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Freakonomics - You've Got to Read It to Believe It!

June 26, 2011 | Comments: 0 | Views: 141

How is it that Steven Levitt, an economist, and Stephen Dubner, a journalist, have sold millions of copies of Freakonomics? The book's success and wide acclaim rest with the fact that it explains perplexing human behavior from the standpoint of economic incentives. The authors examine, in particular, actions that usually merit social disapproval: crime, cheating, corruption, terrorism, and racism. Their book connects seemingly unrelated facts to offer eye-opening reasons for widespread behavioral anomalies.

The authors reason, for example, that the dramatic drop in crime in the 1990s was not due to better law enforcement or a good economy, but to the legalization of abortion 20 years earlier. The availability of abortion reduced the number of unwanted children born to unwed mothers who would otherwise rear their children in adverse conditions: The same type of conditions that spawn adult criminals. How many other experts cited abortion as the reason for the drop in crime? Zero.

Levitt and Dubner offer intriguing economic explanations as to why your real estate agent might not sell your house for top dollar. Why? Because an extra $10,000 to a home seller is not sufficient incentive, compared to the extra $150 it brings the real estate agent, after expenses.

The two authors give ample proof that cheating takes place in almost all human endeavors, regardless of the structure of rewards and penalties. The authors show how teachers inflate student test scores in order to keep their jobs. Readers also learn about white collar cheating at the office. Watch your lunchroom bagel supply!

Freakonomics shows how information (especially secret information) is a powerful form of currency that, in adversarial hands, can lead to the downfall of the high and mighty. Insider information confers economic advantages to those who hold it. That's why, increasingly, the Internet is leveling the playing field between the information haves and have-nots. Levitt and Dubner document, in fact, that some of the most costly criminal acts of the past decade have been based on manipulating and falsifying information. It comes as no surprise that ignorance and fear go hand-in-hand, and those who can leverage both can easily rise to prominence.

Repeatedly, Freakonomics tells readers how it is possible to falsify information (especially statistics) to promote social, political, and economic agendas for special-interests. One chapter reveals the economic structure of street gangs: The top bosses make six figure incomes, while the minions make less than minimum wage and stand a 1 in 4 chance of being killed. Readers also learn how a typical prostitute can earn more than a typical architect (in case anyone wants to know this). The authors describe how people tend to overestimate risks to safety, making choices based on fear rather logic. You might be surprised that backyard swimming pools pose a greater danger to children's lives than guns in the home.

Would you like to know how bad schools harm children's futures? Every parent should read Chapter 5 to find out. That same chapter gives the eight socio-economic factors most highly correlated with high standardized test scores. Chapter 6 proves, via correlational analyses, that a child's first name can help to determine his or her future socio-economic status.

While Freakonomics contains brilliant analyses and many obscure statistics, the authors freely concede that the data and conclusions have no unifying theme. The book is a fun, rambling read for its novel (and in some cases amusing) way of assessing the human condition, often overturning conventional wisdom.

What are three things that people often buy but fail to use? What is a penny really worth? Why do Sumo wrestlers concede defeat when they could easily win a match? Freakonomics has the answers to these and dozens of other burning questions. The book is full of factoids and wit, engrossing to read, and gives plenty to talk about, laugh about, and ponder!

Judith E. Pearson, Ph.D. is a licensed counselor, hypnotherapist, writer, speaker, and NLP Coach with a private practice, Motivational Strategies, Inc., in Springfield, Virginia. She is the executive director of the National Board for Certified Clinical Hypnotherapists She recently published The Weight, Hypnotherapy, and You Weight Reduction Program: An NLP and Hypnotherapy Practitioners Manual. Her web site is

Source: EzineArticles
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