Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt, Stephen J. Dubner

From Barnes & Noble

Is this book's appeal due to its wacky revisionist title, its unsettling take on Roe v. Wade, or just its compulsively readable argument that economics does nothing more than study the incentives that drive us? Probably all of the above. What we do know is that it's the only economics book we've ever labeled a page-turner. An extraordinary work of social science explanation without oversimplification.

From the Publisher

Which is more dangerous, a gun or a swimming pool? What do schoolteachers and sumo wrestlers have in common? Why do drug dealers still live with their moms? How much do parents really matter? What kind of impact did Roe v. Wade have on violent crime?

These may not sound like typical questions for an economist to ask. But Steven D. Levitt is not a typical economist. He is a much heralded scholar who studies the stuff and riddles of everyday life -- from cheating and crime to sports and child rearing -- and whose conclusions regularly turn the conventional wisdom on its head. He usually begins with a mountain of data and a simple, unasked question. Some of these questions concern life-and-death issues; others have an admittedly freakish quality. Thus the new field of study contained in this book: freakonomics.

Through forceful storytelling and wry insight, Levitt and co-author Stephen J. Dubner show that economics is, at root, the study of incentives -- how people get what they want, or need, especially when other people want or need the same thing. In Freakonomics, they set out to explore the hidden side of ... well, everything. The inner workings of a crack gang. The truth about real-estate agents. The myths of campaign finance. The telltale marks of a cheating schoolteacher. The secrets of the Ku Klux Klan.

What unites all these stories is a belief that the modern world, despite a surfeit of obfuscation, complication, and downright deceit, is not impenetrable, is not unknowable, and -- if the right questions are asked -- is even more intriguing than we think. All it takes is a new way of looking. Steven Levitt, through devilishly clever and clear-eyed thinking, shows how to see through all the clutter.

Freakonomics establishes this unconventional premise: If morality represents how we would like the world to work, then economics represents how it actually does work. It is true that readers of this book will be armed with enough riddles and stories to last a thousand cocktail parties. But Freakonomics can provide more than that. It will literally redefine the way we view the modern world.

The New York York Times - Jim Holt

Economists can seem a little arrogant at times. They have a set of techniques and habits of thought that they regard as more ''rigorous'' than those of other social scientists. When they are successful -- one thinks of Amartya Sen's important work on the causes of famines, or Gary Becker's theory of marriage and rational behavior -- the result gets called economics. It might appear presumptuous of Steven Levitt to see himself as an all-purpose intellectual detective, fit to take on whatever puzzle of human behavior grabs his fancy. But on the evidence of Freakonomics, the presumption is earned.

Publishers Weekly

Though the idea of listening to an economics text may bring to mind nightmarish visions of incomprehensible facts, figures and graphs, this audiobook is refreshingly accessible and engrossing. Journalist Dubner reads with just the right mix of enthusiasm and awe, revealing juicy morsels of wisdom on everything from what sumo wrestlers and teachers have in common (a propensity to cheat) to whether parents can really push their kids to greatness by buying them Baby Einstein toys and enlisting them in numerous before- and after-school activities (not really). The only section that doesn't translate well to the format is the final one on naming conventions. The lists of "White Girl Names" and "Black Girl Names," and "Low-End" names and "High-End" names can be mind-numbing, though the text that breaks up these lists will intrigue. Overall, however, these unusual investigations by Levitt, the "rogue" of the subtitle, make for meaty-and entertaining-listening. Simultaneous release with the Morrow hardcover (Reviews, Mar. 14). (May) Copyright 2005 Reed Business Information.

Library Journal

Economist Levitt and Dubner (Turbulent Souls) team up in this intriguing, quirky look at life and how to understand better the world in a new way. In 2003, the New York Times Magazine sent Dubner to do a profile of Levitt, and the idea for this book was born. Levitt looks at a variety of data, including KKK membership rolls, online dating services, and names for children, and finds in the math underlying answers to difficult questions that have a freakish quality. The quirky chapters include the commonality between schoolteachers and sumo wrestlers, why drug dealers still live with their mothers, and what makes a perfect parent. The crisp, bright narration by Dubner enlivens this title, which will appeal to fans of Malcolm Gladwell's The Tipping Point as well as to economists. Recommended for university libraries supporting a business and economics curriculum and larger public libraries.-Dale Farris, Groves, TX Copyright 2005 Reed Business Information.

Kirkus Reviews

Why do drug dealers live at home? Levitt (Economics/Univ. of Chicago) and Dubner (Confessions of a Hero Worshiper, 2003, etc.), who profiled Levitt for the New York Times, team up to demolish conventional wisdom. To call Levitt a "rogue economist" may be a tad hyperbolic. Certainly this epitome of antistyle ("his appearance is High Nerd: a plaid button-down shirt, nondescript khakis and a braided belt, brown sensible shoes") views the workaday world with different eyes; the young economist teases out meaning from juxtapositions that simply would not occur to other researchers. Consider this, for instance: in the mid-1990s, just when the Clinton administration projected it was about to skyrocket, crime in the U.S. fell markedly. And why? Because, Levitt hazarded a few years ago, of the emergent effects of the Roe v. Wade decision: legalized abortion prevented the births of millions of poor people who, beset by social adversity, were "much more likely than average to become criminals." The suggestion, Dubner writes, "managed to offend just about everyone," conservative and liberal alike, but it had high explanatory value. Levitt hasn't shied away from controversy in other realms, either, preferring to let the numbers speak for themselves: a young man named Jake will earn more job interviews than one with the same credentials named DeShawn; the TV game show The Weakest Link, like society as a whole, discriminates against the elderly and Hispanics; it is human nature to cheat, and the higher up in the organization a person rises, the more likely it is that he or she will cheat. Oh, yes, and street-level drug dealers live at home with their moms because they have to; most earn well belowminimum wage but accept the bad pay and dangerous conditions to get a shot at the big time, playing in what in effect is a tournament. "A crack gang works pretty much like the standard capitalist enterprise," Levitt and Dubner write, "you have to be near the top of the pyramid to make a big wage." An eye-opening, and most interesting, approach to the world.

Product Details

• ISBN: 006073132X
  
• ISBN-13: 9780060731328
• Format: Hardcover, 242pp
• Publisher: HarperCollins Publishers
• Pub. Date: April 2005

• Table of Contents
• Interviews & Essays
• Reading Group Guide
• Read an Excerpt
• Read a Sample Chapter

Table of Contents

Interviews & Essays

Reading Group Guide

Discussion Questions:

About the authors

Read an Excerpt

Chapter One

What Do Schoolteachers
and Sumo Wrestlers
Have in Common?

Imagine for a moment that you are the manager of a day-care center. You have a clearly stated policy that children are supposed to be picked up by 4 p.m. But very often parents are late. The result: at day's end, you have some anxious children and at least one teacher who must wait around for the parents to arrive. What to do?

A pair of economists who heard of this dilemma -- it turned out to be a rather common one -- offered a solution: fine the tardy parents. Why, after all, should the day-care center take care of these kids for free?

The economists decided to test their solution by conducting a study of ten day-care centers in Haifa, Israel. The study lasted twenty weeks, but the fine was not introduced immediately. For the first four weeks, the economists simply kept track of the number of parents who came late; there were, on average, eight late pickups per week per day-care center. In the fifth week, the fine was enacted. It was announced that any parent arriving more than ten minutes late would pay $3 per child for each incident. The fee would be added to the parents' monthly bill, which was roughly $380.

After the fine was enacted, the number of late pickups promptly went ... up. Before long there were twenty late pickups per week, more than double the original average. The incentive had plainly backfired.

Economics is, at root, the study of incentives: how people get what they want, or need, especially when other people want or need the same thing. Economists love incentives. They love to dream them up and enact them, study them and tinker with them. The typical economist believes the world has not yet invented a problem that he cannot fix if given a free hand to design the proper incentive scheme. His solution may not always be pretty -- it may involve coercion or exorbitant penalties or the violation of civil liberties -- but the original problem, rest assured, will be fixed. An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation.

We all learn to respond to incentives, negative and positive, from the outset of life. If you toddle over to the hot stove and touch it, you burn a finger. But if you bring home straight A's from school, you get a new bike. If you are spotted picking your nose in class, you get ridiculed. But if you make the basketball team, you move up the social ladder. If you break curfew, you get grounded. But if you ace your SATs, you get to go to a good college. If you flunk out of law school, you have to go to work at your father's insurance company. But if you perform so well that a rival company comes calling, you become a vice president and no longer have to work for your father. If you become so excited about your new vice president job that you drive home at eighty mph, you get pulled over by the police and fined $100. But if you hit your sales projections and collect a year-end bonus, you not only aren't worried about the $100 ticket but can also afford to buy that Viking range you've always wanted -- and on which your toddler can now burn her own finger.

An incentive is simply a means of urging people to do more of a good thing and less of a bad thing. But most incentives don't come about organically. Someone -- an economist or a politician or a parent -- has to invent them. Your three-year-old eats all her vegetables for a week? She wins a trip to the toy store. A big steelmaker belches too much smoke into the air? The company is fined for each cubic foot of pollutants over the legal limit. Too many Americans aren't paying their share of income tax? It was the economist Milton Friedman who helped come up with a solution to this one: automatic tax withholding from employees' paychecks.

There are three basic flavors of incentive: economic, social, and moral. Very often a single incentive scheme will include all three varieties. Think about the anti-smoking campaign of recent years. The addition of a $3-per-pack "sin tax" is a strong economic incentive against buying cigarettes. The banning of cigarettes in restaurants and bars is a powerful social incentive. And when the U.S. government asserts that terrorists raise money by selling black-market cigarettes, that acts as a rather jarring moral incentive.

Some of the most compelling incentives yet invented have been put in place to deter crime. Considering this fact, it might be worthwhile to take a familiar question -- why is there so much crime in modern society? -- and stand it on its head: why isn't there a lot more crime?

After all, every one of us regularly passes up opportunities to maim, steal, and defraud. The chance of going to jail—thereby losing your job, your house, and your freedom, all of which are essentially economic penalties -- is certainly a strong incentive. But when it comes to crime, people also respond to moral incentives (they don't want to do something they consider wrong) and social incentives (they don't want to be seen by others as doing something wrong). For certain types of misbehavior, social incentives are terribly powerful. In an echo of Hester Prynne's scarlet letter, many American cities now fight prostitution with a "shaming" offensive, posting pictures of convicted johns (and prostitutes) on websites or on local-access television. Which is a more horrifying deterrent: a $500 fine for soliciting a prostitute or the thought of your friends and family ogling you on www.HookersAndJohns.com ...

Read a Sample Chapter

Chapter One

What Do Schoolteachers and Sumo Wrestlers Have in Common?

Imagine for a moment that you are the manager of a day-care center. You have a clearly stated policy that children are supposed to be picked up by 4 P.M. But very often parents are late. The result: at day's end, you have some anxious children and at least one teacher who must wait around for the parents to arrive. What to do?

A pair of economists who heard of this dilemma—it turned out to be a rather common one—offered a solution: fine the tardy parents. Why, after all, should the day-care center take care of these kids for free?

The economists decided to test their solution by conducting a study of ten day-care centers in Haifa, Israel. The study lasted twenty weeks, but the fine was not introduced immediately. For the first four weeks, the economists simply kept track of the number of parents who came late; there were, on average, eight late pickups per week per day-care center. In the fifth week, the fine was enacted. It was announced that any parent arriving more than ten minutes late would pay $3 per child for each incident. The fee would be added to the parents' monthly bill, which was roughly $380.

After the fine was enacted, the number of late pickups promptly went . . . up. Before long there were twenty late pickups per week, more than double the original average. The incentive had plainly backfired.

Economics is, at root, the study of incentives: how people get what they want, or need, especially when other peoplewant or need the same thing. Economists love incentives. They love to dream them up and enact them, study them and tinker with them. The typical economist believes the world has not yet invented a problem that he cannot fix if given a free hand to design the proper incentive scheme. His solution may not always be pretty—it may involve coercion or exorbitant penalties or the violation of civil liberties—but the original problem, rest assured, will be fixed. An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation.

We all learn to respond to incentives, negative and positive, from the outset of life. If you toddle over to the hot stove and touch it, you burn a finger. But if you bring home straight A's from school, you get a new bike. If you are spotted picking your nose in class, you get ridiculed. But if you make the basketball team, you move up the social ladder. If you break curfew, you get grounded. But if you ace your SATs, you get to go to a good college. If you flunk out of law school, you have to go to work at your father's insurance company. But if you perform so well that a rival company comes calling, you become a vice president and no longer have to work for your father. If you become so excited about your new vice president job that you drive home at eighty mph, you get pulled over by the police and fined $100. But if you hit your sales projections and collect a year-end bonus, you not only aren't worried about the $100 ticket but can also afford to buy that Viking range you've always wanted—and on which your toddler can now burn her own finger.

An incentive is simply a means of urging people to do more of a good thing and less of a bad thing. But most incentives don't come about organically. Someone—an economist or a politician or a parent—has to invent them. Your three-year-old eats all her vegetables for a week? She wins a trip to the toy store. A big steelmaker belches too much smoke into the air? The company is fined for each cubic foot of pollutants over the legal limit. Too many Americans aren't paying their share of income tax? It was the economist Milton Friedman who helped come up with a solution to this one: automatic tax withholding from employees' paychecks.

There are three basic flavors of incentive: economic, social, and moral. Very often a single incentive scheme will include all three varieties. Think about the anti-smoking campaign of recent years. The addition of a $3-per-pack "sin tax" is a strong economic incentive against buying cigarettes. The banning of cigarettes in restaurants and bars is a powerful social incentive. And when the U.S. government asserts that terrorists raise money by selling black-market cigarettes, that acts as a rather jarring moral incentive.

Some of the most compelling incentives yet invented have been put in place to deter crime. Considering this fact, it might be worthwhile to take a familiar question—why is there so much crime in modern society?—and stand it on its head: why isn't there a lot more crime?

After all, every one of us regularly passes up opportunities to maim, steal, and defraud. The chance of going to jail—thereby losing your job, your house, and your freedom, all of which are essentially economic penalties—is certainly a strong incentive. But when it comes to crime, people also respond to moral incentives (they don't want to do something they consider wrong) and social incentives (they don't want to be seen by others as doing something wrong). For certain types of misbehavior, social incentives are terribly powerful. In an echo of Hester Prynne's scarlet letter, many American cities now fight prostitution with a "shaming" offensive, posting pictures of convicted johns (and prostitutes) on websites or on local-access television. Which is a more horrifying deterrent: a $500 fine for soliciting a prostitute or the thought of your friends and family ogling you on www.HookersAndJohns.com?

So through a complicated, haphazard, and constantly readjusted web of economic, social, and moral incentives, modern society does its best to militate against crime. Some people would argue that we don't do a very good job. But . . .