Freakonomics

I just read the book Freakonomics by Levitt and Dubner. The authors admit that there is no central theme to the book, which is really a series of individual essays that are loosely tied to one another.

Each chapter consists of comparisons between unlike groups of people to make a point. KKK members and real estate agents maintain power (or at least used to in the KKK's case) by protecting the information that they hold. A high school quarterback works hard against the stacked odds of becoming a star, while crack dealers work for minimum wage while hoping to make it some day as a big time drug dealer. Sumo wrestlers in Japan and school teachers in the U.S. sometimes cheat by throwing matches or by changing student answers on standardized tests, even though both professions are considered honorable and above such activity.

Other than these comparisons, there are some controversial findings. The drop in crime in the 1990s was due to abortion becoming legal back in the 1960s. More kids die in swimming pools than from guns in the home. It doesn't matter what school parents send their children to when they have a choice; the fact that they are willing to send their kids to another school means more than the new school itself. Sexual assault rates are lower than what is usually reported, but no one can publicly dispute those numbers due to political pressures.

The book does not cover traditional economic research topics, but in the foreward, Levitt explains that he's not really interested or competent when it comes to monetary policy, fiscal policy, econometrics, and the stock market. The research seems more like Sociology than Economics, but calling him a "rogue economist" sounds better than a "rogue sociologist". Levitt's PhD dissertation at MIT covered several political topics such as campaign spending, incumbent advantage in elections, midterm elections, and politician voting records.

Regardless of the topic of Levitt's research, this book should be required reading for any new PhD student. The book does not necessarily purport to solve any great world problems but rather encourages people to be a little more skeptical and to try to think more about why things happen how they do and to ask more questions. Basic research concepts are covered, such as correlation vs. causality and choosing correct data to measure.