Challenging the State Lottery System with Matthew Curtis

My guest today is Matthew Curtis, founder of the startup Vice Lotteries. Vice Lotteries is a new startup that aims to challenge state governments’ legal monopolies over lotteries.

State lotteries are amazingly and bizarrely unethical. They drain billions of dollars out of communities, primarily poor ones. Lottery spending has increased substantially over the past decades, with the average lotto player spending $600 per year, and many spending significantly more than that.

Vice Lotteries aims to create a more ethical alternative to state lotteries, allowing people to have the fun of gambling without losing significant amounts of money. From the Vice Lotteries website:

Vice Lotteries was founded with one purpose: Allow our customers to enjoy gambling while saving money. With Vice Lotteries, you can enjoy the tremendous pleasure of tossing the dice without losing your ability to afford all the other things in life that you love.

However, it is currently illegal to run a private lottery. Before Vice Lotteries can start operating, they need to win one of the multiple lawsuits they are filing in state courts to challenge state lotteries.


 

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Why Students Switch Majors with Jamin Speer

Today’s guest is Jamin Speer of the University of Memphis. We discuss his paper, “Are Changes of Major Major Changes? The Roles of Grades, Gender, and Preferences in College Major Switching” co-authored with Carmen Astorne-Figari.

The choice of college major is a key stage in the career search, and over a third of college students switch majors at least once. We provide the first comprehensive analysis of major switching, looking at the patterns of switching in both academic and non-academic dimensions. Low grades signal academic mismatch and predict switching majors – and the lower the grades, the larger the switch in terms of course content. Surprisingly, these switches do not improve students’ grades. When students switch majors, they switch to majors that “look like them”: females to female-heavy majors, and so on. Lower-ability women flee competitive majors at high rates, while men and higher-ability women are undeterred. Women are far more likely to leave STEM fields for majors that are less competitive – but still somewhat science-intensive – suggesting that leaving STEM may be more about fleeing the “culture” of STEM majors than fleeing science and math.


Links

Jamin’s Twitter thread about the paper

Niederle and Vesterlund’s paper on gender differences in competitiveness

Neal’s paper on job mobility featuring the following quote mentioned in the episode:

“To the extent that college provides an opportunity for premarket search over potential careers, this result [of fewer career changes among college graduates] is to be expected.” (p. 250)

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Re-thinking the so-called Housing Bubble with Kevin Erdmann

Kevin Erdmann of the Mercatus Center returns to the podcast to discuss his new book, Shut Out: How a Housing Shortage Caused the Great Recession and Crippled Our Economy. From the publisher’s website:

The United States suffers from a shortage of well-placed homes. This was true even at the peak of the housing boom in 2005. Using a broad array of evidence on housing inflation, income, migration, homeownership trends, and international comparisons, Shut Out demonstrates that high home prices have been largely caused by the constrained housing supply in a handful of magnet cities leading the new economy.

The same phenomenon is occurring in leading countries across the globe. Gentrifying cities have become exclusionary bastions in the new postindustrial economy. The US housing bubble that peaked in 2005 is more accurately described as a refugee crisis than a credit bubble. Surging demand for limited urban housing triggered a spike of migration away from the magnet cities among households with moderate and lower incomes who could no longer afford to remain, causing a brief contagion of high prices in the cities where the migrants moved.


Links:

My previous interview with Kevin, from 2017

Kevin’s policy brief for Mercatus, arguing that housing was undersupplied during the so-called “housing bubble”

Kevin’s blog, Idiosyncratic Whisk

 

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Kidnapping for Ransom with Anja Shortland

Today’s guest on Economics Detective Radio is Anja Shortland of King’s College London, discussing her new book Kidnap: Inside the Ransom Business, where she brings an economist’s perspective to the shady world of the kidnapping for ransom business and to the professionals who specialize in getting hostages home safely. The book’s description reads as follows:

Kidnap for ransom is a lucrative but tricky business. Millions of people live, travel, and work in areas with significant kidnap risks, yet kidnaps of foreign workers, local VIPs, and tourists are surprisingly rare and the vast majority of abductions are peacefully resolved – often for remarkably low ransoms. In fact, the market for hostages is so well ordered that the crime is insurable. This is a puzzle: ransoming a hostage is the world’s most precarious trade. What would be the “right” price for your loved one – and can you avoid putting others at risk by paying it? What prevents criminals from maltreating hostages? How do you (safely) pay a ransom? And why would kidnappers release a potential future witness after receiving their money?

Kidnap: Inside the Ransom Business uncovers how a group of insurers at Lloyd’s of London have solved these thorny problems for their customers. Based on interviews with industry insiders (from both sides), as well as hostage stakeholders, it uncovers an intricate and powerful private governance system ordering transactions between the legal and the criminal economies.


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The Skyscraper Curse and Business Cycles with Mark Thornton

Mark Thornton returns to the podcast to discuss his new book The Skyscraper Curse (available digitally for free). The book discusses the connection between record-setting skyscrapers and economic recessions. Here’s an excerpt from the book’s introduction:

The Skyscraper Index expresses the strange relationship between the building of the world’s tallest skyscraper and the onset of a major economic crisis. This relationship only came to light in 1999 when research analyst Andrew Lawrence published a report noting the odd connection between record-height buildings and noteworthy economic crises — that is, the skyscraper curse, a relationship that dated back nearly a century. Without a theory to support it, journalists largely dismissed Lawrence’s report as the fun story of the day.

Mark relates these skyscrapers to the Austrian Business Cycle Theory (ABCT). He shows how record-setting skyscrapers and recessions can be caused by a common factor: excessively cheap credit. We discuss this theory in the interview.


 

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Military History and the Remplacement Militaire with Louis Rouanet

Today’s guest is Louis Rouanet from George Mason University. Our discussion focuses on an economic history paper he co-authored with Ennio Piano (a previous guest of the show), “Filling the Ranks: The Remplacement Militaire in Post-Revolutionary France.”

Many economists have analyzed the efficiency of a volunteered army relative to a conscripted army. However, they have rarely studied the working of real-world alternative, market-based, military institutions where military obligations are traded among the citizens. This paper fills this gap by studying the rise and fall of the Remplacement Militaire in 18th and 19th century France. This system endured for more than three-quarters of a century until the French government progressively moved toward universal conscription after 1872. We explain why, as the proportion of men drafted increased, the State systematically restricted the trade of military obligations.


 

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Classical Economics and the New Poor Law with Gregory Clark

Today’s guest is economic historian Gregory Clark, and our topic is England’s New Poor Law of 1834. Gregory and his co-author, Marianne E. Page, wrote a paper on the topic entitled “Welfare reform, 1834: Did the New Poor Law in England produce significant economic gains?” Spoiler alert: It didn’t. Continue reading Classical Economics and the New Poor Law with Gregory Clark

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Institutional Cryptoeconomics with Mikayla Novak

Today’s guest is Mikayla Novak (Twitter, SSRN) of the RMIT Blockchain Innovation Hub at RMIT University. Her work focuses on some innovative new and potential uses for blockchain technology.

As we all know at this point, the first use of blockchain technology was to create decentralized digital currencies like Bitcoin and Ethereum. But a blockchain is a much more general technology than this: it is a decentralized ledger that is resistant to tampering by any one individual. As such, it is a technical innovation that can allow us to coordinate activities that a lack of trust may have prevented otherwise.

Mikayla discusses institutional cryptoeconomics, an emerging field of research centered on the ways blockchain technology can improve both private and public institutions.


Links

Mikayla’s Medium article on Crypto Fiscal Federalism discusses how blockchain could make the system of making government grants more transparent and efficient.

This article by Mikayla’s colleagues at RMIT gives a detailed and accessible introduction to institutional cryptoeconomics.

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Why my ReMarkable Tablet is my Favourite Device

[Note: I was not compensated for this post.]

I’ve had my ReMarkable tablet for over a year now and I can’t imagine life without it. I am constantly carrying it with me, pulling it out to jot down notes during meetings, or to read PDFs on the SkyTrain, or to sketch out ideas for one of my creative projects. I start many of my days by jotting down a to-do list on my ReMarkable. It has taken the place of the many disorganized notebooks and sheets of printer paper that were constantly cluttering up my life in The Before Time Continue reading Why my ReMarkable Tablet is my Favourite Device

The Revolt of the Public with Martin Gurri

Today’s guest is Martin Gurri (Twitter, blog), author of The Revolt of the Public. We discuss his book, which deals with the impact of information technology on political trends and populism.

In the words of economist and scholar Arnold Kling, “Martin Gurri saw it coming.” Technology has categorically reversed the information balance of power between the public and the elites who manage the great hierarchical institutions of the industrial age—government, political parties, the media. The Revolt of the Public tells the story of how insurgencies, enabled by digital devices and a vast information sphere, have mobilized millions of ordinary people around the world. Originally published in 2014, this updated edition of The Revolt of the Public includes an extensive analysis of Donald Trump’s improbable rise to the presidency and the electoral triumphs of “Brexit” and concludes with a speculative look forward, pondering whether the current elite class can bring about a reformation of the democratic process, and whether new organizing principles, adapted to a digital world, can arise out of the present political turbulence.


 

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Garrett M. Petersen's blog about markets, institutions, and ideas.