Freakonomics
Encyclopedia
Freakonomics: A Rogue Economist Explores the Hidden Side of Everything is a 2005 non-fiction book by University of Chicago
economist
Steven Levitt
and New York Times journalist
Stephen J. Dubner
. The book has been described as melding pop culture with economics
, but has also been described as "amateur sociology". By late 2009, it had sold over 4 million copies worldwide.
microeconomic
model of rational utility-maximization
. In Freakonomics, Levitt and Dubner argue that economics is, at root, the study of incentives. The book's topics include:
One example of the authors' use of economic theory involves demonstrating the existence of cheating among sumo wrestlers. In a sumo tournament, all wrestlers in the top division compete in 15 matches and face demotion if they do not win at least eight of them. The sumo community is very close-knit, and the wrestlers at the top levels tend to know each other well. The authors looked at the final match, and considered the case of a wrestler with seven wins, seven losses, and one fight to go, fighting against an 8-6 wrestler. Statistically, the 7-7 wrestler should have a slightly below even chance, since the 8-6 wrestler is slightly better. However, the 7-7 wrestler actually wins around 80% of the time. Levitt uses this statistic and other data gleaned from sumo wrestling matches, along with the effect that allegations of corruption have on match results, to conclude that those who already have 8 wins collude with those who are 7-7 and let them win, since they have already secured their position for the following tournament. Despite round condemnation of the claims by the Japan Sumo Association
following the book's publication in 2005, the 2011 Grand tournament in Tokyo was cancelled for the first time since 1946 because of allegations of match fixing.
The authors attempt to demonstrate the power of data mining
. Many of their results emerge from Levitt's analysis of various databases, and asking the right questions. Authors posit that various incentives encourage teachers to cheat by assisting their students with multiple-choice high-stakes tests
. Such cheating in the Chicago
school system is inferred from detailed analysis of students' answers to multiple choice questions. But first Levitt asks, "What would the pattern of answers look like if the teacher cheated?" The simple answer: difficult questions at the end of a section will be more correct than easy ones at the beginning.
's Florida home where the topic of Kennedy's investigations of the Ku Klux Klan were discussed. However, in their January 8, 2006 column in the New York Times Magazine, Dubner and Levitt wrote of questions about Stetson Kennedy's research ("Hoodwinked", pp. 26–28) leading to the conclusion that Kennedy's research was at times embellished for effectiveness.
In the "Revised and Expanded Edition" this embellishment was noted and corrected:
"Several months after Freakonomics was first published, it was brought to our attention that this man's portrayal of his crusade, and various other Klan matters, was considerably overstated....we felt it was important to set straight the historical record."
, stating that "Compared to Romanian children born just a year earlier, the cohort of children born after the abortion ban would do worse in every measurable way: they would test lower in school, they would have less success in the labor market, and they would also prove much more likely to become criminals. (p. 118)". John DiNardo, a professor at the University of Michigan
, retorts that the paper cited by Freakonomics states "virtually the opposite of what is actually claimed":
Levitt responded on the Freakonomics Blog that Freakonomics and Pop-Eleches "are saying the same thing":
and/or criminology
, rather than economics. Israeli economist Ariel Rubinstein
criticised the book for making use of dubious statistics and complained that "economists like Levitt ... have swaggered off into other fields", saying that the "connection to economics ... [is] none" and that the book is an example of "academic imperialism". Arnold Kling
has suggested the book is an example of "amateur sociology".
Book of the Year in the Adult Nonfiction category. The book received positive reviews from critics. The review aggregator Metacritic
reported the book had an average score of 67 out of 100, based on 16 reviews.
The success of the book has been partly attributed to the blogosphere
. In the campaign prior to the release of the book in April 2005, the publisher (William Morrow and Company
) chose to target blog
gers in an unusually strategical way, sending galley copies to over a hundred of them, as well as contracting two specialized word of mouth
(buzz marketing) agencies.
In 2006, the Revised and Expanded Edition of the book was published, with the most significant corrections in the second chapter (see above).
was hired as the full time editor of the site. In August 2007, the blog was incorporated into The New York Times
web site – the authors had been writing joint columns for The New York Times Magazine
since 2004 – and the domain Freakonomics.com became a redirect
there. In March 2008, Annika Mengisen replaced Lafsky as the blog editor.
Among the recurrent guest bloggers on the Freakonomics blog are Ian Ayres
, Daniel Hamermesh
, Eric A. Morris
, Sudhir Venkatesh, Justin Wolfers
and others.
The Freakonomics blog ended its association with the New York Times on March 1, 2011.
, as well as a study of the use of money by capuchin monkey
s. Dubner said the title would be SuperFreakonomics, and that one topic would be what makes people good at what they do. The book was released in Europe in early October 2009 and in the United States on October 20, 2009.
, Chris Romano, and Dan O'Meara produced a documentary film
adaptation
with a budget of nearly US
$3 million in an omnibus
format by directors Seth Gordon
, Morgan Spurlock
, Alex Gibney
, Eugene Jarecki
, Rachel Grady
, and Heidi Ewing. It was the Closing Night Gala premiere film at the Tribeca Film Festival
on April 30, 2010. It was also the Opening Night film at the AFI/Discovery SilverDocs
film festival on June 21, 2010. Magnolia Pictures
has acquired distribution rights for a Fall 2010 release.
Freakonomics: The Movie was released in major cities with a pay what you want
pricing offer for selected preview showings. No report of the results has yet been published.
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
Steven Levitt
Steven Levitt
Steven David "Steve" Levitt is an American economist known for his work in the field of crime, in particular on the link between legalized abortion and crime rates. Winner of the 2004 John Bates Clark Medal, he is currently the William B...
and New York Times journalist
Journalist
A journalist collects and distributes news and other information. A journalist's work is referred to as journalism.A reporter is a type of journalist who researchs, writes, and reports on information to be presented in mass media, including print media , electronic media , and digital media A...
Stephen J. Dubner
Stephen J. Dubner
Stephen J. Dubner is an American journalist who has written four books and numerous articles. Dubner is best known as co-author of the pop-economics book Freakonomics: A Rogue Economist Explores the Hidden Side of Everything and its 2009 sequel, SuperFreakonomics.-Background:His parents were...
. The book has been described as melding pop culture with economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, but has also been described as "amateur sociology". By late 2009, it had sold over 4 million copies worldwide.
Overview
The book is a collection of 'economic' articles written by Levitt, an expert who has already gained a reputation for applying economic theory to diverse subjects not usually covered by "traditional" economists; he does, however, accept the standard neoclassicalNeoclassical economics
Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...
microeconomic
Microeconomics
Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...
model of rational utility-maximization
Utility maximization problem
In microeconomics, the utility maximization problem is the problem consumers face: "how should I spend my money in order to maximize my utility?" It is a type of optimal decision problem.-Basic setup:...
. In Freakonomics, Levitt and Dubner argue that economics is, at root, the study of incentives. The book's topics include:
- Chapter 1: Discovering cheating as applied to teachers and sumoSumois a competitive full-contact sport where a wrestler attempts to force another wrestler out of a circular ring or to touch the ground with anything other than the soles of the feet. The sport originated in Japan, the only country where it is practiced professionally...
wrestlers (See below) - Chapter 2: Information control as applied to the Ku Klux KlanKu Klux KlanKu Klux Klan, often abbreviated KKK and informally known as the Klan, is the name of three distinct past and present far-right organizations in the United States, which have advocated extremist reactionary currents such as white supremacy, white nationalism, and anti-immigration, historically...
and real-estate agents - Chapter 3: The economics of drug dealing, including the surprisingly low earnings and abject working conditions of crack cocaineCrack cocaineCrack cocaine is the freebase form of cocaine that can be smoked. It may also be termed rock, hard, iron, cavvy, base, or just crack; it is the most addictive form of cocaine. Crack rocks offer a short but intense high to smokers...
dealers - Chapter 4: The role legalized abortion has played in reducing crimeLegalized abortion and crime effectThe effect of legalized abortion on crime is the theory that legal abortion reduces crime. Proponents of the theory generally argue that since unwanted children are more likely to become criminals and that an inverse correlation is observed between the availability of abortion and subsequent crime...
, contrasted with the policies and downfall of Romanian dictator Nicolae CeauşescuNicolae CeausescuNicolae Ceaușescu was a Romanian Communist politician. He was General Secretary of the Romanian Communist Party from 1965 to 1989, and as such was the country's second and last Communist leader...
(Levitt explored this topic in an earlier paper entitled "The Impact of Legalized Abortion on CrimeThe Impact of Legalized Abortion on Crime"The Impact of Legalized Abortion on Crime" is a controversial paper by John J. Donohue III of Yale University and Steven Levitt of University of Chicago that argues that the legalization of abortion in the 1970s contributed significantly to reductions in crime rates experienced in the 1990s...
.") - Chapter 5: The negligible effects of good parenting on education
- Chapter 6: The socioeconomic patterns of naming children
One example of the authors' use of economic theory involves demonstrating the existence of cheating among sumo wrestlers. In a sumo tournament, all wrestlers in the top division compete in 15 matches and face demotion if they do not win at least eight of them. The sumo community is very close-knit, and the wrestlers at the top levels tend to know each other well. The authors looked at the final match, and considered the case of a wrestler with seven wins, seven losses, and one fight to go, fighting against an 8-6 wrestler. Statistically, the 7-7 wrestler should have a slightly below even chance, since the 8-6 wrestler is slightly better. However, the 7-7 wrestler actually wins around 80% of the time. Levitt uses this statistic and other data gleaned from sumo wrestling matches, along with the effect that allegations of corruption have on match results, to conclude that those who already have 8 wins collude with those who are 7-7 and let them win, since they have already secured their position for the following tournament. Despite round condemnation of the claims by the Japan Sumo Association
Japan Sumo Association
The is the body that operates and controls professional sumo wrestling in Japan under the jurisdiction of the Japanese Ministry of Education, Culture, Sports, Science and Technology. Rikishi , gyōji , tokoyama , and yobidashi , are all on the Association's payroll, but the organisation is run...
following the book's publication in 2005, the 2011 Grand tournament in Tokyo was cancelled for the first time since 1946 because of allegations of match fixing.
The authors attempt to demonstrate the power of data mining
Data mining
Data mining , a relatively young and interdisciplinary field of computer science is the process of discovering new patterns from large data sets involving methods at the intersection of artificial intelligence, machine learning, statistics and database systems...
. Many of their results emerge from Levitt's analysis of various databases, and asking the right questions. Authors posit that various incentives encourage teachers to cheat by assisting their students with multiple-choice high-stakes tests
High-stakes testing
A high-stakes test is a test with important consequences for the test taker. Passing has important benefits, such as a high school diploma, a scholarship, or a license to practice a profession...
. Such cheating in the Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
school system is inferred from detailed analysis of students' answers to multiple choice questions. But first Levitt asks, "What would the pattern of answers look like if the teacher cheated?" The simple answer: difficult questions at the end of a section will be more correct than easy ones at the beginning.
Reappraisals
In Chapter 2 of Freakonomics, the authors wrote of their visit to folklorist Stetson KennedyStetson Kennedy
William Stetson Kennedy was an American author and human rights activist. One of the pioneer folklore collectors during the first half of the twentieth century, he is remembered for having infiltrated the Ku Klux Klan in the 1940s, exposing its secrets to authorities and the outside world...
's Florida home where the topic of Kennedy's investigations of the Ku Klux Klan were discussed. However, in their January 8, 2006 column in the New York Times Magazine, Dubner and Levitt wrote of questions about Stetson Kennedy's research ("Hoodwinked", pp. 26–28) leading to the conclusion that Kennedy's research was at times embellished for effectiveness.
In the "Revised and Expanded Edition" this embellishment was noted and corrected:
"Several months after Freakonomics was first published, it was brought to our attention that this man's portrayal of his crusade, and various other Klan matters, was considerably overstated....we felt it was important to set straight the historical record."
Effects of abortion ban
Freakonomics commented on the effects of an abortion ban in RomaniaRomania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
, stating that "Compared to Romanian children born just a year earlier, the cohort of children born after the abortion ban would do worse in every measurable way: they would test lower in school, they would have less success in the labor market, and they would also prove much more likely to become criminals. (p. 118)". John DiNardo, a professor at the University of Michigan
University of Michigan
The University of Michigan is a public research university located in Ann Arbor, Michigan in the United States. It is the state's oldest university and the flagship campus of the University of Michigan...
, retorts that the paper cited by Freakonomics states "virtually the opposite of what is actually claimed":
Levitt responded on the Freakonomics Blog that Freakonomics and Pop-Eleches "are saying the same thing":
Effects of extra police on crime
Freakonomics claimed that it was possible to "tease" out the effect of extra police on crime by analysing electoral cycles. The evidence behind these claims was shown to be due partly to a programming error. McCrary stated "While municipal police force size does appear to vary over state and local electoral cycles ... elections do not induce enough variation in police hiring to generate informative estimates of the effect of police on crime."Criticism
Freakonomics has been criticised for in fact being a work of sociologySociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...
and/or criminology
Criminology
Criminology is the scientific study of the nature, extent, causes, and control of criminal behavior in both the individual and in society...
, rather than economics. Israeli economist Ariel Rubinstein
Ariel Rubinstein
Ariel Rubinstein is an Israeli economist who works in game theory. He was educated at the Hebrew University of Jerusalem, 1972–1979, in both mathematics and economics...
criticised the book for making use of dubious statistics and complained that "economists like Levitt ... have swaggered off into other fields", saying that the "connection to economics ... [is] none" and that the book is an example of "academic imperialism". Arnold Kling
Arnold Kling
Arnold Kling is a founder and co-editor of , an economics blog, along with Bryan Caplan and David Henderson.Kling graduated from Swarthmore College in 1975 and received a Ph.D. in economics from Massachusetts Institute of Technology. He worked as an economist in the Federal Reserve System from 1980...
has suggested the book is an example of "amateur sociology".
Publishing history
Freakonomics peaked at number two among nonfiction on The New York Times Best Seller list and was named the 2006 Book SenseBook Sense
Book Sense was a marketing and branding program of the American Booksellers Association, in which many independent bookstores across North America participated in order to better compete with the large book chains. Bookstores participating in the Book Sense program were expected to display the Book...
Book of the Year in the Adult Nonfiction category. The book received positive reviews from critics. The review aggregator Metacritic
Metacritic
Metacritic.com is a website that collates reviews of music albums, games, movies, TV shows and DVDs. For each product, a numerical score from each review is obtained and the total is averaged. An excerpt of each review is provided along with a hyperlink to the source. Three colour codes of Green,...
reported the book had an average score of 67 out of 100, based on 16 reviews.
Blogosphere
The blogosphere is made up of all blogs and their interconnections. The term implies that blogs exist together as a connected community or as a social network in which everyday authors can publish their opinions...
. In the campaign prior to the release of the book in April 2005, the publisher (William Morrow and Company
William Morrow and Company
William Morrow and Company is an American publishing company founded by William Morrow in 1926. The company was acquired by Scott Foresman in 1967, and sold to Hearst Corporation in 1981. It was sold along to the News Corporation in 1999...
) chose to target blog
Blog
A blog is a type of website or part of a website supposed to be updated with new content from time to time. Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in...
gers in an unusually strategical way, sending galley copies to over a hundred of them, as well as contracting two specialized word of mouth
Word of mouth
Word of mouth, or viva voce, is the passing of information from person to person by oral communication. Storytelling is the oldest form of word-of-mouth communication where one person tells others of something, whether a real event or something made up. Oral tradition is cultural material and...
(buzz marketing) agencies.
In 2006, the Revised and Expanded Edition of the book was published, with the most significant corrections in the second chapter (see above).
Freakonomics blog
The authors started their own Freakonomics blog, which is "meant to keep the conversation going", in 2005. In May 2007, writer and blogger Melissa LafskyMelissa Lafsky
Melissa Lafsky is an American writer who is known as the author of the blog, which formerly focused on the dehumanizing aspects of law firms. - Education and legal career :...
was hired as the full time editor of the site. In August 2007, the blog was incorporated into The New York Times
The New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
web site – the authors had been writing joint columns for The New York Times Magazine
The New York Times Magazine
The New York Times Magazine is a Sunday magazine supplement included with the Sunday edition of The New York Times. It is host to feature articles longer than those typically in the newspaper and has attracted many notable contributors...
since 2004 – and the domain Freakonomics.com became a redirect
URL redirection
URL redirection, also called URL forwarding and the very similar technique domain redirection also called domain forwarding, are techniques on the World Wide Web for making a web page available under many URLs.- Similar domain names :...
there. In March 2008, Annika Mengisen replaced Lafsky as the blog editor.
Among the recurrent guest bloggers on the Freakonomics blog are Ian Ayres
Ian Ayres
Ian Ayres is an American academic who is the William K. Townsend Professor at the Yale Law School and a Professor at the Yale School of Management.-Biography:...
, Daniel Hamermesh
Daniel S. Hamermesh
Daniel Selim Hamermesh is a U.S. economist, Sue Killam Professor in the Foundations of Economics at the University of Texas at Austin, Research Associate at the National Bureau of Economic Research, and Research Associate and Program Director at the Institute for the Future of Labor...
, Eric A. Morris
Eric A. Morris
Eric A. Morris is a transportation scholar at UCLA and a former television writer.Morris grew up in Deerfield, Illinois. He attended Harvard University, where he received an A.B. magna cum laude in history and literature....
, Sudhir Venkatesh, Justin Wolfers
Justin Wolfers
Justin Wolfers is an Australian-American economist at the Wharton School of the University of Pennsylvania. He is a contributor to the New York Times and the Wall Street Journal and an editor of the Brookings Papers on Economic Activity...
and others.
The Freakonomics blog ended its association with the New York Times on March 1, 2011.
SuperFreakonomics
In April 2007, co-author Stephen Dubner announced that there would be a sequel to Freakonomics, and that it would contain further writings about street gang culture from Sudhir VenkateshSudhir Alladi Venkatesh
Sudhir Alladi Venkatesh is an Indian American sociologist and urban ethnographer. Born in India, he is a professor of sociology and African-American studies at Columbia University. He is a board member at Philadelphia-based nonprofit Public/Private Ventures...
, as well as a study of the use of money by capuchin monkey
Capuchin monkey
The capuchins are New World monkeys of the genus Cebus. The range of capuchin monkeys includes Central America and South America as far south as northern Argentina...
s. Dubner said the title would be SuperFreakonomics, and that one topic would be what makes people good at what they do. The book was released in Europe in early October 2009 and in the United States on October 20, 2009.
Film adaptation
In 2010, Chad TroutwineChad Troutwine
Chad Troutwine is an American Independent film producer and Co-Founder and CEO of Veritas Prep.-Biography:As a child, Troutwine's parents encouraged his entrepreneurial spirit and placed a high value on education. Troutwine earned a perfect score on the Stanford Achievement Test, and graduated...
, Chris Romano, and Dan O'Meara produced a documentary film
Documentary film
Documentary films constitute a broad category of nonfictional motion pictures intended to document some aspect of reality, primarily for the purposes of instruction or maintaining a historical record...
adaptation
Freakonomics (film)
Freakonomics: The Movie is a 2010 documentary film based on the book Freakonomics by Steven D. Levitt and Stephen J. Dubner. The film had its premiere at the Tribeca Film Festival in April 2010, with a theatrical release planned for later in the year. Freakonomics is a documentary featuring Steven...
with a budget of nearly US
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
$3 million in an omnibus
Anthology
An anthology is a collection of literary works chosen by the compiler. It may be a collection of poems, short stories, plays, songs, or excerpts...
format by directors Seth Gordon
Seth Gordon
Seth Gordon is an American film director, producer, and film editor. He has produced and directed both film and TV for various film and television studios, including PBS, the Bill & Melinda Gates Foundation, and the United Nations 1% For Development Fund...
, Morgan Spurlock
Morgan Spurlock
Morgan Valentine Spurlock is an American documentary filmmaker, humorist, television producer, screenwriter and journalist best known for the documentary film Super Size Me...
, Alex Gibney
Alex Gibney
Alex Gibney is an American documentary film director and producer. In 2010, Esquire magazine said Gibney "is becoming the most important documentarian of our time."...
, Eugene Jarecki
Eugene Jarecki
Eugene Jarecki is an author and a dramatic and documentary filmmaker based in New York.His works include Why We Fight, which won the 2005 Grand Jury Prize at the Sundance Film Festival, The Trials of Henry Kissinger, Reagan, Freakonomics , Quest of the Carib Canoe, and Season of the...
, Rachel Grady
Rachel Grady
Rachel Grady is a film director involved in producing the documentary films Jesus Camp, The Boys of Baraka, and 12th and Delaware. She is the daughter of James Grady.- Jesus Camp :...
, and Heidi Ewing. It was the Closing Night Gala premiere film at the Tribeca Film Festival
Tribeca Film Festival
The Tribeca Film Festival is a film festival founded in 2002 by Jane Rosenthal, Robert De Niro and Craig Hatkoff in a response to the September 11, 2001 attacks on the World Trade Center and the consequent loss of vitality in the TriBeCa neighborhood in Lower Manhattan.The mission of the festival...
on April 30, 2010. It was also the Opening Night film at the AFI/Discovery SilverDocs
Silverdocs
AFI-Discovery Channel Silverdocs Documentary Festival is an American international film festival created by the American Film Institute and Discovery Channel. It is held every year in Silver Spring, Maryland near Washington, D.C.. Started in 2003, the festival is held for eight days in June at...
film festival on June 21, 2010. Magnolia Pictures
Magnolia Pictures
Magnolia Pictures is an American film distributor, and is a holding of 2929 Entertainment, owned by Todd Wagner and Mark Cuban. Magnolia was formed in 2001 by Bill Banowsky and Eamonn Bowles, and specializes in both foreign and independent films....
has acquired distribution rights for a Fall 2010 release.
Freakonomics: The Movie was released in major cities with a pay what you want
Pay what you want
Pay what you want is a pricing system where buyers pay any desired amount for a given commodity, sometimes including zero. In some cases, a minimum price may be set, and/or a suggested price may be indicated as guidance for the buyer. The buyer can also select an amount higher than the standard...
pricing offer for selected preview showings. No report of the results has yet been published.
Freakonomics Consulting Group
In 2009, Steven Levitt co-founded Freakonomics Consulting Group, a business and philanthropy consulting company now known as The Greatest Good.Further reading
- Ariel RubinsteinAriel RubinsteinAriel Rubinstein is an Israeli economist who works in game theory. He was educated at the Hebrew University of Jerusalem, 1972–1979, in both mathematics and economics...
(2006): "Freak-Freakonomics", The Economists' Voice: Vol. 3 : Iss. 9, Article 7
External links
- Official site
- Critical review of the book by n+1N+1n+1 is a New York–based American literary magazine that publishes social criticism, political commentary, essays, art, poetry, book reviews, and short fiction. It is published three times each year, and content is published on several times each week...
magazine - Seminar on the book at Crooked TimberCrooked TimberCrooked Timber is a widely-read political blog run by a group of academics from and working in several different nations, including the United States, the United Kingdom, the Republic of Ireland, Australia and Singapore...
- Full summary of Freakonomics