What changes? | A lesson in statistics, incentives, and internet stupidity 

I know this was a different type of video for this channel especially since it had pretty much no math but because I basically never write comments online I have to vent through making videos instead, thought this was an important topic. If you want to further support the channel and get the floating globe or engineering clock (which we also have a watch version of now) check out stemerch.com . Then all relevant links/books are in the description.

How dare you present two sides of an argument, this is the internet goddamit

"We'd like to offer you the opportunity to purchase being late, for the reasonable microtransaction fee of only $3!"

Official youtube disclaimer: This individual uses facts and logic to back up his statements. We do not endorse this type of reckless and irresponsible behavior. Listen at your own risk.

Thank you Zach for informing me that I am now an expert in economics after my 2 introductory courses

This has turned from engineering to psychology

On this same theme as the part about ABS, it's a well known fact that football helmets increase neck injuries, because the players don't bother avoiding head knocks and even use the helmet as a weapon.

"Intentions don't matter" *Angry Kant noises

The non-linear nature of things like policy is fascinating

I sat on the board of a youth organization which assisted hard-to-serve youth who didn't fall into any already-existing programs. That means the youth we dealt with were struggling with issues like school attendance, anti-social behaviour, etc. but without any obvious causes like drug use, mental health, parental abuse, and so on. The one initiative which was most successful for us was _paying_ kids for good behaviour. Instead of using money to hire social workers and psychologists, we took a tiny fraction of that money and just gave it to the kids when they hit certain benchmarks. For example, we would pay kids $1 a day to go to school if they went to every class. And at the end of the week they could double it if they'd gone to school every single day that week. To collect they had to come to their group therapy session, and they'd be handed cash at the end of it. What we paid out was a tiny fraction of what social workers and bureaucrats would cost, and we got wildly higher levels of compliance from the kids than we'd ever got before with traditional programs.

"Intentions don't matter" Friedman and Sowell have been trying to get people to understand this for literally decades. The fact that you have a cost-benefit analysis of *incentives* rather than *intentions* puts well ahead of our politicians and pundits. +10 brain points.

9:46 I've always heard this called "The Cobra Effect," named after some Indian Urban Legend (or possibly true event). Basically, this ruler of a town noticed there was a big cobra infestation, so he incentivized people to kill cobras by paying them to do so. Every dead cobra you brought him, he would pay you. But that actually just caused many people to become cobra breeders, and kill the cobras they bred to turn in the dead bodies for the reward money. So actually, the incentive system caused a massive increase the cobra population, which was the exact problem it was trying to solve. I've heard that the same thing happened with seat belts in cars as well as protective equipment in sports (better made helmets still led to the same rate of concussions).

Ferengi Rule of Acquisition #109: Good intentions and an empty sack is worth the sack.

Really interesting, especially with the late fee example. Informative as always man!

I just shared this with my brother who owns a grocery store and he has done a charity food drive for 4 years. For 2 years there was no incentive for the cashiers to get donations ans for the last 2 years, whichever cashier got the most donations in a week got a gift card and he told me he has got significantly less donations these last 2 years.

4:45 When I moved from one country to another I had to leave a lot of furniture and things. I gave them for free to the new guy that moved in, because it was either giving it to him or throwing it into the garbage bin. He paid me £10 and it pissed me off so much. He was receiving things that were worth £200. No money would've been better than £10.

This video is gold. I am currently studying economics and you succeed in summarising lots of important and basic information in 16 minutes. Kudos.

The first example might also be affected by the fact that people tend to document things more when there's a reason to document them. There were probably a lot of parents who were a couple of minutes late that slipped through the cracks before the fee was introduced.

"Statistics are confusing, but so are we". I absolutely love your videos about statistics: you managed to shift my perspective towards what statistics really means, and that sentence pretty much distillis it! You have a very good approach in explaining things and making them digestible, even to a thick head like me who always hated mathematics (both because I always been lazy and because of bad teaching)

I’m a statistics major, and I just LOVE your videos! The way that math can seem really clear cut but is actually very complex is so fun, and as a fan of books like “freakenomics” and “weapons of math destruction”, I find your videos great! I love that you approach things with such a sense of nuance, which is so necessary.

Hmmm I guess I always thought about this but was never able to put it into words. That is, the difference between “intentions” and “what actually happens” I’m glad I watched this video, thanks Zach!

From the employer's perspective that $3 doesn't even cover the wages that had to be paid for staff staying late. Charge overtime wage rate plus and admin fee.

ive noticed that ill do chores fine without any pay but as soon as someone offers very little to do a chore i suddenly don't want to do it anymore

This is kinda similar to that book, Freakonomics. Interesting.

Ooh as a former stat student I find this interesting 🤔

This actually makes a lot of sense to me. I often donate plasma because I get paid a decent amount to do so by the center. If they only have me like $5 each donation I would probably never go but if it there was no financial compensation I would probably still go every once and a while, but not as much as I do with a large financial incentive

'There are no solutions, only trade-offs' - Thomas Sowell

"I'll provide drug benefits to all my full-time employees. Mr. Burns made me a freelance consultant "

"Am I an expert? Yes. I am a super expert? Probably." The sarcasm is what defines this channel I love it.

It was a matter of time versus money: rather than having to juggle time to be on time, for a small fee, one could be there when it best suited the parent. Leaving the door open should annul the insurance. ■

The effect with ABS (9:00) should be changing again - as the tecnology gets older and older more and more people like myself probably never even saw a car without ABS (other than historical ones), not even speaking of driving one.

Now this is how you diss- I mean put up a argument. Too bad tweeter works on intents and healing crystals

I love the transition to economics from physics and pure math. It's like you pick a new field to learn about every once in a while, and that's awesome! Looking forward to math based economics videos in the future.

Excellent video. I have no idea how i stumbled on your channel but ive been on it for the past few hours. Being a car enthusiast/built a few race cars and other daily street cars. The abs bit was a good one to touch on. The system is designed to maintain control over your car by allowing the vehicle to keep the wheels moving instead of locking up like a vehicle without abs. This actually increases braking distance not reducing it but allowing you to steer out of the way of danger/obstacles where as a vehicle without it would not turn in a skid without the wheels being able to move and create grip on the ground. Huge mis understanding in the winter time and have heard countless people say/think they are safer with abs and do drive more erratic.

As someone who's going back to university in economics and who had big problems with maths in high school, your channel really helped me to get a good relationship with math again ! I went from having a hate relationship with math in school to thinking about a double major in math and economics ! I also really love your videos about statistics and social science like this one !

Love your presentation of not picking or even implying one side is better! I've seen so many videos that try to be non-bias but aren't, great job!

This channel @Zach Star has honestly taught me more about life than school has.

"After 5 pm, each child will be given an espresso and a snare drum"

Love the discussions as always!

The less than half a second of music at 6:43 gets me more than it should. Love your vids

Excellent video, but I disagree with the conclusion that "intentions don't matter, only the actual consequences matter". This is a statement that can only be made in hindsight, after the consequences of a decision have been observed. When discussing FUTURE decisions (that have not been made yet, and therefore have not had consequences), you cannot make such post hoc claims. Intention (when properly applied) is of PARAMOUNT importance, because it should take into account the likely consequences and most probable outcomes, while taking into account the "ways that things change" that you discuss in the video in a principled and probabilistic manner.

I really love the way this question is so fundamentally and elegantly phrased.

I actually noticed this in my country's recycling system where you get charged extra for liquids depending on the container. Some plastics are 15ct, other plastics are 25ct and glas is 8ct. I (and most people I know) always return the 25ct plastic and almost always the 15ct plastic. But carrying glas bottles back to the store for 8ct? Not worth it at all. But since they are worth money now you dont throw them away either but rather place them somewhere other people can find them if they actually need the money. So you rarely ever see plastic bottles on the streets but glas is everywhere.

I really like your videos on statistics. They make me question things critically and help me understand things that might not be obvious on the first glance Keep doing what you're doing 👍

We need more videos like this on RU-vid. Thank you for the amazing content!

We might not be able to predict stuff but we'll always have trial and error, and the ability to copy what worked for others.

Who would have thought that people willing to pay for you to stay with their kids would be willing to pay for you to stay longer with their kids : o

Loved this nuanced video! You've put into words the feeling I have about all these extremes

Excellent video Zach, I'd never thought about any of this before. Thanks again

tell people the car doesn't have abs but give them one that has

This was such a good video. It really gives so much perspective, and I love the psychology involved like with human behavior. Stuff is nuts

I really like math but also economics. The ability of economics to study complex and dynamic structures using mathematical tools is simply amazing. And being exposed to that power of economics through such interesting examples is very fun. The whole concept you touched upon and the examples you gave were pretty fascinating. Thank you so much for doing this

depending on the road conditions ABS can increase stopping distance. My Tacoma will cadence break right into cross traffic, if the road is the slightest bit gravelly or sandy (even sand leftover from sanding in the winter), into stopped cars, through stop signs, etc.

it was similar back in school....in order to raise more capitol for additional parking...they raised parking pass fees....and it really wasn't a great deal more. But it was "enough" to cause many students to quit using the higher cost parking spots, and paralleled (legally) just on the outskirts where tolls were lowered not subject to the school jurisdiction. so not only did the school not achieve more revenue, but actually lost revenue. so then they tried book fees..and yes, also not alot in revenue, but JUST ENOUGH that caused more than one student to get all entrepreneurial and start up a underground used book "club"...and the bookstore was NOW very full of books they could not seem to sell..another loss. apparently even "higher education" centers do not have a complete appreciation of the human capacity to act rationally and find efficiency. we see this all the time....even in children... for example: if you want to teach a child how to be honest, it's important not to be cruel or hard when they make mistakes..otherwise, you teach them how to be very effective liars. so it goes with the behavior of rather intelligent, but imperfect and incomplete humans. underneath the seeming chaos, is a logic and near mathematical eloquence of perfection that generates art unto itself. isn't life interesting? lets examine some other interesting components: when a pandemic hits the world, and in the urgent race to find a novel first time used new technology vaccine, AND phase 3 trials are skipped, AND indemnity of harm is guaranteed, how would you expect the masses to respond? favorably? this is where it's probably somewhere in the middle..some will consider the risk of the virus greater than the risk of the vaccine. Many will not. Let say that split is 50/50....or maybe it's 60/40...80/20? but the reality is that because detractors will not oblige the jab and these will represent a sufficient number of humans not protected, then herd immunity from vaccination will never be achievable. I think instinctively most humans DO KNOW about this paradox/conundrum. So, the question even some who are on the fence about the efficacy of the vaccines and their safety BECOMES this: given herd immunity is not likely to happen, why would I get the jab? If getting the jab means essentially nothing in the long run, how does that meter out my appetite for risk of a vaccine that may harm me over the long term? predictably, this means central governments will have to either use a stick or a carrot to motivate people getting the jab. and we will see another severe case of unintended consequences play out. simply put...this virus is likely to do much less harm than the policies surrounding it. check back in another year...it's going to be a dumpster fire.

Really enjoyed this type of video! Hopefully there’s more on the way

How many law makers do you think do their due diligence and ask themselves before making any decision that affects millions of people, "What changes?" Great work Zack!

I donate platelets pretty regularly, and I realized that if it were compensated, then it wouldn't be a friendly experience. It would be a transaction and I would be expected to deal with anything due to the fact I was being compensated.

As a computer programmer with an interest in math and physics (quantum computing among other topics), I really enjoy your videos. As someone with a graduate degree in experimental psychology who taught statistics and took an experimental econ course in college, I really enjoyed this video. If you could get the rest of the internet to "vent" as intelligently and as thoughtfully, I see potential for an excellent sociology video on that topic as well. I'll be waiting... good luck with that one.

“Intentions don’t matter” FINALLY SOMEONE GETS IT AND SAYS IT

I think one of the things causing the problems is the focus on political parties and single politicians instead of the actions and policies taken, and the disagreement on the most basic levels. We argue without using the same definitions, we fight over small things without taking the big picture in and seeing where our misunderstandings arise, we argue over whether a thing should do something instead of if it does something. And the problem is, many studies have some flaws, and without deep knowledge it is hard to know which ones to trust. And, even worse, many things can't be measured with a high degree of certainty because there are too many factors. Often enough we can only speculate how all the gears that are turned will influence the whole system, and which ones caused what. The way I think a proper discussion must be structured: Agree on a common ground you can define, values you agree on or sentences you both can agree on. Be sure you both mean the same thing with what you say. Define proper terms and phrases to discuss things where this sentence or value applies, why and how does it apply, and ask for clarification if you think the other needs to define it more clearly. And say in what ways you could change it and how that would work out realistically. Show the other person what you think would be a more realistic version of events following his change. And if needed, agree to disagree, but still find a common ground, which is acceptable to both of you. There is no need to get ugly.

I love the idea of your's, of recommending book on that particular topic.. It helps a lot! :-)

This was very informative ! Thanks Zach for sharing

I’ve heard that late fee example in a lot of books. It’s pretty common.

This was really really informative. Thank you good sir.

Totally agree with your last three min and the whole video in general. On that note, its important to understand that while I was in college (and still believe it true today) they purposefully teach you to write arguements with only facts that support your view and leave out those that dont support it. I always hate that they would grade me down for what i thought was an honest representation of the arguement but still have one side favored by me after analyzing the pros and cons. This is reflected throughout most societies, lawyers only argue their side, politicians rarely if ever concede points to opponents, etc

Dan Ariely has a great chapter on this in his book Predictably Irrational. Talks about Social Norms vs. Market Norms, and how people who were asked to volunteer to complete a task were most successful compared to a group who was paid a small amount (finished last), and a group who was paid a moderate amount (finished 2nd, but still below the volunteers). Really interesting stuff; incentives always send my brain down rabbit holes

One thing that I wish you had included. Any one policy change upsets the status quo, and that's generally a mess as routines are disrupted. Disruption later gives way to reorganization, and THAT's when a policy's effect can be fully assessed. I'm sick of people adamantly opposing any and all systemic changes because the short term is chaotic.

Thank you for making this !

Wow that's a great video ! Very informative and tied to the real world

@Zack Star The two basic lessons of economics are: 1. Voluntary trade is good. 2. Tradeoffs. Nothing is without a cost. TANSTAAFL. Minimum wage laws go contrary to both those fundamental lessons. They are a really bad idea. Thankfully, RU-vid and the internet has a lot of simple explanations that anyone -- even a person without a course in econ can understand. Cheers. (Just FYI, I had to do a few econ courses to get my PhD in econ from UC Berkeley.)

With the car example you gave it reminded me of a quote (unfortunately I do not know who originally said it) that went something along the lines of "If you want to reduce the amount of accidents to zero, put a spike on every steering wheel" of course it is a joke, but the point is that by increasing the risk to drivers, most will drive more carefully

Awesome video!, I'm adding those books to my reading list, thank you!

$3 for a half hour of childcare, great price. In some places when seat belts were introduced and required, drivers drove faster and got into more wrecks for a while.

I like how you were bold enough to take up that topic at the end 👍👍 a lot of people skip knowledge to avoid controversy but you really put it well to make it impossible to be dragged into one

Used to laugh at an idea to improve auto safety. Poor brakes, no seatbelt, a milk crate for a seat, and a big sharp spike in the middle of the steering wheel pointed at the driver. Accident rates will tank immediately.

Intentions matters only when it exists collectively in the masses, but as an individual one must see what is actually happening. Great video. ☺

This is why I'm subscribed to this channel. Good job 👍

Zach, u r a super expert and a super star in my eyes

This video is so awesome, I learned something and it was very educative, persuasive, and smart. So awesome

The point of looking at both positives in negatives makes me think of a somewhat related phenomenon we see in people, and especially on the internet. People often take information as evidence that it supports their hypothesis, but they seem to rarely ever ask themselves how likely that evidence would be if their hypothesis was incorrect.

Excellent video, really interesting 👍

12:57 funny I was thinking exactly that. That said I will still use that example out of context to prove a point one of these fine days.😂

Woah, this is quite insightful and enlightening!

Thanks for your videos!! They are surprisingly uplifting :-) I can't help wondering what would happen, if there could be a do-over of the luxury tax, with an added a 15-20% luxury stuff import tax.. guess we'll never know!

Small note on the "intentions don't matter" line - the donations example is a counterexample to that idea, since people with the intent of being charitable did work harder than those who re-contextualized the exercise as a way to get money. I actually did take (way more than) the 2 econ classes required to be a super-expert (:P) and while you're right to say intentions are not the be-all and end-all of a policy/exercise/etc. I think more accurate way of portraying it is that intentions and results are a feedback loop. Intentions will drive how people behave and that in turn will drive the results which, over time, may alter the intentions and so on and so forth. Perfect example is how the property market started with the good intentions of people getting homes, but over time became a place for the rich to invest their cash and so will inevitably crash when those homes need to be liquidated, and the cycle starts again.

Did they buy the boats from elsewhere because American boat manufacturers were bad since many years? And the added tax was the tipping point to take their business elsewhere?

I really liked your video. This is such a nice content!! :)

maaan i love your videos.... its fun and i learn stuff

I feel very lucky for finding this channel!!!!

Given the ABS and incentive program, don't we have to look at the effects over time to actually come to a conclusion? The initial impact of a change isn't the same as the total impact.

Zach, this was a great video. Thank you

Interesting, informative and worthwhile video .

Hey do you recommend that I read the books that you recommend because you probably already told me the golden nugget in that book in the video?

Finally a video , waiting for like ages, you are my favourite youtuber Zach Star😃😃👍❤️ I have watched all the videos on your channel

Very well presented. These concepts play strongly into game development. Game developers need to ask 'what changes' when they consider adding more rewards, taking away rewards, or adding "safety nets".

Probably your best video, Zach. Hats off!

This is an important lesson for humanity. Assume no bias and critically think of the consequences

Love the discussion as always !

Great video. Thanks.

This video was gold. Looking forward to more