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Archive for November 13th, 2008

(Down)Turnpikes

I knew the car makers were in trouble, but roads are laying people off?

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Posted on Thursday, November 13th, 2008 at 6:05 pm by: Tom Vanderbilt
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Risky Business: Speeding and Trading

It’s hardly news in the traffic psychology world that people who routinely speed fall under the category of what are called “sensation-seekers.” But it’s always interesting to see just who those people are, and how this behavior correlates with other areas of their life.

A study by Mark Grinblatt, a professor of finance at the University of California, Los Angeles, and Matti Keloharju, a finance professor at the Helsinki School of Economics, titled “Sensation Seeking, Overconfidence and Trading Activity” (available here), gets at that question in an interesting way.

They had access to an interesting data set: A record of investing behavior among Finnish households that had, scattered amongst its sub-categories, the number of speeding tickets those households received. And they found an interesting relationship: “Each additional speeding ticket tends to increase turnover by 11%.” In other words, the people who sped the most, traded the most.

The economists were really looking to find evidence of whether behavioral attributes could explain trading volume, but the finding is just as relevant for driving. Whether it was down to sensation-seeking or, perhaps, overconfidence, the riskiest investors took the most risks on the road. And given that this was Finland, where speeding tickets for violations over 15 kph are related to one’s income, the risks one took could bear a high financial (and personal) cost. Interestingly, those who traded most didn’t see better performance than those who traded less (not to mention all the money they probably lost to speeding tickets). And it will surprise no one that “sports cars,” as a variable, were more linked to the most active traders, though not as much as speeding tickets.

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Posted on Thursday, November 13th, 2008 at 4:43 pm by: Tom Vanderbilt
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Amherst Talk

If you’re in the area, I’ll be talking tomorrow at the University of Massachusetts-Amherst tomorrow, Friday, at 11 a.m. in the Isenberg School of Management. Details here.

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Posted on Thursday, November 13th, 2008 at 9:43 am by: Tom Vanderbilt
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Traffic Tom Vanderbilt

How We Drive is the companion blog to Tom Vanderbilt’s New York Times bestselling book, Traffic: Why We Drive the Way We Do (and What It Says About Us), published by Alfred A. Knopf in the U.S. and Canada, Penguin in the U.K, and in languages other than English by a number of other fine publishers worldwide.

Please send tips, news, research papers, links, photos (bad road signs, outrageous bumper stickers, spectacularly awful acts of driving or parking or anything traffic-related), or ideas for my Slate.com Transport column to me at: info@howwedrive.com.

For publicity inquiries, please contact Kate Runde at Vintage: krunde@randomhouse.com.

For editorial inquiries, please contact Zoe Pagnamenta at The Zoe Pagnamenta Agency: zoe@zpagency.com.

For speaking engagement inquiries, please contact
Jenna Meulemans at the Knopf Speaker Bureau.

Order Traffic from:

Amazon | B&N | Borders
Random House | Powell’s

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U.S. Paperback UK Paperback
Traffic UK
Drive-on-the-left types can order the book from Amazon.co.uk.

For UK publicity enquiries please contact Rosie Glaisher at Penguin.

Upcoming Talks

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