May 1, 2012

Book: Freakanomics by Stephen Levitt and Stephen Dubner

Filed under: Books — Tags: , , , — krishnafromtoronto @ 9:17 am

The pair of authors here are collaborators: Steven Levitt is the economist of the pair, and most of the theories of the book are from him and Stephen Dubner is the journalist who has presumably wrapped it up in the language and format that has also contributed to the prenominal success of the book. Incidentally, the latter also found time to appear in an episode of ‘Beauty and the Geek’.

It is a great book and has rightly generated so much buzz that hardly anyone interested in non fiction has not heard of it. I want to share a couple of impressions I had while reading the book before even talking about the contents of the book.

First , Steven Levitt himself comes across as a remarkable individual, endlessly curious about the world and the everyday riddles we meet therein. He applies economic (and mainly statistical) thinking to the problems and arrives often at surprising and counterintuitive conclusions from his analysis. It is this ‘Aha!’ moment that sustains interest in the book and raises it above the other economic or business books that flood the market periodically.

Second, those who have read quite a few of the reviews in this forum (are there any?) may remember the review of the ‘Undercover Economist‘ . They are similar in that both are the product of the fertile, lateral thinking brains of economists, both eschew difficult economic theories to explain everyday occurrences in simple terms which have an economic basis, and also both arrive at surprising conclusions regarding everyday questions that turn conventional wisdom on its head. However, there are two important variations. One: Whereas Freakanomics almost entirely relies on data and statistical analysis of it, The Undercover Economist applies general economic theory to everyday life. Two: Freakanomics applies mainly to microeconomics or individual acts of people but Undercover Economist mostly focuses on macroeconomics, or to countries and industries and their impact. Both are great reads.

Back to the book review: Stephen poses questions such as ‘Does your real estate agent do all he can to get you the highest price possible for your house?’ or ‘Do teachers cheat in collusion with students in standardized tests that measure the children’s progress nationwide?’ or the odd ‘Why do most drug dealers live with their moms?’ and comes with surprising answers in each. Equally surprising is the explanation of how he arrived at the answer. The answer to ‘Who should take real credit for the drop of crime in New York?’ is sure to surprise you. Giuliani and  Bill Bratton, his police chief at that time, got a lot of mileage out of that one, in popularity.

You want to be intrigued more? How about this question? “Why is the Ku Klux Klan similar to the Music Industry?”

What constituted good parenting? The answer may really really surprise you, again.

In short, there is no one unifying theme to the book, as the authors themselves are the first to admit. But what a great read this is! If you enjoyed the Undercover Economist, this book will be a treat for you. (And vice versa).

It definitely deserves an equivalent 7/10, surely!

— Krishna


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