Book Review: SuperFreakonomics – Economics Lessons

Super Freakonomics is the follow-up to the 2005 bestseller, Freakonomics by Levitt and Dubner. This review will not be a summary of all the stories inside, although they are indeed entertaining. Given that they compare Santas and prostitutes, you quickly realize this is no economics textbook. However, I think both books should be required reading for high school students anyway because they teach that economics isn’t just about supply-and-demand curves. Economics is really about how people respond to incentives.

One main lesson is that sometimes you can’t clearly see what incentives people are responding to. When you think it’s just about money, it often isn’t. People respond to the need for sex, praise, love and the desire to avoid shame, judgment, and criticism. For example, why do people give to charity? It’s not just to help others. We do it for the tax break, for recognition in a newsletter or on a plaque, to feel better about ourselves, to avoid guilt, to help guarantee a spot in the afterlife, or simply because somebody important or attractive asked us to.

Or when you think it shouldn’t be about money, it actually is. Not very many people in the U.S. consent to organ donation, even though it could directly save countless lives. Iran compensates people for kidney donations, something that is considered unethical in the U.S. Remember, most people have two kidneys, and can live with one. How many lives could letting money play into this save?

Another worthwhile lesson is to watch out for unforeseen consequences. Here’s another example. The feminist movement resulted in dumber schoolchildren. Early in the last century, teaching was one of the few jobs available to women that didn’t involve cleaning, cooking, or other menial labor. In 1940, 55% of all college-educated females workers in their early 30s were employed as teachers.

As more and more women entered the fields of law, medicine, finance, science, and so on, resulted in a “brain drain” for schoolteachers. There are many excellent teachers still today, but according to cited research the overall teacher skill level and quality of instruction has declined over time. Between 1967 and 1980, U.S. test scores fell by the equivalent of about 1.25 grade levels.

If you liked Freakonomics, you’ll probably like this book. You have to read carefully to separate what “the research says” and the authors’ theories as to the actual reasons why. Again, there weren’t any direct applications to personal finance inside, other than perhaps showing us how pimps provide more value than Realtors. Their chapter on global warming was especially controversial. It’s been out for a while, so it should be easy to find at your local library, and used copies can be found at Half.com or Amazon for about $2 + shipping.

Comments

  1. Woah… I was with you until the last one. Perhaps it hit too close to home. Maybe there is more in the book, but it seems hard to prove that feminism resulted in less quality teachers thus making dumber school children. There are myriads of factors that could and do impact that, nor is there good research now and certainly wasn’t good research then to compare student success.

    There is one way that feminism clearly impacted education, but it has nothing to do with a teacher brain drain. Now that women are more likely to be working out of the house, the child has lost the stability and the benefits to a steady nurturing and supportive parent at home. Furthermore these working women now have a sense of guilt of abandoning their children which leads to them entitling and spoiling them (meet the new mom Mrs. DS) …a huge issue for the modern teacher.

  2. Lots of their conclusions can be controversial. I watched their show on Netflix and they concluded that Roe v. Wade led to lower crime by virtue of not having unwanted offspring around…..
    Either way, thought provoking stuff.

  3. You’re review convinced me to finally read this series. I’m 7th on my library’s waiting list for the e-book of Freakonomics, and I see they also offer both SuperFreakonomics and SuperFreakonomics, Illustrated edition. Looking forward to them.

  4. If the government paid people to hand in kidneys. I wonder how many people would wake up in a bathtub full of ice missing thier kidney.

  5. Victoria says:

    Exactly. That’s the reason why selling organs is illegal here. If you give people financial incentive to sell/steal organs, people will. Also, people don’t realize that mother nature gave us TWO organs like kidneys for a reason. Maybe when you’re young and healthy in your 20s and 30s, it’s okay, but you will feel the consequences when you’re in your 40s, 50s, 60s. It’s going to be very difficult to have a long and healthy life with just one kidney and you’re 80.

    There are documentaries on countries/areas where the sale of organs are legal. People do get exploited and they do wind up with serious health problems in the long run.

  6. Victoria says:

    Also, one should note that this practice would give rise to placing value only on the lives of those who can afford to buy organs; those who do not will die.

    The lottery system current in place is set up so that it is fair. It is about body compatibility and need. Not who has the most money. If you are poor, you can still have a fair access to a life saving procedure.

  7. Regarding feminism and falling test scores for U.S. students:

    “Correlation does not imply Causation.”

    See “Pirates and Global Warming” at:

    http://en.wikipedia.org/wiki/F.....nglish.jpg

  8. Seriously, you’re going to tell a leading economist, “Correlation does not imply Causation” ??

    You should read the book before assuming they made a ridiculous claim.

  9. Just commenting on the sample Jonathon reports they provided in the book. If they didn’t, that’s on Jonathon, not me.

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