☘Misericordia☘ ~ The Serendipity Aegis ~ ⚡ϟ⚡ϟ⚡⛈ ✺❂❤❣'s Reviews > Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

Freakonomics by Steven D. Levitt
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Extremely enlightening! Worthy of 15 stars out of 5! This is a book about the world and not about any science in particular. It's about learning to question the given and see beyond the obvious. An extremely useful gift in the misguiding modern world.

Yeah, populistic much too much but neverthless compulsively readable. A definite revisit and reread.

Q:
As Levitt sees it, economics is a science with excellent tools for gaining answers but a serious shortage of interesting questions. His particular gift is the ability to ask such questions. For instance: If drug dealers make so much money, why do they still live with their mothers? Which is more dangerous, a gun or a swimming pool? What really caused crime rates to plunge during the past decade? Do real-estate agents have their clients’ best interests at heart? Why do black parents give their children names that may hurt their career prospects? Do schoolteachers cheat to meet high-stakes testing standards? Is sumo wrestling corrupt?
And how does a homeless man in tattered clothing afford $50 headphones?
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Q:
the modern world, despite a surfeit of obfuscation, complication, and downright deceit, is not impenetrable, is not unknowable, and—if the right questions are asked—is even more intriguing than we think. All it takes is a new way of looking.
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Q:
“Experts”—from criminologists to real-estate agents-use their informational advantage to serve their own agenda. However, they can be beat at their own game. And in the face of the Internet, their informational advantage is shrinking every day-as evidenced by, among other things, the falling price of coffins and life-insurance premiums.
Knowing what to measure and how to measure it makes a complicated world much less so. If you learn how to look at data in the right way, you can explain riddles that otherwise might have seemed impossible. Because there is nothing like the sheer power of numbers to scrub away layers of confusion and contradiction.
So the aim of this book is to explore the hidden side of . . . everything. This may occasionally be a frustrating exercise. It may sometimes feel as if we are peering at the world through a straw or even staring into a funhouse mirror; but the idea is to look at many different scenarios and examine them in a way they have rarely been examined.
...
Steven Levitt may not fully believe in himself, but he does believe in this: teachers and criminals and real-estate agents may lie, and politicians, and even CIA analysts. But numbers don’t.
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Q:
Levitt had an interview for the Society of Fellows, the venerable intellectual clubhouse at
Harvard that pays young scholars to do their own work, for three years, with no commitments.
Levitt felt he didn’t stand a chance. For starters, he didn’t consider himself an intellectual. He would
be interviewed over dinner by the senior fellows, a collection of world-renowned philosophers,
scientists, and historians. He worried he wouldn’t have enough conversation to last even the first
course.
Disquietingly, one of the senior fellows said to Levitt, “I’m having a hard time seeing the
unifying theme of your work. Could you explain it?”
Levitt was stymied. He had no idea what his unifying theme was, or if he even had one.
Amartya Sen, the future Nobel-winning economist, jumped in and neatly summarized what he
saw as Levitt’s theme.
Yes, Levitt said eagerly, that’s my theme.
Another fellow then offered another theme.
You’re right, said Levitt, my theme.
And so it went, like dogs tugging at a bone, until the philosopher Robert Nozick interrupted.
“How old are you, Steve?” he asked.
“Twenty-six.”
Nozick turned to the other fellows: “He’s twenty-six years old. Why does he need to have a
unifying theme? Maybe he’s going to be one of those people who’s so talented he doesn’t need one.
He’ll take a question and he’ll just answer it, and it’ll be fine.”
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Q:
There are three basic flavors of incentive: economic, social, and moral. Very often a single incentive scheme will include all three varieties. Think about the anti-smoking campaign of recent years. The addition of a $3-per-pack “sin tax” is a strong economic incentive against buying cigarettes. The banning of cigarettes in restaurants and bars is a powerful social incentive. And when the U.S. government asserts that terrorists raise money by selling black-market cigarettes, that acts as a rather jarring moral incentive.
Some of the most compelling incentives yet invented have been put in place to deter crime. Considering this fact, it might be worthwhile to take a familiar question—why is there so much crime in modern society?—and stand it on its head: why isn’t there a lot more crime? After all, every one of us regularly passes up opportunities to maim, steal, and defraud. The chance of going to jail—thereby losing your job, your house, and your freedom, all of which are essentially economic penalties—is certainly a strong incentive. But when it comes to crime, people also respond to moral incentives (they don’t want to do something they consider wrong) and social incentives (they don’t want to be seen by others as doing something wrong). For certain types of misbehavior, social incentives are terribly powerful. In an echo of Hester Prynne’s scarlet letter, many American cities now fight prostitution with a “shaming” offensive, posting pictures of convicted johns (and prostitutes) on websites or on local-access television. Which is a more horrifying deterrent: a $500 fine for soliciting a prostitute or the thought of your friends and family ogling you on www.HookersAndJohns.com.
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Q:
Some cheating leaves barely a shadow of evidence. In other cases, the evidence is massive.
Consider what happened one spring evening at midnight in 1987: seven million American children
suddenly disappeared. The worst kidnapping wave in history? Hardly. It was the night of April 15,
and the Internal Revenue Service had just changed a rule. Instead of merely listing each dependent
child, tax filers were now required to provide a Social Security number for each child. Suddenly,
seven million children—children who had existed only as phantom exemptions on the previous
year’s 1040 forms—vanished, representing about one in ten of all dependent children in the United
States
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Q:
Of all the ideas that Kennedy had thought up—and would think up in the future—to fight bigotry, his Superman campaign was easily the cleverest and probably the most productive. It had the precise effect he hoped: turning the Klan’s secrecy against itself, converting precious knowledge
into ammunition for mockery. Instead of roping in millions of members as it had just a generation
earlier, the Klan lost momentum and began to founder. Although the Klan would never quite die,
especially down South—David Duke, a smooth-talking Klan leader from Louisiana, mounted
legitimate bids for the U.S. Senate and other offices—it was also never quite the same. In The Fiery Cross: The Ku Klux Klan in America, the historian Wyn Craig Wade calls Stetson Kennedy “the single most important factor in preventing a postwar revival of the Ku Klux Klan in the North.”
This did not happen because Kennedy was courageous or resolute or unflappable, even though he was all of these. It happened because Kennedy understood the raw power of information. The Ku Klux Klan was a group whose power—much like that of politicians or real-estate agents or stockbrokers—was derived in large part from the fact that it hoarded information. Once that information falls into the wrong hands (or, depending on your point of view, the right hands), much of the group’s advantage disappears.
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Q:
Information is so powerful that the assumption of information, even if the information does not actually exist, can have a sobering effect.
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Q:
It is common for one party to a transaction to have better information than another party. In
the parlance of economists, such a case is known as an information asymmetry. We accept as a
verity of capitalism that someone (usually an expert) knows more than someone else (usually a
consumer).
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Q:
If you were to assume that many experts use their information to your detriment, you’d be
right. Experts depend on the fact that you don’t have the information they do. Or that you are so
befuddled by the complexity of their operation that you wouldn’t know what to do with the
information if you had it. Or that you are so in awe of their expertise that you wouldn’t dare
challenge them. If your doctor suggests that you have angioplasty—even though some current
research suggests that angioplasty often does little to prevent heart attacks—you aren’t likely to
think that the doctor is using his informational advantage to make a few thousand dollars for
himself or his buddy. But as David Hillis, an interventional cardiologist at the University of Texas
Southwestern Medical Center in Dallas, explained to the New York Times, a doctor may have the
same economic incentives as a car salesman or a funeral director or a mutual fund manager: “If
you’re an invasive cardiologist and Joe Smith, the local internist, is sending you patients, and if you
tell them they don’t need the procedure, pretty soon Joe Smith doesn’t send patients anymore.”
(c)
Q:
Consider this true story, related by John Donohue, a law professor who in 2001 was teaching at Stanford University: “I was just about to buy a house on the Stanford campus,” he recalls, “and the seller’s agent kept telling me what a good deal I was getting because the market was about to zoom. As soon as I signed the purchase contract, he asked me if I would need an agent to sell my previous Stanford house. I told him that I would probably try to sell without an agent, and he replied, ‘John, that might work under normal conditions, but with the market tanking now, you really need the help of a broker.’”
Within five minutes, a zooming market had tanked. Such are the marvels that can be conjured by an agent in search of the next deal.
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Q:
They were also a lot richer, taller, skinnier, and better-looking than average. That, at least, is what they wrote about themselves. More than 4 percent of the online daters claimed to earn more than $200,000 a year, whereas fewer than 1 percent of typical Internet users actually earn that much, suggesting that three of the four big earners were exaggerating. Male and female users typically reported that they are about an inch taller than the national average. As for weight, the men were in line with the national average, but the women typically said they weighed about twenty pounds less than the national average.
Most impressively, fully 70 percent of the women claimed “above average” looks, including 24 percent claiming “very good looks.” The online men too were gorgeous: 67 percent called themselves “above average,” including 21 percent with “very good looks.” This leaves only about 30 percent of the users with “average” looks, including a paltry 1 percent with “less than average” looks—which suggests that the typical online dater is either a fabulist, a narcissist, or simply resistant to the meaning of “average.” (Or perhaps they are all just realists: as any real-estate agent knows, the typical house isn’t “charming” or “fantastic,” but unless you say it is, no one will even bother to take a look.) Twenty-eight percent of the women on the site said they were blond, a number far beyond the national average, which indicates a lot of dyeing, or lying, or both.
Some users, meanwhile, were bracingly honest. Eight percent of the men—about 1 in every 12 conceded that they were married, with half of these 8 percent reporting that they were “happily married.” But the fact that they were honest doesn’t mean they were rash. Of the 258 “happily married” men in the sample, only 9 chose to post a picture of themselves. The reward of gaining a mistress was evidently outweighed by the risk of having your wife discover your personal ad.
(c)
Q:
But if there is no unifying theme to Freakonomics, there is at least a common thread running through the everyday application of Freakonomics. It has to do with thinking sensibly about how people behave in the real world. All it requires is a novel way of looking, of discerning, of measuring. This isn’t necessarily a difficult task, nor does it require supersophisticated thinking. We have essentially tried to figure out what the typical gang member or sumo wrestler figured out on his own (although we had to do so in reverse).
Will the ability to think such thoughts improve your life materially? Probably not. Perhaps you’ll put up a sturdy gate around your swimming pool or push your real-estate agent to work a little harder. But the net effect is likely to be more subtle than that.
You might become more skeptical of the conventional wisdom; you may begin looking for hints as to how things aren’t quite what they seem; perhaps you will seek out some trove of data and sift through it, balancing your intelligence and your intuition to arrive at a glimmering new idea. Some of these ideas might make you uncomfortable, even unpopular. To claim that legalized abortion resulted in a massive drop in crime will inevitably lead to explosive moral reactions.
(c)
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Quotes ☘Misericordia☘ ~ The Serendipity Aegis ~ Liked

Steven D. Levitt
“Information is a beacon, a cudgel, an olive branch, a deterrent--all depending on who wields it and how.”
Steven D. Levitt, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything


Reading Progress

October 14, 2015 – Shelved
December 25, 2016 – Started Reading
December 25, 2016 – Finished Reading

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message 1: by Gio (new) - rated it 5 stars

Gio Listmaker http://www.npr.org/podcasts/452538045...

They have a Podcast. It is like the book but better.
I don't know if you can get it in Moscow.


message 2: by ☘Misericordia☘ ~ The Serendipity Aegis ~ (last edited Dec 04, 2017 07:03AM) (new) - rated it 5 stars

☘Misericordia☘ ~ The Serendipity Aegis ~  ⚡ϟ⚡ϟ⚡⛈ ✺❂❤❣ Gio wrote: "http://www.npr.org/podcasts/452538045...

They have a Podcast. It is like the book but better.
I don't know if you can get it in Moscow."
Uh, thanks, but I rarely listen to podcasts since I read a lot faster than they talk.

Why the doubts abouts Moscow? From what I know, Internet over there works fine, just like everywhere. Why not?


message 3: by Gio (new) - rated it 5 stars

Gio Listmaker ☘Misericordia☘ wrote: "Gio wrote: "http://www.npr.org/podcasts/452538045...

They have a Podcast. It is like the book but better.
I don't know if you can get it in Moscow." Uh, thanks, but I rarely listen..."


Oh sorry!! no doubts.... just sharing.


☘Misericordia☘ ~ The Serendipity Aegis ~  ⚡ϟ⚡ϟ⚡⛈ ✺❂❤❣ Gio wrote: "Oh sorry!! no doubts.... just sharing. "
Ok :)


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