Insightology

Does movie violence increase crime? Does Fox News have an impact on voting? Do people pay not to go the gym? Are companies correct in expecting that investors pay less attention to information released on Friday? These and other interesting questions are asked and answered by Stefano DellaVigna,  an Associate Professor of Economics at the University of California at Berkeley. To study movie violence, he and his colleagues looked at actual crime statistics surrounding movie releases, rather than run lab experiments.

They found a decrease in violent crime between 6pm and midnight, presumably because large numbers of people are in the movie theatres. This is followed by a larger drop in crime between midnight and 6am, perhaps because people prone to violent activities are now otherwise engaged. Evidence from this study suggests that in the short run violent movies may deter up to 1000 assaults on an average weekend. And it's not just that crime is being delayed as there is no evidence of crime increases over the next few days.

How about the effect of Fox News? DellaVigna and his colleague Ethan Kaplan looked at voting patterns after the introduction of Fox News in more than 9000 towns. They conclude that in the 1996 and 2000 Presidential elections, Fox News may have influenced between 3 and 28 percent of its viewers to vote Republican. The effects were smaller in towns with more cable channels (because of increased competition), rural areas and in Republican congressional districts (probably because there are less non-Republicans to convince).     

Are companies correct in assuming that investors pay less attention on Fridays? Yes they are. But it turns out there is a delayed response, implying that investors distracted by other activities on Fridays are paying increasing attention to the information later on.

On the question of gym attendance, DellaVigna and his colleague Malmendier find that consumers who choose contracts with flat fees (as opposed to purchasing 10-visit passes) are overpaying for an average visit, since they don't go to the gym often enough to justify the monthly flat fee. In other words, they are paying not go to the gym. Health club members have an incentive to sign people to flat rate contracts since the usage is low enough that the deal is profitable for the club. Hence a consumer trying to decide between a monthly contract and a per visit pass, should be careful not to overestimate how many times they will be going to the gym. It can easily lead to a pretty significant monetary loss (although there may be psychological benefits from just having a gym membership).

Stephano DellaVigna got his M.A and Ph.D. in economics from Harvard University and his undergraduate degree in economics from Laurea Bocconi University in Italy.