The Economist reported on some fascinating research with real implications for the next time you visit the supermarket:

• If you were offered a 33% discount in price or a 50% increase in quantity which would you take? According to studies people would overwhelmingly prefer having 50% more, but the two offers are completely identical.
• Similarly if you were given 33% extra free or a 33% discount off the price, you should pick the discount. But most think the two are equal.
• Finally people prefer getting 20% off, and then another 25% off rather than 40% off. But the two are the same.
• The problem is that people, in general, are bad at fractions.

To read more including some of the ways that this is, and can be, used, what this might teach the government, details of the study, why you should watch out before you buy your next car, and what would help you as a shopper, click here.

Source: The Economist

San Francisco has an innovative new plan to deal with the problem of pan-handlers lining the streets writes Heather Knight. Highlights include:

• Evidence suggests that beggars in San Francisco have housing, but pan-handle to supplement their income or because they have nothing else to do.
• At the same time the economic recession has caused pet owners to abandon their dogs. A minority of these dogs require special treatment and care from people with a lot of time.
• The city plans to offer to pay beggars $50-$75 a week to take care of these dogs, and promises to pay all associated dog expenses.
• Candidates need to be living in a house, can’t be severely mentally ill, can’t have a history of violence, must seek treatment if they have addictions, and must give up begging if they want to keep the dogs.

To read more including the safeguards put in place for both the pan-handlers and the dogs, what happens to dogs that are not socialized to interact with humans, how many dogs are left in the shelters, what happens when a human-dog pairing isn’t deemed a good match, other ways that the city has tried to deal with the problem of pan-handing, and the therapeutic effect of dogs, click here.

Source: San Francisco Chronicle

Via: Freakonomics

Tim Harford presented three explanations for why so many prices in stores end in .99. They are:

• A .99 price requires the person at checkout to open the drawer and make change. This prevents them from giving the item away to the consumer and pocketing the money for themselves.
• Some believe that a price that ends with .99 is a mark of quality that makes consumers feel more comfortable.
• The most popular explanation, however, is that by the time customers see the .99 in $7.99, they already think the good is priced closer to $7 than $8.

To read more including why Harford decided to write this article, how changing eras have led to changing explanations, the role of psychology in economics, and what studies have suggested, click here.

Source: Tim Harford

Via: Marginal Revolution

Those who go to the library and those who go to the gym seem to have something in common, writes Fred Pampel. They’re both generally thin. According to his study:

• In theory reading a book is just as low calorie an activity as watching TV or playing cards. Yet those who read books have a lower weight than those who don’t.
• This connection is strongest for those who live in Western Europe. The relationship is less strong in Eastern Europe and other parts of the world.
• This relationship is stronger for women than for men.
• Some explanations for this link include:
  • Educated people are more likely to read books, and are also likely to understand the importance of good health and the steps needed to maintain a healthy body weight.
  • Graduating from college may give one the confidence necessary to pursue life-long goals and ambitions.
  • Those who read books likely exist in a social circle that values low body weight. Social norms might be driving weight loss.

To read more including other explanations for the relationship, how the study was conducted, what the data wasn’t clear on, which countries the findings were clearest in, and how you can lose 10 pounds, click here.

Source: Pacific Standard

Via: Freakonomics

Why do we go to college? Studies suggest that it doesn’t really teach us anything that is applicable to our careers. Economists argue that we go to college as a signal to employers that we’re the type of employees they want to hire. But Noah Smith disagrees:

• What does college signal? Intelligence? There are much easier ways to signal intelligence that don’t require four years. Just take a simple standardized test.
• Perhaps it signals dedication. The ability to work while others are out partying. This may well be true, but in Japan for example, companies hire based on standardized tests alone, and students go to college, and basically do nothing other than party. Why do they go to college then?
• It can’t be for partying alone – people enjoy smoothening out their consumption over time. Is college just meant to be four years of concentrated fun? Unlikely.
• College is actually about three things:
  • Motivation – why does anybody work? For those around them. But as you leave your home you no longer have your parents to work for. So you find friendships and romantic relationships and work for them. College screens the people to ensure that they are individuals who you would have a better chemistry with than a random person off the street.
  • Perspective – you meet all these different people headed in different directions and you see the range of possibilities available and what you are capable of.
  • Networks – building professional networks that help you later in your career.
• None of these things can easily be done online.

To read more including why people are encouraged to party in Japanese universities, how the Japanese make employment decisions, why it’s harder to find motivation in rich countries, the importance of attitude, the role that children play, the importance of diversity, why perspective probably isn’t as important in Japan, and what the word ‘college’ means, click here.

Source: Noahpinion

Via: Marginal Revolution