We have spoken to your mother. We know everything.

Wednesday, July 20, 2005

Wanna Sound Really Smart?

We didn't write this- but hey...read this, talk about it and the whole world will admire your mind and be impressed that your reading list includes more than JK Rowlings, Danielle Steele, Dr Seuss or Popular Mechanics.

"The book Freakonomics by Levitt and Dubner is absorbing, and unlike any other economics book. There is no theme, but a series of insights into what the numbers tell us on the small scale.

Some are straightforward, such as the observation that if you own a backyard pool and a gun, a child is 100 times more likely to be killed by the pool than by the gun. Some are cleverly done, such as the mathematical proof that some public school teachers are cheating to give their students and their schools better grades on tests. The clue, says Levitt, is to enter the mind of a cheat. How would you do it? You would probably erase some wrong answers and fill in a series of correct ones, or fill in answers left blank. Levitt designed an algorithm to spot the cheats by the pattern their fraud left.

Some are disturbing. Why did US crime drop so sharply in the 1990s? Levitt looks at the suggested explanations, including changing demographics, more prison terms, innovative police methods, and tighter gun control. He compares time with time and state with state, remorselessly showing the degree, if any, each influence might have had. Then comes the killer punch. He suggests it was Roe v. Wade and the legalization of abortion which prevented many potential criminals from being born. Children of poor, single, young parents stand a high chance statistically of becoming criminals, and this is the very group which made big use of abortion. He compares the crime figures state by state over time to see if the high abortion states had the biggest crime drop two decades later. They did.

The authors look at human honesty through sale of bagels to business workers through the honour system (you take the bagel and leave the money). Who cheats and when? The answer is that dishonesty is more rife in big corporations, and more prevalent in the higher executive levels than with the lower workers. (Maybe that's how they got to the top? suggests Levitt mischievously). Although people have every opportunity to steal bagels undetected, the vast majority do not. They are guided by Adam Smith's impartial observer, say Levitt and Dubner, for 87 percent of the time.

These snatches convey something of the flavour of the book. It is very empirical, using precious information and data not previously available, as well as looking afresh at those which were. It is easily one of the most readable economics books ever written, as well as one of the most fascinating."