Friday, July 1, 2011

Your paycheck is killing you.. No, really your paycheck IS killing you!...See how here...

When social scientists do research, they try to avoid the "correlation vs. causation" trap. In this particular study (Source: Freakonomics), the basic conclusion is that it is not the actual paycheck that kills you, but the additional activities you engage in after getting paid that increase the risk of something bad happening to you.  My own example: You have little gas a few days before your paycheck--- you drive less. Get paid, and you will drive more in the day(s) after receiving your check, so the probabilities of something bad happening increase.

Why You’re More Likely to Die After Getting Paid
""In a study to be published in an upcoming issue of the Journal of Public Economics, Evans and Moore examined the death records of four demographic groups in the U.S.: seniors on Social Security; military personnel; families receiving tax rebate checks in 2001; and recipients of Alaska’s Permanent Fund dividends. Their results show that mortality increased the week after checks arrived for each of these groups.

Though the effects are strikingly consistent across populations, there are some interesting variations:

•In counties with a large military presence, daily mortality among 17-29 year olds increases by around 10 percent the week after mid-month paychecks arrive.

•The week the 2001 tax rebate checks arrived, mortality among 25-64 year olds increased by 2.5 percent.

•During the week that direct deposits of Permanent Fund dividends are made, mortality among urban Alaskans increases by 13 percent.""
What do they believe is the reason for this outcome?
Q: What about cause of death?

A: For the 17 to 29 population, you see lots of substance abuse and blunt force trauma from auto accidents.

Q: So is it fair to say that when people get paid, they go out and engage in risky behavior? They go party and buy drugs and drive drunk? Is that what’s happening here?

A: There is some of that, but it’s not that extreme for the most part. For a lot of people, you’re just going to the mall to buy something, which increases the risk of all kinds of things: car accidents, heart attacks. It’s not that you’re doing crazy, irresponsible things. It’s not the receipt of income that’s necessarily driving this, it’s the activity generated by the receipt, that’s the killer activity. And that cuts across the entire population.

Q: Did that surprise you, that it was consistent across different types of people?

A: Very much, I think that’s the most important phenomenon with this study, just how broad-based the effect is. The within-month mortality cycle holds for everyone, young and old, rich and poor. It is enhanced for certain demographics. But it’s also very persistent across populations. So, it’s not just poor people or young people, it’s everyone.

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