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Category: Culture

Why Is “Downton Abbey” So Popular?

It was Spring Break last week at Duke, so I enjoyed all that “free” time to do two things. During the day, I worked on revising a few research papers that are in various stages of production. At night, I watched all of the BBC’s ITV’s Downton Abbey.

I thoroughly enjoyed the show, but I wonder why I — and, apparently, hundreds of thousands of others — enjoyed it so much. When all is said and done, most of the characters are pretty one-dimensional, and The Wire this is not. But if you’ve not seen the show and plan on watching it, skip the next two paragraphs to avoid the spoilers.

Thomas and O’Brien, who are respectively a footman and the lady’s maid, are always bad. Anna and Bates, who are respectively the head housemaid and the lord’s valet, are always good. Perhaps the only character who exhibits a bit of depth is the dowager countess, brilliantly played by Maggie Smith.

(Yes, I know: Bates is in prison for the death of his wife. But is there any doubt that season 3 will bring a new development which will exonerate him?)

Our Risk Perceptions Do Not Make Much Sense

So much of what we think and do about risk does not make sense. (…) In Europe, where there are more cell phones than people and sales keep climbing, a survey found that more than 50 percent of Europeans believe the dubious claims that cell phones are a serious threat to health. And then there’s the striking contrast between Europeans’ smoking habits and their aversion to foods containing genetically modified organisms. Surely one of the great riddles to be answered by science is how the same person who doesn’t think twice about lighting a Gauloise will march in the streets demanding a ban on products that have never been proven to have caused so much as a single case of indigestion.

That’s Dan Gardner, in the introduction to his 2009 book Risk: The Science and Politics of Fear. Gardner also has another book out titled Future Babble, on the lack of accountability — not to mention the lack of accuracy — of experts making predictions.

I have the students in my Law, Economics, and Organization seminar read the beginning chapters of Gardner’s book as part of our in-class discussion of risk sharing and incentives, and they usually find Gardner’s book to be thought-provoking.

Speeding Fines That Vary With Income: Absolute vs. Relative Risk Aversion and Public Policy

Where there are posted restrictions, most European countries take speeding very seriously and levy hefty fines. The latest case in point is a 37 year-old Swedish man who was clocked at 180 miles per hour on a motorway between Bern and Lausanne in Switzerland.

Unfortunately for this driver of a new Mercedes-Benz SLS AMG, Switzerland doesn’t have fixed fines for speeding. Instead they use a formula similar to that in Finland where the fine is calculated based on the vehicle’s speed and the driver’s income. Back in 2002, Nokia executive Anssi Vanjoki had to pay a fine of $103,600 for going 47 mph in a 31 mph zone.

A student in my Law, Economics, and Organization seminar mentioned the article quoted above last week when I was explaining the difference between the twin concepts of absolute and relative risk aversion.

In economics, risk is not so much about what most people call risk as it is about gambles over income. In other words, risk preferences are defined over income or wealth. See here for an excellent discussion starting on page 64 in chapter 6 of David Friedman’s Law’s Order. So why would Switzerland and Finland have speeding fines that vary with income?