Freakonomics

November 20, 2007
By
Freakonomics, by Steven Levitt and Stephen Dubner, explores the hidden side of a variety of situations and destroys many preconceived notions. Levitt uses the power of information and data analysis to investigate overlooked correlations. From the crack gangs of Chicago, to the decrease in crime to perfect parenting, Levitt and Dubner flip conventional wisdom on its head. The “hidden side” theme reoccurs throughout the book with the analysis of intercity drug dealing, the effect of legalized abortion on crime, and the effect of obsessive parenting on adolescent success.
Levitt and Dubner expose the truth of organized illegal drug dealing that is often portrayed by society to be a way of life where gangsters run all cash industries and reap huge profits that they flaunt. Levitt interviews a colleague who has spent a year living with the Black Disciples crack gang in Chicago. He procures the financial log from the gang leader and obtains important information about the daily life and structure of the average crack gang. Surprisingly, the gang is organized into factions with leaders that report monthly to organizational meetings controlled by mob bosses. The higher tier gang members earn six figure annual salaries while the foot soldiers earn about minimum wage, not to mention the one in four chance of being killed on the job. “In fact, if you were to hold a McDonald's organizational chart and a Black Disciples org chart side by side, you could hardly tell the difference (Levitt and Dubner 99).” Levitt and Dubner dispel the myth about the glory of drug dealers and reveal that it is not easy to become wealthy, and the structure of the gang is similar to that of a corporation, where only the top succeed and reap the huge profits.
The unexpected dramatic crime drop in the 1990's is often attributed to innovative police strategies and the aging population, but Levitt exposes another strong correlation hidden in the data. For example, abortion was made legal in the United States with the ruling of Roe v. Wade in 1973. Levitt insists this decision had a crucial effect on the crime drop because fewer babies were being born, especially those who were not wanted and most likely to become criminals. “In the early 1990s, just as the first cohort of children born after Roe v. Wade was hitting its late teen years—the years during which young men enter their criminal prime—the rate of crime began to fall (Levitt and Dubner 139).” Although this theory is highly disputed by many political and religious groups, it offers interesting insight into the topic of crime and reveals a logical hidden correlation in the data.
While parents sometimes obsess over naming their baby, how to place him when he sleeps, and whether to spank or not, Levitt and Dubner argue that a child's success is most often determined well before he is born. Using data from the Early Childhood Longitudinal Study, statisticians find the characteristics that correlate with high test scores for adolescent children are already innate in their families. Conversely, parenting techniques for child upbringing show no significant correlation. “The reality is that technique looks to be highly overrated (Levitt and Dubner 175).” Although study results only examine test scores, they still conflict with the conventional wisdom that certain parenting methodologies overwhelmingly affect a child's success.
Levitt and Dubner explore the logic and economics of conventional wisdom in Freakonomics. They examine everything from the financial lust of Chicago crack gangs, to the drop in US crime during the 1990s, to obsessive parenting. Freakonomics finds hidden correlations in the data that destroy many preconceived notions. The theme of the “hidden side” reoccurs in each riveting chapter and in a variety of circumstances as these two “rogue economists” dispel what many believe to be true.





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