Superfreakonomics: Global Cooling, Patriotic Prostitutes and Why Suicide Bombers Should Buy Life Insurance by Steven D. Hevitt and Stephen J. Dubner, the equally fascinating follow-up to Freakonomics, draws unexpected, unintuitive conclusions about how world economics really works–how it influences our behavior, personal relationships and daily lives. Read it and/or its predecessor for a hint of how complicated the world really is.
Key Takeaways
- People respond to incentives, and sometimes these incentives lead to unexpected or counterintuitive outcomes. That’s the central message of Freakonomics and its successor, Superfreakonomics. From the effect of legalized abortion on crime rates to the cheating of sumo wrestlers in Japan, incentives have an enormous, complicating and surprising effect on real-life problems.
- Sometimes, phenomenon can be explained by analyzing incentives, and other times, phenomenon (such as social problems) can be changed or altered by altering getting the incentives right. As an example, the authors describe a hospital program that encouraged doctors to wash hand by placing a scan of a bacteria-filled hand taken from an actual doctor in that hospital as a screen saver on the hospital computers. The authors also discuss the problem of global warming at length, describing a group of Seattle-based inventors that might have solved it by adding liquefied sulfur dioxide to the air.
- The authors also emphasize the effect of information asymmetry, where one party in a transaction possesses more information than the other. They discuss how certain professionals or experts might exploit this information gap to their advantage and examine scenarios such as the disparity between real estate agents’ incentives and those of their clients and the disparity between teachers’ incentives and students’ educational outcomes.
- The authors also stress the importance of distinguishing between correlation and causation when interpreting data and drawing conclusions. They caution against making assumptions about causality based solely on observed correlations. The authors illustrate this concept by examining topics like the link between parenting practices and children’s outcomes, the relationship between names and success, and the impact of drug dealers’ income. Through these examples, they demonstrate how deeper analysis is required to determine true cause-and-effect relationships.
- The economics of prostitution, terrorism, suicide bombing, hospital management, seatbelt use and more are also discussed.
- On prostitution, the authors state that contrary to common belief, it is safer and more profitable for sex workers to be managed by a pimp. Also, people might not realize that a large percentage of tricks are done for policeman as freebies, and lots of street prostitutes make very good money.
- The authors also discuss the differences between good behavior that’s due to profit motive and good behavior that’s due to true altruism.
- The authors argue that it is much easier to raise charity funds with personal stories than with statistics and data.
- The author discusses how, due to the power of unintended consequences, the best fixes are often the simplest and cheapest. Examples of this are the polio vaccine; the practice of hand washing by doctors; and the seatbelt.
About the Authors
Steven D. Levitt is an American economist and professor at the University of Chicago. He is renowned for his research in the field of microeconomics, particularly applying economic principles to unconventional topics.
Stephen J. Dubner is an American author, journalist, and podcast host. He is best known for his collaboration with Steven Levitt on the Freakonomics series. In addition to writing, he is the host of the popular podcast “Freakonomics Radio,” where he and Levitt explore economic concepts and their applications in various areas of life.
***
***
Babies come. But babies don't go. Get Fights You’ll Have After Having a Baby: A Self-Help Story on Amazon now.
***