BOOK REVIEW: “SuperFreakonomics” by Steven D. Levitt & Stephen J. Dubner (2009)

Freakonomics was a wonderfully refreshing book that gave a clear insight into some of the idiosyncrasies of human behavior. As any film critic will know, writing a good sequel is a very difficult task indeed. Unfortunately, this seems to have been the case for the two authors of this book. 


  

Key words

Economics, entertainment, global warming, terrorism, religion, health care, altruism, psychology, University of Chicago, Steven Levitt, Stephen Dubner

Summary

As good as Freakonomics is, the follow up just isn’t quite up to the standards they originally set for themselves. The advertising for the book says that the authors, Steven Levitt and Stephen Dubner “look deeper, question harder and uncover even more hidden truths about our world, from terrorism to shark attacks, cable TV to hurricanes.  They ask, among other things: 

  • What’s a sure-fire way to catch a terrorist?
  • Are people hard-wired for altruism or selfishness?
  • Which cancer does chemotherapy work best for?
  • Why is combating global warming easier than we think?”

And yet, having read the book I am totally incapable of spontaneously answering any of these questions. Clearly, there was limited impact. The best that could be said is that it is a nice gentle read that will get you through a boring journey. It will give you a couple of nice little stories as well such as how cars were originally seen as an environmental miracle.

One saving grace of this book is the conclusion. Research on capuchin monkeys showed that they suffered from what economists know as ‘loss aversion.’  This means we place a higher value on something we lose than something we gain. For the monkeys the pain of losing a grape was greater than the pleasure of gaining one. This, they say, “makes them statistically indistinguishable from most stock-market investors”. You can draw your own conclusions from there.


  

Interesting quotes from the book:

People respond to incentives.

 1 of every 140 miles is driven drunk, or 21 billion miles each year. There is just one arrest for every 27,000 miles driven while drunk. Each year, more than 1,000 drunk pedestrians die in traffic accidents. A drunk walker is eight times more likely to get killed than a drunk driver. (NOTE: THIS DOES NOT MEAN YOU SHOULD DRINK AND DRIVE!)

 51 percent of Indian men said that wife-beating is justified under certain circumstances; more surprisingly, 54 percent of women agreed – if, for instance, a wife burns dinner or leaves the house without permission. The women who recently got cable TV were significantly less willing to tolerate wife-beating, less likely to admit to having a son preference, and more likely to exercise personal autonomy.

A New Yorker was nearly twice as likely to die from a horse accident in 1900 than from a car accident today

At the turn of the twentieth century, some 200,000 horses lived and worked in New York City, or 1 for every 17 people. In 1900, horse accidents claimed the lives of 200 New Yorkers, or 1 of every 17,000 residents. In 2007, meanwhile, 274 New Yorkers died in auto accidents, or 1 of every 30,000 residents. This means that a New Yorker was nearly twice as likely to die from a horse accident in 1900 than from a car accident today. The automobile, cheaper to own and operate than a horse-drawn vehicle, was proclaimed “an environmental savior.”

 In general, Krueger found, “terrorists tend to be drawn from well-educated, middle-class or high-income families.” It may be that when you’re hungry, you’ve got better things to worry about than blowing yourself up.

 The probability that an average American will die in a given year from a terrorist attack is roughly 1 in 5 million; he is 575 times more likely to commit suicide. In just the three months following the attacks, there were one thousand extra traffic deaths in the United States. Why? One contributing factor is that people stopped flying and drove instead.

 Thomas Jefferson and John Adams each valiantly struggled to forestall death until they’d reached an important landmark. They expired within fifteen hours of each other on July 4, 1826, the fiftieth anniversary of the ratification of the Declaration of Independence.

 Two Australian scholars found that when their nation abolished its inheritance tax in 1979, a disproportionately high number of people died in the week after the abolition as compared with the week before.

Are eyes 3 times more effective than flowers?

 Melissa Bateson of University of Newcastle upon Tyne created ‘honesty box’ to collect payment for beverages. The prices never changed, but the small photograph atop the list did. On odd weeks, there was a picture of flowers; on even weeks, a pair of human eyes. When the eyes were watching – Bateson’s colleagues left nearly three times as much money in the ‘honesty box’.

 Most giving is, as economists call it, impure altruism or warm-glow altruism.

Robert McNamara was right: the seat belt would eventually save many lives. But the key word here is ‘eventually’. The brilliant rationalist had encountered a central, frustrating tenet of human nature: behavior change is hard. Congress began setting federal safety standards in the mid-1960s, but even fifteen years later, seat belt use was laughably low: just 11 percent. Seat-belt use rose to 21 percent by the mid-1980s, 49 percent by 1990, 61 percent by the mid-1990s, and today it is over 80 percent. Seat belts reduce the risk of death by as much as 70 percent; since 1975 they have saved roughly 250,000 lives. And seat belts, at about $25 a pop, are one of the most cost-effective lifesaving devices ever invented.

 Until the mid-nineteenth century, life insurance was considered “a profanation,” as the sociologist Viviana Zelizer writes, “which transformed the sacred event of death into a vulgar commodity.”

Hospital personnel wash or disinfect their hands in fewer than half the instance they should

A raft of recent studies have shown that hospital personnel wash or disinfect their hands in fewer than half the instance they should. In a 1999 report called ‘To Err Is Human’, the Insitute of Medicine estimated that between 44,000 and 98,000 Americans die each year because of preventable hospital errors – more than deaths from motor vehicle crashes or breast cancer. 

 We hope that after reading this book, you’ll realize there is a whole different breed of economist out there – microeconomists.

SuperFreakonomics Steven Levitt Stephen Dubner Business School  Grenoble

See also:

    

Other Book Reviews

Superfreakonomics by Steven D Levitt and Stephen J Dubner

The Guardian: “If ever two writers were likely to suffer from “difficult second book” syndrome, it’s Steven Levitt and Stephen Dubner, authors of the smash-hit Freakonomics, which made them the rock stars of the economics world.”

Neil Irwin’s book review of ‘Superfreakonomics’

The Washinghton Post: “Back in 2005, they wrote “Freakonomics,” a wildly successful book brimming with interesting stories about why incentives matter and how actions have unintended consequences. Indeed, incentives do matter, and actions (or publications) do have unintended consequences: Their book made economists around the world more inclined to come up with cute little analyses of the business of being a drug dealer or the impact of a first name on a child’s success.”

The Secrets of SuperFreakonomics

The Wall Street Journal Blogs: ““SuperFreakonomics,” by the economist Steven Levitt and writer Stephen Dubner, is not only a book with mind-blowing ideas, innovative research and quality investigative journalism, it’s also a story about creativity and what it takes to get the mindset to turn conventional concepts upside down. The authors have found their stride with “SuperFreakonomics.” As good as the first “Freakonomics” was, I found this read much more enjoyable and interesting.”

  

Defines what constitutes a luxury product and how companies develop their strategies to profit from this status. Wonderful essay that lays out the benefits of international trade. Classic book that gives the ins and outs of creating new markets.

A fun book that show why humans don’t always behave in a rational manner. An excellent history of finance. Easy to read and lots of interesting examples. Learn about The IKEA Effect, The Baby Jessica Effect and why large bonuses make CEOs less effective.

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