Freedomnomics: Why the Free Market Works and Other Half-Baked Theories Don't by John Jr. (books that read to you TXT) 📕

2005 (http://www.forbes.com/forbes/2005/0110/088_print.html). The authors point to one insurance company, Liberty Mutual, that gives “large discounts” to those with LoJacks: “A study by Ian Ayres and Steven Levitt showed that each dollar spent on LoJack resulted in $10 of reduced car theft. Alas, this doesn’t make the device a winner for insurers with less than 10% of the market, because most of the benefit will accrue to their rivals. Even so, Liberty Mutual gives a large insurance discount to LoJack users, even where it isn’t required by law.” This would imply that if LoJack was effective, then the largest insurance companies would be the ones most likely to give a discount. However, the opposite is true. (Liberty Mutual is only the ninth largest insurance company.)

53 Telephone interview with Amy Kelly, GEICO Sales Agent, October 16, 2006 (1-800-861-8380). See also a publication from Transportation Alternatives on Car Alarms and Car Insurance in New York that quotes GEICO as claiming that they do not support LoJack discounts because “it does not prevent the initial theft.”

54 Unfortunately, Ayres and Levitt were unable to provide the primary data used in their paper to others on the number of LoJack devices installed in cars. An attempt to test whether there was a drop in auto thefts did not confirm these original claims. John R. Lott Jr., “Does a Helping Hand Put Others at Risk?”

55 Williams v. Walker-Thomas Furniture Co., 350 F.2d 445 (D.C. Cir. 1965) (http://www.scu.edu/law/FacWebPage/Neustadter/e-books/abridged/main/cases/Williams.html).

56 Reyes v. Wyeth Laboratories, 498 F.2d 1264 (5th Cir. 07/31/1974) (http://biotech.law.lsu.edu/cases/vaccines/reyes_v_wyeth_laboratories.htm).

57 The award was for $200,000 in 1970.

58 For example, take something as simple as football helmets, where helmet makers are now held liable for neck injuries even though manufacturers warn customers that helmets will only protect the skull, not the neck. (Bell Sports v. Brian j. Yarusso,Supreme Court of the State of Delaware, C.A. No. 93C-10-132, September 7, 2000) In hopes of avoiding liability, helmet manufacturers are placed in the absurd situation of having to warn their customers not to play sports. Some helmets now carry the following warning: “NO HELMET SYSTEM CAN PROTECT YOU FROM SERIOUS BRAIN AND/OR NECK INJURIES INCLUDING PARALYSIS OR DEATH. TO AVOID THESE RISKS, DO NOT ENGAGE IN THE SPORT OF FOOTBALL” (emphasis in the original). See http://www.amazon.com/Schutt-Air-Jr-Football-Helmet/dp/B0000AQKCS). The columnist George Will also ridiculed the climate of corporate fear created by excessive litigation, citing the example of a baby stroller carrying the warning, “Remove baby before folding.” See “The Law vs. Good Sense,” http://www.jewishworldreview.com/cols/will060302.asp.

59 Richard L Manning, “Changing Rules in Tort Law and the Market for Childhood Vaccines,” Journal of Law and Economics, vol. 37, 1994.

60 Richard L. Manning, “Is the Insurance Aspect of Producer Liability Valued by Consumers?: Liability Changes and Childhood Vaccine Consumption,” Journal of Risk and Uncertainty, 37-51.

61 John R. Lott, Jr. And Richard L Manning, “Have Changing Liability Rules Compensated Workers Twice for Occupational Hazards?: Earnings Premium and Cancer Risks,” Journal of Legal Studies, January 2000.

62 This assumes a real interest rate of 3 percent.

63 Lott and Manning, “Have Changing Liability Rules Compensated Workers Twice for Occupational Hazards?”

64 The premiums fell by 43 to 108 percent. A drop of 108 percent indicates that workers were being overcompensated by the ability to sue and now took on low wages to get this right.

65 Lott and Manning, “Have Changing Liability Rules Compensated Workers Twice for Occupational Hazards?”

Chapter Two: Reputations

1 This according to Michael Moore’s official website, http://www.michael-moore.com/books-films/index.php.

2 Benjamin Klein and Keith Leffler, “The Role of Market Forces in Assuring Contractual Performance,” Journal of Political Economy, 1981, 265-267. See also John R. Lott, Jr. “Brand names, Ignorance, and Quality Guaranteeing Premiums,” Applied Economics, 1988, 165-176 and Benjamin Klein, “Hold-ups Occur: The Self-Enforcing Range of Contractual Relationships,” Economic Inquiry, July 1996, 444-463.

3 Ibid.

4 John R. Lott, Jr., “Political Cheating,” Public Choice, vol. 52, no. 2, 1987: 169-186.

5 About a quarter of this 40 percent announced that the upcoming term would be their last. See John R. Lott, Jr., “Political Cheating,” 169-186. See also Stephen G. Bronars and John R. Lott, Jr., “Do Campaign Donations Alter How Politicians Vote?” Journal of Law and Economics, 1997.

6 Ibid.

7 David Laband and Bernard Lentz, The Roots of Success: Why Children Follow in Their Parent’s Career Footsteps, Praeger Publishers: New York, New York, 1985, 64. This refers to the numbers where the father’s occupation is known. See also John R. Lott, Jr., “Political Cheating,” 169-186.

8 Children of parents who are self-employed, licensed professionals will become self-employed, licensed professionals themselves at a rate of nearly 15 percent. This example, however, includes children choosing other self-employed, licenses careers than their parents, such as a doctor’s child becoming a lawyer, accountant, or even a plumber. Laband and Lentz, The Roots of Success, 23.

9 See, for example, Jeremy Rabkin’s “The Sorry Tale of David Souter, Stealth Justice,” The Weekly Standard, vol. 1, no. 8, 1996, 30.

10 This is not to say that the tenure system functions perfectly in this respect, or that unproductive professors never gain tenure. Studies have found relatively small drops in productivity among professors after receiving tenure. These, however, are most pronounced among those professors who were least productive to begin with. See Sharon M. Oster and Daniel S. Hamermesh, “Aging and Productivity Among Economists,” Review of Economics and Statistics, vol. 80, no. 1, (1998): 154-157. See also Flora F. Tien and Robert T. Blackburn, “Faculty Rank System, Research Motivation, and Faculty Research Productivity,” Journal of Higher Education, vol. 67 (January /February, 1996): 13 and 14.

11 Daniel B. Klein and Charlotta Stern, “Professors and Their Politics: The Policy Views of Social Scientists,” Critical Review, vol. 17 (2005): 257-303.

12 Including the hard sciences at other schools such as the University of California at Berkeley and