Steven D. Levitt's Freakonomics

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Freakonomics Theme Analysis

Freakonomics by Steven D. Levitt and Stephen J. Dubner shows that in life, everything has a hidden side. The book also discusses many topics, such as: incentives are the cornerstones of modern life, the conventional wisdom is frequently wrong, dramatic effects often have distant causes, “experts” often use their informational advantage to serve their own agenda, and knowing what to measure and how to measure it makes a complicated world much less so.

(Levitt & Dubner 12). In this essay, I will be focusing on how incentives are the cornerstones of modern life, conventional wisdom is often wrong, and how “experts” often use their informational advantage to serve their own agenda.

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Most incentives though, can be predicted and used to stimulate or punish people, but like in the “Daycare Dilemma,” are stronger and more enhanced for some circumstances than others. For example, police departments started posting pictures of johns and prostitutes in local papers and news stations to shame the guilty party. As Levitt & Dubner put it, “Which is a more horrifying deterrent: a $500 fine for soliciting a prostitute or the thought of your friends and family ogling you on www.HookersAndJohns.com?” (Levitt & Dubner 18). In this case, a social incentive was more humiliating and punishing to them than an economical one.
Another key value in Freakonomics, is that “conventional wisdom” is often wrong. We form certain “notions” about how things and people should be. Such as a women’s rights activist. Studies have shown that they actually dramatize the statistics they give to guilt more people into standing behind their foundation. Most people would think that if anyone wanted to the right thing it would be activists, but that’s not always the case. In chapter 6, we learn about

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Studies have shown that real estate agents will hold out for the best deal possible when selling their own home, but encourage you to take the first decent deal to come along. (Levitt & Dubner 8). The best way to stop this, is to do a little research on your before consulting an “expert.”
In conclusion, economics is the study of incentives and how people react to them.
Freakonomics, however, studied the hidden meanings beyond that and the cases where incentives not only reacted as expected, but where they were reacting differently as well. Levitt and Dubner did that by sticking to five main philosophies in their book, knowing what to measure and how to measure it makes a complicated world much less so, “experts” often use their information to their advantage, dramatic effects often have more subtle causes,

“conventional wisdom” is often wrong, and incentives are the cornerstones of modern life.
(Levitt & Dubner 12). Three of which, I believed to be the most important: “specialists” often use their information to their advantage, “conventional astuteness” is recurrently false, and incentives are the keystones of contemporary life.