Freakonomics: A Rogue Economist Explores the Hidden Side of Everything (Hardcover)

Winner of the John Bates Clark Medal (awarded biennially to the top US economist under 40), Levitt is no lightweight. His thinking, however, is refreshingly different from most mainstream economists. Simply put, Levitt asks questions, and uses his craft to answer them. Some of the questions are less seemingly 'relevant' (Is there cheating in professional sumo wrestling?) than others (What was the real cause of the drop in crime during the 1990's?), yet all are interesting.

Levitt's topics run the gamut, from racism on 'The Weakest Link' to parallels between the KKK and real estate agents to the reason why drug dealers tend to live with their mothers, and he attacks all of his questions with ingenuity and tremendous skill.

If you'd enjoy a light but engaging read on a wide variety of topics, this one might fit the bill. There's something for everyone here.

Economics has been traditionally focused on writing equations to explain "how things should work" assuming that nothing else changes. That's the rub. Everything else does change . . . and the theories don't work in practice. You've all heard the resulting economist jokes.

Steven Levitt does something that academics don't like anyone to do: He looks for interesting, practical questions and devises simple, straightforward solutions.

His method is usually pretty simple. He looks for patterns by using regression programs and then thinks about what the regressions might mean. That often leads to a trip to some other data, and eventually the correct cause-and-effect pattern emerges. It's like the invention methods of champion tinkerer Thomas A. Edison. Keep trying until something practical works. Fortunately, with today's computers you don't have to wait very long. The biggest challenges are in finding the right data sets, as this book shows through its example of why drug dealers usually live with their mothers.

The book indicts the media and many so-called experts who simply haven't done their homework. As a result, you can spend a lot of time being misinformed by reading the latest Congressional testimony, the latest think-tank study or by watching a talking head debate on television. The lesson: Be skeptical unless you see the data and the analyses, as they are displayed in this book's few examples.

In the book, you will find out how statistics can identify some of those who cheat (whether they are teachers or sumo wrestlers) and how economic incentives slant behavior (how real estate brokers sell their own property versus selling yours). You will encounter a novel argument that Roe v. Wade has reduced the violent crime rate. You'll find an even more interesting argument about how to equate the value of reduced crime to the cost of abortions.

More favorably, there are case studies on how accurate information trumps bad or misleading information to the benefit of us all.

The book ends up on a largely unsatisfying statistical look at nature versus nurture . . . and pretty much dismisses nurture when it comes to child-raising.

So it's a grab bag of topics, mixed with lots of hero worship (by co-author Stephen J. Dubner for co-author Steven D. Levitt).

Why is this book selling so well? I couldn't figure it out. It doesn't have the elegance and relevance of The Tipping Point. It's about statistics, and hardly anyone wants to read about that.

So I asked my wife and younger daughter. They both knew the book was a best seller (obviously it has good media play). They both loved the cover . . . especially the illustration of an apple that when you cut into it reveals an orange. They also liked the title (both finding economics pretty freaky). I nominate whoever came up with that cover concept and title for the best "you can't tell a book by its cover" award for 2005.

So what does Freakonomics have to do with apples and oranges? As best I can tell, Freakonomics has very little to do with those fruits in a literal sense. The metaphor seems to be intended to be applied in two ways: First, you have to compare apples and oranges to the right reference to understand what you are examining; and second, sometimes the cause of something comes from an unexpected source when we peel back the skin of surface reality. If you want more, I discuss some applications of the book in my blog posting for today.

If you already like and know statistics, you can read Professor Levitt's articles instead of this book. If you like "gee whiz" facts about things you don't know much about, this book is for you.

It is fascinating in that it unveils the real causes to various observed phenomenon and for that it is to be highly commended.

Those interested in causes and effects, positively and negatively correlated observations will enjoy reading it.

I regret the labourious and pedestrian writing style. Perhaps the author assumed we were some of the academic products of the Chicago State System? 40 pages would have sufficed!