Priceonomics Blog

Apple's First Computer Was A Better Investment Than Apple Stock

Fri, 24 May 2013 15:47:42 -0400

If only you’d kept your Apple I computer in mint condition for 37 years.

Why Does Siri Say Sorry?

Thu, 23 May 2013 18:10:25 -0400

Who decided that we need our soulless machines to act like eager to please friends? It’s not like we think they’re human. Right?

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What if the Super Bowl is a Home Game for the 49ers?

Thu, 23 May 2013 15:24:04 -0400

It might be fun (but costly) for the city of San Francisco since half the fans won’t need hotels.

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I Google; They Yahoo

Wed, 22 May 2013 15:46:11 -0400

Silicon Valley sometimes seems to be playing a game of hot or not. Yahoo’s acquisition of the blogging platform Tumblr was analyzed as a bid to make Yahoo cool again as much as a piece of corporate strategy. New Yahoo CEO Marissa Mayer was supposed to bring the cool of her former employer, Google. But then again, with everyone from the nerdocracy to Saturday Night Live mocking Google Glass, maybe Google-bashing has gone mainstream?

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The Case for Airbnb

Wed, 22 May 2013 14:27:36 -0400

Earlier this week, a judge in New York City ruled that renting out extra space in your apartment to travelers is illegal. Since Airbnb is a platform that facilitates these short-term rentals and New York City is its largest market, this is seen as bad news for the company.

But should these laws prohibiting short term sublets exist in the first place?

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The Irony of Epic Fails

Wed, 22 May 2013 12:33:00 -0400

In sitcoms, a character told not to mention an uncomfortable fact will undoubtedly divulge it in conversation. Sometimes it feels as inevitable in real life. Is there something about trying not to say or do something that makes it more likely? According to Harvard professor David Wegner, the answer is yes.

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Open Science vs Intellectual Property

Tue, 21 May 2013 15:47:33 -0400

Intellectual property rights incentivize research by private companies but foster a culture of secrecy that slows down the speed of innovation. Is there a way to foster more openness in private sector research?

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What Is Cultural Fit?

Tue, 21 May 2013 13:14:44 -0400

“Job interviews are becoming more like first dates.” Or so reads a Businessweek article on how cultural fit increasingly complements or even trumps qualifications as the most important hiring criteria. The article cites Glassdoor, a website offering an inside look at jobs and companies, which notes that questions like “What’s your favorite movie?” rank among the top 50 asked at job interviews in 2012.

Famous examples abound here in Silicon Valley. Facebook wants people who “Move fast and break things.” Palantir hires people who want to “Save the Shire,” and PayPal famously hired competitive workaholics with anti-establishment leanings.

When it comes time to nail down a definition of what people mean when they talk about company culture, however, the definitions are as standardized as definitions of art. Is company culture a big vision for the company? A manner of getting along with co-workers? Prioritizing certain values over others? Or aspects of the work environment like level of autonomy and uncertainty?

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The Price of a Human Kidney

Tue, 21 May 2013 12:36:53 -0400

The human kidney is the body’s filter. It cleans 180 liters of liquid per day, retaining the good stuff and expelling the bad. Most fortuitously, humans are born with two kidneys. If one of them becomes damaged, the other one can pick up the slack. If both your kidneys fail, however, your body will fill with harmful toxins. Without medical intervention, you’ll die within weeks.

Almost nine hundred thousand Americans suffer from End State Renal Disease (ESRD), meaning that both their kidneys have failed. Thankfully, over the last half century, science has technically triumphed over kidney failure. If both your kidneys fail, you can receive a transplant from a donor and live a fairly normal, healthy life. The technology for kidney transplants has gotten so good that the donor and recipient just need to share the same blood type. Surgeons and anti-rejection drugs can handle the rest. Since almost everyone has a spare kidney, the supply of potential donors is plentiful.

And yet, over 5,000 people die in the US every year while waiting for a kidney transplant. This is puzzling because only 83 thousand people in the United States need a new kidney, compared to hundreds of millions of potential donors. And yet, the average person with failed kidneys remains on the transplant waitlist for 3-5 years. In the meantime, they’re hooked up to dialysis machines several times a week at an annual cost of approximately $75,000 per year. Kidney transplant surgeries typically pay for themselves within one to three years because the need for dialysis is eliminated by the new kidney.

So why do people die from ESRD while waiting for a kidney transplant? The answer is well known - not enough people volunteer to donate a kidney. This is true in the United States and every other country in the world (with the possible exception of Iran). People simply don’t volunteer to go into surgery and give up their organs. Even when they’re dead, most people (or their families) hold onto their kidneys instead of donating them.

Economists have long suggested that this kidney shortage is easily solvable. If you need more kidneys for transplants, just start paying people to provide kidneys. At the right price, kidney donors will be lining up. Opponents of this view argue that creating a free market for kidneys would be exploitative and immoral. Would we want to live in a world where the poor sell their organs to the rich?

But maybe this “efficient” versus “moral” debate about how to allocate kidneys is a false dichotomy. Solving the kidney shortage by paying people doesn’t have to mean creating a laissez-faire market for organs.

In order to save thousands of lives every year, we can keep the current kidney donation system entirely in place with one major exception - the US Government should get into the business of buying kidneys. Taxpayers will actually save money and thousands of lives will be saved every year.

Perhaps it’s time we start allowing the government to harvest our organs.

The Growing Shortage of Kidneys in America

In the United States, over 20 million people have some sort of chronic kidney disease (CKD). Approximately 871,000 Americans suffer from the most severe form of chronic kidney disease, End State Renal Disease. Roughly one half (398,000) of these patients are on dialysis each year. It costs approximately $75K a year to keep each of these patients alive.

Dialysis is a brutally difficult but completely necessary experience for people with failed kidneys. Most patients have to be plugged into a machine at a facility three times a week for three to five hours each time. The machine simulates kidney function, but it’s an imperfect substitute. While normal kidneys remove toxins from the blood continuously, the dialysis machine does so for a few hours every 48 hours. When the patient is not plugged into a machine, these toxins build up, causing the patients to feel tired and in a state of mental fog until the next dialysis session.

Being on dialysis is hopefully a stop gap measure to keep a patient alive till they can get a kidney transplant. Of the nearly four hundred thousand patients in the United States, only 83,000 of them were on the the waitlist for a kidney transplant. Many people on dialysis are too old or sick to qualify for a transplant.

Patients that live long enough to get off the waitlist can get kidney transplants and live fairly normal, healthy lives. It’s estimated that these patients will live 10-15 years longer than if they stayed on dialysis. The transplanted kidneys start working almost right away for the patient. Over time, they are far more likely to live because of the transplant.

As America gets older and sicker, however, the demand for kidney transplants is exploding.

The number of kidney donations is not keeping pace. Donations today from live donors (altruistic people) or cadavers (organ donors who passed away) have barely ticked up as demand for kidneys has steadily risen. The shortage of kidneys is not a uniquely American problem. Across almost every single country, there are too few kidneys available relative to the demand.

The result is that lots of people die every year waiting for a new kidney that would save their life.

Where do Kidneys come from Today?

Kidney transplants in America are managed by the United Network for Organ Sharing (UNOS). UNOS is a non-profit with a Congressional mandate to administer the entire waitlist of patients, inventory of organs, and algorithm by which patients and donors are matched. Because of this centralized process, there is incredibly accurate information about the supply and demand for kidneys.

In the US, most kidneys come from donors that have died, as opposed to living donors that voluntarily donated their kidneys.

Most efforts to solve the kidney shortage have so far focused on increasing the supply of donated kidneys. Campaigns to sign up more people as organ donors are the most common.

Some European countries like Spain and Austria make donating organs the default - people need to choose to opt out. These countries still have much lower overall organ donation rates than the United States.

Another avenue for increasing kidney donations is focusing on live donors. One recent innovation is the concept of a “paired exchange.” Someone on the waitlist may have a family member who is willing to donate a kidney but is the wrong blood type. A paired exchange looks among a pool of families in similar circumstances to find blood type matches. If each donor has the blood type the other patient needs, then they are paired and each donor gives a kidney to the patient in the other family. Initiating these pair exchanges improves liquidity in the market for kidneys and saves lives, but it hasn’t made much of a dent on the kidney shortage so far.

Almost every country has a scarcity of kidneys despite the existence of billions of potential suppliers who could easily meet the relatively modest demand for kidneys. Every system that depends on kidney donations has failed to get enough kidneys to the people that need them.

The current system of paired exchanges and campaigns for kidney donors has noble intentions, but it’s not working. People are needlessly dying as a result.

Who Foots the Bill?

The annual cost of kidney failure in the United States is approximately $42.5 billion as of 2009. The federal government, through its Medicare program, has a special exemption that helps pays for the care of people with End State Renal Disease, even if they are not yet 65 years old. (Medicare typically only covers costs for senior citizens.) The result is that the US government pays $29 BN (68% of total kidney spending) towards covering the cost of dialysis and kidney transplants. When it comes to End State Renal Disease, the US almost has a single payer healthcare system.

As mentioned earlier, it costs approximately $75,000 per year to keep someone alive on dialysis in the United States. The vast majority of this goes to private companies that run dialysis centers or sell dialysis related equipment and drugs. Two nationwide for-profit dialysis chains, Fresenius and DaVita, provide over 60% of dialysis treatments.

A kidney transplant surgery costs approximately $105,000 in the US and is a relatively safe procedure for the donor. In most countries, it’s estimated that the surgery pays for itself within 1-3 years.

What’s Wrong with Selling Kidneys?

The idea of buying and selling kidneys have been around for a long time, but moral uneasiness has kept it from being seriously considered or implemented.

Critics of a marketplace for kidneys typical raise the following objections:

1. Kidneys would be distributed based on ability to pay, so rich people would be able to get kidneys and poor people would not.

2. If the price of organs is high, that will incentivize stealing organs. It could also motivate unscrupulous people to force other people to sell their organs in order to profit from the sale.

3. The system would exploit poor people by promising quick money for their kidneys. If someone is destitute, can they really give informed consent? While donating a kidney is relatively safe, it has inherent risks like any form of surgery.

The current, donation-based system addresses all three of these concerns. The United Network for Organ Sharing distributes organs based on need, not income (Objection 1), and the price of kidneys is $0 (Objections 2 and 3). Currently, there is almost no risk of someone “selling their kidney to buy an ipad” in the United States.

If operating a free market for kidneys suddenly became legal, all of these objectionable practices might start happening. The results could be dangerous and inconsistent with mainstream American values. Wealthy people would get kidneys at the expense of poor people who might need them more. The destitute might be compelled to sell their organs for short term gain or against their will. And at a high enough price, organ theft could become prevalent.

Let’s assume we agree with all of these ethical objections. Could we devise an ethical system that pays kidney donors, saves lives, and saves money?

A Modest Proposal: Let The Government Buy Our Organs

In the United States, we already have a safe, well-organized way to get kidneys from donors to the patients that need them most. We also have one party (Medicare) that spends hundreds of thousands of dollars to keep people alive on dialysis for 3-5 years before they can get a kidney transplant. Why not let Medicare spend that money instead on buying kidneys?

If the US Government bought kidneys from healthy individuals, then the United Network for Organ Sharing could continue to allocate the kidneys on the basis of need instead of ability to pay. Instead of creating a “free market” for kidneys, the government could mandate that Medicare be the exclusive buyer of kidneys. It would create a tightly regulated system for buying up kidneys, which is better than no system at all.

What’s the advantage of letting Medicare buy kidneys instead of creating a free market? First, it would save Medicare and private insurers money since the current cost of dialysis for people on the waitlist is so high. These parties have a financial incentive to consider a plan like this.

Second, a government-regulated system can address concerns about equity. Rather than rich people privately contracting poor people to buy their kidneys, the government and the UNOS can continue to allocate purchased kidneys based on need (Objection 1). Moreover, the risk for organ thieves is eliminated in this scenario (Objection 2). Would an organ thief show up at the Medicare office with bag of kidneys? Instead, individuals would have to go through an approval process to ensure that they are not selling their organ under duress and understand the risks.

This proposal is weakest at overcoming Objection 3 - the concern that destitute people cannot give informed consent due to their financial duress. (Let’s ignore for now that we allow women to rent out their uteruses for childbirth - something more dangerous than donating a kidney that subjects the less well-off to the same risks of exploitation.)

If individuals were offered a “fair price” for their spare kidney, could you make the argument they were being taken advantage of? If the price were a million dollars? $100K? $50K? 10K? $1?

For every dangerous task, there is probably some price at which society would feel that people are being adequately compensated for the risk of performing that task. This is the case for security contractors in Iraq and surrogate mothers. Why should donating a kidney be any different?

There is some “price for a kidney” that would eliminate the waiting list, feel like a fair price, and also save Medicare lots of money. That price might be higher than what the “market price” of a kidney would be. Economists Gary Becker and Julio Elias estimate that the price of a kidney in a free market would be $15,000. It’s possible that would feel like an unfair price. Some online commentators have suggested around $50,000 as a price that they consider fair.

At $50,000, we’d consider donating a kidney. What’s the price at which you’d consider selling your extra kidney?

Conclusion

Today, there are simply too few kidneys being donated to people with kidney failure. As a result, more than 5,000 patients a year needlessly die on the waitlist in the United States. The gap between the number of people that need a kidney and the supply of donated kidneys continues to grow. Campaigns to increase voluntary kidney donations simply haven’t worked. Even dead people don’t want to donate their kidneys.

It’s time to fix this problem once and for all. Instead of hoping that more people start becoming organ donors and doubling down on failed policies, it’s time to start buying and selling kidneys.

This post was written by Rohin Dhar. Follow him on Twitter here or Google. To get occasional notifications when we write blog posts, sign up for our email list.

Is This Why TED Talks Seem So Convincing?

Mon, 20 May 2013 16:18:15 -0400

The speakers at TED conferences give the type of presentations that public speaking coaches use as examples of effective presentation skills. They open with arresting images or stories that engage the audience, speak clearly and passionately, and illustrate each of their points with concise evidence or examples.

At the end of a TED talk, this author often feels inspired and enlightened, patting himself on the back for spending 10 minutes improving his mind instead of watching sitcom reruns. But according to a study performed by a group of psychologists, the degree to which a TED audience feels newly educated may be partly illusory - the result of showmanship as much as actual learning.

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Why Does the Senior Citizen Discount Still Exist?

Mon, 20 May 2013 12:34:07 -0400

You’ve seen them on the bus, in museums, and at movie theaters: senior discounts. As a reward for being old, senior citizens pay a quarter less for bus fare, a small fortune less for movie tickets, and receive discounts generally all over the place.

If you’re a twentysomething, or part of what some journalists have colorfully called “the screwed generation,” you may be wondering: why not me?

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The Pseudo-Business of the NCAA

Fri, 17 May 2013 12:56:00 -0400

College sports are an $8 billion industry. Without even accounting for the revenues that private companies like CBS and ESPN make from college sports, that is roughly the value of the National Football League.

Given that college athletes are considered “amateurs” for whom sports are an extracurricular activity, the scale of college athletics is incredible. The University of Michigan football stadium, known as “The Big House,” seats over 100,000, making it the 3rd largest stadium in the world. Over 80 million fans watch March Madness, the Division I college basketball championship tournament. In 2010, CBS and Turner Broadcasting signed a $10.8 billion, 14 year deal for broadcasting rights to the tournament.

This has made college coaches the best compensated public employees in America. It has turned athletic directors and administrators into high-powered executives that earn six or seven figure salaries and sign million dollar contracts with corporate America. Everyone seems to be enjoying record paydays from the popularity of college sports - everyone but the players, who lose their eligibility if they profit so much as a cent off their status as stars in a billion dollar industry.

Addressing the presence of millions of dollars of corporate money in college athletics, National Collegiate Athletics Association (NCAA) vice president Wallace I. Renfro attempted to clarify his association’s position:

“To be clear, student-athletes are amateurs; intercollegiate athletics is not. The enterprise itself may not be professional, but those employed to administer and coach clearly are.”

The explanation seems simple enough. Just as an accomplished pianist or talented professor will be hired as a professional to work with amateur musicians, the coaches and administrators of college athletics are professional hires and paid accordingly. If corporate sponsors are a necessary component to the management of a large, national athletic association, then they too have their place. They are just the college version of the local ice cream parlor sponsoring jerseys for little league teams.

In 2001, a former university president asked Sonny Vaccaro, a man who made millions by pioneering shoe contracts for brands like Nike and Adidas, whether college athletes should be an “advertising medium for [Vaccaro’s] industry.” He responded cheerfully:

“They shouldn’t, sir. You sold your souls, and you’re going to continue selling them. You can be very moral and righteous in asking me that question, sir, but there’s not one of you in this room that’s going to turn down any of our money. You’re going to take it. I can only offer it.”

The existence of well-funded athletic departments that sell tickets, purvey merchandise, and sign multi-million dollar media deals is unique to the United States. College athletes in the rest of the world operate mostly on a club model. Athletes raise funds themselves to pay for competitions, equipment, and travel.

Are universities taking advantage of student-athletes? Or are they merely running a largescale, amateur pursuit with hard nosed business strategy?

The answer seems to lie somewhere in between.

The marriage of commercialized sports and academic institutions has turned the situation of a small but high profile group of elite athletes into one resembling exploited workers as much as talented student-athletes. But the image of profitable sports teams subsidizing the entire athletic departments or making money for the university is a myth. The sports professionals managing elite college athletics are prospering, but universities are bleeding cash. As college athletics becomes a bigger and bigger industry with ever larger stakes, colleges risk sacrificing huge amounts of funding as well as their academic culture in the race to keep up.

The 1% of College Sports

College sports are an $8 billion industry, but 1% of college athletes are responsible for 99% of the revenue. All this money, commercialization, and national exposure applies to only a very small number of college athletes.

The majority of student-athletes play in Division III, the largest and least competitive of the divisions in the NCAA, which does not offer athletic scholarships or pursue revenue. Many more play in lower divisions (that are not part of the NCAA) or in club sports. In Division II, only a handful of games are televised nationally. Some money exchanges hands between fans, colleges, and private companies, but it is limited.

Within Division I, the majority of revenues are in football and men’s basketball. Texas, the top national football program in terms of revenue, made $103.8 million in revenue in 2011-2012. Ten teams had revenues above $50 million. The Louisville basketball team brought in over $40 million in revenue, with the next most profitable teams earning well over $10 million. In contrast, only two hockey teams had revenues above $5 million and only 4 women’s basketball teams had revenues above $4 million.

Even the elite, big-money sport divisions are sharply divided in terms of commercial size. In Division 1A football, the biggest programs generate 14 times as much revenue as smaller teams. Among the conferences, the most successful (the Big Ten Conference) distributes over $150 million to its members while the tiny Sun Belt Conference splits just over $1 million.

In the most lucrative sports - Division I football and men’s basketball - every player receives a full scholarship. Other Division I athletes receive full scholarships or, more commonly, a partial scholarship or none at all. But regardless of whether an athlete draws 50,000 paying fans to the stadium or plays for an audience of several hundred, his or her max “compensation” is the same: a scholarship.

Student-Athletes

The term student-athlete sounds like it was invented by a particularly talented disciple of Plato who competed in the Olympics, but the phrase has a sordid history.

The NCAA invented the term as college sports gained prominence in the 1950s as a way to describe the status of young students competing in a very commercial industry. Its first use was to make sure that courts did not grant legal protections like worker’s compensation to college athletes. Author and historian Taylor Branch describes the birth of the term:

“The term came into play in the 1950s, when the widow of Ray Dennison, who had died from a head injury received while playing football in Colorado for the Fort Lewis A&M Aggies, filed for workmen’s-compensation death benefits. Did his football scholarship make the fatal collision a ‘work-related’ accident? Was he a school employee, like his peers who worked part-time as teaching assistants and bookstore cashiers? Or was he a fluke victim of extracurricular pursuits?

“…The Colorado Supreme Court ultimately agreed with the school’s contention that he was not eligible for benefits, since the college was ‘not in the football business.’”

Since the fifties, corporate logos have been plastered on athletes’ jerseys and the fact that colleges are in the football business seems clear. Nevertheless, Branch notes that the “student-athlete defense” continues to defeat liability cases in court. Universities have no obligation to cover all the costs of athletes’ medical care. An upset mother testified before Congress in 2011 that she received a $10,000 bill for an MRI performed on her injured son after a basketball game. Players that develop chronic injuries playing college sports often receive nothing from schools once their careers end. They are left to wallow in debt as they try to pay medical bills and overcome their handicaps.

Lack of medical coverage is just one example of the hypocrisy resulting from a billion dollar industry sitting on top of a supposedly amateur sports league. Another is that a profitable activity that would get a player suspended is business as usual for athletic departments. Branch notes this in the case of a player selling a jersey:

“At the start of the 2010 football season, A. J. Green, a wide receiver at Georgia, confessed that he’d sold his own jersey from the Independence Bowl the year before, to raise cash for a spring-break vacation. The NCAA sentenced Green to a four-game suspension for violating his amateur status with the illicit profit generated by selling the shirt off his own back. While he served the suspension, the Georgia Bulldogs store continued legally selling replicas of Green’s No. 8 jersey for $39.95 and up.”

College athletes also have no right to profit off their own likeness, even as the NCAA does so. Media giant Electronic Arts pays the NCAA to use the names of its teams, bowl games, and whatnot in video games like NCAA Football and NCAA Basketball. It also pays the NFL to produce the Madden series - video games based on the NFL. In the case of Madden, Electronic Arts pays over $35 million in royalties to the NFL players union for using players’ names and images. The only difference between Madden and NCAA Football is that the college version does not include names, yet the NCAA did not share any money with the players.

The NCAA waves away these inconsistencies by pointing to athletes’ amateur status and arguing that student-athletes receive the most valuable benefit of all: a college education. But waiving tuition and providing an education can be two distinct things.

Athletic time commitments are so high that only very productive individuals get the full benefit of their tuition. That is particularly true for the many basketball and football players who come from disadvantaged backgrounds and need more time to catch up with the skills of their peers. The time requirements of elite college athletics are 50 plus hours a week, not including travel time. The NCAA and athletic conferences also frequently schedule games during exam periods and playoffs into the following semesters.

Further, the practice of universities shepherding athletes toward easy classes and even minimizing academic obligations through fake classes and academic fraud seems systemic. Articles on scandals of this sort occur frequently. There are no good statistics or sources investigating whether it is systemic because the NCAA - the protectors of the student-athlete ideal - allow athletic departments to self-report students’ grades and only investigate when accusations of fraud are made public. But the one public metric the NCAA requires to maintain academic standards is revealing: their Academic Progress Rate requires that a mere 50% of teams’ players be on track to graduate.

There are student-athletes in football and basketball that excel academically and value the discipline, teamwork, and enjoyment of their athletic commitments as a valuable complement to their time in college. There are also students who are eager to shirk their academic obligations.

But given that an education is the justification of college sports, the NCAA and many college programs are cavalier about seeing athletes get one. A 1973 NCAA rule, for example, bans all but one year scholarship offers for athletes. Instead of offering 4 years guaranteed, universities must decide whether to renew every year. As a result, it is not uncommon for new coaches to take away an athlete’s scholarship in order to recruit a new prospect or to drop a scholarship belonging to a player who gets a career-ending injury.

In a trial over academic fraud, football powerhouse Georgia University explained how they still helped football players who did not receive the same level of education as other Georgia students:

“We may not make a university student out of him, but if we can teach him to read and write, maybe he can work at the post office rather than as a garbage man when he gets through with his athletic career.”

College athletes are not going completely unpaid. The scandal of athletes being paid under the table has been national news since 1929, when a report found that “Of the 112 schools surveyed, 81 flouted NCAA recommendations with inducements to students ranging from open payrolls and disguised booster funds to no-show jobs at movie studios.” Today’s strengthened NCAA does much to fight the system of college boosters and unscrupulous agents giving money to athletes, threatening athletes with suspensions if caught.

When these scandals come to light, it’s easy to see athletes in the wrong. Often they take money to fund parties or make frivolous purchases. But that does not take away from the exploitive nature of college sports culture.

Critics point out that athletes’ “full scholarships” provide $3,222 less per year than the real cost of their education and leave 85% of student-athletes living under the federal poverty line. And it is the NCAA that maintains a system that profits commercially off students while actively prioritizing a full-time commitment to sports over education.

Put another way, why does the NCAA target full compliance with the amateur idea of not being paid, but only a 50% graduation rate?

Where Does the Money Go?

A college degree can be a priceless opportunity. But it does have a price tag, and it is far below the value contributed by players at elite football and basketball schools.

The National College Player’s Association (NCPA), an advocacy organization, finds that the NCAA’s amateurism policy amounts to a “$6 billion heist.” While the average athletic scholarship at these schools is worth $23,204 per year, the NCPA finds that football and basketball players would command salaries of $137,357 and $289,031 respectively. As a result, over a 4 year college athletic career, football players at an elite program lose out on $456,612 and a men’s basketball player $1,063,307.

So where does that money go? According to sports economist Andrew Zimbalist, much of that money goes to the coach:

“In a normal marketplace, when you hire a worker, you pay the employee what they’re worth to you in a competitive circumstance. In this marketplace, you’re not allowed to pay the employee, right? So how do you recruit players? Presumably it has to do with the coach’s personality, the coach’s reputation, how well the coach is able to come on to the player and the parents of the player and so on and so forth.

So it’s not money that brings the player; it’s the coach: his reputation, his charisma, his charm… And so in that system, the coach ends up getting paid the money that would otherwise go to the player.”

One piece of evidence Zimbalist offers is to compare college coaches’ salaries to their professional counterparts. Since professional teams in the National Football League have revenues in the hundreds of millions and college football teams in the tens of millions, you would expect professional coaches to make much more. But they don’t. The best paid coaches in the National Football League make $5-$7 million. The highest paid college football coaches make $3-$5 million, plus perks like free use of private planes, cars, and country clubs.

If we take a college football coach at an elite athletic program to be overpaid by $2 million, that represents $23,529 of value taken from each player and given to the coach. In basketball, where teams have only 10-20 players, that number is over $100,000.

In some cases, the profits of college football and basketball teams subsidize non revenue generating sports. Teams don’t operate as silos; their financing all falls under the discretion of a single athletic director. As a result, a successful football team may generate $10 million of profit that subsidizes other sports like track and field and swimming. Of course, if athletes were paid, that profit would be lower. But as we’ll see, cases of profitable teams subsidizing other sports or otherwise returning money to the university are rare.

So where is the rest of the missing money? It’s likely padding the salaries and bottom lines of everyone profiting off college athletics: the assistant coaches, NCAA administrators (the president of the NCAA makes a cool $1.6 million per year), television companies, marketing companies, and so on.

We can only conjecture that private companies receive more favorable terms due to college players not getting wages (it does make good economic sense), but we can see in the figure below how a bloated and/or overpaid staff takes up that surplus money. In the NFL, teams spend roughly 60% of their budgets on player salaries. As we see below, the biggest teams spend only 15% to 20% on scholarships. But they do spend 35% to 40% of their budget on staff salaries.

Source: Knight Commission on Intercollegiate Athletics Primer

The Commercialized Nonprofit Frankenstein

Seventy-eight percent of Americans believe that college athletic departments are profitable. Given the ever increasing salaries of coaches, price tags of facilities, and national exposure, the belief is understandable. But this common perception of lucrative football and basketball programs covering the costs of entire athletic departments is a myth. No one knows this better than the colleges themselves. University presidents overwhelmingly view the high cost of athletics as a problem and athletic directors are busy cutting their budgets - a process only accelerated by the recession. Just over half of elite football and basketball programs turn a profit. Only 14 out of 120 athletic departments in the upper tier of Division I cover their costs. The remainder run a median deficit of $10 million.

One could respond calmly that college athletic departments are not in the business of making money. Who cares if they operate at a loss? No one expects Division III athletics, or high school athletics for that matter, to make money. No one demands that the history department be shut down because it loses money each year. (Well, almost no one.) Colleges’ athletic expenditures represent only 6% on average of their annual budget. Athletics are a part of university life - isn’t it natural that it cost some money to run them?

However, there are a number of reasons to be critical of the deficits run by college athletic departments. College athletics’ blending of academic institutions with commercialism is at the heart of each.

The first is that deficits appear to be growing unsustainably. Economist Andrew Zimbalist estimates that if costs increase as they have over the past ten years, median yearly deficits will increase to $44 million in 2020.

One of the biggest factors behind this increase in prices is an “arms race” between elite teams. Professional football and basketball leagues have only 32 and 30 teams each, yet the highest division of college sports has 120 teams. There are far too many teams trying to be elite. In their competition over windfalls from March Madness appearances and BCS bowl games, universities spend large sums of money, gambling that a better coach, stadium, or marketing campaign can deliver them to the top of the pack. A report from the Knight Commission on Intercollegiate Athletics sums up the problems facing a team in a small sports market:

“Iowa State University of the Big 12 is an example of a have-not school in a big-time conference. It brings in a respectable $17 million per year in football revenue. Among its competitors are Texas, with $73 million in football revenue, and Nebraska, with $49 million in football revenue. But Iowa State’s fans and boosters expect its program to retain coaches and build facilities at the same level as their richer Big 12 colleagues. Keeping up with the Joneses is increasingly difficult, if not impossible.”

This arms race is enabled by the fact that college coaches are chasing commercial success in a nonprofit institution. The professionals running college athletics, particularly the coaches that hop between gigs at universities and in professional leagues, are hired to win. The incentives are to spend, spend, spend, not to achieve a level of success commensurate with the school’s market size, or to return a surplus to support the school’s academic mission. Coaches and college administrators simultaneously justify their high salaries and expensive facilities by pointing to the commercial nature of the league, and are shielded from their failure to turn a profit by the institutions’ nonprofit status and subsidies from the general budget.

The frankenstein marriage of big business and academic institutions also leads to runaway spending on sports that don’t generate income. To live up to its rhetoric about supporting the athletic experience for all students, rather than just those in profitable sports, the NCAA requires the highest level of Division I schools to field at least 15 division one teams. In the spirit of equality, schools feel pressure to spend large amounts of money on these other, non-revenue generating sports that could otherwise operate more like club sports, or at least be run more modestly.

Similarly, colleges’ commitment to gender equity - even if it is often half hearted - results in big expenditures on women’s sports. Complying with Title IX legislation, which bans sex-based discrimination at institutions receiving federal funding, is codified into NCAA rules. Schools do not need to spend equally on men and women’s sports, but they do need to facilitate equal opportunity to play. This mean, in particular, an equal number of athletic scholarships. As a result, even if providing 85 athletic scholarships reflects only the necessary spending to compete at a commercialized, elite level, that means that 85 scholarships still need to be found for women in non revenue generating sports.

Although not codified NCAA policy, the rhetorical commitment to gender equity of public institutions also puts upward pressure on the salaries of coaches of female sports. Although their sports don’t bring in revenue, they point to the salaries of their colleagues in men’s basketball and football in salary negotiations to demand similar paychecks.

While gender equity and the support of a diverse array of sports is admirable, it may be problematically that they take a commercialized sport as a benchmark. If a few sports were not so commercialized, couldn’t these other sports function more like club sports as they do overseas?

Another reason to scrutinize athletic departments’ deficits is that since the majority of the big athletic powers are public universities, and even private institutions enjoy nonprofit status, taxpayers are essentially footing the bill for the large and growing costs of college sports. In this light, costs are also incredibly understated. The largest source of athletic departments’ revenues is donations and contributions from alumni, often through “booster clubs” that support a specific sport. Like any donation, these contributions are tax-exempt, meaning that the government misses out on getting that money. Tax-exempt donations to support part of the college experience is a traditional part of how colleges operate, but is it justifiable to support elite athletic programs that make millions of dollars for coaches, select administrators, and executives of clothing brands and media companies?

There’s also the question of how the presence of a highly-commercialized, high revenue industry on campus affects college life. Football and basketball coaches are the most highly compensated public official in almost every state, with salaries typically 5 to 10 times higher than those of the university president. Since the recession, journalists have reported frequently on the phenomenon of professors being laid off and research budgets cut while coaches receive record salaries and bulldozers break ground on new stadiums. It is a cliché that college students don’t care about academics, and that they just care about beer, partying, and football. But how much more do universities need to prioritize sports over academics before it becomes university policy?

Too Big To Fail

In 1984, hometown hero Doug Flutie launched a hail mary pass as the last seconds ticked away in the Orange Bowl. His receiver improbably caught the pass in the endzone. The last minute throw became a staple of highlight reels and the game considered a classic. Flutie went on to win college football’s highest award, the Heisman Trophy.

Commentators like to say that this put Flutie’s school, Boston College, on the map. Among college administrators aware of the financial losses incurred by athletic departments, the spending is often justified as necessary to experience their own “Flutie effect”: achieving a level of nationwide recognition through sports that inspires bigger donations from alumni, better applicants, and a superior student body.

Research studies on these claims, however, find that these positive effects of athletic success are nonexistent or negligible. Summaries of the research in a Knight Commission report find that there is no meaningful correlation between athletic success and higher SAT scores of applicants, that the number of applicants may increase 2% to 8% after nationally publicized victories, but only for a short period, and that bowl game appearances seem to lead to modestly bigger donations, but often for the athletic department rather than financial aid or academics.

Instead, it seems that college administrators see the deficits and culture of college sports as a problem, but cannot tackle it. A survey of university presidents at schools with elite athletic programs found:

“Presidents would like serious change but don’t see themselves as the force for the changes needed, nor have they identified an alternative force they believe could be effective.”

The scale of elite athletics programs has made them simply too big to fail. Debt payments and spending on new facilities is a large expense for schools - as much as 20% of athletic spending. Any wholesale attempt at reform, especially a move to an amateur model of sports, would face the barrier of ongoing expenses and multi-million dollar, long term deals with private companies for selling merchandise, broadcasting rights, and employee salaries. Locked into these big expenses, universities can only hope to succeed wildly and become one of the few programs with a profitable or sustainable athletic budget. But most are trying to dig themselves out of a whole.

Source: Knight Commission on Intercollegiate Athletics Primer

The other barrier to change is the sheer popularity of college athletics and power of school pride. The animal spirits that bristle in defense of elite athletic programs are strong. One university president describes how presidents all know that taking on the athletic department is the best way to an early retirement:

“The presidents who have had their heads handed to them? A high percentage of them had that happen because it was something to do with athletics.”

Board members, alumni benefactors, and even state politicians want to see their school win big on the national stage. When university presidents try to restore athletics to a subordinate role in an academic institution, they find themselves pressured or removed by the university’s most important supporters. Presidents’ number one job is fundraising, and no one feels they can fundraise when they undercut the chances of the school’s popular sports teams.

In 2011, the president of Penn State fired Joe Paterno, the longtime and very successful coach of the football team. Paterno had failed to act on knowledge that one of his assistant coaches was sexually assaulting children, at one point in campus facilities. In response, Penn State students rioted. When facing such deep-seated emotions, what chance do brainy college presidents have?

Conclusion

The majority of college athletes are able to enjoy the student-athlete ideal. Competing is a choice, and can be a valuable complement to their college education. Among the elite programs, however, the introduction of corporate sponsors and huge television deals has benefitted many coaches, administrators, and other college athletes, but not necessarily the football and basketball players themselves. Instead, they find themselves performing a full-time job without the benefits and protections of employment, and all too often as students in name only.

Despite the huge revenues of elite college sports, athletic departments are losing money. By combining the risks and costs of a commercial enterprise with the subsidies and goals of a nonprofit institution, universities face runaway costs. The biggest expense is the arms race between schools to outspend each other on coaches and facilities in the hope of winning championships and becoming one of the few schools with an athletic department that balances its budget.

When they fail, however, everyone pays. As public institutions, the subsidies pouring into college sports are student fees and taxpayer dollars. That spending also challenges the academic culture of universities, as academics face budget cuts while athletics lavishes money on coaches and facilities. College presidents and a number of reformers recognize the problem, but don’t see how to solve it. Between long term television contracts and large debt payments on new stadiums, the rat race over college sports’ spoils is simply too big to fail. Those presidents that do take on the college sports juggernaut find themselves looking for a new job. They are no match for the passion that college sports can inspire in fans, alumni, board members, and political officials in defense of their beloved teams.

With the foolish passion of an injured player returning to the field or of rioting fans burning cars to defend their school’s pride, college athletics looks set to keep rushing forward on its destructive path.

This post was written by Alex Mayyasi. Follow him on Twitter here or Google Plus. For a comprehensive critique of college sports, see Taylor Branch’s article in The Atlantic. To get occasional notifications when we write blog posts, sign up for our email list.

Data Mined To Unemployment

Tue, 14 May 2013 13:56:10 -0400

People generally recognize that promptly paying your credit card bill and building up your credit score is important because not doing so could jeopardize your ability to obtain a loan or get a mortgage. A financial slip can be a yoke for life.

Its reach can extend beyond the bank. The New York Times reported last week on the practice of businesses buying the credit reports of job applicants before making hiring decisions. People who got in financial troubles years earlier found themselves tarnished for life, as unhireable as someone who had robbed a bank rather than someone who just fell behind on credit card payments.

One man - who had previously struggled financially when he had health problems and no insurance - did not understand why he kept receiving rejections after positive job interviews. Eventually he applied at a store where a friend worked. His friend enlightened him: “Oh, you’ve got bad credit? They’ll never hire you.”

Although we associate credit reports with loan decisions, everyone bringing a credit report to their prospective landlord knows how people assume, as one credit reporting bureau markets its reports, that “Credit information provides insight into an applicant’s integrity and responsibility toward his or her financial obligations.”

Nearly 50% of companies run credit background checks on potential hires, according to one survey. Even if managers don’t believe that a credit report is a great indicator of who will be a good employee, it seems to often be blindly applied as company policy. The two most common reasons for requiring credit report checks is to decrease theft and avoid legal liability for negligent hiring.

A credit report is an easily accessible source of information for employers, a quick complement to reading a resume and speaking to a past employer. But people actively share information about themselves every day online. And that data is being collected, analyzed, and sold by companies for advertising purposes. As we’ve written before, just analyzing public information like Facebook Likes is sufficient to predict most people’s age, gender, personality traits, and a host of other personal information.

What’s to stop employers from also using this information? Marketers want to understand your personality to show you targeted ads, but what if data collection companies created, for example, an Employee Stability Score?

Maybe someone who had an interest in communism and and crypto-anarchism in high school would be considered a risky hire for the rest of his life. Or maybe analysis of what types of personality traits are correlated with tardiness and quitting would tarnish anyone with those traits. Just as with credit scores today, not everyone would be affected. But businesses with monolithic, risk-averse hiring practices might use it.

Data companies do not have the level of detail and accuracy described above. But between search history, emails, Facebook comments, online purchases, and more, that information is in the hands of private companies.

Government regulation and responsible use of our data by private companies can prevent it, but it’s not hard to imagine dystopian applications of our online data being used as hiring criteria. The worst case? A world in which a majority of workers have to carefully prune from their online personalities any hint of a characteristic that conservative corporate businesses may find risky.

This post was written by Alex Mayyasi. Follow him on Twitter here or Google Plus. To get occasional notifications when we write blog posts, sign up for our email list.

Saving The World By Helping People Sell Their Crap

Mon, 13 May 2013 13:49:10 -0400

The same gnawing uncertainty that keeps an amateur pilot from buying a plane without a logbook is the same uncertainty at work with every used iPhone, toaster, and bicycle. It’s why the value of a new car drops around 10% as soon as it is driven off the lot and why the market for used mattresses ain’t exactly thriving. You can never truly know how a used product has been treated by its owner.

That’s too bad because a major shift toward buying used could move the needle in many ways. It would reduce waste, pollution and carbon emissions, save people money, and maybe even put a dent in the American proclivity for accumulating too much crap.

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Why A Memorable Book Does Not A Memorable E-book Make

Mon, 13 May 2013 13:21:11 -0400

From our perch in Silicon Valley - where photocopiers are a quaint technology we are familiar with only from episodes of The Office -it is easy to assume that e-readers and pdfs will fully replace books and printouts.

It is the physicality of books and paper that make them seem inefficient. Do dead trees really have a place in the future? But it is their physicality, which, according to a recent article in Scientific American, helps us remember what we read, that may give books an edge over e-readers.

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Why is Science Behind a Paywall?

Fri, 10 May 2013 12:51:00 -0400

Scientists’ work follows a consistent pattern. They apply for grants, perform their research, and publish the results in a journal. The process is so routine it almost seems inevitable. But what if it’s not the best way to do science?

Although the act of publishing seems to entail sharing your research with the world, most published papers sit behind paywalls. The journals that publish them charge thousands of dollars per subscription, putting access out of reach to all but the most minted universities. Subscription costs have risen dramatically over the past generation. According to critics of the publishers, those increases are the result of the consolidation of journals by private companies who unduly profit off their market share of scientific knowledge.

When we investigated these alleged scrooges of the science world, we discovered that, for their opponents, the battle against this parasitic profiting is only one part of the scientific process that needs to be fixed.

Advocates of “open science” argue that the current model of science, developed in the 1600s, needs to change and take full advantage of the Internet to share research and collaborate in the discovery making process. When the entire scientific community can connect instantly online, they argue, there is simply no reason for research teams to work in silos and share their findings according to the publishing schedules of journals.

Subscriptions limit access to scientific knowledge. And when careers are made and tenures earned by publishing in prestigious journals, then sharing datasets, collaborating with other scientists, and crowdsourcing difficult problems are all disincentivized. Following 17th century practices, open science advocates insist, limits the progress of science in the 21st.

The Creation of Academic Journals

“If I have seen further it is by standing on the shoulders of giants.”

~ Isaac Newton

Into the 17th century, scientists often kept their discoveries secret. Isaac Newton and Gottfried Leibniz argued over which of them first invented calculus because Isaac Newton did not publish his invention for decades. Robert Hooke, Leonardo da Vinci, and Galileo Galilei published only encoded messages proving their discoveries. Scientists gained little by sharing their research other than claiming their spot in history. As a result, they preferred to keep their discoveries secret and build off their findings, only revealing how to decode their message when the next man or woman made the same discovery.

Public funding of research and its distribution in scholarly journals began at this time. Wealthy patrons pooled their money to create scientific academies like England’s Royal Society and the French Academy of Sciences, allowing scientists to pursue their research in a stable, funded environment. By subsidizing research, they hoped to aid its creation and dissemination for society’s benefit.

Academic journals developed in the 1660s as an efficient way for the new academies to spread their findings. The first started when Henry Oldenburg, secretary of the Royal Society, published the society’s articles at his own expense. At the time, the market for scientific articles was small and publishing a major expense. Scientists gave away the articles for free because the publisher provided a great value in spreading the findings at very little profit. When the journals market became more formal, almost all publishers were nonprofits, often associated with research institutions. Up until the mid 20th century, profits were low and private publishers rare.

Universities have since replaced academies as the dominant scientific institution. Due to the rising costs of research (think linear accelerators), governments replaced individual patrons as the biggest subsidizer of science, with researchers applying for grants from the government or foundations to fund research projects. And journals transitioned from a means to publish findings to take on the role of a marker of prestige. Scientists’ most important qualification today is their publication history.

Today many researchers work in the private sector, where the profit incentives of intellectual property incentivize scientific discovery.

But outside of research with immediate commercial applications, the system developed in the 1600s has remained a relative constant. As physicist turned science writer Michael Nielsen notes, this system facilitated “a scientific culture which to this day rewards the sharing of discoveries with jobs and prestige for the discoverer… It has changed surprisingly little in the last 300 years.”

The Monopolization of Science

In April 2012, the Harvard Library published a letter stating that their subscriptions to academic journals were “financially untenable.” Due to price increases as high as 145% over the past 6 years, the library said that it would soon be forced to cut back on subscriptions.

The Harvard Library singled out one group as primarily responsible for the problem: “This situation is exacerbated by efforts of certain publishers (called “providers”) to acquire, bundle, and increase the pricing on journals.”

The most famous of these providers is Elsevier. It is a behemoth. Every year it publishes 250,000 articles in 2,000 journals. Its 2012 revenues reached $2.7 billion. Its profits of over $1 billion account for 45% of the Reed Elsevier Group - its parent company which is the 495th largest company in the world in terms of market capitalization.

Companies like Elsevier developed in the 1960s and 1970s. They bought academic journals from the non-profits and academic societies that ran them, successfully betting that they could raise prices without losing customers. Today just three publishers, Elsevier, Springer and Wiley, account for roughly 42% of all articles published in the $19 billion plus academic publishing market for science, technology, engineering, and medical topics. University libraries account for 80% of their customers. Since every article is published in only one journal and researchers ideally want access to every article in their field, libraries bought subscriptions no matter the price. From 1984 to 2002, for example, the price of science journals increased nearly 600%. One estimate puts Elsevier’s prices at 642% higher than industry-wide averages.

These providers also bundle journals together. Critics argue that this forces libraries to buy less prestigious journals to gain access to indispensable offerings. There is no set cost for a bundle, instead providers like Elsevier structure plans in response to each institution’s past history of subscriptions.

Source: “The Economics of Ecology Journals”

The tactics of Elsevier and its ilk have made them an evil empire in the eyes of their critics - the science professors, library administrators, PhD students, independent researchers, science companies, and interested individuals who find their efforts to access information thwarted by Elsevier’s paywalls. They cite two main objections.

The first is that prices are increasing at a time when the Internet has made it cheaper and easier than ever before to share information.

The second is that universities are paying for research that they themselves produced. Universities fund research with grants and pay the salaries of the researchers behind every paper. Even peer review, which Elsevier cites as a major value it adds by checking the validity of papers and publishing only significant and valuable findings, is performed on a volunteer basis by professors whose salaries are paid by universities.

Elsevier actively responds to each challenge to its legitimacy, refuting point by point and speaking of “work[ing] in partnership with the research community to make real and sustainable contributions to science.” Deutsche Bank, in an investor analyst report, summarizes Elsevier’s arguments:

“In justifying the margins earned, the publishers point to the highly skilled nature of the staff they employ (to pre-vet submitted papers prior to the peer review process), the support they provide to the peer review panels, including modest stipends, the complex typesetting, printing and distribution activities, including Web publishing and hosting. REL [Reed Elsevier] employs around 7,000 people in its Science business as a whole. REL also argues that the high margins reflect economies of scale and the very high levels of efficiency with which they operate.”

How do their arguments stand up?

One means of analysis is to compare the value of for profit journals to non-profits. Within ecology, for example, the price per page of a for profit journal is nearly three times that of a non-profit. When comparing on the basis of the price per citation (an indicator of a paper’s quality and influence), non-profit papers do more than 5 times better.

Source: “The Economics of Ecology Journals”

Another is to look at their profit margins. Elsevier’s profit margins of 36% are well above the average of 4%-5% for the periodical publishing business. Its hard to imagine that no one could do the centuries old business of publishing papers at lower margins. The aforementioned Deutsche Bank report concludes similarly:

“We believe the [Elsevier] adds relatively little value to the publishing process. We are not attempting to dismiss what 7,000 people at [Elsevier] do for a living. We are simply observing that if the process really were as complex, costly and value-added as the publishers protest that it is, 40% margins wouldn’t be available.”

Libraries point to the high cost of journal subscriptions as a problem. It has been reported as far back as 1998 by The Economist. But now even the world’s wealthiest university cannot afford to purchase access to new scientific knowledge - even though universities are responsible for funding and performing that research.

No One to Blame but Ourselves

For critics of private publisher’s monopolization of the journal industry, there is a simple solution: open access journals. Like traditional journals, they accept submissions, manage a peer review process, and publish. But they charge no subscription fees - they make all their articles available free online. To cover costs, they instead charge researchers publication fees around $2,000. (Reviewers not on payroll decide which papers to accept to spare journals the temptation of accepting every paper and raking in the dough.) Unlike traditional journals, which claim exclusive copyright to the paper for publishing it, open access (OA) journals are free of almost all copyright restrictions.

If universities source the funding for research, and its researchers perform both the research and peer review, why don’t they all switch to OA journals? There have been some notable successes in the form of the Public Library of Science’s well-regarded open access journals. However, current scientific culture makes it hard to switch.

A history of publication in prestigious journals is a prerequisite to every step on the career ladder of a scientist. Every paper submitted to a new, unproven OA journal is one that could have been published in heavyweights like Science or Nature. And even if a tenured or idealistic professor is willing to sacrifice in the name of science, what about their PhD students and co-authors for whom publication in a prestigious journal could mean everything?

One game changer would be governments mandating that publicly financed research be made publicly available. Every year the United States government provides over $60 billion in public grants for scientific research. In 2008, Congress mandated (over furious opposition from private publishers) that all research funded through the National Institute of Health, which accounts for 50% of government funding of science, be made publicly available within a year. Extending this requirement to all other research financed by the government would go a long way for OA publishing. This is true of similar efforts by the British and Canadian governments, which are in the midst of such steps.

The Costs of Closed Publishing: The Reinhart-Rogoff Paper

The controversy over the 2010 paper “Growth In A Time of Debt,” published by Harvard economists Carmen Reinhart and Kenneth Rogoff in the American Economic Review, illustrates some of the problems with the journal system.

The paper used a dataset of countries’ rate of GDP growth and debt levels to suggest that countries with public debts over 90% of their GDP grow significantly slower than countries with more modest levels of debt.

To the media that covered their findings and the politicians and technocrats that cited it, the message was clear: debt is bad and austerity (reducing government spending) is good. Although they discussed their findings with more nuance, Reinhart and Rogoff obliged Washington by discussing how their findings supported the case for deficit reduction.

But this past April, a group of researchers from UMass Amherst revealed that the Reinhart-Rogoff paper was wrong. Like many economists, the researchers had been trying unsuccessfully to replicate Reinhart and Rogoff’s findings. Only when the Harvard economists sent them their original dataset and Excel spreadsheet did the UMass team discover why no one could replicate the findings: the economists had made an Excel error. They forgot to include 5 cells of data. Noting this mistake, and the exclusion of a number of years of high debt growth in several countries and a weighting system that they found questionable, the UMass team declared that the effect Reinhart and Rogoff reported disappeared. Instead of contracting 0.1%, the average growth rate of countries with debt over 90% of GDP was a respectable 2.2%.

The mistake was caught, but for 2 years the false finding influenced policy-makers and informed the work of other economists.

Bad Incentives

Moving to open access journals would expand access to scientific knowledge, but if it preserves the idolization of the research paper, then the work of science reformers is incomplete.

They argue that the current journal system slows down the publication of science research. Peer review rarely takes less than a month, and journals often ask for papers to be rewritten or new analysis undertaken, which stretches out publication for half a year or more. While quality control is necessary, thanks to the Internet, articles don’t need to be in a final form before they appear. Michael Eisen, co-founder of the Public Library of Science, also notes that, in his experience, “the most important technical flaws are uncovered after papers are published.”

People celebrate the discovery of new drugs, theories, and social phenomena. But if we conceptualize science as crossing out a list of possible hypotheses to improve our odds of hitting on the correct one, then experiments that fail are just as important to publish as successful ones.

But journals could not remain prestigious if they published litanies of failed experiments. As a result, the scientific community lacks an efficient way to learn about disproven hypotheses. Worse, it encourages researchers to cherry pick their data and express full confidence in a conclusion that the data and their gut may not fully support. Until science moves beyond the journal system, we may never know how many false positives are produced by this type of fraud-lite.

A Scientific Process for the 21st Century

Although scientists are the cutting edge, there are many instances of missed opportunities to make the process of science more efficient through technology.

As part of our look at academic journals and the scientific process, we talked with Banyan, a startup whose core mission is open science. A surprisingly illuminating moment was when we learned how much low hanging fruit is out there. “We want to go after peer review,” CEO Toni Gemayel told us. “Lots of people still print their papers and [physically] give them to professors for review or put them in Word documents that have no software compatibility.”

Banyan recently launched a public beta version of their product - tools that allow researchers to share, collaborate on, and publish research. “The basis of the company,” Toni explained, “is that scientists will go open source if given simple, beneficial tools.”

Physicist turned open science advocate Michael Nielsen is an eloquent voice on what new tools facilitating an open culture of sharing and collaboration in science could look like.

One existing tool that he advocates expanding upon is arXiv, which allows physicists to share “preprints” of their papers before they are published. This facilitates feedback on ongoing work and disseminates findings faster. Another practice he advocates - publishing all data and source code used in research projects along with their papers - has long been called for by scientists and could be accomplished within the journal framework.

He also imagines new tools that don’t yet exist. A system of wikis, for example, that allow scientists to maintain perfectly up to date “super-textbooks” on their field for reference by their fellow researchers. Or an efficient system for scientists to benefit from the expertise of scientists in other fields when their research “gives rise to problems in areas” in which they are not experts. (Even Einstein needed help from mathematicians working on new forms of geometry to build his General Theory of Relativity.) For a full account of his proposals, see his excellent essay, “The Future of Science.”

But none of these ideas are likely to take off on a mass scale until scientists have clear incentives to contribute to them. Since publication history is all too often the sole metric by which a scientist’s work is judged, a scientist who primarily assembles data sets for others to use or maintains a public wiki of meta-knowledge of the field will not progress in his or her career.

Addressing this issue, Toni references the open spirit amongst coders working on open-source software. “There’s no reward system right now for open science. Scientists’ careers don’t benefit from it. But in software, everyone wants to see your GitHub account.”

Talented coders who could make good money freelancing often pour hours of unpaid work into open-source software, which is free to use and adapt for any purpose. On one hand, many people do so to work on interesting problems and as part of an ethos of contributing to its development. Thousands of companies and services (including Priceonomics’s price guides) would simply not exist without the development of open-source software.

But coders also benefit personally from open-source work because the rest of the field recognizes its value. Employers look at their open-source work via their GitHub accounts (by publicly showing their software work, it can effectively function as a resume), and people generally respect the contributions people make via open-source projects and sharing valuable tips in blog posts and comments. It’s the exact type of open pursuit that you would expect in science. But we see it more in Silicon Valley because it is valued and benefits people’s careers.

Disrupting Science

“The process of scientific discovery – how we do science – will change more over the next 20 years than in the past 300 years.”

~ Michael Nielsen

The current model of publicly funding research and publishing it in academic journals was developed during the days of Isaac Newton in response to 17th century problems.

Beginning in the 1960s, private companies began to buy up and unduly profit off the copyrights they enjoyed as the publishers of new scientific knowledge. This has caused a panic among cash-strapped university libraries. But the bigger problem may be that scientists have not fully utilized the Internet to share, collaborate, and invent new ways of doing science.

The impact of this failure is “impossible to measure or put an upper bound on,” Toni told us. “We don’t know what could have been created or solved if knowledge wasn’t paywalled. What if Tim Berners-Lee had put the world wide web behind a paywall. Or patented it?”

Advocates of open science present a strong case that the idolization of publishing articles in journals has resulted in too much secrecy, too many false positives, and a slowdown in the rate at which scientific discoveries are made. Only by changing the culture and incentives among scientists can a system of openness and collaboration be fostered.

The Internet was created to help scientists share their research. It seems overdue that scientists take full advantage of its original purpose.

This post was written by Alex Mayyasi. Follow him on Twitter here or Google Plus. To get occasional notifications when we write blog posts, sign up for our email list.

Weekend Reads

Fri, 10 May 2013 12:29:54 -0400

Dear nerds, here are a few of our favorite articles of late. Hope you’ll enjoy reading them as much as we did.

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Results from our “Pay What you Want” Experiment

Thu, 09 May 2013 15:14:00 -0400

Last week, we ran a quick experiment on our blog. We asked our readers how they would propose to save journalism. In the post, we noted that many of the thought-leaders in the space suggested that the future of funding journalism might involve voluntary donations from readers. The implication was that the future of journalism looks a lot more like NPR than The New York Times.

We were intrigued. Could a “pay what you want” model help publishers monetize content? Moreover, social science research indicates that people are more inclined to give if there is a charitable component. We were doubly intrigued.

As a test, we proposed that readers of our blog donate any amount of money (of which we’d donate 100% to charity). In return, they could tell us what to write on a forthcoming blog post.

Would people volunteer to “pay what they want” for this very minor benefit and support charity?

Here are the results.

Saving Journalism Does Not Necessarily Rile People Up

The title of the blog post was “How Would You Save Journalism?” The rate at which subscribers to our email list opened the article was about 50% less than our average click through rate. Click through rates were also much lower than normal on Facebook, Twitter, and Hacker News. About 2,500 unique visitors viewed the post, which is roughly 90% fewer visitors than an average post on this blog of comparable word count. People seem to be much more interested in the topic Phish or Ivy League admissions!

So the words “How Would You Save Journalism?” was not necessarily sufficient to get people riled up and ready to save journalism. But the awesome thing is that the 2,500 people who did see the post were part of our experiment. Would any of them voluntarily give money to help choose a future Priceonomics blog post topic? It turns out that, yes, they would!

This small amount of traffic still managed to raise $180.22 for charity. Let’s break down the numbers.

Stats around “Pay What You Want and Support Charity”

So far the experiment raised $180.22 and came from 15 unique donors. The average amount donated was $12.01. The most generous was $50. The smallest donation was $0.10.

Before breaking down the stats further, let’s go over what the experiment was testing. Would people voluntarily go through the hassle of sending us money? Would they do so for a very small benefit (helping guide a future blog post) that they would be able to consume (read the blog post) even if they didn’t make the contribution?

Also remember that all the money given to us by our readers went to charity. If the experiment were “give money to Priceonomics, a corporation,” it could have turned out differently. Also, this was a one time experiment. If you asked for money on every blog post, readers might not react as well.

Asterisks aside, let’s dig in to the numbers. First off, let’s exclude the page views and $60 in contributions that were made by Priceonomics employees. While these four people are handsome, smart, and generally amazing, it would be unfair to include them in the analysis, no matter how handsome they are.

So, for everyone else, here are the stats. There were 2,588 unique visitors to the post. Eleven of them went through the complete pain in the butt process of sending us money by Paypal. This by itself is interesting to us.

Much of the literature on micropayments says that people won’t spend small amounts of money on content because the friction is too high. But here are 11 people that went through a lot of friction to send us money that they didn’t have to.

Perhaps thinking about payments as friction is the wrong way of thinking. Perhaps publishers should instead consider how you recast paying as supporting causes, people, or charities you like. Is there a way to recaste “friction” as a feature, rather than a bug?

Of the people that visited the article, 0.043% (slightly less than half of one percent) opened up their credit cards and paid money voluntarily. All of the donations came through Paypal and none of them came through the other option, Bitcoin.

How Profitable Could “Pay What you Want” Be?

Let’s compare the money generated from this “pay what you want” experiment with how much money you could make off advertising instead. If these donations were revenue, it would have generated $120 with just 2,588 pageviews. In ad industry lingo, this is a $47 CPM (cost per thousand impressions).

Monetizing content at a $47 CPM would be outrageously good compared to advertising. If you had put Google Adsense ads on the site instead, it would get about $1 CPM at best (in this author’s experience). If you sold ads on your own, maybe you could get a $10-$20 CPM.

Of course, if there were no charity component, people may have been less likely to give. And yes, this was just a tiny experiment that might not scale over millions of page views. But maybe it would. Has anyone tried?

Suggestions For Our Next Blog Post

The payoff for making the donation was proposing a topic for the next article on the Priceonomics blog. We curated the suggestions and donors will next vote on their favorite topic for us to write about. “Big” donors will get slightly more influence. About half the donors didn’t send in a topic or just wrote that they were donating money to play along in the experiment or because they liked our blog. People are awesome, thank you!

Here are the topics! We culled through the donor suggestions to pick the five most interesting ones.

If you want to vote and choose which one we write about, make a donation of any amount by paypal and you can vote! (If you’ve already made a donation, we’ll contact you by email to get your vote.)

Donate here to vote on a topic.

1. The Prostitution Business. We’d talk to local prostitutes in San Francisco, find out how they got to be prostitutes, what their job is like, and how the economics of their industry worked. What’s the price of sex?

2. Why is it that men commit most crimes? Why is it that most violent crimes are committed by men? What the hell is wrong with men?

3. The Informal Economy of Dolores Park in San Francisco. Talk with the various vendors, beer salesmen, and drug dealers in Dolores Park. How much money do they make? Do the cops bust them?

4. The Freelance Economy. What are the structural barriers in place that make it difficult to strike out for yourself as a freelancer or small business? Health care, taxes, bureaucracy? Are we moving to a world where we are all freelancers?

5. The Economics of Ski Resorts. Skiing is an expensive sport, but do ski resorts actually make money? They have to maintain a friggin’ mountain after all. What’s the business of ski resorts like?

If you want to vote, make a donation here using Paypal. During the donation process, tell us which topic (1, 2, 3, 4, or 5) you’d like us to write about.

Click this above button to make a donation and vote.

Send any amount of money: a dime, a dollar, $10, a cool grand. If you donate more, you’ll have slightly larger voting share. As a reminder, we’re giving 100% of the money to charity (EFF, Pro Publica & Watsi). We’ll update the amount raised by the experiment here:

Number of Donors: 27

Total Amount Raised for Charity: $292.50

Average Amount: $10.83

Most Generous Donation: $50

Conclusion

The “pay what you want, support charity” experiment had some interesting, but limited implications. First, if you ask people to open their wallets, some of them will. That’s pretty awesome and frankly shocked us. They’ll even go through the pain of using Paypal and send you money to support a cause they like.

Could something like this be used to save journalism? If at the end of every article on the web, there was an easy way to pay what you want for it, would anyone do it? How would you incentivize people to do it? Would people send money to a corporation or would people only make voluntary donations to non-profits like NPR?

Either way, this experiment was really fast, easy, and fun. Thanks to those of you that participated and donated. If you want to choose our future blog post, donate here.

What do you think? Could “pay what you want” save journalism or does it reinforce the notion that content has no value?

This post was written by Rohin Dhar. Follow him on Twitter here or Google. To get occasional notifications when we write blog posts, sign up for our email list.

Nina G: The Stand-Up Comedian Who Also Stutters

Wed, 08 May 2013 14:26:41 -0400

Stand-up comedy is perhaps the most difficult form of public speaking. In normal public speaking, if you give a speech that’s not well received, the audience will just stop paying attention. Stand-up comedians stand on stage telling jokes. When their punch lines fall flat, everyone knows right away. No one laughs and the room is filled with a palpable, awkward silence. Sometimes a member of the audience yells at the comedian “You suck!” This is called heckling and is generally considered acceptable behavior by the audience.

You have to be fairly brave, confident, or deluded to start performing stand-up comedy. But what if you stuttered? What if your entire life, teachers, classmates, and strangers grimaced when you spoke? Even if your dream was to be a stand-up comic, would you pursue it?

Nina G stutters and she’s a pretty darn good stand-up comedian in San Francisco. She is fearless on stage, rattling off clever jokes, bantering with the audience, and all the while stuttering and pausing without a hint of self-consciousness. When we saw Nina G perform, we asked ourselves, “Who is this person?” Did she not get teased and bullied as a kid? Did she not struggle with public speaking when she was younger? How did she come to embrace the ruthless world of stand-up comedy?

You can see from this clip that Nina is both very funny and comfortable on stage. For those of you unfamiliar with stuttering, you can also see that yes, Nina stutters while on stage (warning: language NSFW).

In software, there is an expression that goes “That’s not a bug. That’s a feature.” When the iPhone was released, for example, Steve Jobs famously argued that its lack of Flash video support was a feature that meant longer battery-life and fewer device crashes. A less optimistic person might have called it a bug, since most of the web’s videos were in that format at the time.

Nina embraced a neurological condition and completely owned it as part of her comedy product. She took what some might call a limitation (stuttering) and is trying to build a comedy career around it. We think that’s pretty neat, so wanted to find out more after seeing her perform.

This is the story of Nina G, the world’s only female stand-up comedian that stutters.

What It’s like to Stutter as a Kid

When you see Nina perform onstage, she exudes self-confidence. That wasn’t always the case. Nina wanted to be a stand-up comedian ever since she was a little kid, but didn’t work up the nerve to do it until her mid-thirties.

I wanted to be a comedian since I was 11 years old but I didn’t really think of it seriously since I stuttered and that wasn’t something that comedians did. I remember from being a little kid just loving comedy. Steve Martin, Saturday Night Live, I loved it.

Anytime I had to do a book report, it was about comedy. In college, whenever I could, I’d write papers analyzing stand-up comedians and their impact. Whenever I had free time as an adult, I’d go watch live comedy. I always just loved comedy.

Nina grew up in Alameda, California, a suburb of San Francisco. When she was eight years old, she started stuttering. Around the same time, she was diagnosed with a learning disability. Compared to her learning disability, stuttering actually wasn’t a big deal:

Going to Catholic school with a learning disability was the big problem. The school was so set in its ways they wouldn’t do anything to accommodate me unless my parents fought for it.

When I started stuttering at the age of 8, it was no big deal for my parents. My Dad had a hearing impairment; my Mom’s mom had polio. This was just something that happened, part of life. They were always really supportive.

Nina’s parents didn’t think of her stuttering as something that needed to be fixed. It was just a part of life. Nina’s childhood speech therapist was also a great source of support, helping her learn how to communicate more effectively without treating stuttering as something wrong with Nina.

Four percent of children stutter but only one percent of adults stutter. For some people, stuttering goes away as they get older. Others have it for life. Many fall on a continuum in between.

Nina recalls the first time she stuttered in front of a large public audience and what the consequences of that experience were:

I remember in 7th grade I was in the student government, and during the ‘inauguration’ you had to say your name in front of the whole school. I practiced and practiced so I could say my name without stuttering. But then, on the day of the inauguration, I couldn’t say my name. I just stuttered in front of the whole school instead of saying my name. Afterwards, I was sure everyone would be laughing at me.

But you know what? People didn’t laugh at me. Afterwards a girl came up to me and said “Nice job Nina.” I thought at first she was being sarcastic, but then I realized she really meant it.

There was one exception. Right afterwards, I was hanging out with a friend of mine, this 8th grader. A second grade boy came up to me and said “Hi n-n-n-n-Nina.”

My friend the 8th grader got down on one knee to look the 2nd grader in the eye and told him “If you ever say that again, I’m going to tell the whole school you have a tiny [redacted].”

To Nina, the consequences of stuttering in front of the entire school were relatively minor. People didn’t seem to mind. Instead, she found that having an “advocate” that “had her back” was extremely valuable, whether that advocate was fluent or stuttered. Sometimes when you have a disability, you just need someone to defend you, even if that means berating a second-grader.

Howard Stern As Disability Advocate

As Nina became a teenager, she recognized stuttering as part of her life. We were surprised to learn that she credited The Howard Stern Show as playing an important role in her coming to accept her stuttering.

For Nina, The Howard Stern show was the first time she saw someone in the media “stutter openly.”

Howard Stern was the only show I ever watched where one of the main characters stuttered. Stuttering John was a part of the show. They made fun of him like everyone else and he wasn’t treated any differently on the show because he stuttered. He was the first person I ever saw on TV that was just stuttering openly.

Stuttering John would go around interviewing celebrities and it was be really interesting to see how people reacted to him. I was fascinated by what assholes people were. Chevy Chase once told him, ‘Maybe if someone hit you, you’d stop stuttering.’ I still hate Chevy Chase because of that.

Nina wanted to be a comedian since she was 11, but she didn’t regard it as a realistic goal. Comedy and television were places for people that spoke fluently, not for someone like her:

I didn’t think I could be a comedian because I stuttered. There was no one on TV that stuttered unless it was a “very special episode” with a character that had a problem because they stuttered.

You just get the message that comedy is not the place for you. TV was a place for fluent people.

Instead, Nina focused her energy on being an advocate for disability rights. Nina remembers what it was like growing up and the issues she encountered because of her disability:

It’s the teachers who treated me badly that I blame because they had the power. I did a presentation with a friend in school and my friend got an A and I got an A- because I ‘didn’t speak clearly.’ Of course I didn’t speak clearly. I stutter, you [redacted]!

She went to community college and then transferred to Berkeley. She later earned a graduate degree and became a full time advocate for people with disabilities. For the next decade, she spread the message that those with disabilities are okay the way they are and that it’s society that needs to fix itself by better accommodating those with disabilities.

Hitting Middle Age Without Giving Your Dream a Try

Nina entered her mid-thirties having simultaneously accomplished a lot and not enough. On one hand, she had a successful career advocating for individuals with disabilities. At the same time, she still dreamed of being a comedian, and had never given that dream a shot since she stuttered.

Nina thought of herself as “doing pretty well for someone with a disability.” She still let her stuttering define her. She would speak up less often than she’d like so she wouldn’t subject others to her stutter and generally be more meek than she ought to be:

I was comfortable in my own skin, but I still let my disability limit me. Like I wouldn’t talk as much as I would otherwise so I wouldn’t make other people uncomfortable. I would be in relationships that weren’t always good for me because of self esteem issues I carried around from stuttering and my learning disability. I was in a state like, ‘I’m doing pretty well in life for someone with a disability,’ but I was still letting my issues around my disabilities limit me.

Everything changed in 2008 when Nina attended the annual conference for the National Stuttering Association, which she hadn’t attended since she was a teenager. Nina credits attending this conference as being a turning point for her life.

2008 was the year when I changed and completely owned who I was. I went to the Stuttering Conference. I hadn’t been since I was 19 years old.

Being around all these people that stuttered, I realized how differently I was acting back at home. I was afraid of “taking up too much space” by subjecting people to hearing me talk. I was being meek and small, and I didn’t realize it until I was around all these other people who stuttered and I was able to be myself.

It was a four-day conference, but by the end I was changed.

When Nina came home from the conference, she immediately severed relationships with the people in her life whose behavior contributed to Nina thinking less of herself because she had a disability.

She also decided that stuttering would no longer be an excuse to not pursue her dream of stand-up comedy. Right after the conference, she enrolled in a stand-up comedy class and was on her way to giving her dream a try.

How to Make it in Stand-Up Comedy

The odds of “making it” in the stand-up comedy circuit are slim. From chatting with San Francisco comedians, the last household name they can point to that emerged from the local comedy scene was Dana Carvey, and that was two decades ago. It’s not only difficult to become famous, it’s nearly impossible to make a living wage.

Almost all stand-up comics start their careers by going to “open mics.” Anyone can perform, but audiences are generally small. Open mics are a good way for stand-up comedians to get stage time and improve. Of course, you don’t get paid for performing at open mics.

The next step up from open mics is getting paid about $10-$50 to do a short set (5-10 minutes) at an event put on by a promoter. Promoters rent out a venue and sell tickets to the show. Comics that build enough relationships and work at it for a decade can sometimes string together enough of these paying shows to earn a living wage. Most don’t. Occasionally during this process a comic is “discovered” and ends up with his or her own TV show as the next Louis CK. But that is rare.

A feature from The New York Times sheds light on the finances of stand-up comedians. The beginner stand-up comedian in the article earns $2,500 a year from comedy and makes her living as a receptionist. The comedy veterans in the article have put in 10+ years of work and make between $65K to $85K a year. They have to do things like perform on cruise ships, find voice gigs and podcast sponsors, sell CDs, and generally hustle hard to make a living. An experienced comedian, Eugene Mirman, represents the top of the pyramid. He makes $200K a year. To make that kind of money, he has regular TV credits and headlines large comedy venues. Yet he’s not a household name. For that reason, he finds his current success very tenuous:

“There’s no one thing that makes anybody unless you’re on a hit show that has your face on it,” he said, “and even then, however famous or successful anyone gets, it can all go away.”

Nina G Takes the Stage

In February 2009, Nina dove headfirst into standup comedy. She started filling all her free time with it. Her first experience onstage was validating:

The first time I performed, it’s not like I was amazing. But it was like ‘Ah, this is right for me.’

Stand-up comedy is a difficult craft to master. If you spend an evening at The Brainwash, a San Francisco laundromat that doubles as an open mic stage, you’ll notice that most of the performers are still trying to figure out how to be funny on stage. You’ll also notice that most of the audience is comedians waiting to go on stage.

Nina threw herself into the Bay Area’s open mic scene, performing almost every night after work at a show in San Francisco, Berkeley, or Oakland. After a few months, Nina landed her first paying gig, which paid $10. The first year, she sunk almost a thousand hours into practicing, writing, and driving to comedy shows that generated only a few hundred dollars in total revenue.

In many ways, stuttering is an asset for Nina on stage. When you see Nina at a show, you remember it because you’ve likely never heard a performer tell a story or joke about what it’s like to stutter. It helps her stand out among the sea of male performers talking about comic books, being gay, and their crappy love life.

When asked if doing stand-up comedy was particularly challenging because she stutters, Nina demurred. Stand-up comedy is hard for everyone, she told us. But she deals with issues unique to her as a comedian.

For starters, many audience members aren’t sure whether it’s okay to laugh at her (it is). They worry that it’s making fun of Nina’s disability to laugh at her jokes about stuttering (it is not).

Others think Nina fakes her stutter. They literally can’t believe that someone who stutters is a stand-up comedian. Nina’s YouTube page frequently has comments from viewers accusing her of being an impostor.

Finally, Nina could stutter during the punch line of a joke, which would throw off the comedic timing. Jokes generally have a setup, followed by a snappy conclusion called the punchline. If the punchline isn’t delivered with the proper snappy timing (if Nina stutters, for example), it can fall flat even if the joke is well written. To compensate for that, Nina writes her jokes with a particular structure so that the joke will be funny even if the timing on the punch line is slightly off.

Nina has also turned her experiences as someone who stutters into some of her best jokes. A guy she met at a bar who told her to “spit out” her name when she stumbled over it is now the butt of one of her mainstay jokes. When someone asked her why she couldn’t stop stuttering “like that King’s Speech guy,” she worked into her set what parts of the movie were accurate. It’s funny, but also informative.

Nina has embraced the educational aspect of her comedy. She started touring with a group of comedians with disabilities on the “Comedians with Disabilities Act.” They travel around the country and perform in front of much larger audiences than Nina’s typical shows in San Francisco. She’s also started putting on disability training seminars for companies that are a mix of comedy and corporate training. She sells shirts at her shows and recently self-published a children’s book about accommodating disabilities.

Despite her growing commercial prospects, Nina will make only a few thousand dollars from stand-up comedy this year and still has her day job as a disability advocate. She performs about 25 shows a month, but she only gets paid for one or two of them. Recently she performed in Memphis, Tennessee, and was paid $800 for the show. But she had to pay for her own plane ticket, so she only netted $200. Even when you start getting paid to perform, it’s hard to make money in comedy.

Conclusion

In one of Nina’s sets, she tells the story of a comedy club manager who tells Nina that if she keeps practicing and doing opening mics and getting out there, one day she’ll finally have the self-confidence to stop stuttering.

Nina’s response to the manager crystalizes her story perfectly:

If you get up on stage and you stutter, then maybe self-esteem isn’t your frickin’ issue.

Plus if I stopped stuttering, I wouldn’t have an act. So let’s hope that doesn’t happen.

We all have characteristics that mark us as different. When you’re a kid, that can mean being bullied or told your dreams are out of reach. Even if no one tells us that explicitly, we may get that idea implicitly. Maybe from watching TV and noticing that no one on the screen looks or talks like us. And as a result, we may have regrets later on in life about the things we never tried.

As a child, Nina got the message that she couldn’t become a stand-up comedian because she stuttered. But one day, she decided to ignore that message. She tried stand-up comedy, and she was good at it. She channelled her differences into a unique perspective. While every other comedian makes jokes about male genitalia, Nina makes jokes about male genitalia and social justice. If Nina makes it big as a stand-up comic one day, that “and” will have made all the difference.

This post was written by Rohin Dhar. Follow him on Twitter here or Google. To get occasional notifications when we write blog posts, sign up for our email list.

If you’d like to support Nina G’s comedy career, you can purchase her children’s book about disabilities, Once Upon An Accommodation.

Why Everyone Looks Back At College Too Fondly

Tue, 07 May 2013 14:14:59 -0400

When undergraduates’ college careers come to a close, universities step up their game. In pursuit of the perfect commencement ceremony, landscapers work extra hours, an important person arrives to address the graduates and make them feel special, and deans and professors prepare warm speeches about the college experience.

Senior class presidents also get into the game, promising that the class will go out on a high note, while the alumni association begins wooing the graduates with social events.

As institutions that rely on fundraising, it makes sense for universities to take advantage of graduates’ last weeks on campus to make them grandiose, fun, and memorable. And it’s understandable that graduates themselves want to make the most of their last days on campus.

But when graduates look back and take stock of their college careers, surely even the nicest commencement ceremony and final weeks will not keep them from factoring in the all-nighters, awkward social encounters, and academic setbacks as well?

Not necessarily. Because when people recall an experience, they tend to give far more weight to the finale than the rest of the experience.

This, at least, is the assertion of famed psychologist Daniel Kahneman. It is backed up by a number of experiments in which research subjects experience something unpleasant like loud noises, holding their hands in frigid water, or undergoing a painful medical procedure.

The participants undergo the unpleasant experience twice. The first time they experience a significant amount of discomfort or pain. The second time they experience an identical amount of discomfort or pain, followed by an additional period of minor pain or unpleasantness.

Although the first experience was objectively less unpleasant, subjects overwhelming reported the second as less painful and, when forced to undergo one of the experiences again, chose the second option.

Kahneman posits that when we recall events or experiences, we remember them as a story. And in stories, endings are very important. So recollections are overwhelmingly colored by how they end.

All the ups, downs, and diverse experiences of 4 (ish) years of college are too much for us to remember and too much to fit into our story of how college went. Not every college experience ends positively, and a great commencement ceremony won’t be able to make up for an overwhelmingly negative four years. On average, though, the conspiracy between students and administrators to end college on a high note and remember it fondly succeeds in framing how people recall the entire experience.

Our recollection of college is like a Hollywood adaptation - condensed and simplified, with a happy ending thrown in.

This post was written by Alex Mayyasi. It applies to graduates of every school but his own. Follow him on Twitter here or Google Plus. To get occasional notifications when we write blog posts, sign up for our email list.

H/t to Ezekiel J. Emanuel for pointing out fun applications of this study.