An Analysis of Freakonomics, by Steven D. Levitt

1585 Words 7 Pages
Economics in reverse is the best way of describing the unconventional method preferred by economist, Steven D. Levitt. While most economists measure social situations and present the data as numbers and graphs Levitt takes anomalies within the data to reveal truths obscured. It’s Levitt’s sociological take on economics that has set him apart from his peers with his heavy focus on incentives, choices, and the consequences they have. Freakonomics mirrors Levitt’s method since it’s a collection of stories he has uncovered or read, and the core economic principles are hidden within each story throughout the book, sometimes even in plain sight like how there are exactly as many chapters as there are core economic principles. …show more content…
After he left and started to sell bagels full time using the same business model he devised at the institute he noticed that the original return he had been less than expected. What had changed? The moral incentive had since Feldman was personally less involved than with these companies than the one he had original worked at. People were less obliged to pay for the bagels since the victim of the crime is less know to the individuals and since the bagels only cost roughly a dollar it seems less severe of an act. Also Feldman had created disincentives to steal the money its self after he had also had problems with baskets missing on top of disappearing bagels. When he switched the containers from baskets to wooden boxes since the hassle to steal a box made the act of taking the money seem more criminal thus acting on the morality of the individuals and the incentive of stealing. One discovery Feldman noticed was that after a long period of declining pay rates from 1992 after 9/11 in 2001 the pay rates surged by two percent and stayed constant, Levitt said the two possibilities were either a rise in patriotism or in empathy (note the this story is taking placing at our nation’s capital) (Levitt 45-51). Feldman’s data had shown people would cheat him in their own self-interest, but the biggest shock was that larger companies had higher rates of theft than smaller ones. Another case Levitt presents about large cheaters was Sumo wrestling match rigging. Data
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