Book Review: Freakonomics
I found that some of the most interesting TED talks are those on the subject of human behavior. Dan Ariely's lectures about motivation, choice and morality are fascinating. Which is why I was thrilled to receive Freakonomics for my birthday.
Steven D. Levitt and Stephen J. Dubner, the authors of this book, treat the world like one big social experiment. They talk about what drives people to behave like they do. They discuss causality - the real factors that lead to the result. What makes this book so interesting is that the authors often overturn common perceptions and widely-held beliefs about how people behave, react, change and, most importantly, how they are incentivized.
The way I describe it makes this book sound like it was written by sociologists, rather than by economists (actually, one author is an economist, the other is a journalist.) The blurb on the back of the book explains:
...He studies the riddles of everyday life - from cheating and crime to parenting and sports...they show that economics is, at its root, the study of incentives - how people get what they want or need, especially when other people want or need the same thing.
Many years ago I studied economics (two years in high-school and one year at university) and it was never as interesting as the subjects in Freakonomics. And that is just it: You don't have to be an economist or have any training in analyzing data to appreciate the content in this book. The way the information is presented and the explanations of the findings are appealing across the board.
Freakonomics is an intelligent and entertaining read. The authors provide case-studies on a wide range of topics from the effect of the legalization of abortion on the crime rate, to cheating teachers, to sumo wrestlers, to the Klan and the organizational structure of drug gangs. All of the information presented is footnoted and backed-up by real data.
Freakonomics is very American-centric, although the principles and topics discussed can be used to describe most Western cultures, and probably many non-Western cultures, too. However, don't expect any great revelations on how to leverage the book's findings to maximize profits - this is not a business book. In the Q&A section at the back (I read the 2009 expanded edition) one of the questioners asks why the book does not provide any guidance for business. The answer: The questioner is correct - no guidance for business on how to use the lessons learned are provided; perhaps in a future book. As a public service, I'll distill the book down to three main points:
- The cause of the result is not always obvious, though it might seem so
- The human race is an incentive-based species
- You can't trust schoolteachers
Catch the Freakonomics blog at http://www.freakonomics.com/blog/ (also in the blogroll on the right-hand side of this page.)
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