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Freakonomics A Rogue Economist Explores The Hidden Side of Everything by Steven D. Levity & Stephen J. Dubner

Book Synopsis:

Which is more dangerous, a gun or a swimming pool? What do schoolteachers and sumo wrestlers have in common? Why do drug dealers still live with their moms? How much do parents really matter? How did the legalization of abortion affect the rate of violent crime?

These may not sound like typical questions for an economist to ask. But Steven D. Levitt is not a typical economist. He is a much-heralded scholar who studies the riddles of everyday life—from cheating and crime to sports and child-rearing—and whose conclusions turn the conventional wisdom on its head.

Freakonomics is a ground-breaking collaboration between Levitt and Stephen J. Dubner, an award-winning author and journalist. They usually begin with a mountain of data and a simple, unasked question. Some of these questions concern life-and-death issues; others have an admittedly freakish quality. Thus the new field of study contained in this book: Freakonomics.

Favorite Lines from Freakonomics:

“Levitt’s underlying belief: 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.”

“…theories made their way, seemingly without friction, from the experts’ mouths to journalists’ ears to the public’s mind. In short, they became conventional wisdom.”

“Morality, it could be argued, represents the way that people would like the world to work – whereas economics represents how it actually does work. Economics is above all a science of measurement.”

“Incentives are the cornerstone of modern life.”

“Experts – from criminologists to real-estate agents – use their informational advantage to serve their own agenda.”

“Knowing what to measure and how to measure it makes a complicated world much less so.”

“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.”

“Economics is at root, the study of incentives: how people get what they want, or need, especially when other people want or need the same thing.”

“An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation.”

“Any incentive is inherently a trade-off; the trick is to balance the extremes.”

“So inscrutable is the arrangement of causes and consequences in this world that a two-penny duty on tea, unjustly imposed in a sequestered part of it, changes the condition of all its inhabitants.”

“A thing worth having is a thing worth cheating for.” -W. C. Fields

“A broad swath of psychological and economic research has shown that people will pay different amounts for the same item depending on who is providing it.”

“How selfish soever man may be supposed,” Smith wrote, “there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.”

“Information is a beacon, a cudgel, an olive branch, a deterrent – all depending on who wields it and how. Information is so powerful that the assumption of information, even if the information does not actually exist, can have a sobering effect.”

“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.”

“The fear created by commercial experts may not quite rival the fear created by terrorists, but the principle is the same.”

“Five terms correlated to a higher sale price: Granite, State-of-the-Art, Corian, Maple, Gourmet.”

“Five terms correlated to a lower sale price: Fantastic, Spacious, !, Charming, Great Neighborhood”

“The gulf between the information we publicly proclaim and the information we know to be true is often vast.”

“The first trick of asking questions is to determine if your question is a good one. Just because a question has never been asked does not make it good. If you can question something that people really care about and find an answer that may surprise them – that is, if you can overturn the conventional wisdom – then you may have some luck.”

“A little creative lying can draw attention, indignation, and perhaps most important, the money and political capital to address the actual problem.”

“The secret to finding the right data usually means finding the right person – which is more easily said than done.”

“A crack gang works pretty much like the standard capitalist enterprise: you have to be near the top of the pyramid to make big wage.”

“If crack dealing is the most dangerous job in America, and if the salary was only $3.30 an hour, why on earth would anyone take such a job? Well, for the same reason that a pretty Wisconsin farm girl moves to Hollywood. For the same reason that a high-school quarterback wakes up at 5 a.m. to lift weights. They all want to succeed in an extremely competitive field in which, if you reach the top, you are paid a fortune (to say nothing of the attendant glory and power).

“Emotion is the enemy of rational argument.”

“Risks that you control are much less a source of outrage than risks that are out of your control.”

“If morality represents an ideal world, then economics represents the actual world.”

“In Levitt’s view, economics is a science with excellent tools for gaining answers but a serious shortage of interesting questions.”

“Levitt reduces the theory to a tiny syllogism: Unwantedness leads to high crime; abortion leads to less unwantedness; abortion leads to less crime.”

“Economists typically separate our daily activities into three categories: market work (which produces income), home production (unpaid chores) and pure leisure.”

“There are a million books that explain the principles of economics, and they are widely read, usually at universities. But those books explain what economics is; they don’t really explain how to look at the world like an economist.”

“Books being what they are – not just stories and information, but stories and information that people like to talk about with other people – there is obviously an extra incentive to read what everyone else is reading.”

Thank you for reading! Here’s the freakonomics website for more information.

Website: http://www.freakonomics.com

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