FREAKONOMICS: A Rogue Economist Explores The Hidden Side of Everything
by Steven Levitt & Stephen Dubner, William Morrow, 2005
I really wanted to like this book. There’s a lot about how economist Steven Levitt thinks that I resonate with, and the free association of how seeming unrelated things interrelate is certainly reminiscent of one of my favorite authors, James Burke and his best-selling and immensely entertaining book “Connections.”
But I didn’t like Freakonomics, for a variety of reasons, the first being that nowhere in the writing or editorial process did anyone bother to mention to the authors that modesty trumps egocentric writing. Between the introduction to the book and the chapter introductions, Levitt has more ego strokes (which is to say we’re trapped having to read about him) than any other living author I’ve encountered in thirty years of voracious reading.
Economists tend to be very focused on numbers. You could reasonably observe that all economists are “quants”, they quantify things, they believe facts if the numbers support them and disbelieve theories or “qualitative” information. Quants don’t like anything that’s not quantifiable. And that’s the fundamental flaw of this book: everything in life cannot, in fact, be reduced to measurable numbers and data fed into regression algorithms.
Rather surprisingly, though Levitt and Dubner criticize others about being unable to separate correlation and causal data, they too slip into this basic analytic error too. For example, “it turns out that obstetricians in areas with declining birth rates are much more likely to perform cesarean- section deliveries than obstetricians in growing areas — suggesting that, when business is tough, doctors try to ring up more expensive procedures.” Catch the logic error here? There are in fact many other reasons why the perceived risk of childbirth could increase in an area with a declining birth rate, including an aging of the population, a factor that can easily increase birth risk even as the birth rate declines.
What’s missing in the analyses is that there are random, chaotic, and apparently unrelated causes for behaviors. In addition to IQ, for example, healthy successful adults also can be measured on more qualitative scales like the so-called “emotional intelligence quotient” of EQ.
These are the fundamental ideas embodied in this book: incentives are the cornerstone of modern life, the conventional wisdom is often wrong, dramatic effects often have distant, even subtle, causes, “experts” – from criminologists to real estate agents, use their informational advantage to serve their own agenda, and the mantra of quants, knowing what to measure and how to measure it makes a complicated world much less so.
Do teachers help students cheat on tests? The answer is “no”, unless the test also affects the economic well being of the teacher (think standardized tests and their built-in incentive systems). Then the answer becomes “yes”, as is eloquently explained in Freakonomics. But, again, too much quant trips up the discussion, when it is confidently asserted that a dramatic one-year spike in test scores can be attributed to a good teacher, but when there’s a dramatic fall to follow, it’s probably cheating. Working with lots of teachers myself, I disagree. I have seen time and again how an inspirational teacher will encourage students to stretch, to get out of their comfort zones, and attain remarkable results. Once they leave that teacher and go back into the grist mill of modern education, their results plummet. Looked at analytically, is the good teacher ‘cheating’ by inspiring their students? Levitt seems to think so…
Freakonomics also discusses the rise in power, and later drop in power, of the Klu Klux Klan, observing that its power was “largely derived from the fact that it hoarded information” and that the KKK saw a precipitous drop in membership once its secrets were aired publicly. The story is fascinating and well-written, but the conclusion is dangerously false. Hate groups don’t gain power because of secret, hoarded information, they gain power by reinforcing the existing hates and biases of potential members. That is, people who were Klan members might have quit due to the troubling inability of the leadership to keep Klan information secret, but it didn’t change whether or not any given Klan member hated certain ethnic minorities, and it certainly didn’t affect whether these people would be willing to don a robe and try to intimidate or harass someone. It’s more a loss of brand luster than anything more significant, but that seems to pass Levitt by.
The Freakonomics Weblog
Another remarkable analytic error: the book analyzes the likelihood that people who profile themselves for online dating sites distort the truth, without ever acknowledging that there’s no reason to believe that the members of an online dating site are in fact representative of the population at large. That being concluded, it isn’t as damning to find from analysis that “more than four percent of online daters claimed to earn more than $200,000 year, whereas fewer than one percent of typical Internet users actually earn that much.”
The main reason I was asked to review Freakonomics, however, was because I’m an outspoken advocate of attachment parenting (see my parenting blog to learn my biases) and half of Freakonomics wrestles – unsuccessfully – with the question of What Makes a Perfect Parent?
In a classic case of using what I call “Limbaugh Logic”, Levitt, a self-avowed expert (which is reinforced time and again in this book) says that experts “don’t so much argue the various sides of an issue as plant his flag firmly on one side.” Which is, of course, exactly what Levitt does throughout this book too, though his flag has the motto “numbers are facts” emblazoned upon it.
To understand how Levitt approaches parenthood, imagine Mr. Spock from the popular TV show “Star Trek” was raising a child. He’d carefully analyze all the facts associated with a behavior, draw the conclusion most supported by the “facts”, and be baffled why others aren’t following the same approach. The discussion of the statistical facts surrounding fear of flying and the safety of flying versus driving have just this tone, with Levitt asking almost plaintively why people are afraid to fly when driving is, statistically, equally dangerous.
Are airbags dangerous to small children? Levitt notes that “fewer than five children a year have been killed by airbags since their introduction” without ever acknowledging that the warnings that parents keep their children away from airbags have a clear and significant effect on this yardstick. The question is how many kids would be killed by airbags if there were no warnings, but that’s not examined.
There’s a big flaw in the reasoning presented that becomes clear in the parenting section too: conclusions are drawn from the analysis of data based on various studies, but just like medical research, there’s no discussion of what criteria were used to evaluate the base research. Was that study on children growing up to be criminals funded by a liberal think-tank or a conservative pro-imprisonment organization? Was the data upon which so much is based regarding the efficacy of parenting techniques based on research funded by a group with a particular view they sought to promote? If you don’t think that this is a critical part of evaluating modern research, you’re asleep at the analytic wheel.
In the discussion of test results (which Levitt correlates to various positive or negative parenting techniques) a startling lack is any discussion of cultural or ethnic bias in the test itself. For example, one of the factors that correlates strongly with high test scores is “The children’s parents speak English in the home”. But that’s only true if the test is given in English. So concluding or even highlighting that parents who speak English correlate strongly with children who have higher test scores is fundamentally flawed.
Falling deep into the well of quant thinking, Levitt also draws the correlation from the data that whether a family is intact doesn’t seem to matter (in terms of being a good parent. Remember, the question isn’t “what approach to parenting produces children who test well”) and that parents splitting up “has little impact on a child’s personality” or “academic abilities.” But what of emotional intelligence? What of the experience of childhood? Hard to quantify, sure, but that’s exactly my point. In a world that’s purely quantitative, major measures are ignored, and Freakonomics is a powerful example of this error.
It should be no surprise that the authors conclude that nurture is not of much importance in parenting, and that it’s nature that’s more important. As Levitt says “this is not to say that parents don’t matter… [but] most of the things that matter were decided long ago – who you are, whom you married, what kind of life you lead.” This is a dangerous line of thinking, and the very fact that modern parents are striving to create a maximally nurturing environment for their children is a tremendous boon for our generation and future generations. It’s easy to forget the dramatic changes in how children are reared and limit the discussion to that which we have data for, but self-enlightenment always brings about positive change in society, whether we can quantify it or not.
The book ends oddly, too, by turning the analytic technique on its head for the ability to make what is ostensibly an ironic observation about how nurture doesn’t guarantee outcome: the poor black child profiled in the book grew up to be a Harvard economist, and the wealthy white child became the Unibomber. But so what? It’s a trivial matter to isolate a single anomolous case from any dataset and suggest it proves a postulate. It’s just very, very weak science.
Freakonomics is a very interesting book to read. Skip the introduction and ask someone to rip out the chapter introductions, then write across the cover “The World Is Not Quantifiable” and you’ll have a fascinating read, without being lulled into the false confidence of the quant. Or just highlight the sentence in the introduction where the authors explain their ultimate bias: “Morality, it could be argued, represents the way that people like the world to work – whereas economics represents how it actually does work.”
“but when there’s a dramatic fall to follow, it’s probably cheating. Working with lots of teachers myself, I disagree. I have seen time and again how an inspirational teacher will encourage students to stretch, to get out of their comfort zones, and attain remarkable results. Once they leave that teacher and go back into the grist mill of modern education, their results plummet. Looked at analytically, is the good teacher ‘cheating’ by inspiring their students? Levitt seems to think so…”
You seem to have failed to realize that he said it is “probably” cheating. Obviously sometimes it can be attributed to a good teacher, but usually it is cheating. In addition to that, you’re review was pretty much horrible.
This is a rather one-sided review. Perhaps the world is or is not quantifiable. However, it is useful to do so, understanding through numbers gives us a consistent approach to understanding repeatable behaviors. Perhaps, as I suspect, Mr. Levitt is trying to open up a certain idea that, tempered by reason (perhaps reasons he hasn’t even mentioned, as he alluded to at some points in the book) can create a reasonable model for dealing with people on something other than a case by case basis. He experiments were very sound, and his analysis very sound. That cannot be discounted, however, it would be useful to instead of hearing “his conclusions are wrong, becasue this is how it is”, perhaps it would be time to use your grasp of right and wrong to in a quantifiable and qualitative way dispute his arguments. I appreciate your disdain for arrogance, but arrogance alone is not a reason do condemn sound studies and analysis. I do, however, applaud this review for its acknowledgement that this book is a good read, honesty about your enjoyment at least shows your mind is perhaps more open about the subject than some others might be.
It does seem evident that the analytical errors made by this critique in claiming Freakonomics has analytical errors are more damning than anything the authors of said book, as well as the implied ego self-masturbation the author summarilarily accuses Levitt of. I haven’t actually read Levitt’s major works, so perhaps he’s right to some extent, but this essay stinks of pot, kettle, black.
Besides, who says the world isn’t quantifiable? As far as I can tell, the things deemed unquantifiable in this essay merely refer to things that are quantifiable, difficult to quantify, or simply haven’t been bothered to quantify. The whole point of the book is to use quantification and analysis of the numbers to come up with conclusions, and that’s what makes it interesting, rather than any number of books that make claims that are not justifiable by any means.
It’s always interesting to see what kind of responses one gets for swimming upstream. I’m well aware that Freakonomics is on the New York Times best seller list and that lots of people are clearly reading it and enjoying it. Splendid. My cricitism of the book stems from the belief – that none of these respondents have shaken even slightly – that the world we live in is not fully and completely quantifiable. It’s fascinating to apply analytic and statistical methods to cultural phenomena, as they’ve done in the book, but it’s fallacious thinking to believe that everything can therefore be explained, neatly and accurately, by science, by the scientific method and by mathematics.
There’s a world of difference between a statistical model and the act itself, even with thousands, nay, millions of data points.
What’s sad is that we now live in a society where people don’t bother to differentiate between what someone says or does and the person themself. If you don’t like my review, if you don’t agree with what I say, that’s completely fine. We live in a free country (more or less) and you are quite welcome to your opinion. But it’s quite different to say “your review stinks” and “you stink”.
I look forward to more discussion on this book — goodness knows most of the reviews now just follow the popular trend and reflect the fact that it’s selling well, therefore it must be good — but let’s try to keep things civil, shall we?
Thanks.
I found your review to be more of a critique than a review. It is my personal opinion (actually a guess) that the “ego strokes” are more a tool of the co-author Mr. Duber in an attempt to set the stage for what is to folllow. What I liked about the book was Mr. Levitt’s ability to see things from a slightly different perspective than most of us. He reminds me of a few others with this ability, George Carlin, Steven Wright and your friend and mine, James Burke. Reread the book and don’t sweat the numbers. I enjoyed it even more the second time.
The point of many authors in this genre, say along the lines of Malcolm Gladwell and others who choose to shake things up with a “new kind of science/psychology”…as this does with drawing unusual connections seems to have been achieved. Just look at your postings. Did the book not evoke thoughtful discussion? Prompt insightful thought? Get people talking? Whether you agree or disagree I believe both authors as well as authors like Gladwell are seeking not just a bestseller, but a counterculture response- seems to me this is the way to do it. Blogs and internet are faster than mainstream anymore.
Just a thought. Lots of mags. w/ interviews lately…seen any?
Very good review, it pointed out some key flaws in the book. While I liked Freakonomics, I do admit that some of Levitt’s conclusions and attitudes are flawed. Anyway, I just want to point out what seems to be an error in your review. You said, “Hate groups don’t gain power because of secret, hoarded information, they gain power by reinforcing the existing hates and biases of potential members…but it didn’t change whether or not any given Klan member hated certain ethnic minorities, and it certainly didn’t affect whether these people would be willing to don a robe and try to intimidate or harass someone.” While I agree that hate groups gain recruits through existing hatred, I believe that Mr. Levitt was pointing out was not the manpower of the KKK. I believe he was saying that the precieved power of the KKK, the fear that they invoked, was severly injured by the radio campaign.
I found the book valuable for its unwillingness to accept the standard explanations for some very important social phenomena. Whether all the analysis holds up to rigorous scrutiny is less relevant to me than the fact that these authors attempt to provide a different frame through which to discuss and evaluate key social predicaments.
I get a little insulted by reviewers who think I should appreciate a book (or movie or anything else)based on their particular point of view or some standard that they assume everyone subscribes to. Afterall, that’s sort of the theme of this book in my opinion; things aren’t always as they appear to be.
It was an interesting review. I appreciate the effort of the authors to bring in some relevant & controversial topics & give their take on it, in an offbeat manner.
Economics somehow does not have the brand equity of science or other arts, that puts off many people. That way, if this book allows people to shrug off their possible fear of the subject and starts them off to read more, it can claim to have done what many economists could not do – promote the subject in a more “user-friendly” format.
What next – “popular economics”?!
I liked your critique of Freakonomics. I haven’t been able to articulate my dislike for the book and your critique did a very good job. I had only read a few excerpts of Freakonomics and grew very irritated. Unfortunately, I was unable to do much more than rant, CORRELATION IS NOT CAUSATION! CORRELATION IS NOT CAUSATION!
The most interesting thing, that I feel other comments have missed is that regardless of whether or not the world is quantifiable, the quant must use good statistical practices regardless.
The increase in cesarean sections in low birth rate regions can also be attributed to doctors performing C-sections to reduce the risk of being sued for malpractice–and wealthier couples of much more likely to be aware of the ability to sue. Furthermore, wealthier regions have much lower birthrates than low income regions.
I do not expect the general public to be able to navigate statistics, and consequently, authors can easily use statistics to sway peoples opinions because the reader simply doesn’t know any better.
I think the book, How to Lie with Statistics, by Darell Huff should be mandatory reading for all high school graduates.
My favorite example to explain that correlation, no matter how strong, does not prove causation is the following:
There is a very strong correlation between number of ice creams sold and the number of drownings at the beach.
Does ice cream kill people? Do they not wait the requisite 30 minutes after eating and get cramps and drown in the tide?
No. Both are caused by temperature. More people are at the beach on hot days.
You say that “self-enlightenment always brings about positive change in society, whether we can quantify it or not”.
Given that, according to this premise, you can’t quantify the degree of positive change self-enlightenment brings, how else can you prove the self-enlightenment is a good thing?
That is, if quantities are out, how else do you measure whether self-enlightenment always leads to positive change? Can you use qualitative data to prove your premise? If so, what qualitative measure would you use? Are we just to trust what you say because you said it?
You attack Levitt for making conclusions without adequate evidence, and then you go ahead and do the same.
The fact that you disagree with many of Levitts arguements – seemingly due to a directional difference in political leaning – does not make this a “bad” book.
Here’s a review of your review: You come across as dismissive of alternative viewpoints simply because they differ from your own.
Though I agree that not all of the points presented by Levitt are salient, it does not take away from the thought-provoking ideas that are raised.
Good review, I felt much the same.
The point of many authors in this genre, say along the lines of Malcolm Gladwell and others who choose to shake things up with a “new kind of science/psychology”…as this does with drawing unusual connections seems to have been achieved. Just look at your postings. Did the book not evoke thoughtful discussion? Prompt insightful thought? Get people talking? Whether you agree or disagree I believe both authors as well as authors like Gladwell are seeking not just a bestseller, but a counterculture response- seems to me this is the way to do it. Blogs and internet are faster than mainstream anymore.
Just a thought. Lots of mags. w/ interviews lately…seen any?