Primary Sources

Presidential tea leaves; open-market elves; the fine art of sword-swallowing
Law Enforcement

The Out-of-Towners

Savvy tourists don’t need a regression analysis to know that they should ease off the gas when they come to a Podunk town, but two George Mason University professors now have the proof. By examining 29,752 speeding citations issued in April and May 2001 in Massachusetts, they found that who and where you are matters as much as how fast you’re going. An out-of-town driver stopped by a police officer in any given area has a 51 percent chance of getting slapped with a fine, versus 30 percent for a local, and the average fine for an out-of-towner is $5 higher. Local police are 10 percent more likely to fine out-of-town drivers and 20 percent more likely to fine out-of-staters, while state troopers ticket out-of-state drivers at a rate 28 percent higher than in-staters. The poorer the town (in terms of property-tax receipts), the more likely its cops are to target drivers passing through; fines also increase the farther away drivers live, since distance makes them less likely to contest the ticket. The study also found that women are more likely to get off with a warning, though the gender advantage disappears around age 75.

“Political Economy at Any Speed: What Determines Traffic Citations?” Michael Makowsky and Thomas Stratmann, George Mason University


Fair Trade

The knock on free trade has always been that it makes the poor poorer: Small-scale farmers have a hard time selling their goods at home when cheap agricultural goods from abroad flood their markets. This argument has been employed by foes of the Central American Free Trade Agreement, which aims to eliminate trade tariffs between the United States and five Central American countries and the Dominican Republic; the agreement, critics say, will expose the poor countries to competition from the United States but offer them little in return, since 80 percent of the region’s exports to the U.S. market already arrive duty-free. But the pro-CAFTA case gets a boost from a recent study in which three economists predict that in most cases, the trade agreement will actually improve the welfare of the rural poor in developing countries. The study finds that although rural incomes will likely decline as protective tariffs are phased out over the next 20 years or so, food prices in those countries will drop enough in almost every scenario to make up the difference—often with extra cash to spare. The typical rural household in CAFTA countries devotes a substantial chunk of its earnings to buying basic food items, and import tariffs (some as high as 154 percent) inflate their cost. As a result, the authors find, “lower food prices would mitigate and, in most cases, reverse the negative effect that lower incomes would have on rural welfare.”

“Does Agricultural Liberalization Reduce Rural Welfare in Less Developed Countries? The Case of CAFTA,” J. E. Taylor, A. Y. Naude, and N. Jesurun-Clements, University of California, Davis


Pink Slips and Red Ink

Even as newspapers around the country send reporters packing at the behest of the papers’ investors, a new study finds that the fastest way to profits may be spending more, not less, on the newsroom. Two marketing professors crunched four years’ worth of economic data from 1,400 daily papers in the United States, and they came up with a formula to determine the most profitable mix of spending—whether in the newsroom, to improve news quality; in the circulation department, to hook more readers; or in the ad sales department. They found that investing in the newsroom has the biggest impact on a paper’s bottom line: Improving news quality not only increases circulation; it’s actually as effective in luring advertisers as putting money into ad sales teams. (The authors also found that having more ads in a paper increases circulation as well, because Americans love to flick through them.) The researchers then ran the newspapers in their sample through their formula and found that most papers (60 percent of papers with small staffs and 80 percent with large staffs) are near the right spending balance; however, many (22 percent of small papers and 15 percent of bigger ones) could raise profits by putting more money into the newsroom. On the other hand, cutting newsroom spending, because it exerts a negative influence on other forms of revenue, inevitably forces further cuts and sends a newspaper into a “suicide spiral.”

“Uphill or Downhill? Locating Your Firm on a Profit Function,” Murali K. Mantrala et al., Journal of Marketing


Stalin Was Right

“A single death is a tragedy,” Joseph Stalin said. “A million deaths is a statistic.” Now a psychology professor at the University of Oregon has tried to figure out why, with a paper suggesting that an evolved behavioral response may mean that we don’t feel that genocide is real unless we can focus on a particular individual. People understand reality in two ways, he argues: one is intuitive and experiential, the other is analytical and rational. Making decisions based on intuition is usually easier and more efficient than forming a judgment after analysis, and although our rational processes are supposed to monitor our intuitive impressions, they’re often “rather lax.” A case in point: When participants in a study were asked to donate money either to a starving girl in Mali or to a larger group of famine victims represented only by a number, they gave significantly greater amounts to the wide-eyed girl. Moreover, contributions to the starving girl actually dropped when statistical information about the number of people suffering from severe hunger accompanied the girl’s name and picture.

“‘If I Look at the Mass I Will Never Act’: Psychic Numbing and Genocide,” Paul Slovic, University of Oregon

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