What's Scottish Independence Worth?

Summary

---

More or Less: What's Scottish Independence Worth?

BBC Radio 4
Host: Tim Harford
Air date: June 6, 2014

Episode Overview

This episode focuses on the economics and statistics behind the debate over Scottish independence, dissecting the competing financial claims made by both sides ahead of the 2014 referendum. Tim Harford and his guests critically analyze the numerical forecasts offered by the Scottish Government and the UK Treasury, questioning their assumptions and highlighting the inherent uncertainties. The episode also features segments on statistical "zombies" (misleading or persistent but inaccurate stats), and an interview with economist Steve Levitt about using coin tosses for major life decisions.

---

Main Segments & Key Insights

1. Competing Visions of Scotland’s Future (00:36–02:03)

• Fictional Future Reports:
  Tim Harford playfully introduces two foreign “reporters” in different hypothetical futures:

  • James: Describes an independent Scotland in 2030 as successful, with high immigration, increasing productivity, and among the top five OECD countries.
  • Gail: Reports from a Scotland still in the UK, describing relief, fiscal stability, and continued high public spending despite aging population and falling oil revenues.

  Purpose: To humorously illustrate the starkly different futures promised by each side of the independence debate.

---

2. Crunching the Numbers: Independence Windfalls vs. Union Benefits (02:03–11:13)

A. The Rival Economic Claims (02:03–03:35)

• Alex Salmond (First Minister):
  "A thousand pounds for every man, woman and child in Scotland, or 2,000 pound a family. That's the basis on which we articulate the independence bonus."
  (02:30)
  – Claim: Scots will be £1,000 better off annually under independence by 2029.

• Danny Alexander (UK Treasury Minister):
  "Staying within the UK is worth 1400 pounds for each person in Scotland each year for the next 20 years."
  (02:38)

• Tim Harford:
  Notes that such precise, attractive figures are likely crafted to sway voters, with research suggesting a £500 difference influences many decisions.

B. Why the Numbers Don’t Add Up: They Answer Different Questions (03:35–04:20)

• Dr. Angus Armstrong (National Institute of Economic and Social Research):

  "They are answers to two different questions which look the same, but... they're actually two different questions."
  (03:35)

• Key Insight:

  • Scottish Government assumes positive effects from independence and economic policy changes.
  • Treasury compares future under independence to staying, without assuming major policy upside.

C. Dissecting the Treasury’s Figures (04:20–07:06)

• Assets and Liabilities:

  • “Divorce” analogy: Treasury essentially tallies up starting costs for a new state, declining oil revenues, and aging population.
  • Main cost driver: Scotland’s current higher public spending (~£1,000 per year per person).

• North Sea Oil:

  • Both sides concede “90% of the oil revenue to Scotland, based on a geographical split."
    (06:30)
  • Treasury uses conservative official forecasts—£550 per Scot/year.
  • Scottish Government projects up to £1,300 per Scot/year, based on more optimistic scenarios.

• Gemma Tetlow (Institute for Fiscal Studies):

  "There is a huge amount of uncertainty about how much revenue will be generated from the North Sea... we've seen forecasts be very wrong, even less than a year ahead of time."
  (07:33)

D. The Scottish Government's Economic Growth Scenario (08:23–10:23)

• Alex Salmond:
  "The basis of the thousand pound figures is simple... increasing productivity... increasing the working age population... gives us the 5 billion additional revenue not from increases in individual taxation, but from economic growth."
  (08:23)

• Key Assumptions:

  • Annual productivity growth at 2.5% (higher than current UK rates).
  • Increased immigration boosts working-age population.
  • Nearly all extra tax revenue from growth, not higher taxes per person.

• Criticisms:

  • Assumes no increase in welfare/public services as GDP grows—historically unrealistic.
  • Gemma Tetlow:

    "...as the economy grows and we become more productive, we also tend to spend more on public services and on welfare. So it is questionable how sustainable that position would be..."
    (10:01)

• Projections are Highly Uncertain:

  "Economic forecasts are inherently very difficult, and when we're talking about projections that go forward up to 50 years, there is a huge amount of uncertainty. And I think the one thing we can be sure of is that none of these numbers are going to prove to be correct." (Gemma Tetlow, 10:38)

E. Conclusion (11:13)

• Both sides’ figures are essentially speculative, reflecting hopes and assumptions, not certainties.
• Takeaway: Voters should focus on underlying issues and assumptions more than headline numbers.

---

3. Zombie Statistic: Christian Martyrs Per Year (12:15–13:29)

• Claim:
  "100,000 Christians being martyred every year, more surely than at any time in history." (12:27)

• Debunked:
  Professor Thomas Schirrmacher, International Society for Human Rights:

  "There is no scientific number... we start with a guess of 7 to 8,000 Christians killed as martyrs each year." (13:06)

  • Misquoted and inflated stat repeatedly circulates in media and official speeches.

• Listener Vigilance:
  Listeners Clive (Lancashire) and Sarah (Ballymena) noted the error, showing the show's impact on public understanding.

---

4. Making Big Life Decisions: Steve Levitt’s “Flip a Coin” Experiment (14:52–22:52)

• Steve Levitt (Freakonomics co-author):

  • Launched an experiment inviting people to submit major life dilemmas (e.g., divorce, quitting job).
  • For the indecisive, decisions were made by coin toss.
  • Over 40,000 people have used their website for decision help.

• Live Demo:

  • BBC producer Laura asks whether she should move in with her boyfriend.
  • Levitt guides her through regret-minimization thinking, then flips a coin (it lands heads; Laura planned to move in). (18:16)

• Early Results:

  "20% of these 40,000 people ended up making a different decision as a result of the coin toss." (Levitt, 19:56)

• Surprise Finding:

  • Best data support: If you’re debating going on a diet, "the data say go on the diet." (20:21)

• Behavioral Economics Insight:

  "There's not enough quitting going on, not enough changing going on... when you make changes, it tends to be that you pay the costs right away and reap the benefits later." (Levitt, 21:14)

  • The coin toss acts as a commitment device, helping the undecided overcome inertia.

---

5. Probability and Office Sweepstake Strategy (22:52–27:10)

• Listener Andrew:
  Asks: Is it better to wait to enter a World Cup sweepstake to maximize odds of drawing a winning team?

• Tim Harford:

  • For random draws: No statistically significant advantage to entering early or late.
  • If you can opt out, waiting may help—if bad teams are drawn early, your odds improve; otherwise, don’t buy in.
  • If everyone waits, process breaks down—sweepstakes organizer implements a two-stage draw to encourage fairness.

---

Notable Quotes & Timestamps

• Dr. Angus Armstrong:
  “They are answers to two different questions which look the same, but... they’re actually two different questions.” (03:35)

• Gemma Tetlow:
  “Forecasts have been very wrong, even less than a year ahead of time. So this is a very difficult source of revenue to forecast.” (07:33)

• Tim Harford:
  “We’re not sure it helps when the issues are summarised into a pair of numbers that are both almost certainly going to turn out to be wrong.” (11:13)

• Steve Levitt:
  “20% of these 40,000 people ended up making a different decision as a result of the coin toss.” (19:56)
  “There's not enough quitting going on, not enough changing going on...” (21:14)

---

Takeaway Messages

• The financial promises in the Scottish independence debate were based on fundamentally different assumptions and questions, not directly comparable forecasts.
• Forecasting oil revenue and long-term economic growth is highly uncertain; neither campaign’s number is likely to be accurate.
• Listeners should be wary of persistent, emotionally compelling but inaccurate statistics (“statistical zombies”).
• For tough personal decisions, forcing commitment (even by coin toss) can help overcome inertia and may boost satisfaction for some choices.
• Simple probability often defies intuition—sometimes, waiting doesn’t improve your chances after all.

---

For more information or to listen to the full episode, visit BBC Radio 4 - More or Less.

Transcript

[A]

Thank you for downloading More or less from the BBC. This is the version first broadcast on Radio 4. Here's Tim Harford.

[B]

Hello and welcome to More or Less, where your weekly numerical haggis stuffed full of tasty statistics. This week, a statistical zombie returns in the pages of the Times. And superstar economist Steve Levitt has come up with a cunning way to help make life's big decisions.

[C]

Whether you should get a tattoo or go on a diet or quit your job or break up with your boyfriend. Any question you want. It didn't matter. We flipped a coin.

[B]

But first, I'm delighted to unveil the More or Less time machine we've sent our roving reporters into the future to let us know how Scotland's been getting on in 2030 to ensure neutrality. Neither of our reporters are British and the James Fletcher. Can you hear me, Tim?

[C]

I can hear you loud and clear.

[A]

I'm standing in Holyrood park and around me a crowd of people are celebrating the 14th anniversary of Scotland's independence.

[B]

Fascinating. Well, James, how has it been working out for Scotland?

[A]

Well, Tim, it looks like it's been going very well indeed. These have been good times for Scotland. Immigrants are flocking to the country, employment is up and Scotland's productivity has surged. The countries in the top five performing countries of the oecd.

[B]

That's very good to hear, James. Now, let me see if I can get in touch with Gail Legru. Gail, you're also in Edinburgh in 2030, is that right?

[D]

Yes, indeed, Tim, although I haven't been able to make contact with James at all. As you know, Tim, back in 2014, the Scottish people voted to stay in the United Kingdom. There's a real mood of relief here.

[B]

And why is that?

[D]

It's become obvious that Scotland is stronger as part of the Union. The population is aging and revenues from the North Sea have declined. Fortunately, Scotland has been able to share these burdens and to continue to enjoy historically high levels of public spending.

[B]

Well, thank you, Gail. How strange. The more or less time machine has sent James and Gail into two totally different futures. But that's appropriate, perhaps, because two totally different futures are exactly what Scots have recently been promised by politicians on either side of the independence debate. First off the mark, in the blue corner, Scotland's first minister, Alex Salmond.

[E]

A thousand pounds for every man, woman and child in Scotland, or 2,000 pound a family. That's the basis on which we articulate the independence bonus.

[B]

Vote for independence be £1,000 better off. Sounds like a good deal. But in the red White and blue corner. UK Treasury Minister Danny Alexander was ready to make the Scots a better offer. Staying within the UK is worth 1400 pounds for each person in Scotland each year for the next 20 years. £1,400 better off if you stay with the UK. Another good deal and a quandary for Scottish voters. Which offer should they choose? Well, this matters. Polling research suggests that a difference of even 500 pounds either way is enough to sway a significant number of people into voting for or against independents during the upcoming referendum. Stay classy Scotland. But presumably that's why both sides have come up with such precise figures. So who should we believe? Can we simply compare the two numbers and take the best offer?

[F]

They are answers to two different questions which look the same, but. But they're actually two different questions.

[B]

This is Dr. Angus Armstrong, Director of Macroeconomics at the National Institute of Economic and Social Research. He's analysed both sets of numbers.

[F]

The Scottish government question is, if Scotland becomes an independent country and the government takes some new policies which lead to an improved economic outlook, then Scots would be better off. The treasury report says that if Scots decide to leave the Union, then compared to staying in the Union, then they will be worse off. So it doesn't have this improved economic performance as an assumption.

[B]

Think of independence as a divorce. The UK treasury is essentially dividing up the assets and the liabilities and saying that the breakup will leave Scots 1,400 pounds ahead, worse off than they are now after 2016. The Scottish Government might quibble about the settlement, but that's not really the basis for the disagreement. Instead, the message look, you've been holding us back. When we divorce, we'll be free to do things our own way and grow faster in the future. And that future growth is worth £1,000 ahead each year by 2029. Let's take a look at each claim in turn to see how they arrive at their numbers. Lets start with the divorce and the UK Treasury's assessment of who gets the assets and the liabilities. Here's Danny Alexander. A worst starting point.

[E]

The cost of setting up a new state.

[B]

Unfunded policies, declining oil revenues and an aging population. All of that easily avoided by staying within the UK.

[E]

It's worth £1,400 for each person in

[B]

Scotland each year for the next 20 years. That's a list of things the treasury says an independent Scotland will have to factor into their bottom line. Things that won't be an issue or will be less of an issue if Scots remain part of the uk. One claim got a lot of immediate attention. The costs of setting up new institutions. The academic who produced the numbers complained that the UK treasury had misused them, which is embarrassing. But in cash terms, the argument's irrelevant. Spread over a number of years, it's a tiny proportion of the 1400 pounds. Far more important, around 1000 pounds per year, is higher public spending in Scotland, things like health or transport. That's also the least controversial. Both sides agree that spending is that much higher at the moment. But the other big deal and the big bone of contention is oil and gas in the North Sea. The the numbers produced by Both sides concede 90% of the oil revenue to Scotland, based on a geographical split. So why the argument? North Sea oil production has been rapidly declining, so the disagreement is about what it might be worth in future. Gemma Tetlow from the Institute for Fiscal Studies explains, if we look over the

[G]

next few decades, that source of revenues is going to start declining for the UK as a whole. That declining source of revenues can be shared across everybody. If Scotland were an independent nation, that declining source of revenue is being much more important. And they would need to figure out how to either reduce their levels of public spending or find other sources of revenues to address that fiscal gap.

[B]

So evaluating the revenues from oil is pretty crucial for Scotland. The UK treasury uses the Office for Budget Responsibility forecasts, and they add up to about £550 per Scot per year. In 2016. The Scottish Government has a rosier scenario based on industry forecasts as much as 1,300 pounds per Scot per year. Well, who should we believe? Here's Gemma Tetlow.

[G]

Again, there is a huge amount of uncertainty about how much revenue will be generated from the North Sea because we don't know what the price will be and we don't know what the levels of production will be and how that might be allocated to Scotland in. If we look back over recent years forecasts, the forecasts have been very wrong, even less than a year ahead of time. So this is a very difficult source of revenue to forecast.

[B]

That's the position immediately after the breakup. If you believe that North Sea production will continue to fall rapidly, you might be inclined to believe the UK treasury figure. But if you're optimistic about revenue from the North Sea staying high, then 1,400 pounds per person starts to look a bit too much. Now let's look further into the future. The Scottish government scenario. Here's the First Minister, Alex Salmond.

[E]

Again, the basis of the thousand pound figures is simple. It looks over a period of years, taking as the starting point of the first year of independence of 2016, 17 of what the impact would be of increasing productivity in the Scottish economy, increasing the working age population of Scotland and increasing employment in the Scottish economy. And that give us the 5 billion additional revenue not from increases in individual taxation, but from economic growth.

[B]

In other words, if the government's new policies lead to better economic performance, with a better productivity growth rate, a better employment rate and a working age population increased by immigration, well, then the government calculates that the tax pot would be £5 billion a year bigger by 2030. That's almost £1,000 per Scot. Very nice. If it happens, almost half of this additional money would come thanks to an increase in the productivity growth rate. That's how much Scotland can produce per hour of labour. The Scottish government says that by applying new policies, for example, a new tax regime, annual productivity growth would rise by 0.3 percentage points to 2.5% growth a year. That might not sound like much, but it adds up quickly. It would be hard to find a government that didn't want higher productivity growth. But there's nothing about independence that automatically makes the Scottish government more likely to achieve it. After all, 2.5% a year is greater than what's been achieved by the UK recently. And Chairman Tetlow says the Scottish government figures assume that while productivity will rise, spending on welfare and public services will stay the same.

[G]

It's worth saying that that's something that we actually have never seen happen in the uk. As the economy grows and we become more productive, we also tend to spe more on public services and on welfare. So it is questionable how sustainable that position would be and whether in fact, the Government of Independence Scotland wouldn't come under pressure to increase public spending alongside the growth in GDP that's going on.

[B]

So to get to the Scottish government's figure of £1,000 ahead, you need strong faith in Alex Salmond and his successor's ability to manage the economy. Speaking of strong faith, Gemma Tetlow from the Institute for Fiscal Studies has cautionary words.

[G]

Economic forecasts are inherently very difficult, and when we're talking about projections that go forward up to 50 years, there is a huge amount of uncertainty. And I think the one thing we can be sure of is that none of these numbers are going to prove to be correct. However, the reason for doing this and the reason it's important, is that it does allow us to quantify and highlight some of the pressures that would become important going forwards, both for the UK and for a potentially independent Scotland. So it's more a case of thinking about the issues that are raised here rather than believing the precise numbers.

[B]

That seems sensible to me. The real argument here is about whether the long term advantages of independent policy making outweigh the undoubted costs to Scotland of leaving the Union. Deep down, Danny Alexander and Alex Hammond are talking about real issues, but we're not sure it helps when the issues are summarised into a pair of numbers that are both almost certainly going to turn out to be wrong. You're listening to more or less regular listeners will know that we go to some lengths to slay zombie statistics, statistics that are proven wrong but somehow crop up again and again like whack a mole. We hit them over the head with our statistical hammer, but they keep popping up again. One of our listeners pointed to a recent editorial in the Times, but provoked by a case in Sudan where a woman was sentenced to death for refusing to renounce her Christian faith. It's a serious and troubling case, and one which doesn't need any statistical hyperbole.

[C]

A Vatican official speaks of 100,000 Christians being martyred every year, more surely than at any time in history. We cannot be spectators at this carnage.

[B]

Oh dear, we thought we'd got that one. Here's Vatican spokesman Archbishop Silvano Maria Tomasi, making a radio address to the United Nations Human Rights Council a year ago.

[C]

Credible research has reached the shocking conclusion

[B]

that every year an estimate of more

[C]

than 100,000 Christians are killed because of some relation to their faith.

[B]

His figure was repeated many times in the months that followed, but we thought we struck it down in January.

[H]

That means that 90% of the number, 100,000, actually are people that died in Congo.

[B]

Professor Thomas Schiermaker from the International Society for Human Rights has been interrogating these numbers.

[H]

One has to see there is no scientific number in the moment, it has not been researched, and all experts in this area are very hesitant to give a figure. We are starting a research project with several universities worldwide on this topic, and there we start with a guess of 7 to 8,000 Christians killed as martyrs each year.

[B]

We pointed out that the underlying research covers years in which almost all of these deaths, 90% of them, were in the Democratic Republic of Congo. Now, the war there, thankfully, is largely over, and by the way, it was a civil war in which Christians killed Christians. So we could quibble with the definition of martyrdom, too. The very people who came up with the number told us it needs revising, and they don't use it anymore. But that isn't stopping the Vatican or the Times. Fortunately, our loyal listeners haven't forsaken us. Clive in Lancashire emailed us and included the Stern letter he had written to the Times. And Sarah, a reverend in Ballymena, County Antrim, also got in touch to let us know she was trying to correct false impressions about Christian martyrs in her part of the world. Thank you, Clive and Sarah. Onward, statistician soldiers. Now, I'd like to claim that the world's most popular economics writer is me. But sadly, we don't live in a just universe. Instead, it's Steve Levitt, prize winning professor of economics at Chicago, famous data detective, and with the journalist Stephen Dubner, the author of Freakonomics, and more recently, Think Like a Freak. Levitt and Dubner say they want to help people make better decisions. So I sat down with Steve Levitt and asked him about a very unusual project he and Dubner have been working on.

[C]

People who are unhappy in their marriage, are they better off getting divorced or not getting divorced? Those are the kinds of questions which are of fundamental importance when people actually live their lives. And so here was the idea, which is completely ridiculous. Essentially, we put out the word that if you had a big problem that you were trying to solve, you could come and we would help you. We would help you decide whether you should get a tattoo or go on a diet or quit your job or break up with your boyfriend. Any question you wanted didn't matter. And we tried to, through the questions we had, help people think differently about the problem so maybe they could come to some resolution. Many people, even after having done that, still couldn't decide what they should do. And then we did the ultimate favor to these folks, which is that we decided for them, we flipped a coin.

[B]

Now, Steve, there is actually someone in the studio with us, my producer, Laura Gray, who's putting her head in her hand. I'm going to take a coin out. Laura, would you mind coming on the mic? Steve, I'm going to give you a coin. Now, Laura has a decision, so tell Steve all about it.

[D]

Okay, so my decision is should I or should I not move in with my boyfriend?

[C]

Okay, so you want me to help you decide that?

[D]

Yes, please.

[C]

Okay, so before I would flip a coin, I would want to ask you a few questions about that. Okay, so if you had, if you had to decide today, which way are you leaning?

[D]

No.

[C]

You're leaning no. Okay. And have you in the recent past been leaning yes or you've been leaning no the whole time?

[D]

Been leaning yes.

[C]

Okay. One thing I think that's helpful in decision making is to first think about if you move in and the worst case scenario and think about how bad that is and how much regret you'll have. Okay. And then think about if you don't move in the worst case scenario and kind of what you what, how much regret you have. Because I think that that's not a crazy way to make decisions is to say, I'm going to take the path where in the worst case, I will have the least regret. So is there one path or the other? Which feels incredible, like we would have the most regret.

[D]

I think I'd have more regret if I didn't move in.

[C]

So that, to me, would argue towards moving in. Okay.

[A]

But you.

[C]

Are you ready to flip the coin?

[D]

Yeah, go for it.

[B]

Before you do, I should ask Laura, how likely are you. So, heads you move in with your boyfriend, tails you don't. How likely are you to follow the coin toss?

[D]

Ooh, you can't say 50. 50, can you?

[C]

You can. So if you had to tell me honestly your guess of what the likelihood is that your decision will be, yes, I'll move in with my boyfriend.

[D]

70%.

[C]

70%. Okay. And then the other question. How likely is it that you will follow the coin toss?

[D]

60%. Yes.

[C]

60%. Yes. Okay, so heads is going to be move in, tails is going to be not moving. You ready? We also, we also do a very important option on the website which is to offer best 2 out of 3 if you really want to make sure the gods don't make a mistake. Do you want the two out of three option? You want to go with just one? One? Cause.

[D]

Just the one.

[C]

Okay, here we go. Heads you move in, tails you don't. Here we go. What were you hoping for?

[B]

This is so embarrassing.

[D]

On the radio, I was thinking, yes,

[C]

you're hoping for heads. It was heads. Okay. So we will know soon enough.

[B]

There you have it. Their ultimate tool for decision making, flipping a coin. What's incredible is that more than 40,000 people have used this site to make decisions. It is, of course, a vital public service. But Levitt was also harvesting all the data that people typed into their website to see what impact they might be having on people's decisions. Participants and their friends were encouraged to follow up after using the site to say whether they'd followed the coin's advice. You might think this just isn't serious social science, and you'd be sort of right, but Levitt is attacking a difficult problem here. Think about the really Big decisions in life. Would you be better off getting married or quitting your job or having a baby? It's pretty much impossible to study these questions with ordinary statistical methods, because the people who choose to get married just aren't the same as the people who don't choose to get married. You can't study such behaviour in a laboratory either. And you can't run a randomised trial in which, at random, you order people to get pregnant or to resign from their jobs. But you can find people who are genuinely undecided and you can toss a coin for them. And while you can't force them to follow the coin, you can check whether the coin influenced their decision and what difference it made to how satisfied they were with their lives.

[C]

20% of these 40,000 people ended up making a different decision as a result of the coin toss.

[B]

You've said you haven't got all the data in, but you have got some data and you've examined people deciding whether to quit their jobs, whether to leave their husbands or wives, boyfriends or girlfriends, whether to move in, whether to have children, whether to run marathons. Are there any conclusions that are already clear?

[C]

The one result that I'm confident of so far is that there's a particular decision which where very definitively in the data. Clearly in the data, it jumps out that the people who were told to go on a diet buy the coin toss. Both are more likely to go on a diet and are significantly happier than the people who don't go on a diet. So the best advice I can give you is if you're out there and you're wavering back and forth between going on a diet, the data say go on the diet.

[B]

Leavitt admits that even with 8,000 people changing their minds on the toss of a coin, he doesn't have statistically robust results to tell us that. For example, if in doubt, we should change direction in life. But he argues that other evidence from economics and psychology suggests that we do tend to be too stuck in our ways.

[C]

I think the biases that humans have suggest that there's not enough quitting going on, not enough changing going on, because

[B]

the we should be clear about that by quitting we really mean changing the status quo, doing something different.

[C]

Yeah, changing the path that you're on. And the reason I say theory suggests this is that in general, when you make changes, it tends to be that you pay the costs right away and reap the benefits later. So when you quit your job today, you stop getting a paycheck. You have to tell your parents, that you quit your job, you have to move back home with your parents, what do you have to do? Painful things. And then you do it in the long run because you think someday you'll be on a career path which is more rewarding. And in general, we know that humans, they weigh the near future more heavily than the distant future. And so if the costs come first, they're unlikely to want to pay those costs, even though they might get a long term return. I think there's also some evidence that humans aren't that good at thinking about what economists call opportunity cost. That even though today I feel like I should change, I think to myself, okay, I could change today or I could stick with it for one more day and I could quit tomorrow. And so it's easy in this world of option value to always put off the decision. And one of the benefits, if you want to call it, of this little coin toss experiment is that the coin toss is actually, this is a case where I think you could argue from a behavioral economics perspective that imposing a constraint, forcing someone to actually decide, today I'm either going to quit or I'm not going to quit. It has a real benefit to the person.

[B]

So if you have a big life decision to make, why not try flipping a coin you're listening to more or less. If you've ever felt a sense of excitement building recently, you'll know we're coming up to a major event which happens only once every four years. I'm talking about the office sweepstake for the World Cup. Who cares about the football when there's a chance to turn a £1 steak into £32, which you're then forced to spend on drinks for your colleagues. For those of you not aware of the peculiar institution of the office sweepstake, the basic idea is that you pay an entry fee into a pot, you draw a team at random, and if your team wins, you, you scoop the entire lot. Naturally, the thoughts of more or less listeners are turning to sweepstakes strategy, and listener Andrew from Surrey contacted us with this.

[I]

I wonder if there's any advantage to be had in not picking first. When the sweepstake was announced, there was a rush to enter, but I held back, my thinking being that of the 32 teams, only four teams have got short odds and so can be considered likely winners. Nine teams have only got a very small chance of winning and a further 19 teams have effectively not got a chance at all. So surely those people who enter the sweepstake at the start stand a greater chance of drawing one of the 28 weak teams, because they far outnumber the four favourites, and so it's therefore optimal to defer entering. So my question is, does it make sense to wait until a predetermined point and then enter? Is there any tactical advantage to be had from going in early, middle or late?

[B]

Time to peel the probability onion. The outer layer is Andrew's question. Is there a benefit from entering later rather than sooner? And the answer is no. Brazil is as likely to be picked first as last. What's lured Andrew in? It's the idea that the first team probably won't be any good, which is true. But if the first team out of the hat is Brazil and you've been hanging back, your chance of winning has just taken a hell of a beating. Every time you wait, Andrew, you've a large chance of improving your odds a little bit and a small chance of reducing your odds an awful lot. Or to put it more simply, the teams you want are just as likely to come out of the hat first as last. If you're determined to play the sweepstake, Andrew, it doesn't matter when you buy a ticket. But let's look at the next layer of the probability onion. Does Andrew have to play? If he's happy to miss out entirely, then the calculus changes. He should wait and see what happens in the early rounds. If a few poor teams come out of the hat and the favourites are still in there, then Andrew's odds have improved and he should consider stepping up and buying a ticket. If some of the favourites are taken early, Andrew can just wait four more years for a more opportune contest. Now, the decision rule for exactly how long to linger and when to buy in is mathematically complex, so we leave that as an exercise for the loyal listener. The final layer of the probability onion, though, is what happens when not only Andrew, but everyone hangs back to await more favourable odds. Why does anyone ever buy the first ticket in a sweepstake? Well, let's leave the probability onion behind us, having chopped enough to make a delicious bowl of French probability onion soup. And ask the man who's had to grapple with this in our very own office, BBC Radio current affairs sweepstakes supremo Richard Fenton Smith. He filed his report from the front line of the sweepstake world.

[H]

So I'm running this year's World cup sweepstakes for the Radio Current affairs department, where we make more or less, and I'm doing it a little bit differently to previous years because before people would pay me their money and they would pick a team out the hat automatically. And the problem was that once all the good teams went, then it was much harder to get people to participate. So this year I decided to take all the money first and then have a draw. And then it dawned on me, perhaps we should have a draw for the draw. So we're going to have a draw whereby people pick a name out the hat for the order of the draw and then they will pick their team.

[B]

Sensible statistical precaution or sad indictment of the likelihood of BBC journalists complaining? You be the judge. That's all we have time for this week. As always, Our address is BBC.co.uk more or less. Our email address is more or lessbc.co.uk. we'll be back next week, but until then, goodbye.

[A]

More or Less was presented by Tim Harford, the Financial Times undercover economist, and the program's made in association with the Open University. The producer was me, James Fletcher, with Charlotte MacDonald, Laura Gray and Gail Legru. You can download many more programs for free from Radio 4. You can find them at BBC.co.uk radio4.