Assignment

Introduction

New York Times best seller Freakonomics was the first book of the series written by Economics Professor Steven Levitt and New York Times writer that explains how our common assumptions about what are true are many times wrong. The book was a smash hit and was followed up by “SuperFreakonomics”. The book kicked off the genre of 'popular economics' - a title that beforehand would have sounded oxymoronic. In it they explored a seemingly random set of questions, involving cheating Sumo wrestlers and drug-dealers that live with their mothers, using economic tools such as quantitative analysis, but in a completely jargon-free way. The main objective was to show that looking at such topics through the lens of an economist could offer an objective understanding of why people behave as they do. The point is to understand incentives, and how rational, self-interested people respond to them. As such, the book introduced the general reader to the type of thinking done by that much-misunderstood creature: the economist (Levitt & Dubner, 100 - 200).

Synopsis

The sequel, SuperFreakonomics, which came out in 2010, largely follows the same format. Again, an eclectic bunch of topics are examined, with chapter titles including 'How is a street prostitute like a department-store Santa?' (the answer being that prostitution is a surprisingly seasonal activity) and 'Unbelievable stories about apathy and altruism' (where the word 'unbelievable' is used literally). One reason why this book is 'super' compared to the original is that it explicitly introduces core economic ideas, that everyone benefit from knowing about, such as price discrimination, adverse selection and externalities. These are introduced in a completely logical way, helping the reader understand the specific topic in more depth by providing a basic understanding of basic economic material. The authors should also be applauded for showing that these concepts can easily be approached by the non-economist, and any fear of their complexity is misplaced. For this reason, I find this book mostly excellent, but with one reservation, which I shall return to.

The authors seem to relish the prospect of finding simple, efficient solutions, but also of revealing truths that refute conventional wisdom. An example is with car seats, where, through an analysis of the data on safety records, they try to show that children's car seats offer no significant extra safety compared with the standard seat. As is expected, attempting to overhaul conventional wisdom generates controversy and resistance, and one wouldn't expect parents who read this book to stop strapping their children into special car seats as a result (Levitt & Dubner, 100 - 200).

Tackling the fields of behavioral economics, criminology, psychology, sociology and other fields, Superfreakonomics examines taboo topics and sheds new light - and answers - while challenging conventional wisdom. Reading through the easily digestible volume, one learns why walking drunk is more dangerous than driving drunk (shorter average number of miles before accidental death), why department store Santas are like prostitutes (seasonal demand), and how capuchin monkeys actually behave like humans when given the right monetary ...