“Which is more dangerous, a gun or a swimming pool? What do schoolteachers and sumo wrestlers have in common? How much do parents really matter?”. If these don’t sound like typical questions raised by economists, it’s because they are not. But breaking conventional wisdom by exploring the hidden patterns behind daily life occurrences is exactly what distinguishes “Freakonomics” from other traditional economics books.
Published in 2005, “Freakonomics: A Rogue Economist Explores the Hidden Side of Everything” is a collaboration between researcher Steven D. Levitt and journalist Stephen J. Dubner. With quick-witted and engaging writing, the book delves into a wide range of topics – from the inner workings of drug dealing gangs to the value of parenting – and applies statistical tools to reach surprising conclusions about human behavior.
The book is structured around a random assortment of questions and doesn’t have a clear connecting theme. In fact, the reader might get whiplash from one page to the next as the authors go from talking about the presence of cheating among school teachers to corruption in sumo wrestling competitions. However, Levitt argues that “Economics is above all a science of measurement”(p.11), meaning that the real goal of economics is to serve as a tool to study society. Thus, according to the author, no unifying theme is needed as the same set of tools used to analyze market dynamics or investment decisions can be applied to subjects that appeal to the researcher’s curiosity.
Indeed, this “treasure-hunt approach” to analyzing different socioeconomic phenomena allows for a great flexibility of topics, including controversial themes. For instance, the authors used the dissemination of secrets from the Ku Klux Klan, a group whose power largely derived from the fact that it hoarded information, to illustrate the power and the effects of information asymmetry. Another prime example from the book is the examination of the drop in crime rates in the United States in the 1990s. Conventional wisdom attributed this decrease in crime to innovative policing strategies or economic growth, but Levitt linked it to the Roe v Wade ruling, which legalized abortion in 1973.
“Legalized abortion led to less unwantedness; unwantedness leads to high crime; legalized abortion, therefore, led to less crime”(p.137). Of course this theory is bound to create controversy, but what Levitt stresses is the existence of a positive correlation between abortion and drops in crime, which was found through data-driven insights. This example perfectly encapsulates Levitt’s approach to investigating socioeconomic issues: using empirical evidence and statistics to make the reader challenge common beliefs and consider how seemingly unrelated factors may be connected.
However, it can be argued that Levitt overlooks the complexities of socioeconomic factors and oversimplifies his analyses. Moreover, the book generally refrains from diving deeper into the statistical processes behind the conclusions, brushing past data and providing just a glimpse of the methodology used. A final consideration that readers should keep in mind is that the book is highly centered around American experiences, which is justifiable as both writers are American and probably had easier access to information from the US. Further, as the work was published in 2005, some data used in the analyses may be outdated, but their findings are still relevant to this day.
In conclusion, with just over 200 pages (plus 100 pages of bonus material), “Freakonomics” gives a new perspective on economics, encouraging readers to think beyond established norms and to see the world through a more critical lens. The book also sparked various discussions about data analysis and its relevance in understanding everyday occurrences. Although ‘Freakonomics” is not ideal for people who expect detailed explanations of the statistical tools applied, it is easily accessible to readers who are just starting to learn more about behavioral insights in economics. With clear and sometimes even humorous writing, Levitt and Dubner’s work brought economics to the forefront of public discussion and is a must read for anyone interested in uncovering the hidden side of everyday subjects.
B.BIAS 