Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
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- About the Author
- Read an Excerpt
- Reading Group Guide
- What People are Saying
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The legendary bestseller that made millions look at the world in a radically different way returns in a new edition, now including an exclusive discussion between the authors and bestselling professor of psychology Angela Duckworth.
Which is more dangerous, a gun or a swimming pool? Which should be feared more: snakes or french fries? Why do sumo wrestlers cheat? In this groundbreaking book, leading economist Steven Levitt--Professor of Economics at the University of Chicago and winner of the American Economic Association's John Bates Clark medal for the economist under 40 who has made the greatest contribution to the discipline--reveals that the answers. Joined by acclaimed author and podcast host Stephen J. Dubner, Levitt presents a brilliant--and brilliantly entertaining--account of how incentives of the most hidden sort drive behavior in ways that turn conventional wisdom on its head.
ISBN-13: 9780063032378
Media Type: Paperback
Publisher: HarperCollins Publishers
Publication Date: 05-19-2020
Pages: 352
Product Dimensions: 5.30(w) x 8.10(h) x 0.90(d)
Steven D. Levitt, a professor of economics at the University of Chicago, was awarded the John Bates Clark Medal, given to the most influential American economist under forty. He is also a founder of The Greatest Good, which applies Freakonomics-style thinking to business and philanthropy.Stephen J. Dubner, an award-winning journalist and radio and TV personality, has worked for the New York Times and published three non-Freakonomics books. He is the host of Freakonomics Radio and Tell Me Something I Don't Know. Stephen J. Dubner is an award-winning author, journalist, and radio and TV personality. He quit his first career—as an almost rock star—to become a writer. He has since taught English at Columbia, worked for The New York Times, and published three non-Freakonomics books.
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 an Excerpt
Chapter One
What Do Schoolteachers
and Sumo Wrestlers
Have in Common?
The foregoing is excerpted from Freakonomics by Steven D. Levitt and Stephen J Dubner. All rights reserved. No part of this book may be used or reproduced without written permission from HarperCollins Publishers, 10 East 53rd Street, New York, NY 10022
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About the Book 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 young scholar who studies the 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. Discussion Questions: About the authors Steven Levitt is a Professor of Economics at the University of Chicago and an editor of The Journal of Political Economy. In January 2004 he was awarded the John Bates Clark medal -- for the economist under 40 who has made the greatest contribution to the discipline -- by the American Economic Association. Stephen J. Dubner is the author of Confessions of a Hero Worshiper and Turbulent Souls and is a former writer and editor at the New York Times Magazine. He lives in New York City with his family.Reading Group Guide
“Freakonomics is politically incorrect in the best, most essential way.... This is bracing fun of the highest order.”
“Steven Levitt has the most interesting mind in America... Prepare to be dazzled.”What People are Saying About This
Kurt Andersen
An Explanatory Note xxiii In which the origins of this book are clarified. Introduction: The Hidden Side of Everything 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 criminologists 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? Chapter 1 What Do Schoolteachers and Sumo Wrestlers Have in Common? 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 million American children 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. Chapter 2 How is the Ku Klux Klan Like a Group of Real-Estate Agents? 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 worth 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? Chapter 3 Why Do Drug Dealers Still Live with Their Moms? 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 hit black Americans since Jim Crow? Chapter 4 Where Have All the Criminals Gone? 115 In which the facts of crime are sorted out from the fictions. What Nicolae Ceausescu 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. Chapter 5 What Makes a Perfect Parent? 147 In which we ask, from a variety of angles, a pressing question: do parents really matter? 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. Chapter 6 Perfect Parenting, Part II; or: Would a Roshanda by Any Other Name Smell as Sweet? 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 name, 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 Harvard 209 In which the dependability of data meets the randomness of life. Bonus Matter 213 "The Probability That a Real-Estate Agent Is Cheating You …" 215 Selected "Freakonomics" Columns From The New York Times Magazine 233 A Q&A with the Authors 261 Notes 269 Acknowledgments 295 Index 297Table of Contents