Freakonomics Revised[1]

7/29/2019 Freakonomics Revised[1]

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FREAKONOMICS

NAME : SMRITI GANAPATHI

CLASS : FY BAF

ROLL NUMBER : 54

SUBJECT : ECONOMICS

SUBMITTED TO : MS. ANUPAMA SAWANT


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INDEX

SERIAL

NO.

TOPIC PAGE NO.

1 ACKNOWLEDGEMENT 3

2 CHAPTER 1 4

3 CHAPTER 2 7

4 CHAPTER 3 10

5 CHAPTER 4 14

6 CHAPTER 5 17

7 CHAPTER 6 22


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ACKNOWLEDGEMENT

First and foremost, I would like to thank Mrs Anupama Sawant for giving us this project. It

has helped open our mind to the different ways in which Economics can be applied in our

daily lives. I would also want to thank my family and friends, for their support, guidance and

suggestions; especially in finding examples in the Indian context.


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CHP 1: WHAT DO TEACHERS AND SUMO WRESTLERS HAVE IN COMMON ?

Summary

The chapter talks about incentives; what motivates people to act a certain way and as a

corollary, what makes people cheat.

There are three types of incentives: (1) Economic (2) Social (3) Moral

Very often, a single incentive scheme includes all three varieties of incentives.

He gives the example of an Israeli day care centre, where, to combat the problem of late

parents, a fine of $3 was imposed on any parent coming nore than 10 minutes late. However,

this only caused an increase in the number of late parents. This is because:

1) The fine was too small.

2) Parents felt less guilty about coming late as they were being penalised for it. But the

penalty amount was so small that they preferred to pay it and pick up their kids at

their own sweet time

Another case study involving economic and moral incentives is the one about Blood

Donation. It was found that people actually donated less blood if they were paid a small

stipend for it. This is because the stipend turned a noble act of charity into a rather painful

way to earn a few extra bucks, and that simply wasnt worth it.

The authors point out that Economics can be applied to nearly everything in our lives. For

example, by analysing the answer sheets of two classrooms from a school in Chicago, they

were able to figure out which teacher was changing the answers of the students.

Similarly, he gives examples of instances from Sumo Wrestling in Japan to a bagel man to

explain what causes people to behave in a certain way in a certain circumstance. Thus, he

effectively makes the reader understand the power of incentives.


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Learning:

Incentives work in complex ways. The various impacts have to be considered beforeimplementing an incentive scheme.

For example : By imposing a $3 fine on the tardy parents, the moral incentive (the

guilt the parents were supposed to feel on coming late) was substituted by an

economic incentive (the $3 fine). This resulted in an increase in the number of

latecomers.

However selfish a person may be, he does have some moral principles in his nature

which makes him care about other peoples interests, even though he derives nothing

from it other than the joy of seeing someone else happy.

Great care needs to be taken while formulating any incentive scheme, keeping in mind

whom and what it will affect in which manner.

It is not only monetary incentives that matter. In fact, very often a moral incentive has

a greater effect than a monetary one.

Everyone cheats at some point of time, if the incentive is good enough.


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Indian example:

The following is an extract from an article from the Indian Express on Aug 31, 2011:

50 Delhi Police personnel caught taking bribes this year

Around 50 Delhi police personnel were caught taking bribes this year while over 1,800 faced

action for dereliction of duty, according to official statistics.

Of the around 50 caught for taking bribes, 25 of them were constables and nine were head

constables indicating that bribe taking was more prevalent in the lower ranks.

Six sub inspectors and seven assistant sub inspectors were also caught taking bribe frompeople to favour them, a senior police official said.

.While action has been taken against 40 police personnel this year, 104 faced punishment

last year. In 2008, 26 cases were reported in which 14 personnel faced action while 75

complaints were received in 2009 and 81 personnel punished.

Source : http://www.indianexpress.com/news/50-delhi-police-personnel-caught-taking-bribes-this-year/839710/1

This indicates that policemen in higher ranks so not take as much bribe as the ones in lower

ranks because they feel more of a moral responsibility towards society.

Also, the statistics show that only 14 personnel faced action whereas 75 complaints were

received. So the lack of action being taken emboldens the policemen and causes them to takemore bribes.
http://www.indianexpress.com/news/50-delhi-police-personnel-caught-taking-bribes-this-year/839710/1http://www.indianexpress.com/news/50-delhi-police-personnel-caught-taking-bribes-this-year/839710/1http://www.indianexpress.com/news/50-delhi-police-personnel-caught-taking-bribes-this-year/839710/1http://www.indianexpress.com/news/50-delhi-police-personnel-caught-taking-bribes-this-year/839710/1http://www.indianexpress.com/news/50-delhi-police-personnel-caught-taking-bribes-this-year/839710/1


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CHP 2: HOW IS THE KU KLUX KLAN LIKE A GROUP OF REAL-ESTATE

AGENTS?

Summary

The chapter speaks about the power of information. It starts out with an introduction to the

Ku Klux Klan, which was a clan formed by 6 former confederate soldiers in Pulaski,

Tennessee.

It soon grew into a multistate terrorist organisation designed to frighten and kill emancipated

slaves. It wanted to prevent all political action not in accord with the view of its members by

force and terror.

It lay largely dormant till 1915 and came back into full force in the 1920s. The early Klan did

its work through pamphleteering, lynching, shooting, castrating and other such forms of

intimidation.

However, the statistics on the lynching of Blacks in the US shows that there were actually

more lynchings between 1900 and 1909 when the Klan was dormant, than during the 1920s

when the Klan had millions of members. This indicated that all those early lynchings

worked.

Stetson Kennedy, a man with the bloodlines of a Klansman, but a liberal at heart, wanted to

bring about the downfall of the Ku Klux Klan. So he infiltrated the Klan and started

disseminating all of the Klans inside information on the radio. The result attendance at

Klan meetings began to fall and so did applications for new memberships.

The advent of the internet has reduced the information asymmetry that exists, by transferring

knowledge from experts to customers. For instance, the price of term life insurance felldramatically after the arrival of websites that enabled customers to compare the prices of term

insurance policies sold by dozens of insurance companies.

The book talks of the power of information as well as assumed information.

The example of Real estate agents, who actually act against the interests of their clients to

close a deal soon, shows how hazardous information asymmetry can be.


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Learning:

People respond strongly to strong incentives. One of the most powerful incentives isthe fear of random violence, as seen in the Ku Klux Klan case. This is why terrorism

is so effective.

Kennedy turned the Klans secrecy against itself by making its private informationpublic; thereby converting hitherto precious knowledge into ammunition for mockery.

He realised the raw power of information.

In a similar fashion, the power held by experts is because of the information hoarded

by them; and once this information becomes known, their power is lost.

The dissemination of information leads to its dilution

Even assumed information holds a lot of power. For example, if a person wishes tosell his car just a week after he buys it, people will pay a much lower price because

they thinksomething may be wrong with it.

The internet has played a huge role in shrinking the gap between the experts and the

public.

Very few information crimes are detected, as they usually do not leave behind a trail.

Many experts use their information to our detriment, by conversion of information tofear, as the case of real estate agents made clear.

Most people say one thing and do another. This was indicated by the example of NewYork Citys Mayoral race in1989.


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Indian Example

Chennai, Sept 7: The Coal block allocation scam has left the UPA government in the Centre

scathing. There are many other parties in the firing line for their dubious links to the scam.

The latest casualty in the scam seems to be a DMK Minister Jagathrakshakan, who according to

a Times Of India report is accused of being part of the coal scam. His family members are

allegedly part of a company that was awarded a coal block in Odisha in 2007.

Jagathrakshakan, also a Minister of state for Information and Broadcasting, is under the scanner

after his company JR Power Gen Pvt Limited entered into an MoU with a public sector company

PITDIC just five days before the PSU was allotted coal blocks.

After gaining the coal blocks in 2007, JR Power gained its market stand and sold as much as 51

per cent stake of their company to a Hyderabad based power company in 2010.

Choosing to downplay the involvement of the Minister, the party stated, "The MOS forinformation and broadcasting was not a member of the DMK in 2007.

Source: http://www.firstpost.com/politics/coalgate-khurshid-rejects-probe-against-dmk-

minister-447975.html

http://news.oneindia.in/2012/09/07/coalgate-dmk-min-jagathrakshakan-under-fire-1066581.html
http://www.firstpost.com/politics/coalgate-khurshid-rejects-probe-against-dmk-minister-447975.htmlhttp://www.firstpost.com/politics/coalgate-khurshid-rejects-probe-against-dmk-minister-447975.htmlhttp://www.firstpost.com/politics/coalgate-khurshid-rejects-probe-against-dmk-minister-447975.htmlhttp://news.oneindia.in/2012/09/07/coalgate-dmk-min-jagathrakshakan-under-fire-1066581.htmlhttp://news.oneindia.in/2012/09/07/coalgate-dmk-min-jagathrakshakan-under-fire-1066581.htmlhttp://news.oneindia.in/2012/09/07/coalgate-dmk-min-jagathrakshakan-under-fire-1066581.htmlhttp://news.oneindia.in/2012/09/07/coalgate-dmk-min-jagathrakshakan-under-fire-1066581.htmlhttp://news.oneindia.in/2012/09/07/coalgate-dmk-min-jagathrakshakan-under-fire-1066581.htmlhttp://www.firstpost.com/politics/coalgate-khurshid-rejects-probe-against-dmk-minister-447975.htmlhttp://www.firstpost.com/politics/coalgate-khurshid-rejects-probe-against-dmk-minister-447975.html


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CHP 3: WHY DO DRUG DEALERS STILL LIVE WITH THEIR MOMS?

Summary

The chapter starts with an introduction to the term conventional wisdom. It was coined by

John Kenneth Galbraith, who says that it is simple, convenient, comfortable and comforting

though not necessarily true.

It then goes on to talk about how journalists and experts are pretty much the founders of

conventional wisdom. For example, Mitch Snyder, an advocate for the homeless in America

in the 1980s, said that there were about 3 million Americans. He quoted several other

ridiculously large figures. He was finally forced to admit they were a fabrication, because he

wanted to be able to say something to the journalists hounding him.

Thus, it goes to show that experts like Snyder can be self-interested to the point of deceit.

However, they cannot deceive on their own. Journalists, who are desperate for experts who

can deliver a jarring piece of wisdom, help them out.

Advertising too, is a brilliant tool for creating conventional wisdom. The authors give the

example of Listerine, which suddenly brought to light the devastating problem of halitosis,

something people never really gave thought to earlier.

There was a sudden, violent appearance of crack cocaine in many American cities. The drug

dealers had state-of-the art weapons and a huge supply of cash. However, a closer study

revealed that most of the crack dealers werent all that rich and in fact still lived with their

moms.

A study was conducted by Sudhir Venkateshinto the lives of crack dealers. He found that

J.T., the leader of the Black Disciples franchises he was researching, was paid $66 per hour,whereas his three officers got only $7 an hour. The foot soldiers got to take home only $3.30

per hour. This shows that for every big earner, there were hundreds more just scraping along.

The top 20 men in the Black Disciples represented just 2.2% of the total gang membership,

but took home more than half the money.

This is because crack dealing, like any other glamorous profession, had a lot of people

competing for a few prizes.


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J.T. faced a problem when there was a gang war and he was forced to increase the foot

soldiers wages. Also, the war was bad for business. The war was started by the foot soldiers,

because they wanted to prove their mettle for violence and thus distinguish themselves.

The authors draw a comparison between crack cocaine and nylon stockings. Both of them

brought class to the masses, by being cheaper substitutes for pure cocaine and silk stockings

respectively.

Crack cocaine soon turned into a phenomenon due to:

1. An abundant supply of raw cocaine (due to a Columbian Cocaine glut in the 1970s)

2. A way to get the new product to the masses (thanks to Oscar Danilo Blandon)

The 1960s and 1970s were a great time to be a criminal in most American cities, because of

the liberal justice system and the criminals rights movement. So it simply didnt cost very

much to commit a crime. However, this trend radically reversed by the 1980s.

The signs of societal progress had finally taken root among the Black Americans since the

civil rights legislation of the mid-1960s. The black-white income gap was shrinking and so

was the gap between black childrens test scores and those of white children. The IMR

among black children also reduced drastically when the federal government ordered hospitals

to be desegregated. By the 1980s, every facet of life was improving for the Black Americans

and the progress showed no signs of stopping.

Then came crack cocaine, which hit black neighbourhoods harder than most. All the signs of

progress began to reverse and crime was at an all-time high.

But then suddenly, the crime rate fell dramatically. The reasons for these are explained in the

4th chapter of the book.


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Learning

Different experts have different incentives. These may change drastically depending

upon the situation.For example: The policemen in Atlanta began under-reporting the crime in the early

1990s because Atlanta had to shed its violent image to land the 1996 Olympics.

Crack dealing is just like any other capitalist enterprise- you have to be near the top of

the pyramid to make a big wage.

Along with the bad pay, foot soldiers faced terrible and dangerous job conditions. But

they put up with it because they hope to make it big in an extremely competitive

industry; and if they actually do succeed, then they are paid a fortune and of course, alot of glory and power is attached to the position.

Criminals, like everyone else, respond to incentives. When there were a lot of people

willing and able to do the job of being a foot soldier, the pay was low. But they were

still willing to work hard at substandard wages in the hope that they will make it to

the top someday.

Even though a gang war was actually bad for business and in fact increased the risk

for the foot soldiers, they still started it because they wanted to prove themselves and

become famous. A killer was respected, feared and talked about.

The discovery of crack cocaine had a huge impact on the black community. Black

IMR rates began to soar, as did the rate of low birth-weight and parent abandonment.

The gap between black and white schoolchildren widened. The number of blacks sent

to prison tripled.

The rules of any tournament are:1. You must start at the bottom to have a shot at the top.

2. You must be willing to work long and hard at substandard wages.

3. In order to advance in the tournament, you must prove yourself to be not just

above average but spectacular.

4. Once you come to the realisation that youll never make it to the top, you will

quit.

To turn a product into a phenomenon, all you need are two things abundant supply

of the product and a way to get the new product to the mass market.


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Indian examples

The Fairness Craze

The advertisement media feed on the attraction for fairness among Indians in general and

encourage the conventional wisdom that to be fair is beautiful and desirable and being of a

dark complexion is unacceptable. This is mainly done to push the sales of their products; so

much so that even men are now using fairness creams, even going against thinking from the

past that Tall, Dark and Handsome men are desirable.

Eg: Himani Fair and Handsome, Garnier Light Fairness cream.

Source:http://oliviakanna.blogspot.com/2012/03/fairness-craze.html
http://oliviakanna.blogspot.com/2012/03/fairness-craze.htmlhttp://oliviakanna.blogspot.com/2012/03/fairness-craze.htmlhttp://oliviakanna.blogspot.com/2012/03/fairness-craze.htmlhttp://oliviakanna.blogspot.com/2012/03/fairness-craze.html


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CHP 4: WHERE HAVE ALL THE CRIMINALS GONE?

Summary

The chapter opens with the story of Nicolae Ceausescu, the Communist dictator os Romania

in 1996. He made abortion illegal and banned all contraception and sex education. Any

woman who repeatedly failed to conceive was forced to pay a celibacy tax.

Due to this, birth rate doubled within a year. But unless you belonged to either the Ceausescu

clan or the Communist Elite, life was miserable. Ceausescu met a violent death, which was

precipitated in large measure by the youth of Romania; a great number of whom would not

have been born, were it not for his abortion ban.

The crime rate in the US began falling sharply in the 1990s, despite the long, brutal spike in

crime during the 80s. A diverse army of experts gave a variety of reasons to explain the drop.

The authors sort these reasons into pairs of two- one valid and one invalid- based on their

research. Some examples are:

Innovative policing strategies; Increased number of police.

After analysing the data, it was found that the first reason holds true, whereas the seconddoesnt really make much of a difference. Other reason that made a significant difference was

the bursting of the crack bubble.

He considers various other factors that have been propounded by the experts and rules them

out one by one based on logic and the use of data of previous years.

But one of the most important contributors to the decline in crime rate was something that no

expert mentioned or even recognised. On January 27th, 1973, legalised abortion was extended

to the entire country with the U.S. Supreme Courts ruling in Roe vs. Wade.

Before Roe vs. Wade, it was predominantly the daughters of middle or upper-class families

who could arrange and afford a safe illegal abortion. Now, instead of an illegal procedure that

might cost $500, a woman could easily obtain an abortion, often for less than $100.


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Learning

The abortion ban by Ceausescu had much deeper implications than he knew.

Compared to Romanian children born just a year earlier, the children born after theban did worse in every measurable way. The ban also circuitously caused his death.

The legalisation of abortion in the U.S. has myriad consequences. Legalised abortion

led to less unwanted-ness; unwanted-ness leads to high crime; legalised abortion,

therefore, led to less crime.

The post Roe cohort was not only missing thousands of young male criminals but also

thousands of single teenage mothers, for most of the aborted baby girls would havebeen the children most likely to replicate their own mothers tendencies.

Although abortion helps lower crime rate, it is a highly inefficient way of doing so.

What the link between crime and abortion says is: when the government gives a

woman the opportunity to make her own decisions about abortion, she generally does

a good job of figuring out if she is in a position to raise the baby well.


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Indian Example

Sanjay Gandhi started compulsory sterilisation in a move by the government to reduce the

population growth. However, this move backfired with people revolting against forced

sterilisation.

Over a period of time, with economic growth and better standard of living, with enhanced

empowerment and education the number of children per family dropped and the rate of

growth of population declined.

Economic growth rather than force achieved the desired objective.

Source:http://en.wikipedia.org/wiki/Sanjay_Gandhi
http://en.wikipedia.org/wiki/Sanjay_Gandhihttp://en.wikipedia.org/wiki/Sanjay_Gandhihttp://en.wikipedia.org/wiki/Sanjay_Gandhihttp://en.wikipedia.org/wiki/Sanjay_Gandhi


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CHP 5: WHAT MAKES A PERFECT PARENT?

Summary

There are so many theories on what is the perfect way of parenting. There have been

hundreds of articles and books addressing the subject, each one saying a different thing.

No one is more susceptible to an experts fearmongering than a parent. But the problem is

that they are often scared of the wrong things.

According to Peter Sandman, Risks that you can control are much less a source of outrage

than risks that are out of your control. It is the imminent possibility of death that drives fear.

He states that

Risk = Hazard + Outrage.

When hazard is high and outrage is low, people underreact. When hazard is low and outrage

is high, people overreact.

This is illustrated in an example of how a parent would be more worried about their child

being around a gun rather than a swimming pool, which has actually caused a lot more deaths

than accidental firing of a gun.

The Chicago Public School (CPS) system decided to admit students on a lottery basis. So a

study was done on this and the following were the findings:

1. It is true that students who entered the school choice lottery were more likely to

graduate than students who didnt. However, the students who won the lottery and

went to a better school did no better than equivalent students who lost the lottery and

were left behind.

2. The group of students who did see a dramatic change were those who entered a

technical school or a career academy.

The black-white income gap is largely a result if a black-white education gap that could have

been observed many years earlier. The different theories to explain the test gap that have been

put forth are: poverty, genetic makeup, the summer setback phenomenon, racial bias in

testing or in teacher perceptions and a black backlash against acting white.


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In a paper called The Economics of Acting White, Black Harvard economist Roland G.

Fryer Jr. argues that some black students have tremendous disincentives to invest in

particular behaviours (i.e. education, ballet, etc.) due to the fact that they may be deemed a

person who is trying to act like a white person (a.k.a selling-out). Such a label in some

neighbourhoods, can carry penalties that range from being deemed a social outcast to beingbeaten or killed.

The chapter then discusses what are the factors that do and do not affect a childs

performance in the early school years.

In the late 1990s the U.S. Department of Education undertook a monumental project called

the Early Childhood Longitudinal Study (ECLS). It sought to measure the academic progress

of over 20,000 children from kindergarten through the 5 th grade.

It gathered typical survey information about each child- race, gender, family structure,

socioeconomic status and so on. It also included interviews with the students parents,

teachers and school administrators, posing a long list of personal questions like whether the

parents spanked their children & how often; whether they took them to libraries or museums;

how much T.V. the children watched.

They subjected this data to regression analysis to identify any possible correlations. The

following were the findings:

A. The black-white test score gap- After controlling just a few variables (including theincome and education levels of the parents and the mothers age at the birth of her

first child) the gap is virtually eliminated at the time the children enter school.

B. Correlations between a childs personal circumstances and school performance-For eg: On an average, girls test higher than boys and Asians higher than whites.

C. Eight factors that show a strong correlation with test scores;1. The child has highly educated parents.

2. The childs parents have a high socioeconomic status.

3. The childs mother was 30 or older at the time of her first childs birth.

4. The child had low birthweight.

5. The childs parents speak English at home

6. The child is adopted.

7. The childsparents are involved in the PTA

8. The child has many books in his home.


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Eight factors that are often said to have a great impact on a childs performance but dont are:

1. The childs family is intact.

2. The childs parents recently moved into a better neighbourhood.

3. The childs mother didnt work between birth and kindergarten.

4. The child attended Head Start.

5. The childs parents regularly take him to the museum.

6. The child is regularly spanked.

7. The child frequently watches Television.

8. The childs parents read to him nearly everyday.

The first list describes the things that the parents ARE; the second list describes the things

that parents DO. Parents who are well educated, successful and healthy tend to have children

who test well in school; but it doesnt seem to matter much whether a child is taken to

museums or spanked or sent to Head Start or watches a lot of T.V.

In a paper titles The Nature and Nurture of Economic Outcomes, the economist Bruce

Sacerdote addressed the nature-nurture debate by taking a long-term quantitative look at the

effects of parenting. He found that parents who adopt children are typically smarter, better

educated and more highly paid than the babys biological parents. But the adoptive parents

advantages had little bearing on the childs school performance. However, he found that the

parents were not powerless forever. By the time the adopted children became adults, they had

veered sharply from the destiny that IQ alone might have predicted.


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Learning

Like experts in other fields, the typical parenting expert is prone to sound exceedingly

sure of himself. An expert doesnt so much argue the various sides of an issue asfirmly stick to one point of view.

The expert whose argument contains restraint or nuances does not garner much

attention.

Fear is one of the most potent emotions. It is mainly this emotion that drives us

towards experts. It is a powerful short-term play.

It was not the school that the students went to, but their academic motivation, that led

to their success.

The students left behind in the neighbourhood continued to test at the same level as

before the supposed brain drain.

The students who entered a technical school or career academy performed much

better than their past performance would have predicted. Thus the CPS system did

help a small group of struggling students by giving them practical skills.

Reducing the black-white test score gap would do more to promote racial equality

than any other strategy that commands broad political support.

Educators and researchers are wrong to be so hung-up on the black-white test score

gap; the bad school/ good school gap may be the more salient issue. A childs school

does seem to have a clear impact on his academic progress, at least in the early years.

Its not that parents dont matter, just that most of the things about a parent that affect

a childs capabilities were already decided long ago- their education, success,

motivation levels, etc.

The study conducted by Sacerdote shows that compared to similar children not put up

for adoption, the adoptees were far more likely to attend college, have a well-paid job

and to wait until they were well out of their teens before getting married. It was the

influence of the adoptive parents that made the difference.


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Indian Example

The following is an extract from a bookEducating Muslim Girls: A Comparison of Five

Citiesby Zoya Hasan, & Ritu Menon :

...

In India as a whole, the authors reveal, Muslim girls school enrolment rates continue to be

low: 40.6%, as compared to 63.2% in the case of upper caste Hindus. In rural north India it

is only 13.5%, in urban north India 23.1%, and in rural and urban south India, above 70%,

which is above the all-India average for all girls. Only 16.1% of Muslim girls from poor

families attend schools, while 70% of Muslim girls from economically better-off families do

so, thus clearly suggesting that low levels of education of Muslim girls owe not to religionbut to poverty. Less than 17% of Muslim girls finish eight years of schooling and less than

10% complete higher secondary education. In the north the corresponding figures are 4.5%

and 4.75% respectively, compared to the national female average of 17.8% and 11.4%.

Just like the Blacks in America, a majority of Muslims in India tend to have a lower

socioeconomic status and education level than the rest. This in turn, affects the performance

of the future generations of Muslims, causing the low levels of education. However, as

pointed out in the extract, the children of well-off families attend schools and go on to dofurther education; thus proving the authors point that the situation of the parents has an

impact on the children.

Source:http://www.irfi.org/articles/articles_501_550/educating_muslim_girls.htm
http://www.irfi.org/articles/articles_501_550/educating_muslim_girls.htmhttp://www.irfi.org/articles/articles_501_550/educating_muslim_girls.htmhttp://www.irfi.org/articles/articles_501_550/educating_muslim_girls.htmhttp://www.irfi.org/articles/articles_501_550/educating_muslim_girls.htm


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CHP 6: WOULD A ROSHANDA BY ANY OTHER NAME SMELL AS SWEET?

Summary

This chapter answers Shakespeares question Whats in a name?. Name-giving is

something parents place great emphasis on.

They give examples of parents who have given their children rather absurd names, like

Temptress, Winner & Loser.

Fryers mission is the study of Black underachievement. Blacks are the worst performing

ethnic group on SATs and earn less than Whites. In addition to the economic and social

disparity between Blacks and whites, Fryer was intrigued by the virtual segregation of

cultures. Blacks watched different T.V. shows, smoke different cigarettes and give their

children names that are starkly different from those of White children.

He began to wonder whether the distinctive Black culture was the cause of the Economic

disparity or merely a reflection of it. For this, he collected the birth certificate information of

every child born in California since 1961. The data included standard items such as name,

race, gender, etc. as well as more telling factors about the parents such as:

- Zip Code, which indicates socioeconomic status and a neighbourhoods racial

composition.- Their means of paying the hospital bill (an economic indicator).

- Their level of education.

The following were the findings of the study:

1) Black and White parents name their children very dissimilarly. White and Asian-

American parents give their children remarkably similar names, while there is some

disparity between White and Hispanic-American parents.2) The Black-White gap is a recent phenomenon. Until the early 1970s, there was a great

overlap between Black and white names.

3) A great many Black names of today are unique to Blacks. An unmarried, low-income,

undereducated teenage mother from a Black neighbourhood who has a distinctively

Black name herself is most likely to give her child a distinctively Black name as well.


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Over the years, a series of audit studies have tried to measure how people perceive different

names. Here, a researcher would send two identical (and fake) resumes- one with a traditional

White name and the other with an immigrant or minority sounding name- to potential

employers. The White resumes have always gleaned more job interviews.

Name changing is fast becoming a very common practice. Some of the changes are purely

aesthetic & some for economic purposes.

Using regression analysis on the California data, it was possible to hold constant the other

factors that might influence life trajectories and measure the impact of a persons first name

alone on her education, income and health outcomes. The analysis revealed that a person with

a distinctively Black name does have a worse life outcome than a person with a White name.

There is a discernible pattern to the way a name migrates through the population. There is a

strong correlation between a babys name and the parents socioeconomic status. This is

evident from the California data, where the most common middle-income and low-income

white girl names are very different.There is also a strong link between the parents education

levels and the names they give their babies. The names that signify the highest level of

parental education have a fair share of literary and otherwise artful touches for the girls; and

tending towards Irish traditionalism for boys.

In a space of 10 years, even the most popular name among the Black boys (Michael) becamefar less popular. Not a single name from 1960 remains in the top 10 names of 2000.

There is a clear pattern: Once a name catches on among high-income, highly educated

parents, it starts working its way down the socioeconomic ladder.


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Learning

The Black-White gap in names started around the 1980s. This can be attributed to the

Black Power movement, which sought to accentuate African culture.

Giving a child a superblack name is a Black parents sign of solidarity with the

community.

The California data tells us how parents see themselves and more significantly, what

kind of expectations they have for their children.

If two black individuals are born into the same familial and economic circumstances,but one with a White name and the other with a Black name, their life outcomes are

likely to be similar.

Anybody who bothers to change his name for economic success is likely to be highly

motivated. It is probably this motivation that is the cause for his success, more than a

name.

Parents are getting more diverse with names. There is also a very high rate of turnover

in names.

A variety of motives are at work when parents consider a name for their child. They

are all trying to signal something with the name they choose. The California data

suggests that an overwhelming number of parents use a name to signal their own

expectations of how successful their children will be.


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Indian Example

A study conducted by the Indian Institute of Dalit Studies (IIDS) reveals that:

This field experiment study of job applications observed a statistically significant pattern by

which, on average, college-educated lower-caste and Muslim job applicants fare less well

than equivalently-qualified applicants with high caste Hindu names, when applying by mail

for employment in the modern private-enterprise sector. The only aspect of family

background that was communicated in these applications was the applicants name, yet this

was enough to generate a different pattern of responses to applications from Muslims and

Dalits, compared to high caste Hindu names. These were all highly educated and

appropriately qualified applicants attempting to enter the private sector, yet even in thissector, caste and religion proved influential in determining ones job chances. These

discriminatory outcomes occurred at the very first stage of the process

Source:http://www.dalitstudies.org.in/download/wp/0901.pdf
http://www.dalitstudies.org.in/download/wp/0901.pdfhttp://www.dalitstudies.org.in/download/wp/0901.pdfhttp://www.dalitstudies.org.in/download/wp/0901.pdfhttp://www.dalitstudies.org.in/download/wp/0901.pdf

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Freakonomics Revised[1]

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