”happens. And we’ve calculated the probability of situation “x,” and we know we’re going to charge enough. But as they’re taking in the money now — what the insurance business is really about is investing, right? I mean, that’s what insurance companies do, is they take in your money and then invest it and make more money. And that’s essentially where their profits come from, yes?

LEVITT: Yeah, exactly.

DUBNER: So do you think that if people understood that that’s the way that the insurance business essentially works that they’d be a little bit less eager to give money to insurance companies?

LEVITT: No, I don’t think so. I think it’s more fungible. I think it’s — I know you’re really obsessed with financial literacy, and I think this is a case where there’s a general idea that’s been passed on in our society that insurance is a good thing — that you should be insured, that you should be protected against losses. And people don’t actually understand why they should get insurance, they just have been told they should, and they kind of understand that it feels good when you lose something to get paid back.

DUBNER: Well, do you think it’s connected to the theme we’ve talked about a lot of times, which is that we tend to really exaggerate not only the likelihood, but kind of the pain caused by anomalous events that turn out to be bad, which are pretty rare and often not as damaging as we think? Do people just kind of over-scare themselves into buying a lot of insurance?

LEVITT: Yeah, I think people imagine it would be really, really awful if their car got stolen. And it would be bad, right? And it would be the equivalent of, let’s say you got a $20,000 car, well you’re $20,000 poorer. So the question is: does it really change my life if I have my car stolen? If it really changes your life, then I think you should have insurance. But you hit on something important, which is that people are very bad judges of what they’re — how they’ll feel in the future.

So I’ll tell you, one of the best investments that I made in the insurance domain was in buying LoJack. So as you know, and our readers may know, LoJack is a little hidden transmitter you put inside the hood of your car. Or, they put it in the hood of your car. And then, if your car gets stolen, you’re able to track it. Now, most people get LoJack because both you get a deduction off your insurance, and also, it’s a way of getting your car back when it’s stolen. And what I hadn’t anticipated when I got LoJack, but what I eventually came to understand, is that the real reason to get LoJack is it makes you want your car to get stolen. So every time I, say, parked on a different level of the parking lot, and got confused, and couldn’t find my car, instead of the dread that most people have about, “Oh no, my car’s not going to be here,” I think, “Oh my, this would be awesome, God, I hope my car gets stolen!” You know, we’ll release the hounds and see what happens as we go, you know, on the chase to get the car back. So that, to me, was the best kind of insurance I ever had, because it transformed an experience which was in general a very negative one into one which was actually a positive. And that’s something that it’s hard for insurance to do, generally.

DUBNER: Levitt, here’s a note from a reader named Mary Wiseman who says, “My daughter bought your book because of the ‘funny title’ and has read sections to us — her father and me — in the car and at home. She’s 16! Goodness, what a nerd! So I was thinking that I want to have your book as my book club choice. What I would like to know is: what you think that perfect meal is to match up with your book at our book club discussion?” Ooh. Apples, oranges, I guess is the fruit salad you start with. And Appletinis. But holy cow, Levitt, you have any thoughts on a Freakonomics-themed meal?

LEVITT: You know, I’m embarrassed to say that after she sent this email, I spent a lot of time trying to think of the answer. So I was trying to think different angles. The apple, oranges, is an obvious, a good one, a can’t-miss for, at least visually. But — so I think we don’t really talk about food. So kangaroo burgers. Kangaroo burgers would be good if you’re doing Superfreak, because we talk about the virtues of those for global warming.

DUBNER: We do, because — we should just explain — because, you know, red meat is very greenhouse gas intensive, in part because animals that chew their own cud — ruminants — exhale a lot of methane, which is a powerful greenhouse gas. And kangaroos do not. So kangaroo burgers versus hamburgers, very good for the environment on the scale that it can be. So, yeah. Okay, kangaroo burgers, apples, oranges…

LEVITT: Okay, so after that, I think maybe the right tribute would be to eat some of our favorite foods. And she could say, “Yeah we talked to the authors and this is what they eat.” So you know my tastes go to things like—.


LEVITT: KFC, beef jerky.

DUBNER: Chipotle.

LEVITT: Grape Crush. So I think you couldn’t really go wrong with fast food.

DUBNER: Dill pickles.

LEVITT: Chicken wings, I love chicken wings.

DUBNER: You do love your chicken wings. Hey, so how about this: how about she has a potluck supper where everybody brings a food, and then each one has a pay-as-you-wish for each food, and then you could really determine, you know, I guess the appetite and value of each person’s contribution.

LEVITT: You know, the potluck is so anti-Freakonomics.

DUBNER: So you think that—.

LEVITT: Don’t you think?

DUBNER: What do you mean, then? They’d have to be assigned what they’re bringing?

LEVITT: No, no, people shouldn’t bring stuff. That’s so, it’s anti-Freakonomics in the sense that, number one, it’s got this huge free-rider problem that you’re making stuff for everybody else. The other thing is, it’s so inefficient for individuals to make their own food. So the only sensible thing to do is to call someone who’s good at making food, like a restaurant, and have the restaurant do it. I mean, when we have potlucks at my kids’ school, the only thing worth eating is KFC. You know, as soon as someone brings KFC because they’re too lazy to cook something, it disappears! I mean, it’s so inefficient to have people make food at home. I mean, obviously there’s a social component, whatever, but it’s totally — potluck, totally anti Freakonomics, can’t do that.

DUBNER: Did people frown on the KFC at your kids’ school potluck?

LEVITT: Yeah, they frowned on it as they wiped the grease stains off of the sides of their mouth and pretended they didn’t eat it.

DUBNER: [laughs].

LEVITT: Actually, to be honest, we slipped it in there real fast so no one could see that’s what we brought.

DUBNER: Yeah, I had a feeling it might have been.

LEVITT: [laughs].

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