Wednesday, April 3, 2013 In Copy | trackback

Freakonimics: A Rogue Economist Explores the Hidden Side of Everything

Books 2012 in review

This book does not have a specific theme, but it is a portray of the authors’ obsession with numbers, and the hidden stories behind data. Fascinating read and very enlightening. This is one of the books behind my decision to consider everything we read on the internet as false, until proven otherwise. Find it on Amazon.

Steven D. Levitt and Stephen J. Dubner | Notes here

Consider the folktale of the czar who learned that the most disease-ridden province in his empire was also the province with the most doctors. His solution? He promptly ordered all the doctors shot dead.

That’s how the authors start off, information; and data is irrelevant of the conclusions made based upon them. They also make a similar argument that some cities with more police officers end up with more crimes, which may drive you to wonder, is it that more police cause more crime, or the chicken brought the egg?

a thing worth having is a thing worth cheating for.

In this segment the authors bring statistics and numbers to old philosophy, whether people tend to be good by nature. They discuss the issue of incentives and how unexpected the outcome would be. So offering money for donated blood is an incentive to the dishonest people to take advantage, as well as imposing punishment as an incentive to attend meetings on time, which unexpectedly reliefs peoples from the pressure of guilt, thus is a invitation for them to be as late as they can afford.

people will pay different amounts for the same item depending on who is providing it.

Discussing a business plan of Feldman, who sold bagels in his office by making them available in the kitchen, with a basket for money, and a sign of “$1” next to it. But when he went public, since other companies’ employees did not know him in person, and he wasn’t around to rise the feeling of guilt, the rate of payment went lower than he expected. Well, not surprisingly.

Glaucon’s story posed a moral question: could any man resist the temptation of evil if he knew his acts could not be witnessed? Glaucon seemed to think the answer was no. But Paul Feldman sides with Socrates and Adam Smith—for he knows that the answer, at least 87 percent of the time, is yes.

And there you go, Socrates no longer abstract. I wonder if the fact that the experiment took place in a democratic, peaceful, and well functioning country had any effect on results.

there are few incentives more powerful than the fear of random violence—which, in essence, is why terrorism is so effective.

Detailing the acts of Ku Klux Klan of the forties, and how it came down to few random acts, a lot of secrecy and intimidation, but very little killing acts.

the Klan’s bible, which was called the Kloran.

It is unknown why they named their bible a name very much resembling Koran, but the authors thought Koran and Kloran were the same! Talking about research!

Within five minutes, a zooming market had tanked.

A true story about a man trying to buy a house, the agent was bargaining around the fact that the market was about to zoom, when the man accepted to buy, the agent offered his service to help him sell his previous house, claiming the market was about to tank! The authors were still discussing how fear of random acts prevented us from getting a good deal, fear of under selling or not selling at all.

standard capitalist enterprise: you have to be near the top of the pyramid to make a big wage.

In crack business, statistics show that 2.2% of the dealers earn something around $66 an hour, while the rest of the army around them can’t afford to move out of their mothers’ house. Just like burger business.

The worms never get satisfied, regardless of how much food you give them,” she said when Romanians complained about the food shortages brought on by her husband’s mismanagement

A new chapter opens with the story of the Romanian dictator forcing a rule to ban abortion. In this chapter the authors look into the possible reasons behind the sudden decline of crime in USA during the 90’s. This story is so interesting I read about it in multiple books.

One of the opposition leaders, a forty-one-year-old professor, later said it was his thirteen-year-old daughter who insisted he attend the protest, despite his fear. “What is most interesting is that we learned not to be afraid from our children,” he said.

The dictator wanted Romania stronger by adding more human resources, but he brought them into a life of despair, and misery. In 1989 those same kids took to the streets and brought him down. Does these events ring a bell? History is known to repeat itself in large segments, like every 100 years, but to see this resemblance in very short periods? Surreal!

Abortion in USA was granted in mid 70’s. As the 80’s arrived anyone born before 75 became a teenager, and there were many of them towards the end of the decade. Crime peaked. By early 1990s, those kids became adults, and there were suddenly shortage of teenagers. So crime rates fell.

if someone breaks a window and sees it isn’t fixed immediately, he gets the signal that it’s all right to break the rest of the windows and maybe set the building afire too.

The broken window theory. It was one of the innovative measures the police used to fight crime. They stopped over-looking smaller crimes, which were an invitation for bigger crimes. I wish the police learn that theory here in Amman. For so long, Amman was known among its neighbors as the most strict in applying traffic laws. Lanes were lanes, and red lights were feared. My dad told me once that when he was younger, the police fined him 10 piasters for crossing the road from an illegal passage. That stopped, thus we have hanging walk bridges that… beautify… the city! Now the police had turned a blind eye to red light challenges, and even outright crossings. Not only is it increasing, but the fear of punishment of any other crime is on the decrease.

So does having a teenage mother. Another study has shown that low maternal education is the single most powerful factor leading to criminality.

Abortion law was used excessively by teenage girls who got themselves with child in recklessness. Thus they were going to be the mothers of the criminals-to-be. But of course not all teenage women are not up to the job. A steady house is the best insurance against future crime.

genes alone are responsible for perhaps 50 percent of a child’s personality and abilities.

In this chapter they dive into numbers and statistics to find out what makes good parenting, and how much of it really affects our personalities and directions.

school choice barely mattered at all.

As proven by statistics, the choice of school did not affect how well the kids performed academically, or on the long run. Phew, that’s a relief!

mothers who offer up their children for adoption tend to have significantly lower IQs than the people who are doing the adopting.

More on discussing what matters and does not matter in forming our kids’ performance. It appears that we inherit our IQ test results from our biological parents. That creates a negative correlation between good performance and adoption.

There are other factors the authors discuss, like low birth-weight, domestic violence, cultural environment… etc. It is quite interesting what numbers show as a correlation, and what does not matter.

But what is more interesting is the authors’ invitation to look beyond these numbers to understand better. For example, kids born for mothers above 30 do better at school. This could on the surface drive us to think it’s better to have children after 30. But the real reason behind it is that women above 30 are more driven to success that they delayed they’re conception till after 30. It is not about what is right or wrong, it is simply the type of person she is, her drive, her intelligence, and sense of responsibility.

Conclusion

This is a wonderful read, very amusing and eye opening. The authors have done it again later with their SuperFreakonomics book. Notes can be found here.

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