John List has been chief economist for UBER and for Lyft. He’s also run experiments for United, the United Way, and the Chicago schools. In his new book, The Voltage Effect, he talks about a number of these experiments but what really comes through is how much fun he is having.
Several years ago, a company that provided loans to small business owners approached me and my friend and colleague Steven Levitt to help them try to do something intriguing: accurately evaluate the character of people who had applied for loans.
Now, I can imagine a lot of ways of doing this–a traditional approach, for example, would be to look at spending decisions, credit card reports, criminal records, marriage lengths, number of children. One can imagine a lot of potential correlations to be found using big data. That would be pretty clever but here’s what List and Levitt did:
Over the course of several weeks, a research assistant walked by each establishment whose owner had applied for a loan and “accidentally” dropped his wallet on the sidewalk out front. Seconds later, a different member of my research team would pick up the wallet (in which we had placed a slip of with a name and phone number) walk into the establishment, and turn in the wallet to the owner, saying that they had found it outside on the sidewalk and weren’t sure what to do.
Then we waited.
Our first metric coded how long it took for the loan applicant to call to tell us that they had our wallet–that is, if they called at all..[Next] we looked at how much money remained inside: the original $60 (in the form of 3 $20 bills), $40, $20 or no money at all….we were invariably treated to a declaration to the effect of ‘this is how I found it.’ I thanked each person who called; then once we had the data we needed, my team and I generated character/integrity scores for each business owner and sent our reports to the company that had hire us.
Moral of the story: if you ever find a wallet in Chicago, return it. You never know who is watching.