A few years ago, the book Freakonomics written by economist Steven D. Levitt and journalist Stephen J. Dubner came out. I found that book to be ground-breaking and fascinating, a book in many ways that has inspired me to take my natural analytical inclination and apply it to a diverse set of topics and document it in this very blog (examples such as Internet Freedom by Country and Corruption Rankings, Steroids and Game Theory, and Will Facebook improve or worsen High School Reunions). For me, Freakonomics helped ignite curiosity and evaluation of both every day and unusual, rare events.
Now four years later, Levitt and Dubner have released their follow up book—the aptly named SuperFreakonimcs. I just completed reading the book. Here’s my review of the book.
SuperFreakonomics follows the same blueprint of Freakonomics. The authors look at various topics and present a case (often a non-conventional wisdom case) through analysis, data, and logic. As was the case in Freakonomics, a common theme in their analysis is People respond to incentives. A major principle of economic theory; this principle is the foundation to their analysis.
Key topics in SuperFreakonomics include:
- How is a street prostitute like a department-store Santa?
- Why are doctors so bad at washing their hands?
- How much good do car seats do?
- What’s the best way to catch a terrorist?
- Did TV cause a rise in crime?
- What do hurricanes, heart attacks, and highway deaths have in common?
- Are people hardwired for altruism or selfishness?
- Can eating kangaroo save the planet?
- Who adds more value: A pimp or a realtor?
What I liked
- The most memorable and controversial chapter to me focused on some solutions and proposals to epic global problems including hurricanes and global warming. The authors spent time with a motley crew that appears to be a collection of some of the smartest people in the world working for a think tank/VC firm called Intellectual Ventures (IV), founded by former Microsoft CTO Nathan Myhrvold (a man that Bill Gates has said is the smartest person he knows). IV has some interesting solutions to reduce the number of and impact of hurricanes and analysis, conclusions and theories on climate change impact. This has been a particularly controversial chapter in the book– (Levitt was on the Daily Show discussing the book and particularly the global warming discussion– see the link here Steven Levitt on the Daily Show)
- Myhrvold has what seems to be an amazingly simple solution to help reduce the number of hurricanes. It basically uses an “inner tube with a skirt” from thirty to three hundred feet across with a cylinder attached to the inside. By having these items float in the ocean, these devices ultimately could lower the water’s surface temperature—as the water surface gets hotter, that leads to hurricanes. A fairly simple, low cost, low impact potential solution—a lesson here is sometimes simplicity is all you need (one of the Product Design trends in 2009 from IDEO was simplexity—here’s a good example).
- Interestingly, cows are wicked polluters—the exhalation, flatulence, belching and manure of cows emit methane that is about 25 times more potent as a greenhouse gas than the carbon dioxide released by cars. If the whole world gave up red meat, the global warming conversation would be much different. Of course, that isn’t practical. In comparison, the kangaroos exhalation, flatulence, belching doesn’t contain any methane. Scientists are trying to replicate the digestive characteristics of the kangaroo and and transplant that to the cow—now that could have a meaningful impact on global warming.
- Continuing the theme regarding incentives, a study by Keith Chen, a professor at Yale, was described where he studied if monkeys could be taught to use money. Amazingly, the monkeys quickly learned to use money, understood that money had value and even exhibited loss aversion (in other words acted as if the pain from losing the opportunity to buy an item was greater than the joy of acquiring one). He even observed one monkey exchanging one of his coins to another monkey and then the two monkeys were having sex—Monkey prostitution—go figure!
- Reminders of the law of unintended consequences, which we often don’t think enough about before pursuing a course of action. An example was when the Americans with Disabilities Act (ADA) was enacted to safeguard disabled workers from discrimination. The authors show that the data convincingly demonstrates that the net impact of the act was far fewer jobs for Americans with disabilities. Employers were so worried that they couldn’t fire bad performers who had a disability, independent of the disability, that they wouldn’t hire them in the first place.
What I didn’t like
- There are too many examples relating to the economics of prostitutes and pimps. While clearly not something one normally doesn’t spend much time thinking about, there was way too many pages and time devoted to this topic.
- I have mixed feelings on this particular one—in one section, the authors detail how a banking analyst came up with an algorithm to identify potential terrorists in London. While I find that time of analysis fascinating, I wonder if they did or could have actually altered the characteristics that listed as most likely linked to terrorists so that future terrorists don’t have a blueprint of characteristics to avoid.
Overall Review and Key Takeaway
As expected, I enjoyed the follow up and went through the book remarkably quickly. While this book certainly did not have the affect that Freakonomics did, which was such a fresh, smack you in the face type book with data and analysis that one wasn’t expecting, this book continues to reinforce the power of analytical rigor and keeps the concept of People respond to incentives at the forefront of explaining human behavior. A definite recommended read.