🍏 The Freakonomics Review 🍊

Brain Computers

I am engaged in intertemporal substitution. You won’t notice the difference, but every letter I type is one more second of intertemporal substitution.

What is this concept?

The typical substitution we think of is when we change our consumption patterns in response to changes in relative prices. When the price of hamburgers increases, we buy fewer patties and buy more hot dogs. Substitution!

Intertemporal substitution occurs when we change the timing of our actions based on changes in relative prices across time. This happens at the end of every calendar year when people rush to donate before the New Year. Donating on December 31 counts as an immediate deduction, but donating on January 1 takes a whole year to count as a deduction. Since it’s cheaper to donate on December 31, you see a spike at the end of the year and a cliff at the beginning.

So what’s my intertemporal substitution? I’m going on vacation this weekend! My daughter turned 8 yesterday, and today I’m away with her on a special day.

But, of course, when I say “yesterday” and “today”, I mean relative to when you’re reading this. Because I’m writing this almost a week in advance. Normally I write my newsletter about an hour before I send it. But since that’s when I’ll be spending prime-time with my daughter, the cost of writing it at my normal time is high. But right now the cost is low, so I’m shifting my writing to today. Intertemporal substitution!

Anyway, if everything goes according to plan, today’s adventure will be in next week’s video. I’m excited to share it because it’s a story I’ve been wanting to tell for a long time.

But what about today’s video?

The Freakonomics Review!!

I’ve teased this for at least a month, and today it has arrived. I’m publishing my review of Freakonomics 16 years after my first read. Did the strange orange within an apple maintain its flavor? Or did it rot?

The review was fun, and I filmed it in a beautiful canyon near my campus. So come for my insights but stay for the beautiful scenery.

A Project of Your Own

I’m a big fan of Paul Graham essays, and his most recent one is fantastic. He talks about the importance of working on your own projects. Here was one of my favorite lines:

It's a bit sad to think of all the high school kids turning their backs on building treehouses and sitting in class dutifully learning about Darwin or Newton to pass some exam, when the work that made Darwin and Newton famous was actually closer in spirit to building treehouses than studying for exams.

The essay is consistent with my argument on how to stand out as an economics student.

Brain-Computer Interface Reaches New Milestone

This article doesn’t come with the cool video like Elon Musk’s monkey playing pong. But it’s pretty cool that brain-computers are getting faster at recognizing letters in our thoughts. The best part of the article is the clear intuition for why imagining writing letters does better than just imagining their position on a keyboard:

“Why it works so much better than plain typing...is because each handwritten letter has a different pen trajectory associated with it, and a very different pattern of finger motions and motor actions. This evokes a unique pattern of neural activity that’s easy to distinguish”

This is a principle that is important in economics too. Identifying causal effects requires sufficient variation. Without significant differences in treatment, we can’t detect differences in outcomes