Book Review: Freakonomics by Steven Levitt


Freakonomics is a collection of interesting problems and a look at how statistical methods lead to surprising answers to these problems. Since the author (Steven Levitt) is an economist, he looks at them with an economist’s eyes focusing on the incentives that drive people behind these problems. It obviously helps to sell the book when the problems and solutions are "controversial". For example, Steven statistically concludes that one of the major reasons for reduction in crime rate in US is legalized abortion! Such conclusions obviously generate a lot of heat.

Book Review: Freakonomics by Steven Levitt

Freakonomics is written by economist Steven Levitt and journalist Stephen Dubner. It has sold over 4 million copies worldwide. It is based on various articles and papers written earlier by Steven Levitt. Each chapter deals with an interesting question,

  • What do school teachers and sumo wrestlers have in common?
  • How is Klu Klux Klan like a group of real estate agents?
  • Why do drug dealers still live with their moms?
  • Where have all the criminals gone?
  • What makes a perfect parent?

These questions and the statistical solutions to these questions are pretty interesting. The question about Klu Klux Klan and real estate agents is interesting and the conclusion about "experts" hoarding their "specialized knowledge" is something I could closely relate to. For example, doctors have been using "specialized knowledge" to confuse and fleece patients. However the Internet has been a major liberator from such "experts" since much of the "specialized knowledge" is publicly available. We also tend to overestimate the "specialized knowledge" available with "experts".

The book also has a bonus matter section with additional questions and analysis. This sections explore questions such as why we vote and the economics behind gift cards. This section is followed by a Q&A session with the authors.

I personally think that one of the biggest contributions of this book is that it forces people to be critical of the things that are pushed to them as good or as essential. For example, take the case of vaccinations (this example is NOT from the book). It is almost always projected as good thing. But in reality, there is a trade off to be made between the known and unknown side effects of a vaccine against the risk of contracting a specific disease. If there is a 1% chance of contracting a specific disease and in contracted patients if there is 1% chance of death, is vaccination against that disease worth the 0.1% side effects and the possible long term impact on health?

Take another example of global warming or tree conservation (again NOT from the book, however a new book named Superfreakonomics seems to address these topics). Both these are given much more importance than they actually need. It is always important to ask the question, who actually benefits from the scare of global warming or the scarcity of cheap raw material such as wood (trees) which can be easily replenished?

One of my favourite chapters is the one dealing with parenting. I see parents all around me who try everything in their power to make their children better. I have always suspected that parenting has a lesser influence on a child than his genes and his peer group. It appears that what matters in the case of a child is how parents live/what parents are NOT what parents do!

Freakonomics is an interesting read. The authors have done a good job in making even the statistical part seem interesting. The book encourages us to be alert on what we do and what others do and look for reasons behind it.

The Q&A section at the end contains a pretty argument as to why you should read this book!,

Q: Am I worse off for never having read Freakonomics? – Terry

A: Sadly, yes. Independent testing has shown that people who read Freakonomics have sweeter-smelling breath, better posture and more interesting dreams. Also women feel no pain during childbirth; male readers find that their sperm swim faster.

My Rating: 8/10. An excellent book of interesting problems and interesting trivia. If you are a blind follower of "experts", this is an eye opener!

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January 12, 2014 | Posted in Opinion No Comments » | By Jayson Joseph

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