Thursday, 12 July 2012

Book Review: Freakonomics by Steven Levitt and Stephen Dubner

Freakonomics was the hit book that brought economics and economic theory to the masses in an interesting, witty and oddly trivial fashion.   The book is a great read for those who are new to economics as it is easy to read and simplifies economic theories quiet well, and it is an eye opener for those who have studied traditional economic theories in the various applications that it can take.

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything The primary author of the book is Steven Levitt, a chaired professor of economics at the University of Chicago.  He is probably best described as an empiricist who uses his economic background to answer interesting (though sometimes seemingly trivial) questions.  In Freakonomics he uses economics to answer a wide variety of questions including:
  • What do schoolteachers and sumo wrestlers have in common? (They sometimes have very strong incentives to cheat – and evidence shows that they often do)
  • How is the Klu Klux Klan like a group of Real Estate Agents? (The power of information is on their side)
  • Why do drug dealers still live with their moms?
  • Where have all the criminals gone? (Probably the most controversial point in the book.  Levitt argues that the fall in the crime rate in the US has a direct link to the introduction of abortion in the 70s.  Personally I don’t subscribe to this view though his use of data is compelling)
  • What makes a perfect parent? (What child rearing strategies have an impact on grades in later life)
  • How does naming affect children in later life?
As mentioned previously the topics covered above seem rather trivial and are probably not going to win Levitt a Nobel Prize any time soon.  However for a light read on a weekend or if you’re really looking for some real life application of economics then this is a great book.

  • Easy to read and understand.  There is no complexity here and Levitt and Dubner have gone to significant effort to ensure that most readers can understand what they are trying to say.
  • Easy to put down and pick up again at a later point.  You can read this book in one setting or simply pick it up and read an odd chapter – there is no prior knowledge assumed anywhere in the book
  • The topics covered are generally pretty trivial.  You will not learn anything that you can apply in your life however economics is generally like that so perhaps we should not be surprised.

  • Some parts of the book (especially in the abortion section as covered above) have a logic jump that I am not completely comfortable with. Though if anyone has read the book and disagrees please feel free to say so below.
  • While the quality of the main chapters highlighted above are very high – I found the sections containing the blog posts to be less interesting and well thought out.
  • This is a great light read for all those who are interested in a different view on how the word works.  It is written for everyone so even if you haven’t read an economics book before or have no prior knowledge don’t let that put you off
  • Under normal circumstances I would give this book 5 stars however, while I enjoyed it immensely, it did not teach me anything substantially new.  I still however highly recommend it as an interesting book.

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