Feakonomics

Title: Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

– August 25, 2009

• URL

• good summary here URL

• Ch1: “Incentives are the basic building blocks of economics: according to economists, nearly every decision can be explained through incentives. Because of incentives, people are sometimes driven to cheat.”

• Ch2: “Experts often abuse information asymmetry between themselves and consumers, but things like the internet are working to erase this information imbalance by providing more information to everyday people.”

• Ch3: “debunks the myth that drug dealers are all rich by telling the story of a man who studied the organization of the Black Disciples crack gang in Chicago.” In reality, crack gangs are very similar in structure to any business in corporate America, with a small number of people on the top making big money and hundreds of people on the bottom barely scraping by at all. T

• Ch4: “where have all the criminals gone?” “the story of Romania, a country that experienced a huge rise in crime after its dictator banned abortion.”
  • “then turns to the United States in the mid-1990s: while crime had been rapidly rising in the year prior, the trend suddenly reversed, leaving many experts puzzled and attempting to explain it.”
  • None of the explanations they proposed were correct—instead, according to Levitt, the crime drop was heavily linked to the Roe vs. Wade Supreme Court decision of abortion was legalized. “Meant that many babies who would have grown up unwanted and impoverished—and, by this trend, more likely to become criminals as they neared adulthood—were not being born. Nearly two decades later, this generation of potential criminals would have been teenagers; however, they had never been born, and so there was a sudden drop in crime.”
• Ch5 talks about parenting,
  • “Levitt points out that many parents are misguided, and the things they do matter much less than the things they are. “
  • “Parents who are highly educated with a high income are most likely to have successful children; these factors are determined before the child is even born.”
• Ch6: naming children
  • “The name given to a child does not cause their success or failure; rather, it is a reflection of the status and circumstances of the parents. “
  • “high-income parents begin to use a name, and then, over time, it trickles down to low-income parents until it becomes less popular.”
• no single unifying theme / the main takeaway is a new way of thinking, looking at, and interpreting the world according to the tools of economics discussed.