6+ hours of Freakonomics

Yesterday I voyaged home from western Lousiana to Austin, Texas. On the 6 hour drive home we listened to the audio-book version of Freakonomics by Steven D. Levitt, and Stephen J. Dubner.

I found the first half of the book to be interesting and insightful, the remainder, however was dreadfully disappointing. The full title of the book was "Freakonomics: A Rogue Economist Explores the Hidden Side of Everything." My first thought upon reading the title was that I hoped the "Rogue" part came from a marketting department and not from the economist himself or we would not be dealing with a "rogue" economist so much as a pompous one.

Obviously the subtitle's claim was more than a little exaggerated. Though I certainly wasn't expecting the book to cover the "hidden side" of absolutely everything. I was hoping to at least discover some principles that could be applied near-universally, thus revealing a little something about everything.

The only such ideas that could have meaningfully approached such universality were basically that all human behavior was effectively incentive based (if this were not the case economics would have been an awfully short-lived science), and that conventional wisdom tended to be wrong. At least in this corner of the blogosphere it is conventional wisdom that conventional wisdom tends to be wrong.

Nevertheless the real jewels of the book seemed to be overlooked by both of the authors who seemed to be skittish of unintentionally creating a "unifying theme." There were two specific values I saw, and these may be more of a reflection of my own limited experience with economics than "jewels" in their own right. The first was being able to use broad economic and strategic reasoning applied to specific situations, and ending up with actual real world applications -and I don't mean monentary policies based on theoretical work either. I mean like being able to ferret out teachers who fill in correct answers for students on standardized tests, or figuring out if Sumo Wrestlers ever throw matches. The other "jewel" in the book was seeing economic reasoning used to form hypotheses, support the hypotheses, and then testing the hypotheses with hard data. It was so scientific it seemed as if we had wandered into some other academic field.

But alas all the good stuff was in the first half of the book leaving the reader (or in my case listener) anticipating more jewels to come and being left rather disappointed. For one thing the author's seemed to spend quite a bit of time praising themselves. No it wasn't actually their own writing, they were long quotes from magazines that praised Steven Levitt in almost precisely the same manner, on precisely the same subject matter. Of course a couple of excerpted paragraphs from critics who offer high praise are to be expected on the back or inside cover of a book, but this book was riddled with such excerpts. It seemed like every 15-20 minutes or so we got to hear again about how unconventional and creative the author was, how he wasn't like other economists, how he wasn't even good at "normal economics" etc. These sort of excerpts are typically useful in selling books, but one certainly doesn't buy a book so that they can hear or read about how unconventional its authors are. Overall I would say these excerpts detracted from the book because they made you wonder why the authors felt it necessary to include so many of them. Should I doubt the author's credibility? Did they think that I doubted the first excerpt that called the author "unconventional?" Thus the excerpts were ulitmately a little confusing, very boring, and led me back to thinking that perhaps the author was as I originally suspected not "rogue" but actually a little pompous.

The latter portion of the book was not only disappointing but ultimately undermined my originally, enthusiastic response to the first half. The trouble was that the authors blurred the line between exposition and editorial, though they did this to some degree throughout the entire book. What had made the first half of the book so great was the way the author's jumped around between diverse topics, describing them in detail, before tying them back together by some broad correllation between the underlying economic incentive structure. In the latter half of the book the authors spent two or three very long chapters (apparently in the actual book version it is only 1 chapter it just seemed like many because of how long we got to listen to it and how many CD's it filled up of the audio book) talking about how roe vs. wade brought down crime in the latter part of the 1990's. They listed 10 or 11 popular and often cited theories for why the crime rate fell, and then examined each and every one of them in detail. For each they explained why it either failed as a reason for the decline, or could not account for it entirely. The annoying part of this, other than being extreme overkill of what was otherwise an interesting idea, was that some of the theories they refuted thoroughly, and some of them had a core argument that consited mainly of "studies have shown this is the case."

One of those was the authors saying that an increase in the use of prisons in the 90's could account for a decrease in crime. Given that a significant part of that increase in the 90's was of non-violent offenders, such as marijuana users, I had to wonder if perhaps the authors were making a mistake that they themselves had made great pains to describe in detail and personally rally against: mistaking correllation for causation. Likewise the author's made a point to emphasize the difference between morallity and economics (mainly because they expected and had already experienced a significant backlash from the abortion lowers crime idea). But the authors were not free from moralistic tirades themselves. After describing everything from picking up children late from childcare, to lying on your tax forms as "cheating," I found it hard to believe that the authors were refraining from opining about how the world "should be" and talking only about how the world is. After a long tirade about the evils of crack cocaine, and the weakly supported theory that locking up more drug offenders reduced crime, my suspicions were confirmed.

What ultimately undermined my initial positive response to the work itself was simply a passing comment made by the author about midway through the book. It was at a point when the author was mentioning ways in which people were known to cheat, and mentioned how Martha Stewart had dumped her ImClone shares and then lied to cover it up. I have long complained about this exact claim because anyone who is familiar with the detail of this case knows that the Department of Justice never had anything more than circumstantial evidence against Martha Stewart in this case. There was neither an abundance of evidence nor anything conclusive, many of their key witnesses were found to be lying, and the evidence they did have neither proved nor disproved the prosecution's case.

Thus those that insist she lied are operating on either opinion or conventional wisdom. Presenting an opinion as fact in a piece that to that point we are expected to believe is expositional, and thus should be taken by and large as fact (to the best of the author's knowledge) makes me begin to think that perhaps the whole book was in fact just an elaborate editorial work (though it is also possible that the author was operating on conventional wisdom which would be ironic given how much the authors bother to discuss the trouble with, and shortfalls of, conventional wisdom). By the end the book seemed more like an elaborate tirade against conventional wisdom, than an informative piece on actual innovative approaches and creative applications of economic reasoning to real-world situations.

This was unfortunate because the latter was far more interesting. Though the end had some interesting tidbits about the relative danger of swimming pools to guns, and the impact (or lack thereof) of name trends, by then I wasn't particularly interested in hearing more about how the author's thought the world "should be."

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Great review - I agree in

Great review - I agree in almost every way.

The book itself had interesting points, but I found the self-promotion throughout the book absolutely nauseating. Plus it was too damn short. I read the whole thing in a few hours (not what I expect for $17).

The hype that is heaped upon the two Steve's is sickening especially in light of the work of another - Steve Landsburg. He wrote Freakonomics before Freakonomics was cool. It's called "The Armchair Economist" and it is the best pop econ book ever written. You learned nothing of Landsburg as an individual, just a bunch of econ applied in a lot of interesting ways.

The authors have done a good

The authors have done a good job of marketing Freakonomics. I read somewhere that they sent out advanced copies to certain influential bloggers (no, I didn't get one!) to get people talking about the book before it was released.

It usually isn't the smartest, most-capable person who gets all the attention. Rather, it's all in the marketing.

JLP

AllThingsFinancial

PS - It also helped that the book had a slightly leftist tone to it. The main stream media loves that.

Thanks for the review. I

Thanks for the review. I saw the chief author on the Daily Show, and he didn't seem to be a very rigorous economist. I think he's getting his own column in the NY Times magazine. It's sad that he seems to be becoming a prominent "popular economist" along the same lines as Brian Greene is a "popular physicist". It seems the chattering classes could have found someone better for that role. But his marketing has spun his "unconventionality" so well that most people won't notice his lack of substance.

Yeah I also couldn't check

Yeah I also couldn't check the notes when I thought the authors' references to studies were inadequate. I had to take their word that the studies actually showed what the authors' said it did. Once I figured the work was more editorial than expositional there really was no point for me in continuing to listen without being able to even glance at a notes or references page.

I wonder whether the

I wonder whether the annoying things about the book were particularly annoying in audio form because it was harder to skim past them? It seems like in reading it, you could start skimming the self-lauding sections...

I don't see how the Sumo

I don't see how the Sumo Wrestling had ANYTHING to do with economics.

What we had was the use of STATISTICAL ANALYSIS to ferret out the truth. A commendable process yes, but any good statistician without the first clue about economics could have done it.

Rainbough, I was just about

Rainbough, I was just about to download Freakonomics from Audible.com but after reading your review I'm rethinking that. Would you still recommend the book or is there another you think is better?

The other “jewel” in the

The other “jewel” in the book was seeing economic reasoning used to form hypotheses, support the hypotheses, and then testing the hypotheses with hard data. It was so scientific it seemed as if we had wandered into some other academic field.

Why?

That's what any and every economist worth paying attention to does.

This statement makes it appear that you know zero about what modern economics is. "For economic ideas to have any value, they have to be expressed as testable hyptheses." That idea was drilled into me, time and time and time again in during my Econ Ph.D.

The scientific method is probably applied more rigorously in economics than it was in my previous career, engineering.

Spoonie, There were some

Spoonie,

There were some good parts to the book, it was just way over-spun, and I suspect there is much better stuff out there. As for myself most of the stuff I read is more in the vein of philosphy of science not economics. Daniel Dennett, Douglas Hofstader, and Stephen Kauffman are some of my favorites.

Barry,

As I mentioned in my post the "jewels" were more likely a reflection of my own limited experience in economics rather than jewels in their own right. I have no doubt economics is scientific, as I know it to be. It is simply that in the couple of classes I had in college and the few books I have read on the subject never approached it directly using the scientific method. It was new to me, and nice to see economic ideas explored that way. It is not however surprising that economics uses the scientific method, nor that a doctoral student in the field would be intimately familiar with its use. However I'm curious how much you had it drilled into you in your undergraduate and graduate classes on the subject? The scientific method certainly wasn't "drilled-in" in my undergrad classes. That's why it was a nice change, seeing the science actually be a science.

That's a question I'd like

That's a question I'd like answered as well, since my few economics classes also haven't consisted of "drilling-in" the scientific method--I doubt it was even mentioned. I always thought that was because economics doesn't easily allow for empirical study.

They might have. It's been

They might have. It's been a while. I only took an introductory class.

Regardless, I'm glad to hear your methods.

Scott, Rainbough: I suppose

Scott, Rainbough:

I suppose the focus is different at the grad and undergrad levels: at the undergrad level, people are being exposed to things that economists have previously figured ou, or perhaps, "what economics has been done."

At the grad level, people are being trained in "how to do" economics. And in the west today, "doing" economics is basically "doing" statistical analysis of real-world data.

At the graduate level in Econ, we are taught to
(1) observe the world;
(2) think of a question to ask about something we see;
(3) formulate the question in terms of a testable hypothesis;
(4) collect data; and
(5) analyze the data and see whether it disproves the hypothesis or not.

If it doesn't disprove the hypothesis, we try to come up with another, tougher, test. In a nutshell, that's the Scientific Method.

That's what modern economics is. When I teach 100-level students, I spend half a lecture or so pointing out that this is the process by which we have reached many of the conclusions we currently hold about homo economicus - I want them to know that things like the First Law of Demand are not just somebody's opinion, but are hypotheses that have stood up to rigorous analysis by many people for a long time, not unlike the laws of gravity or thermodynamics.

It's a bit sad that no econ prof ever took the time to point this out to you, since it is mentioned in pretty much every 100-level econ text out there.