Question

One of the few books about economics to recently hit the New York Times bestseller’s list was Freakonomics by Levitt and Dubner.   The book was so popular they even made a movie about it. The specialty of Levitt and Dubner is applying economics to unconventional, controversial, or sometimes even downright bizarre topics. Some praise them for bringing economics to a wider audience, while others criticize them for not tackling serious issues or for delving into overly conversional areas.

So what’s all the fuss about? Take a look for yourself by viewing some of their videos from YouTube, including clips from their movie, or take a look at some articles at their blog. The links are below:

https://www.youtube.com/user/FreakonomicsVideos/playlists

http://freakonomics.com/category/freakonomics-blog/

Choose one of the videos or blog articles that you find most interesting, and share the link with your classmates. Discuss some of the following issues based on what you have viewed or read:

What did you find interesting about the video or article that you found?

Did you find anything from any of the videos or articles that might help you understand some concepts from the class, or is their stuff too odd or far out there to be useful for this class?

Overall, what is your impression of Levitt and Dubner? Silly? Interesting? Bizarre? Informative? Boring? Other?

Answer 1

Answer:

Freakonomics is the study of economics based on the prinicple of incentives. The book takes a novel approach to studying economics, sharing its most interesting research.

There are some concepts in this book like,

a) Winner takes all labour market,

This describes a situation in which many laborers compete for a position in the market, but few actually succeed in finding employment. Those few who do are paid extraordinarily large salries. In the example of Chicago drug gang, only 2.2% of the members earned more than half the profits. Levitt and Dubner refer to this labor market as a tournament. A tournament refers to a situation of many players compete against each other and, one by one, are eliminated.

b) Incentives matter,

Given the low wages and the fact that the chance of being violently and ignominiously murdered is one in four, why are so many willing and able to perform the job of dealing crack? This is because the winners in suvh a labor market are handsomely rewarded and each budding drug dealer believes he can succeed.

c) Supply, demand & equilibrium price,

Example of Black Disciples street vendors explains an immutable law of economics. Whenever there are a lot of people willing and able to perform a job, taht job doesn't pay well.

Steven D. Levit sunthesized in his book as common sense and psychology directly affects the money trail and how can we use these aforementioned tools to generate revenue from an idea.

Although this book is interesting, in my opinion there are two problems with this book,

1) Stephen Dubner comes across as a sycophant. Way to much of the book is spent praising Levitt.

2) I was disappontment as it lacks in providing details about Levitt's hypothesis.

Levitt showed everyone that how interesting we can discover when we aplly statistical analysis to problems where we wouldn't normally think of using it. As being Masters in Economics I use statistical methods a fair amount in my own work, so I found it interesting.

Overall my impression is combined and I found it informative and interesting somewhere and some of the things are silly as well.