A very interesting take on real-life situations using principles of economic theory. Seems forced at some places but if looked at objectively it does make sense. For real it's economic steak on a hot plate, with a side of a motley collection of interesting stories.

At a cocktail party you don’t count on quant types to provide much entertainment. In rare cases a data-plying vector-head like me might talk about how some big swinging member at the trade desk got eviscerated when he messed up his numbers. A story like that can be marginally interesting if told in a gory way. But as relatable tidbits go, that had pretty much been the full gamut. Now, with Freakonomics, we dare to dream of audiences appreciating a new set of number-based anecdotes. They came up with examples where their quantitative forensics would yield something clever or fun, often exposing ironic, counterintuitive, or sordid behavior in the process. I suspect the less these examples had to do with economics, the more interesting they seemed. Be that as it may, it was gratifying to see that the modeling techniques quants rely on (like multivariate regression) have been brought to bear to tell these tales.

The Freakonomics formula is a smart one. It starts with sound research on non-traditional topics with results that were vetted in academic journals. That was Levitt’s part. Co-author Dubner is the writer. His job was to provide context, explain how results were uncovered, and sell us on why it’s all so cool. And who wouldn’t be at least mildly intrigued by patterns that show how teachers in Chicago cheated to raise their students’ test scores, and how that links them with Sumo wrestlers in Japan. They cited another example discovered in April of ’87. Evidently that year 7 million children in the US simply disappeared off the face of the earth. This was fully one-tenth of the dependent-age population. They speculated that maybe, just maybe, the new requirement from the IRS in ’87 to include a child’s SSN on the form had something to do with the massive decline in dependents.

The authors were careful to explain the methodological difficulties in making data confess. Researchers of this stripe are rarely given the luxury of a lab, where one variable at a time can be changed, holding everything else constant. Ceteris is almost never paribus in social science. I give the authors credit, too, for their interpretation of results. For instance, they explained how the old cliché in real estate that your first offer will be your best may have a lot to do with the incentive structures of the seller’s agent. Say they’re slated to get 3% of the sale price. If it’s a matter of getting 0.03 x $300,000 right now and no longer needing to show the home versus holding out for 0.03 x $310,000 at some unknown point in the future, the usual counsel is to take the first offer. They’re only foregoing a potential $300. The homeowners’ incentive is very different. Say they owe the bank $250,000. For them it’s a matter of netting $50,000 or $60,000. Not surprisingly, the data show that realtors selling their own homes keep them on the market for longer and get a higher percentage of the true value.

Some of their findings generated controversy. Read their account on the legalization of abortion and subsequent drop in crime rates 20 or so years later if you want an example. They were careful not to engage in moral calculus, but they had to know they were playing with fire.

All in all I thought their examples were interesting, but generally not the most important issues we confront today. Still, they may serve a purpose if you’re looking for cocktail party chitchat of a quantitative bent.

!!ليس اقتصاداً عجيباً فحسب وإنما اقتصاد ممتع

ستيفن لييفيت الذي يخشى التفاضل والتكامل هو في الوقت نفسه أذكى اقتصادي أمريكي حيث حصل على ميدالية جون بيتس كلارك وهي الميدالية التي تقدم كل سنتين إلى أفضل رجل اقتصاد أمريكي لا يتجاوز عمره الأربعين

"إن الأخلاق تمثل الطريقة التي يجب أن يرى الناس فيها العالم يسير، بينما يمثل الاقتصاد كيف يعمل العالم في الواقع"

هذا ما يعتقده ليفيت حيث يرى أن الاقتصاد بعد كل شيء هو علم القياس ويتألف من مجموعة من أدوات قوية ومرنة يمكن تطبيقها على قضايا مختلفة وقد كانت نتائج تطبيق ليفيت لتلك الأدوات مذهلة بحق ومنها:
أن انخفاض معدل الجريمة في التسعينيات سببه الإجهاض القانوني، وأن حوض السباحة أخطر على الطفل من مسدس، كما أنه كشف أساليب الغش لدى المدرسين ولدى مصارعي السومو....