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. She was unable to give up her third child up for abortion because abortion was illegal in Texas. Essentially, the case was brought up to the Supreme Court in the case of Roe v. Wade. Norma McCorvey won the case on January 22, 1973, and her victory legalized abortion throughout the country. According to Levitt, this case contributed to the reduction of criminal rates because fewer babies were entering the world. The belief was that criminals came from adverse family environments and so, if the of potential pool of criminals shrunk, there would essentially be less criminal offenses. Levitt also brings up the concept of incentives through his examples of real estate agents. Real estate agents usually push sellers to take the first decent offer when it comes to selling their property even though waiting can earn sellers an extra $9400 for the sale of a $300,000 house. From the perspective of real estate agents, though, waiting isn't worth making the extra $150, but when the same situation is applied to themselves, they wait for the best offer possible. Experts such as real estate agents clearly use their informational advantage to serve their own agenda, but with the help of public records, it is easy to determine whether or not real estate agents prioritize their client’s needs.
Another interesting point that Levitt brings up is the incentive of cheating and how cheating is evident in almost every real life situation. Cheating even exists in educational systems where standardized testing is used. Teachers are found changing student’s answers because they want to ensure that the students’ grades are high enough to reach the state’s required standards. Also, obtaining higher scores can lead to more funding for the school and of course, higher raises for teachers. In a teacher’s point of view, cheating can be beneficial to everyone because students can get to move on to the next grade level, schools have more money to support enrichment programs and they are receiving better pay and recognition. However, Levitt stresses how cheating can actually negatively impact a child’s education. A child who usually does poorly on tests and miraculously does well probably expects to do great in the next grade but then ends up failing miserably. This is a great blow to not just students, but anyone who faces such disappointment.
What is also interesting is how cheating can be found in sumo-wrestling. Similar to standardized testing, sumos form some kind of agreement with each other in order to step up the ranks. Although records of sumo matches clearly display irregular patterns of wins and losses, Japan is unable to accept that cheating is involved because sumo wrestling is a national sport and also a repository of the country’s religious, military, and historical emotion. White collar crime is another case where only a small fraction of people are caught cheating, but it surely does exist. The story of Paul Feldman’s bagel delivery illustrates white collar crime taking place. Paul Feldman delivers bagels to companies and leaves some sort of box so that people can leave their money. Sometimes, people take advantage of Feldman’s method by not paying for their bagels even though they are supposed to. The data shows that smaller offices tend to be more honest than big ones. An office with a few dozen employees generally outpays by a 3 to 5 percent an office with a few hundred employees. Smaller communities tend to exert greater social incentives against crime because it is more likely for one to get caught stealing in a smaller community than a big one. In a closely knit environment where everyone knows each other, one does not want to develop a negative impression because everyone will know. Other factors that also contribute to whether or not one would steal include weather, holidays and morality.
In conclusion, all the above situations are addressed in ways that people do not normally think about. It is not recognizable that the birth of babies can lead to dramatic increases in criminalities; however there are data that supports this correlation. Incentives are the cornerstones of modern life and whether it is the sale of houses, standardized testing or even sumo wrestling, people are committing acts that either positively or negatively affect the system.