Freakonomics

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
Author	Steven D. Levitt and Stephen J. Dubner
Language	English
Publisher	William Morrow
ISBN	0-06-073132-X
Pages	336

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything is a book by economist Steven D. Levitt and journalist Stephen J. Dubner. First published in 2005, the book explores the application of economic theory to diverse subjects not usually covered by "traditional" economists. The authors argue that economics is, at its root, the study of incentives and how people get what they want or need, especially when other people want or need the same thing.

Overview

The book is structured around several key themes and questions, each illustrating how economic principles can be applied to understand real-world phenomena. The authors use a variety of case studies and data analyses to challenge conventional wisdom and reveal surprising insights.

Key Themes

Incentives Matter

One of the central tenets of Freakonomics is that incentives are the cornerstone of modern life. The authors explore how incentives drive behavior in various contexts, from crime to education. For example, they examine how the introduction of monetary incentives for teachers can impact student performance and the potential for cheating.

The Power of Data

Levitt and Dubner emphasize the importance of data in uncovering truths about human behavior. They use data analysis to debunk myths and reveal hidden patterns. For instance, they analyze crime data to argue that the legalization of abortion in the 1970s contributed to the drop in crime rates in the 1990s.

Conventional Wisdom is Often Wrong

The authors challenge widely held beliefs by presenting counterintuitive findings. They argue that conventional wisdom is often shaped by self-interest and misinformation. For example, they question the effectiveness of gun control laws and the real impact of parenting on children's success.

The Role of Experts

Freakonomics also examines the role of experts in society and how their advice can sometimes be misleading. The authors discuss how experts, such as real estate agents, may act in their own interest rather than that of their clients.

Case Studies

Crime and Abortion

One of the most controversial arguments in Freakonomics is the link between the legalization of abortion and the subsequent drop in crime rates. Levitt and Dubner suggest that unwanted children are more likely to become criminals, and thus, the availability of abortion led to fewer unwanted children and, consequently, lower crime rates.

Cheating in Sumo Wrestling

The authors analyze data from sumo wrestling matches to uncover patterns of cheating. They demonstrate how wrestlers manipulate outcomes to maintain rankings and how this behavior is incentivized by the structure of the sport.

The Economics of Drug Dealing

Levitt and Dubner explore the economic structure of drug dealing, comparing it to a corporate hierarchy. They reveal that most street-level drug dealers earn less than minimum wage, challenging the perception of drug dealing as a lucrative business.

Impact and Criticism

Freakonomics has been both praised and criticized for its unconventional approach to economics. Supporters laud its ability to make economics accessible and engaging to a broad audience. Critics, however, argue that some of the book's conclusions are overly simplistic or based on flawed data analysis.

Also see

• Steven D. Levitt
• Stephen J. Dubner
• Behavioral economics
• Incentive
• Data analysis
• Economics