Apparently that ‘A1’
wasn’t for service
The next time you have a plumbing emergency, don’t just contact the first business listed in the yellow pages or the one with the most prominent advertisement on Google: These businesses may actually be substantively different than others. As an economist at Duke University shows in a recent study, low-quality plumbers try to seduce the clueless, desperate customer by having a business name that begins with an A or a number—thus getting listed first in the yellow pages—and/or by paying for a prominent advertisement. Using data on plumbers in Illinois, the economist found that “those with names that begin with an A or a number receive more than five times as many complaints with the Better Business Bureau, on average, and more than three times as many complaints per employee,” which “is not simply a result of differences in business volume or customer composition,” and that “plumbers that advertise on Google’s search page receive more than 13 times as many Better Business Bureau complaints...and receive more than three times as many complaints per employee.”
McDevitt, R., “‘A’ Business by Any Other Name: Firm Name Choice as a Signal of Firm Quality,” Journal of Political Economy (August 2014).
Some upsides to legal prostitution
Prostitution is illegal in the United States, except in certain parts of Nevada. So what difference does this ban make, say, in a small state in New England? Two economists studied what happened during the unexpected, court-ordered decriminalization of indoor prostitution in Rhode Island between 2003 and 2009. They found that prostitution advertising and market size dramatically increased, but they also found “robust evidence across all models that decriminalization caused rape offenses and gonorrhea incidence to decrease.” The economists note that “while we cannot provide definitive evidence on the exact mechanism of the decrease in rapes, it appears likely that some of the decrease is due to men substituting away from rape toward prostitution.” To explain the decrease in gonorrhea, the economists note that “post-decriminalization we observe significant entry of White and Asian workers, and these races have the lowest gonorrhea prevalence.” They also noted that prostitutes reported a decrease in higher-risk sex acts, suggesting that they felt “more empowered to reject risky sexual propositions.”
Cunningham, S. & Shah, M., “Decriminalizing Indoor Prostitution: Implications for Sexual Violence and Public Health,” National Bureau of Economic Research (July 2014).
New peace tactic:
The Israeli-Palestinian conflict has flared up again. Both sides are dug in. Is there any way of digging them out? One strange tactic might be to try some reverse psychology. In a new study, psychologists in Israel exposed Jewish Israelis to 30-second ads conveying the message that the conflict is actually good for Israel. Those who watched a series of these ads before the 2013 Israeli elections experienced more “unfreezing of socio-psychological barriers, which in turn decreased perceived Palestinian responsibility, which in turn increased willingness to compromise,” and they ended up casting more votes for dovish parties. Even a year after the elections, those who had watched the ads reported a greater willingness to compromise.
Hameiri, B. et al., “Paradoxical Thinking as a New Avenue of Intervention to Promote Peace,” Proceedings of the National Academy of Sciences (forthcoming).
Is belief in ‘progress’
Environmentalists often invoke the discoveries and advances of science in their advocacy. But be careful: Too much confidence in science may backfire. In experiments, people who read an article stipulating that science is making rapid progress subsequently reported more control over their lives and less environmentally friendly attitudes, and chose fewer organic grocery items. The researchers theorize that the expectation of scientific progress makes people more complacent. On the other hand, when people were simply exposed to words related to disorder, they subsequently compensated by reporting more environmentally friendly attitudes, and after making environmentally friendly choices, people reported more control over their lives.
Meijers, M. & Rutjens, B., “Affirming Belief in Scientific Progress Reduces Environmentally Friendly Behavior,” European Journal of Social Psychology (forthcoming).
Strange side effects
of the 3-point line
Changes in regulations and technology can sometimes have counterintuitive effects. For example, in a new analysis, a team of economists finds that the introduction of the three-point line in the 1979-1980 NBA season improved the scoring success of centers and forwards—and taller players in general—who tend to play closer to the basket, relative to guards. As a result, the height of drafted NBA players increased after the introduction of the three-point line. Although one would expect guards to benefit from the greater potential value of outside shots, this expectation doesn’t account for the response of the defense, which shifts to cover the outside players.
Gannaway, G. et al., “Technological Change, Relative Worker Productivity, and Firm-Level Substitution: Evidence from the NBA,” Journal of Sports Economics (forthcoming).
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