Freakonomics Finally!

Thanks to my school teacher who generously lent me the book from his personal collection, Im now a Freakonomics aware reader 🙂 One word : Awesome.

Some pertinent points that I jotted down

  • “Teach to the test” – basing the lesson plans on questions from past years exams, which isnt considered cheating but violates the spirit of the test. Which brings me to point that most of the engineering student, X class students I know of follow this very same method to prepare for the exams. The lesson plans are however not exactly done based on previous years questions.
  • Economics is a science primarily concerned with incentives: also a science with statistical tools to measure how people respond to those incentives
  • Turning the Klan secrecy against itself, converting precious knowledge into ammunition for mockery…
  • Raw power of information – Stetson Kennedy, …
  • Power is derived in large part from the fact that information is hoarded. This is basically a case of Information Asymmetry at play.
  • Internet has vastly shrunk the gap between the experts and the public. But even in this case the devil is in the details i.e Specifics matter. Every deal can be made to look profitable and information hoarded when the specifics are not dealt with.
  • Absence of Information Induces Fear, the worst of which is the fear of immediate, imminent death. Hence people fear a terrorist attack more than a accident even thought statistically they are more prone to an accident.
  • Bombastic words are used when there are no words worth discussing. Hence we are more dubious about claims about elegant wonderful majestic programs than about 4kb sized program which run in O(n)
  • There are two major types of discrimination : Taste Based & Information based.
  • Dating websites are the most successful subscription based business on the internet
  • People on dating  surfers are very much dubious about the profiles on the sites. Their perceptions are either basically Fabulist, Narcissist, Resitant to the meaning of the “average”, Realist.
  • Regulation of a legal market is bound to fail when a healthy black market exists for the same product
  • If the product is highly potent and addictive (say cocaine), its no wonder hugely profitable markets are created practically overnight
  • The basic reality is that risks that scare people and the risks that kill people are entirely different.

I should say Levitt is just awesome. Many times it has been my doubt that most of the question dealing with human relations, society in general, can be very correctly understood by understanding the underlying economics. And frankly when we see that most of the customs and traditions are in context of the economics.

Like for example, why is it that Hindus cremate while Moslems and Christians bury? Well, Indians are more of a agrarian society and when you bury bodies an amount of cultivable land goes waste; while for nomadic, hilly terrain societies of Christians and Moslems, lands not the premium. Anycase, that was a shameless plug primarily hijacked from my dad.

Anycase, just go out and buy the book and make yourself a favor. And also keep visiting Freakonomics blog.

2 thoughts on “Freakonomics Finally!

  1. ahoy! great post! loads of cud to chew 🙂 liked the view points…
    esp ‘Economics is a science primarily concerned with incentives’ and ‘…society in general, can be very correctly understood by understanding the underlying economics. And frankly when we see that most of the customs and traditions are in context of the economics.’

    Me thinks we learn these lessons early, as kids – I could say so personally. It’s part of our psyche to want to know more than the neighbor, to appear less stupid to the superior soul next to us. Some of us recognize this need and build on it, others learn to ignore it 😛

    And thanks for the link!

  2. @sabs
    dude, you must read Freakonomics book then. If this is cud, then the book itself is the huge green meadow.

    as you’ve already put that is just one part of the system of incentives. as kids, it is a social incentive we have to appear the best of the best for being appreciated. the financial/material incentives are not long off, you get to get good marks from parents for being smart, an extra candy. but we also learn to find the negative incentive, that of moving away from your peer group for being smarter than them and they getting overshadowed consistenly by us…

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