[Review] SuperFreakonomics

Dear Reader,

“What do Al Gore and Mount Pinatubo have in common?” This is one of the many questions that economist Steven D. Levitt and writer Stephen J. Dubner answer in their hit book SuperFreakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance. SuperFreakonomics like its predecessor Freakonomics explores how the world works through a keen and creative analysis of microeconomics data. If economics sounds dry to you, I urge you to reconsider your position at least for this book. SuperFreakonomics is filled with strange stories and queer questions that will make you see the world in a new light. In this post, I will highlight some of the stories and lessons to give a brief overview of what I mean.

Case Study: Women in India

Even before birth, Indian girls experience sexism. Sex-selective abortions in the case of a female fetus is not unheard of in the country, and after birth, girls face discrimination at every phase of life. In one study, 51% of Indian men and 54% of Indian women stated that wife beating is justified in some instances (for example, if a wife were to burn dinner). To help combat prejudice and violence against women, the Indian government incentivized citizens to “respect women” by paying families not to abort their daughters and by offering scholarships to women. The authors claim that these policies failed to produce the intended outcome of gender equality. Yet, there was a shift in a woman’s role in society over time. How did this happen? The authors suggest cable television.

In the early 2000s, researchers studied how the introduction of cable television to Indian cities and villages influenced the perception of women in society. For the first time, many Indians were exposed to Western programing and saw women play a dominant and commanding role in television and movies. The economists found that increased cable TV consumption correlated with greater autonomy in Indian women. Survey data revealed that Indian women were staying in school longer, were less tolerant of wife beating, and did not claim a strong son preference. While economists cannot prove that cable TV is responsible for a shift in the cultural mindset, they can speculate on how people make decisions. The government policies did little, but an unconventional answer like cable television, perhaps, was more effective.

This story, like many in this book show an interesting correlation between data and an outcome.

Fun (data-driven) “Facts”

This book is entertaining in the way that it uses data to come to conclusions. For example, in one short story the authors discuss the dangers of drunk driving in relation to that of drunk walking. In a convoluted (yet logical way), the authors proposed that on a per-mile basis, a drunk walker is eight times more likely to get killed than a drunk driver.

There were a few other fun tidbits about prostitutes.

• In Chicago, a prostitute’s wages today are relatively much lower than sex workers’ in the same city in the early 1900s.
• Also, in Chicago the average prostitute will turn 450 tricks before a single arrest and only 1 in 10 arrests will result in prison sentence.

Interesting Tales

Other stories in this book include the tragic and infamous murder of Kitty Genovese, an argument for when you should and shouldn’t visit the emergency room, and an explanation for why terrorists should buy life insurance (long story short – so they don’t get caught!). While all of these tales are whimsically told, they touch on important topics in behavioral economics like perverse incentives, impure altruism, the principal agent problem, and the role of positive and negative externalities.

…in conclusion

This book is a random heap of stories that perfectly illustrate how people respond to incentives and make decisions. Or, if you want to read this text in a less analytical fashion, you may read this collection as an amusing history of problems that is somehow relevant for today!

Levitt and Dubner do not disappoint, and I highly recommend this book if you are interested in general knowledge, trivia, or behavioral economics. So, to conclude where we began—what in fact do Al Gore and Mount Pinatubo have in common? They both propose a way to cool down the planet – Al Gore through his activism and Mount Pinatubo through sulfurous eruptions. However, when it comes to cost effective climate change solutions, Mount Pinatubo takes the prize.

Happy reading.

Love,

Raven