A Freakonomics-inspired Novel
We recently got an email from Michael Klein, an economics professor at Tufts who’s currently on leave as chief economist at the Office of International Affairs at the U.S. Treasury. Klein, it turns out, has done the rarest of things: turned the dismal science (economics) into fodder for a humorous work of fiction. His new novel is called Something for Nothing. Klein wrote to tell Dubner and Levitt that the novel was (at least partly) inspired by Freakonomics. Quoting from his email:
At the center of its plot is a Freakonomics-like result that a young professor publishes which promises to launch his career (it concerns the efficacy of teenage abstinence programs – this is one meaning behind the book’s title).
…The novel’s focus is the challenges facing a young professor who faces tradeoffs in work vs. personal life, and intellectual integrity vs. career advancement.
Thanks for writing Michael, and good luck with the book!
How Are Sharks Less Dangerous than Vending Machines? An Exercise in Conditional Risk
Did you know that vending machines, not a major danger in most of our minds, are twice as likely to kill you as a shark? I heard this statistic at the new shark-and-ray touch tank of the New England Aquarium, which I try to visit weekly with my daughters. You stand at a large, shallow tank with plexiglass walls and can lay your hand in the water, gently feeling the sharks and sting rays swimming by.
The aquarium probably wants to convince visitors that sharks are not the fierce predators of Jaws fame, and thereby help protect sharks from hunting and extinction. Although I could admire this motive, the comparison always surprised me. My number sense complained that sharks simply must be more dangerous than vending machines.
However, upon looking up the risks, I found that the comparison was correct. The yearly risk (in the United States) of dying from a shark attack is roughly 1 in 250 million. In contrast, the yearly risk of dying from a vending machine accident is roughly 1 in 112 million. The vending machine is indeed roughly twice as lethal as the shark!
Why then was I still troubled by the comparison? Maybe my number sense needed a tune up, and I should just accept the statistical facts of life. I then started thinking about it using the method of easy cases. Read More »
The Price of Blown Glass: Opportunity Cost and Demand Elasticity
A puzzle. My nephew has switched to making art glass full-time, and I think his work is gorgeous. His problem, though, is figuring out what price to charge. Among other things, he blows gorgeous candlesticks, which he thought of selling for $70 a pair. I say he should charge $250 a pair. He says no, because he thinks he can sell many more at the lower price.
He assumes it takes one hour of his time to blow a pair after he’s done the first pair, and incurred the fixed cost. So I guess his decision depends on the opportunity cost of his time and the elasticity of demand for his product. Clearly, there is a set of combinations of the cost of his time and the expected change in quantity sold that would make him indifferent between the high and low prices, with a higher opportunity cost requiring a higher demand elasticity if the price is lower.
Given the two prices, what is this set? And what do you think the demand elasticity actually is in this case? (HT to SEH)
Freakonomics Poll: Would You Stop Someone From Jumping Off a Bridge?
In the last Freakonomics Radio episode “The Suicide Paradox,” (You can download/subscribe at iTunes, get the RSS feed, listen live via the media player above, or read the transcript here) we talked to a San Francisco cabbie with a long name who said something that caught our attention:
One night I picked up a guy, I think down nearby Tenderloin and he want to go Golden Gate Bridge. Must be 11 o’clock at night. And I said “okay,” so I drove on Franklin Street. He said, “You want to ask me why I go to Golden Gate Bridge this late?” I said, “No, but if you want to tell me I guess I will listen to it.”
And he said “I’m going to go and jump off the Golden Gate Bridge” and I said, “Okay.” He said, “You’re not going to stop me?” I said, “No, why should I?”
The cabbie doesn’t know what happened to his passenger, but he did call the coast guard immediately afterwards. Suicide isn’t illegal in the U.S., and as a citizen of a country that prides itself on individual rights – what would you do? Read More »
and 
. If you haven’t seen it yet, the movie features Steven Levitt and Stephen Dubner, and was made by a dream team of documentary directors. Paste Magazine named it one of the 