(Picture courtesy of addicted2success.com)
Ever wonder what tricks real estate agents have under their sleeve? How about what teachers and sumo wrestlers have in common? Did you ever wonder how your name could cost you a job?
These are the types of themes that get further explored and analyzed in Freakonomics by Steven Levitt and Stephen Dubner.
At first, when I read the synopsis, I thought, “This is kind of stupid. Who would ever compare teachers and sumo wrestlers? They have nothing in common!”
However, after I dove in to the first several pages of chapter one, I realized I was going to learn A TON of information that I never thought to conceptualize. And even better, I was engaged the entire time.
A little about the authors-Steven Levitt is not your typical economist; he doesn’t really care about numbers and how to get data. Rather, he cares about WHAT that data might mean. He believes in drawing conclusions, sometimes far-fetched (as you will learn), from numbers.
Stephen Dubner is an author. The two, Dubner and Levitt, teamed up to write a book that no one would think would ever exist. Levitt, the information provider, and Dubner, the word crafter, wrote this book together in order to shed some light on the atypical side of economics.
When most people hear the term economics, they think “money” or “the study of money”. However, after reading this book in its entirety, I learned that there is a whole lot more to economics. In fact, I learned that economics actually has little to do with money; it has a whole lot more to do with resources that we find valuable to us, and how those resources drive the choices we make all day long, every single day.
In the first chapter, “What Do Schoolteachers and Sumo Wrestlers Have in Common”, it is learned that economists refer to these “resources” as incentives. Apparently, there are three incentives that drive the decisions we make every single day: economic, moral, and social.
Chicago teachers cheated in the early 90s by strategically changing their students’ answers on a standardized (high-stakes) test, so that they would not lose their job and so they could possibly win a substantial monetary reward. Thus, they had an economic incentive to change their students’ answers-so they could get a bonus for being a “good teacher”.
Sumo wrestlers purposely lose a match to another wrestler because before the match, they made a quid pro quo deal-if I lose for you now, then you need to lose for me later. The goal? To win every match in order to win the tournament, so they could win the monetary prize. Thus, they have an economic incentive to purposely lose a match in hopes the opponent would return the favor, so they could win a more important match later on.
Therefore, what do teachers and sumo wrestlers have in common? They are both powerful, for one, as they control their own destiny but also the destiny of others. But they also both cheat in order to gain something. They both cheat for economic incentives.
This is, at least, what the authors reveal in chapter one. I LOVE this chapter because we do learn something other than that teachers and sumo wrestlers cheat; we learn that every action or choice we make was driven by some force. It made me think a lot of why I do the things I do all day, every day. It will make you think as well.
In chapter two, what real estate agents are really up to is revealed, as well as how they relate to the Ku Klux Klan. Yes, that is correct, the authors correlate real estate agents with the KKK.
Every wonder why your real estate agent talks you into accepting a lower offer on your house than you wanted? Not because they are there to help you sell your house; they are there to help you sell your house FOR THEM. Even if the offer is lower. they still make out pretty well on the sale of your house.
Those terms real estate agents use on the listings for a house reveal a lot as well, and can either help you sell your house or can prevent you from selling it.
If you see the terms excellent, amazing, beautiful, incredible, charming, great neighborhood, etc., basically any term that is non-specific, this means they really don’t like the house, and that the house really doesn’t have anything great about it, prompting them to use these generic terms. These terms result in a lower sale rate.
However, if you see more specific terms, such as granite, state-of-the-art, and gourmet, the real estate agents believe the house is of higher value, so using these terms will result in a higher sale rate.
So, how exactly do the authors relate these two seemingly unrelated groups? Read and find out. 😉
Chapter three reveals what conventional wisdom is, and why it is usually never true. Conventional wisdom tells us that drug dealers are rich. Why? Because in the movies, most drug dealers ARE rich-they have luxurious homes and fast, expensive sports cars.
However, after combing through the data, Levitt and Dubner reveal that this, in fact, is not reality. Rather, drug dealers, as the chapter title states, still live with their moms, Why? Again, you will need to pick this book up and read it!
Chapter four discusses something so incredibly sinister, that it had caused a verbal fight in my classroom (I teach this book every year) in which I had to kick those two ladies out. The idea is so preposterous that it angers many; however, it just might be true. The authors do an incredible job of trying to convince the reader the “real” reason as to why crime dropped so drastically in the 90s, when it was predicted that crime would actually significantly INCREASE.
The “real” reason the authors propose is highly controversial, as many reviews angrily discuss, and in fact, depending on your view, may have actually proved what others predicted-that crime actually did increase in the 90s. So, if you believe the authors, then you support the fact that crime dropped in the 90s; if you don’t agree with them, then you think that crime actually increased. You will just have to read to make your decision. As for me, I lean both ways. There is some truth to what they say, but I morally cannot take that side because I do not believe in the act that “caused” crime to drop.
Chapter five might be one of my favorites. The authors discuss what it takes to be a good parent, and how to raise successful children. The data reveals, according to Levitt, that what really matters in parenting is not so much what you do (read to your child; take them to the library), but more so who you are as a parent/mom (IQ). They discuss the nature vs. nurture debate, and what the data conclude in regards to that topic.
Most of my students get angry with this chapter, so it leads to a wonderful discussion-what really matters in parenting? Can you reverse your “destiny” by proving that even though your parents didn’t go to college and have a successful life, that YOU could? This chapter has such thoughtful and meaningful concepts to explore.
Every student loves chapter six. Why? Because many of my students relate to it. How can someone’s name prevent them from obtaining a job? How does someone’s name alone cause discrimination? I teach mostly minority students from different cultures, and they ALWAYS have interesting stories to share regarding this topic. They get so emotional as well, because they agree with what the authors say, and because they feel such injustice as a result. Again, meaningful discussions ensue.
What does this book do for you as a reader? It opens up your mind and makes you think about concepts you would never give two thoughts to. It makes you deeply analyze the choices you make every day, and the reasons behind those choices.
If you are a teacher, it leads to some incredible, engaging discussions where students even get heated, which makes the discussions even better. It opens a new whole world or side to economics. It makes economics seem fun and exciting rather than just tediously combing through numbers.
In sum, I highly recommend this book.