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Freakonomics » The Mixed Blessings of a Welfare Program

Consider the Mexican welfare program Oportunidades. To get aid, applicants have to itemize their personal possessions and house hold goods.

…found that applicants routinely underreported certain items, including cars, trucks, video recorders, satellite TVs, and washing machines. This shouldn’t surprise anyone. People hoping to get welfare benefits have an incentive to make it sound like they are poorer than they truly are.

But… applicants overreported other items: indoor plumbing, running water, a gas stove, and a concrete floor. 

Even people who are poor enough to need welfare apparently don’t want to admit to a welfare clerk that they have a dirt floor or live without a toilet.

Tags welfare economics pride incentives

Freakonomics » Having Trouble Making a Big Decision? We Can Help

If you really can’t decide between two actions, a coin toss is as good as any other solution. Not only will it give you the answer. It will help our research. By flipping the coin and following the coin’s advice, you will become a critical member of the Freakonomics research team. We’ll send you a follow-up survey to learn how things turned out, and you will (with complete anonymity, of course), become a data point in our experiment to understand the outcomes of important decisions. Believe it or not, we are completely serious about this.

Tags economics decision making research

Freakonomics » The Midol Monopolist

A student writes that she became a monopolist in her freshman dorm — hoarding Midol to sell to her dorm-mates at the time each month when dorm-mate had a quite inelastic demand for this product. She also realized that at that time, there is an increasingly inelastic demand for chocolate-chip cookies, so she hoarded and sold those, too. She correctly notes that the two goods are complementary over time — more of both consumed on some days than on others.

Tags economics midol PMS

putthison:

My friend Robert Krulwich wrote a fascinating little post on his NPR blog about men’s clothing-buying habits. Apparently menswear spending peaks in a man’s early 50s, the essentially falls off a cliff. I’ve included the graph for shirts above, but it’s true for coats and shoes and even underwear. It reminded me of Frank Costanza’s 1970s duds on Seinfeld. I wonder if we calcify in the image and clothing of our most powerful, affluent selves. Or if we just don’t care anymore. Food for thought.

Tags menswear economics

Reblogged from Put This On 

Freakonomics » How Did the Worst Team in NBA History Become a Title Contender?

Five players, though, seem to be especially important. Of the team’s 27.5 Wins Produced (again, the team has won 27 games), 23.1 can be traced to the numbers generated by Chris Paul, Blake Griffin, Matt Barnes, DeAndre Jordan, and Eric Bledsoe. These five players are responsible for 84% of this team’s wins. In other words, the remaining seven players on this team are not producing much.

Tags Los Angeles Clippers sports basketball economics statistical analysis

Freakonomics » How Much Financial Inequality Is Due to Financial Illiteracy?

Our simulations show that endogenous financial knowledge accumulation has the potential to account for a large proportion of wealth inequality. The fraction of the population which is rationally financially “ignorant” depends on the generosity of the retirement system and the level of means-tested benefits. Educational efforts to enhance financial savvy early in the life cycle so as to produce one percentage point excess return per year would be valued highly by people in all educational groups.

Tags financial knowledge wealth economics

Freakonomics » How Much Does a Good Boss Really Matter? A New Marketplace Podcast

Replacing a boss who is in the lower 10% of boss quality with one who is in the upper 10% of boss quality increases a team’s total output by about the same amount as would adding one worker to a nine member team. Using a normalization, this implies that the average boss is about 1.75 times as productive as the average worker. Second, boss’s primary activity is teaching skills that persist. Third, efficient assignment allocates the better bosses to the better workers because good bosses increase the productivity of high quality workers by more than that of low quality workers.

Tags bosses leadership workplace human resource economics management

Freakonomics » Question of the Day: Are We Overlooking a Meat Source?

Every year the U.S. euthanizes approximately 3 to 4 million companion animals (mostly dogs and cats). To put it bluntly, what do you think about using these carcasses as a meat source? We expend enormous resources — land, money, and energy – in producing animal feed and ultimately meat. Given this expense, as well as the world’s need for protein sources, I’d love for you to weigh in on this rather repugnant idea.

Tags economics pets meat

Freakonomics » The Cobra Effect: A New Freakonomics Radio Podcast

LEVITT: Well I think you start by admitting to yourself that no individual, no government, is ever going to be as smart as the people who are scheming against you. So when you introduce an incentive scheme, you have to just admit to yourself that no matter how clever you think you are, there’s a pretty good chance that someone far more clever than yourself will figure out a way to beat the incentive scheme.

Tags incentives economics unintended consequences cobra effect audio