Essay on Review of Freakonomics

This chapter deals with the essence of information, how one acquires it, what one does with it, and how one makes decisions based on the information at hand. This fact is so basic and important, yet one can take this for granted. Wrong judgments and decisions occur when one needs to make a decision

The intended audience of Steven D. Levitt and Stephen J. Dubner’s Freakonomics is made up of middle class Americans and comprised of adults and teenagers with a basic education and a broad knowledge of a wide range of subjects. Since Levitt and Dubner reference a large variety of topics, it is imperative for the audience to also be familiar with a wide variety of subjects or at the very least to be aware of popular culture and government. For example, when Levitt and Dubner reference a Supreme Court case, Roe v. Wade, where a young woman named Norma McCorvey was “...the lead plaintiff in a class-action lawsuit seeking to legalize abortion” they establish their audience as one that would be educated enough to know the fundamentals of some of the most important events in American history (Levitt and Dubner 5). By referencing the Roe v. Wade case, a court case which is generally considered to be common knowledge for Americans, Levitt and Dubner reveal that their audience must be comprised of

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 author Steven Levitt studied economics at Harvard University and MIT. He is primarily known for his work in the field of crime. The title Freakonomics means a study of economics based on the principles of incentives. The title is related to the book since he emphasizes how incentives drive and affect people’s actions. Although this book does not have a single theme, the main focus of the book is a new way of interpreting the world using economic tools. He explores incentives, information asymmetry, conventional wisdom, crime and abortion, and parenting throughout the six chapters of the book.

For this review I read Freakonomics written by Steven Levitt and Stephen Dubner. This book was published by William Morrow an Imprint of HarperCollins and is copyrighted 2005. Freakonomics is a unique book where there is no central story. It is not a story where it goes from point a to point b and follows a traditional storyline. This book is broken up into a collection of mini stories where the authors try explore issues and approach them from a non-conventional way of thinking. Some of these issues in the book include comparing Ku Klux Klan members to real estate agents, why drug dealers live with their moms, and linking abortion to criminal rates. The book addresses the issues at hand and uses data they have accrued and in their

“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.

In the book Freakonomics, by Steven D. Levitt and Stephen J. Dubner, is made up of a series of scenarios in which an economist and a journalist apply basic principles of economics to demonstrate that information can often expose interesting truths about how the world operates. It uses the science of economics and specific data to challenge our assumptions about everything. In the book Freakonomics by Levitt & Dubner, compares and contrasts two groups of people or things by using their informational data. This is called juxtaposition, which means the fact of two things being seen or placed close together with contrasting effect. Levitt and Dubner look at the world in a way that is both surprising, occasionally funny, and always enlightening. They do so by drawing unexpected connections between two greatly different but complementary aspects of sociology and economics, such as sumo wrestlers to school teachers, KKK members to the real estate agents, and lastly, crack gangs to McDonalds.

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

Firstly, our example illustrates how people respond to incentive. In economics, an incentive is defined as any factor that provides a motive for a particular course of action. This example is exemplified in our first customer. Perhaps, the promotion encourages her to purchase an extra bottle of X shampoo now instead of later. By doing so, the BOGO 1.5 promotion can be classified as an incentive which ensures her decision. As she rationalizes her decision to purchase an extra shampoo, she demonstrates that everyone do respond to incentives. In contrast, the promotion does not have the effect on the second consumer because it does not provide incentive therefore not applicable to him and his choice as a consumer.

Today, just about everyone depends on information and communication to keep their lives moving through daily activities like work, education, health care, leisure activities, entertainment, travelling, personal relationships, and the other stuff with which we are

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.

money’ and ‘one action gives rise to another’. That means if people are rewarded they will be motivated

In my job, I also receive the incentive of money for working. Incentives also show up while driving; not getting a speeding ticket is the incentive for driving the speed limit. Tradeoffs and incentives are only two of the ten principles that I come across in my life at home.