308. How Can I Do the Most Social Good With $100? And Other FREAK-quently Asked Questions

Dubner and his Freakonomics co-author Steve Levitt answer your questions about crime, traffic, real-estate agents, the Ph. D. glut, and how to not get eaten by a bear.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Stephen J. Dubner?

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• 0:43Stephen J. Dubner?

  boring things like calculations and careful planning are usually behind it. Which begs the question, why not apply it to other aspects of life, like banking, for example? Well, PNC Bank did since its inception, proving time and again that the best banking strategy isn't the exciting type, but the steady, reliable, definitely not YOLO type. PNC Bank. Brilliantly boring since 1865. Brilliantly boring since 1865 is a registered mark of the PNC Financial Services Group, Inc. PNC Bank, National Association, Member, FDIC. Freakonomics Radio is sponsored by Mint Mobile. With Mint Mobile's summer sale, all of Mint's

• 1:25Stephen J. Dubner?

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• 2:11Stephen J. Dubner?

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• 2:47Stephen J. Dubner?

  You ready?

• 2:48Steve Levitt?

  OK, we're real? We're live?

• 2:49Stephen J. Dubner?

  We're live. You love radio, don't you love it?

• 2:53Steve Levitt?

  I do, especially when it's taped.

• 2:59Stephen J. Dubner?

  So it's been a while since we've taken listener questions. On a scale of 1 to 10, how much have you missed it?

• 3:05Steve Levitt?

  I think about 2 and 1/2, 3.

• 3:09Stephen J. Dubner?

  That's my Freakonomics friend and co-author Steve Levitt. He's an economist at the University of Chicago. I guess he doesn't love radio quite as much as I thought, but still, we wound up having a great time on today's episode, answering your questions. Questions about crime and punishment.

• 3:24Steve Levitt?

  As you take the knife and think about whether you're going to stab the person with it, you're not thinking about what's going to happen 15 years later when I apply for a job and I have to check the box.

• 3:33Stephen J. Dubner?

  Questions about how to do the most social good.

• 3:36Steve Levitt?

  So that is one of the weirdest definitions of social good that I've ever heard in my entire life.

• 3:41Stephen J. Dubner?

  And questions about the price of a tiger's life.

• 3:45Steve Levitt?

  And he looked at me like I was crazy, and he said, "We can shoot the gun in the air, but we absolutely could never shoot a tiger."

• 3:54Stephen J. Dubner?

  That's coming up right after this.

• 4:08Speaker 02

  From WNYC Studios, this is Freakonomics Radio, the podcast that explores the hidden side of everything. Here's your host, Stephen Dubner.

• 4:23Stephen J. Dubner?

  So Levitt, there's been some news at your university, University of Chicago, since we last spoke, some Nobel news?

• 4:30Steve Levitt?

  Yeah, my friend and colleague, Richard Thaler, won the Nobel Prize in Economics, which has been another joyous occasion on the University of Chicago campus. And especially nice for me because Thaler and I have been close friends for a long, long time, play golf together quite a bit, and even had some, a little spillover for me because Golf Digest, which I've always dreamed of somehow being written up in Golf Digest, well, they decided they'd write up Thaler because he won the Nobel Prize and because he's an avid golfer. So I was able to tag along and be the third wheel. And so maybe I'll get a brief mention or, you know, come kind of a scrap in Golf Digest so I can cross that off of my bucket list.

• 5:11Stephen J. Dubner?

  So the moral of the story is you've wasted thousands of hours on instructional golf and you just need to get your Nobel and then you'll get your spread in Golf Digest?

• 5:22Steve Levitt?

  Yeah, exactly.

• 5:27Stephen J. Dubner?

  All right, Levitt, so our first question today is from Jay Jones in Tennessee. Do you think people who use one initial are more typically male or female?

• 5:35Steve Levitt?

  I would say male, but it's hard to tell because they only use one initial.

• 5:39Stephen J. Dubner?

  All right, Jay Jones from Tennessee writes to say, "One of our local four-lane divided highways has been under construction for years. Typically, one of the two northbound lanes is closed. There's a full mile of signs and lights to warn drivers and cones slowly start to close off the one lane." I think we know where this is going, right? "I don't know if it's southern hospitality or what, but drivers will start merging into the open lane for a mile or more before the other lane closes. It's not uncommon to find the open lane backed up for several miles and the other lane standing empty." Long before it actually closes. And then, Jay Jones writes, I know the most efficient way is to use the zipper merge, where drivers fill both lanes right up to the merge point and then take turns merging

• 6:24Stephen J. Dubner?

  into the single lane, because I know this is the best way. I typically drive in the unused lane, flying past dozens of cars who look at me as if I'm cheating. Levitt, I believe this behavior is called side zooming. Jay Jones concludes, I am a very friendly and safe driver, and I believe my behavior is helping reduce traffic. If I am correct, why don't more people know about the zipper merge? So Levitt, to me, I don't know if it's so much a question of why don't more people know, but a question of even if people do know, would they still not do it? What do you think?

• 6:59Steve Levitt?

  So let me just divert this question a little bit before we talk about the particulars of what Jay Jones has to say, which is, we were just talking about Richard Thaler and his Nobel Prize, and this is actually, I think, a classic example of where you need a nudge, where it's actually, the problem here is, is the signage is so terrible. So this is a case where, where people who are trying to do the right thing are doing the wrong thing because they're being told to do something. So just tell them to do something different, which is stay in your lane, just, you know, all the sign would have to say is stay in your lane, a merge will happen in, in half a mile. And you get the exact same zipper, it would be more efficient, you wouldn't have any open lanes, and nobody would feel bad about themselves.

• 7:43Steve Levitt?

  So this is actually a perfect example of where public policy, and a very simple public policy, which is just moving around a few signs, could actually resolve the problem and create tremendous amounts of efficiency and, and also utility, I think, because it's, it's not just inefficient, it's incredibly frustrating when people are doing side zooming.

• 8:02Stephen J. Dubner?

  And what's your personal stance on the morality of side zooming?

• 8:07Steve Levitt?

  I tend not to think of the world in very moral terms. I tend to think of the world in terms of efficiency terms and in terms of prices and whatnot. But I have to say, the one place where I exercise some morality is when I'm driving the car, and at some point in my life, I just decided that I wasn't going to be a side zoomer. And it's funny, it's a very tenuous morality because if I'm in a taxi cab and he's side zooming, I'm happy. I'm glad that the onus of the misdeed is not on me. I like to get there faster. But I just found it easier for myself, rather than every time I got in a situation to try to make a judgment on whether I should side zoom or not, to simply say, it's not who I am. I'm not a side zoomer. I'm just going to do the right thing.

• 8:52Stephen J. Dubner?

  Yeah, but let me ask you this. According to the Federal Highway Administration, the zipper merge, or what's called late merges in the traffic literature, that they do work, that they cut down a lot on overall congestion. So really, in your urge to be a moral person in this case, in the side zooming case, you're actually part of the problem, not the solution. Doesn't that make you reconsider? It doesn't even take a traffic authority or a physicist to know that if you are leaving half a mile of one lane empty, then you're slowing down everything, yes?

• 9:23Steve Levitt?

  Yeah, absolutely. So the thing you want to do is, I think, from a public policy perspective, is not put people's identity and their morality in conflict with efficiency.

• 9:34Stephen J. Dubner?

  So getting back to Jay Jones's actual question, if I am correct here, She-Ro, why don't more people know about the zipper merge? So maybe we would change that and say, why don't more people, you know, use that side zooming, use that second lane and do it? What's your overall answer to Jay Jones and for why people don't do it?

• 9:50Steve Levitt?

  I think in his setting, it's socially costly to be zooming past people when you don't want to be that kind of person.

• 9:55Stephen J. Dubner?

  Socially costly because people will maybe shoot you a look or honk their horn at you?

• 9:59Steve Levitt?

  You know, you're taking advantage of other people. You're putting yourself above other people by every car you pass is waiting a few extra seconds because you passed them. And I have to admit, there was a time in my life where I wanted to be the kind of person who did that. It was fun. I got a little bit of joy out of the whipping by on the right lane. But then, at some point, I changed.

• 10:20Stephen J. Dubner?

  So if Jay Jones is the kind of person who says, look, I know that I'm doing the right thing for everyone, and it's even more right for me, and he or she is willing to absorb that social cost, you have no problem with it. It's just that that's not who you are?

• 10:35Steve Levitt?

  Yeah, absolutely. I have no real problem with the individual. So I understand when people pursue their own incentives. What I have a problem with is when the structures of society break down and it allows people who are exploiting other people to be able to do that without any punishment.

• 10:58Stephen J. Dubner?

  Okay, Levitt, next question is from a listener named Bruno Heepers in Pittsburgh. Here we go, Steelers, here we go. And Bruno wants to hear about what he calls, quote, "the dysfunctions of the academic job market." So he writes, "The academic job market is quite odd. It does not seem to adjust to supply and demand forces as other markets do. Some even compare it to a Ponzi scheme. Despite the very limited job openings every year, PhD programs accept many graduate students, who are paid very modestly to operate labs and do research for faculty members. As is well-known, grad students' job prospects are poor. In some areas, the prospects are worse than others. There's also," he writes, "the likely impact of tenure in this market, working as an incentive to pursue a career in academia, but also discouraging faculty retirement

• 11:43Stephen J. Dubner?

  and the opening of new faculty posts. So in spite of that," he writes, "universities keep admitting many new grad students every year. Moreover, many people keep applying for grad school despite unpromising job prospects. There seems to be no change in sight. The status quo seems well entrenched." Therefore, here are his questions. "What is going on? Why is this market structured this way? How does economics explain it? Is the academic job market really a Ponzi scheme? Should PhD programs accept..." Okay, Bruno has a lot of questions. "Should PhD programs accept fewer grad students to adjust to limited job availability or not? What could or should be done to reform this market?" So Levitt, I can think of few people more qualified to answer those 1,800 questions than you.

• 12:28Steve Levitt?

  Okay. I think there are two possible explanations for what's going on. The first is that, in general, people are incredibly over-optimistic about their own ability and talent. So this is true not just in PhD programs, but it's true on the basketball courts across America and the set of people who move out to Los Angeles thinking they're going to be star actors and actresses. There's just a lot of optimism among some people about how talented they are and the belief that they can overcome the odds. And of course, by the time they get to graduate school, I think they'll find out that there are 30 other people who are exactly coming from the same position

• 13:10Steve Levitt?

  they're coming from, and the odds of success are quite low. Okay. But I think that's only a small part of the... Conundrum, the puzzle, I think the real fact is that for the set of people who are going to get PhDs in subjects like history or Latin, there's just an enormous consumption value associated with the pursuit of that PhD, that the relatively meager wages, but enough to survive, while you study the thing that you love with a great amount of free time and autonomy, with the hopes and dreams that you will be a great academic in time,

• 13:54Steve Levitt?

  all of that is a very fun, exciting thing to do. And if people love doing it, then you can't criticize the universities for offering them the spots.

• 14:06Stephen J. Dubner?

  So you're part of the PhD industrial complex. You get students who want to get their PhD in econ at Chicago. Do you feel a little bit guilty about being part of that machine, especially when you're the 10-year-old sitting back there with essentially no risk?

• 14:22Steve Levitt?

  No, I've never, I have not felt once guilty.

• 14:27Stephen J. Dubner?

  What was I thinking of asking Steve Leffler? Do you feel guilty about anything? That's not your way. I apologize.

• 14:32Steve Levitt?

  It is true that I try to talk almost everybody out of a PhD program, except for a very rare set of people. And those set of people either have such an amazing talent or excitement or passion for doing research, or they're so socially inept that they really couldn't function outside of academics.

• 14:55Stephen J. Dubner?

  So going back to Bruno's question, other than try to dissuade everyone who comes into your office from actually getting the PhD, what should be done to reform this market?

• 15:05Steve Levitt?

  So I think information cannot hurt. So if it were required that entire disciplines or perhaps individual schools within disciplines would report the how many people enter each year, how many eventually graduate, how long it takes them, and what jobs they end up doing, because then at least people would be making informed choices. I really don't think that if informed people are saying they want to do something, that a university should say, no, I think it's immoral to let in people who really are going to enjoy this program, even if they don't think it will be the most valuable career-enhancing experience along the way.

• 15:47Stephen J. Dubner?

  In other words, if you're smart enough to pursue a PhD, you're smart enough to know better.

• 15:51Steve Levitt?

  I love that. That's perfect.

• 15:55Stephen J. Dubner?

  All right. So Levitt, next is a question from Mike Moore from Corinth, New York, which is in Saratoga County. And I believe it's known as the snowshoe capital of the world. The subject line of Mike Moore's email is "Doing Social Good With Spending." And he writes, "If I have $100 in disposable income per month, what can I do with it that will do the most social good?" If "social good" is defined as the maximum number of people in the United States who will see those dollars in their paychecks before their dollars leave the country for the first time. I'm going to read that part again for emphasis. He writes, "If social good is defined as the maximum number of people in the United States who will see those dollars

• 16:37Stephen J. Dubner?

  in their paychecks before the dollars leave the country for the first time." And he goes on a little bit.

• 16:42Steve Levitt?

  And let's just stop there, though. Okay, so that is one of the weirdest definitions of social good that I've ever heard in my entire life. I mean, why would you define social good, say, stopping at the border? I mean, what it implies is that you care only about Americans. And in some sense, from the question, equally about all Americans, but not at all about anyone who isn't an American. And indeed, like, I think we actually have a little bit of that behavior. I think we do draw lines of us versus them. But I think that is a particularly difficult social welfare function to think is the right one if you're talking about doing social good.

• 17:20Stephen J. Dubner?

  So how would you encourage Mike to think differently about his question? Or do you just want to answer his question straight up?

• 17:28Steve Levitt?

  So to be honest, I don't know the answer to his question. It's macro, in some sense. It's this really complicated idea about money multipliers. And it interacts with the banking system and the Federal Reserve. And it has to do with the speed at which money circulates. I think it actually reflects a belief that the economy is very much driven by what we call the demand side, that if people just spend, spend, spend. It's a very Keynesian view of the world. And I just don't think it's- It's exactly the way economists think about the world. There might be somebody who knows more about it than me who would say it makes sense. But to me, it's one of those things that doesn't make a lot of sense to me. But a lot of macro doesn't make a lot of sense to me. So let's just say, instead, the question we're trying to answer is, if you just want

• 18:13Steve Levitt?

  to help the world as much as possible through an investment of $100, how would you allocate that $100? And it seems to me that a logical place to start is you want to help the super poor, that the really poor are the ones who will get the most benefit from an additional dollar worth of good things happening to them. And you're not going to find really any of those people in the United States. You're going to have to go far away to find those people. And then, once you find them, it turns out it's just not that easy to figure out what to do next that is really helpful.

• 18:49Stephen J. Dubner?

  Right. But let me ask you, you're kind of sort of implying that Mike Moore is a little bit, if not xenophobic, at least narrow-thinking, that the idea of social good is more valuable if it touches those that you see or know or are kind of like you. But on the other hand, you know, given the history of humankind, the way that we care about some people more than others, is there anything so terribly wrong with his constricting his definition of social good as people who, like me, live in America?

• 19:21Steve Levitt?

  You know, I don't think it's wrong. I think it's odd. It just strikes me as odd. But, I mean, economists believe that people can have whatever preferences they want, and we don't really make judgments about preferences. Certainly, I understand how you might put America first, or your own town, or really easier to understand, even your own family would be certainly a justifiable thing. And clearly, we know that a lot of people think like that, because most of, when people die, they leave most of their money to their family, very little to the people in Bangladesh, and, you know, not so much money to the poor in America. So I think actually what he's talking about is not unusual. It's only unusual when you couch it in terms of wanting to do what's socially good.

• 20:08Stephen J. Dubner?

  You got a little more in you?

• 20:09Steve Levitt?

  Sure.

• 20:12Stephen J. Dubner?

  Coming up after the break, questions about the efficacy of, respectively, bear spray, realtors, and the death penalty.

• 20:21Steve Levitt?

  So, yeah, I think the death penalty is purely, at this point, a political beast and not a crime reduction tool.

• 20:29Stephen J. Dubner?

  That's next, right after this.

• 20:35Stephen J. Dubner?

  Freakonomics Radio is sponsored by Southern New Hampshire University. The best investments are the ones you make in yourself, and no one knows that better than Southern New Hampshire University. With more than 200 online degree programs, no set class times, and low online tuition, Southern New Hampshire University is built to fit your life today and set you up for success tomorrow. Education is an investment. Why not make it a smart one? Apply for free at SNHU.edu/freakonomics.

• 21:08Stephen J. Dubner?

  Freakonomics Radio is sponsored by PNC Bank. Boring. Great word, bad rep. Yet, time and time again, here at Freakonomics, we find that when something culture-changing happens, boring things like calculations and careful planning are usually behind it. Which begs the question, why not apply it to other aspects of life? Like banking, for example? Well, PNC Bank did, since its inception, proving time and again that the best banking strategy isn't the exciting type, but the steady, reliable, definitely not YOLO type. PNC Bank: brilliantly boring since 1865. Brilliantly boring since 1865 is a registered mark of the PNC Financial Services Group, Inc. PNC Bank, National Association Member FDIC.

• 21:55Stephen J. Dubner?

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• 22:30Stephen J. Dubner?

  So Levitt, one more question for you before we get back to our listener questions. The Booth School at the University of Chicago runs this survey where they ask economists from many universities their take on policy issues of the day. You don't participate in that survey, do you?

• 22:46Steve Levitt?

  No, I don't.

• 22:47Stephen J. Dubner?

  But you know about it?

• 22:48Steve Levitt?

  Yeah, absolutely.

• 22:49Stephen J. Dubner?

  This is from the Washington Post recently. I'm curious to know your thoughts. This is from back in May, actually, before the Trump administration announced the outline of a tax reform plan. President Trump's administration says his tax cut will pay for itself. It turns out it's really hard to find an economist who agrees. The University of Chicago's Booth School of Business regularly polls economists. As I said, in a survey the school published on Trump's tax plans, only two out of the 37 economists that responded said that the cuts would stimulate the economy enough to cancel out the effect on total tax revenue. Okay, so granted, it's a fairly narrow question about being revenue neutral. Those two economists now both say they made a mistake and that they misunderstood the question.

• 23:30Steve Levitt?

  [laughing]

• 23:31Stephen J. Dubner?

  "I screwed up on that one," said one of the two economists, Kenneth Judd. "I meant to say that this is a horrible idea, a bad idea, no chance in hell." But I guess he checked the wrong box. Then the other one was Bengt Holmström of MIT, who confirmed in an email to the Washington Post that he also had misread the question. So if you have essentially 37 out of 37 economists, who are fairly heterodox in their conservative, liberal, Dem, Republican lean, from what I can tell, should that indicate to us that on that measure at least, a revenue-neutral tax plan, that we should be wary?

• 24:04Steve Levitt?

  Absolutely. Although there's a lot of discussion about how economists are always fighting with each other and disagreeing, I actually think the overall agreement among economists on a broad set of questions is very, very large. And I think that the Booth School survey actually shows that, as this particular question does. Now, whether the economists are right or not is another question, but I think there's a lot of experience with... Incredibly optimistic forecasting done by political hacks who are trying to get their particular policy advanced.

• 24:42Steve Levitt?

  And if I were one of the economists doing this particular survey, I would have been the 38th out of 38 to say that this thing's not going to pay for itself.

• 24:53Stephen J. Dubner?

  The 38th of 38, meaning you would have understood the question, though, at least.

• 24:57Steve Levitt?

  Well, who knows? I might have hit the wrong button, but if contacted by The Washington Post, I would have said exactly what Ben said.

• 25:05Stephen J. Dubner?

  All right. So let's see if you hit the right button on this listener question. This is coming from Ryan, who's from Sandy, Utah. Ryan writes to say, "My question is, how has the Internet not killed the market for realtors yet? As a middleman, realtors connect sellers with buyers because they have access to a huge database, MLS, or multiple listing service. But one thing the Internet is best at, making information accessible, has created efficiencies that have decimated other middlemen industries, such as travel agents. So why is it still the norm to pay tens of thousands of dollars per home in commissions to realtors? I've tried to find answers," writes Ryan, "but it's extremely hard to find unbiased info. Parthenesis: everyone has a relative who's a real estate agent."

• 25:49Stephen J. Dubner?

  So Levitt, before you answer the question, why hasn't the disintermediation of the Internet and the digital revolution generally worked on the real estate business? Maybe you could just start by summarizing your research on real estate agents that we wrote about way back in 2005 in Freakonomics.

• 26:06Steve Levitt?

  Sure. A long, long time ago, with Chad Silverston, I did some research on real estate. And the somewhat perverse incentives that real estate agents face could lead them to not give the best possible service to their clients. And in particular, when a real estate agent sells a house, they do take a commission. But by the time that commission is split between the buying and the selling agent and their respective companies, that to the actual pocket of the agent goes only 1%. And so what happens is, since the agent has to do- Most of the work and actually is responsible for paying many of the fees associated with advertising and whatnot.

• 26:47Steve Levitt?

  The agent in principle should be really eager to make a sale, even if the sale is not at the highest possible price. And that's just a simple fact of the way the incentives are set up.

• 26:58Stephen J. Dubner?

  So that explains why the incentives of an individual agent may not be aligned with the incentives of a home seller, right? But it looks like the average commission rate nationwide on home sale transactions as of 2013, latest number I see here, it's still 5.38, 5.4%. So that's still an awful lot of money to be paying for what a lot of people would argue is a relatively small amount of work. Or I guess an easier way to put it is if you end up paying $100 or $50,000 commission on the sale of an expensive home, if you were to divide that into an hourly rate, your real estate agent for that one sale at least is getting paid an awful lot per hour. So why does this model still predominate?

• 27:42Steve Levitt?

  I'm not exactly sure. I think that the most likely explanation is what an economist would call the two-sided nature of the real estate market in the sense that there's an agent who represents the buyer and an agent who represents the seller. And so the question is, if I didn't have an agent, could I have gotten a home cheaper? So what I might do as a buyer is I'd say to the seller's agent, hey, you and I both know that if I had my own real estate agent, you would have to give 2.5% to that agent. So how about we work out a deal where out of your own fee, you give me some money or

• 28:23Steve Levitt?

  you bargain harder with your own client so that you like get me a better deal or some way I can get some part of that 2.5%.

• 28:32Stephen J. Dubner?

  So that sounds totally sensible. It also sounds like it might put the seller's agent in a slightly illegal position.

• 28:40Steve Levitt?

  So I don't know about legality. I do know that the last time I bought a house, I exactly uh

• 28:47Stephen J. Dubner?

  Did that?

• 28:47Steve Levitt?

  Did try to

• 28:48Stephen J. Dubner?

  So did I.

• 28:49Steve Levitt?

  Go ahead and say, and you know, what was interesting is the seller's agent actually said, you know, I don't want to be caught in some kind of moral bind. So I'm going to have one of my friends serve as your buyer's agent.

• 29:03Stephen J. Dubner?

  Of course.

• 29:03Steve Levitt?

  And so there isn't any worry about a conflict of interest because I want someone to represent you.

• 29:09Stephen J. Dubner?

  But that's also giving their friend a big envelope of cash essentially, right?

• 29:13Steve Levitt?

  I wanted them to give the cash to me, but they wanted to give it to their friend instead. I'll tell you what I'm surprised by is the way of providing services by realtors that come in the form of a percentage of the house price. That's the thing that to me seems to make less sense in that agents do all sorts of things that have tremendous potential value to both buyers and sellers. They tell you what your home is worth, how to prepare it. They do advertising, they do open houses, they do negotiating, they, you know, they find clients. They do all sorts of things. They put you on MLS and all of those things you could imagine being

• 29:55Stephen J. Dubner?

  Just buying à la carte.

• 29:56Steve Levitt?

  À la carte, yeah, à la carte or by the hour.

• 29:58Stephen J. Dubner?

  So here are some BLS data for total median pay for real estate agents and brokers in the US is in the neighborhood of forty six and a half thousand dollars a year or twenty two dollars an hour. So theoretically, if you could hire an agent directly for twenty five dollars an hour, which is not very much, certainly would pale in comparison to what you pay in overall commission, it'd be win-win because you're going to end up paying a lot less, presumably, I would argue, than you would if you're going for the whole full monty commission structure.

• 30:30Steve Levitt?

  Yeah, the thing though, that's left out of that argument is that very small share of the time that agents are actually spending being real estate agents is actually representing clients. That the overwhelming activity that agents do is trying to find clients. And so, you know, the fact that they get paid twenty five dollars an hour, you know, means probably they're getting paid, you know, if only say twenty five percent of their time is spent actually working on behalf of clients, they'd have to charge you a hundred dollars an hour. Now that still might be much cheaper than the commission you pay if you do a high priced property.

• 31:09Stephen J. Dubner?

  Hey Levitt, here's a question I think you'll like. Actually, kind of two related questions. First one comes from Marvin Young, who is a statistical clerk with the US Census Bureau. He writes, "With policies for tough-on-crime, mandatory minimums, and application checkboxes, I'm curious about the economic impacts of how we rehabilitate felons and some misdemeanor offenders." Levitt, you've thought about this in the past, yes?

• 31:33Steve Levitt?

  Yeah, I sure have thought about that. I mean, these are important and hard questions. Almost everyone who gets sent to prison is going to come out of prison. And it's really tricky to know what to do, both from the perspective of public policy, but also from the perspective of individuals, say, people in an HR department who are in charge of doing hiring and deciding, should I hire a convicted felon? And now with the availability of databases, it's very easy to find out who's been convicted of various crimes and whatnot. And I think that the evidence suggests that the stigma associated with a conviction at some time in prison for all but the lowest-skill workers is pretty high, pretty costly, the

• 32:18Steve Levitt?

  punishment you pay, not just while you're in prison, but in the labor market after you emerge from prison.

• 32:23Stephen J. Dubner?

  Given that the punishment is relatively high, do you think it acts as a deterrent on some would-be criminals?

• 32:31Steve Levitt?

  I'm not sure we have so much evidence on it. It's a hard question to figure out how to answer smartly. I do have a general belief that when you make punishments worse in ways that people can see, then people respond to it. So I would have every reason to believe that there is a deterrent effect.

• 32:50Stephen J. Dubner?

  Could you just as easily think that the kind of person who is most likely to commit that kind of crime is just not the kind of person who's going to be thinking long-term enough about the punishment in the labor market after prison?

• 33:06Steve Levitt?

  Well, I do think most violent crimes are committed under the influence of alcohol or drugs and, you know, you're in a fight or angry, whatever. So you can imagine that you're not thinking, as you take the knife and think about whether you're going to stab the person with it, you're not thinking about what's going to happen 15 years later when I apply for a job and I have to check the box. I mean, that's not in the forefront of your mind. But on the other hand, I suspect that there's an ethos of, of general thinking about, I cannot rob somebody because if I get caught for armed robbery, my whole life is messed up.

• 33:40Stephen J. Dubner?

  And you also, you've argued in the past, I'm curious if this is still your view or whether there's any data that's changed it, that the death penalty as practiced in the United States is wildly ineffective as a deterrent, as a crime deterrent, because it's too distant, takes too long, and just doesn't happen often enough for it to actually be enough of an at the moment deterrent against that kind of crime?

• 34:02Steve Levitt?

  Yeah. If you're a reasonable calculator of costs and benefits, you should not be deterred by the death penalty in the sense that there are something like, I don't know, 12,000 homicides in the US and there's something like, I don't know, 20 executed. So your chances of being executed if you commit a homicide are essentially one in a thousand, but it comes with a delay usually of 15 or 20 years. And so if you compare it all, the disutility of, you know, life in prison compared to 15 years in prison followed by being executed, and you multiply that by 1,000, it just, it just shouldn't matter at all. The likelihood

• 34:45Steve Levitt?

  of dying if you're in a drug dealer on the streets is higher than your likelihood of dying if you're on death row, because the streets are dangerous and it's hard to get killed when you're on death row. So it all, I think, in that regard, yeah, I think the death penalty is purely at this point a political beast and not a crime reduction tool.

• 35:08Stephen J. Dubner?

  Here's a related question from Jimmy Derringer, who's a real estate investor in Spokane, Washington. He writes, "My question is, if you could do one thing in a city to reduce crimes, specifically violent or drug-related crimes, what would that be?"

• 35:21Steve Levitt?

  Well, so I'd say Jimmy's asking exactly the right question, that when you're thinking about crime in a city, that crimes that have a lot of costs are the violent crime. And when you say drug-related crime, I think he really means drug-related violence. And I think those are exactly the kinds of crimes that we might be able to have the biggest effect on. I'm not saying the right answer socially would be to do what I'm about to say, but I think in terms of reducing violence, it is by far the single most powerful tool we have, which would be to simply legalize drugs, especially cocaine. A lot of the violence around in the big cities, at least the ones that I've been in, have been around crack cocaine, cocaine more generally. So I think very effectively and quickly,

• 36:06Steve Levitt?

  we could dramatically reduce violent crime through the legalization, not just, say, of marijuana, but of all drugs. Now, I think actually that would be a bad idea in general, but I think for solving crime, that to me is an obvious and clear path to some success.

• 36:24Stephen J. Dubner?

  So you say that would be obvious and clear and pretty drastic, right? Like, on the spot, it would work. But that would be nowhere near as drastic as, for instance, if you change the death penalty, right? And invoke the death penalty for, like, any violent crime and you execute people pretty much on the spot, kind of Philippines-style. And that would, if you want to do one thing to really reduce crime, if the sky is the limit, wouldn't you go more in that direction?

• 36:50Steve Levitt?

  I mean, we could just kill everybody before we start if we want to make sure there's no crime.

• 36:54Stephen J. Dubner?

  Well, there's that.

• 37:02Stephen J. Dubner?

  Okay, so Levitt, here's a message from a listener. We'll go ahead and play it on tape.

• 37:05Speaker 03

  My name is Rob Eaton. I live in Rexbury, Idaho. I'm a professor of religious education and administrator at BYU Idaho. As I was hiking near Grand Teton National Park recently with my bear spray, I was wondering about the protocol for what you do when you encounter bears and whether there's any data behind this protocol. You certainly can't do randomized clinical trials, not even with college students, for seeing what works when you encounter a grizzly bear. So how do we really know?

• 37:34Stephen J. Dubner?

  So Levitt, I love this question. It's about real, you know, evidence, cause and effect. And I know that you're a real outdoorsman, aren't you?

• 37:43Steve Levitt?

  I have. I have to admit that I have, once in my life, while walking a very short part of the Appalachian Trail, carried bear spray and rung a bell from time to time to tell the bears I was on my way.

• 37:57Stephen J. Dubner?

  Yeah, and it worked out? You weren't eaten?

• 38:00Steve Levitt?

  I was not eaten.

• 38:01Stephen J. Dubner?

  I'm fond of Rob's question because it is one of those things that if you're going in the woods and you're thinking about bears and someone tells you, "Use bear spray," who am I to know whether that makes sense or not?

• 38:14Steve Levitt?

  I think that what the economist's question would be is, so, given the choice between a bear who's standing on the path and one who's just been sprayed in the face with bear spray and is really, really angry at you right now, which is a better situation? And I think among people, it's not completely obvious. It's not completely obvious that you want to spray really mean people in the face with, you know, with pepper spray. Now, it may be that pepper spray is so effective that it really does completely stop them. And my hunch is that bears probably don't attack people after they've been sprayed. But that would be the kind of question you'd worry about because you can spray a bear in a cage and see if a bear likes this stuff or not. And I'm sure somebody's done that. But it's a little harder to, like, you probably don't stand in the cage with the bear when

• 38:57Steve Levitt?

  you spray him to see whether, after he's been sprayed, he goes and huddles in the corner or he tries to eat you.

• 39:02Stephen J. Dubner?

  Well, you are right that someone has tried. A zoology student years ago named Gary Miller saved a male bear, his name was Growley, who was slated for death, and used him, this was a research project in 1977, and he used a bunch of different things to see what Growley did not like. And a dog spray was the first apparently successful one. And then the experiment was conducted on four other bears. Then another student, Carrie Hunt, tested a range of prototypes of bear spray as part of her master's thesis at the University of Montana in the 1980s. And apparently, it does work pretty well.

• 39:41Steve Levitt?

  Do bears ever hurt anyone? Honestly, like, we hear about shark attacks, even though you and I have written a lot about how sharks never attack anyone. But unless you're a total idiot and you, like, have food in your tent, do bears actually bother anyone?

• 39:56Stephen J. Dubner?

  Well, here is a site, based on newspaper accounts collected during 1985 to 96, so not very new. Brown bear attacks resulted in 2.75 human injuries and 0.42 deaths per year in Alaska. So Alaska alone, half a death a year. Here's Yellowstone as an example. Since 1980, over 100 million people visited Yellowstone National Park. During that time, 38 people were injured by grizzly bears, which is a subspecies of the brown bear. So it's not nothing.

• 40:27Steve Levitt?

  It's pretty close to nothing compared to, I can't, what does a can of bear spray cost? I think a can of bear spray is not cheap.

• 40:34Stephen J. Dubner?

  All right. To your point, more people die in the park from drownings, burns from hot springs, and suicide. Not so surprising, suicide being a leading cause of death in the United States. So your answer to Rob's question is, don't worry about it. That's your answer to the man who's asking whether bear spray works?

• 40:55Steve Levitt?

  Yeah, so I think Rob was asking a slightly different question, which was, in a world in which we can't do randomized experiments, how do we know what works and what doesn't? And I think what your discussion pointed out was a pretty sensible thing. Like, sure, I can't do a randomized experiment, but if I got a bear in a cage and I spray him in the face, and then I spray four other bears, and all four of them are very unhappy and lie down on the ground, moaning afterwards, it does seem like pretty good evidence that bears aren't going to like this. But like, the economic part of it, which is interesting, is how then this turns into an industry where you put some stuff in a can that probably costs, like... 25 cents to produce and then sensibly you charge high prices because people are terrified of bears and you multiply that

• 41:40Steve Levitt?

  out and yet nobody was ever going to get attacked by a bear in the first place.

• 41:44Stephen J. Dubner?

  This citation I'm looking at says that bear spray is better than guns for fending off bears. People who had firearms on them during a close encounter with a bear had the same injury rate, 56%, regardless of whether they used their firearm or not. Does that surprise you?

• 42:02Steve Levitt?

  So the implication sounds like if you shoot a bear, the bear keeps on running at you, but if you spray him with bear spray, they turn around.

• 42:11Stephen J. Dubner?

  Well, either that or you missed.

• 42:12Steve Levitt?

  Or you missed, yeah. But it also wouldn't maybe surprise me that if you shoot a bear, they do keep running because they don't exactly know what happened. But when you get sprayed in the face with stuff, it hurts so much you can't even think about it. It's a good question. You know, I had an interesting, this is a little bit unrelated, but when I was in India, I went to try to see tigers in one of the national parks and we got to talking about guns and tigers because I asked him, they did carry guns.

• 42:43Stephen J. Dubner?

  The tigers? Oh, not the tigers, did not.

• 42:45Steve Levitt?

  The Rangers carry the gun. And so I asked the guy if he ever had to use a gun against a tiger. And he looked at me like I was crazy and he said, we can't, we could never, we can shoot the gun in the air, but we absolutely could never shoot a tiger. And I said, well, what if the tiger was like eating me? And he said, no, I mean, the tigers are more valuable than people. And it's only after a tiger has eaten three or four people that we then would relocate the tiger to a place where there weren't so many people around. But it was, it was really interesting to hear it because it was a very different perception about the relative value of humans and animals. So I said to the guy, surely

• 43:28Steve Levitt?

  you must value the tourist life higher than one of the local people's lives, don't you? But he very clearly suggested to me that no, tourists' lives were still nothing near the value of a tiger's life.

• 43:41Stephen J. Dubner?

  Did you think about trying to get hold of his gun if you encountered a charging tiger?

• 43:46Steve Levitt?

  You know, despite the fact that we bounced around for eight hours through this wildlife park.

• 43:52Stephen J. Dubner?

  No tigers.

• 43:52Steve Levitt?

  Not, no tigers. We saw one animal the entire time we were there. We saw the butt of a deer running into the underbrush in eight hours.

• 44:03Stephen J. Dubner?

  So this price discrepancy between the US and India in this case, and the value of a human life compared to a tiger, how do you think about that discrepancy? Is there a "right way" to price a human life in that context?

• 44:17Steve Levitt?

  Pricing human life is just hard, and I don't think there's a right answer. I think, I put it like pricing anything, right? The value that I put on any particular good or service or activity or animal or person is going to be very individualistic, very different from yours. And as a society, we have various tools where we try to aggregate people's preferences, you know, through surveys or whatnot to see what something's worth. It's something we try to do, say, when there are lawsuits going on, or when there are treaties being done, or you're trying to figure out whether you should save an indigenous species.

• 44:58Steve Levitt?

  But it's turned out to be really hard to come up with good estimates of what, as a society, we think the value is of a tiger or all tigers together. And I think if you say it really clearly, look, there's a tiger and a random person who lives in India, and we're about to shoot one of them. We only have one bullet. Who would you like us to shoot? I don't know. I'm not sure what most people would say. But that is a pretty direct way of getting at the question.

• 45:34Stephen J. Dubner?

  Excellent. All right. We should sign off. Do you have anything else you want to say?

• 45:38Steve Levitt?

  It's good to be back on doing the FAQ stuff. Let's do that more often.

• 45:41Stephen J. Dubner?

  All right, Levitt. Nice to talk to you. Be well.

• 45:43Steve Levitt?

  Okay.

• 45:43Stephen J. Dubner?

  Take care.

• 45:49Stephen J. Dubner?

  Thanks for listening to our frequently asked questions and special thanks to Jay Jones, Bruno Heapers, Mike Moore, Ryan Lillywhite, Marvin Young, Jimmy Derringer, and Rob Eaton for sending in their questions on the next episode of Freakonomics Radio. If I asked you to guess the most trusted profession in America, what would you say?

• 46:07Speaker 04

  Uh, most trusted?

• 46:10Speaker 05

  The most trusted profession? I can't quite answer that.

• 46:15Speaker 03

  Maybe a coach. A construction worker. Pilots. Librarians.

• 46:19Stephen J. Dubner?

  Nope, none of those. The answer?

• 46:21Speaker 06

  The most trusted profession, I would say nurses. I would say nurses.

• 46:26Stephen J. Dubner?

  Correct. Nurses. For 15 years straight. So, in our next episode, we will talk about what nurses contribute to our healthcare system. So these effects are quite large. We'll hear about a national movement that's reimagining the role of nurses.

• 46:42Speaker 07

  The evidence seems to be that increasing accessibility is actually getting better outcomes.

• 46:51Stephen J. Dubner?

  And we'll hear how this movement is running into political and regulatory hurdles. I mean, it's just almost insane. It's like putting the mafia in charge of the New York Police Department. That's next time on Freakonomics Radio. Freakonomics Radio is produced by WNYC Studios and Dubner Productions. This episode was produced by Eliza Lambert. Our staff also includes Allison Hockenberry, Merritt Jacob, Greg Rosowski, Stephanie Tam, Emma Morgenstern, Harry Huggins, and Brian Gutierrez. The music you hear throughout the episode was composed by Luis Guerra. You can subscribe to Freakonomics Radio on Apple Podcasts, or Stitcher, or wherever you get your podcasts.

• 47:35Stephen J. Dubner?

  You should also check out our archive at Freakonomics.com, where you can stream or download every episode we've ever made. You can also read the transcripts, and you can find links to the underlying research. We can also be found on Twitter, Facebook, or via email at [email protected]. Thanks for listening.

• 48:08Stephen J. Dubner?

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• 48:41Stephen J. Dubner?

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• 49:11Stephen J. Dubner?

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• 49:49Speaker 08

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