Freakonomics

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Freakonomics:
A Rogue Economist Explores
the Hidden Side of Everything
Freakonomics.jpg
Hardcover edition
Author Steven D. Levitt
Stephen J. Dubner
Country United States
Language English
Subject Economics, Sociology
Genre Non-fiction
Publisher William Morrow
Publication date
April 12, 2005
Media type Hardback & Paperback
Pages 336 pp (hardback edition)
ISBN ISBN 0-06-123400-1 (Hardback), ISBN 0-06-089637-X (large print paperback)
OCLC 73307236
Followed by SuperFreakonomics

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything is a non-fiction book by University of Chicago economist Steven Levitt and New York Times journalist Stephen J. Dubner. It was published on April 12, 2005 by William Morrow. The book has been described as melding pop culture with economics.1 By late 2009, the book had sold over 4 million copies worldwide.2

Overview

The book is a collection of 'economic' articles written by Levitt, an expert who has already gained a reputation for applying economic theory to diverse subjects not usually covered by "traditional" economists; he does, however, accept the standard neoclassical microeconomic model of rational utility-maximization. In Freakonomics, Levitt and Dubner argue that economics is, at root, the study of incentives. The book's topics include:

One example of the authors' use of economic theory involves demonstrating the existence of cheating among sumo wrestlers. In a sumo tournament, all wrestlers in the top division compete in 15 matches and face demotion if they do not win at least eight of them. The sumo community is very close-knit, and the wrestlers at the top levels tend to know each other well. The authors looked at the final match, and considered the case of a wrestler with seven wins, seven losses, and one fight to go, fighting against an 8-6 wrestler. Statistically, the 7-7 wrestler should have a slightly below even chance, since the 8-6 wrestler is slightly better. However, the 7-7 wrestler actually wins around 80% of the time. Levitt uses this statistic and other data gleaned from sumo wrestling matches, along with the effect that allegations of corruption have on match results, to conclude that those who already have 8 wins collude with those who are 7-7 and let them win, since they have already secured their position for the following tournament. Despite condemnation of the claims by the Japan Sumo Association following the book's publication in 2005, the 2011 Grand Tournament in Tokyo was cancelled for the first time since 1946 because of allegations of match fixing.3

The authors attempt to demonstrate the power of data mining, as a number of their results emerge from Levitt's analysis of various databases. The authors posit that various incentives encourage teachers to cheat by assisting their students with multiple-choice high-stakes tests. Such cheating in the Chicago school system is inferred from detailed analysis of students' answers to multiple choice questions. But first Levitt asks, "What would the pattern of answers look like if the teacher cheated?" The simple answer: the more difficult questions found at the end of test sections will be answered correctly more frequently than the easy questions at the beginning of test sections.

Reappraisals

In Chapter 2 of Freakonomics, the authors wrote of their visit to folklorist Stetson Kennedy's Florida home where the topic of Kennedy's investigations of the Ku Klux Klan were discussed. However, in their January 8, 2006 column in the New York Times Magazine, Dubner and Levitt wrote of questions about Stetson Kennedy's research ("Hoodwinked", pp. 26–28) leading to the conclusion that Kennedy's research was at times embellished for effectiveness.

In the "Revised and Expanded Edition" this embellishment was noted and corrected: "Several months after Freakonomics was first published, it was brought to our attention that this man's portrayal of his crusade, and various other Klan matters, was considerably overstated....we felt it was important to set straight the historical record."4

Refutations

Effects of abortion ban

There have been many responses to the theory that legal abortion reduces crime – see Legalized abortion and crime effect: Responses and The Impact of Legalized Abortion on Crime for details.

Freakonomics commented on the effects of an abortion ban in Romania (Decree 770), stating that "Compared to Romanian children born just a year earlier, the cohort of children born after the abortion ban would do worse in every measurable way: they would test lower in school, they would have less success in the labor market, and they would also prove much more likely to become criminals. (p. 118)". John DiNardo, a professor at the University of Michigan, retorts that the paper cited by Freakonomics states "virtually the opposite of what is actually claimed":

On average, children born in 1967 just after abortions became illegal display better educational and labor market achievements than children born prior to the change. This outcome can be explained by a change in the composition of women having children: urban, educated women were more likely to have abortions prior to the policy change, so a higher proportion of children were born into urban, educated households. (Pop-Eleches, 2002, p.34).

—John DiNardo, Freakonomics: Scholarship in the Service of Storytelling5

Levitt responded on the Freakonomics Blog that Freakonomics and Pop-Eleches "are saying the same thing":

Here is the abstract of the version of the Pop-Eleches paper that we cited:

…Children born after the abortion ban attained more years of schooling and greater labor market success. This is because urban, educated women were more likely to have abortions prior to the policy change, and the relative number of children born to this type of woman increased after the ban. However,controlling for composition using observable background variables, children born after the ban on abortions had worse educational and labor market achievements as adults. Additionally, I provide evidence of crowding in the school system and some suggestive evidence that cohorts born after the introduction of the abortion ban had higher infant mortality and increased criminal behavior later in life.

The introduction of the Pop-Eleches paper says:

This finding is consistent with the view that children who were unwanted during pregnancy had worse socio-economic outcomes once they became adults.

Effects of extra police on crime

Freakonomics claimed that it was possible to "tease" out the effect of extra police on crime by analysing electoral cycles. The evidence behind these claims was shown to be due partly to a programming error. McCrary stated "While municipal police force size does appear to vary over state and local electoral cycles ... elections do not induce enough variation in police hiring to generate informative estimates of the effect of police on crime."5

Criticism

Freakonomics has been criticised for in fact being a work of sociology and/or criminology, rather than economics. Israeli economist Ariel Rubinstein criticised the book for making use of dubious statistics and complained that "economists like Levitt ... have swaggered off into other fields", saying that the "connection to economics ... [is] none" and that the book is an example of "academic imperialism".6 Arnold Kling has suggested the book is an example of "amateur sociology".7

Thomas Ferguson, author of Golden Rule: The Investment Theory of Party Competition was asked in 2009 to respond to the following claim in Freakonomics:

"A winning candidate can cut his spending in half and lose only 1 percent of the vote. Meanwhile, a losing candidate who doubles his spending can expect to shift the vote in his favor by only that same 1 percent."

His response was:

"Where on earth do such figures come from? You would need a fully specified regression equation to do this, that incorporated a lot of variables. Unless you hold constant everything else, including issues -- not easy even to imagine -- such claims are nonsense. Think of a couple of cases. Obviously, an incumbent Congressman or woman with a big margin could spend a bit less and probably do almost as well. By contrast, candidates in close elections surely cannot do this. The real issue is the dependence of money on taking conservative issue positions. Claims about existing candidates typically reflect censored data. That is, there's no one able to run that can run very far to the left."

Economist Robert P. Murphy takes exception to the way the book describes economists and their field, saying the authors end up actually describing econometrics. He also contends the book's ambiguous style makes it very difficult to determine exactly what the authors are claiming in various chapters.8

Publishing history

Freakonomics peaked at number two among nonfiction on The New York Times Best Seller list and was named the 2006 Book Sense Book of the Year in the Adult Nonfiction category. The book received positive reviews from critics. The review aggregator Metacritic reported the book had an average score of 67 out of 100, based on 16 reviews.9

Screen shot of Freakonomics Blog

The success of the book has been partly attributed to the blogosphere. In the campaign prior to the release of the book in April 2005, publisher (William Morrow and Company) chose to target bloggers in an unusually strategical way, sending galley copies to over a hundred of them, as well as contracting two specialized word of mouth (buzz marketing) agencies.1

In 2006, the Revised and Expanded Edition of the book was published, with the most significant corrections in the second chapter.10

Freakonomics blog

The authors started their own Freakonomics blog, which is "meant to keep the conversation going", in 2005.

In May 2007, writer and blogger Melissa Lafsky was hired as the full-time editor of the site.11 In August 2007, the blog was incorporated into The New York Times' web site – the authors had been writing joint columns for The New York Times Magazine since 2004 – and the domain Freakonomics.com became a redirect there.12 In March 2008, Annika Mengisen replaced Lafsky as the blog editor.13 The Freakonomics blog ended its association with the New York Times on March 1, 2011.14

Among the recurrent guest bloggers on the Freakonomics blog are Ian Ayres,15 Daniel Hamermesh,16 Eric A. Morris,17 Sudhir Venkatesh,18 Justin Wolfers19 and others.

In 2008, Stephen Dubner asked for questions from the site's readers and then featured them in an extended Q&A on "Best Places to Live" with demographics expert Bert Sperling.20

SuperFreakonomics

In April 2007, co-author Stephen Dubner announced that there would be a sequel to Freakonomics, and that it would contain further writings about street gang culture from Sudhir Venkatesh, as well as a study of the use of money by capuchin monkeys.21 Dubner said the title would be SuperFreakonomics,22 and that one topic would be what makes people good at what they do.23 The book was released in Europe in early October 2009 and in the United States on October 20, 2009.

Film adaptation

In 2010, Chad Troutwine, Chris Romano, and Dan O'Meara produced a documentary film adaptation with a budget of nearly US$3 million in an omnibus format by directors Seth Gordon, Morgan Spurlock, Alex Gibney, Eugene Jarecki, Rachel Grady, and Heidi Ewing.24 It was the Closing Night Gala premiere film at the Tribeca Film Festival on April 30, 2010.25 It was also the Opening Night film at the AFI/Discovery SilverDocs film festival on June 21, 2010. Magnolia Pictures has acquired distribution rights for a Fall 2010 release.26

Freakonomics: The Movie was released in major cities with a pay what you want pricing offer for selected preview showings.27 No report of the results has yet been published.

Freakonomics Consulting Group

In 2009, Steven Levitt co-founded Freakonomics Consulting Group, a business and philanthropy consulting company now known as The Greatest Good. Founding partners include Nobel laureates Daniel Kahneman and Gary Becker, as well as several other prominent economists.28

See also

References

  1. ^ a b Deahl, Rachel (6 May 2005). "Getting a Buzz On: How Publishers Are Turning Online to Market Books". The Book Standard. 
  2. ^ Fox, Justin (26 October 2009). "Is the World Ready for Freakonomics Again?". Time.com. Retrieved 7 June 2011. 
  3. ^ "Sumo tournament cancelled amid match-fixing scandal". BBC. 2011-02-06. 
  4. ^ Levitt, Steven D.; Dubner, Stephen J. (5 October 2006). Freakonomics: A Rogue Economist Explores the Hidden Side of Everything (Revised and Expanded Edition). William Morrow. p. xiv. ISBN 0-06-123400-1. 
  5. ^ a b DiNardo, John. "Freakonomics: Scholarship in the Service of Storytelling". American Law and Economics Review (Oxford Journals) 8 (3): 615–626. 
  6. ^ Rubinstein, Ariel. 7. "Freak-Freakonomics". The Economists' Voice 3 (9). doi:10.2202/1553-3832.1226. 
  7. ^ Kling, Arnold (5 July 2005). "Freakonomics or Amateur Sociology?". Ideas in Action with Jim Glassman. Retrieved 7 June 2011. 
  8. ^ Murphy, Robert P. (25 May 2005). "More Fun than Truth". Mises.org. Retrieved 2012-03-20. 
  9. ^ "Freakonomics by Steven D. Levitt and Stephen J. Dubner: Reviews". Metacritic. Archived from the original on 18 February 2008. Retrieved 11 March 2008. 
  10. ^ Dubner, Stephen J. (20 September 2006). "Freakonomics 2.0". Freakonomics (blog). Retrieved 7 June 2011. 
  11. ^ Dubner, Stephen J. (4 May 2007). "Please Welcome the First Editor of Freakonomics.com". Freakonomics (blog). Retrieved 7 June 2011. 
  12. ^ Dubner, Stephen J. (7 August 2007). "Moving Day". Freakonomics (blog). Retrieved 7 June 2011. 
  13. ^ Dubner, Stephen J. (17 March 2008). "Please welcome...". Freakonomics (blog). Retrieved 7 June 2011. 
  14. ^ Dubner, Stephen J. (18 January 2011). "Yes, This Blog Is Leaving NYTimes.com". Freakonomics (blog). Retrieved 7 June 2011. 
  15. ^ "Posts published by Ian Ayres". The New York Times. Retrieved 2 May 2010. 
  16. ^ "Posts published by Daniel Hamermesh". The New York Times. Retrieved 2 May 2010. 
  17. ^ "Posts published by Eric A. Morris". The New York Times. Retrieved 2 May 2010. 
  18. ^ "Posts published by Sudhir Venkatesh". The New York Times. Retrieved 2 May 2010. 
  19. ^ "Posts published by Justin Wolfers". The New York Times. Retrieved 2 May 2010. 
  20. ^ Dubner, Stephen. "Bert Sperling Answers Your "Best Places to Live" Questions". Retrieved 3 August 2012. 
  21. ^ Lombardi, Candace (19 April 2007). "Freakonomics writer talks monkey business". CNET News. Archived from the original on 19 January 2013. Retrieved 7 June 2011. 
  22. ^ Conley, Lucas (1 November 2005). "Freakonomics, economic hit men, undercover economists. This ain't Adam Smith.". Fast Company. Retrieved 7 June 2011. 
  23. ^ "Here Is What SuperFreakonomics Will Look Like". The New York Times. 7 August 2009. Retrieved 2 May 2010. 
  24. ^ "Freakonomics". Internet Movie Database. Retrieved 20 July 2009. 
  25. ^ Kohn, Eric (1 May 2010). "TRIBECA REVIEW — Movies Within a Movie: The Anthology Documentary "Freakonomics"". indieWIRE. Retrieved 17 November 2010. 
  26. ^ "Magnolia Picks Up 'Freakonomics' Documentary". News in Film. Retrieved 5 April 2010. 
  27. ^ "Pay what you want to see Freakonomics: The Movie". 
  28. ^ "The Greatest Good - Consulting". Retrieved July 14, 2012. 
  29. ^ Gladwell, Malcolm (March 2006). "Levitt and Dubner respond". Retrieved 23 December 2012. 

Further reading

External links








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