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Freakonomics : A Rogue Economist Explores the Hidden Side of Everything

by
ISBN13:

9780060731328

ISBN10:
006073132X
Format:
Hardcover
Pub. Date:
3/23/2005
Publisher(s):
WILLIAM MORROW & CO.

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  • Freakonomics : A Rogue Economist Explores the Hidden Side of Everything
    Freakonomics : A Rogue Economist Explores the Hidden Side of Everything





Summary

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.

Author Biography

Steven D. Levitt teaches economics at the University of Chicago.

Table of Contents

An Explanatory Notep. xxiii
In which the origins of this book are clarified.
Introduction: The Hidden Side of Everythingp. 1
In which the book's central idea is set forth: namely, if morality represents how people would like the world to work, then economics shows how it actually does work.
Why the conventional wisdom is so often wrong
How "experts"-from crimnologists to real-estate agents to political scientists-bend the facts
Why knowing what to measure, and how to measure it, is the key to understanding modern life
What is "freakonomics," anyway?
What Do Schoolteachers and Sumo Wrestlers Have in Common?p. 15
In which we explore the beauty of incentives, as well as their dark side-cheating.
Who cheats? Just about everyone
How cheaters, cheat, and how to catch them
Stories from an Israeli day-care center
The sudden disappearance of seven millon American childern
Cheating schoolteachers in Chicago
Why cheating to lose is worse than cheating to win
Could sumo wrestling, the national sport of Japan, be corrupt?
What the Bagel Man saw: mankind may be more honest than we think
How Is the Ku Klux Klan Like A Group of Real-Estate Agents?p. 51
In which it is argued that nothing is more powerful than information, especially when its power is abused.
Spilling the Ku Klux Klan's secrets
Why experts of every kind are in the perfect position to exploit you
The antidote to information abuse: the Internet
Why a new car is suddenly sorth so much less the moment it leaves the lot
Breaking the real-estate agent code: what "well maintained" really means
Is Trent Lott more racist than the average Weakest Link contestant?
What do online daters lie about?
Why Do Drug Dealers Still Live with Their Moms?p. 85
In which the conventional wisdom is often found to be a web of fabrication, self-interest, and convenience.
Why experts routinely make up statistics; the invention of chronic halitosis
How to ask a good question
Sudhir Venkatesh's long, strange trip into the crack den
Why prostitutes earn more than architects
What a drug dealer, a high-school quarterback, and an editorial assistant have in common
How the invention of crack cocaine mirrored the invention of nylon stocking
Was crack the worst thing to bit black Americans since Jim Crow?
Where Have all the Criminals Gone?p. 115
In which the facts of crime are sorted out from the fictions.
What Nicolae Ceauşescu learned-the hard way-about abortion
Why the 1960s was a great time to be a criminal
Think the roaring 1990s economy put a crimp on crime? think again
Why capital punishment doesn't deter criminals
Do police actually lower crime rates?
Prisons, prisons everywhere
Seeing through the New York City police "miracle"
What is a gun, really?
Why early crack dealers were like Microsoft millionaires and later crack dealers were like Pets.com
The superpredator versus the senior citizen
Jane Roe, crime stopper: how the legalization of abortion changed every-thing.
What Makes A Perfect Parent?p. 147
In which we ask, from a variety of angels, a pressing question: do parents really matter?p. 147
The conversion of parenting from an art to a science
Why parenting experts like to scare parents to death
Which is more dangerous: a gun or a swimming pool?
The economics of fear
Obsessive parents and the nature-nurture quagmire
Why a good school isn't as good as you might think
The black-white test gap and "acting white"
Eight things that make a child do better in school and eight that don't
Perfect Parenting, Part II; or: Would a Roshanda By Any Other Name Smell As Sweet?p. 181
In which we weigh the importance of a parent's first official act-naming the baby.
A boy named Winner and his brother, Loser
The blackest names and the whitest names
The segregation of culture: why Seinfeld never made the top fifty among black viewers
If you have a really bad banem should you just change it?
High-end names and low-end names (and how one becomes the other)
Britney Spears: a symptom, not a cause
Is Aviva the next Madison?
What your parents were telling the world when they gave you your name.
Epilogue: Two Paths to Harvardp. 209
In which the dependability of data meets the randomness of life.
Bonus Matterp. 213
"The Probability That a Real-Estate Agent Is Cheating You..."p. 215
Selected "Freakonomics" Columns From The New York Times Magazinep. 233
A Q&A with the Authorsp. 261
Notesp. 269
Acknowledgmentsp. 295
Indexp. 297
Table of Contents provided by Ingram. All Rights Reserved.

Excerpts

Freakonomics
A Rogue Economist Explores the Hidden Side of Everything

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 bepicked up by 4 p.m. But very often parents are late. The result: at day'send, you have some anxious children and at least one teacher whomust wait around for the parents to arrive. What to do?

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

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

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

Economics is, at root, the study of incentives: how people get whatthey want, or need, especially when other people want or need thesame thing. Economists love incentives. They love to dream them upand enact them, study them and tinker with them. The typical economistbelieves the world has not yet invented a problem that he cannotfix if given a free hand to design the proper incentive scheme. Hissolution may not always be pretty -- it may involve coercion or exorbitantpenalties or the violation of civil liberties -- but the originalproblem, rest assured, will be fixed. An incentive is a bullet, a lever, akey: an often tiny object with astonishing power to change a situation.

We all learn to respond to incentives, negative and positive, fromthe outset of life. If you toddle over to the hot stove and touch it, youburn a finger. But if you bring home straight A's from school, you geta new bike. If you are spotted picking your nose in class, you getridiculed. But if you make the basketball team, you move up the socialladder. If you break curfew, you get grounded. But if you ace yourSATs, 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 youperform so well that a rival company comes calling, you become a vicepresident and no longer have to work for your father. If you becomeso excited about your new vice president job that you drive home ateighty mph, you get pulled over by the police and fined $100. But ifyou hit your sales projections and collect a year-end bonus, you notonly aren't worried about the $100 ticket but can also afford to buy that Viking range you've always wanted -- and on which your toddlercan now burn her own finger.

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

There are three basic flavors of incentive: economic, social, andmoral. Very often a single incentive scheme will include all three varieties.Think about the anti-smoking campaign of recent years. Theaddition of a $3-per-pack "sin tax" is a strong economic incentiveagainst buying cigarettes. The banning of cigarettes in restaurants andbars is a powerful social incentive. And when the U.S. government assertsthat 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 beenput in place to deter crime. Considering this fact, it might be worthwhileto take a familiar question -- why is there so much crime inmodern society? -- and stand it on its head: why isn't there a lot morecrime?

After all, every one of us regularly passes up opportunities tomaim, steal, and defraud. The chance of going to jail—thereby losingyour job, your house, and your freedom, all of which are essentiallyeconomic penalties -- is certainly a strong incentive. But when itcomes to crime, people also respond to moral incentives (they don'twant to do something they consider wrong) and social incentives (they don't want to be seen by others as doing something wrong). Forcertain types of misbehavior, social incentives are terribly powerful. Inan echo of Hester Prynne's scarlet letter, many American cities nowfight prostitution with a "shaming" offensive, posting pictures of convictedjohns (and prostitutes) on websites or on local-access television.Which is a more horrifying deterrent: a $500 fine for soliciting aprostitute or the thought of your friends and family ogling you onwww.HookersAndJohns.com ...

Freakonomics
A Rogue Economist Explores the Hidden Side of Everything
. Copyright © by Steven Levitt. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

Excerpted from Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt, Stephen J. Dubner
All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.


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