Exploring the interconnected nature of realitythrough hard data might offer many surpris-es, but real stories about real people give us
solid points to ponder about ourselves. Combiningthese two methods of observation — data and sto-ries — into a single view of our lives answersnumerous questions while providing us with a betterperspective on our world and helpingus understand what we see when weopen our eyes a little wider.Freakonomics helps us unearth the sub-tle facts that converge to create largerconcepts, events and phenomena in ourlives, as well as the personal stories thatcreate them. It also shows us how wecan use the tools of the economist, suchas “regression analysis” and theLexisNexis database, to shape theseelements into a more coherent perspec-tive on the society in which we live.
Discovering the DetailsIn Freakonomics, renowned economist
Steven D. Levitt and journalist Stephen J.Dubner ask many valid questions aboutthe world around us, and go about “strip-ping a layer or two from the surface ofmodern life and seeing what is happeningunderneath.” As an economist who findsgreat pleasure in discovering the detailsthat have been missed by others, Levitt seeks out theanswers found in the data, as well as the patterns inthat data, which can only be revealed when the prop-er questions are asked (outside of the realm of moralposturing and conventional wisdom).
For example, why did the average price paid forterm life insurance fall dramatically in the late1990s? The authors point out that the Internetallowed customers to instantaneously find the cheap-est policy, saving them $1 billion per year. What did
crack cocaine have in common with nylon stockings?They explain that both things made a previouslyexpensive product available to the masses. Howmuch do parents really matter? The authors concludethat parents matter a great deal in some ways, and notat all in others, and provide the specific details andstudies that help us understand many of those ways.
The authors explain thatFreakonomics is based on the followingfive fundamentals:1. Incentives form the cornerstone of
modern life.2. Conventional wisdom is usually
faulty.3. Dramatic effects can often be
traced to distant, subtle causes.4. The people who call themselves
experts use the advantage of theirinformation to serve their own per-sonal interests.
5. We can reduce the complexity ofour world by understanding whatwe should measure and how we canmeasure it.Freakonomics has become a runaway
bestseller due to many factors. On asuperficial level, Freakonomics is themost compelling name a book on eco-nomics has ever had. The word freak
added to the word economics is a clever play onwords — an enticing moniker that is both fun torepeat and instantly recognizable as a concept worthyof closer inspection. To further the intrigue, the bookalso bears an appealing graphic of an apple that upondeeper inspection reveals the pulpy interior of anorange under its green, shiny skin — a perfect imageto represent the secret worlds lurking beneath thebook’s surface. This one-two combo punch of titleand graphic makes it the best-looking business tome
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Things Aren’t Quite What They SeemHow to Think and Explore the World Like a Renegade Economist
to hit the bookstores in years, perhapsever. The bright orange spine and titlealso scream out for additional attention.
A Simple GuidelineBut the inside of Freakonomics
is what keeps the book at ornear the top of many bestsellerlists. Although it offers none ofthe usual seven strategies, fivesteps, six ways, and 10 things thatoften grace the pages of the usualbusiness book, it does provide a simpleguideline that blazes a trail through itscontents. This unifying element unleash-es its intent, and guides readers into itsconclusions that are strong enough toinvite reflection long after the book hasbeen shelved. That guideline is made upof short excerpts from a magazine arti-cle that was written long beforeFreakonomics was a book.
Initially, journalist Stephen J. Dubner,wrote an extensive piece about the bril-liant young economist Steven D. Levittin the Aug. 3, 2003, edition of The NewYork Times Magazine. Dubner detailedthe controversies surrounding Levitt’swork as an economist who is willing toput himself on the front lines of politi-cal debate. At the time, Levitt and a col-league were turning heads by question-ing the connection between the Roe v.Wade abortion decision and the recentdecline in the nation’s crime rate.Dubner also painted a personal profileof the economist that colored him as alovable, absent-minded professor whosenerdy style, youth, and unique take onthe world of economics set him apartfrom his contemporaries.
Conventional Wisdom MeetsStatistical Analysis
Each chapter in Freakonomics beginswith a snippet from that fateful piece inThe New York Times Magazine. Theseexcerpts provide a starting point fromwhich the stories within the book takeshape. Not only do we see the glossyprose of a masterful journalist turn theobsessions of a young economist intosubject matter that is relevant to the aver-age person, but we also get the deeper
inside scoop that was left out of the orig-inal article due to space restrictions.Moving up to the next level of story-
telling and comprehension, thebook expands the nitty-grittydetails that help us compre-hend more than the story ofan economist on the cutting
edge: We get facts andconcepts that canhelp us live ourlives, as well asunderstand moreabout the systems
surrounding us.These details are not
just trivia for entertainment’s sake.Thanks to Levitt’s masterful ability tocrunch the numbers past conventionalwisdom down to a foundation of statisti-cal facts, we learn that swimming poolsare far more dangerous to children thanthe guns in their homes, that the man-agement infrastructure of some crack-dealing gangs often resembles that ofMcDonald’s, and that an honor systemfor buying bagels works at least 87 per-cent of the time.
ControversyMany of the points made in
Freakonomics are controversial. Theseinclude claims that many sumo wrestlerscheat, the elderly and Hispanics are con-sistently discriminated against on TheWeakest Link game show, and commis-sions motivate real-estate agents to sellhomes at lower, not higher, prices. ButLevitt’s controversial conclusion thatlegalized abortion has had a dramaticeffect on reducing crime in the UnitedStates (and elsewhere) made nationalheadlines when former Secretary ofEducation Bill Bennett said on his Sept.28, 2005, “Morning in America” radioshow: “It’s true that if you wanted toreduce crime … you could abort everyblack baby in this country, and yourcrime rate would go down.” The com-ments ignited a media firestorm of con-demnation and defense. Bennettexplained that he was simply extrapolat-ing an idea that was written inFreakonomics.
But on the authors’ Web log two days
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“Moving up tothe next level ofstorytelling andcomprehension,
the bookexpands thenitty-gritty
details that helpus comprehendmore than the
story of aneconomist on
the cuttingedge: We get
facts andconcepts that
can help us liveour lives,as well as
understandmore about the
systemssurrounding
us.”
later, Levitt took issue with Bennett’stwist on his work. Levitt writes that heand John Donohue, the co-writer on theiracademic paper that brought to light theabortion-crime connection, did not focuson race in their work. Levitt writes, “Imean it when I say that, from a purelyfact-based and statistical perspective,race is not in any way central to ourarguments about abortion and crime.”
Freakonomics is a book that offersmore than advice and tips: It providesdeeper understanding of many profes-sions and fundamental concepts by chal-lenging faulty conventional wisdom atevery turn. The people who can benefitfrom its statistical analysis include par-ents who may be doing too little or toomuch for their children, social activistslooking for an edge, anyone interested ineducation reform, schoolteachers whowant to learn how their cheating col-leagues get caught, and fans of inner-citycrime dramas who want to learn howreal gangsters make their money.Freakonomics offers all readers the hid-den facts buried within the stories theylive and see dramatized every day, alongwith the numbers and statistics that canhelp them draw sense from the chaos.
Klansmen and Real-Estate Agents
For inquisitive people in the habit ofasking random questions, Levitt is amentor. He has asked some of the mostoutlandish questions ever conceived andfound illumination in their answers. Forexample, when Levitt poses the question,“How is the Ku Klux Klan like a groupof real-estate agents?” he isn’t justthrowing two concepts together to seehow they clash. He is actually drawingthe reader deep into the economist’sworld of hidden incentives and thepower of exclusive information. By deci-phering the codes used by both Ku KluxKlansmen and real-estate agents, theauthors demonstrate how the right infor-mation in the right minds can bothenlighten and empower.
At the onset of World War II, anti-bigotry activist Stetson Kennedydecoded the language of the Ku KluxKlan and helped to get its code words
inserted into the Adventures ofSuperman radio show. This convertedthe Klan’s private communications intoammunition for mockery. By portray-ing Klansmen as Superman’s foes whoused a silly coded language to commu-nicate with each other, Kennedydemystified the Klan’s real secret codewhen it was broadcast to millions oflisteners nationwide. The authorsexplain that removing the Klan’s infor-mational advantage reduced its abilityto gather new members, deflating itspower. Similarly, the authors offerreaders the code words that real-estateagents use to sell their own homes,uncovering and sharing the informationasymmetry they use to their ownadvantage.
Perfect ParentsIn a compelling chapter called, “What
Makes a Perfect Parent?” the authorsdelve into the connections between achild’s personal circumstances and hisor her performance at school, as well asour perceptions of those connections.Breaking down the data from a studyundertaken by the U.S. Department ofEducation called the Early ChildhoodLongitudinal Study (ECLS), whichmeasured the academic progress ofmore than 20,000 grammar-school chil-dren from across the country,Levitt uses the economist’stools to find out more aboutthe art of parenting.
Levitt found eight factorsthat showed a strong corre-lation with the students’test scores, and eight fac-tors that had no correlation.The factors that did affect testscores were no surprise,including the fact that thechild has highly educated par-ents, the child’s parents havehigh socioeconomic status,the child has many books athome, and the child’s parentsare involved in the PTA. Butthe eight factors that had nocorrelation to the children’s test scoreswere the biggest surprises of all.
According to Levitt’s analysis of the
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“Freakonomicsoffers all
readers thehidden facts
buriedwithin the
stories they liveand see
dramatizedevery day,along with
the numbersand
statisticsthat can help
them drawsense fromthe chaos.”
ECLS data, the fact that a child’s family is intact hadno correlation with his or her test scores. It also didnot matter that the child’s parents recently moved to abetter neighborhood, nor did it matter if the child’smother did not work between the child’s birth andkindergarten. Even more surprising, Levitt found thatregularly taking your child to museums and readingto him or her nearly every day also had no effect ontest scores. Likewise, frequently watching televisionhad no negative effect on the child’s test scores. Whatcan parents learn from Levitt’s insights? Basically,the conventional wisdom about the detrimentalresults of watching television is wrong. And, despitethe best of intentions, the cultural cramming per-formed by doting parents will not bring up theirchild’s test scores. Levitt explains that parents whoare successful, well-educated and healthy usuallyhave children who test well in school, but most child-rearing techniques are highly overrated.
The Heart of the MatterAlthough Freakonomics has no traditional narra-
tive running from beginning to end, it leaves readerswith the overall feeling that they have stumbled on atreasure-trove of many concepts and facts that wereonce beyond their grasp. By justifying the use ofstrange questions to get at the heart of the matter,the authors expand their readers’ minds by showingthem how economists turn collections of facts intounusual theories, and then prove them by subjectingthem to critical analysis. The authors admit thattheir book has no “unifying theme,” but it does havea unifying element: the thought patterns of its econ-omist protagonist, Steven Levitt. With StephenDubner’s empathetic portrayal of Levitt’s personalquirks (unfashionable eyewear, unkempt hair, etc.)and personal tragedy (the sudden loss of a youngson), we can easily put ourselves in his shoes as ahuman, and just as easily find ourselves in hisinquisitive, truth-seeking head. ■
Chris Lauer is senior editor for Soundview.He can be reached at [email protected].
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The co-author: Steven D. Levitt teaches economics at theUniversity of Chicago. He recently received the John BatesClark Medal, awarded every two years to the best Americaneconomist under the age of 40.
The co-author: Stephen J. Dubner lives in New York City.He writes for the New York Times and The New Yorker, andis the national bestselling author of Turbulent Souls andConfessions of a Hero-Worshiper.
Inside the Bestsellers:What Makes Freakonomics So Special?
Ever since its release on May 1, 2005,Freakonomics has been making waves on thenonfiction hardcover bestseller lists of theNew York Times, Amazon, Publisher’s Weekly,BusinessWeek, and many other media outlets.Although great books weave in and out of ourperceptions on a daily basis, the unique booksthat make it to the bestseller charts are a privi-leged few.
About 200,000 books were published in2005. Of those books, only a tiny percentage(about 0.2 percent) made it to the bestsellerlists. According to Daisy Maryles fromPublisher’s Weekly, only 442 new adult tradetitles made it onto PW’s four weekly lists lastyear. In addition, she explains, 45 percent ofthose stayed on a list for less than one month.
Statistics such as these demonstrate therelevance of Freakonomics’ success. Marylespoints out that the combined stays of MalcolmGladwell’s Blink, Thomas L. Friedman’s TheWorld Is Flat, and Freakonomics on the 2005charts took up almost 15 percent of the avail-able weekly nonfiction hardcover positions onthe bestseller charts: a distinguished reignindeed.
Freakonomics spent 35 weeks onPublisher’s Weekly’s hardcover nonfictionbestseller list, the fifth most popular book ofthe year on that list, topped only by two booksthat had a head start by being released before2005. The only other 2005 books that stayedon the hardcover nonfiction bestseller list for alonger period of time are Blink and The WorldIs Flat, which were both published beforeFreakonomics.
