Book Review: Freakonomics

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

My rating: 4 of 5 stars


I've been meaning to get around to this one for a long time. Bought it and kept in on the shelf for a while. Then, one day not long ago while looking for something for a long airplane ride, I pulled it down and tucked it into my carry on. Good call.

Freakonomics is the result of a collaboration between an outside-the-box journalist/writer (Stephen J. Dubner) and an equally unorthodox economics professor at the University of Chicago (Steven D. Levitt). They assigned themselves the task of "asking better questions" related to how modern society works. The result is a funny and enlightening shredding of conventional wisdom. The authors take a fact-based hard look at established truisms and debunk commonly-held beliefs about cause and effect. They claim the book has no unifying theme other than to suggest that things are often not what they seem and taking a hard look at evidence is usually advisable.

Here are a few of the best bits.

--Because "[i]nformation is a beacon, a cudgel, an olive branch, a deterrent, depending on who wields it and how" access to information can determine where one stands in relation to others. The internet has busted open information inequality. Those who make their livings by knowing more than others (realtors, car salesmen, etc.) have to readjust their ways.

--The table of organization for the illicit drug sales force looks much like that of any heavily franchised corporation. Fees are paid up. Product, protection, and branding comes down from above. The fellows at the top of the pyramid are skilled businessmen and very wealthy. The guys doing the hard work are not making much money, but they are striving to advance. Wages are depressed by the availability of many people who would take a job dealing drugs for less than the current guys make.

--Crime rates dropped in the 1990s. This was partially due to increased sentencing for lesser drug offenses and to increased policing. Allowing people to carry concealed guns did not have a measurable effect on crime. What had the most impact was Roe vs. Wade: "the crime rate continued to fall as an entire generation came of age minus the children whose mothers had not wanted to bring a child into the world. Legalized abortion led to less unwantedness; unwantedness leads to high crime; legalized abortion, therefore, led to less crime.

--Attending a magnet or charter school does not correlate to success as strongly as having the kind of parents who would try to enroll their students in such a school. Whether a child's parents have an education is more related to that child's test scores than whether the parents are together. Low birth weight is more predictive of school success than attendance at Head Start. Whether the child has books in the home is more important than whether parents read to them regularly.

Some of these cause-and-effect facts have important implications for public policy. Someone should tell Congress these things. Meanwhile, I'm just glad I read it. I'd like to see the word "freakonomics" come in to the lexicon as a stand in for "challenging what you think you know." Good stuff.






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