Freakonomics by Steven D. Levitt and Stephen J. Dubner

The Slog Reviews: 10/10. This book, as The Economist put it "A delight". It is well-written yet easy to read and most captivating (one could read it in a single sitting!). The book is the product of an unconventional, creative economist and a talented journalist and as the economist admits, there is no unifying theme at all. The book is rather, a publication of the economist's investigations of the riddles of everyday life and how the world really works. The economist's underlying belief is "that the modern world is not impenetrable, is not unknowable, and is even more intriguing than we think. All it takes is a new way of thinking".

Some bits of the book worth thinking about:

1. Experts are human, and humans respond to incentives. How any given expert treats you, therefore, will depend on how that expert's incentives are set up. It is one thing to muse about experts' abusing their position and another to prove it. The best way to do so would be to measure how an expert treats you versus how he performs the same service for himself.

2. This book has been written from a very specific world-view, based on a few fundamental views: incentives are the cornerstone of modern life and understanding them is the key to solving just about any riddle.

3. Economics is at root, the study of incentives: how people get what they want, or need, esp when other people want or need the same thing. We all learn to respond to incentives, negative and positive, from the outset of life. An incentive is simply a means of urging pp to do more of a good thing and less of a bad thing. There are 3 basic flavors of incentive: economic, social and moral and very often, a single incentive scheme will include all 3 varieties.

4. Any incentive is inherently a trade off: the trick is to balance the extremes. Every incentive has a dark side. Whatever the incentive, whatevcer the situation, dishonest pp will try to gain an advantage by whatever means necessary. As W.C. Fields once said: a hting worth having is a thing worth cheating for.

5. Who cheats? Well, just about anyone if the stakes are right. Cheating is a primordial economic act: getting more for less. If economics is a science primarily concerned with incentives, it is also a science with statistical tools to measure how pp respond to those incentives. All u need are some data.

6. Information is a beacon, a cudgel, an olive branch, a deterrent - all depending on who wields it and how. Information is so powerful that the assumption of information, even if the info does not actually exist, can have a sobering effect. It is common for one party to a transaction to have better information than the other party. In the parlance of economists, such a case is known as information asymmetry. Information is the currency of the internet - it has shrunk the gap between experts and the public - but it has hardly slain the beast that is information asymmetry eg Enron.

7. Armed with information, experts can exert a gigantic leverage: fear.

8. Five terms with a positive correlation to the sale price of a house: granite, state of the art, corian, maple, gourmet while five terms with a negative correlation: fantastic, spacious, charming, !, great neighbourhood. 3 of the 5 positive terms are physical descriptions of the house and such terms are specific and straightfoward and therefore pretty useful. Fantastic meanwhile is a dangerously ambiguous adjective as is charming.

9. Of the many ways to fail on a dating website, not posting a photo of yourself is most certain. For men, a woman's looks are of paramount importance. For women, a man's income is terribly income. But a woman's income appeal is a bell-shaped curve: men do not want to be date low-earning women, but once a woman starts earning too much they seem to be scared off. For men, being short is a big disadvantage but weight doesnt matter. For women, being overweight is deadly.

10. The gulf beftween the info we publicly proclaim and the info we know is true is often vast. This can be seen in personal relationships, in commercial transactions and of course in politics.

11. Emotion is the enemy of rational argument. And as emotions go, one of them - fear- is more potent than the rest.

12. A long line of studies, including research into twins seperated at birth, had already concldued that genes alone are repsonsible for perhaps 50% of a child's personality and abilities. The 8 factors that are strongly correlated with a child's early test scores (bearing in mind poor testing in early childhood isnt necessarily a great harbinger of future earnings, creativity or happiness): the child has highly educated parents, the parents have high socioeconomic status, the child's mother was 30 or older at the time of her first child's birth, the child had low birthweight, the child's parents speak Eng at home, the child's parents are involved in the PTA and the child has many books in his house. A child's family structure, a mother not working between birth and kindergarten, the child attending "head start" the child being regularly spanked, the child frequently watching tv, the child's parents reading to him nearly every day do not have any effect. The first list describes things that parents are while the second list (the ones without any effect) are things that parents do. By the time most people pick up a parenting book, it is far too late. Most of the things that matter were decided long ago - who you are, wh om you married, what kind of life you lead. But it isn't so much a matter of what you do as a parent; it's who you are.

13. An overwhelming no of parents use a name to signal their own expectations of how successful their child will be. The name isnt likely to make a shard of difference.

14. An economist might describe a gift as a signaling mechanism that allows 1 to tell another that she (a) is thinking about him (b) cares about him and (c) wants to give him something that he'll value. With adults, an adult is free to buy whatever he wants, and presumably he knows what he likes. So ideally, you'd want to give him something he might like but doesn't know about, or some kind of guilty pleasure that he wouldn't buy for himself. Either case, u are creating value for the recipient by giving him something that is actually worth more to him than the money you spent on it.