Notes and Quotes - SuperFreakonomics (Steven D. Levitt and Stephen J. Dubner)

Finished on 25/4/18 in Brisbane, Australia.

"When prostitution was criminalised in the United States, most of the policing energy was directed at the prostitutes rather than their customers. This is pretty typical. As with other illicit markets - think about drug dealing or black-market guns - most governments prefer to punish the people who are supplying the goods and services rather than the people who are consuming them.

But when you lock up a supplier, a scarcity is created that inevitably drives the price higher, and that entices more suppliers to enter the market. The U.S. “war on drugs” has been relatively ineffective precisely because it focuses on sellers and d-nor buyers. While drug buyers obviously outnumber drug sellers, more than 90 percent of all prison time for drug convictions is served by dealers.

Why doesn’t the public support punishing users? It may seem unfair to punish the little guy, the user, when he can’t help himself from partaking in vice. The suppliers, meanwhile, are much easier to demonise.

But if a government really wanted to crack down on illicit goods and services, it would go after the people who demand them. If, for instance, men convicted of hiring a prostitute were sentenced to castration, the market would contract in a hurry."

"Prostitutes do not charge all customers the same price. Black customers, for instance, pay on average about $9 less per trick than white customers, while Hispanic customers are in the middle. Economists have a name for the practice of charging different prices for the same product: price discrimination."

"Well, sort of. As we wrote earlier, even the best-educated women earn less than their male counterparts.This is especially true in the big-flying financial and corporate sectors - where, moreover, women are vastly underrepresented. The number of female CEOs has increased roughly eightfold in recent years, but women still hold less than 1.5 percent of all CEO positions. among the top fifteen hundred companies i the United States, only about 2.5 percent of the highest paying positions are held by women. This is especially surprising given that women have earned more than 30 percent of all the master’s in business administration (MBA) degrees at the nation’s top colleges over the past twenty-five years. Their share today is at its highest yet, 43 percent.

The economists Marianne Bertrand, Claudia Goldin, and Lawrence Katz tried to solve this wage-gap puzzle by analysing the career outcomes of more than 2,000 male and female MBAs from the University of Chicago.

Their conclusion: while gender discrimination may be a minor contributor to the male-female wage differential, it is a desire - or lack thereof - that accounts for most of the wage gap. The economists identified three main factors:

Women have slightly lower GPAs than men and, perhaps more important, they take fewer finance courses. All else being equal, there is a strong correlation between a finance background and career earnings.

Women work fewer hours than men. Ten years after completing their MBAs, women in the study were working 52 hours a week versus 58 hours a week for the men.

Women take more career interruptions than men. After ten years in the workforce, only 10 percent of male MBAs went for six months or more without working, compared with 40 percent of female MBAs.

The big issue seems to ne that many women, even those with MBAs, love kids, The average MBA with no children works only 3 percent fewer hours than the average male MBA. But female MBAs with children work 24 percent less. “The pecuniary penalties from shorter hours and job discontinuity among MBAs are enormous,” the three economists write. “It appears that many MBA mothers, especially those with well-off spouses, decided to slow down within a few years following their first birth.”

This is a strange twist. Many of the best and brightest women in the United States get an MBA so they can earn high wages, but they end up marrying the best and brightest men, who also earn high wages - which affords these women the luxury of not having to work so much.

Does this mean the women’s investment of time and money in pursuing an MBA was poorly spent? Maybe not. Perhaps they never would have met such husbands if they hadn’t gone to business school.

There’s one more angle to consider when examining the male-female wage gap. Rather than interpreting women’s lower wages as a failure, perhaps it should be seen as a sign that higher wage simply isn’t as meaningful an incentive for women as it is for men. Could it be that men have a weakness for money just as women have a weakness for children?

Consider a recent pair of experiments in which young men and women were recruited to take an SAT-style math test with twenty questions. In one version, every participant was paid a flat rate, 5% for showing up and another $15 for completing the test. In the second version, participants were paid the $5 show-up fee and another $2 for each correct answer.

How’d they do?

In the flat-rate version, the men performed only slightly better, getting 1 more correct answer out of the 20 than the women. But in the cash-incentive version, the men blew away the women. The women’s performance barely budged when compared with the flat-rate version, whereas the average man scored an extra 2 correct questions out of the 20."

"The economists Douglas Almond and Bhashkar Mazumder have a simple answer for this strange and troubling phenomenon: Ramadan.

Some parts of Michigan have a substantial Muslim population, as does southeastern Uganda. Islam calls for a daytime fast from food and drink for the entire moth of Ramadan. Most Muslim women participate even while pregnant; it's not a round the clock fast, after all. Still, as Almond and Mazumder found by analysing years’ worth of natality data, babies that were in utero during Ramadan are more likely to exhibit developmental aftereffects. The magnitude of these effects depends on which month of gestation the baby is in when Ramadan falls. The effects are strongest when fasting coincides the first month of pregnancy, but they can occur if the mother fasts at any time up to the eighth month.

Islam follows a lunar calendar, so the month of Ramadan begins eleven days earlier each year. In 2009, it ran from August 21 to September 19, which made May 2010 the unluckiest month in which to be born. Three years later, with Ramadan beginning on July 20, April would be the riskiest birth month. The risk is magnified when Ramadan falls during summertime because there are more daylight hours - and, therefore, longer periods without food and drink. That’s why the birth effects can be stronger in Michigan, which has fifteen hours of daylight during summer, than in Uganda, which sits at the equator and therefore has roughly equal daylight hours year-round."

"To find out, the economist Alan Krueger combed through a Hezbollah newsletter called Al-Ahd (The Oath) and compiled biographical details on 129 dead shahids (martyrs). He then compared them with men form the same age bracket in the general populace of Lebanon. The terrorists, he found, were less likely to come from a a poor family (28 percent versus 33 percent) and more likely to have at least a high-school education (47percent versus 38 percent).

A similar analysis of Palestinian suicide bombers by Claude Berrebi found that only 16 percent came from impoverished families, versus more than 30 percent of male Palestinians overall. More than 60 percent of the bombers, meanwhile, had gone beyond high school, versus 15 percent of the populace.

In general, Krueger found, “terrorists tend to be drawn from well-educated, middle-class or high-income families.” Despite a few exceptions - the Irish Republican Army and perhaps the Tamil Tigers of Sri Lanka (there isn’t enough evidence to say) - the trend holds true around the world, from Latin American terrorist groups to the al Qaeda members who carried out the September 11 attacks in the United States."

"In October 2002, the Washington D.C. metropolitan area experienced fifty murders, a fairly typical number. But ten of these murders were different. Rather than the typical domestic disputes or gang killings, these were random and inexplicable shootings. Ordinary people minding their own business were shot while pumping gas or leaving the store or mowing the lawn, After the first few killings, panic set in. As they continued, the region was virtually paralysed. Schools were closed, outdoor events cancelled, and many people wouldn’t leave their homes at all.

What kind of sophisticated and well-funded organisation had wrought such terror?

Just two people, it turned out: a forty-one-year-old man and his teenage accomplice, firing a Bushmaster .223-caliber rifle from an old Chevy sedan, its roomy trunk converted into a sniper's nest. So simple, so cheap, and so effective: that is the leverage of terror. Imagine the the nineteen hijackers from September 11, rather than going to the trouble of hijacking airplanes and flying them into buildings, had instead spread themselves around the country, nineteen men with nineteen rifles in nineteen cars, each of them driving to a new spot every day and shooting random people at gas stations and schools and restaurants. Had the nineteen of them synchronised their actions, they would have been hard to catch, and even if one of them was caught, the other eighteen would carry on. The entire country would have been brought to its knees.'

"When one of the four airplanes hijacked on September 11 crashed into the Pentagon, all of the seriously injured victims, most of whom suffered burns, were taken to Washington Hospital Centre, the largest hospital in the city. There were only a handful of patients - corpses were more plentiful - but even so, the burn unit was nearly overwhelmed. Like most hospitals, WHC routinely operated at about 95 percent of capacity, so even a small surge of patients stressed the system. Worse yet, the hospital’s phone lines went down, as did local cell service, so anyone needing to make a call had to jump on a car and drive a few miles away.

All things considered, WHC performed well. But for Craig Feied, an emergency-medicine specialist there, the incident confirmed his greatest fears. If the hospital nearly went haywire with just a few extra burn patients, what would happen during a major disaster, when the the ER was most needed?"

"On average, about 160 patients showed up each day. The busiest day is Monday, and weekend days are the slowest. (This is a good clue that many ailments aren’t so serious that they can’t wait until the weekend’s activities are over.) The peak hours is 11:00 AM, which is five times busier than the slowest hour, which is 5:00 AM. Six of every ten patients are female; the average age is forty-seven."

"Believe it or not, this flat mortality rate actually hides some good news. Over the same period, age-adjusted mortality from cardiovascular disease has plummeted from nearly 600 people per 100,000 to well beneath 300. What does this mean?

Many people who in previous generations would have died from heart disease are now living ling enough to die from cancer instead. Indeed, nearly 90 percent of newly diagnosed lung-cancer victims are fifty-five or older; the median age is seventy-one."

"Given that the United Kingdom was battling Islamic Fundamentalists and no longer, for instance, Irish militants, the arrested subjects invariably had Muslim names. This would turn out to be one of the strongest demographic markers for the algorithm. A person with neither a first or last Muslim name stood only a 1 in 500,000 chance of being a suspected terrorist. The likelihood for a person with first or last Muslim name was 1 in 30,000. For a person with first and last Muslim names, however, the likelihood jumped to 1 in 2,000.

The likely terrorists were predominantly men, most commonly between the ages of twenty-six and thirty-five. Furthermore, they were disproportionately likely to:

Own a mobile phone

Be a student

Rent, rather than own, a home

These traits, on their own, would hardly be grounds for arrest. (They describe just about every research assistant the two of us have ever had, and we are pretty sure none of them are terrorists.) But, when stacked atop the Muslim-name markers, even these common traits began to add power to the algorithm."

"So did the introduction of TV have any discernible effect on a given city’s crime rate?

The answer seems to e yes, indeed. For every extra year a young person was exposed to TV in his first 15 years, we see a 4 percent increase in the number of property crime arrests later in life and a 2 percent increase in violent crime arrests. According to our analysis, the total impact of TV on crime in the 1960s was an increase of 50 percent in property crimes and 25 percent in violent crimes.

Why did TV have this dramatic effect?

Our data offer no firm answers. The effect is largest for children who had extra TV exposure from birth to age four. Since most four-year-olds weren’t watching violent shows, it's hard to argue that content was the problem.

It may be that kids who watched a lot of TV never got properly socialised, or never learned to entertain themselves. Perhaps TV made the have-nots want the things the haves had, even if it means stealing them. Or maybe it had nothing to do with the kids at all; maybe Mom and Dad became derelict when they discovered that watching TV was a lot more entertaining than taking care of their kids."

"Consider the Americans with Disabilities Act (ADA), which was intended to safeguard disabled workers from discrimination. A noble intention, yes? Absolutely - but the data convincingly show that the net result was far fewer jobs for Americans with disabilities. Why? After the ADA became law, employers were so worried they wouldn’t be able to discipline or fire bad workers who had a disability that they avoided hiring such workers in the first place.

The Endangered Species Act created a similarly perverse incentive. When landowners fear their property is an attractive habitat for an endangered animal, or even an animal that is being considered for such status, the rush to cut down trees to make it less attractive. Among the recent victims of such shenanigans are the cactus ferruginous pygmy owl and the red-cockaded woodpecker. Some environmental economists have argues that “the Endangered Species Act is actually endangering, rather than protecting, species”."

"The Agricultural Revolution freed up millions of hands that went on to power the Industrial Revolution. By 1850, worldwide population had grown to 1.3 billion; by 1900, 1.7 billion; by 1950, 2.6 billion. And then things really took off. Over the next fifty years, the population more than doubled, reaching well beyond 6 billion. If you had to pick a single silver bullet that allowed this surge, it would be nitrate fertilisers, which are astonishingly cheap and effective. It wouldn’t be much of an overstatement to say that nitrate fertilisers feed the world. If it disappeared overnight, says the agricultural economist Will Masters, “most people’s diets would revert to heaps of cereal grains and root crops, with animal products and fruits only for special occasions and for the rich”."

"And seat belts, at about $25 a pop, are one of the most cost-effective lifesaving devices ever invented. In a given year, it costs roughly $500 million to put them in every U.S. vehicle, which yields a rough estimate of $30,000 for every life saved. How does this compare with a far more complex safety feature like airbags? At an annual U.S. price if more than $4 billion, air bags cost about $1.8 million per life saved."

"How so? Because cows - as well as sheep and other cud-chewing animals called ruminants - are wicked polluters. Their exhalation and flatulence and belching and manure emit methane, which by one common measure is about twenty-five times more potent as a greenhouse gas than the carbon dioxide released by cars (and, by the way, humans). The world’s ruminants are responsible for about 50 percent more greenhouse gas than the entire transportation sector.

Even the “locavore” movement, which encourages people to eat locally grown food, doesn’t help in this regard. A recent study by two Carnegie Mellon researchers, Christopher Weber and H. Scott Matthews, found the buying locally produces food actually increases greenhouse-gas emissions. Why?

More than 80 percent of the emissions associated with food are in the production phase. And big farms are far more efficient than small farms. Transportation represents only 11 percent of food emissions, with delivery from producer to retailer representing only 4 percent. The best way to help, Weber and Matthews suggest, is to subtly change your diet. “Shifting less than one day per week’s worth of calories from red meat and dairy products to chicken, fish, egg or a vegetable-based diet achieves more greenhouse-gas reduction than buying all locally sourced food”, they write."