Slate eBook Club - Best of 2003

by Slate. com

  But when it later came out that Jones had boasted to a friend, "If I go over and I live, I am going to make some money," it was time to call in the economists.

  Jones is now negotiating with tabloids to sell his story for thousands of dollars. His case, however, will complicate a debate that is roiling suicidology, one that pits economists against psychiatrists over a basic question: Is suicide a rational decision?

  This controversy began in 1974 when two Princeton economists created a model to forecast suicidal decisions. Admittedly, the economists wrote, some suicidal behavior is purely irrational. But evidence suggests that economic theory explains some suicides. The economists proposed that the value of a life might be calculated the same way we value companies: Measure all the happiness a life might contain, discount it by the cost of achieving that happiness, and if the net present joie de vivre is less than zero, suicide is a viable option.

  The economics of suicide were largely ignored in the ensuing decades. But last year Dave Marcotte, a professor of public policy at the University of Maryland, Baltimore County, pushed the field forward when he wondered what happens to people like Jones who attempt, but do not achieve, suicide.* There are about 20 attempts for every successful suicide. (Approximately 2.9 percent of the U.S. population has attempted suicide—1,760 attempts per day.)

  Previous studies had demonstrated that as personal incomes rise, the propensity for suicide falls (presumably, money does buy some happiness). Marcotte's insight was that individuals contemplating suicide do not just choose between life and death. Rather, they choose between three alternatives: life, death, and the gray area of unsuccessful suicide, which may be negative (expensive injury and permanent disability) or positive (a "cry for help" that elicits attention).

  The resulting formula contains a somewhat paradoxical conclusion: Attempting suicide can be a rational choice, but only if there is a high likelihood it will cause the attempter's life to significantly improve.

  Marcotte couldn't test the relative "life improvement" of successful suicides—since they were, of course, dead—but he could study those who had failed at suicide to determine if their lives improved after the attempt. The results are surprising. Marcotte's study found that after people attempt suicide and fail, their incomes increase by an average of 20.6 percent compared to peers who seriously contemplate suicide but never make an attempt. In fact, the more serious the attempt, the larger the boost—"hard-suicide" attempts, in which luck is the only reason the attempts fail, are associated with a 36.3 percent increase in income. (The presence of nonattempters as a control group suggests the suicide effort is the root cause of the boost.)

  Why should suicide be an economic boon? Once you attempt suicide you suddenly have access to lots of resources—medical care, psychiatric attention, familial love and concern—that were previously expensive or unavailable. Doubters may ask why the depressed don't seek out resources earlier. But studies have demonstrated that psychological and familial resources become "cheaper" after a suicide attempt: It is difficult to find free medical care when you are sad, but once you try to kill yourself, it's forced on you.

  Suddenly the calculus of suicide has become even more complicated. Now attempting suicide seems a rational choice, as long as the attempt isn't too successful. But this conclusion alarms suicidologists: Treating suicide as a logical act runs counter to everything they have been advocating for the past 40 years.

  The suicide-prevention movement of the 1960s was founded upon the idea of "suicide crisis moments"—relatively brief periods when "psychological pain and mental illness causes irrational thoughts, which are treatable and temporary," explained Dr. David Rudd, president of the American Association of Suicidology. This idea is the basis of suicide hotlines, which studies prove are effective in saving lives. Suicidology suggests that most failed suicide attempts are not caused by permanent mental illness. Rather, they are the products of momentary lapses in reason. Once the crisis moment is resolved through intervention and care, suicidal instincts pass and would-be attempters go on to fruitful and healthy lives. (Many economists and suicidologists agree that multiple suicide attempts and successful suicides are often products of longstanding mental illnesses.)

  Constructing suicide as a momentary loss of reason is vitally important to the suicide-prevention movement because it suggests that men and women who have attempted self-murder should be allowed to shrug off social stigmas. If suicidal instincts are just momentary delusions, they are easily explained and dismissed. The suicide-prevention movement fears that if suicide is deemed the rational product of someone's mind, we may feel justified in suspecting that mind forever.

  But by objecting to rational explanations of suicide, the suicidology community may be undermining its own cause. Although suicide attempts cost the nation more than $3 billion per year, and suicides claim more American lives than homicides, suicide prevention is hampered by scarce resources. Ultimately, say mental health advocates, legislators don't like to fund suicide prevention because they believe that suicidal people must be crazy, and crazy people don't really want help. Perhaps if suicide were considered a rational and combatable disease, like skin cancer or high cholesterol, we might see well funded educational campaigns similar to those for more socially acceptable ailments.

  Lies, Damn Lies, and Focus Groups

  Why don't consumers tell the truth about what they want?

  By Daniel Gross

  Posted Friday, Oct. 10, 2003, at 3:29 PM PT

  Here's a paradox: Fifty million Americans have registered for the national Do Not Call list, suggesting they don't want to be bothered by telemarketers and won't buy if they are. Yet telemarketers want to keep calling them. Why? Because the marketers realize that what consumers say they want and what they actually do are not the same: Those who don't want to be called actually buy from telemarketers when they are called. This evidence of consumer untrustworthiness got Moneybox thinking about focus groups. If consumers lie, what good are focus groups?

  Evidence suggests focus group participants often lie. "The correlation between stated intent and actual behavior is usually low and negative," writes Harvard Business School professor Gerald Zaltman in his influential book How Customers Think. After all, he notes, 80 percent of new products or services fail within six months when they've been vetted through focus groups. Hollywood films and TV pilots—virtually all of which are screened by focus groups—routinely fail in the marketplace.

  Focus groups have become a requirement of everything from product launches to political campaigns. But even though few in the industry question their value, a huge gap yawns between customer intentions expressed in focus groups and behavior in the marketplace.

  There are several reasons for this. Start with the participants. Sure, they're all volunteers and presumably well-disposed to the process. But psychological reasons exist that could lead them to say one thing in the confines of a windowless conference room and do another thing at the mall. Moneybox has participated in a few focus groups—and has talked to several people who conduct them. And it seems clear that the motivations of those who show up are varied. Some come because they need the cash, not because they have a deep desire to express their consumer preferences. Others come for the cookies and punch or for the opportunity to interact with other humans. Still others—including Moneybox—spend a lot of time trying to suss out precisely who is doing the testing.

  A small percentage of focus group participants may indeed lie maliciously—although it takes a particularly devious criminal mind to go to such lengths to mislead marketers. More participants are simply eager to please. They're getting paid and fed or might have a crush on the moderator. So, they might tell her—and the marketing types behind the one-way mirror—what they think they want to hear, rather than what they really think.

  What's more, one would be hard-pressed to come up with a worse environment for eliciting heartfelt and brutally honest opinions. Getting paid to get together with a bunc
h of strangers, and being led in a discussion by another stranger, is unnatural. In their book Qualitative Interviewing, Herbert Rubin and Irene Rubin note that focus group leaders don't have time to build trust, which is a precondition for eliciting the true feelings of participants. If the discussion turns to controversial issue—like race or women's role in the workplace—many might feel a powerful impulse to self-censor or give politically correct rather than completely honest answers.

  Another conceptual flaw: Focus groups frequently ask people to make snap judgments about products they haven't seen or used. "When you ask somebody a question, they'll have an opinion," said Robbie Blinkoff, principal anthropologist and managing partner of the Context-Based Research Group. "And they may know absolutely nothing about it, or have never experienced it. It's abstracted from their reality." (Rather than conduct focus groups, Context focuses on fieldwork. Brinkoff and his colleagues watch people using products in their natural habitats. Think Margaret Mead in New Rochelle, not New Guinea.)

  Gerald Zaltman agrees. Because focus groups don't reflect experience but rather hypothetical choices, "Contrary to conventional wisdom, they are not effective when developing and evaluating new product ideas, testing ads, or evaluating brand images."

  But he goes a step further. The real reason people may seem to "lie" to focus groups is that they simply don't know what they want. Nor can they readily conceive what they want. "Standard questioning can sometimes reveal consumers' thinking about familiar goods and services if those thoughts and feelings are readily accessible and easily articulated," Zaltman writes. But that's a huge "if." "Most of the thoughts and feelings that influence consumers' and managers' behavior occur in the unconscious mind." Not irrational, but unconscious.

  "Unconscious thoughts are the most accurate predictors of what people will actually do," Zaltman said in an interview. "In the space of 5 or 10 minutes in a focus group, which is the average airtime per person, you can't possibly get at one person's unconscious thinking."

  So, why do focus groups remain so popular? They are time-honored mechanisms with clearly defined costs and that produce data in a specific time frame. Perhaps most important, they can be used to validate initiatives or concepts that the people commissioning the focus groups have already invested vast resources and time in. Typically, Hollywood focus-groups endings of films or completed pilots—not screenplays and development pitches. Ad agencies tend to focus-group a few ideas they have brainstormed and then report to the client which one scored best. The primary function of focus groups is often to validate the sellers' own beliefs about their product. Focus groups, which are supposed to explore the psychological needs of consumers, may serve as much to fulfill the psychological needs of sellers.

  You're Not Rich, but Now You Can Fake It

  How Starbucks coffee, BMW cars, and Godiva chocolates have become luxuries for the masses.

  By Daniel Gross

  Posted Wednesday, Oct. 1, 2003, at 3:26 PM PT

  Everywhere you look, brands that once catered to the rich are now targeting the rest of us. Costco is the biggest retailer of Bordeaux wines. Wolfgang Puck has a restaurant at O'Hare Airport. Starbucks has outlets in Meijer, the Midwestern grocery chain.

  The new book Trading Up: The New American Luxury, by Michael Silverstein of Boston Consulting Group and Neil Fiske, formerly of BCG and now chief executive officer of Bath & Body Works, explains how American companies have invented the oxymoronic business of mass elitism.

  Old Luxury goods are high-margin, low-volume products priced so only the wealthiest can afford them. You can get rich selling Old Luxury. New Luxury goods, by contrast, are not quite cheap, high-volume goods aimed at the 47 million middle-market households that make more than $50,000—Williams-Sonoma dishes, Samuel Adams beer, Victoria's Secret lingerie, Bath & Body Works Sandlewood Rose Relaxing Body Wash. You can get really rich selling New Luxury.

  The consultants have divined that everyone is willing to pay more for something. It could be bread, lipstick, wine, golf clubs, underwear, chocolate, dolls, or pet food, so long as it speaks to a longing in the soul. Silverstein and Fiske write that consumers are moving up to "a new level of goods and services that cost more than conventional products—sometimes a lot more—but seemed to deliver a lot more value, particularly emotional value, to them."

  This is the Shopping of Meaning. "The American consumer is in a state of heightened emotionalism." After surveying 2,300 consumers, the authors concluded that "many Americans feel overworked, isolated, lonely, worried, and unhappy." But it turns out the cure is shopping for premium-priced products. Don't have time to walk your poodle? Prove you love him by buying expensive dog food. Feeling down? A 5-cent Hershey's Kiss may provide a jolt of sugar, but a $2 Godiva truffle will perk you up more.

  Some of the arguments they put forth in support of a happy, shallow, harmless materialism are tendentious. "For its apostles—and there are many—a visit to the Cheesecake Factory is mostly about Connecting and Questing." (It's hard to see what Quest there is involved in eating at the Cheesecake Factory, except: Can I possibly finish the 6 pounds of Caesar salad they piled on my plate?) And, perhaps this is a result of spending too much time in New York, but it seems to Moneybox that the authors have a strange idea of what constitutes "luxury." Panera Bread? Kendall-Jackson wines? Carnival Cruises?

  The book does not focus on how New Luxury products may, in fact, be dragging down their manufacturers. There's a fine line between "masstige" and cheapening your brand. Once you've bought a Polo shirt at Costco for $20, you might not pay $50 for the same shirt on Madison Avenue.

  Part of the allure of luxury goods was that other people couldn't easily afford them. By contrast, New Luxury goods are supposed to be inclusive. "New Luxury goods also provide a way for consumers to align themselves with people whose values and interest they share—to join the club." But what club precisely are people who buy the new $27,800 BMW 3-Series joining? The club of people who can afford to pay $27,800 for a cheap BMW but can't afford a "real" one?

  As much as customers may be trading up, the companies are trading down, because the demands of the market force them to. Virtually all the New Luxury titans are publicly held. And many went public in the 1990s. To meet investors' expectations, a company must show sustained growth, whether it's Tiffany or Wal-Mart. Of course, companies that sell premium-priced products tend to reach the limits of their natural markets more quickly than discounters do. And so New Luxury companies are likely to expand into areas where their natural customers are scarce, in order to get huge. Restoration Hardware tried and failed to do this. Callaway Golf lost tens of millions of dollars trying to sell fancy golf balls when the market for its high-end clubs softened. Cosi, the sandwich chain, has been a disaster since it went public. Indeed, the stock charts of many New Luxury purveyors don't look so hot.

  Almost as an afterthought, the authors append a discourse about luxury in Western Civ., starting with the Greeks and touching briefly on all the biggies: Calvin, Marx—"It would be hard to make the case that Marx was an advocate of trading up or that New Luxury signals the end of capitalism"—Thorsten Veblen, John Kenneth Galbraith, David Reisman. Amazingly, they left out Christopher Lasch. His devastating 1979 book, The Culture of Narcissism, looms over their entire project. The American narcissist, Lasch wrote, "does not accumulate goods and provisions against the future, in the manner of the acquisitive individualist of nineteenth-century political economy, but demands immediate gratification and lives in a state of restless, perpetually unsatisfied desire." The impulse driving the New Luxury isn't so new.

  Make Money Fast!!!!

  If you owned your inbox, spammers would pay to get inside.

  By Jonathan Rauch

  Posted Monday, Aug. 11, 2003, at 12:56 PM PT

  If you e-mail me in response to this article, chances are you won't hear back. This is not because I'm too lazy to reply. Well, I'm not always too lazy to reply. Mainly it's because I get so much spam these day
s that survival means fast-deleting anything that looks like junk, which sometimes includes reader e-mail. Like a lot of people, I have passed a threshold in the last year or so: Spam has gone from one of life's little nuisances to a threat to the usefulness of e-mail.

  Technologically, no quick fix is in sight. But it's helpful to think about what sort of fix the technologists should be hunting for. The answer, I think, is this: I should have property rights to my e-mail inbox, and I should be able to charge you for admission.

  The spam problem is a new instance of a very old and familiar dilemma, which economists call the tragedy of the commons. When any resource is both valuable and freely available, people will tend to overuse it. Moreover, everyone anticipates that everyone else will overuse it, so everyone tries all the harder to get while the getting is good. The result is a run on the resource. The tragedy is that everyone's least-favored outcome—the depletion or exhaustion of the resource—is assured.

  Centuries of theory and practice have discovered two effective remedies. One is to appoint a conservator with the unique power to mete out the resource: say, the U.S. Fish and Wildlife Service. The other is to create property rights to the resource and allow a market to develop. What people own, they conserve.