Freakonomics by Steven Levitt & Stephen Dubner - Review

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything is a non-fiction book written by Steven Levitt (University of Chicago Economist) and Stephen Dubner (New York Times journalist) that uses an applied economic approach to understand a diverse range of sociological issues by way of data-mining.

"Since the science of economics is primarily a set of tools, as opposed to a subject matter, then no subject, however offbeat, need be beyond its reach."

The book, structured as a series of thought provoking adapted economic papers that challenge the conventional line of thinking, goes in multiple directions and the authors suggest it perhaps has no universal theme - I would argue that the theme is showing how far and wide economic theory can be applied to help us progress our understanding of the world.

The topics covered in the book include:

  • How both teachers in NAPLAN test and Japan’s elite sumo-wrestlers cheat
  • How the Ku Klux Klan and Real Estate agents both used/use information asymmetry to their advantage
  • Why do drug dealers still live with their mom’s? – the economics behind the drug dealing trade
  • Where have all the criminal’s gone? – how legalised abortion has reduced crime-rates
  • What makes a perfect parent? – the sociological factors that affect a child’s test scores
  • What’s in a name? – what are the economic implications of a name and how naming trends are changing over time.

Whilst the book illustrates the power of the economic method to form predictions and explanations for such a variety of events and occurrences, the epilogue illustrates that there are some occurrences that are outliers – Ted Kaczynski (AKA Unabomber) and Roland G. Fryer came from vastly different backgrounds and upbringings that would’ve predicted the other one to succeed and the other to fail as opposed to what in reality eventuated.

The 2006 revised and expanded edition contains an additional note regarding the Stetson Kennedy and his involvement in the Klu Klux Klan’s infiltration and subsequent downfall, which was found to be exaggerated by his own recounts, in taking credit for others actions.

Additionally it also contains some of the best posts from the Freaknonomics Blog.

"If you learn how to look at data in the right way, you can explain riddles that otherwise might have seemed impossible. Because there is nothing like the sheer

As an economics student, it was very interesting and inspiring to see how economic theory can be applied to such a vast range of issues beyond it’s application in business and government policy.

Overall, the book is well-written, interesting, entertaining and insightful – you will find it hard to put down once you start.

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