There's a handful of economists, maybe a dozen or two, whoare recognizable by name. Raj Chetty likely isn't one of them. At 29, he was the youngest tenured professor in the history of the economics department at Harvard. Now, at the age of 33, he's got a MacArthur Genius award and this past Friday he won the John Bates Clark Medal given by the American Economic Association to the best economist in the country under 40.
Chetty uses real-world experiments to challenge traditional assumptions of economics. One study he did took place at a grocery store. The goal of the experiment was to gather data about how we think about taxes.
Think of the last time you bought shampoo. Did you calculate what it would cost with sales tax?
"So the traditional assumption in economics," says Raj Chetty, "is that you are keeping such taxes in mind when you make purchasing decisions."
Chetty wanted to test that assumption, so he set up an experiment. He went to a large grocery store chain in California and asked if he could put special price tags on items.
"We added these tags that said $7.99 plus California sales tax equals whatever the price of the item was," Chetty says.
The owners limited the experiment to hair care and cosmetics. They assumed the price tags would cause customers to buy less. This assumption is the opposite of what traditional economic theory tells us. It turns out the store owners were right.
"We ended up finding that demand for these products fell by 8 or 10 percent," Chetty says. "So it was as if everybody was ignoring the tax before we put these tags on." Chetty says.
What sets Chetty apart from many of his colleagues is that he comes up with creative ways of using data to understand how the economy works. Henry Aaron is an economist at the Brookings Institution. He says Chetty has a unique ability to look at data sets and ask the right questions.
"And when you marry those two you get results to which people pay attention and I think that's been the case with Raj Chetty," Aaron says.
For policy makers, Chetty's studies of real-life economic behavior could be a very useful tool.
The Latino Decisions poll also found that 87 percent of those polled would apply for citizenship if a new law allowed them to.
For this week's Sandwich Monday, we try a new cooking gadget: the Egg Rollie. It's basically a vertical grill that cooks your eggs in tube form.
Vietnam has sent what analysts believe could be the remains of a member of the American military who died in the country during the Vietnam War. After a repatriation ceremony at the airport in Da Nang Sunday, the remains were sent to Hawaii for examination and possible identification.
The pitcher pitchman is getting a new computer-generated look and will be talking in his new ads. But fans of the old guy can take heart: Kool-Aid Man still prefers to bust through things.
Venezuelans elected a president over the weekend. Nicolas Maduro, the hand-picked successor of Hugo Chavez won a narrow victory over Henrique Capriles, a pro-business candidate.
And on the Monday after the elections? "It's rather quiet everywhere," says Daniel Duquenal, a blogger and small business owner based in Yaracuy. "And that also happened last year when Chavez was reelected. On that Monday, it was more like a funeral, the mood, than any victory celebration."
Duquenal has been critical of Chavez's government in posts he has written over the last ten years. He also acknowledges that "whoever won would be faced with very difficult choices," as Venezuela continues to weather a rocky economy. But he had hoped that under Capriles, Venezuela would end Cuban aid -- which reaches into the billions of dollars -- and weapon purchases. Duquenal sites these as sources of graft and corruption in the country. Even if Capriles couldn't balance the budget, it would be more manageable.
As a business owner, Duquenal expects more of the same -- a tough economy in which to do business in. "Whatever profits my business did last year has been completely wiped out and we're in obligation to reduce our payroll."
How does he stay optimistic? He feels he has to. "You do have an obligation to your employees. I can be extremely depressed but I still need to go and fight because I need to make payroll." Even though about half his employees are Chavistas and supporters of the newly elected president.
There's lots of i-dotting and and t-crossing going on right now on Capitol Hill as the big immigration reform bill gets ready for its big reveal on Tuesday. One of the last issues that does seem to have been worked out is what to do about farm workers. Of the one million farmworkers nationwide, somewhere between 50 and 80 percent are thought to be here illegally.
So, what might the immigration compromise look like down on the farm?
When I asked Peter Osterkamp, he was finishing up paying a bunch of fertilizer bills, and about to head out to check on his onion and sugar beet fields. Osterkamp is a fourth generation farmer in southern California’s Imperial Valley, and has about 30 employees.
He says he decided the current immigration system was broken when, a few years ago, he wanted to promote a temporary worker -- “so bright, so intelligent and willing to work so hard,” Osterkamp says -- in to a full-time job, but discovered the man had entered the U.S. illegally.
Because Osterkamp says it can be hard to find people willing to work the grueling hours and hard labor involved with farm work, he wanted to see if he could get a work visa for the man.
Osterkamp says he spent hours trying to navigate the H-2A visa program which currently provides a very limited amount of visas to immigrant farm workers, to “and the answer was always sorry, there's nothing we can do.”
That would change under the current farm-worker proposal recently hashed out between U.S. farmer groups and the United Farm Workers. It would allow all farm workers already here without documents to apply for temporary legal status if they stay in agriculture for five years. Diana Tellefson Torres, executive director of the UFW Foundation, says that would be good not just for farmers, but also for their workers.
“They’ll be able to work in the fields without fear of getting deported immediately,” says Tellefson Torres. “When there are injustices at the work place, they're not going to have to think ‘Well, I don't have my documents and so I can't speak about what's going on right now.”
The compromise would also increase the number of new visas open to immigrant farm workers each year, and allow those workers to change employers, rather than be tied to a single farming operation.
The idea of having a new “free-floating” pool of immigrant farm labor, and how to regulate that pool, raises a new set of questions for the agricultural economy and beyond, says Philip Martin, an immigration economist at University of California, Davis.
“What's going to prevent me, because I'm legally in the U.S., from going and working in construction as opposed to agriculture, because I can make more money?” Martin says. “In theory, my work permit is only good for agriculture, but I don't know exactly how we're going to monitor that.”
These are just the sorts of details that the Senate and regulators would need to hammer out in the coming months, if the compromise is going to last.
In Europe, more than 23,600 people were victims of human trafficking during a recent three-year period, according to a new European Union report. The comprehensive study, which gathered data from more than 30 nations, found that trafficking increased by 18 percent between 2008 and 2010.
Every Monday, one Marketplace staff member offers their favorite stories from the past week. Here’s a quick hit of some of the things that caught my ear on the Marketplace airwaves recently.
- Should you include your race on your resume? Not something I’ve thought much about. As a white person, it’s easy to think sometimes that we’ve achieved a color-blind society. But of course, race can still play a major role in the workplace. We tackled the topic on last weekend’s Marketplace Money.
- With the passing of Britain’s Iron Lady Margaret Thatcher, we came up with a couple of nice ways on the PM program to look at her economic legacy and have a bit of fun.
- I was happy to hear that innovation is not just the purview of the young in an interview done by Jeremy Hobson on Marketplace Morning Report on Monday.
- While we’re on the topic of innovation, our sustainability reporter Scott Tong did a nice spot on Tuesday’s afternoon show about what the impending bankruptcy of Fisker motors says about differences towards innovation on the East versus West Coasts. I liked this story a lot because Scott had a really original angle that I wasn’t hearing anywhere else in the coverage of Fisker’s woes.
- We took a more tech-focused look at Fisker with David Brancaccio and our Marketplace Tech cast.
- Pausing for a moment for a nod to a really strong freelance piece on Thursday: Youth Radio’s enterprise reporting on what it’s like to have a juvenile record and be looking for work. I thought this piece had strong voices and gave me a great sense of how mistakes made at a young age can cost you so much.
- And finally, to end on a light note: Sabri Ben-Achour did a fun piece on the lunatics, uh athletes, who run the North Pole marathon and how much it costs to pull it off.
Kenya's Rita Jeptoo won the women's race. It's her second victory at Boston. Ethiopia's Lelisa Desisa won on the men's side. It's his first victory at Boston.
Even though temperatures were less than normal late in the season, winter 2012-13 was still on the warm side.
When a food-safety student found out her dog's food was being recalled for possible contamination with salmonella, she learned a few things about how germs travel between critters and their humans.
When a food-safety student found out her dog's food was being recalled for possible contamination with Salmonella, she learned a few things about how germs travel between critters and their humans.
During a time of paralysis in Washington, states are taking the lead on a whole host of issues, from guns and gay marriage to education and tax policy. Of course, not everyone applauds the laws they pass. The Daily Show's Jon Stewart recently called states the "meth laboratories of democracy."
As the Senate prepares to vote on gun legislation, there are more mixed signals on what will be the fate of a bipartisan plan concerning background checks of gun purchasers.
America's seismic demographic shift is upending life in our suburbs, cities and our popular culture. So why are we still clinging to the same stories to make sense of these changes?
In a long interview with The Dallas Morning News, the former president says that "nobody likes to be criticized all the time," but that he made the right decisions based on the information he had at the time.
The Dish TV Network is making a big bid to get into the mobile space. It wants to buy the country’s third largest cellphone carrier Sprint-Nextel for more than $25 billion.
It's no surprise that Google is expanding, and one place where they are growing fast is New York City. The company's offices, which are located in the downtown Meat Packing neighborhood, feel part warehouse, part office building, and part elementary school. Chief Information Officer Ben Fried takes us on a tour of Google's East Coast headquarters and discusses how its culture differs from Silicon Valley.
The satellite TV distributor hopes it can outmaneuver Japanese phone company SoftBank for control of Sprint.
Federal aviation regulators say a pin on the horizontal stabilizer could be prone to corrosion and "premature failure."