The book” Freakonomics” is by Steven D. Levitt and Stephen J. Dubner. The title, “Freakonomics”, is a combination of two words: Freak (which means quirky, unusual, or weird) and economics, but in the sense of economic related to economic activity; the economics that consumer, families and businesses encounter every day. The title reflects the author’s name of the method of economic analysis in aspects of everyday life that normally fall outside the scope of the work of economists. The author’s success is due to the fact that this is a fun book to read, with a little dose of humor. No one can resist investigating the answer to questions like, "What do common schoolteachers and sumo wrestlers have in common? “ Or “Why drug dealers live with their mothers? “. But beyond anecdotes, the case studies presented in the book show some controversial findings, such as linking the decrease in violence in the United States to the legalization of abortion .The really interesting thing is that the book shows the true activities performed by economists that the general public usually does not know about.
Most people have assumptions about what an economist does. If a survey was made that asked people to show an example of what an economist does, answers would be varied. Some would say that an economist is a person that knows tax and accounting, others would say maybe a project manager, and some would even say that it is a person who analyzes the financial markets and is able to predict the exchange rate of a currency or market price of a market value. In the best case, it would be a professional who analyzes economic data such as GDP, inflation, and unemployment to predict how the economy will behave. Very few people would be to think of an economist as a researcher of a company whose job is to analyze people’s social behaviors and why they occur. To accomplish the task of analyzing social behaviors, an economist has two advantages which largely distinguish them from other non-economic researchers of society: the assumption of the economic rationality of the decisions of people and verification of facts through the data analysis. Economic rationality is the assumption that people will make decisions that are best for them financially.
Economic rationality arises from necessity. There is a gap between desires and the means we have to achieve those desires, and this brings us to continually make decisions to best manage our scarce resources and minimize dissatisfaction. We are all affected by restrictions like information, time, and money. Even privileged people whose income could exceed their capacity to buy have the restriction of time. In order to overcome some of these restrictions or at least alleviate them, we try to give the best response to a situation based on the information we have.
The assumption of economic rationality has many advantages. If a group of individuals are facing the same problem, and its restrictions are very similar, their responses...