Wednesday, February 20, 2008

Freakonomics - Desi 'Ish-style'

How come you have never seen a venture capitalist on a motorbike? How come most doctors in South India are named Vijay Lakhsmi or Ramamurthy? Just like the immensely successful book did, this post endeavours to answer these and a few strange, ironic or freaky occurrences which tend to find their way into our day to day lives.

None of these questions or occurrences might have any bearing on your life.

Come to think of it, when was the last time you read something that actually had a bearing on your life?

So, let's get started

Why do people prefer borrowing a DVD from a library, even though buying one is in most cases cheaper?

Yes, buying one is cheaper. And more so, you get to own it, build a library and do all those sorts of things. Yet, statistics say that the libraries are the most successful. They have the maximum foot-falls and make more revenue.

Why so then? I asked around and these are some of the answers I got:

  • Borne out of Habit
  • Libraries are more civil places than back-alleys which sell pirated DVD's
  • Wider selection

And so on, but then each of these can be easily refuted, it’s like saying the ICL won't be a success because of the IPL, there must be something more to it, or so I thought.

Most DVD's are only watched once, therefore there intrinsic value plummets after you watch them the first time. More so, they are not so easy to store and those who do manage to store them successfully will tell you that they are so inundated with requests to borrow DVD's from friends, that very soon they don't have much of a collection.

While this is true, it didn't quite convince me enough. So, about 3 months ago, I went ahead and bought 10 DVD's from the black market and also parallely began renting movies one week at a time, such that I borrowed approximately 10 over a 3 month period. All other conditions remained the same – standard of print, popularity of movies and so on.These were my findings at the end of the 3 month period:

  • The 10 DVD's I borrowed from the library - I've watched 9 of them, had to return one without watching it, which I am till today repenting.
  • I look at my 'collection' which I tried to build. Out of the 10 movies I bought, only 6 remain, 4 have been ‘borrowed’ and I have no idea when I’m getting them back. Out of the remaining 6, I have watched only 3.

Every movie evening, I look at my ‘collection’ and tell myself “Haan these DVD’s are mine right, I will watch them when there is nothing else.” If it were a Library DVD, my thought process is a little different, it’s more on the lines of “Damn it, put it on, I have to return the damn thing tomorrow or that guy will hound me.”

Why do your friends not return your DVD’s? They have every good intention of doing so, but hey there is a part of them which wants to replenish their own own depleted ‘collections’ right? It’s a vicious cycle.

Why do frequent flyers have a tendency to put on weight?

Ideally, you'd think that a frequent flyer has more of a tendency to lose weight. What with choc-a block queues, flights which never seems to take off on time and traffic jams which seem to pop up only when you are running late for that connecting flight. You'd think the stress would get to you and cause for you to lose your mind and some weight along with it.

Surprisingly, freakonimian research indicates otherwise. Contrary to popular belief, frequent flyers actually have a tendency to gain weight or there would be enough evidence to suggest so anyway. Why so then?

What was the last domestic flight you took? 11 AM Delhi - Mumbai, a 4 PM Chennai - Bangalore or perhaps a 9 PM Bangalore - Delhi, for the 11 AM flight your wife/mother probably made sure that you had a good breakfast before leaving. you had a coffee and a puff while you were waiting for the flight, you got on board and was served a healthy 'brunch' by a beautiful air-hostess, who you quite palpably couldn't refuse. The same probably happened to you on your return journey home.

A quick look back will tell you that at 11 AM and at 4:30 PM, instead of smoking / blogging / faffing or whatever it is you generally do at those times, you were eating. And why so, cause really you had very little else to do.

So boredom + pretty air hostess leads you to eat a meal regardless of the time of the day it is, and in many ways a flight itself creates environments in which you are forced to eat. The more you fly, the more you eat, so there you go.

In a social gathering, why is there a good chance that you will be told that you've both lost and put on weight?

I'm sure this is happened to you. You walk into a party where you are meeting a bunch of old acquaintances, and one of them pops up and says, " Hey Dev, looking slim and trim, working out kya?". You feel extremely happy with yourself, you walk a little further and then this heart throb from the good ole days stops you, " Hey Dev", she pats your stomach and says, "Looking quite prosperous, I must say."

How did then that happen? Could that Gulab Jamun you had between meeting Rajiv and Shruti cause you to have put on weight? Do women acknowledge men to be fatter than they really are? Are men more polite?

Not quite.

The real reason is far simpler. It's for the same reason that the most common conversation you hear at a party is "Where is your drink?" or "How is your drink?" or an equivalent. In many ways, it's for the same reason that Indians crowd around an accident site and make conversation.

Because by nature, man is social. He wants to be social, to meet people, he is looking out for something to talk about, looking to break the ice. So he talks about the weather, talks about your weight, talks about anything that he believes will get a response. Really, he doesn't care about your drink, nor does he remember really how fat or thin you looked the last time. In many ways, it's just something to get the show going and if you are intelligent enough to recognize that, you are well on your way to becoming a ‘socialite’. If you want to become one, that is.

Why Indians have a tendency to crowd around an accident site and do nothing to help? That my friend, is a different question altogether and we can probably look at answering that in a separate forum.

Why is a free hit not capitalized upon as much as it should be in modern cricket?

You've seen it before, smashing opening batsman on strike, bowler bowls a no-ball, the next ball is a free hit, the bowler is under pressure, the crowd is expecting one to fly into their section of the stands, the bowler comes into bowl and wonder oh wonder, the batsman misses it completely. How did that happen? Why did he miss the ball?

Do bowlers bowl free hit balls better? Do 'free-hit' deliveries swing more? Or do batsmen put more pressure on themselves. Well, the latter sounds sane, and is probably an answer. But we aren't going to end this discussion so easily, are we?

I would like to draw upon a parallel here. Have you been to one of those all-you-can eat buffets, where it seems like you need to hire a cab to actually see all the dishes being served. You go there with this massive appetite all ready to devour the food. Half an hour later, you are all done and full without even finishing half as much food as you would have wanted to.

Freakonomian research states that like with the free hit, your approach to an all you can eat buffet is very different to how you would approach a normal meal. As any cricketer would tell you, technique and the necessity to guard your stumps is as important for a regular delivery as it is for a free hit. However, when a free hit is announced, all that seemingly goes out of the window. It's like all his Diwali’s have come on the same day and he swings his bat with gay abandon, not realizing that his chances of hitting the ball out of the park in effect reduce.

My syllogism here is that free hit or not, at the end of the day, they are certain balls you can hit out of the park and certain balls you can't. Just like when you go for a meal, there is only so much you can eat regardless of whether it’s free or if they are paying you for it.

It’s a pity that we can’t do a real-time comparison for this, but in my estimate, if 6 balls are bowled in the 50th over of an ODI match, 6 free hits Vs 6 regular deliveries, there is a good chance that the batsman will score more of the 6 regular deliveries.

Why do cigarette companies in India celebrate every time the budget is announced?

It happens every year, the budget is announced and the first thing you read under the column 'Things that will be dearer' is Cigarettes, followed most times by Paan Paraag. The government's reason, simple - it's injurious to health. Somehow taxing something that's 'injurious' to health, reduces their feeling of guilt.

So, the prices get higher. The markings on cigarette packs, first started to create 'awareness' on the ill effects of smoking have now progressed to show life threatening images which would evoke as much fear as the scariest Hitchcock movie.

Beware - Smoking ruins your teeth, heart, lungs and whatever is left

clip_image001

Do you think he cares?

clip_image002

Your right - he doesn't. It's an addiction for him and honestly he couldn't care if it were his own corpse on the cover. So, the fact of the matter is that in spite of the annual price rise, the scary images on the covers and all the commotion of how an individual is not allowed to smoke anywhere else except underneath his bed, sales of cigarettes have increased every year. Bottom line figures state that annual sales of cigarette prices have gone up by 8% every year. More so, the industry is worth a whopping 100,000 crore today and maybe, just maybe, this is the main reason why everyone likes taxing them so much. How come the alcohol industry is not taxed every year because of it being injurious to health?

So with every tax rise, the price of the cigarette goes up by a certain percentage. What happens is that a cigarette pack which was worth about Rs.30, is now priced at about Rs. 33. The cigarette companies see this as an opportunity to conceal a price rise and take the price up to Rs. 35. After all in the smokers mind, the price has increased because of the budget. Damn government! The cigarette company in his mind is not responsible for this price rise at all.

A smoker really doesn't mind paying an extra two rupees for every cigarette pack he smokes, for him there is little difference between Rs.33 and 35. Sales increase every year, so do profits.

End analysis - cigarettes remain one of the most 'profitable' commodities to tax for the government, Cigarette companies use it as a vehicle to conceal a price rise and hence increase their profit margins, the smoker well he forgets about it after a couple of days, and really he couldn't care. And I thought – “ Win – Win situations didn’t exist”.

I'm quite looking forward to the budget now to see what the increase will be...

This post tries to provide some answers to questions which might have baffled people. More so, this post tries to underline the fact that most times life is more about the questions than the answers. With Google.com, everybody can find out the answer, if they know the right question. Right?

19 comments:

Syed Nazir Razik said...

Hi Sudhir, The fact of the matter is that this is an amazing post very interesting to read with gyan from elevated senses. Are you in for thRTFF this weekend ?

Sudhir syal said...

Hi Syed,

Thank you for your comment. Didn't know about the RTFF - Will find out more details from you on mail.

Mahesh Shantaram said...

I am indeed a bit confused. I'm confused whether the person who wrote the comment above is the same Sudhir Syal who wrote the original post.

One Sudhir confidently asked, "With Google.com, everybody can find out the answer, if they know the right question. Right?" The other Sudhir is philosophising on what parameters constitute the right question. Dai, villayata?

I'm sorry if you feel I didn't read your post deeply enough. I didn't see much depth in your arguments, which is why I frankly pointed it out.

Ah, what is this you say about insider information from the cigarette industry? Wow, now that sounds really deep :)

Anyway, your post inspired me to go check a few facts for myself and I found this very interesting article from two years ago:

http://www.forbes.com/global/2006/0213/026A.html

So thanks.

Shmuly said...

This piece has open my mind. In a good way. I see the light. And it is deliciously de-lightful.

Sudhir syal said...

Hi Shmuly,

Thank you for coming over.

The next post will be our show together :)

Abhinav said...

dude, you never fail to disappoint.. i loved this post, ESPECIALLY the bit about being told youve lost weight and put on weight in the same party. happens to me all the time!
and the cigarette thing was flawless...
except i wouldnt say it was win-win - there are three parties involved and the poor customer is driven to desperate means such as begging all and sundry to bring him a carton of goldflake kings from india!

Sudhir syal said...

Hahaha... good one Vice Captain.

I left out the plight of the poor over Indian soul.

Kindred may be his soul!

May he find more Sardarjis who offer him free bus rides across all of the United Kingdom!

Vineet Pabreja said...

That bit about the way the cigarette industry operates, I had no idea about and I think its an amazing business tactic.

Regarding putting on weight I managed to do that without being a frequent flyer.

The DVD example is not pertinent to me any longer coz here in the US buying is definitely more expensive than renting since there is no piracy. Maybe you can start a 'Chennai Pirated DVDs' outlet when you land on american soil. And when I was in Chennai I could not manage to buy good quality pirated DVDs at the same price as a good quality rental DVD from the shop.

That bit about the weight is so true because I know I have put on a kilo but someone i met today just commented that i have lost weight and i know that the comment was made 100% for the sake of conversation.

Sudhir syal said...

Hahaha... Vineet Pabreja.

You have brought this piece to life.

There is another one - Meeting 'Brides to be' through facebook, can help improve your Virility!

Your on the right track my friend! :)

Wanderer said...

Interesting thinking but not sure they are cooked enough. In economics, its very easy to make a theory. Quite another to verify it and give it some credence.

Let me dig a bit deeper into the frequent flyer one since I feel more qualified on this one than others. Been some time since my economics degree and MBA but am still Platinum on jet, gold on KF and silver on Indian. I think there is corelation thats getting mistaken as causation

1. The frequent flyers are also the folks who have lunches and dinners outside. When hosting/being guest, one has to have the best food. Most of it happens to be high on calorie count
2. Most of the folks do have a sedantry life too! Many of the frequent flyers take the morning flight out and the evening one in. Where is the time to even jog? weekends usually go in catching up with sleep and friends and family.

As someone who has done more flights that I would care for,
1. I don't have 2 stomachs. If I have time, I'll have food before the flight - home, airport lounge etc. Allows me to do reading etc on the flights. Else plate stays in front of you for too long
2. Who cares if the airhostess is pretty?! Why will I eat if I'm not hungry?!

Sudhir syal said...

Hi Aditya,

Though the post is titled Freakonomics, like the book this really isn't economics in the true sense of the word :)

The factors you've mentioned here on the frequent flyer point are true as well, they lead a sedentary life, they tend to entertain, they don't have time to jog.

All these are true as well, didn't have space to elaborate upon them in my post.

Thanks for the comment

shashank said...

Chuey...You are most social than most men..

You are on your way to becoming a professional writer dude.

Have you read the book called freakonomics?

Sudhir syal said...

Mr.Hudson - you have surfaced again.

Yes, the post is in some way based on that book. Thanks for your comment homey!

Is the social comment, a reflection of you being more anti-social then most men? :)

Vineet Pabreja said...

For some reason I wasting time on your blog reading the comments and I noticed that you have actually replied to my insightful comment.

your facebook profile is filled with so much crap that i could not find any writing of yours called 'meeting brides to be' on facebook. you will need to tell me where it is.

Sudhir syal said...

Haha Vineet. It's one of my non-core pursuits, not core enough to be on my FB 'Profile'. Besides, I've been pretty awful at it so far... :)

Indu Balachandran said...

Why is it that only some people are good at both writing AND dancing?

The answer is simple: God picked a precious few freaks ( like you and me) and just made them that way.There isnt any other intellectual explanation. Thank you for that, god-onomics:-)

ok, sudhir you dude, see you at Quick Step Jive class today!

Indu

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