Book Review: Freakonomics : A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt
This book does a pretty good job of tackling subjects that are worth thinking about but which few would think to tackle. Their answers are interesting but not always as rigorous as I hoped.
The implication that this is an economics book is a bit misleading. While it is occasionally guided by the principle that incentives matter, it is at least as much about Kelvinism (the belief that we ought to quantify knowledge whenever possible), but then some of the book consists of stories which have little to do with either.
My favorite parts of the book explore the extent to which experts’ incentives cause them to pursue goals that don’t coincide with their clients’ interests. But his arguments about realtors exaggerate the extent of their conflict of interest – it is likely that part of the reason they are quick to sell a client’s house more cheaply than they would sell their own is that the realtor is less likely to need to sell by a deadline.
I am left puzzled by the claim that crack gang leaders want to avoid gang wars, but gang members are rewarded for starting violence with promotions. Who’s controlling the rewards if it isn’t the leader? Why can’t he ensure that members who engage in nondefensive violence aren’t promoted?