Freakonomics | Steven D. Levitt | Cliff Note Books
“Freakonomics: A Rogue Economist Explores the Hidden Side of Everything” is a non-fiction book by economist Steven D. Levitt and journalist Stephen J. Dubner, published in 2005. The book combines elements of economics, sociology, and psychology to explore various unusual and unexpected aspects of everyday life, often revealing hidden patterns and connections.
The book is divided into six chapters, each focusing on a different topic or question. Here’s a brief summary of each chapter:
What Do Schoolteachers and Sumo Wrestlers Have in Common?: This chapter explores the concept of incentives and how they influence human behavior. The authors discuss the role of incentives in cheating, using examples from the world of sumo wrestling and the US educational system.
How Is the Ku Klux Klan Like a Group of Real-Estate Agents?: In this chapter, Levitt and Dubner analyze the power of information and how it can be used to exert control. They compare the Ku Klux Klan’s secretive nature with the real estate market, highlighting how withholding or controlling information can create an advantage.
Why Do Drug Dealers Still Live with Their Moms?: This chapter investigates the economic structure of a drug-dealing organization in Chicago. Contrary to popular belief, the authors find that the majority of drug dealers make very little money and often live in poverty, while only those at the top of the organization reap significant profits.
Where Have All the Criminals Gone?: The authors examine the factors behind the dramatic drop in crime rates in the United States during the 1990s. They controversially argue that one of the main factors was the legalization of abortion in the 1970s, which led to fewer unwanted children being born into circumstances that could have predisposed them to criminal behavior.
What Makes a Perfect Parent?: In this chapter, Levitt and Dubner explore the impact of parenting on a child’s success, analyzing various factors that contribute to educational achievement. They argue that some commonly believed factors have little effect on a child’s success, while others, such as socioeconomic background and the parents’ level of education, play a more significant role.
Perfect Parenting, Part II; or: Would a Roshanda by Any Other Name Smell as Sweet?: The final chapter investigates the impact of a child’s name on their future success. The authors find that a child’s name has little direct influence on their outcomes but may reflect the parents’ socioeconomic status and aspirations, which can indirectly affect the child’s success.
Throughout “Freakonomics,” Levitt and Dubner apply economic principles to a wide range of unconventional topics, revealing unexpected connections and offering fresh insights into human behavior and decision-making. The book has been praised for its engaging and accessible style, making complex economic concepts easy to understand for a general audience.
QUOTES
“Morality, it could be argued, represents the way that people would like the world to work, whereas economics represents how it actually does work.”
“Incentives are the cornerstone of modern life. And understanding them – or, often, deciphering them – is the key to understanding a problem, and how it might be solved.”
“The conventional wisdom is often wrong. Crime didn’t keep soaring in the 1990s, money alone doesn’t win elections, and—surprise!—drinking eight glasses of water a day has never been shown to do a thing for your health. Conventional wisdom is often shoddily formed and devilishly difficult to see through, but it can be done.”
“If you both own a gun and a swimming pool in your backyard, the swimming pool is about 100 times more likely to kill a child than the gun is.”
“Solving a problem is hard enough; it gets that much harder if you’ve decided beforehand it can’t be done.”
“An expert doesn’t so much argue the various sides of an issue as plant his flag firmly on one side. That’s because an expert whose argument reeks of restraint or nuance often doesn’t get much attention.”
“The typical drug dealer (even one who deals crack cocaine) still lives with his mother.”
AUTHORS
Steven D. Levitt:
Steven D. Levitt is an American economist, born on May 29, 1967, in New Orleans, Louisiana. He received his Bachelor of Science in Economics from Harvard University in 1989 and his Ph.D. in Economics from the Massachusetts Institute of Technology (MIT) in 1994. Levitt is currently the William B. Ogden Distinguished Service Professor of Economics at the University of Chicago, where he has been teaching since 1997.
Levitt is best known for his work in the field of microeconomics, particularly in the areas of crime, corruption, and the impact of various social policies. He was awarded the John Bates Clark Medal in 2003, an honor given to the best American economist under the age of 40.
In addition to co-authoring “Freakonomics” and its sequels, Levitt has published numerous academic articles and has contributed to various public policy debates. His research often challenges conventional wisdom and explores the hidden side of various social and economic issues.
Stephen J. Dubner:
Stephen J. Dubner is an American journalist and author, born on August 26, 1963, in Duanesburg, New York. He earned a Bachelor of Arts in English and a Master of Fine Arts in Writing, both from Columbia University. Before his collaboration with Levitt, Dubner was already an accomplished writer, having published several books and articles in prominent publications such as The New York Times and The New Yorker.
Dubner’s writing style is characterized by his ability to make complex topics accessible and engaging for a general audience. His collaboration with Levitt in “Freakonomics” and its sequels has allowed him to combine his journalistic skills with Levitt’s economic expertise to create bestselling books that challenge conventional thinking and explore the hidden connections in everyday life.
Together, Levitt and Dubner have co-authored multiple books in the “Freakonomics” series, including “SuperFreakonomics,” “Think Like a Freak,” and “When to Rob a Bank.” They also co-host the popular podcast “Freakonomics Radio,” which covers a wide range of topics related to economics, psychology, and sociology.
CRITICISMS
While “Freakonomics” has been widely praised for its engaging writing style and thought-provoking insights, it has also faced several criticisms. Here are some of the most common criticisms:
Overreliance on correlation: Critics argue that Levitt and Dubner sometimes rely too heavily on correlation to make their points, potentially leading to flawed conclusions. For example, the authors’ argument that the legalization of abortion in the 1970s contributed to the drop in crime rates in the 1990s has been criticized for its reliance on correlational data without sufficient evidence of causation.
Oversimplification: Some readers argue that the book oversimplifies complex economic and social issues, presenting them in a way that may be misleading or superficial. Critics contend that while the authors’ approach makes the material more accessible, it can also result in an incomplete or oversimplified understanding of the topics discussed.
Sensationalism: Critics have accused the book of employing sensationalism to grab readers’ attention, focusing on provocative or controversial topics rather than offering a balanced exploration of the subjects. This approach, some argue, can lead to an overemphasis on outliers and unusual cases rather than a comprehensive understanding of the issues at hand.
Lack of rigorous methodology: Some critics, particularly from the academic community, argue that “Freakonomics” lacks the rigorous methodology and careful analysis typically associated with academic research. They contend that the book’s conclusions are not always supported by robust evidence or in-depth analysis.
Cherry-picking data: Levitt and Dubner have been criticized for selectively choosing data and examples that support their arguments while ignoring or downplaying contradictory evidence. This approach, critics argue, can result in a biased or incomplete presentation of the issues discussed.
Despite these criticisms, “Freakonomics” has been widely popular and has inspired many readers to think differently about economics and the world around them. It has also led to a series of follow-up books, as well as a successful podcast that continues to explore the hidden side of various social and economic issues.
SUMMARIES
“Freakonomics: A Rogue Economist Explores the Hidden Side of Everything” consists of an introduction, six main chapters, and an epilogue. The chapters in the book are as follows:
What Do Schoolteachers and Sumo Wrestlers Have in Common?
How Is the Ku Klux Klan Like a Group of Real-Estate Agents?
Why Do Drug Dealers Still Live with Their Moms?
Where Have All the Criminals Gone?
What Makes a Perfect Parent?
Perfect Parenting, Part II; or: Would a Roshanda by Any Other Name Smell as Sweet?
Each chapter in “Freakonomics” explores a different topic or question, often revealing surprising connections and insights into human behavior and decision-making.
What Do Schoolteachers and Sumo Wrestlers Have in Common?
This chapter delves into the concept of incentives and their influence on human behavior. It discusses cheating and how it manifests in various situations. The authors use examples of cheating among sumo wrestlers in Japan and schoolteachers in the US who manipulate their students’ test scores to meet performance targets. Levitt and Dubner present their analysis of the data, which exposes the patterns of cheating in both cases.
How Is the Ku Klux Klan Like a Group of Real-Estate Agents?
The authors explore the power of information asymmetry and how controlling information can create an advantage. They draw a parallel between the secretive nature of the Ku Klux Klan and the real estate market, where agents can manipulate clients due to their superior knowledge of the market. The chapter also tells the story of Stetson Kennedy, who infiltrated the KKK and exposed its secrets, undermining its power.
Why Do Drug Dealers Still Live with Their Moms?
This chapter investigates the economic structure of a drug-dealing organization in Chicago. Contrary to the popular belief that drug dealers make significant amounts of money, the authors find that most street-level dealers earn very little and often live in poverty. Using data from the organization’s financial records, Levitt and Dubner reveal that only those at the top of the organization make substantial profits, while the majority of drug dealers face significant risks for minimal rewards.
Where Have All the Criminals Gone?
Levitt and Dubner examine the factors behind the significant drop in crime rates in the US during the 1990s. The chapter presents various theories explaining the decrease, including changes in policing strategies, the booming economy, and an increased number of incarcerated individuals. The authors then controversially argue that the legalization of abortion in the 1970s led to fewer unwanted children being born into circumstances that could predispose them to criminal behavior, ultimately contributing to the decline in crime rates.
What Makes a Perfect Parent?
In this chapter, the authors explore the impact of parenting on a child’s success and analyze various factors that contribute to educational achievement. They use data from the Early Childhood Longitudinal Study (ECLS) to evaluate the significance of different parenting practices. Levitt and Dubner argue that some commonly believed factors, such as reading to a child every day or enrolling them in Head Start programs, have little effect on a child’s success, while others, such as socioeconomic background and the parents’ level of education, play a more significant role.
Perfect Parenting, Part II; or: Would a Roshanda by Any Other Name Smell as Sweet?
The final chapter investigates the impact of a child’s name on their future success. The authors analyze data from the California Birth Records and find that a child’s name has little direct influence on their outcomes. However, a child’s name may reflect the parents’ socioeconomic status and aspirations, which can indirectly affect the child’s success. The chapter also discusses the role of distinctively black names and the potential impact of name-based discrimination on future opportunities.