Powerball

I'm buying a Powerball ticket
(Or several, or even a thicket),
In hopes I may win
A billion bucks in
The unlikely case that they pick it.

The money on tickets I spent
Undoubtedly wastefully went,
As the odds it's apropos
Work out to point oh-oh-
Oh oh-oh-oh three-four percent.

The lotteries have their detractors,
Who point out, among other factors:
They regressively tax
The shirts from the backs
Of poor and irrational actors.

But what should one say in regards
To those who've considered the odds?
The learned and lettered
Who ought to know better
But still end up wagering wads?

We're not quite as dumb as we seem
To fall for the lottery scheme;
Though remote is the chance,
There's still the romance
That our dollar may buy us a dream.

   **********************

First of all: happy New Year!
Greetings dear readers, and especially (and apologetically) to those of you who have enquired as to when Dr. Goose would break his long blogging silence. Happy to be back though, things being as they are, I make no promises or predictions as to the length of the next hiatus.

Now to the topic at hand: it has long been accepted that participation in a lottery is economically irrational because the expected payout is so small and remote. However, in the realm of behavioral economics - i.e., the psychology of the economic choices that people make - such participation follows predictable patterns. For example, in economic hard times, lottery sales increase somewhat; not because the jackpot is any likelier, but just because the dream is that much sweeter. Behavioralists would also warn us that we should not really want to win, lest the subsequent let-down rob us of the enjoyment in everyday things.

Of course, you and I have virtually no chance of winning. As disclosed by the Powerball organizers, the odds are just 1 / 292,201,338, or 0.00000034%. We are literally (or statistically) more likely to die in an asteroid strike.

Bottom line: winning is bad, the odds are effectively nil, but the game is cheap and the dream is sweet. So, "play on, America" - I, too, will join the queue of hopefuls.

Skills Mismatch

Though an HR director named Schmidt
Looked for candidates with the right fit,
The conditions she set
Could only be met
By the one who had recently quit.

One of the puzzling aspects of America's ongoing high unemployment rate is the so-called skills mismatch: in spite of millions of unemployed, there are also millions (though not as many) of unfilled positions for which employers cannot find applicants with the right skills. The Wall Street Journal looks at this conundrum and finds an alternative explanation: that the software used to screen candidates imposes so many requirements that only someone who has already done the job would qualify. One may infer an element of behavioral economics behind this; evidently, the aversion to a less-than-perfect candidate is greater than the desire to fill the position.

Thanks to Jodi Beggs of Harvard University and Economists Do It With Models, who requested a behavioral economics limerick. Hope this fits the bill, Jodi!

Behavioral Research

An economist made a regression
Of love during growth and recession.
"What my scatter plot shows,
I cannot disclose,"
Said she, "for the sake of discretion."

My thanks to my fellow "tweep" @Bankrchick for her "patented Dating Age Cohort Theory."

New Year's Resolution

A researcher of deep comprehending
Said: "To hold down medicinal spending,
One would certainly fare well
To take to the stairwell,
And spend 30 minutes ascending."

This past weekend, The New York Times asked its economics columnists to think deeply on the issues and solutions that may have an impact in 2012. Professor Richard Thaler, who teaches economics and behavioral science to business students at the University of Chicago, suggests that our national health care spending crisis can be ameliorated with a few "nudges" from employers. The thesis of “Nudge,” by Dr. Thaler and Cass R. Sunstein, is

that “choice architects” can often help people achieve their goals simply by making the necessary steps easier.

According to Dr. Thaler, employers can nudge their employees in the right direction by, among other things, subsidizing healthy foods in the cafeteria, enticing workers to use the stairs instead of elevators, and tweaking insurance plans to make life-saving prescriptions free, thereby encouraging patients to keep up with their medications.