EconTalk John List on Scale, Uber, and the Voltage Effect
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Jul 25, 2022 
John List, an economist at the University of Chicago and former chief economist of Uber and Lyft, dives into his book, The Voltage Effect. He discusses what makes ideas scalable and why many small successes don't translate to larger implementations. List shares insights from the ride-sharing industry, like the challenges of surge pricing and tipping dynamics. He explores the complexities of scaling educational programs and the impact of data-driven decision-making on economic policies, reinforcing how context is crucial for successful scaling.
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Voltage Effect
- The "voltage effect" describes what happens when a program's effects change from small to large scale.
- It's usually a voltage drop, meaning promising small-scale results diminish upon scaling up.
Reasons for Voltage Drops
- Five reasons exist for voltage drops: false positives, overestimating the audience, unrepresentative situations, spillovers, and supply-side limitations.
- Understanding these factors helps assess an idea's scalability potential.
Chicago Heights Pre-K
- John List and Steve Levitt debated teacher selection for a pre-K program in Chicago Heights.
- List prioritized hiring representative teachers, while Levitt wanted the best, highlighting a tension between efficacy and scalability testing.
