Busy tooth fairies

[Originally from CoreEcon]

In the last couple of days, I have spent considerable energy thinking about the tooth fairy. It is our own fault really. On Thursday, our daughter lost her sixth tooth. On Friday morning, she woke up to tell us that the tooth fairy hadn't come. And then trouble ensued.

My initial reaction to this sad news was to go up and check her 'tooth box' carrying money in my hand in a vain attempt to suggest that she had just missed it being bleary eyed in the morning. This plan was aborted when I opened the box to find, well, a tooth. Obviously, to take the tooth now would be a tad too obvious.

On to plan B; imaginative lying. We settled on, "obviously, lots of children must have lost teeth on Thursday and the tooth fairy is just one fairy and can do so much. She will be here tonight." Our daughter bought that and, indeed, when discussing the incident with a friend, it turned out the same thing had happened to him once. (We must remember to thank the parents!)

A colleague of mine recounted to me his 'imaginative lie' when faced with a similar dilemma. He said to his daughter (and I am not making this up), "Oh, I came into your room last night and saw a bright thing buzzing around that looked like a firefly and so I swatted it." It wasn't clear that that was to death or just away but his daughter was suitably (and understandably) horrified.

In that light, our lie is much more tame. However, that didn't stop another parent being horrified with me as I recounted the day's incident: "how could you just lie to your children?" Ahem, it is the 'tooth fairy' we are talking about here! I think I have a pretty much free license on that one.

To continue the story, we almost forgot again on Friday night, but got this just in time. We have so many more teeth to come amongst our three children, this is bound to be an on-going issue.

This led me to think about the whole tooth fairy thing. From an efficiency standpoint, it would be much better if a child could present a tooth to us and receive cash on the spot. No running around at midnight searching for coins. It also saves on other inefficiencies. This time around our daughter ended up with New Zealand currency (I had just returned from there and it was lying about). If she asks about it I'll embellish our original lie. "The Australia tooth fairy has been busy, as you know, and so probably asked the New Zealand one to come in and help out." As you can see, globalisation works out for the general good again.

How did we end up in our current situation? According to Wikipedia, the tooth fairy has origins in the United States around 1900. But it really appears to have taken off in Western cultures post-WWII. Suggestions allude to the value of myth and how children like story telling as a rationale for the tooth fairy. But that doesn't ring true.

When it comes down to it my daughter knows exactly where the money is coming from but is quite happy to 'play the tooth fairy game' if only for the benefit of her younger siblings. So there is no sense of wonderment there. Just the usual raw economic calculus.

My hypothesis is that the 'tooth fairy deal' persists because it is an excellent incentive device. When a child has a loose tooth, there is a possibility that it may not come up necessitating more drastic action. This might be a parental intervention (you know, the string and the door trick) or worse, an expensive trip to the dentist. What can stop this is if the child endures a little bit of pain and wiggles the loose tooth. To provide an incentive for this action, we offer some money for the tooth. Saving a $50 dentist bill for a dollar or two a pop seems like a good deal.

Indeed, we know of a child who was two days from going to the dentist who was offered (and it is not quite clear how this fits in with the tooth fairy lie) $20 if they could pop the tooth that day. Surprise, surprise that is just what happens. I pity those parents, however, on what will happen with the next tooth. The child will anticipate the dentist deal and wait until the last minute. Much better to hold the strict tooth fairy line.

This all leads me to think more about other economic issues associated with tooth fairies. What drives the price of a tooth? Does it drift with the rate of inflation or the cost of dentists? What about the mechanism for the exchange (tooth under pillow versus tooth in cup of water versus, our solution, tooth in special box)? All interesting questions that I'll need to return to at some point.

Tuning in doesn't make you tune out

[From CoreEcon]

As a parent, access to television is seen as a privilege and not a right. We place a television alluringly in the family room and then place an invisible wall around it saying 'Off Limits.' If a request to watch television comes in from one or more household members it is carefully reviewed by committee including taking of submissions from all interested parties, examinations of the time of the day and the day of the week, and a rigorous account as to the applicants' other merits (doing homework, asking nicely). Then a decision is based with reference to guidelines as well as precedent. Unfavourable decisions usually are accompanied by appeals and requirements for the committee to suggest alternative activities. Favourable ones are then referred to a lower level subcommittee to determine what will actually be watched on television.

In an earlier day, without DVDs or Tivo, that process would have been lengthy enough so that a new problem of 'there is nothing interesting on TV' would have come up and the TV may actually not get turned on. Today, we don't have the luxury and so practices are then reviewed by a non-consultantive panel regarding whether too much TV is being watched overall. In the end, I think an average child in our household ends up watching 4-6 hours per week (yes, per week; about a seventh of the average in the population. For TV loving parents such as us, this is somewhat surprising).

Our review panel devours any studies that might enlighten on this issue. The sum total of those studies has been basically uninformative. Some claim TV is plain bad, others it depends on what you watch and others depend on who watches with you. The end result is too use common sense as these outcomes also apply to books and computers.

A new study has appeared by Matthew Gentzkow and Jesse Shapiro that will get our attention this evening. These economists at the University of Chicago have used the fact that television was introduced at different times in different cities of the US. They have then taken standardised tests conducted in the 1960s to examine the long-term effects of television watching. Theoretically, if television is bad, if you had been watching it for 12 years before taking the test as opposed to 4 years or not at all, it would show up in test performance. [See this article in Slate for a more comprehensive explanation.] Moreover, this is all done at a time prior to VCRs etc where there was little ability of parents to choose what their children might watch and there was certainly no regulation of advertising content.

And the results: there is certainly no negative effect from television watching. If anything the effect was positive and more so for children in non-English speaking households and where the mother had less than a high-school education.

Can we disband our review processes now and let the kids watch TV until they are sick of it? Then we would have more time to get back watching as much TV as we did when we were growing up.

Restraining parents

Steve Levitt of Freakonomics fame wrote an interesting paper recently that strongly suggested that car seats did not assist in preventing child fatalities in car crashes any more than seat belts. A link to his article and related findings is here.

Now when I proudly brought this excellent piece of econometric research home as evidence as to how we could free up space in the car, I was informed that our household behaviour would not be changing. Car seats all around until they are well beyond 6 years old. Well, we had the seats anyway (4 or 5 by last count between various cars and ages and a total expenditure of $1000).

I suspect that reaction will be similar. Give parents and option and suggest that it will have a marginal improvement in safety and they will demand it in droves. Get some government regulations and it is entrenched forever.

But one wonders how far this might go. Suppose I developed a cocoon type restraint whereby you took said children, put them in a coffin like structure with a little window to look out of and staked them neatly in the boot of the car or SUV. Now I am pretty sure I could get some engineer to demonstate their safety properties. Coupled with an alluring idea of having the kids out of sight while driving (whine free!) and I think this is a winning product.

Parental demand for safety (subject to wealth constraints) seems to me to be unlimited and as close to inelastic as we are ever going to find. Although against this is the fact that we are yet to see the ‘Safe and Silent Cocoon.’ Nonetheless, an issue of public policy makers interested in consumer protection is how to restrain parental purchases of unnecessary equipment. I for one could use some restraint.

Toilet Training and Incentives: Child No.1

We have just started toilet training our two year old son. Actually, it is more like pre-toilet training: just to get him used to the idea that there is life free of a nappy. Basically, we have a year to achieve this before he starts pre-school.

We have reason to be optimistic, we did this once before with our (now) four year old daughter. And this time, if we can avoid some of the mistakes we will hopefully make this an easier transition.

Those mistakes were numerous and some of them were easily anticipated had I used game theory properly.

To see what I mean you have to think a little about incentives. Toilet training is an exercise in behaviour modification: to convince an otherwise happy and content child that they have to take responsibility for their own actions; namely, toileting. Now, any economist would tell you that to achieve this you have to get the price right. That is, what reward do you need to offer to get the behaviour you want.

We didn't start out that way. We thought we would appeal to some broad, vague sense that it would be good to grow up and wouldn't that be 'exciting.' Those claims had about the same impact as calls for whiter, brighter towels.

So it wasn't long before the incentives -- or in common terms shameless bribery -- took in. But there is not a lot to work with with a two year old. While money can appeal to adults above the age of 8, for those younger you have to appeal to a base motive. For us, all we had was food; in particular, 'special' food.

It was fortunate that we had decided at some earlier point -- several weeks earlier -- to make a distinction between your general food (food that we would always allow our daughter to have) and special food (food that we would virtually never allow her to have). Into the former category fell rice cakes, fruit, yogurt, chicken and all vegetables. Into the latter category fell virtually everything else. So we had lots to work with.

We decided to begin with jelly beans. The basic reward was to give out jelly beans for successful toileting behaviour. You got one or two jelly beans depending upon what you did with one for -- you get the rest.

But the whole scheme went further. There was simply a bag of beans but a whole publicly displayed apparatus that required the push of a button to dispense a bean. You see, the jelly bean is the reward but game theory teaches us that unless the 'incentive contract' (that link between action and reward) is clearly communicated it won't work. So we decided to apply this reward universally. That is, anyone -- including us and our guests -- would be entitled to a jelly bean as they emerged from the toilet.

So I would emerge from the bathroom to find my daughter standing outside asking me if I could have one or two jelly beans. If we forgot to take one, we would be reminded. Outsiders could monitor the whole household's performance as they came in.

Did this work? It certainly put the whole issue on the table and our daughter showed much interest in spending time on the potty. But, after a couple of weeks, we had little to show for it except for a personal dislike of jelly beans as their consumption came to us to be associated with unpleasant activities. My partner tried to disguise her toileting activities to avoid having any more!

At this point, we had to contemplate a ratcheting up of the reward -- to chocolate frogs. This was a decision we did not take lightly as we were well aware that at some point we will want to end our little incentive contract. But we knew that if anything was going to get the behaviour we wanted it was going to be this; we would work on our exit strategy later.

To a casual observer, this did the trick. While precious few jelly beans had been awarded to our daughter, she was getting two or three chocolate frogs a day. Moreover, we had started saving on nappies.

Alas, a more careful audit of our household performance would reveal a more problematic story. Our daughter realised that she could successfully get a frog by simply waiting. If you sit on the toilet long enough something will happen. And so she did this, for hours and hours on end.

Now we let this go for a while in the hope she would get more control and feeling about her own bodily functions. When she didn't appear to tire of these activities, we changed the reward. She was only allowed to sit on the toilet for short (!) half hour bursts.

After a week, she began to anticipate her needs. However, no sooner had we fixed one problem that another began; she got too much control! Our daughter realised that by holding back, she could convert one trip to the toilet into two or three and triple her frog consumption.

It was then that we decided to phase out our rewards program; we did it with fear -- of eliminating all of our good work. But we did it slowly; first, by increasing her quota (the period of time over which she had to exclusively use the toilet, and then by removing the reward entirely.

Suffice it to say, there was no reverson and all in all we were happy with the outcome. Eventually, our initial hoped for motive: getting out of nappies and into more exciting undies took over. But the management process was painful and it is unclear whether this wouldn't have all happened of its own accord anyway. Next time around we will wait a little longer, check for signs of readiness and go for a big bang behavioural change. Let's see how that goes.