Introduction: The Hidden Side of Everything
- Do not confuse correlation with causality.
- Frontrunners in a close race and incumbents raise a lot more campaign funds than long shots because people like to back a winner.
- What matters in an election is not how much you spend but your appeal. Winning candidates can cut their spending in half and lose only 1% of the vote, while losers can double their spending and expect to gain only 1% of the vote.
What Do Schoolteachers and Sumo Wrestlers Have in Common?
- Economics, at root, is the study of incentives. Three basic flavors of incentives: economic, social, and moral. Day-care late payment substituted an economic incentive for a moral one.
- Personal mood seems to affect honesty: good weather, relaxing holidays, employees who like their boss. Also, high executives tend to cheat more than administrative employees—is the cause entitlement or an indication of their success in the first place?
- The Ring of Gyges’ tale: can man resist the temptation of evil, if he can be invisible and no one can witness his acts?
How is the Ku Klux Klan Like a Group of Real-Estate Agents?
- Power of asymmetric information: experts use their informational advantage to exploit the uninformed. The dissemination of information dilutes its power.
- Real estate agents list their own houses for longer and sell it for more than they do for their clients. Five terms positively correlated to sales price (specific and straightforward): granite, state-of-the-art, gourmet, corian, maple; five terms negatively correlated to sales price (ambiguous, empty adjectives): fantastic, spacious, charming, great neighborhood, and “!”.
- The Weakest Link: evidence of discrimination against non-protected groups: elderly and Hispanic contestants get voted off in a larger proportion than their game skill should dictate. Elderly contestants suffer from taste-based discrimination (the desire not to interact with a certain group); Hispanics suffer from information-based discrimination (the belief that a group has poor skills).
- A prominent dating website statistics: 57% of men and 23% of women posters don’t receive even 1 email; men strengths: high income, looking for long-term relationship; women strengths: looks, blonde, income appeal is bell-shaped curve; men weaknesses: short, balding, red/ curly hair (weight doesn’t matter as much); women weaknesses: overweight, gray hair. Men want to date students, artists, musicians, veterinarians, celebrities, and avoid secretaries, retirees, military, and police; women want to date military, policemen, firemen, lawyers, financial executives, and avoid laborers, actors, students, and hospitality workers.
- The gulf between the information we publicly proclaim and what we know to be true is often vast—we say one thing and do another. While 50% of the women and 80% of the men say race does not matter to them, 97% of the white women emails were to white men, and 90% of the white men emails were to white women.
Why Do Drug Dealers Still Live with Their Moms?
- Conventional wisdom: we associate truth with convenience, with what accords with self-interest, well-being, or what avoids unwelcome dislocation in life
- Crack gangs work like corporations—pyramid structure, with those near the top reaping an inordinate proportion of the rewards. Most crack foot soldiers had to hold another legitimate, minimum wage jobs to survive.
- Drug gang, movies, sports, music, fashion: the young participate in a tournament where they start at the bottom to have a (however small) shot at the top. Once they realize that they will never make it to the top, they quit the tournament.
Where Have All the Criminals Gone?
- Dramatic effects often have distant, even subtle causes—the proverbial butterfly that flaps its wings causing a hurricane on another continent.
- Effective crime drop explanations: increased number of police, harsh prison terms (as a deterrent and prophylactic), crack cocaine became cheap.
- Ineffective crime fighting techniques: gun control (takes guns out of the “right” hands, too many guns already in the U.S., criminals use large black market), capital punishment (too few to be meaningful deterrent), aging population (true but very gradual).
- Abortion lowers crime—supported by data in states with earlier adoption of legalized abortion, states with higher abortion rates, and countries such as Romania, Canada, and Australia.
- Strong predictors for criminals: growing up in poverty, in a single parent home, with a mother of low education. Correlation, not causality.
- Abortion as a crime fighting tool is terribly inefficient, as the number of aborted fetuses immensely outnumber the decrease in homicides.
What Makes a Perfect Parent?
- The risks that scare people and the risks that kill people are very different. What scares people is imminent, “outrageous” danger beyond their control.
- A child is 100 times more likely to die in a swimming pool accident than a gun-play accident.
- Academic performance gap of black vs. white kids explained more from school quality (and from “acting black” and not “selling-out”): higher rate of troublesome behaviors that is not a conducive to a good learning environment.
- What matters (generally who parents are): parents with high IQ’s (thus children who are not adopted), who value education, who speak English, who are healthy, who were over 30 when they had their first child. What doesn’t matter (generally what parents do): parents who are together, who didn’t work between birth and kindergarten, who take the child to museums and read to him, who spanks, children who watch television, or who move to a good neighborhood.
Perfect Parenting, Part II: Would a Roshanda by Any Other Name Smell as Sweet?
- Names are a reflection of economic disparity, not a cause. Single, uneducated, poor, teenage black mothers tend to give their babies “black” names as a sign of solidarity with their community. These babies grow up and tend to have worse life outcomes due to their disadvantaged background.
- A high-end name passes down the socioeconomic ladder, in the span of about a decade, and once adopted en masse, eventually falls out of the rotation of popular names.
Finished: Nov-2006