Analysis and Critique of Freakonomics

Steven Levitts takes an interesting spin on economics in his book, Freakonomics. He uses the tools that are unique to the field of economics to answer several bizarre questions that he has formulated, and despite their bizarre nature, Levitts manages to use ordinary information to substantiate the equally bizarre answers to those questions. He begins the introduction with a shocking theory on the cause of the decline in crime in the 1990’s: Roe vs. Wade. The children, who were most likely to be the cause of a rise in crime, were instead aborted (Levitts 4).

Without fear, Levitts flows directly into the theory that real estate agents are out for their own incentives, even at the detriment of their clients. Levitts uses evidence from data collected in regards to real estate agents selling their own homes versus data in regards to real estate agents selling their clients homes to back this theory, and makes a very good argument. This is an avenue to bring to the forefront his point of the advantage of expert information, or information asymmetry.

His next introduction example is money in politics. Levitts uses this example to explain how conventional wisdom is often wrong, and the evidence is present in his example of how money really has no bearing on the outcome of a political election. Levitts also stresses that while he does mention many different concepts do not look for a unifying theme as there is not one. The first chapter of Freakonomics addresses what school teachers and sumo wrestles could possibly have in common, which turns out to be cheating.

Using data from standardized tests and from data collected regarding sumo wrestlers, Levitts confirms that both school teachers and sumo wrestlers have their reasons for cheating. He also discusses the different avenues that can be taken to accomplish this cheating. Levitts prime examples are evidence of teachers changing students’ test answers, and sumo wrestlers throwing a match in turn for a win later. He notes in his Bonus Materials section that the mention of cheating teachers caused more of flood of angry emails than did his abortion lowering crime theory, but his evidence is sound. (Levitts 252)

Chapter 2 deals with information asymmetry using examples of the Ku Klux Klan and the aforementioned real estate agents. The information asymmetry regarding the Ku Klux Klan was in its secrecy of a secret society, while real estate agents have trade secrets. The Ku Klux Klan was ruined by their secrets being aired on the radio, while market information on the internet has lessened real estate agents’ advantages. He also touches on how the internet has affected information asymmetry in other industries as well. Shedding light on why drug dealers still live with their mothers is the basis of Chapter 3.

Using data collected by Sudhir Venkatesh, Levitts makes clear how the hierarchy of drug dealing works, and how the dealers themselves really do not benefit greatly. This chapter is really geared toward the concept of taking conventional wisdom with a grain of salt. Chapter 4 is where Levitts gets his chance to give some evidence to his theory on where all the criminals have gone. This chapter discusses what the popular excuses are for the drop in crime, such as the age of population and the change in the drug markets, and uses evidence to show these ideas’ flaws.

Levitts then uses statistical data and correlation to give basis to his theory that abortion’s legalization and availability has caused the drop in crime. Two chapters are devoted to parenting in essence. Chapter 5 deals with the question of how parents affect their children, and Chapter 6 has to do with what a child’s name reflects upon his or her parents. Many examples are given that explain that children are more affected by factors which include their parents prior to their birth, such as inherited intelligence and a mother’s care during pregnancy.

Levitts also shows a correlation of how children who are adopted show more tendencies of their biological parents in younger years, but then begin to show tendencies of their adoptive parents in later years. A child’s name, according to Levitts, reflects their parents’ socioeconomical environment, and the parents’ and child’s race. The entire chapter is dedicated to how names are used in assumptions by others, and the marked difference in the names of white and black children.

The bonus materials included in the back of the book are articles that the author has written and articles written about the articles, and articles and blogs on Freakonomics. Many of the articles are in reference to topics already covered in the book, and some are the personal rants of the author. All of the questions posed in Freakonomics are ones that I never took the time to consider before. I was unaware of how closely abortion correlated to the drop in crime, and I am unable to find flaw in his argument. While I find the idea rather immoral, that does not change the fact of the matter.

Levitts used accurate data and economical practices to provide evidence to his argument. I find his methods of research and his presentation of his evidence versus the alternative explanations to be founded, and honestly, convincing. The section in regards to teachers and sumo wrestlers was surprising to me. While the sections regarding teachers was not hard for me to accept, as in previous years there were times that I felt I was being “taught to the test”, I found cheating in sumo wrestling rather appalling.

I believe that this is due for the extreme respect that I have for Japanese culture, in specific their cultural aspect of personal honor. As this is the Japanese national sport, I was surprised that such a major cultural aspect would be tainted with cheating. I was delighted to see the references to politics, as I have similar views to the authors. While money greatly helps in an election, as some people and ideals can be bought, I find for the most part that the candidate has to make it worthwhile to the average voter in order to be elected.

If a candidate attempted to buy off every voter needed to win, he or she would be broke when all was said and done. Candidates must win on their own merit; a good example is the presidential election featuring Kerry and Bush. I had many people express to me that they voted for Kerry simply because he wasn’t George Bush. They didn’t believe in what Kerry stood for, and I believe that though it was close, this was why he did not win the election. I also believe that a single vote is of no consequence, but if enough people of this belief did not vote, then a large margin is now gone.

Unlike the part I enjoyed most, the aforementioned politics, I was not impressed with an entire chapter being dedicated to names. While the concept was interesting, I felt that an entire chapter was just too much. I feel that the concept could have been incorporated into the parenting chapter that preceded it without losing much of the evidence or explanation of the theory. It is related to how parents affect their children, in my opinion, and would have been a logical addition to what was already discussed in the chapter.

I believe that the way the data was presented and the evidence was given was useful and convincing. Levitts explained everything in a way that is appealing to those who are rational minded. His evidence was straight forward, and he laid his theory out as if he welcomed scrutiny. I felt that I was more intrigued because he was straightforward, than I would have been had he attempted to be mysterious or suspenseful; after all this is not a work of fiction, which is where attributes such as those belong. His writing style flowed in a logical manner, even though he abandoned the normal practice of a central theme.

I felt that part of his concepts might have been obscured if he attempted to link them all back to a central theme. For those who must have this type of theme, it would not be fair to say that it did have a theme: rational logic. I found that the author’s severe disregard for what other’s think make Freakonomics more rational and more evidentiary. Levitts laid all evidence bare to be evaluated, and he stated what he did and what he used. It’s almost as if Levitts issued a dare to every reader to prove him incorrect.

In part of the bonus material, he speaks of the origins of the Black Sox nickname and how the White Sox earned this moniker. Levitts mentions a reader who gave an alternate theory on how the moniker was earned, and he states the reader’s incorrect logic of using Wikipedia as evidence to found his alternative theory. He goes on to say that he welcomes proof of an alternate theory, and would be glad to print a correction; you must simply prove your claim with valid sources. Whether the author is really issuing a challenge to his readers, or was simply looking for a segue way to express his views on Wikipedia is a topic for debate.

I was glad he expressed his view regarding Wikipedia as many people assume that what they read on the site is fact, when in reality, you can print anything that you please on the site. It is forgotten too often that Wikipedia, Wikimedia, and all the other Wiki products are written by the common mass. They are taken at face value and very rarely is anything verified before it is added. In fact most pages ask for additional information from the reader, and unfortunately many pages do not have the warning at the top that states that the information has not been verified.

Needless to say, I was pleased that Levitts stated that Wikipedia was not a good source to use. Levitts did the science of economics a favor when he published Freakonomics. He offered a way to make economics intriguing by using the bizarre, and yet he did not veer from the science of economics with his evidence or his methods of arriving at that evidence. By using this intrigue, some who would not have been interested in economics are tempted to read the book and find that economics is in fact interesting.