Levitt And Dubner's Freakonomics

Conventional wisdom would argue that all crack cocaine dealers make an obscene amount of money. Despite the danger of dealing drugs in Chicago (or anywhere for that matter), many people still do it. Lower paying jobs generally have a large supply pool, and higher paying jobs generally have a smaller supply pool. Realizing that these crack dealing organizations and gangs operate like a normal business flies in the face of the conventional wisdom that crack dealers are all rich. The American idea of working hard and eventually becoming successful is what the lower level dealers believe in and what makes them stay in that horrible job. There is a multitude of lower level jobs to fill, but there is a significantly smaller number of higher paying jobs available. The people in charge would like things to stay as

they are though, with themselves making more money and maintain a relatively stable business to keep the revenues coming in. The main incentive was the hope that the men on the ground would rise through the ranks one day and make six figures.
The sudden drop in crime rate in the 1970-80’s wasn’t caused by a sudden increase in policing, but by the recent legalization of abortion.

Levitt and Dubner focus on this correlation in chapter four of Freakonomics. Beginning with Nicolae Ceausescu, the leader of Romania, who made abortion illegal, they identify the ramifications of Ceausescu’s actions that eventually lead to his losing control of Romania. The generation of children who would have been aborted grew up miserable, poor, and less successful than children before them. The opposite is essentially what happened in the United States. Instead of an abortion ban leading to more crime (as in Romania), the legalization of abortion led to a drop in crime. A strong economy, increased gun laws, and the threat of capital punishment were all cited as causes for this sudden decrease in crime, but the authors of the book assert that it was because of abortion becoming legal in Roe v. Wade in 1973. The type of woman to typically have an abortion is unmarried, poor, or a teenager. If the child was born, he would most likely turn to crime at some point in his life as one consequence of his

upbringing.
Dramatic effects or events often have distant, even subtle, causes. From the cases in Romania and America, it is easy to see that abortion is linked to crime. However, the effects of those actions may not take place until decades later. This is not as tangible as implementing laws to directly change the present. Also, this was an unforeseen consequence of legalized abortion. Even though abortion and crime are correlated, that doesn’t mean one is caused by another. Isolating other variables and accounting for the rest has to be considered. In order to distinguish which variables cause another, one needs an understanding of positive and normative analysis, as mentioned in this chapter. Positive analysis is observable through date whereas normative analysis is subjective (like whether or not abortion should be legalized). I still don’t agree that abortion is ever the right choice, but the statistics related to crime are significant. The final question in my mind is “Do the ends justify the means?”
Chapter five examines that some risks are more frightening than others, even if data show the opposite. Each parent wants to do the best they can for their children, so they turn to the experts on what to do. However, these experts usually are on the extreme edges of a parenting technique or issue. Otherwise, they wouldn’t gain any attention or make any money. Playing on someone’s emotions, particularly their fear, is how these experts can manipulate anyone, especially parents. False information has been fed to people, so they are now afraid of the things that they statistically shouldn’t be afraid of. For example, swimming pools and guns, airplanes and car rides, or terrorist attacks and heart disease. This same thought process of reacting and overreacting drives parents in what to let their children do, who they associate with, and what advice is followed in their upbringing. Thinking of the “immediate risk” is also what drives people to fear. This is why a terrorist attack is scarier than heart disease. Levitt specifically asks the question of how much parents really matter, and he expounds upon it using this thought process. He cites the lives of two boys, one white and the other black, who live in opposite realities. One is primed for success, the other seems primed for failure. Levitt uses many variables to analyze the black-white gap that is found in education levels. Levitt specifically found a correlation between a student’s test scores and his family situation, considering many different factors. He found that the first list of eight factors described what parents ”are,” and the second described what parents “do” for their children. The parents’ economic and social status are what really mattered, while what the parents decide to do is largely irrelevant.
Coming back to incentives, it is clear that the parenting technique experts have a large incentive to focus on controversial topics that will spark outrage, in turn sparking fear among parents. This fear blinds parents in an already difficult situation where they are operating on misleading and incomplete information regarding what is best for their child. In response to these experts, Levitt uses regression analysis to determine which factors are related to one another (what variable cause another). Because there are many variables and tactics a parent can use, their children’s futures are largely determined by who the parents are. This has a greater effect on their children.
In Chapter six, the authors discuss how the names parents choose for their children can affect their life or why people give certain names to children. They particularly discuss how white and black people choose names for their babies. The numerous lists of black- and white-sounding names further the argument that a name carries great weight in one’s life outcome. High income and low income social spheres are analyzed, and giving real life examples (like Winner and Loser) about how a name can affect a child’s future. The names that Levitt and Dubner chose are then revealed to be used in a pattern depending on the popularity of that era. The economic and social status of the parents is where names typically begin, and they then make their way down the ladder until a name that was once thought of as a “successful” name is not that anymore.
This final chapter is mainly how parents’ choices affect their children’s lives. Levitt and Dubner argue that it is not what parents do that sway their children, but what the parents are. Adults with similar social and economic situations tend to marry one another, so they pass the genes and characteristics down to their children. The circumstances in which the child was born into have a larger effect than any parenting techniques that the parents try to implement to prime their child for success. The parents put a lot of thought into what sounds like a “smart” name for their child, but names change with the times. Names also divide the different races into groups, not just different economic classes. Seeing a name on an application that sounds “black” will most likely hurt that person’s chances of getting that job. The parents have a financial and social incentive to give their children better names. It is a way for them to attempt to give their kids a head start towards a successful life.
Although the authors say the book has no “unifying theme,” Levitt and Dubner sought to explain some reasons why people act the way they do in the real world. Being skeptical of conventional wisdom and looking at everything from a different angle than usual is how Levitt and Dubner came up with their ideas. Incentives are what drive us in every decision we make, so a better understanding of those incentives and how different people react to them in diverse situations in vital.