A simple idea: take an ordinary savings account, but instead of paying interest to account holders, hold a lottery to see who gets the lump sum. Freakonomics Radio investigates Prize-linked savings (PLS) accounts (Part 1
, Part 2
), which combine two things that seem completely at odds with each other: saving money and gambling. In Highland Park, MI, PLS accounts have been very successful
at converting "non-savers" into "savers". Why hasn't it caught on in the US? It's illegal in most states, of course.
posted by Jonathan Harford
on Dec 2, 2010 -
SEED Magazine: Wealth of Nations
: "Shared natural resources underpin the global economy, but our current economic system does not acknowledge their worth. Can a major new effort to assess the costs of biodiversity loss force a paradigm shift in what we value?" [more inside]
posted by zarq
on Nov 30, 2010 -
The Economics of Seinfeld
strives to illustrate basic economic concepts using scenes from the famous sitcom. "Seinfeld ran for nine seasons on NBC and became famous as a “show about nothing". It is the simplicity of Seinfeld that makes it so appropriate for use in economics courses." [more inside]
posted by Phire
on Nov 26, 2010 -
What Good is Wall Street? Think of all the profits produced by businesses operating in the U.S. as a cake. Twenty-five years ago, the slice taken by financial firms was about a seventh of the whole. Last year, it was more than a quarter. (In 2006, at the peak of the boom, it was about a third.) In other words, during a period in which American companies have created iPhones, Home Depot, and Lipitor, the best place to work has been in an industry that doesn’t design, build, or sell a single tangible thing.
posted by shivohum
on Nov 22, 2010 -
Ken Lay & Enron. Bernie Madoff. Bernie Ebbers & WorldCom. What is it about CEOs that makes them uniquely capable of pulling off the most audacious & expensive kind of white collar crime? Control Fraud Theory
has the answer. Via the ever-enlightening Bruce Schneier
posted by scalefree
on Nov 8, 2010 -
Paul Krugman and Robin Wells have a long two-part essay in the
New York Review of Books on the current economic slump.
The Slump Goes On: Why?
The Way Out of the Slump
Since around June 2009 many indicators have been pointing up: GDP has been rising in all major economies, world industrial production has been rising, and US corporate profits have recovered to pre-crisis levels.
Yet unemployment has hardly fallen in either the United States or Europe--which means that the plight of the unemployed, especially in America with its minimal safety net, has grown steadily worse as benefits run out and savings are exhausted. And little relief is in sight: unemployment is still rising in the hardest-hit European economies, US economic growth is clearly slowing, and many economic forecasters expect America's unemployment rate to remain high or even to rise over the course of the next year. [more inside]
posted by russilwvong
on Sep 28, 2010 -
"We infer that beyond about $75,000/y, there is no improvement whatever in any of the three measures of emotional well-being."
Two social scientists at Princeton, Angus Deaton
and Nobelist Daniel Kahneman
, have a new paper in PNAS about money and the determinants of happiness. Increased income above $75,000 is not associated with higher subjective happiness, though it is associated with superior scores on measures of overall life satisfaction. Other tidbits: "Religion has a substantial influence on improving positive affect and reducing reports of stress, but no effect on reducing sadness or worry... The presence of children at home is associated with significant increases in stress, sadness, and worry."
posted by escabeche
on Sep 8, 2010 -
say the USA is a Plutonomy
-an economy dependent on the spending and investing of the wealthy. In a further sign
, the top 5% of Americans by income now account for 37% of all consumer outlays (the bottom 80% by contrast share about the same). Consumer spending accounts for roughly two-thirds of U.S. gross domestic product. In a possibly worrisome sign, the wealthy are cutting back on spending
posted by stbalbach
on Aug 6, 2010 -
"The meteoric rise of Facebook raises four general questions . . . How is it possible for a teenager, however brilliant, to create a multibillion-dollar online business in such a short time? How likely is such a business to flame out? What, if any, legal protection from competition should be given to the ideas that power these businesses? And how far will social networking erode privacy or have other social consequences, good or bad?" Richard Posner (the federal judge and University of Chicago law professor best known as one of the pioneers of the "law and economics" movement [Wikipedia]
) answers these questions in his brief history and critique of Facebook. (This is a printer-friendly version that may cause a print dialogue box to pop up, but it's the only link that will work unless you subscribe to The New Republic. The article is nominally a book review but spends barely any time talking about the book that's supposed to be reviewed.)
posted by Jaltcoh
on Aug 5, 2010 -
After announcing that Lebron James
, Chris Bosh
, and Dwayne Wade
would join the Miami Heat in July
the team almost immediately sold out
their seasons tickets packages while placing another 6,000 on the waiting list. The result? All 30 seasons ticket salespeople were fired
on friday becasuse as a staffer put it `They let us go because there was really nothing left to do anymore.'' [more inside]
posted by jourman2
on Aug 2, 2010 -
Shared social responsibility
- When customers could pay what they wanted in the knowledge that half of that would go to charity, sales and profits went through the roof ... Gneezy describes the combination of charitable donations and paying what you like as 'shared social responsibility', where businesses and customers work together for the public good.
) [also see 1
posted by kliuless
on Jul 28, 2010 -
"His fiancee smiled and commented, 'Isn't that cute. They have the spirit of giving.' That really set me off, as my regular readers can imagine. 'No!' I exclaimed [...] 'They're giving away their parents' things [...] It's not theirs to give.' I pushed the button to roll down the window and stuck my head out to set them straight. 'You must charge something for the lemonade.
posted by WCityMike
on Jul 7, 2010 -
What US Health Care Needs Medical doctor and writer Atul Gawande gave the commencement address recently at Stanford's School of Medicine. In it he lays out very precisely and in a nonpartisan way what is wrong with the institution of medical care in the US — why it is both so expensive and so ineffective at delivering quality care uniformly across the board.
posted by kliuless
on Jun 21, 2010 -
"Does Professor Quality Matter? Evidence from Random Assignment of Students to Professors" by Scott Carrell and James West
is the title of an interesting new study in this month's Journal of Political Economy
, a leading journal in economics. (For a summary of the paper, see this review
. An ungated version
, too). The authors are interested in determining the role of "professor quality" in student learning. They do this by exploiting an unusual institutional feature of the Air Force Academy whereby all undergraduates are randomly assigned their professors, and all professors use the same syllabus. The authors also have the professor's student evaluations, as well each student's subsequent performance in the follow-up classes. To keep it simple, they focus only on Calculus I and the follow-up courses in Calculus (which are mandatory), though they note that an earlier study that looked at Chemistry and Physics found similar things. [more inside]
posted by scunning
on Jun 12, 2010 -
The Politically Incorrect Guide to Ending Poverty In the 1990s, Paul Romer revolutionized economics. In the Aughts, he became rich as a software entrepreneur. Now he's trying to help the poorest countries grow rich—by convincing them to establish foreign-run "charter cities" within their borders. Romer's idea is unconventional, even neo-colonial—the best analogy is Britain's historic lease of Hong Kong. And against all odds, he just might make it happen.
) [more inside]
posted by kliuless
on Jun 10, 2010 -
or: How I Learned[4,5]
to Stop Worrying
and Love Deficit Spending[7,8,9]
(during a general glut
at the zero bound
) -- When I was a kid, if I was sitting around the house and complained I didn't have anything to do, my mom would always respond the same way. "I'll find something for you to do," and she would. It was make work, she was finding something for me to do on the spot to cure my unemployment problem... [more inside]
posted by kliuless
on Jun 8, 2010 -
Good morning, ladies and gentlemen. In a few hours, I will destroy the Greek economy. Unless, that is, you give me the sum of...one trillion dollars
(SLNYT, but with this much money I can afford to look frumpy)
posted by anigbrowl
on May 10, 2010 -