Oscar Winners by Genre

Is it true that dramas are more likely to win best picture than other genres?  I decided to run the numbers.  It turns out, the trend is very true and growing stronger.

Best Picture Nominees for 1927 – 2001

(data source: http://www.filmsite.org/bestpics2.html)

Dramas: 48% (click chart to enlarge)

Best Picture Winners for 1927 – 2001

(data source: http://www.filmsite.org/bestpics2.html)

Dramas: 39% (click chart to enlarge)

As you can see, dramas are heavily favored.  But interestingly, the trend grows even stronger in the past dozen years.

Best Picture Nominees (2002 – 2014)

Dramas: 62% (click chart to enlarge)

Best Picture Winners (2002 – 2014)

Dramas: 61% (click chart to enlarge)

They might as well call it the Academy Award for Best Drama.  Granted, in 2009, the Academy began nominating as many as 10 movies for best picture.  This allowed Sci Fi movies like District 9 and Animated movies like Up to gain nominations.

Academy Awards for Best Adapted and Best Original Screenplay are similarly weighted toward dramas.  Two-thirds of best picture winners also win either of the two best screenplay awards, so there is a strong correlation.

Best Adapted Screenplays (2002 – 2014)

Dramas: 46% (click chart to enlarge)

Best Original Screenplays (2002 – 2014)

Dramas: 54% (click chart to enlarge)

The upshot here is that if you’re looking to win a writing Oscar, it’s best to write a drama!

Are Romantic Comedies Profitable?

For years, the film industry has mourned the death of the romantic comedy. According to the Hollywood Reporter, romantic comedies don’t travel well to cultures and languages overseas where Hollywood makes at least 75% of its revenue. Furthermore, romantic comedies, by definition, don’t lend themselves to sequels.

According to the Scoggins Report, there were only two comedy spec screenplay sales in Q1, 2015, neither of which was a romantic comedy.  Studios now rarely invest in rom-coms, as they are no longer considered a profitable genre.

But are these assumptions correct?

Are romantic comedies really an unprofitable genre? And do rom-coms fail overseas?

Looking at the data for all movies released theatrically from 2009 – 2015, romantic comedies are actually extremely profitable both domestically and overseas.  I scraped the available box office data from BoxOfficeMojo.com and crunched the numbers below.

In terms of gross profit, rom-coms handily outperformed my two control groups: action and sci fi.  Net profit is trickier to evaluate, and I will address that below.  But first, the overall numbers:

Average Budgets (2009 – 2015)

Rom-coms are significantly less expensive to produce than action or sci fi (click image to enlarge):

Average Worldwide Gross (2009 – 2015)

The average rom-com earns less revenue than the average action or sci fi movie:

Average Gross Profit (2009 – 2015)

“Gross profit” here is worldwide revenue-divided-by-budget.  For all genres, this number does not account for the exhibitor’s split, or P&A (addressed below).

In box office gross, the average romantic comedy is more profitable than either action or sci fi.  In fact, the average rom-com grosses three times its budget.  This is because the rom com budget is typically half that of action movies and one third that of sci fi, so rom-coms are a much smaller financial outlay.  It is worth noting that while studios have avoided rom-coms over the past five years, rom-coms still show a healthy 200% profit margin in this time period, soundly outperforming both action and sci fi.

Studios are run by very, very smart people who wouldn’t avoid rom-coms without good reason. So if rom-coms are clearly less expensive and more profitable than action or sci fi movies, why do studios avoid them?


According to Steven Soderbergh, the answer may lie in studio marketing budgets.  If you add a flat $60 million marketing budget to each genre, it radically changes the profit percentages.  In this hypothetical, rom-coms still earn a greater profit than action movies, but nowhere near as strong a profit as sci fi.

We have no transparency on studio marketing budgets, so it’s difficult to know what studios spend on marketing and how effectively they spend it.  It seems reasonable to assume that p&a budgets should be dropping as the internet revolutionizes marketing, but marketing budgets continue to sky-rocket.

Consider the fact that 87% of Twitter users claim that tweets influence their movie choices. Yet studios continue to spend more than half their marketing budgets on TV spots in the face of mounting evidence that TV advertising is increasingly inefficient.

Transformers: Age of Extinction spent $100 million on domestic print-and-advertising alone.  Meanwhile, the average studio spends as much as half-a-billion on marketing annually.  With no transparency on these numbers, there can be no critical evaluation.  The MPAA stopped tracking studio marketing spends in 2007, and there is no public breakdown of marketing budgets per movie.

Studios now tend to avoid mid-budget movies of any genre, which cuts out rom-coms entirely. It may be that mini-majors and large financiers may find a way to fill this mid-budget gap in the film ecosystem, and fill the under-served demographic of movie-goers who love romantic comedies. As long as film companies learn to market rom-coms economically, this genre is demonstrably more cost efficient and profitable than action or sci fi.

The big takeaway from the numbers above is that rom-coms actually do perform profitably internationally.  But as studios focus their marketing dollars on fewer movies each year, they are under pressure to invest in gigantic movies that will help them reach billion dollar annual grosses.  Publicly traded companies need to show growing revenue year-over-year, and it is easier for a studio to reach billions in grosses by investing in $200 million movies than in small, yet profitable, romantic comedies.  Perhaps if studios were still privately held, their emphasis might be on greater profitability rather than increasing revenues.

Favorite Books of 2014

Previously: 2007, 2008, 2009, 2010, 2011, 2012, 2013

I read 100 books this year. Each year I blog about my favorite books, an idea I got from the incomparable Aaron Swartz.

What follows are the books I most enjoyed in 2014.

* Drive by Daniel H. Pink – A lot of great ideas about how to motivate creative problem solving in a business environment. Pink clarifies the differences between intrinsic and extrinsic motivation in the workplace. Pink also makes a compelling case that creative employees work best when they are given autonomy, an opportunity for mastery of their craft, and a sense of purpose.

* The James Bond books by Ian Fleming - My favorites were “Moonraker,” “To Russia With Love,” “Live and Let Die,” “Dr. No,” “The Man With the Golden Gun,” “Diamonds are Forever,” “Thunderball,” “In Her Majesty’s Secret Service,” “The Spy Who Loved Me,” “For Your Eyes Only,” and “Casino Royale.” I’ve seen all the Bond movies and think there is still opportunity to do justice to the depth and complexity of Bond’s character.

* Red Mars and Green Mars by Kim Stanley Robinson – Extremely well-researched and fun imagining of Mars colonization and terraforming. A bit like Asimov’s Foundation series in that there is no clear protagonist – it’s really more about the ideas than the plot.

* American Sniper by Chris Kyle – Extremely compelling read; a complete page turner. A really fascinating portrait of an American hero.

* Letters to a Young Poet by Ranier Maria Rilke – The first letter is brilliant – the idea that one should only become a writer if one sees no alternative. The next nine letters contain little to no specific advice on writing, but rather give increasingly vague ideas on love and loneliness. Nevertheless, some moments of extraordinary prose.

* The Conquest of Gaul by Julius Caesar - Astonishingly clear prose reflecting an incredible mind. Caesar is a tireless worker, a brilliant politician and diplomat, and an incredibly successful general. Each strategy and ruse-de-guerre is breath-taking.  So little has changed in politics and warfare in 2000 years; a fascinating book.

* The Civil War by Julius Caesar – Just astonishingly good. Possibly the greatest military leader of all time. He fought in hundreds of military engagements and won all of them against staggering odds. When Bibulus uses his naval superiority to try to blockade Caesar and cut off all supply ships to Greece, Caesar blockades the entire Aegean so Bibulus has nowhere to land his fleet and dies of thirst and exposure. That is just the ultimate testament to Caesar’s confidence and his extraordinary mind.

* Something Wicked This Way Comes by Ray Bradbury – I reread from my childhood. Astonishingly lyrical prose; like Jimi Hendrix lyrics – a jumble of language that works together to form perfectly evocative imagery.

* Hitchhiker’s Guide to the Galaxy by Douglas Adams – I reread for the third time. This book is just wonderful on every level.

* Richard Sharpe series by Bernard Cornwell – This year I read “Sharpe’s Gold,” “Sharpe’s Havoc,” “Sharpe’s Eagle,” “Waterloo,” “Sharpe’s Sword,” and “Sharpe’s Regiment.” I love everything about these books. I particularly admire Cornwell’s ability to craft insidious antagonists who are often more incompetent, racist, haughty, or immoral, than one-dimensionally evil. “Sharpe’s Regiment” may be my favorite of this bunch, though “Sharpe’s Eagle” is also fantastic.

* The Demon’s Sermon on the Martial Arts by Issai Chozanshi – I find these old Japanese texts to be 10% brilliant and 90% inscrutable.  But I suppose that’s the point of zen.

* The Naked Ape by Desmond Morris – An ingenious book that feels extremely current despite being published in 1967. Sort of the Malcolm Gladwell of its day, it evaluates humans from the perspective of a zoologist, and finds how – for all our sophisticated behaviors – we are just fancy chimpanzees.

* Autobiography of Benjamin Franklin & The Way to Wealth and other letters by Benjamin Franklin – I reread for the first time in ten years. Such a fantastic piece of work – just an astonishing human being of myriad accomplishments. There is so much to be learned from this book.

* Benjamin Franklin by Walter Isaacson – Fascinating, astonishing, inspiring, and revolutionary. What an amazing man with an amazing life. A brilliant diplomat, from the Declaration of Independence, to the treaty with France that saved the American Revolution, to the British peace treaty ending the war, to the Constitution. Massive contributions to science – he coined the language of electricity with words like “current,” “conductor,” “positive,” “negative,” and “battery.” An incredible mind – so far ahead of his time – and so well accomplished in all things.

* Meditations by Marcus Aurelius - If you ask me, the Stoics are sanctimonious bores. Still, it was interesting to read the diary of an emperor who lived 2,000 years ago.

* Travels by Michael Crichton – Very readable and interesting. To a certain extent a biography, to another extent a travelogue, but mostly it is a man’s quest for meaning. I didn’t realize how successful Crichton was by age 30; that he was a Hollywood director and a Harvard Med School grad. I really just knew of him as a sci-fi best seller.

* Tell-All by Chuck Paluhniak – He’s an astonishing talent. The first few chapters are mesmerizing. Ultimately, this book is not too heavy on plot, but it is a tour-de-force of style.

* Hunger Games Trilogy by Suzanne Collins – Beautifully planned and structured, with a plausible heroine we root for from start to finish.

* Divergent Trilogy by Veronica Roth – Quite the page-turner. Hard to put down.

* Freeway Rick Ross by Rick Ross – The story of his rise from an illiterate high school dropout in South Central Los Angeles to becoming the largest crack cocaine dealer in LA. An interesting piece of history. Ultimately, the book is slightly disturbing in that Rick Ross comes across as unabashedly proud of what he accomplished as a crack dealer and really shows no remorse.

* Cyrus the Great (Cyruspaedia) by Xenophon – Cyrus was an extraordinary leader, conqueror, and humanitarian. This 2400 year-old book sets the stage for modern biography in that it seeks to instruct in moral character.

* Crocodile on the Sandbank by Elizabeth Peters – Very fun. Lots of linguistic British cleverness and certainly a page turner.

* Creativity, Inc by Ed Catmull – A very insightful book on how to manage a creative company like Pixar. Fascinating to gather the inside history of the most consistently successful movie studio in history, and how Pixar’s philosophy turned around Disney animation. Building that creatively supportive culture drew a lot from Silicon Valley ideas.

* Hombre by Elmore Leonard - Very well crafted with lots of cleverness and believable details woven into the prose.

* Battle Hymn of the Tiger Mom by Amy Chua – Permissive American parenting is a big issue that doesn’t get talked about nearly enough. I understand why this book is controversial, but it prompts a discussion worth having.

* Outer Dark by Cormac McCarthy – I’ve never encountered a writer with McCarthy’s virtuosic powers of word choice, description, and simile; he utters a phrase and the picture springs into the mind’s eye both familiar and fully formed. He is the greatest American author, the greatest living author, and possibly the greatest author, period. Better even than Nabokov in turning a perfect phrase.

* To Have and Have Not by Ernest Hemingway – Say what you will, he is always interesting.

* Einstein by Walter Isaacson – A fast primer on Einstein.

* Pimp: The Story of My Life by Iceberg Slim – Utterly gorgeous prose writing, like Electric Kool-Aid acid test or William Boroughs. Very shocking material. It’s astonishing how all of the 1990′s rap slang was alive and well in the 1930’s. There is nothing new under the sun. This book is far ahead of its time; delving into the Pimp’s psychology, the prostitute’s psychology, and the criminal mindset.

* The Great Train Robbery by Michael Crichton - Well researched and enjoyable.

* Dataclysm by Christian Rudder – Some interesting observations on the information age.

* Anabasis: The March Up Country by Xenophon – Fascinating tale of Xenophon’s 10,000 Hellenic mercenaries who were hoodwinked by Cyrus the Younger into fighting the King of Persia. The Greek army officers were assassinated by the Persians in a red wedding. So Xenophon, only a young warrior, rallied the Greek mercenaries to fight their way home through hostile territory. A fascinating read and a great adventure.

* Bossypants by Tina Fey - Very funny and with jokes in every sentence. And yet ultimately, this book is an important meditation on feminism.

* Selected Works by Cicero – I found this book tedious and interminable. Cicero himself I found insufferably vain, self-pitying, self-righteous, back-stabbing, and egotistical. Nearly every moral argument in this book fell flat for me. Nevertheless, it was fascinating to glimpse how surprisingly modern Roman society was, in its law, politics, and business.

* What the Dog Saw by Malcolm Gladwell – Gladwell is always fun and interesting.  Such a treat.

* Myth and Meaning by Claude Levi-Strauss - I am not clever enough to decide whether structural anthropology is blithering, unsubstantiated nonsense.  Still, I’ll read anything that discusses the mono myth.

* The Hard Way – A Jack Reacher Story by Lee Childs – Really terrifically smart and well-executed.

* Not Taco Bell Material by Adam Carolla – Really entertaining.

* Rumi Translation by Coleman Barks – Really wonderful modern poetry from a 13th century poet. I slowly savored this poetry collection over the past five or six years.

Age Difference Between Leading Actors and Actresses

Much has been made of the age gap between leading men and women.  Male romantic leads are often cast opposite much younger females.  And it is often difficult for actresses to find roles after age 40.

While I suspect this gender gap has improved in the past 50 years, I decided to see if it is still alive and well.  I built a spider to scrape age data for the top 5,000 actors and actresses, as ranked by IMDb “starmeter.”

For the 500 most popular actors and actresses on IMDb, the average actor is age 40.77 and the average actress is age 33.39.  Expanding to the top 5,000 actors and actresses on IMDb, the gap narrows.  Here the average actor is 44.74 and the average actress is 39.47.

Not surprisingly, star popularity is correlated to age.  The top 50 actors are the youngest, and possess the largest age gap between men and women.  For the top 5000 actors, the average age is older, and with a smaller age gap.  This chart shows how the age gap narrows as popularity decreases.

Another interesting phenomenon is that 60% of the top 500 most popular stars on IMDb are female.  This trend holds true for the top 100 most popular stars, as well as for the top  50.  Put another way, only 40% of the 500 most popular stars on IMDb are male.

However, when the sample size is stretched to include the 5,000 most popular stars, women equal men almost exactly (50.59% – 49.41%).

So why are women more likely to have high starmeter ratings?  Amazon’s starmeter algorithm is a measure of what people are searching for.  A glance at the IMDb message boards suggests IMDb’s userbase is disproportionately male.  So it could very well be that men search for their favorite actresses at a higher rate than women search for their favorite actors.  Thus, actresses may have a slight advantage in obtaining top “starmeter” rankings on IMDb.

Actor Height Myths

There is a long-standing belief in popular culture that actors are shorter than the national average.  I decided to put the theory to the test, creating a spider to scrape height data for the top 5,000 ranked actors and actresses on IMDb.

It turns out: actors and actresses – by IMDb height – are two inches taller than the national average.

Heights of the Top 500 Actors and Actresses as Ranked by IMDb’s “Starmeter.”

The top 500 actors average 5 foot 11.7 inches versus the national male average of 5 foot 9.5 inches. The top 500 actresses average 5 foot 5.72 inches versus the national female average of 5 foot 4 inches.  The trend holds for the top 1,000 actors and actresses, as well as the top 5,000.

The easiest explanation is that both actors and actresses are finding ways to over-report their heights on IMDb on a massive scale. However, when I spot-checked a list of famously short actors and actresses, I found no discrepancies between IMDb’s numbers, and celebrityheights.com. Granted, I’m not sure how to rigorously fact check 5,000 IMDb actor heights.

If actors are over-reporting their heights, it is worth noting they are no different from the rest of us.  OKCupid found their users report heights two inches above the national average.

The alternative explanation is that successful actors are simply taller.  This success/height correlation should make some sense given the data that taller people are smarter, earn more money, and are more respected by their peers, than short people (I am not a particularly tall person, so I write this without any bias).

The real upshot is, there is no data to support the idea that actors and actresses are shorter than average. In fact, the more popular an actor is, the more likely he is to be tall (actresses, on the other hand, retain a constant height regardless of popularity).

Methodology: Because certain minority groups may be underrepresented in the top 5,000 actors, the charts above compare actors to the average height for American Caucasians.

For my data set, I parsed out actors and actresses under 18, as they may not yet have achieved full height.

Books Read 2013

In 2007, I started blogging my favorite books of each year, an idea I got from the incomparable Aaron Swartz.  Aaron is a genius who tragically took his life this year.  He co-wrote RSS at age 14, co-founded Reddit his freshman year at Stanford, and was one of the most prolific Wikipedia editors in the world.  He was a crusader for freedom of information and is greatly missed by the Internet community.

This year I read 75 books. I’ve tracked my books read since 2003, always with the goal of reading at least 50 books each year.

What follows are the books I most enjoyed this year.

*A Natural History of the Piano – Stuart Isacoff – Fun anecdotes and a surprisingly comprehensive history.

*The Master and Commander series – Patrick O’Brian – I finished this series of 20 novels this year.  They are my favorite historical fiction.  After so many books, you come to love the characters like old friends.  An astonishingly three-dimensional portrait of the Royal Navy and its characters.

*Psmith in the City – P.G. Wodehouse - Full of linguistic cleverness and sparkling dialog.

*Holes – Louis Sachar - Very fun read and cleverly tied together.

*An Essay on Criticism – Alexander Pope – Published in 1707.  This essay should be required reading for all critics.  So many notable quotes in this essay: “A little learning is a dangerous thing,” “Fools rush in where Angels fear to tread,” “To err is human, to forgive divine,” and “What the weak mind with strongest bias rules, is pride the never failing vice of fools.”

*River of Doubt – Candice Millard – Great adventure writing with amazing characters.

*Which Lie Did I Tell – William Goldman – Sequel to “Adventures in the Screen Trade.”  In many ways, a very odd book.  But essential reading.

*The Big Short – Michael Lewis - A captivating and lucid window into the financial crisis, its causes and characters.

*To Hell and Back – Audie Murphy – Amazing tale of heroism and character.  Astonishing.

*Marine Sniper 93 Confirmed Kills - Charles Henderson - Some amazing scenes; particularly the duel where he shoots an enemy sniper in the eye through the enemy sniper’s own scope.

*Writing Movies for Fun and Profit – Robert Ben Garant & Thomas Lennon – Tremendously funny, useful, and therapeutic.  I read several screenwriting books this year that I did not find particularly useful.  It is rare to find a screenwriting book written by actual working screenwriters, full of relevant and honest advice about the business of screenwriting.

*Hagakure – The Book of the Samurai – Yamamoto Tsunetomo – (Translated by William Scott Wilson) – A lot of useful philosophy to be garnered from this book.  A samurai makes every decision within the space of seven breaths.  And a samurai always dies facing the enemy.

*You Can Be a Stock Market Genius – Joel Greenblatt – Despite the cheesy title, this is a brilliant book that marries the fundamental analysis of Peter Lynch and Benjamin Graham with the strategy and timing of the derivatives market.

*The Man Who Heard Voices – Michael Bamberger – Fascinating tale of M. Night Shyamalan making “Lady in the Water.”  It is both hagiography and cautionary tale.  Nina Jacobson, then at Disney, comes off as a genius.

*The Elements of Style – William Strunk, Jr. & E.B. White – Wonderful.  I grew up thinking grammar was the mindless passion of pedants.  But really the point of grammar is clear and effective writing.

*Sleepless in Hollywood – Lynda Obst - An interesting window into the challenges of being a producer now that studios are changing their business models.

*Zen in the Art of Archery – Eugen Herrigel - I reread this as I became increasingly interested in Samurai philosophy this year.  Zen and mastery of one’s craft are inextricably tied.

*The Life-Giving Sword – Yagyu Munenori – The best part of the book is the preface giving a sense of Japanese feudal history. What a fascinating period.  The book itself is incredibly arcane, obfuscated with Zen koans, but not without a certain sense of poetry.

*The Battle of Brazil – Jack Matthews – Fascinating account of Terry Gilliam’s somewhat pyrrhic victory over Sid Sheinberg and Universal in releasing his version of Brazil.

*Richard III – William Shakespeare – Kind of a propaganda piece for the Tudors at the expense of the Plantangenets.  I liked the first speech, and a few speeches in Act V.  It picks up around Act IV.  It’s unclear why Richard is so clever in ascending to power and so immediately unclever once he attains power.  Although I suppose it’s all motivated by his general misanthropy.  In this new Golden Age of television, filled with anti-heroes, it is worthwhile to revisit one of the original anti-heroes of literature.

*The Unfettered Mind – Takuan Soho – The Zen priest who advised Yagyu Munenori and even met Miyamoto Musashi, offers his ideas on the relationship between zen and swordsmanship.

*Conversations with Wilder – Cameron Crowe and Billy Wilder – Wilder’s wit and charm – even as a 91 year old – shine through.  The book inspires a great nostalgia for the greatest generation and the glamour of the golden age of Hollywood.

*Love, Dishonor, Marry, Die, Cherish, Perish – David Rakoff – A rhyming novel of stories of characters who connect across time; I really enjoyed page 94.

*Sharpe’s Tiger – Bernard Cornwell - I read several of the Richard Sharpe novels this year.  So far, “Sharpe’s Rifles” is my favorite.  In Sharpe’s Tiger, Sergeant Hakeswell is one of the most loathesome antagonists I’ve encountered in literature.

*Crazy Rich Asians – Kevin Kwan - The subject matter is such a guilty pleasure.  Not literature and yet very satisfying.  Somebody needed to write this book.

*The Green Felt Jungle – Ed Reid and Ovid Demaris - A somewhat dated book cataloguing Vegas mafia corruption in the 40s, 50s, and 60s.  Informative and very much of its time.

*Difficult Men – Brett Martin – A very enjoyable read about the show runners of the new Golden Age of television.  Martin’s thesis is that the same conditions that created wonderful 70s film – execs taking risks and getting out of the way of writers – is exactly what happened to create the cable television revolution.  Great show runners like Matthew Weiner and David Chase took zero studio notes and maintained complete creative control.  And thus created ground-breaking television.

*The Kite Runner – Khaled Hosseini – Well done; an emotional book.

*A Confederacy of Dunces – John Kennedy O’Toole - Some very colorful moments.

*The Summer of Katya – Trevanian - Very well written.  Somewhat different from his spy novels.

*Goldfinger – Ian Fleming – Fun and full of ideas.  Dated in terms of its sexism, ethnocentrism, and post-war nihilism.  But an extremely entertaining read.

“95% of Income Gains to the Top 1%” is a Misleading Statistic

“Obama admits 95% of income gains go to top 1%.”

- CNN, September 15, 2013.

Chances are you’ve seen articles like this pop up in your Facebook news feed, along with angry commenters calling for revolution and storming the Bastille. The statistic conjures images of Mark Zuckerberg and Oprah laughing maniacally as they mug the poor. But take hope…

The 95% statistic is wildly misleading.

And if you put down your pitchforks and torches for a minute, I’ll explain the major fallacies behind this statistic.

First, Some Background…

During the 1980s, the wealthiest 1 percent of Americans got 70 percent of the income gains.” – Bill Clinton and Al Gore, Putting People First, 1992.

This statistic helped Clinton beat Bush Sr. in the 1992 election (see page 77 of Alan Reynold’s “Income and Wealth” for a thorough smackdown of this erroneous statistic). Awkwardly for Clinton, those same one-percenters made 45% of income gains throughout Clinton’s tenure[1].

Bush Jr.’s presidency saw income gains continue to accrue to the nation’s richest. Dubyah raised this 1% statistic in the run-up to the Obama-McCain presidential election [2].  In fact, this handy 1% statistic comes up in every election cycle. It even birthed the ninety-nine percent political movement in 2011.

So who are these pesky one-percenters?

The Non-Enduring Class Fallacy

The term “one-percenter” is a non-enduring class fallacy. There is no static class of individuals earning top 1% income gains year-over-year.

In fact, the smaller the percentage we choose, the larger the inaccuracy. Even if we make statements about 100% of Americans, we are not talking about the same individuals each year. People are born, die, or move away. Marilyn vos Savant, who holds a Guinness record for the highest recorded I.Q., made this point in her 1996 book “The Power of Logical Thinking.”

Berkeley produced the 1% study that currently has Obama in such hot water. But when the IRS and CBO present Berkeley with their raw income data, Berkeley does not get individual names of income gainers. There is no way to track who is in the 1% year-over-year.

So who are those 3.13 million people in this year’s top 1%? Are they all palm-rubbing Goldman Sachs partners in $3,000 suits?

Probably not.

And it’s not all athletes, artists, and entrepreneurs either.

Imagine a man selling the family farm to pay medical bills. Or an exonerated convict winning a legal judgement. Or a struggling screenwriter selling a script after a decade of waiting tables. The point is we don’t know. This year they may be one-percenters. Next year they may be ninety-nine percenters.

So who’s making all the money?

Only 63% of Americans are in the workforce. So roughly half the population makes all the money.

Also consider that people at the peak of their careers, age 54 – 64, have the highest income. Hey wait, 12% of the population is making most of the money! That’s unfair! Oh wait, no. This makes total sense.

But let’s get to the bigger fallacies…

Decile Analysis is Wildly Misleading

The Berkeley study cites decile analysis, which economists use to study income gains. The problem is, decile analysis can be used to say pretty much anything.

To understand why decile analysis is so clunky, consider the ten fictional households of Stokesville:


Let’s say the household earner in Decile 9 launches her singing career. She signs a $200,000 recording contract! This poor Decile just made a lot of money, right?


The richest decile did…


…Because our singer jumped to the richest decile.

So the highest decile made a 100% income gain. And the poorest decile made no income gain whatsoever.

And now a journalist can claim the highest income decile made a 100% income gain at the expense of the poor.

Darn those wealthy people for making all the money!


But this is wildly misleading!

Yes. And this is the methodology of the Berkeley study and all other income distribution studies.

And it gets much, much crazier. Consider the following scenario in Stokesville:
Everyone in Stokesville receives a 100% raise. Plus ten new jobs are created for the bottom five deciles!
Everyone wins, right?
Wrong again. According to decile analysis, the top half of Stokesville received 100% of the income gains while the bottom half received zero percent!

And despite getting equal raises, the top decile’s income grew 95%.  More than any other decile.  Gains always accrue to the top decile.

But there are more fallacies to Berkeley’s one percent study…

The Biased Sample Fallacy

Why does the Berkeley study only choose the time period of 2009 – 2012? According to their own numbers, the top 1% took 75% of the income losses during the recession of 2007 – 2009.

So what are the cumulative numbers from 2007 – 2012? Did the wealthiest 1% only earn 20% of the income gains over that full period? Suddenly this news headline is a lot less sexy.

The wealthiest suffer more when the stock market crashes (2007 – 2009) and gain more when the stock market rises (2009 – 2012). The Dow Jones rose nearly 60% from 2009 – 2012 (see chart). Berkeley’s choice to only report the income gains of one-percenters during a massive stock market run seems like a biased sample.

And now we get to the main point…

The Median-Mode Fallacy

Consider the following problem:

1) 9 people in Stokesville are 5 feet tall
2) 1 person in Stokesville is 6 feet tall

Therefore, the “average” height in Stokesville is 5 foot 1.

So 90% of the population is below average?

Now imagine a person moves to Stokesville who is 1 million feet tall. Suddenly, everyone is 100,000 feet below average. This is what happens when you introduce a billionaire into an economy…

The Billionaire Dilemma

Imagine Stokesville has a total population of 1,000 millionaires. Plus one Warren Buffett (net worth ~ $60 Billion).

The stock market rises 10%. The 1,000 millionaires made $100,000,000! A good year!

But Warren Buffett made $6 Billion. So 98% of the income gains went to the top .001%.

Note the zero-sum fallacy. Everyone in Stokesville is wealthy. Everyone’s net worth increased 10%. But a politician can argue that Stokesville is economically unhealthy because the uber-rich are taking 98% of the pie. Gains in the wealthy do not equal suffering in the poor.

Billions and billions…

Adding billionaire outliers to an economy kills income gain analysis. And we are fortunate to live in a country with 442 billionaires and counting. In 2007, before the financial crisis, America boasted 16,600,000 millionaires. That’s 5.3% of the U.S. population. In 2007, an American had a one-in-twenty chance of being a millionaire. Even after the financial crisis, America has more millionaires than any other country.

As long as we have great innovators like Elon Musk, Jeff Bezos, Sergey Brin, and Larry Page, then we are going to have billionaires. This is great news. And yes, it will throw off our income gain statistics. It will destroy normal distribution curves and create wonky income studies. But the successes of the wealthy do not necessarily come at the expense of the poor.

Books Read in 2012

I read 50 books this year, nine fewer than last year. I’ve been tracking my books read since 2003, always with the goal of reading at least 50 books. What follows are the books I most enjoyed this year.

The Sicilian – Mario Puzo He is fantastic at what he does. I thought the downbeat ending is what makes this mafia story less popular than The Godfather.  But very enjoyable escapist entertainment.

Moonwalking With Einstein – Joshua Foer Fun, well-written, and interesting.

Bambi vs. Godzilla – David Mamet He makes arcane arguments, quotes in French, and is constantly cynical.  But I enjoyed this fast, fun read.

Three Uses of the Knife – David Mamet His book, “On Directing Film” made a tremendous impression on me.

The Mailroom – Compiled by David Rensin Fascinating.  A must-read for anyone working in entertainment.  Historically interesting how abusively un-PC the culture in Hollywood was in the 80′s and 90′s.  I find myself mentally referencing this book constantly.

Right Ho, Jeeves – P.G. Wodehouse So brilliant.  Just laugh-out-loud funny.  I’ve read this book before.  Wodehouse is a genius like no other.

Uncle Fred in the Springtime – P.G. Wodehouse Again, his usual linguistic brilliance.

Pirate Latitudes – Michael Crichton Beginning is brilliant, well-researched, and fun.  Later on it gets a bit silly.  This book is published posthumously, so arguably it’s not Crichton’s fault the story falls off toward the end.

Harry Potter – J.K. Rowling Yes, I finally read the series this year.  Each book is better than the last.  What wonderfully imaginative world-building.  A tremendous accomplishment.  Fantastic, transcendent work.

Wigfield – Amy Sedaris, Paul Dinillo, Stephen Colbert At points as verbally brilliant as P.G. Wodehouse and yet not really a captivating tale as there is no likable protagonist.  Still, very, very clever.

Once a Pilgrim – Will Scully Wow, could not put this book down. One man holds off 1,000 looting, pillaging rebels in the ’97 Sierra Leone coup. True story.

Master and Commander – Patrick O’Brian Incredibly well-researched with swash-buckling action sequences.  I’m now on the 7th book in this series and am loving every moment.

The Art of Worldly Wisdom – Baltasar Gracian Some good nuggets of 18th century wisdom.

Many Lives, Many Masters – Brian Weiss, M.D. A fun read; totally not peer-reviewed science.

Easy Riders and Raging Bulls – Peter Biskind Fascinating read about how and why studio movies made incredible movies from 1970 – 1980. Very illuminating.  I mentally reference this book constantly.

Tchaikovsky – Letters to his Family So good.

Where Angels Fear to Tread – E.M. Forster Enjoyed it much more than A Passage to India; lots of fun insight into people and places and behavior.

Whores for Gloria – William T. Vollman Great moments of poetry and innovation; ultimately, the ending left me hanging.

Desperate Characters – Paula Fox Really skilled craftsmanship, brimming with truth and insight.  Not a ton of forward plot here, but just excellently observed – like a good Mad Men vignette.  Extremely Franzen-esque in its honesty.

Agincourt – Bernard Cornwell Really fun and well researched.  A clever way to follow a long bowman through the events leading up to and including the Battle of Agincourt.

The Death of Ivan Ilyich – Leo Tolstoy Insightful and courageous but not my favorite Tolstoy.  I also read Prisoner of the Caucuses and that’s a bit more fun.

The White Tiger – Aravind Adiga A good read; really informative about the state of India and a page turner from an innovative new writer.

Dark Pastoral – Jessica Hutchins A collection of odd po-mo short stories; she has a gift.

Man’s Search for Meaning – Viktor Frankl On surviving the Holocaust – very powerful book and filled with ideas on the meaning of life that resonate and inspire.

Some Screenplays I really enjoyed this year:  “White House Down” by James Vanderbilt; just dynamite execution.  “St. Vincent de Van Nuys” by Ted Melfi – a tear-jerker for sure.  “Django Unchained” by Quentin Tarantino – what a brilliant idea – challenging and fun.

Birthday Statistics

Each spring I’m hit by a deluge of birthdays to attend.  The deluge tapers off in July.  This made me curious: are my friends more likely to have spring birthdays?  I did some digging and found the answer: overwhelmingly, yes.

First, the control group.  Here are average US birthdays by month (2009 census):

As one would expect, US birthdays average 8.33% per month (as 100% divided by 12 months = 8.33%).  Now, below are my friends’ birthdays by month:

Fully 25% of my friends are born in May and June.  And three of my friends share my exact birthday, June 18th.  When you consider the math of the Birthday Problem, this seems unlikely.  What are the odds of four individuals in a set of 167 sharing the exact same birthday?

By way of control group, only two of my other 167 friends share the same birthday with each other.


To obtain the data above, I took my 650+ Facebook friends and parsed 180 that I feel a genuine connection with (as many Facebook friends are acquaintances).  Of 180 friendships, I was able to scrape birthday data for 176 of them.  Creating the chart above.


Why am I nearly twice as likely to have a friend born in the spring than the summer?  Why am I nearly three times as likely to have a friend born in June as a friend born in January?

Is this random chance or do other people notice trends among their friends as well?


Turns out, science has spotted many birthday correlations, none of which are properly understood.  For instance, children with autism are 16% more likely to be born in winter months. 1 Spring babies are at a 17% higher risk of suicide.2

Other bizarre birthday statistics:

* US teen mothers are more likely to give birth in January than any other month 3
* February babies have a higher likelihood of narcolepsy 4
* Pilots are more likely to be born in March 4
* People with autumn birthdays have the longest lifespans; spring birthdays have the shortest. A person born in October will outlive a person born in March by an average of 215 days.4
* June and July babies consistently have the highest likelihood of short-sightedness4
*September babies get the best grades and test scores in school.4


I think astrology is malarkey. But is it possible that birth month affects personality? Is my statistical sample of 167 friends simply too small to be meaningful? It is interesting to me that among my very best friends, spring babies are still over-represented, with a distribution mirroring the chart above. Possibly science will begin to formulate explanations for the statistical correlations between birth date and personality, health, and aptitude.

Friendship Equation

Work is preventing me from spending enough time with friends lately.  Rather than deal with this problem head on, I got curious about defining the relationship between friendship and time and came up with the following formula for calculating Friendship Value:

This assumes that Friendship Value = [1. Discounted perceived value of past interactions] + [2. perceived value of current interactions] + [3. discounted perceived value of future interactions]. Working backwards:

3. “Discounted Perceived Value of Future Interactions” can be expressed as the summation of all future interactions (t) years from the present (t=0) where “i” = the discount rate at which the net present value of the opportunity costs of a friendship equals the net present value of the benefits of the friendship:

Or, for those that want to graph friendship as a continuous rate (where d=discount rate and λ = log(1+i) ), by the integration:

2. “Perceived Value of Current Friendship Interaction” may be expressed as:

1. “Discounted Perceived Value of all Past Interactions” may be expressed as:

And thus, total Friendship Value can be expressed as =

By this we see that friendship is in a constant state of entropy, buoyed only by the value of our current interactions and the perceived value of our future interactions.  Without the hope of future interactions, the value of a friendship will decline asymptotally, approaching but never reaching zero.

If the value of perceived future interaction declines, it affects the net present value of the friendship.  So if I am going to be busy for the next six months, this dramatically affects the current value of my friendship.

We can calculate the relationship between time and friendship using an inverse square law:

Where FV1 = The Friendship value of a friend, FV2 = The Friendship value of me, and t = the amount of time spent apart.

By this equation, as the net present perceived value of either or both friends decreases, the force of attraction between the friends drops proportionately. But when time is spent apart, the overall value of the friendship drops exponentially.

Thus, friendship is a function of time.  And if I value friends, logic compels me to leave work alone at some point to spend some time with them. I probably need to get out more.