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Books: The Armchair Economist

I love riddles. I don't mean the Laffy Taffy "What kind of shoes do ghosts wear?" kind (well, actually I love those too), but the non-funny kind that crop up in daily life and require a heapin' helping of lateral thinking to unravel. This is why, a while back, I got obsessed with Traffic Flow Theory: the study of how people behave in traffic.

As interesting to me as the riddles themselves is the fact that most of us (myself included) don't even recognize them as riddles until someone calls our attention to them. Why, for instance, do we have traffic jams? It seems like a stupid question -- traffic jams results from too many cars on the road, duh -- but Traffic Flow Theory illustrates that jams are not inevitable, but occur because people behave in very specific (and often counterproductive) ways. The trick to these real world riddles isn't so much figuring out the answer as realizing there is a question worthy of investigation.

Another fascinating (to me) "no-brainer" is: "Why do people stand on escalators but walk on stairs?" As with the traffic jams conundrum, it's not even obvious that there is any behavior worthy of research here -- if people stood on stairs they would never get to the top, duh -- but that didn't stop a bunch of economists at the University of Rochester from looking into this very puzzle. Some of the hypothesis those economists cooked up were summarized here by Steven E. Landsburg.

This is just one of many issues that Landsburg has explored in a regular Slate column entitled Everyday Economics. My interested piqued by the escalator question, I went back and read his entire series of articles, which tackle pressing societal issues ranging from how to win Ebay auctions to why tall people make more money to, my favorite, why people peel bananas with the stem-end up. (Monkeys peel 'em the other way, you know.) Eventually, though, I ran out of articles, leaving me with no option but to read his book, The Armchair Economist.

Written before his tenure at Slate, The Armchair Economist serves as a perfect lead-in to his column. It comes complete with a primer on economics, gives you some idea of Landsburg's worldview, and then tackles a few "Rational Riddles," such as "Why do movie theaters charge more for popcorn?" (Oh, you think you know why theaters charge more for popcorn? Well, tough guy, what if I told you that the chapter in which this is discussed is entitled "Why Popcorn Costs More At The Movies And Why The Obvious Answer Is Wrong" ...)

When not demonstrating that the obvious is incorrect, Landsburg also takes great joy in demonstrating that some plainly ridiculous ideas are, in fact, quite sound: the best way to make drivers safer is to take away their seat belts install sharp spikes on their steering wheels; a city that spends $10,000,000 to build a free aquarium may as well buy $10,000,000 of gold bullion and dump it in the ocean; and it is posible to build a factory that converts corn into automobiles.

For me, personally, The Armchair Economist was especially valuable, because many of the myths is sets out to explode are those that I (as a self-described progressive) hold dear: one chapter is entitled "Why Taxes Are Bad," another is called "Why I Am Not An Environmentalist." He even makes a remarkably convincing argument that bipartisanships in politics is something to be feared rather than welcomed. While I often read writers with beliefs counter to my own, I rarely come across an author who not only challenges my convictions but ponies up the logical arguments necessary to make me think "holy smokes, maybe he's right!" That's what made this the best non-fiction book I've read this year, and one that I recommend highly.

Posted on July 31, 2003 to Books





Comments

Sounds like a really great book. Thanks for sharing.

Posted by: Matthew on August 2, 2003 6:53 PM

complete jibberish. for the stairs conundrum, it's not about minimizing time (or distance) otherwise people would always walk up escalators, which few do. it's minimizing effort.

Posted by: professor von tootenhorn on August 2, 2003 7:27 PM

Thanks for the recommendation. I am going to get this book, yes I am.

Posted by: kmel on August 2, 2003 7:31 PM

for the stairs conundrum, it's not about minimizing time (or distance) otherwise people would always walk up escalators, which few do.
it's minimizing effort.

Standing on stairs (rather than climbing them) requires the minimum of effort.

Posted by: Matthew on August 2, 2003 7:42 PM

You've left us who do not have this book at our local library wondering: why *does* popcorn cost more at movie theatres, if not because they've a captive audience?

Posted by: whatish on August 2, 2003 8:20 PM

yay u of r. alma mater represent.

Posted by: zach on August 2, 2003 8:37 PM

Yes, please. If it's not the obvious answer ("because they can"), then why do movie theatres charge more for popcorn?

Posted by: KF on August 2, 2003 8:49 PM

Wouldn't standing on stairs and standing on an escalator be equal in levels of effort? I mean by the individual not the machinery.

Posted by: Lora on August 2, 2003 9:46 PM

ok, good book and whatnot, but tell me: What kind of shoes DO ghosts wear?

Posted by: cat on August 2, 2003 9:48 PM

It is a combination of effort and results. By standing on stairs, you do not advance and people laugh at you. If you stand on an escalator, you're part of the now crowd, the hip, the moving. And during this time, you're able to eat popcorn.

Cop porn, excuse me, _popcorn_, costs more at the movies because theatre chains don't make much from the ticket sales. A considerable percentage of that goes to the fine people who created "Dude, Seriously, I Don't See The Car Anywhere Around Here, Do You Have One Of Those Annoying Car Alarm Deactivation Units That Triggers The Horn Because Then We Could Zero In On It?" and other such masterpieces. And the trend has been for the movie company to take more, more, and also some more, and even more during the first few weeks when the movie's hot. One of my friends ran a theatre a long time ago, and it was bleeding money, so he finally said "okay, it's free." The distributors weren't happy -- the contract with the theatre said something "you must charge a minimum of 75 cents per show," so my friend just ate that. And the concession sales _almost_ brought the theatre out of the financial nosedive.

Posted by: Newport Cigarettes in the new Crush-proof pack on August 2, 2003 10:06 PM

Why did none of the participants in the peeling-bananas experiment point out that the banana stem is a ready-made banana opener, as convenient as a ring pull? By sharply bending it, a banana of suitable ripeness will crack, and the first strip of peel can be removed in one fluid motion. The remainder of the peel is then easily grasped and dealt with before beginning to eat the banana. Pedestrian technique, I know, but I feel it should have been addressed in any serious discussion of banana peeling.

Posted by: Toby on August 3, 2003 12:37 AM

why do they not consider the movement of the escalator as a benefit in the equation? isn't that the biggest difference between stairs and escalators? or rather, wouldn't standing still on the stairs be considered a cost, since it costs more time to get anywhere if you don't move, and at some point wouldn't that outweigh the benefits of less effort that standing still affords?

Posted by: tom on August 3, 2003 12:44 AM

It does sound like an interesting book, but maybe a little less caffeine, or a re-boot on the spell checker?

Posted by: john on August 3, 2003 3:20 AM

What kind of shoes to ghosts wear?????

BOO-ts, of course!

:)

mmmm....laffy taffy...

Posted by: Kal on August 3, 2003 5:56 AM

thx kal i thought i was gonna shoot myself if i couldn't figure out that riddle.

Posted by: greg on August 3, 2003 8:50 AM

Another of Mr. Landsburg's articles is "We find ourselves ... guilty" (http://slate.msn.com/id/2083034/). Also an interesting read.

I've always suspected that we could significantly lessen the incidence of improperly applied capital punishment by charging the governor who signed a prisoner's death order with murder if the accused was found innocent post-mortem (via DNA or other incontrovertible evidence).

(Not exactly a completely on-topic or yeti-ish comment, but what the heck.)

Now where'd I put that stash of Laffy Taffy ....

Posted by: Sam on August 3, 2003 9:03 AM

Listen to your mother! Fear the mighty escalator.

Posted by: Ben on August 3, 2003 9:09 AM

I would think a better question would be why do people walk on moving sidewalks (such as at certain airports) but stand still on escalators.

Posted by: Matthew S. on August 3, 2003 9:43 AM

Uhh, because walking (fast) on moving sidewalks is incredibly fun to do.

And I'm a bit skeptical about this popcorn issue. There's no good reason to even pose a question such as "why does X cost $Y?" Companies set costs at the point that maximizes their profits, end of story. If enough customers will pay that much, voila.

Posted by: the kiosk on August 3, 2003 11:06 AM

And I'm a bit skeptical about this popcorn issue. There's no good reason to even pose a question such as "why does X cost $Y?" Companies set costs at the point that maximizes their profits, end of story. If enough customers will pay that much, voila.

Posted by: Rob on August 3, 2003 2:30 PM

Well, obviously bipartisanship is bad. If they're acting like one party, then what's the point of having two? Or differing viewpoints at all? Not that it's necessarily always evil, but I'm always a little suspicious when politicians start yelling "yay, look at us! we're bipartisan! aren't we great?" As if when any two people agree they're always automatically right. But I can't see the anti-enviromentalist thing....

Posted by: Jennifer on August 3, 2003 6:04 PM

Just trying to close a tag.

Posted by: Chris on August 3, 2003 7:21 PM

Well, not going to perpetuate a big old back-and-forth here in the Yeti's comments, but the rephrased question is just as empty to me. They pay it because they want the popcorn. They'd rather have it than have an extra $4.50 in their pockets. I'm not sure what exactly I should be seeing as a big mystery, with this or with people not standing still on staircases. :)

Posted by: the kiosk on August 3, 2003 11:49 PM

Their answer is merely a re-wording of the "duh" answer. The question only has meaning if it's taken as "If people walk on stairs, why do they stand on escalators?"

I stand still on an escalator because I probably have a book and want to carry on reading, or a heavy bag and want a rest in carrying it. I don't stand on stairs for these reasons for the same reason that I don't stand on the pavement when walking somewhere. Some people don't walk on escalators because these days, they tend to be longer than staircases and a lot of people find walking up them too much effort - we are still evolutionally pre-disposed to save energy when we can (though again, that's a big simplifaication).

People run up stairs more quickly because it is normally easier to do so, they are less steep, have smaller individual steps, better surfaces for walking, are normally shorter (you don't see many people running up the really long flights - well not for long, anyway), and are wider without stationary people standing to one side.

It's pretty typical of an economist to reduce people's motivations to absurd simplicities.

The reference to stairs being an "inferior" machine was made by someone who's never travelled on London Underground.

Posted by: Adam on August 4, 2003 2:49 AM

Why do some people get on the escalator at the top and walk backwards down it in a weird escalator moonwalk? And why do so many people jump off the last step so they don't get eaten up by the sharp escalator teeth at the bottom?

Posted by: Duane on August 4, 2003 8:01 AM

Another reason people stand on escalators is that they are usually too narrow to pass someone in front of you. Take an NYC subway escalator. If an escalator holds 50 people, and any single one of them decides to stand, then by the time they reach the top, it's likely that 49 people are standing behind him, because no one is going to try to push past everyone else to save 10 seconds. However, if you look at the same escalator without any crowd, I think more people will walk it.

Posted by: Matt on August 4, 2003 3:05 PM

This last escalator thoery is the same type of behavior that causes the misplacement of renewal stickers for license plates. The people who properly either peal and replace or cover the prior year's sticker are of no instruction to people who do not know the right way of placing it. There is no apparent evidence that the plate has been renewed, it could just be new. Then you get one moron who places a subsequent sticker next to the previous years' (or elsewhere) without removing the other one. The next newcomer who sees that may conclude that this is the correct way. . .and that, my friends, is just one example of contagious stupidity.

Posted by: Albert on August 5, 2003 10:27 AM

In the navy, a friend of mine had a game in which he'd stand in front of a closed door at random, wait for a line to form behind him, then leave... He used to take bets on how many people he could get in line in 15 minutes.

Posted by: Pavlov's Dog on August 5, 2003 1:13 PM

I can't believe it! The damn kid is back on the escalator!

Posted by: Ryan Waddell on August 6, 2003 8:34 AM

Hi Matthew, I really like your site. This book was required for one of my MBA classes at the UW, despite its simplicity. I thoroughly enjoyed it. You will probably find this article from last week's NY Times magazine of interest as well. http://www.nytimes.com/2003/08/03/magazine/03LEVITT.html

Cheers!

Posted by: vito90 on August 6, 2003 12:52 PM

Pardon the late arrival.
The trouble is that the armchair economist, like other economists, makes lots of invalid assumptions. Classical economics is based on two assumptions: Markets are efficient, and people make rational choices. Take the second. They don't. Most people don't vote based on a rational analysis of competing candidates manifestos - in fact a lot of people vote in ways that will actually damage their personal economic prospects. People don't choose what religion to observe following careful cost benefit analysis either.
Market efficiency is too big a topic here, but there are plenty of inefficient markets - like popcorn in movie theatres.
Furthermore, there are lots of phenomenomena that are, on the surface, amenable to economic analysis, which in fact, are just irrational events. The Armchair Economist is very good at taking economic theory and applying it to dumb questions (why do monkeys and people open bananas from oppposite ends, for example), but the real answer is that we don't know that economic analysis is a powerful enough tool to tackle the question, or whether the input data is accurate - and, as all computer literate folk know, garbage in=garbage out. There is a famous anecdote about different attitudes to data. It goes like this.
One day, three academics, all friends, are travelling by train to a university in a foreign country they've never visited before - lets call it Canada. They are an economist, a zoologist and a mathematician. Deep in the back country, they look out of the window and see a single black sheep in a field. The Economist says "Ah - sheep in Canada are black". The Zoologist says, "No, I don't think you can say that. But I think you can say that there are black sheep in Canada". The Mathematician, wearily, says "All you can say is this. In Canada, there is at least one field in which there is at least one sheep, of which at least one side is black".

Posted by: Philip on August 7, 2003 3:07 AM

I just checked the book out at the library. Excellent. Required reading. I believe that the moral is to avoid being lazy in thinking. Or would it be intellectually lazy of me to sum up the book that way?

Posted by: thohan on August 11, 2003 11:18 AM

I recently completed a web tool for OSHA about ergonomics and I was thinking about writing a book called The Armchair Ergonomist, with my many witty, whimsical, enlightening views on how carpal tunnel syndrome didn't exist 20 years ago, and now every fifth person has it. Also, there could be a chapter called "Quit Whining: Why Your Back Doesn't Really Hurt"

Posted by: thohan on August 14, 2003 11:47 AM

I never buy popcorn at movies. It's just never appealed to me. I guess I'm just an oddball. ;-)

Posted by: Martin Alak on August 15, 2003 10:48 AM

upon further review of previous comments, it's apparent that a lot of you people don't, or didn't, get it! You are coming here with your fairly certain answers on escalators and popcorn. Let me propose a method of approaching problems the Armchair Economist way. Let's call it Occam's razor and toothbrush. The razor is reserved for the "obvious" answer, the toothbrush is the device that allows you to ponder other possibilities. It's entirely possible that people don't walk up an escalator because gravity is three times as strong on the steps. It's just very unlikely. Do not throw out unlikely possibilities, merely file them under "probably not."

Posted by: bryan on August 26, 2003 10:32 AM

Most people do not stand on escalators, though some (myself included) do.

Many years ago now, back when I was a wee lad, my first assignment in General Experimental Psychology (the first class for my psych major) was to design and conduct an observational experiment. I chose to observe people's behavior on escalators.

I don't remember the exact results, but the numbers were something like: 10% of the people just get on the escalator and stand there (I'm one of these); 30% of the people walk the entire trip; and the remaing 60% do a combination of walking and standing. It's these walkers-and-standers that puzzle me. They seem so noncommital...

Posted by: J.D. Roth on January 2, 2004 9:08 AM