There’s been a hubbub about an upcoming Doonesbury strip that Garry Trudeau has drawn for publication in many newspapers on Wednesday, the day after election day. It goes out on a limb and assumes an Obama victory.

The L.A. Times reports that some newspapers are reluctant to take a chance and schedule the strip, in case its prediction is wrong. Here’s how Trudeau responded:

In an e-mail to the Times, Trudeau said newspapers should run the strip because “… polling data give McCain a 3.7 percent chance of victory. There’s a greater risk that their presses will break down on election day. So I’ve been encouraging editors to choose hope over fear. And reminding them that if I’m wrong, it’ll be my face that’ll be covered with egg, not theirs.”

I assume he is taking the 3.7 percent figure from the FiveThirtyEight.com calculation, which shows Obama with a 96.3 percent chance of winning the election. Read more…

I live in Hyde Park, not far from Barack Obama. He has no shortage of supporters around here, and they express their admiration in every conceivable way. This one, however, is my personal favorite:

(Hat tip: Peter Thompson)

Percentage of daily newspapers endorsing Obama: 67.8.

Percentage of college newspapers endorsing Obama: 98.4.

Percentage of alternative weekly newspapers endorsing Obama: 100.

Do endorsements matter? We’re about to find out — although in a case like this, correlation certainly does not equal causation. Also, pretend for a moment that Obama wins a whopping 60 percent of the popular vote tomorrow; even that margin would still suggest that an awful lot of endorsement capital didn’t turn into votes.

If you’re curious to see The New York Times’s endorsements over the ages, check out this beautiful graphic.

Also, go back and read what Levitt wrote about Obama nearly two years ago. My friend may not be the best horse handicapper in the world, but he may have a future with presidents.

Economix, a blog run by The New York Times newsroom, is running a fun prediction contest ahead of tomorrow’s election. You have to pick three prediction-market stocks, and the winner is the person with the most profitable portfolio. You can enter here and read more here.

Economix is running this contest partly because David Leonhardt is interested in figuring out whether his readers are smarter than the InTrade prediction market.

Let me offer Leonhardt a friendly Economix vs. Freakonomics bet. I’m willing to bet him the market is smarter than the average Economix contestant. Let’s make the terms a good bottle of wine (plus boasting rights). Do we have a bet?

As usual, my reasoning is all about incentives. Let me explain. If I were trying to choose the three stocks on InTrade that would maximize my expected return, I would pick:

1. Winner: Obama (earning me a 20 percent profit)
4. McCain to earn fewer than 300 electoral votes (earning a 10 percent profit)
11. Obama to win Pennsylvania (earning a 20 percent profit)

Read more…

As U.S. home prices continue to fall (down a record 16.6 percent, according to the latest figures), it’s worth considering that in Baghdad, home prices have nearly doubled since last year.

That’s partly because the city has become much safer since 2007, as sectarian violence has receded in the Iraqi capital. While people are moving back to Baghdad in ever larger numbers, new construction has been slow to get off the ground, further tightening the housing supply.

The northern Iraqi region of Kurdistan, meanwhile, faces the opposite problem — construction of new homes has skyrocketed, outpacing demand. Compounding the problem is the fact that, in the Kurdish town of Erbil, at least, most of the new homes cost between $250,000 to $650,000 — far more than the average Iraqi can afford.

Since there is no mortgage market in Iraq and the vast majority of real estate transactions are conducted fully in cash up front, these houses even cost more than most Americans — or most anyone of any nationality — could afford.

So who buys a luxury home in northern Iraq? Government officials, oil executives, wealthy Kurds from abroad. But the homes are selling slowly, and only time will tell whether the subdivisions of Erbil can avoid the fate of this Seattle subdivision, which the American housing crisis has turned into a ghost town.

Alvin Felzenberg

Alvin Felzenberg, author of The Leaders We Deserved (and a Few We Didn’t), wasn’t satisfied with how vaguely, in his opinion, success and failure are defined in presidential evaluations.

So he attempted his own ranking system (which we’ve mentioned before on this blog), grading U.S. presidents based on three criteria: character, vision, and competence; and their handling of three policy areas: management of the economy, approach to national security, and expansion of freedom.

Felzenberg says his intention with grading the presidents and writing a book based on his findings is “not to fix their reputations in concrete, but to provoke discussion.”

He didn’t disclose whom he voted for, but after observing the 2008 campaign, he’d add physical endurance as a grading category.

Felzenberg teaches at the Annenberg School for Communication at the University of Pennsylvania and the Elliott School of International Affairs at George Washington University. He was the principal spokesman for the 9/11 Commission, and served as an adviser to the U.S. Departments of Defense and State, in several senior staff positions at the U.S. House of Representatives, and as New Jersey’s Assistant Secretary of State.

He has agreed to answer our questions about the book. But first, here’s his presidential report card:

Read more…

As the presidential race enters the home stretch, my most recent Wall Street Journal column assesses the likely outcomes. My conclusion probably comes as no surprise: “Barack Obama is the hot favorite to win.”

I begin by noting that prediction markets currently rate Obama an 85 percent chance to win. But I think that these may slightly understate the probability of an Obama victory:

My reasoning is based on a phenomenon that behavioral economists call the “favorite-longshot bias.” In essence, people tend to overbet unlikely outcomes, and so the odds often overstate the chances of a longshot (like McCain) winning, and conversely understate the chances of the favorite.

Most of the previous evidence of the favorite-longshot bias came from analyzing horse-race betting markets. But recently, Andrew Leigh, Eric Zitzewitz, and I have turned to assessing whether a similar bias affects political prediction markets. Our findings — while preliminary — show that it is exceptionally rare that political underdogs win. When political races are close, this bias isn’t so important. But in lop-sided contests, prediction markets really tend to overstate the support for underdogs.

Read more…

We’ve written about commitment devices before: tools that hold you to your promises, like putting a replica glob of human fat on your kitchen counter to remind you to keep to your diet, or signing a contract to have yourself fined each time you smoke a cigarette.

But what about a virtual wife who sends you nagging e-mails throughout the day telling you to keep healthy?

That’s the latest commitment device out of Japan, where a new service allows you to choose from one of four virtual wives who will hold you to your weight goals.

Virtual Japanese wives whose personalities you can customize to make sure you eat your vegetables, but will never be disappointed in you if you slack? Talk about a Shangri-La diet.

(HT: GamePolitics)

Our resident quote bleggar Fred Shapiro, editor of the Yale Book of Quotations, is back with another request. If you have a bleg of your own — it needn’t have anything to do with quotations — send it along here.

In order to help ensure that future editions of the Yale Book of Quotations have good coverage of quotations from major contemporary business leaders, I would welcome contributions of famous quotes from any of the following businesspeople:

Photo: barto

Bill Gates
Sam Walton
Jack Welch
Warren Buffett
Lee Iacocca
Steve Jobs
Michael Milken
Ted Turner
Jeff Bezos
Michael Eisner
Katharine Graham
Shawn Fanning
Martha Stewart
Carly Fiorina
Any other major business leaders of recent decades.

It wasn’t meant to be political.

In fact, Saturday night, while beautiful, was pretty conventional: two of my dear friends from graduate school were getting married. They are fellow economists who have spent 18 years together; they have supported each other through their careers, each has followed the other to different cities, and they provide each other with support in their personal lives.

The only difference is that Jed and Eric are both men.

In many respects, their wedding followed the script I’ve celebrated as my other graduate school buddies have married. Friends and family were assembled, and the lucky couple were excited and busy hosts, making sure that all the details were in place.

But there were differences. Read more…

Economics is sometimes referred to as the science of stating the obvious in a blatantly overcomplicated way.

Where better to apply this definition than in the realm of freestyle rapping? Take a look at this translated video. If it’s not the funniest thing you’ve seen today, then — well, you’ve had a very funny day. Congratulations.

To quote one combatant in the video:

I am in fact orating with little or no prior preparation, an act commonly referred to as freestyling. Once again, and I think this bears repeating, I would like to restate my claim that I am in fact much stronger and have endured a larger number of hardships than you; hardships which have left me with an aggressive behavior and an imposing demeanor which, I believe, frightens you.

(HT: David Friedman)

Sean Masaki Flynn

Last week, we solicited your questions for Sean Masaki Flynn, author of Economics for Dummies.

In his answers below, Flynn addresses the economics of education, the relationship between aikido and economics, the importance of understanding opportunity costs, and how good shoes and nice teeth signal reproductive fitness. (Disclosure: Flynn himself had braces.)

While we didn’t post Flynn’s responses to “all the women who flirted with him” via this blog, he requests that they look him up via Google or Facebook.

Thanks to Flynn for all his answers and to all of you for your good questions.

Q: Aikido makes use of circular motions that are designed to use an opponent’s energy against him/herself. I see it as a step in the direction of nonlinear dynamics, versus the more linear martial arts. Since you have a unique perspective of each domain, what would you consider to be equal to aikido in the domain of economics? Read more…

The industrial organization of rebel groups. (Earlier)

Computer musicians can’t make you sweat.

The history of electoral college results flashing before your eyes. (Earlier)

From Voting America.

From Flickr user Global Jet.

The Economist published its annual graph showing total taxes as a percent of G.D.P. for a large number of rich countries.

Not surprisingly, there’s little year-to-year change — and the U.S. is near the bottom. We are a low-tax country; our average tax rate, counting all taxes, hovers above 30 percent.

Why do we hear so many more complaints about high taxes than I hear in the European Union, where taxes are a much higher percentage of G.D.P.? It’s hard to believe our governments are less efficient than European governments — and that we’re getting less bang for the buck than Europeans get bang for their tax euros.

And it certainly is not the case that our taxes are structured so that the average person pays the top rate: The top federal marginal tax rate kicks in much farther up the income distribution in the U.S. than in European countries.

So what is it? Read more…

Researchers at the Center for Public Health at Liverpool John Moores University recently found that the death rate of rock and pop musicians at a given age is double the rate of the rest of the population, even 25 years after they first achieve fame — due, largely, to drug and alcohol abuse.

Rock ‘n’ roll and R&B musician Andre Williams was known throughout his career for his drinking habit, but at 72, he’s finally sobered up.

He admitted to me before a concert last weekend: “I’m no