Chapter 6: Perfect Parenting, Part 2: Would a ‘Roshanda’ by Any Other Name Smell As Sweet?

This chapter weighs the importance of a parent’s first official act – naming the baby. What your parents were telling you when they gave you your name? Not only must they find a name they will want to call their child for the rest of their lives, they must also perceive the effects and repercussions it will have. A boy named ‘Winner’ and his brother ‘Loser’ – how would this affect their lives, and their eventual success?

Naming is often highly influenced by culture. so this chapter examines “very white” names and “very black” names. Why do parents name their children black names or white names, and how might it affect their lives?

Whether a parent is trying to give their child a black name or a white one, a unique name or a trendy one, a pretty one or one that will bring the child success, it is clear that through their child's name they are trying to signal something. It turns out that a child’s life does not reflect the name he or she is given, but instead, reflects the life his parents have had, and the life they expect him or her to have! But in the end, the name one has does nothing for the life you will eventually lead, but your parents can rest assured with the perception that their naming decision contributed at least a little to it.

Chapter 5: What Makes A Perfect Parent?

In this chapter the authors ask from a variety of angles a pressing question: Do parents really matter?

The chapter discusses developments such as the conversion of parenting from an art to a science. Parenting experts today like to scare parents to death. Why is that? Because there is a lot one can gain by using the economics of fear. Obsessive parents and the nature/nurture quagmire – just as unsolvable as the chicken-or-the-egg conundrum!


Yet again, figures and data from a public schooling system, the duo distilled the perfect explanation. They admit it this explanation is highly underrated. Especially by high-flying parental experts, who would shudder at its simplicity. It is not what you do to or around the child that really matters all that much in essence. Instead it is whom you are that matters. If you have a healthy life, your child is much more likely to be successful than if you have an unstable life but take your child to the museum thrice a week and read them Shakespeare at night!

Chapter 4: Where Have All The Criminal Gone?

This chapter sorts out the facts of crime from the fictions. 

In the 1960 crime rates were skyrocketing in New York. And going by the trends, working their magic on the data, economists predicted that in a few decades a super-predator – “a scrawny, big-city teenager with a cheap gun in his hand and nothing in his heart but ruthlessness” – would be roaming the streets creating complete havoc. 

However, instead of all hell breaking lose, by the 1990s crime rates actually dropped, and the same economists that predicted the super-predator were not scrambling to provide explanations. Its stricter policing, some said, others owed it to the economy, but none of them really knew the truth. Because none of them thought like Levitt!

Levitt explained how, in reality, safer streets in New York City, were all thanks to a young woman in Dallas named Norma McCorvey. Under the pseudonym Jane Roe, she fought for the legalization of abortion in America, which when put into effect, prevented thousands of potential criminals from being born.

And so again, in this chapter, the authors masterfully unravel the hidden side of something so many people thought they understood so well. 

Chapter 3: Why Do Drug Dealers Still Live With Their Moms?

One of the ecosystems examined in this chapter is that of the street side peddlers of crack cocaine. How? Student at University of Michigan, Sudhir Venkatesh, ventured into crack dens, gaining the trust of young street peddlers and understanding how they work.

While most of society believed that cocaine dealers were rolling in money, and nothing infuriated the honest, law abiding citizen more than a millionaire crack dealer, Venkatesh found quite a different reality. Crack-dealing gangs were just like McDonalds, or any other commercial outfits. What’s more, for lower rung members of the gang, chances of being killed on the job were as high as 1 in 4! As a result, there is a lot of empathy and closeness between families of the gang members. They look out for each other.

This particular case study of street peddlers of crack cocaine really struck me because it is very rarely that people would think to write about the street level dealers and gangs. It is usually the drug mafia and the cartels that get written about. This reflects the unconventional way of looking at the world that is the essence of the book.

Chapter 2: How Is the Ku Klux Klan Like a Group of Real Estate Agents?

This chapter argues that nothing is more powerful than information, and illustrates how one of the most easily abused gaps in economy is between those with knowledge, and those without it.

The success and downfall of the Ku Klux Klan, the skills of real estate agents, the number of responses received by online daters, the decision-making process of a potential automobile buyer– what do all of them have in common? The answer: information asymmetry.

Information asymmetry is a situation in which one party knows something the other doesn’t, or knows more than the other. Each of these examples illustrates how people used some information that they had, which the people they dealt with did not, to their advantage.

The chapter also talks about one powerful new-age antidote to the abuse of information asymmetry: the Internet.

One of my favorite anecdotes from the chapter was one that illustrates the shameless ease with which experts often play consumers using their information advantage. It is the story of a Stanford processor who wants to buy a house on the university campus. Having found a house he liked, the seller’s agent tells him that he should take the deal, it is the best he will get as the market is about to zoom! Convinced that the real estate agent has expert insight into market trends he quickly signs purchase papers. Just when he is done the agent asks if he would like help to sell his own house. When the professor expresses a desire to try and sell it himself, the agent says, oh, I wouldn’t advise you to do that, the housing marking is tanking, you know! 

Chapter 1: What Do Schoolteachers and Sumo Wrestlers Have in Common?

Economics is about incentives – negative or positive, economic, social or moral. This chapter explores the beauty of incentives, and how powerful they can be. For example, researchers ran an experiment to understand what motivates people to donate blood. They began giving out small stipends for blood donation, and they found that the number of donations actually dropped! It turned the noble act of charity (a strong moral incentive) into a painful way to make a few dollars. However, had the stipend been much larger, it would have worked the other way, increasing blood “donations”, but by dangerous and unethical means!

Thus, the chapter also examines the dark side of incentives - cheating. Who cheats? Just about everyone, given the right incentives. A teacher whose class is likely to fail an exam and get held back a year, has just as much incentive to cheat on the exam as the students taking it. As does a sumo wrestler whose rank, earnings, social status and entire lifestyle, may have to be relinquished, due to the loss of just a single match!

How does one explain the sudden disappearance of seven million American children? Revised tax laws! “What? Those are two completely unrelated statements”, one might think. Not when the book is done explaining - when tax payers needed start providing proof of life of dependant children they claimed to have instead of simply listing them, seven million made-up children vanished into thin air overnight!

Using these real life examples, some absurd, and some seemingly normal ones viewed differently through the genius economic brain of Steven Levitt, the book illustrates why and how cheaters cheat. And how the tools of economics can be used to catch them!

Who, What, Why?

What exactly is this blog about?

As an assignment for the Learning Skills course at university, I am reading "Freakonomics", by Steven D. Levitt and Stephen J. Dunbar. I will be reviewing the book, chapter by chapter as I go along, using this blog.

What exactly is "Freakonomics?" Co-authored by Steven Levitt, an economist of the highest order (he has degrees and awards to prove it!), and Stephen Dunbar, a witty and engaging journalist and author, it is a book that gives us a glimpse into Steven Levitt's unconventional economic investigations.

Levitt and Dunbar
Photos from http://freakonomics.com/about/

Many non-economists, myself included, tend to believe that economics is a dry, highly technical subject. I had written it off as a subject purely about numbers, markets and money. But this book promises an interesting twist on the subject, by using it to examine fascinating real world situations. For example, why is it that drug dealers, many well into their adult lives, still live with their moms? Or, what is it that makes a perfect parent? As Levitt says, "economics is a science with excellent tools for gaining answers but a serious shortage of interesting questions." And he has a knack of asking such questions.

This is why I chose to read this book. I am drawn by the seemingly arbitrary questions Levitt asks, and the deft way in which he deconstructs real life examples to answer them. And I hope, that at the end of this, I will be a little more intrigued by the subject of economy as a whole, and the ways in which it can be used to look at the world.