...Freakonomics Key Terms : Conventional Wisdom : Explanations generally accepted as true. Correlation : Relationship between two or more things which change (variables) and can be described mathematically; Refers to how closely sets of information or data are related. For example: Smoking has a high correlation with lung cancer. Freakonomics : Study of economics based on the principle of incentives. Incentives means of urging to do more of a good thing or less of a bad thing. :A The Authors identify three kinds: 1. Economic Incentivesperson responds in the marketplace – 2. Social Incentivesmotivate people to respond in a certain way – because they care (or are worried) about how they’ll be viewed by others 3. Moral Incentivesappeal to a person’s sense of right versus wrong – Informational Asymmetry : Situation in which one party has more information than the other party. Snob Effect : The desired to own exclusive or unique goods. The demand increases as the price increases. Freakonomics provided me with concrete illustrations of how unconventional methods of data collection and analysis are often necessary to make sense of the world. Knowing what to measure (and how to measure) data makes a complicated world ... somewhere less complicated. As I read the dumbstrucking Freakonomics, I found this quote, “If you learn how to look at data in the right way, you can explain riddles that otherwise might have seemed impossible...
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...Freakonomics by Steven D. Levitt and Stephen J. Dubner focuses on our economy and the study of incentives. The two authors discuss comparisons that seem so foreign such as “What do school teachers and sumo wrestlers have in common?” and “How is the Ku Klux Klan like a group of real-estate agents?” Questions like these stir up the novel and essentially unravel the untold stories of life and consumption. Core economic principals are discovered within each story of the book. The title Freakonomics in itself has a humorous connotation with the combination of two words: freak and economics. Freak, by definition, means abnormality or oddity and most people might familiarize economics solely with finance or commerce. However, Levitt and Dubner break this common misconception and reveal how...
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...Segregation” (Levitt) (Freakonomics ). There are names that are different between African American and Caucasians but, none of these shouldn’t define you as a person or create a image for yourself. First, does your name cause a problem in the work force? According to Levitt and Dubner, they created a experiment by typing up 5000 of the same resume and just changing the names to half caucasion names to the other half African American names. The resume were sent out to companies acrossed from Chicago and New York. 33% African American names are less likely to get an interview then a Caucasian name. When someone is looking for a job with a Casucasin name in ten weeks they are most likely to get a job but if an African American would take fifteen weeks being unemployed. (Freakonomics ) When African Amercians can get an opportunity in the work force they generally earn less compared to a Caucasians person. As giving your child a name that is “Uneek” can be harder for them in the work force. Also, can living in a different society or coming from a different background change the view on your name? In the 50s African American had basic names such as John or Micheal and etc.,but the Black Power movement began in the 80s and wanted African American to define who they were so they started to make names up so people would realize who they were. Parents that were unmarried and had lower education was most likely to name their child with an unique name (Freakonomics ). But when having...
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...Economist Steven D Levitt, in his book Freakonomics, published in 2005, addresses the topic of incentives, decision-making, and parenting, and challenges readers to think critically about what goes on in the world around them while applying tools of economics to their lives. Levitt supports his argument by showing examples of real life incentives, such as schoolteachers making their classes look better, or sumo wrestlers purposely blowing matches for bribes, and even financial incentives, such as making parents pay a fine for every minute they were late picking their kids up from day care. His purpose is to make readers understand that things aren't always what they seem like. For instance, your parents might tell you that watching TV can have...
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...The chapters that I chose to summarize and discuss were the beginning chapters of Freakonomics and Superfreakonomics. The first chapter of Freakonomics is called “What Do Schoolteachers and Sumo Wrestlers Have in Common?” In this chapter, Levitt and Dubner point out that incentives, defined as “a means of urging people to do more of a good thing and less of a bad thing” (2005, p. 21), play a foundational role in economics. The study of incentives is further defined as “how people get what they want, or need, especially when other people want or need the same thing” (p. 20). Levitt and Dubner introduce the reader to three different types of incentives: economic, moral, and social. Economic incentives are those that include the receiving, or paying of, something (oftentimes money or a reward) to behave a certain way or do a certain action. Moral incentives are those that correlate with what one believes is right and what is wrong – the authors point out that people oftentimes do not want to do something that they feel is wrong. Lastly, social incentives are defined as being very powerful because they are driven by the fact that people care about how others...
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...Freakonomics, Steven D. Levitt, Stephen J. Dubner "(Feldman wondered if perhaps the executives cheated out of an overdeveloped sense of entitlement.What he didn't consider is that perhaps cheating was how they got to be executives.)... If morality represents the way we would like the world to work and economics represents how it actually does work, then the story of Feldman's bagel business lies at the very intersection of morality and economics"(46)Levitt, and Dubner. Levitt implements his first rhetorical device, diction, through the use of the phrase "overdeveloped sense of entitlement", this shows that the belief of the author, was that they were stealing simply because they felt that their higher social status made it ok. However the connotation that comes with the word "entitlement" under the circumstances it is used makes me think of more of a snobby stereotypical movie rich persona, such that in a typical celebrity matter they feel that they are in fact above the law.The second thing he does is use italics to emphasize the word "be", the purpose of emphasizing be in this case is to show the contrasting in between his ideas, and of the Feldman, the business man. It also seems to shine an eerie light on to the fact that perhaps, the cheating to get ahead in the corporate ladder was the same principle they applied to stealing the bagels, it was ok, as long as they didn't get caught. Levitt's final rhetorical device was a metaphor when he says " If morality represents the...
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...The Value of Curiosity- Exploring the Hidden Side of Everything Freakonomics, by Steven Levitt and Stephen Dubner, is an important economical book that shows examples of economics that most people do not understand or realize. This book displays the value of incentives, how the average consumer does not know much about the markets they buy in, cause and effects of these markets, and showing the distrust in most experts. To me, it proves that an average person can’t really look at the economic trends of a lot of markets because the patterns and information are so deep, that the average consumer can’t just ‘dig’ up. Freakonomics allows hidden information and small things that mean so much to come to surface, so the economy that surrounds us can be better understood for a more promising financial future. In chapter one, Levitt and Dubner really focus on incentives. Incentives are the motivator in which I do everything in my life. Sometimes incentives strike negative behavior in people because the amount of power in the motivation. In the chapter, they demonstrate three examples of this bad behavior. The remainder of this chapter brings together schoolteachers, sumo wrestlers, and a bagel salesman. The school teachers are under so much pressure to present excellent grade scores by their students in order to look good in front of the state, that they lose focus in the actual importance. Teachers begin to teach for a test and not for the benefit of the children’s futures. I thought...
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...In the novel Freakonomics, Dubner and Levitt approach the controversial topic of lynching through the use of blunt and belittling diction to unintentionally “make of light of” lynching. The origins, development and history of the Ku Klux Klan are vividly described throughout the beginning of the chapter as well as the multiple hateful actions that were performed that lead to the “trend” of lynching. When the amount of lynching victims are compared to infant mortality, it distracts the audience from the fact that lynching was a hateful crime and it slightly minimizes the issue. There is a shift from the topic of lynching to the topic of infant mortality,“Compare the 281 victims of lynchings in the 1920’s to the number of black infants who died...
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...discrimination has been around for years. However, there are laws that try to protect employees from that type of behavior today. The Employment Non-Discrimination Act (EDNA) prohibits discrimination in the workplace based on gender, race, disability, and recently included, sexual orientation (Anonymous, 2009). Yet despite existing laws about discrimination, many employees still suffer from some type of discrimination or harassment in the workplace. I will discuss the most common types of discrimination and some solutions that may work in your organization. Sexism is still prevalent even in 2009. For example co-authors Levitt and Dubner were featured on ABC’s 20/20 promoting their new book called Super Freakonomics which is the sequel to their original book called Freakonomics. On the show Steven Levitt stated that, “Women’s liberation has been great for high end prostitutes but not for our children.”(2009) Levitt and Dubner believe that in the 1940’s, more than half of Americas brightest women were schoolteachers. Now they have gone on to become doctors, lawyers, and bankers. Therefore, teachers are now left up people that are not as qualified. Levitt stated that successful women with MBA’s end up marrying men with MBA’s and staying home. This is the reason they are not paid as well. They believe that men are motivated by money and women are motivated by families. The authors go on to say that it is not discrimination that caused the “glass ceiling”, it is motivation. Levitt...
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...Is there a causal link between the drastic crime-drop , at the turn of the millennium , to the remote event of the legalization of abortion in the mid 90 's ? Steven Levitt and Stephen Dubner would have us believe , in their movie Freakonomics , that there is a statistically definable and clear relationship between the decision of the Supreme Court in Roe v .Wade and the reduction of criminality In brief , they posit that the legalization of abortion in the 70 's set into motion a chain of causal events which would eventually lead to a dramatic decrease in criminal incidence and crime rates in the last twenty years . The argument is buttressed by the fact that the statistical data in the rise of legalized abortion appear to militate criminal incidence throughout the country . In the decision of the Court , the majority believe that the woman has the right to decide whether or not to continue with the pregnancy .However , such right is not absolute since the moment the first trimester ends , the State acquires the right to prevent or intervene with such decision by the mother because of a valid compelling state interest . At any rate , the Supreme Court reveals that this will help reduce the incidence of bearing unwanted children and causing more trauma for both the mother and the child in the long run . Levitt and Dubner , on the hand , added color into this line of argument by stretching the correlation of unwanted children to either the rise or fall of crime. The less...
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...Working paper Summarization The term Asymmetric information is defined as the unequal knowledge possessed by the parties to a market transaction. Information is crucial for buyers and sellers in the business world today, and sometimes the buyers don’t always have all the information. The second chapter in the book FREAKONOMICS tells us how individuals, organizations, and businesses often exploit their access to crucial information at the expenses of others. The KKK used to be a very profitable organization in America until the 1940’s. Stenson Kennedy had a hatred for the Klan, and in the 1940’s joined the KKK to exploit the Klan’s secrets. What Kennedy found was the Klan was a slick moneymaking organization for those near the top of the organization. The Klan had a number of revenue sources: thousands of dues from membership fees, businesses that would hire the Klan to scare off unions, or pay the Klan protection money, and Klan rallies that generated huge cash donations. When Kennedy discovered this he wrote a letter to the governor of Georgia requesting the charter be revoked. The reason for this was the Klan had been designated a non profit organization, but Kennedy had proof it was clearly devoted to profit. Kennedy still wasn’t getting the desired affect he wanted because even though this would damage the clan in Georgia there would still be other clans around the country that wouldn’t be hurt. He then decided to turn to the radio, once he knew the secrets of the...
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...Freakonomics The book, Freakonomics by Steven Levitt and Stephen Dubner, addresses a variety of questions that one may not typically ask. From finding connections between school teachers and sumo wrestlers to addressing the issue of crime through legalizing abortion, this book provides an interesting perspective on issues and real life situations, one that most people are not unable to make out at first sight. Firstly, Levitt attempts to analyze the issue of crime which has become relatively commonplace in the early 1990's. A generation of young teenage criminals have arisen and roamed the streets, threatening to create all kinds of pandemonium. This increase of crime rates led many criminologists, political scientists, and forecasters to believe that there will continue to be a spike in murders by teenagers in the upcoming years. Surprisingly, the opposite held true and crime deteriorated at a fast rate. Here, Levitt unravels the misconception that the roaring 1990s economy, proliferation of gun control laws, and innovative policing strategies did not contribute to the plummet of crime rates. Rather, we need to shift our attention to the legalization of abortion laws which, according to Levitt, what was actually led to the decrease of crime rates. Levitt draws the connection between crime rates and legalizing abortion by introducing a young Dallas woman named Norma McCorvey, who had already given up her two children for adoption but found herself pregnant once again....
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...Summary In Freakonomics chapter three, a brave college student goes to answer a question many people do not think about which is shown in the title of the chapter, “Why Do Drug Dealers Still Live With Their Moms?” The answer ends up being that family is extremely important to the drug gangs even if they aren’t blood relative, and Sudhir Venkatesh basically gets adopted by a gang he stumbled upon.In the beginning the authors when through the use of conventional wisdom with economics, advertising, and incentives. Response Sudhir Venkatesh was sent into the poorest, black neighborhoods in Chicago, and had to convince the people there to answer his survey even if some of it could be considered blatantly disrespectful. The first question proved just how much danger he could have been in “How do you feel about being black and poor ( Dubner & Levvitt, 2005, p. 90).” This is like if some fancy rich, big city guy came to Scott County, and asked how the people feel about being considered white, poor, and redneck. A lot of people would be offended by this because this would be rude even if the statement was true, they would not want to admit it or let others know about it....
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...Throughout reading “Freakonomics” by Steven D. Levitt and Stephen J. Dubner, I found it astounding that there are so many unthinkable outcomes for something uncorrelated. If I had to guess how in the world did crime rates drop, legalization of abortion would not have made it even close to anywhere on my list (Page 137). Through the warped lens of Freakonomics, the world that I see it gives off a different message. One item in regards was Discovery High School. Was Discovery High School really built to help alleviate the flow of students from surrounding areas? Could it have been just another proposition to try and make a new school superior to others or was a just a coincidence that Discovery High School just happens to try and offer the best...
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...Langstaff Hnrs Economics Critical Analysis March 11, 2013 Freaky Economimcs Which is more dangerous, a gun or a swimming pool? What do schoolteachers and sumo wrestlers have in common? Why do drug dealers still live with their moms? How much do parents really matter? Why am I asking you all of these seemingly irrelevant questions? Well I’ll tell you why, because to economists Steven D. Levitt and Stephen J. Dubner, these questions aren’t irrelevant at all. “The conventional wisdom is often wrong” (Levitt Dunbar 14) so Levitt looks at the economy in a very unconventional way. Often times, the study of economics is seen as dry, boring, and consisting of mind numbing numbers, uninteresting financial trends, and statistics. Yet in Freakonomics Levitt and Dubner make it interesting, and dare I say, funny. They show us that economics is the study of incentives and how people get what they want, or need, and especially when other people want or need the same thing. I’m very fond of the idea that there is no one cause for an effect. I believe that there are multiple tiny causes that build up over time and then suddenly, and oddly to many people’s surprise, you have this looming and terrible effect. So I was a bit put off at how Levitt only offers one cause for some of the arguments he tries to make. He even says himself in the introduction that, "If you learn how to look at data in the right way, you can explain riddles that otherwise might have seemed impossible.” (Levitt...
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