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Keywords: Statistics, economics, politics, sociology, current affairs

Title: Freakonomics

Author: Steven D. Levitt and Stephen J. Dubner

Publisher: Penguin

ISBN: 0141019018

Media: Book

Verdict: Excellent reading.


Freakonomics is one of those books that sets people talking for all the right reasons. It's well-written, extremely interesting and very thought-provoking. In this case the best-seller status and the countless plaudits are an adequate reflection of the quality of the book rather than the result of hype.

For those who've not been keeping up with the news, Freakonomics is a book about the work of economist Steven D. Levitt. If your idea of economics is interest rates, monetary policy and the like then think again. Levitt's not interested in that at all. He views economics as the science of making choices, and that's what he looks at - the choices that people make and the often unforeseen consequences of those choices. With journalist Stephen Dubner as co-author, the book explores some of the surprising outcomes of Levitt's work, from crime and social policy to race and estate agents.

Levitt's modus operandi is to pick a question and then to attack it with hard data, creative ideas and plenty of lateral thinking. The choice of question he tackles is fairly eclectic - Why do drug dealers still live with their moms? Where have all the criminals gone? - but the methods he uses are the same. Rather than accepted opinion or conventional wisdom, he wants to look below the surface at what people really do rather than what they say they do. That means looking for data and then the patterns in that data. And, as if often the case, if there's no direct measure to match the question he's looking he'll go for a proxy. It's this insistence on data that gives his work such enormous power.

The tools that Levitt and his co-workers use are statistical - multiple regressions, factor analysis, different flavours of analysis of variance. These are standard topics in many stats courses, from beginner upwards. For a lecturer looking for interesting examples to motivate bored students, (or bored students looking to see what a stats class equips you for), this book is perfect. Here's stats made flesh, and it's a great motivator. Note however, that the statistical techniques themselves hardly get a mention. The book's not about how you do statistics, it's about what you do with statistics.

Of course the results of his analyses are what have made the book a best seller and which have generated so much heat. For example, his finding that the crime drop in US cities in the 1990's was probably the result of the drop in the birth rate due to the legalisation of abortion in the 60's, was greeted with outrage by some people. But Levitt's analysis took into account the main alternative theories - which ranged from changes in policing to gun control to increases in wealth - and showed how each of them was flawed and not supported by the evidence.

The book itself is very well-written, it's engaging, gripping and impossible to put down. While the ideas and the research are Levitt's, Dubner has worked his craft to turn a set of papers into a readable and accessible volume. If there's a complaint it's that the book isn't long enough.

Whether you agree with Levitt or not, there's no doubting that he is redefining the way people think about economics. Rather than a dry academic science, increasingly technical and highly mathematical, he shows how economics is about people and the societies they create. This is one economics title that everyone should read.

A version of this review was first published by London Book

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Contents © TechBookReport 2006. Published May 17 2006