What Do a Full Moon, the Super Bowl, and Tax Day Have in Common?

Donald REDELMEIER: Motor vehicle crashes — they’re almost always a reflection of driver error. Sometimes it’s a defect in the vehicle or the roadway. The sources of driver error, though, are so delicate to unearth. 

Donald Redelmeier is a doctor and researcher at the University of Toronto in Canada.

REDELMEIER: I work at Canada’s largest trauma center and look after many patients in the aftermath of truly serious motor vehicle crashes.

Car crashes are a problem there. In 2019, five out of every 100,000 people died in a motor-vehicle collision in Canada. But they’re a bigger problem in the U.S., where that same year, 13 out of every 100,000 people died in crashes.

REDELMEIER: I usually don’t ask them what happened at the crash because they just don’t know. A crash happened so quickly, and often there’s some surrounding amnesia. It’s very, very difficult to actually recall the circumstances of the crash. Instead, I like to ask patients, “Was it a normal day when you started off?” And it’s surprising how often they say, “No, Dr. Redelmeier. It was stressful day, beginning in the morning. There were deadlines, and all of a sudden my bad day got worse.”

JENA: So, what you described is sort of a broader narrative, which is, “Let’s just step back and ask what happens to someone who gets in an accident.” I think we often think of it as exogenous. There were weather factors, or maybe at that moment, they were distracted by something. You know, a phone call, or the other driver was distracted by something. But what you’re suggesting is that, no, something preceded that. There was some underlying level of stress that may have started at the very beginning of the day that has this sort of ripple effect.

REDELMEIER: Yeah, that’s a part of it. Although in general, it’s just so hard to study stress because people define it quite differently, and there’s always the fallibility of self-report.

Donald studies a lot of things, but part of his research focuses on understanding driver error. It makes sense that driver stress could contribute to car accidents. But people get stressed out for all sorts of reasons, and to varying degrees, all the time. So, Donald wondered if there might be one day in particular that is really stressful for a lot of people.

REDELMEIER: That’s why we use Tax Day as a probe into this issue. That was one of the major stresses that occurs simultaneously throughout society.

Some days stand out. Usually, it’s for personal reasons: a birth, a death, a new job, an old anniversary. Sometimes, though, there are days that we, as a society, share. And how we act on these days, whether we’re conscious of it or not, can offer researchers an opportunity to look at — and look for — things that can otherwise be hard to see.

From the Freakonomics Radio Network, this is Freakonomics, M.D.

I’m Bapu Jena. I’m an economist and I’m also a medical doctor. Each episode, I dissect an interesting question at the sweet spot between health and economics.

Today on the show: the first in a two-part series about how taxes affect our health. We’ll start with deadlines. They can hurt us —

REDELMEIER: Do you really have so much faith in every single other driver on the road? Any one of which could change your life forever?

— but they can help us, too.

 Sara LaLUMIA: If you’re going to pick a date for your birth, you might as well pick a tax-advantage date.

REDELMEIER: It’s such a cliché, but it’s so true that there’s no way to avoid stress. But there’s an infinite number of ways of making a stressful day worse.

A car crash never made anyone’s day better. And in the U.S., there are a lot of them. In fact, we have one of the highest motor-vehicle death rates among high-income countries. And in 2020, deaths from crashes in the U.S. rose about 7 percent from the year before — which is kind of amazing considering that people drove less that year because of the pandemic. But, the U.S. does have something else many other countries don’t have.

REDELMEIER: The United States does not lead the world in road safety, but does lead the world in road safety data.

Which makes Donald’s job as a researcher, who studies the timing of car crashes, much easier. He and a colleague decided to look at how — and if — Tax Day might raise the risk of someone getting into a traffic collision because of the stress of filing taxes. They looked at crash records for every Tax Day in the U.S. for 30 years. Then, they looked at the same day of the week exactly one week before and one week after each Tax Day to serve as a control group.

REDELMEIER: The average Tax Day accounted for about 226 individuals in fatal events. Whereas the average control day accounted for about 213 individuals in fatal events. So, that’s an absolute difference of about 13 people, or a relative difference of about 6 percent. The increased risk on Tax Day extended all over the United States. It was mostly explained by working-age adults. Exactly as you would expect. And it also extended to pedestrians. So, even if you yourself have filed your taxes early, it doesn’t mean that all of those surrounding motorists have done so just like you.

Donald’s findings raise larger questions about deadlines or other dates that might be tough on us. Should we pay closer attention to the kinds of things we do every day — like driving or walking — just because it’s Tax Day?

REDELMEIER: The message is not unique to Tax Day, but it’s a general message that stressful deadlines can contribute to driving errors that result in a fatal crash.

These results were published in JAMA in 2012. Since then, filing taxes hasn’t necessarily become less stressful, but most people file online, which definitely was not the case 20 or 30 years ago. Lots of people also file their taxes early. Maybe that would ease some of the stress surrounding tax season and, especially, Tax Day.

REDELMEIER: In theory, it should. The difficulty is that some of the individuals that are overrepresented in traffic crashes are the same people that are most prone to come up hard against the deadline. Also, there is a troublesome aspect of paying income taxes and that the calculations are just so complicated. And there’s this tremendous misgiving that somehow you’re paying too much. 

Of course, taxes aren’t the only distraction in our lives. Donald has looked at other days that could affect drivers, like the Super Bowl.

REDELMEIER: It’s the most widely televised sporting event in the United States associated with a lot of excitement, a lot of alcohol, and a lot of distraction. So, the main finding was that: although roadway crashes went down marginally during the telecast, they were more than offset by a great big increase in fatal traffic crashes after the telecast was over that night, presumably as individuals are driving back home. And particularly accentuated if your state was playing and lost. It’s a function of alcohol, of fatigue, and of distraction.

And then there’s Election Day.

REDELMEIER: We took a look at every presidential election for over 20 years. And then we compared that to the Tuesday immediately before, the Tuesday immediately after as a means of looking at what’s going on. And the idea here was that, you know, you were asking responsible citizens to cram one more duty into an otherwise pretty busy day. And so, there again, we do find an increase in roadway fatalities.

And let’s not forget about full moons — which, by the way, multiple listeners have asked me to look into, but guess who already has.

REDELMEIER: Just lifting your eye off the roadway for a split second could make all the difference in the world when you were motorcycling, unlike when you’re driving in a sedan or a truck and so forth. And so, the full moon was just one way of examining that because the full moon is just so beautiful. Plus, it illuminates everything else in the environment. We found a significant increase in fatal motor vehicle crashes on full moon nights compared to the exact same night, exactly one week earlier and one week later. It’s not a huge effect, but again, it was one example of a distractor that can be studied in an objective manner. 

REDELMEIER: Almost all of these crashes, they could have been prevented by a small change in driver behavior. Either through enforcement or engineering or education, or all sorts of other alternatives that many other countries do better than the United States, I’m sorry to say.

JENA: So, Don, you know, you’ve worked on a lot of different types of questions that are very — I would say they’re very clever. They’re different. They don’t always have direct implications for policy. Like, you know, we’re not going to conduct a randomized trial or implement a policy that creates full moons to prevent people from getting into motor vehicle accidents. But why do you do this kind of work? What is it about these sorts of questions that fascinates you and has made you look into them?

REDELMEIER: In terms of background, I entered medical school as a teenager, and I truly am dedicated to a career in medicine, so that — that’s a deeply rooted value of mine. I just don’t want to follow the standard of care for the rest of my life. I want to rewrite small sections of it.

JENA: A few years ago, I had looked into a question that’s sort of similar. And so, we looked at what happened to traffic accidents after the iPhone was released or various updates to the iPhone were released. We even looked to see what — what happened when the camera changed on the iPhone so that it could face towards you, so maybe people were taking selfies when they’re driving. And we never found anything. That’s not to say, obviously, that phone technology use in the car doesn’t cause accidents, but we didn’t find anything. And so, that research never made it to the light of day, which makes me want to ask you the following: what have you looked at that you haven’t published?

REDELMEIER: Oh, it’s a great point. You know, the risk factors for snowmobile-related injuries — which are of course not much relevance in the United States, except perhaps Alaska — are a great big untapped source of mystery for me, but I’ve never been able to find anything there. 

JENA: Interesting. And so, snowmobile accidents on what, what sort of days, like a, just a particular day or —

REDELMEIER: Oh, uh, that I don’t want to give away because it’s so ridiculous. I mean — even that I’m not going to embarrass myself. 

JENA: Oh, okay.

REDELMEIER: But, you know, it’s certainly the case that, you know, Mother Nature has no mercy. She’s often broken my heart, and that’s got to be the way it is in science. 

Donald’s work is pretty creative. They’re the kind of questions you may have asked yourself at some point. But this research suggests that we unintentionally change our behavior in response to factors like stress, distraction, exhaustion, maybe even excitement if you’re celebrating a Super Bowl win. When it comes to Tax Day, people don’t get into more car accidents because they plan to. It’s subconscious.

It turns out that sometimes though, people do make conscious decisions about their health because of tax deadlines. We’ll talk more about that after the break. And in the meantime, don’t forget: All of our episodes, transcripts, and show notes are at freakonomics.com, and you can always email me your thoughts at bapu@freakonomics.com. We’ll be right back.

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LALUMIA: When I was a young person, I remember going with my parents to the post office on April 15th to mail their taxes. And it was exciting.

That’s Sara LaLumia. She’s a professor at Williams College. And, if you haven’t guessed yet, that young person who loved Tax Day ended up becoming a tax economist.

LALUMIA: There were doughnuts and there were balloons and there was a piece of masking tape on the ground, like a finish line. And the post office employees cheered for you when you crossed the finish line. And now as a tax economist, I think like, “Ooh, April 15th, it’s going to be exciting.”

Sara is one of the few people who looks forward to Tax Day. And, for the record, Tax Day this year has been shifted to April 18th, because April 15th falls on a holiday. This also happens if April 15th is over the weekend. As we heard earlier, that deadline can cause all kinds of subconscious problems. But tax deadlines can affect our conscious decisions, too. For those of us who aren’t budding tax economists, there’s a framework that can help us think about how taxes and the timing of taxes shape our actions.

LALUMIA: Taxes can affect real behavior where people are actually changing the things that they do. Maybe undertaking some kind of new activity they otherwise wouldn’t have. Starting a new business or not starting a business. And then there might be just renaming behavior, if there’s a tax advantage to packaging it in a particular way or describing it in a particular way in response to a tax change. Then there’s timing. Maybe people were going to do something anyways, but they changed the exact time at which they engage in some behavior in response to taxes. We tend to think that maybe timing decisions are even more responsive to taxes than real behavior.

Okay, here’s a riddle for you: What’s an event that many people try to plan, sometimes years in advance, that’s not guaranteed to happen. But — if it does happen — can offer some pretty nice tax benefits. Any ideas?

LALUMIA: So, if a child is born anytime during the year, you can claim that child for that year’s tax return.

What Sara means, of course, is claiming a child as a dependent on your income tax filing, which gives you a tax benefit. And there are other tax benefits parents can receive, depending on their income level and their filing status. As with many things in life, when it comes to birth, timing can be everything.

LALUMIA: So, kids who are born any time up until December 31st of 2021, those parents are claiming those kids right now as they file their 2021 taxes. But a kid who was born just one day later — say January 1st of 2022 — right now those parents aren’t claiming that child. That child will be claimed on the 2022 return, which will be filed in the early months of 2023. So, both people are going to get the same benefits, but the time at which it arrives will be different.

And if you’re a tax economist, the idea of people receiving benefits at different times would likely pique your interest.

LALUMIA: Maybe parents care about that, and they might want to accelerate when the child is born in order to get those benefits earlier.

In other words: the timing of this tax cut off presents a pretty clear incentive. Clear at least, to economists.

LALUMIA: The average person might say, “This is such an important decision. I’m not going to be swayed by taxes here.” People are often choosing the timing of their birth for other reasons that have nothing to do with taxes. There are far more births on weekdays than on weekends, and that might be a matter of physician timing and when physicians are around and available. It might be a matter of parents wanting to be in the hospital at times when the hospital’s well-staffed. Also, so many births are C-sections. If you know that a C-section has to be scheduled in advance, then the cost of choosing a particular date is smaller. So, if you’re going to pick a date for your birth, you might as well pick a tax-advantage date.

Sara and her co-authors wanted to see if people really do try to shift their babies’ births from early January to late December to get this tax benefit. They weren’t the first ones to look at this question.

LALUMIA: That idea was already out there in the literature, and the size of benefits has changed over time, the group of people who get the largest benefit has changed over time. So, in some ways we wanted to revisit this question and say in a more recent time period with a different set of tax benefits, what is the relationship here?

To revisit this question, they looked at tax returns filed between 2001 and 2010 and identified babies born during the time period of late December to early January.

LALUMIA: This is a matter of shifting by a few days. Not a matter of months earlier or weeks earlier, but a few days. And that leaves us with about 819,000 births in this narrow, two-week window around the turn of the year.

By using tax returns, Sara and her co-authors were able to take into account a lot of differences between filers, and make sure those differences didn’t affect their analysis. Things like how much money they make, where they live, and whether their state might be friendlier to scheduled C-sections. The researchers couldn’t control, however, for differences that weren’t on those returns.

LALUMIA: Education of parents might be important, and we simply don’t observe that. Race might be important. We don’t observe that. The type of medical insurance that people have or whether they have insurance at all — we can’t observe that on a tax return either.

So, there were some things they couldn’t observe. But what they found was interesting.

LALUMIA: We found that an additional thousand dollars of tax benefit from claiming a child on your tax return increases the probability of having a late December birth by about one percentage point.

That translates to about 900 births. This effect wasn’t as large as prior research had found.

LALUMIA: The fact that we had a big data set — we were able to precisely estimate a small effect. If we had been doing the same sort of analysis but with a smaller dataset, we might have concluded, “We can’t find an effect here.”

Aside from using a larger dataset than other researchers who have studied this same question, there are other reasons why Sarah may not have found as much of an effect this time around.

LALUMIA: In an earlier time period, high-income parents had the biggest tax benefit. In our time period, low-income parents had the biggest tax benefit. And in our time period, 2001 to 2010, that we are studying, the people who have the largest tax benefit might also have the least access to doctors who are willing to shift the timing of births. Parents who are getting the Earned Income Tax Credit are also more likely to be using Medicaid for health insurance, and Medicaid patients have lower rates of C-section than patients who are using private insurance.

The end of the calendar year represents more, though, than just the end of the tax year. It’s also the end of the holiday season. Sara and her colleagues wanted to make sure that births didn’t shift because of the holidays in general.

LALUMIA: Maybe the last place that a parent wants to be is in the emergency room on — on January 1st. And so, parents might want to schedule births a little bit earlier to avoid that New Year’s Eve and New Year’s Day activity in a hospital. And so, we did try to separate out the impact of a holiday from the tax effect. And we did this by looking at other holidays. And there are other times when there’s a lot of holiday activity and celebration and hospitals might be crowded. And we can measure how much people change the timing of birth around those other holidays. And then we can separate out what we might call a general holiday effect from a tax-related effect. And we think that that has a little bit of an impact on our results. But the one percentage point effect is really net of any holiday-related shifting.

So, if it’s true that a small percentage of parents are trying to move their births up by a few days to try to cash in on a last-minute tax break, that leads us to another question: why don’t more parents do this?

LALUMIA: There are probably some parents who are extremely knowledgeable about this, and they are keen to take advantage of this situation. But we also have some evidence that there are parents who are not aware of this benefit at all. And if you are not aware of the tax benefit, you are not going to change the timing of your birth in response to it. Now this was unexpected, but when we did this match between the tax return data and the social security data, we could see that there were some kids who were born in late December, whose parents filed a tax return, but the parents did not actually claim that child on the tax return. And these parents are leaving money on the table. On average it was about $1,700, and that was surprising to us.

Money aside, there are other reasons why this research matters.

LALUMIA: There might be health implications. And so, here I would point to this great paper by Schulkind and Shapiro that also looks at the shifts and timing around the New Year. They are using birth certificate data. So, they have good information about the health of kids. And they find slightly lower Apgar scores and slightly lower birth weights for kids whose birth might have been strategically re-timed in response to taxes. And they’re not huge negative health impacts, but they are negative health impacts.

There could also be positive effects, as some of Sara’s other research has shown.

LALUMIA: There are these late-December moms who are going to have more cash on hand in the early months of their child’s life, because they got the child-related tax benefits right away. January moms have to wait a whole year before they can get those tax benefits. And we looked at employment of mothers in the months just after giving birth. And the December moms are about five percentage points less likely to be employed three months after birth. And we think that this could be — they have this extra cash on hand. Three months after birth is around the time that maternity leaves might be expiring. Maybe having a little extra cash is allowing people to buy a little bit more time before they return to work.

If all of this research on Tax Day tells us anything, it’s that dates and deadlines can have unintended but predictable consequences on our health. That timing really does matter. In some cases, it might even be a matter of life and death. So, as you’re preparing your taxes this year and getting ready to hit the road, take a deep breath, pause, and remember these words from Donald Redelmeier.

REDELMEIER: You should drive your car as if you mean it. It’s the most dangerous activity average people engage in on a daily basis. It amounts to — during the average day in the United States — about a hundred individuals stepping into a car and not emerging alive. And it could have been prevented by a small change in driver behavior, such as follow the basics of the speeding and seatbelt. Signal your turns. Leave space around your vehicle. Never drive drunk. Also, for the pedestrians in the crowd, you know, don’t be so trusting when you’re crossing the road and burying your nose in a smartphone. Do you really have so much faith in every single other driver on the road? Any one of which could change your life forever?

That’s it for today’s show. Coming up next week on Freakonomics, M.D., it’s the second of our two-part series on taxes. So-called “sin taxes” have been around for centuries.

 Catherine MACLEAN: The goal of that tax really was to support debt payments for the Revolutionary War.

These days, the goals of sin taxes are different. But, do they work?

 MACLEAN: When you increase the tax, you actually can change the way that people consume the product.

And, what happens when a new sin is identified?

 Christina ROBERTO: It’s really important for the public health community to think carefully about some of the opposition.

We’re going to get into all of that next week. I’d like to thank Donald Redelmeier and Sara LaLumia again for sharing their wisdom with us. And to all of you, for listening, writing in, and supporting the show. And if you can, leave a review for Freakonomics, M.D. wherever you get your podcasts. It really helps us out.

Freakonomics, M.D. is part of the Freakonomics Radio Network, which also includes Freakonomics Radio, No Stupid Questions, and People I (Mostly) Admire. All our shows are produced by Stitcher and Renbud Radio. You can find us on Twitter and Instagram at @drbapupod. This episode was produced by Mary Diduch and mixed by Eleanor Osborne. Our senior producer is Julie Kanfer. We had research assistance from Emma Tyrrell. Our staff also includes Alison Craiglow, Greg Rippin, Gabriel Roth, Rebecca Lee Douglas, Morgan Levey, Zack Lapinski, Ryan Kelley, Jasmin Klinger, Lyric Bowditch, Jacob Clemente, Alina Kulman, and Stephen Dubner. Our music was composed by Luis Guerra. To find a transcript, links to research, and a newsletter sign-up, go to Freakonomics.com. If you like this show, or any other show in the Freakonomics Radio Network, please recommend it to your family and friends. That’s the best way to support the podcasts you love. As always, thanks for listening.

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JENA: Most of the people that I know from Canada say how great it is. Do you pay taxes in Canada? 

REDELMEIER: Yes, we do, but not on April 15th. 

JENA: You do. Okay. Just —

REDELMEIER: On April 30th. And we pay a lot more.