Saturday, September 23, 2006
I've been filling my early-early morning waking hours by reading a lot this week. One of the books that I just finished is Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven Levitt and Stephen Dubner.
Levitt is most famous for publicizing the idea that the massive crime drop in the 1990s was not due to 'innovative policing techniques' or the booming economy or harsher prison sentences, but rather because of the legalization of abortion 2 decades earlier which allowed many single, low-income mothers access to abortions where before only upper-class women were able to obtain safe, illegal abortions. Without any bias for or against the rightness of the practice of abortion, he spends a chapter in this book outlining the data behind this conclusion, taking each of the popular conventional wisdom explanations and disproving them one-by-one. This raw process of posing a question and going after the real answer, without letting personal beliefs get in the way of finding the real answer.
The rest of the book is a collection of similar questions and answers, explaining why real estate agents do not act in the best interest of their clients — they would rather sell your house quickly then hold out for another week placing more ads and doing more work to sell your house for $10,000 more if it means just a $120 increase in their own commission. He also points out that real estate agents, on average, leave their houses on the market for a week longer than their clients' houses, and sell for $8,000 more. Levitt is always careful to mention that data is corrected for external variables, which does a service for the novice reader who should take away from this book some of the clear-thinking and careful analysis of presented statistics that economists must always employ but the lack of which is counted on by countless polemicists and political writers seeking to advance their agendas with bad data and faulty logic.
The book is very good for someone who isn't familiar with the ideas of economics, and presents some interesting questions and answers, and the writers never go off on any too-heady tangents. Stephen Dubner, a reporter for the New York Times Magazine, probably constructede the bulk of the narrative of the book while Levitt provided the basis for the chapters topics. The book actually reads like a series of articles, where one could pick up the book and read any given chapter and not feel lost. This makes for an exceedingly light read, and that's all the book really seems to present itself as, a source of a few answers to questions that have been hanging around the public consciousness for a while without rigorous answers.
But this is very much a pop-non-fiction work, and to me it felt like I was reading an advertizement for the 'real' book that I wish Levitt had written, which would have been twice as long and had more numbers and tables, and had references right in the text instead of at the end.
Levitt is a true successor of John Kenneth Galbraith, and in fact pays due respect to Gelbraith for pointing out the insidiousness of conventional wisdom and generally expanding the purvue of economics beyond its traditional topics. A couple of Galbraith's books, The Good Society : The Humane Agenda and The Economics of Innocent Fraud would be where I'd point anyone who's read Freakonomics and feels like they've just eaten a meal of Chinese food and are hungry 20 minutes later. Both books extend the science of macroeconomics to include human variables as essential parts of an economic equation.