Analysis Of Freakonomics

In the book Freakonomics, written by economist Steven D. Levitt and journalist Stephen J. Dubne, the authors go through different parts of modern life to show how economics describes why people act a certain way as well as the way specific outcomes occur. They look into different aspects of society and view them with different perspectives. With the use of specific data and the fundamentals of economics, the very obscure comparisons and the different chapters in the book show correlation between economics and human nature. The main point of this book is to explain a few fundamental ideas through the answers of strange questions and how they play a major role in society.

Chapter 1 of Freakonomics focuses on the beauty of incentives. It asks the question “What do teachers and sumo wrestlers have in common?” The answer is that they both

In chapter one, Levitt talks about incentives and how it's an important role in economics. This is something most of us learn at some point in our lives if not at a very young age.

They explained that: “Changes in incentives influence human behavior in predictable ways”. The main point of this concept is that the more attractive an option is the more likely an individual to choose it. Another point that they also focused on was the fact that if a particular product more costly, the more unappealing it will become to the consumer. They used examples such as employees will worker harder if they feel that they will be greatly rewarded or a student will study material that they feel will be on an

The next case study was on Sumo Wrestling matches in Japan. Sumo wrestling is huge in Japan and the ranking is everything to the sumo wrestlers. Highest ranked wrestlers are treated like royalty while those who don’t rank as high must tend to their superiors and do jobs that are less than desirable. The results of the data in this chapter shows that a wrestler very well might throw a match to help his opponent maintain his current ranking, when throwing the match does not hurt or help his current ranking. There was economic and social incentive for them to cheat. A wrestler would help another out with the promise of being helped out when they needed it. It was proven that the majority of sumo wrestlers do cheat at one point or another.

Levitt next examines the incentives that cause people to cheat. The first example of cheating is a story of teachers cheating in Chicago public schools. To avoid the risk of getting fired or getting penalty by the government for low test scores, many teachers chose to cheat and inflate their students ' scores. They cheated by allowing the students to have more time during test, giving away answers, and even by changing students’ answers by themselves. In this case, we can see that the schoolteachers are driven by economic incentives. For them, moral and social incentives are not as strong as economic incentives. Similar cheating can be seen in sumo wrestling. In Japan, sumo wrestling is a very popular sports and the high-ranked wrestlers get great honor. Also, among sumo wrestlers, their rank determines their salary, reputation, how they are treated, and even how much he gets to eat and sleep. Because they are so desperate for higher rank, the incentive for cheating is very powerful. In the crucial matches that determines sumo wrestler’s ranking, they cheat by

In chapter 2 of Freakonomics the main argument is that the absence of information can be used for personal gain. The main example used to display this tactic is when the KKK is compared to real estate agents. Although the crafty practice of real estate agents is in no way similar to the horrors of the KKK, they have a distinct similarity when it comes to the hoarding of information. The majority of the chapter focuses on the history of the KKK and Stetson Kennedy’s effort to stop it through the infiltration and exposure via radio of the Klan. Since the Klan was dependant on their violent—despite not being extremely violent—reputation, the disclosure of the information they had withheld from the public rendered them powerless. The narrators

In what way are schoolteachers and sumo wrestlers similar? At first, this question might be puzzling, but the answer is provided in the book Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. Freakonomics is the result of a partnership between an award winning economist, Steven D. Levitt, and a journalist, Stephen J. Dubner. The duo decided upon making a book after Dubner was given an assignment to profile Levitt. Dubner realized that Levitt took a different approach to economics than other economists and he saw that Levitt had an interesting and effective way to explain statistics. This pushed the two to release the 315 page book to the public in 2005 in New York, New York. Since then, the book has flourished and has been republished numerous times. In Freakonomics, Dubner and Levitt reveal that fundamental ideas of economics can be used to interpret just about everything in modern society. The book focuses on a few key points including; incentives are the driving force behind everything, conventional wisdom is often wrong, small causes can often have dramatic effects, and the advantages of having information. The authors use many interesting stories and statistics to demonstrate these economic themes in the modern world. Stories include how some school teachers in the Chicago school system cheat, the influence that the legalization of abortions had on crime rates, and how real estate agents tend to sell their own homes for higher prices than if they

After reading freakonomics, I need to approach the job hunt from an Economist perspective. When it comes to financial incentives I need to determine my best course of action to make as much money as possible. For instance, do I work harder and stay late to get in good graces with my boss. Or do I go out of my way to help a coworker with their assignment. If given only one choice I need to weigh what is the possible outcome of either choice. One may lead to a good review and higher salary or the other will affect my relationship with a coworker. Also after reading this book the only thing that I was concerned with was salary. Now from an economist point of view I need to weigh the opportunity cost of the job I choose versus another potential job. Let us say job A offers 50k a year vs job B offers 40k. From a traditional point of view I would take Job A 100% of the time, but from an economist point of view the opportunity cost from each job could could include commute, benefits packages, and personal happiness. Let’s say job A is 30 miles farther than job B. The 1 hour extra each day adds up to 5 hours a week. Those 5 hours a week could add up to time spent with my family or time spent pursuing hobbies. Over a year those 260 hours adds up to a long vacation. Before reading freakonomics I would have never

One of the problems that Hartmann addresses is that when scholarly critique sports take their points overboard over another (Hartmann 240). In other words, one will be supportive of one side while undermining the proponent ideas. This is outright discrimination in sports. In the primary source, we can see the same situation where bias judgement happened. The discrimination in the sports that we see in Remember the Titans involved the

“An incentive is a bullet, a key: an often tiny object with astonishing power to change anything”(Levitt 20). What professor Steven D. Levitt (a professor of economics at the University of Chicago’s dictum here is that the incentive has a lot of power in this world). And that the metaphor of comparing “incentives”to a bullet really speaks wonders to their strengths. They can change almost any situation by motivating someone to do something in a business situation, all the way to education fields. After many years of college, business and economics students are being taught how to be greedy in college. It is only a matter of time before greed is too powerful. Incentives and greed both have favorable and critical effects on individuals and the populace, but when connected together both can have dangerous effects on future selections.

One passage that struck me as important was Wheelan's discussion of using incentives to solve social problems. He mentioned public school education, carbon emissions, and recycling as examples of poorly designed policies that promote incentives in the wrong direction. It seems unrealistic that such important issues that are so widely argued are the result of incentives that encourage behaviors we want the public to avoid. We want dedicated teachers and we want to prevent global warming and we want to stop building new landfills, but we can't when there is no motivation to act in society's best interest. Everybody wants to take the easy way out, and when the incentives line up with our desires, there's no stopping the consequences from piling

In chapter 1, Levitt and Dubner describe how many people in different cultures and walks of life, which are otherwise inclined to be honest, find subtle ways of cheating to advance their position or increase monetary awards when incentives are strong enough. The authors define an incentive as “a means of urging people to do more of a good thing or less of a bad thing,” and identify three varieties of incentives. Economic incentives are those, which a person responds to in the marketplace. Social incentives motivate people to respond in a certain way because they care or are worried about how they will be viewed by others. Moral incentives appeal to a person’s sense of right versus wrong. Three case studies of the

In the book Freakonomics, Steven Levitt and Stephen Dubner note “An incentive is a bullet, a lever, a key: an often-tiny object with astonishing power to change a situation” (16). This is to showcase the amount of power an incentive can have over a person or a situation; either good or bad. Humans are found to use incentives when it comes to making daily decisions. Often, people need motives to proceed with their plans. Some tend to make either moral, social, or economic incentive. The moral incentive is about self-respect; keeping in check with what was taught to believe is right and wrong. The social incentive is how the public views the person; wanting to look good in front others. Economic incentive, however, would relate to monetary benefit. While all three incentives can affect people’s decisions, economic

Incentives are seen everywhere in daily life and they appear in a variety of ways. Whether a person is making a choice between what to eat for lunch or when to go to bed, they are being influence by incentives. For example, images of an appealing lunch meal in a TV commercial may make someone choose Subway over Mcdonalds. However, the same thought process can motivate someone to prefer a meal at McDonalds because of the company’s constant promotion of their “dollar menu” (Mcdonalds, 2013). Either of these incentives can appeal to a person, depending on what they are motivated by, in this case, either health or money.