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Freakonomics Essay

2113 words - 9 pages

“Freakonomics: A Rouge Economist Explores the Hidden Side of Everything”, is a best-selling book by Steven D. Levitt and Stephen J. Dunbar. Levitt describes the book as a effort to “strip away a layer or two from the surface of modern life and see what is happening underneath.” He does this by taking two seemingly unrelated events and associates them. From comparing teachers and sumo wrestlers, to inquiring why crack dealers still live with their mothers Levitt and Dunbar manage to successfully put a spin on conventional wisdom by looking at it through very different perspectives. Unlike most books this book has no central idea, in fact in the opening chapter Levitt makes clear that this is ...view middle of the document...

There are three types of incentive: economic, social and moral and most cheating will involve all three of these. Social incentives motivate people to respond in a way the normally wouldn’t because they are worried about how they will be viewed by others. Economic incentives are those that a person responds to in the marketplace. Finally, moral incentives appeal to a person’s sense of right and wrong. Levitt says that economics is nothing more than the study of incentives.
Chicago public school teachers that were found to change student’s answers on standardized tests and Japanese Sumo wrestlers who throw certain high steaks matches Levitt described how research projects led to termination of teachers that were cheating. Teachers in Chicago were offered incentives depending on how their students did on high steaks clearly giving them reason to cheat. After reviewing test scores and creating an algorithm they were able to accurately identify teachers who changed student’s answers. He then took the techniques they used to uncover cheating teachers and showed how and when sumo wrestlers were cheating. Levitt points to especially important matches being "thrown," with the "winners" later reciprocating in less important matches, so that top wrestlers can maintain their status. Levitt points out that both groups under the right circumstances will cheat for similar reasons.
In Chapter 2 the question is How is the Ku Klux Klan like a group of real estate agents? This chapter is all about information and how it can be used as one of the most powerful economic tools. The author claims that much of the KKK’s power came from the fact that so much of what was done was a mystery to most people. They had secrete code language and handshakes they were also careful to keep their meeting places from outsiders. They had an organizational structure that was kept among members only. KKK members were happy to terrorize minorities as long as they could do it without anyone knowing, the information they had that no one else did gave them their power. All it took was one person by the name of Stetson Kennedy to cripple the organization. Kennedy infiltrated the Klan documented the rituals and provided the information to the writer of the Superman radio show and later wrote a book. Once the information was out the KKK’s member dramatically declined because people did not want to be publically exposed as members of the Klan. Levitt explains that real estate agents much like the Klan use secret codes and control much of the information in the sale of a home. Dunbar and Levitt say that all they had to do was look at how long real estate agents leave their own homes on the market compared to how long they leave their clients homes on the market. Real estate agent make more money the more homes they sale Levitt ants to prove here that they encourage clients to sell their homes faster and for less than what they should. They point out that they have much more knowledge of the...

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