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Freakonomics: A Rogue Economist Explores the Hidden Side of Everything    by Steven D. Levitt & Stephen J. Dubner order for
by Steven D. Levitt
Order:  USA  Can
William Morrow, 2005 (2005)
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* * *   Reviewed by Hilary Williamson

Steven D. Levitt, who teaches economics at the University of Chicago, explores 'the stuff and riddles of everyday life', taking an outside the box perspective that presents unique insights. His co-author, Stephen J. Dubner, writes for The New York Times and The New Yorker. Levitt's intellectual detective work uses fundamental ideas - 'Incentives are the cornerstone of modern life'; 'conventional wisdom is often wrong'; 'Dramatic effects often have distant, even subtle, causes'; experts 'use their informational advantage to serve their own agenda'; and 'Knowing what to measure and how to measure it makes a complicated world much less so' - to reveal surprising cause/effect relationships and often counter-intuitive conclusions.

While I had figured out the real estate reality (that agents work to make a speedy sale, rather than in their clients' best interests) many houses ago, and expect online daters to lie, I was surprised by many of the incentive driven effects presented here. They include circumstances that drive some Sumo wrestlers and schoolteachers to cheat, and how statistical analyses can make it evident; executives as bagel thiefs (they do it more than lower level employees); how the Internet has lowered insurance prices; and how ridicule prevented a resurgence of the Ku Klux Klan. Under 'Why Do Drug Dealers Still Live With Their Moms?', the authors provide data that shows this to be one of the glamour professions that in reality have very poor outcomes for most participants. And they say of the impact of crack, that 'Black Americans were hurt more by crack cocaine than by any other single cause since Jim Crow.'

Fascinating comparisons include those between the implications of abortion legislation in Romania and the United States, and of gun control and crime rates in the U.S. versus Switzerland. Given the latter's high availabilty of firearms, the authors tell us that 'guns do not cause crime' but 'the established U.S. methods of keeping guns away from the people who do cause crime are, at best, feeble.' And they make a credible argument that Roe vs. Wade resulted in the falling crime rate of the 1990s, adding that 'one need not oppose abortion on moral or religious grounds to feel shaken by the notion of a private sadness being converted into a public good.' They go on to various parenting issues from the danger of swimming pools (a much greater risk than a gun in the home) to implications of school choices, parental influence on children's outcomes (less than we think), and the first impression that specific names can give of socio-economic status.

In closing, the authors encourage us to be more skeptical of 'conventional wisdom' and to keep asking questions. They have certainly provided a great deal of intriguing and entertaining food for thought in Freakonomics.

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