Freakonomics: A Rogue Economist Explores the Hidden Side of Everything (Revised and Expanded)

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything (Revised and Expanded)

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by Steven D. Levitt, Stephen J. Dubner

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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 econo-mist to ask. But Steven D. Levitt is not a

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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 econo-mist 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 conventional wisdom on its head.

Freakonomics is a groundbreaking collaboration between Levitt and Stephen J. Dubner, an award-winning author and journalist. They usually begin with a mountain of data and a simple 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.

Through forceful storytelling and wry insight, Levitt and Dubner show that 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. In Freakonomics, they explore the hidden side of . . . well, everything. The inner workings of a crack gang. The truth about real-estate agents. The myths of campaign finance. The telltale marks of a cheating schoolteacher. The secrets of the Klu Klux Klan.

What unites all these stories is a belief that the modern world, despite a great deal of complexity 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.

Freakonomics establishes this unconventional premise: If morality represents how we would like the world to work, then economics represents how it actually does work. It is true that readers of this book will be armed with enough riddles and stories to last a thousand cocktail parties. But Freakonomics can provide more than that. It will literally redefine the way we view the modern world.

Bonus material added to the revised and expanded 2006 edition

  • The original New York Times Magazine article about Steven D. Levitt by Stephen J. Dubner, which led to the creation of this book.
  • Seven “Freakonomics” columns written for the New York Times Magazine, published between August 2005 and April 2006.
  • Selected entries from the Freakonomics blog, posted between April 2005 and May 2006 at

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Editorial Reviews
Is this book's appeal due to its wacky revisionist title, its unsettling take on Roe v. Wade, or just its compulsively readable argument that economics does nothing more than study the incentives that drive us? Probably all of the above. What we do know is that it's the only economics book we've ever labeled a page-turner. An extraordinary work of social science explanation without oversimplification.

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Chapter One

What Do Schoolteachers
and Sumo Wrestlers
Have in Common?

Imagine for a moment that you are the manager of a day-care center. You have a clearly stated policy that children are supposed to be picked up by 4 p.m. But very often parents are late. The result: at day's end, you have some anxious children and at least one teacher who must wait around for the parents to arrive. What to do?

A pair of economists who heard of this dilemma -- it turned out to be a rather common one -- offered a solution: fine the tardy parents. Why, after all, should the day-care center take care of these kids for free?

The economists decided to test their solution by conducting a study of ten day-care centers in Haifa, Israel. The study lasted twenty weeks, but the fine was not introduced immediately. For the first four weeks, the economists simply kept track of the number of parents who came late; there were, on average, eight late pickups per week per day-care center. In the fifth week, the fine was enacted. It was announced that any parent arriving more than ten minutes late would pay $3 per child for each incident. The fee would be added to the parents' monthly bill, which was roughly $380.

After the fine was enacted, the number of late pickups promptly went ... up. Before long there were twenty late pickups per week, more than double the original average. The incentive had plainly backfired.

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. Economists love incentives. They love to dream them up and enact them, study them and tinker with them. The typical economist believes the world has not yet invented a problem that he cannot fix if given a free hand to design the proper incentive scheme. His solution may not always be pretty -- it may involve coercion or exorbitant penalties or the violation of civil liberties -- but the original problem, rest assured, will be fixed. An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation.

We all learn to respond to incentives, negative and positive, from the outset of life. If you toddle over to the hot stove and touch it, you burn a finger. But if you bring home straight A's from school, you get a new bike. If you are spotted picking your nose in class, you get ridiculed. But if you make the basketball team, you move up the social ladder. If you break curfew, you get grounded. But if you ace your SATs, you get to go to a good college. If you flunk out of law school, you have to go to work at your father's insurance company. But if you perform so well that a rival company comes calling, you become a vice president and no longer have to work for your father. If you become so excited about your new vice president job that you drive home at eighty mph, you get pulled over by the police and fined $100. But if you hit your sales projections and collect a year-end bonus, you not only aren't worried about the $100 ticket but can also afford to buy that Viking range you've always wanted -- and on which your toddler can now burn her own finger.

An incentive is simply a means of urging people to do more of a good thing and less of a bad thing. But most incentives don't come about organically. Someone -- an economist or a politician or a parent -- has to invent them. Your three-year-old eats all her vegetables for a week? She wins a trip to the toy store. A big steelmaker belches too much smoke into the air? The company is fined for each cubic foot of pollutants over the legal limit. Too many Americans aren't paying their share of income tax? It was the economist Milton Friedman who helped come up with a solution to this one: automatic tax withholding from employees' paychecks.

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 ...

The foregoing is excerpted from Freakonomics by Steven D. Levitt and Stephen J Dubner. All rights reserved. No part of this book may be used or reproduced without written permission from HarperCollins Publishers, 10 East 53rd Street, New York, NY 10022

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What People are saying about this

Kurt Andersen
“Freakonomics is politically incorrect in the best, most essential way.... This is bracing fun of the highest order.”
Malcolm Gladwell
“Steven Levitt has the most interesting mind in America... Prepare to be dazzled.”

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Freakonomics 4.1 out of 5 based on 2 ratings. 699 reviews.
Book_SurferMC More than 1 year ago
My mother is an economics teacher, and ever since she discovered the book "Freakonomics", I've been hearing about its humorous studies that would make even me, like economics. In this book, the authors Steven D. Levitt and Stephen J. Dubner, redefine the whole purpose and study of economics. Instead of looking for the obvious and easiest answer, they dig deep and look for the less obvious, but plausible answer. Instead of giving the public the answer they want to hear, they give them the "ugly truth" something that has caused this book to be a huge success, but also controversial. One study investigated how names can affect your opportunities in life. For example if you have a very obvious black sounding name, will it make you less successful? The authors tested this idea by sending out two sets of identical résumés. One set with a black name the other set with a white sounding name. The set of résumés with the black sounding name received fewer call-backs than the resumes that had obvious white sounding name. This is interesting because it shows how bigotry and racism are still alive in America today. And finally the most shocking study in the book is the one that correlates the drop in crime in the early 1990's to the passage of Roe vs. Wade in the 1970's. Legalized abortion, according to Levitt, is directly related to a drop in crime. Legalizing abortion made it easier for women, especially poor women, to obtain an abortion and prevent unwanted children from being born. Unwanted children have higher rates of truancy, do poorly in school, and are more likely to become criminals. Children of poor, uneducated, unwed teenage mothers are the most likely to grow up to become criminals. If these children are never born, then they cannot commit crimes. He compared states that legalized abortion before Roe vs. Wade and saw that those states crime rates decreased earlier than the rest of the nation. He also noted that states that not only legalized abortion but also made abortion less restrictive saw even greater drops in crime. Although this study may seem morally objectionable, it's difficult to argue with the data. These studies, and many others that the authors did, are what captivated me while reading this book. I believe that anyone with a sense of humor will love the approach that Levitt takes to answer questions and analyze things that people would never consider. Personally, I think the book is amazing, and everyone should read it because it really makes you pause and think that the causes behind some things you hear are not always true. After reading "Freakonomics" I am now looking forward to taking some economics classes in college. This is a book everyone should read.
Anonymous More than 1 year ago
I thought this book was interesting and a fun reead. It offers a fresh perspective on a lot of topics that you wouldn't think are related. The book is fairly well-written, although the authors offer a bit too much detail at times. I liked that it had a practical side that you can apply in everyday life, such as requiring proof and being skeptical.
Sisskind More than 1 year ago
I was definitely surprised to find that this book was not so much about economics as it was about everyday life. Even though the book jumped from topic to topic, the connections were clearly stated, and I never felt like I was being overwhelmed with information. The authors did a good job catering to all reading levels, making it a good book for just about anyone. I am really glad that I chose to read this book for my economics class, and I know that I will never think the same way about anything again.
Anonymous More than 1 year ago
Not completely understanding economics beforehand, Freakonomics was not only interesting and fun to read, but it also helped me to understand what exactly economics is by simplifying it for any age to understand and using relatable  examples. This book will help influence me to look at the world from a different perspective and the question everything and yet still search for the answers, which might be more hidden that one would first assume. 
Anonymous More than 1 year ago
Prior to reading it, I expected a dull, pure mathematically focused book. Nevertheless, the authors do a great job in combining their respective strengths into a best-seller non-fiction novel that conveys the statistics in a creative, friendly approach. If you have ever wondered what school teachers and sumo wrestlers have in common, or why two children in the same class share the same name, yet each come from a contrasting culture and financial background, then I recommend this book! -AJ Jimenez P.4
Anonymous More than 1 year ago
It was a very interesting and fun book. Some of the information wasn't new to me but it was far from repetitive or boring!
nima More than 1 year ago
When I first started reading this book, I didn't expect it to be good at all but after reading it more, I was surprised by the information the author provides the readers with. I thought I would be reading a book with mostly statistics and numbers about economy but it's the exact opposite.This book teaches you how incentives can affect people's behaviors and why people act the way they do.It also gives you interseting examples, such as teachers who cheated in order to win bonuses and how abortions caused crime rates to decreae. By reading this book,you will be able to understand more about the strategies that economists and real estate agents use in order to gain profits. Basically The authors relate random real life examples to economy. I would suggest everyone to read this book because it's interesting and informative.
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When I first started to read this book, I didn't really enjoy it.  My high school Econ teacher had me choose from a list of books, I decided to pick this because of its name and what my school librarians were saying about it. I expected the book to have a lot to do about economics however it also talks about and how different things relate to our everyday lives. Soon the book became interesting and I was intrigued. The author gives his unique views on how he sees the world. I expected to read a book about statics and numbers but instead I was able to learn about how incentives can affect people's behaviors and why people act and the way they do.
Anonymous More than 1 year ago
GOOD BOOK! Freakonomics is a book about daily human behaviors Freakonomics is a book about daily human behaviors The book uses many different examples from cheating school teachers and sumo wrestlers throwing matches to The Ku Klux Klan and real estate agents who pad data to boost how they are perceived. The writers show how these scenarios can affect the economy in similar ways. The book uses a lot of statistics to prove how all of these things are related. Some of the most outrageous things can affect life in unexpected ways. This was a great book and I definitely recommend it.
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I liked this book a lot. It really made you think about things you proably never paid much attention to, but are very real issues in our society. It covers stuff from teachers cheating on standardized tests to the most popular baby names based on race, social status, and income. You learn how an honor payment system actually works, and how well it does. This book was well written, but not every section was necessary. There was a lot of information, but it seemed too random and didn't connect all back together in the end. This boois worth buying, you probably will read it again, and I found it very interesting.
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mrmodel-t More than 1 year ago
An interesting look at the causal relationship between what we might otherwise think are unrelated facts.
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ucla63 More than 1 year ago
This guy is obviously brilliant - at least he thinks of angles that most of us would NEVER think of; then he figures out how to gather the data to validate it (whatever "it" is, often a pretty obscure question). It makes for fascinating reading, but he gets kind of carried away showing how the data prove, or disprove, his point. But, if you always keep in mind his main point that "incentives are everything", he certainly shows some obscure situations that prove this to be true. So, an interesting read, if you can skim the details of exactly how he went about proving his thesis, and concentrate on the bigger picture of "Gee, that's true, and they proved it (somehow)", or even "they proved it by looking at xxxxxxxx....)
Anonymous More than 1 year ago
I think this was a great read. Stephen Levitt's mission of making the reader view the world in a more critical and analytically way is achieved by the end. I thought the chapters about parenting started to get a little dry from to much data but that may be because I was not the target audience for that topic. The book blended economics, sociology, and psychology seamlessly. I would recommend the book to everyone.    
Anonymous More than 1 year ago
I get hooked on the why, then I get shocked as to the real reason why.