What Drug Dealers Can Learn From Walgreens, with Stephen J. Dubner
Author Stephen J. Dubner analyzes the economics of drug dealing in the most Freakonomics way possible, comparing the capitalist tendencies of Walgreens with your friendly neighborhood gang of crack dealers.
Stephen J. Dubner is an award-winning author, journalist, and radio and TV personality. He is best-known for writing, along with the economist Steven D. Levitt, Freakonomics (2005) and SuperFreakonomics (2009), which have sold more than 5 million copies in 35 languages. Their latest books are When to Rob a Bank... and Think Like a Freak (2014).
Dubner is also the author of Turbulent Souls/Choosing My Religion (1998), Confessions of a Hero-Worshiper (2003), and the children's book The Boy With Two Belly Buttons (2007). His journalism has appeared in The New York Times, The New Yorker, Time, and elsewhere, and has been anthologized in The Best American Sports Writing, The Best American Crime Writing, and others.
Freakonomics, published in April 2005, was an instant international best-seller and cultural phenomenon. It made numerous "books of the year" lists, a few "books of the decade" lists, and won a variety of awards, including the inaugural Quill Award, a BookSense Book of the Year Award, and a Visionary Award from the National Council on Economic Education. It was also named a Notable Book by the New York Times. SuperFreakonomics, published in 2009, was published to similar acclaim, and also became an international best-seller.
The Freakonomics enterprise also includes an award-winning blog, a high-profile documentary film, and a public-radio project called Freakonomics Radio, which Dubner hosts. He has also appeared widely on television, including a three-year stint on ABC News as a Freakonomics contributor. He also appeared on the reality show Beauty and the Geek. Alas, he played neither beauty nor geek.
Dubner's first book, Turbulent Souls, was also named a Notable Book, and was a finalist for the Koret National Jewish Book Award. It was republished in 2006 under a new title, Choosing My Religion, and is currently being developed as a film.
The eighth and last child of an upstate New York newspaperman, Dubner has been writing since he was a child. (His first published work appeared in Highlights magazine.) As an undergraduate at Appalachian State University, he started a rock band that was signed to Arista Records, which landed him in New York City. He ultimately quit playing music to earn an M.F.A. in writing at Columbia University, where he also taught in the English Department. He was an editor and writer at New York magazine and The New York Times before quitting to write books. He is happy he did so.
He lives in New York with his wife, the documentary photographer Ellen Binder, and their two delicious children.
Stephen J. Dubner: In our first book Freakonomics we wrote about the economics of a crack-selling gang in Chicago. And it was really fun and interesting because we have these assumptions that if you sell drugs, you become a millionaire. And it turns out that the average criminal, drug-selling gang is set up kind of like a franchise, kind of like a McDonald’s really. And that if you own 10 McDonald’s, you do pretty well; you make good money. And if you’re a manager at one you do okay. But if you’re an employee at one, you know, you make very little money. And it turns out that’s the way a drug gang works. That the vast majority of the profits are concentrated at the top. And so we made the argument that, you know, the average crack dealer isn’t, you know, they’re not very well off and the average crack dealer lives at home with mom and often has a second job at a place like McDonald’s. Well if crack dealers could take lessons from their legitimate drug-selling counterparts, they could do a lot better. So here’s what I mean by that.
Generic drugs, we think — most people seem to think because they’re generic, they’re priced the same. That seems to be kind of the way we think it should work. But as it turns out if you look at the pricing data on generic drugs across different companies, retailers, that sell it, there are instances where I could go to a Walgreens and buy a bottle of, you know, pills, generic — let’s say a statin — and it would cost about $110. And the same, exact bottle of pills at a different place like a Sam’s Club or a Costco would cost literally about $10 or $15. So a markup of like 1,000 percent for the same product that is sold by two companies that look pretty similar and that are generic, moreover. So when you look at this data it’s just shocking. You think how can this possibly be? Not only how can they get away with it? I mean anybody can charge anything they want. Nobody has to buy it, but why would people buy it? And it turns out the reason is very simply that most people who get their, buy their prescriptions in a given place, especially a lot of older people who you get more drugs as you — you buy more drugs as you get older and you’re more on a kind of plan. They just kind of make the assumption that a generic pill is going to be priced the same from one to the next. But it turns out there’s massive, massive disparity in that.
So really, you know, Walgreens is way better at dealing drugs than drug dealers are if the goal is profit maximizing. And I think that even though the people who are just selling at the counter at Walgreens, they are I’m sure not making very much money. You know the shareholders of Walgreens appreciate that a firm like Walgreens is really good at dealing drugs and profit maximizing. So from an economic perspective you have to applaud them. From a fairness perspective, you have to decry them. On the other hand that’s what capitalism is about. It’s about, you know, caveat emptor, you are free to shop around. And if someone can take advantage of what’s called information asymmetry, right, people on different sides of a transaction — I know a lot more about this price than you do — they can exploit it. That’s what’s good about the digital revolution is it makes information asymmetry much harder to maintain. So I don’t know if such an app exists, but a good one would be a very, very, very, very simple price comparison for generic drugs. And it would presumably, off the bat, save, you know, elderly Medicare patients billions of dollars within a month. Of course it would cut into the corporate profits of those shareholders, but that would work.
Author Stephen J. Dubner analyzes the economics of drug dealing in the most Freakonomics way possible, comparing the capitalist tendencies of Walgreens with your friendly neighborhood gang of crack dealers. He also explains how drug stores like Walgreens are able to get away with marking up their generic drugs as much as 1,000 percent, exploiting informational asymmetry to rip off those who don't know any better. Dubner's latest book, co-authored by Steven D. Levitt, is called When to Rob a Bank.
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Whether or not women think beards are sexy has to do with "moral disgust"
- A new study found that women perceive men with facial hair to be more attractive as well as physically and socially dominant.
- Women tend to associate more masculine faces with physical strength, social assertiveness, and formidability.
- Women who display higher levels of "moral disgust," or feelings of repugnance toward taboo behaviors, are more likely to prefer hairy faces.
Beards and perceptions of masculinity<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjU5OTg0MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0NzkxMjM3N30.cH-GqNwP5GVqvstgJWAhBPn1B_lYpVEAI0I7iax7EQw/img.jpg?width=1245&coordinates=0%2C1900%2C0%2C849&height=700" id="caae6" class="rm-shortcode" data-rm-shortcode-id="cb0a355a4e8e1899789bc45f3f7aef56" data-rm-shortcode-name="rebelmouse-image" />
Photo Credit: Wikimedia<p>The study used 919 American (mostly white) women ages 18-70 who rated 30 pictures of men they were shown with various stages of facial hair growth. The photographs depicted men with faces that had been digitally altered to look more feminine or more masculine, with a beard and without a beard. The women rated the men according to perceived attractiveness for long-term and short-term relationships. The study found that the more facial hair the men had, the higher the men were rated on their attractiveness, particularly for their suitability for a long-term relationship.</p><p>Part of this might be attributed to facial masculinity — i.e. protruding brow ridge, wide cheekbones, thick jawline, and deeply set narrow eyes — which conveys information to a woman about a man's underlying health and formidability. Women tend to associate more masculine faces with physical strength and social assertiveness. It can also indicate a man with a superior immune response. The researchers suggested that their findings favoring bearded men could be due to the fact that facial hair enhances the masculine facial features on a man's face, like creating the illusion of a thicker jaw line. This could communicate direct benefits to women like resources and protection that would enhance survival among mothers and their infants. In other words, while a beard doesn't mean superior genetics in and of itself, it might be a primitive, ornamental way of saying, "Hey girl, I'm a testosterone-fueled lean, mean, pathogen fighting machine." <br></p><p>It could also be that a beard becomes its own destiny. The researchers in this study cite prior research that found that by growing a beard, men felt more masculine and had higher levels of serum testosterone, which was linked to a higher level of social dominance. They also tended to subscribe to more old-school beliefs about gender roles in their relationships with women as compared to men with clean-shaven faces.<span></span><br></p>
What does disgust have to do with beard preference?<p>Obviously, not all women dig beards. The researchers were particularly interested in what traits make a women prefer bearded men over clean-shaven faces. They looked into several factors including a woman's disgust levels on various concepts, her desire to become pregnant, and her exposure to facial hair in her personal life. </p><p>According to the study, women who were not into facial hair were turned-off by potential parasites or other critters they imagined could be in the hair or skin. Women ranking high on this "ectoparasite disgust" scale might have viewed beards as a sign of poor grooming habits. However, women who ranked higher in levels of "pathogen" did find the bearded men to be desirable, possibly because they perceived beards as a signal of good health and immune function. An intriguing discovery in the study was links to morality. Women who displayed higher levels of "moral disgust," or feelings of repugnance toward taboo behaviors, were more likely to prefer hairy faces. The authors opined that this could reflect a link between beardedness, politically conservative outlooks, and traditional views regarding performances of masculinity in heterosexual relationships.</p>
Additional findings<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjU5OTg1My9vcmlnaW4uZ2lmIiwiZXhwaXJlc19hdCI6MTYyNDI1NjUyOX0.P9B8WbmJR0q4nfzYZKbuNSA-2SAigVWJgrQE-_Gxlds/img.gif?width=980" id="49143" class="rm-shortcode" data-rm-shortcode-id="2ed3b1d6f20fc170bf2974646e565e8d" data-rm-shortcode-name="rebelmouse-image" />Giphy<p>The correlations that existed between married and single women's rating on the attractiveness of beards were not particularly clear, although the researchers noted that single and married women who wanted children tended to find beards more attractive than the women who didn't want children. They also found that women with bearded husbands found beards to be more attractive, which might indicate that social exposure to beards influences how desirable they are perceived of as being. Or it could be that men with wives who like beards grow beards.</p><p>It's important to note that culture plays a huge role in how attractive women perceive certain male characteristics as being. This study looked at a small, culturally specific group of American women, so no big, universal claims should be made about masculinity, facial hair, and male desirability to women. However, research like this is important in highlighting how human grooming decisions are driven by much more than fashion trends. Sociobiological, economic, and ecological factors all play a part in the way we choose to present ourselves.</p>
Yet 80 percent of respondents want to reduce their risk of dementia.
- A new MDVIP/Ipsos survey found that only 35 percent of Americans know the symptoms of Alzheimer's disease.
- Eighty percent of respondents said they want to reduce their risks.
- An estimated 7.1 million Americans over the age of 65 will suffer from Alzheimer's by 2025.
Credit: logika600 / Shutterstock<p>Remaining healthy requires regular screenings. Here again we see a disassociation between risk reduction and proactivity. Seventy-seven percent of respondents don't talk to their doctors about lifestyle habits that support brain health; 51 percent have never been screened for depression; 44 percent have never had a neurological exam; and 32 percent have never been screened for hearing problems. </p><p>Common early warning signs of dementia, <a href="https://news.yahoo.com/americans-worry-alzheimers-disease-survey-140644803.html" target="_blank" rel="noopener noreferrer">according to</a> Dr. Jason Karlawish, co-director of the Penn Memory Center, include repetitive questions and stories, difficulties with complex daily tasks, and trouble with orientation. </p><p>In terms of intervention, <a href="https://bigthink.com/21st-century-spirituality/does-lack-of-exercise-lead-to-dementia" target="_self">exercise</a>, <a href="https://bigthink.com/surprising-science/obesity-dementia" target="_self">diet</a>, building a <a href="https://bigthink.com/mind-brain/brain-reserve" target="_self">brain reserve</a>, and challenging your brain (such as learning a new language or musical instrument) are all proven methods for staving off the ravages of Alzheimer's. Oxytocin has also <a href="https://bigthink.com/mind-brain/alzheimers-oxytocin" target="_self">showed promise</a> in brain-addled mice, while researchers found positive results for a <a href="https://bigthink.com/mind-brain/intermittent-fasting" target="_self">group of intermittent fasters</a> in promoting neurogenesis. </p><p>Epidemiologist Bryan James says that dementia is <a href="https://www.npr.org/sections/health-shots/2013/04/15/176920391/how-exercise-and-other-activities-beat-back-dementia" target="_blank">not an inevitable result</a> of aging. </p><p style="margin-left: 20px;">"It's simply not pre-destined for all human beings. Lots of people live into their 90s and even 100s with no symptoms of dementia." </p><p>Professor of neurology at Boston University School of Medicine, Andrew Budson, <a href="https://news.yahoo.com/americans-worry-alzheimers-disease-survey-140644803.html" target="_blank" rel="noopener noreferrer">recommends</a> aerobic exercise and the Mediterranean diet. As has long been known, whole grains, fruits and vegetables, fish and shellfish, and healthy fasts like nuts and olive oil seem to have brain-boosting properties. </p><p>To learn more, take the <a href="https://www.mdvip.com/brain-health-iq-quiz" target="_blank">Brain Health IQ quiz</a>.</p><p><span></span>--</p><p><em>Stay in touch with Derek on <a href="http://www.twitter.com/derekberes" target="_blank">Twitter</a>, <a href="https://www.facebook.com/DerekBeresdotcom" target="_blank">Facebook</a> and <a href="https://derekberes.substack.com/" target="_blank" rel="noopener noreferrer">Substack</a>. His next book is</em> "<em>Hero's Dose: The Case For Psychedelics in Ritual and Therapy."</em></p>