Freakonomics Radio: Is a 'No-Lose Lottery' the Answer to America's Savings Problem?
In their books, Steven D. Levitt and Stephen J. Dubner use the tools of economics to explore real-world behavior. As boring as that may sound, what they really do is tell stories — about cheating schoolteachers, self-dealing real-estate agents, and crack-selling mama's boys. Those Freakonomics stories — and plenty of new ones — are now coming to the radio, with Dubner as host. Just like the books, Freakonomics Radio explores “the hidden side of everything.” It will tell you things you always thought you knew but didn't, and things you never thought you wanted to know, but do. Information is available at http://www.freakonomics.com/radio/
Is a 'No-Lose Lottery' the Answer to America's Savings Problem?
A recent Harvard survey found that half of all Americans, if faced with an emergency, couldn't come up with $2,000 in 30 days. Last year, we spent more than $58 billion on lottery tickets, or roughly $200 per person. As entertainment goes, the lottery is pretty cheap – a dollar and a dream, and all that. But as an investment, it offers a dreadful return, which is why the lottery is sometimes called "a tax on stupid people." This episode looks at a little-known financial tool that might help people save more money while still giving them the thrill of the lottery. It's called a Prize-Linked Savings (PLS) account, and it pools a sliver of the interest from all depositors and pays out cash lottery prizes. Also, we take a broader look at financial literacy – or, really, financial illiteracy. In general, Americans aren't very good at the basics of saving, investing and retirement planning. We'll hear ideas for putting financial literacy in school curriculums, and from someone who thinks we shouldn't even try to learn it.