Last year, I said some nice
things about Steven Levitt and Stephen Dubner, or at least about an article
they wrote in the New York Times Magazine:
The best piece of all in the magazine, however, doesn’t look big, it looks
small. Stephen Dubner and Steven Levitt have found an absolute gold mine in
Paul F., a trained economist who now runs a bagels-and-doughnuts service for
local offices. His business runs on the honour system: throw a buck in the
box for a bagel, or 50 cents for a doughnut. And, of course, he’s kept detailed
data on delinquency rates, which go up when the weather is bad, or Christmas
is nigh, or even when the office exceeds a certain size. There are some wonderful
results…
The two Steves are very different individuals. Stephen
Dubner is a journalist and regular contributor to the New York Times Magazine
who wrote an article about Steven Levitt in 2003. From that article first sprang
the bagel story, and now a fully-fledged book, Freakonomics.
(In the book we get the bagel article all over again, except for now Paul F.
is graced with his full name: Paul Feldman.) The publishers liked my blog about
the article so much that they sent me an advance copy of the book; I liked the
article so much that I very much looked forward to reading it. A match made
in heaven, really – or at least in the blogosphere.
Steven Levitt is much
better known: mention his name to anybody even peripherally associated with
economics, and they have a tendency to get extremely excited. Levitt is not
a macroeconomist at all; rather, he’s an expert at microeconomics,
where he tries to find statistically interesting or important patterns in everyday
things. Just scrolling down his list
of recent publications is mouthwatering: whose interest wouldn’t be piqued by
a peer-reviewed article entitled "A Test of Mixed Strategy Equilibria:
Penalty Kicks in Soccer"?
In fact, Levitt has a strong interest in both sports and sports betting: he’s
shown that simply by betting on home underdogs in NFL games, people can break
even, and he has a secret plan (really!) to make money betting on horses. Unfortunately,
none of that material makes it into the book.
Rather, the aim of the book is to popularize Levitt’s work more generally,
and to introduce his brand of thinking to the general public in a format which
was slightly longer lasting than an article for the New York Times magazine.
Levitt would provide the ideas, and Dubner would provide the prose.
The book also, quite explicitly, aims to capitalize on the success of Malcom
Gladwell’s The Tipping Point, or Oliver Sacks’s The Man Who Mistook
His Wife For A Hat: books where anecdotal evidence is corralled in support
of broader, more empirical, and yet extremely original, ways of looking at the
world.
There’s a problem, however: it turns out that while Levitt does have a very
interesting way of looking at the world, he has very little in the way of broader
theses which he might wish to support. The authors make no bones about this:
Most books put forth a single theme, crisply expressed in a sentence or two,
and then tell the entire story of that theme… This book boasts no such unifying
theme. We did consider, for about six minutes, writing a book that would revolve
around a single theme – the theory and practice of applied microeconomics,
anyone? – but opted instead for a sort of treasure-hunt approach.
What that means, in practice, is a series of disjointed chapters, some of which
are much better than others. In fact, it’s the earlier ones which are better
than the later ones, which means that readers are likely to come away disappointed,
as though they were promised something which was never delivered. And due to
its disjointedness, if someone is asked what the book is about, they’re not
really going to be able to come up with an answer. The subtitle of the book
is "A Rogue Economist Explores the Hidden Side of Everything", but
that doesn’t really help us all that much – especially since Levitt, winner
in 2003 of the John Bates
Clark Medal (previous winners: everyone from Milton Friedman to Paul Krugman
and Larry Summers), is no one’s idea of a "rogue economist".
In fact, Levitt is entirely unthreatening to the economic establishment, which
is one reason why he and his co-author have to create a straw man, in the form
of something called "the conventional wisdom", against which Levitt
can valiantly fight. Yet after telling us in their introduction that "the
conventional wisdom is often wrong", the authors have no problem relying
on it whenever they feel like it.
The most egregious form of conventional wisdom is probably the urban myth:
something which millions of people believe, but which is entirely fictional.
Kidney harvesting,
that sort of thing. Once you know about urban myths, you generally know them
when you see them, and when my friend Paul told me a couple of years ago about
a friend of his who worked at a hospital and who witnessed an African-American
woman naming her daughter Shithead (pronounced "Shateed"), I didn’t
think it was the literal truth.
But here’s Levitt and Dubner:
Roland G Fryer Jr, while discussing his names research on a radio show, took
a call from a black woman who was upset with the name just given to her baby
niece. It was pronounced shuh-TEED but was in fact spelled "Shithead"…
OrangeJello, LemonJello and Shithead have yet to catch on among the masses,
but other names do… It would be an overstatement to suggest that all parents
are looking – whether consciously or not – for a "smart"
name or a "high-end" name. But they are all trying to signal something
with a name, whether the name is Winner or Loser, Madison or Amber, Shithead
or Sander.
In other words, when it suits them, Levitt and Dubner lap up the conventional
wisdom to the point at which they perpetuate something which has all the markings
of an urban myth. (Phone-in talk shows on the radio are one of the prime propagating
vectors of these things.) Most likely, the woman who phoned in genuinely believed
that at least one black woman (a "friend of a friend", no doubt) had
named her daugher Shithead, and she simply personalized the anecdote for the
sake of making it more immediate to the radio audience. That’s the way that
urban myths work: it’s always a friend of a friend, never a friend of a friend
of a friend. But Roland Fryer was simply laughing, so he didn’t check her claim
out, and Levitt and Dubner have now given a semblance of academic legitimacy
to what is essentially a racist stereotype.
In fact, there’s more than a little editorialising going on throughout the
book, often for no particular reason. In what I expect is going to be the jacket
copy on the hardback, we’re given a list of "provocative questions"
that Levitt asks, like, um, "Why do we spend more on chewing gum than on
campaign contributions?" In the event, that question is never really asked,
let alone answered. Rather, we get a section of the introduction which begins
like this:
Of all the truisms about politics, one is held to be truer than the rest:
money buys elections.
It ends like this:
What about the other half of the election truism – that the amount
of money spent on campaign finance is obscenely huge? In a typical election
period that includes campaigns for the presidency, the Senate, and the House
of Representatives, about $1 billion is spent per year – which sounds
like a lot of money, unless you care to measure it against something seemingly
less important than democratic elections.
It is the same amount, for instance, that Americans spend every year on chewing
gum.
Now it might well be true that "money buys elections" is conventional
wisdom. But I don’t believe that most people think that it is "truer"
than all other bits of political conventional wisdom, such as, say, the "divided
nation" hypothesis. And as for the chewing-gum factoid, a close reading
reveals that what the authors are doing is taking a whole election cycle –
four years, I would assume – and working out the annual spending per cycle.
In a presidential election year like 2004, it’s probably safe to say that Americans
spent much more on political donations than they did on chewing gum.
Normally, I would be much more forgiving of such rhetorical excesses than I
am here. But this is a book which claims to be solidly rooted in empirical and
indubitable data. The running theme of the book is "you might think
X, but in fact, Y". So lazy assumptions are more egregious here
than they are normally.
Levitt and Dubner like to get holier-than-thou when others make mistakes. At
one point, they eviscerate a homeless advocate named Mitch Snyder, for saying
that there were 3 million homeless Americans:
When Snyder was pressed on his figure of 3 million homeless, he admitted
that it was a fabrication… It may be sad but not surprising to learn that
experts like Snyder can be self-interested to the point of deceit. But they
cannot deceive on their own. Journalists need experts as much badly as experts
need journalists… Working together, journalists and experts are the architects
of much conventional wisdom.
So what happens when Dubner and Levitt – a classic pairing of a journalist
and an expert – get together? It may be sad but not surprising to learn
that even they can come up with decidedly dodgy numbers. Here’s one:
Economists have a curious habit of affixing numbers to complicated transactions.
Consider the effort to save the northern spotted owl from extinction. One
economic study found that in order to protect roughly five thousand owls,
the opportunity costs – that is, the income surrendered by the logging
industry and others – would be $46 billion, or just over $9 million
per owl.
When alarmist figures in the billions start getting quoted, I immediately start
getting suspicious. So I
went to the footnotes, which cited a paper by Jason Shogren from which, I believe,
this
is extracted. Here’s what Shogren actually writes:
Opportunity costs have been estimated for a few high-profile, regional ESA
conflicts such as the northern spotted owl. One study estimated that an owl
recovery plan that increased the survival odds to 91 percent for a population
of about 1,600 to 2,400 owl pairs would decrease economic welfare by $33 billion
(1990 dollars), with a disproportionate share of the losses borne by the regional
producers of intermediate wood products, a relatively small segment of the
population (Montgomery et al. 1994). If the recovery plan tried to push a
goal of 95 percent survival odds, costs increased to $46 billion. Another
study estimated the short-run and long-run opportunity costs to Washington
and Oregon of owl protection at $1.2 billion and $450 million (Rubin et al.
1991).
In other words, Levitt and Dubner have taken the very highest estimate from
Shogren’s paper, one which Shogren didn’t even come up with himself, and used
it uncritically. They could have used the $1.2 billion and $450 million estimates
instead, of course, but chose not to for reasons we can only guess at.
I also sent Shogren an email, asking him what he thought of this use of his
number. He said that the $46 billion was "an outside estimate," and
added:
We used the number to illustrate what little we do know about costs of the
Endangered Species Act. Other numbers we cite in the paper say that the ESA
is more about transfers of wealth (from agricultural to recreation) than about
the loss of wealth.
The really weird thing is that the factoid aboout the spotted owl seems to
have been dropped into the book utterly randomly: it’s there only to illustrate
the broader point that economists try to measure all manner of different things.
But why would Levitt and Dubner concentrate only on the costs of saving the
spotted owl, while ignoring the benefits? And why would they pick a number which
seems designed to shock, rather than a much more reliable number which is less
shocking, like the cost per life saved of installing various safety features
on roads or subways? The broader context, after all, is that of abortion, and
whether it’s possible to quantify the costs and benefits of abortion, after
taking into account its role in lowering the crime rate. Saved lives, in this
context, seem far more germane than saved owls.
But throughout the book, the authors veer wildly between presenting Levitt’s
research and presenting striking information (Shithead! $46 billion! Chewing
gum!) seemingly just for the sake of showing readers how crazy this world is.
When Levitt and Dubner venture into the anecdotal, then, this is a weak book.
I’m sure that the decision to do so was based on conventional wisdom within
the publishing world: that if you want to write for a mass audience about empirical
ideas, then you have to boil everything down to anecdote. So much for ignoring
conventional wisdom.
The empirical parts of the book are much stronger. Chapter 1, for instance,
entitled "What Do Schoolteachers and Sumo Wrestlers Have in Common?",
gives a number of good examples of when people cheat, and how statisticians
like Levitt can catch them doing so. First are Chicago schoolteachers: by looking
at raw test results, Levitt could see where they had altered their pupils’ scores
before handing the tests in. Then there are the sumo wrestlers: it turns out
that pairs of them often engage in deals where one wrestler will win one match
and the other will win the next, when such a deal will keep the first wrestler
in the top leagues. Again, this is quite clear from the statistical data, if
you know where and how to look.
Even in this chapter, however, with three different examples of Levitt’s work
(here’s where we find the bagel guy), the authors aren’t happy unless they add
in some extra colour. So we get padding, too: apparently another teacher cheated,
at the University of Georgia, in 2001. There was no statistical analysis involved
in his capture, and his story doesn’t help the structure of the chapter at all,
but we’re told about it anyway: if we’re interested in cheating schoolteachers
in Chicago, might we not be interested in cheating university teachers in Georgia?
I think the inclusion of the story betrays a certain lack of faith in how compelling
Levitt’s story really is. While Levitt is interested in ways of catching cheats,
the chapter’s attention keeps wandering from that subject, which means we end
up learning about other forms of cheating, as opposed to other forms of detecting
cheating.
Elsewhere, we’re treated to a mildly diverting treatise on the economics of
fear, first introduced in Chapter 2, when the authors discuss how a very small
number of lynchings managed to cow an entire race into submission during the
1940s.
There are few incentives more powerful than the fear of random violence –
which, in essence, is why terrorism is so effective.
This is expanded upon in Chapter 5:
Fear best thrives in the present tense. That is why experts rely on it; in
a world that is increasingly impatient with long-term processes, fear is a
potent short-term play. Imagine that you are a government official charged
with procuring the funds to fight one of two proven killers: terrorist attacks
and heart disease. Which do you think the members of Congress will open up
the coffers for? The likelihood of any given person being killed in a terrorist
attack are infinitessimally smaller than the likelihood that the same person
will clog up his arteries with fatty food and die of heart disease. But…
Let’s put to one side the fact that "infinitessimally smaller" actually
means "of roughly the same size". This is all prefatory to Levitt’s
determination to teach parents that swimming pools are more dangerous than guns,
and that we ought to be more afraid of everyday killers than we are of rare
occurrences like terrorist attacks. The problem here isn’t that Levitt is wrong;
in fact, he’s absolutely right. But he’s hardly a lone warrior in this war.
Here’s
Senator Joseph Biden of Delaware, in this week’s New Yorker:
I would say to John [Kerry], ‘Let me put it to you this way. The Lord
Almighty, or Allah, whoever, if he came to every kitchen table in America
and said, “Look, I have a Faustian bargain for you, you choose. I will
guarantee to you that I will end all terror threats against the United States
within the year, but in return for that there will be no help for education,
no help for Social Security, no help for health care.” What do you do?’
“My answer,” Biden said, “is that seventy-five per cent
of the American people would buy that bargain.”
So Levitt gets it, and Biden gets it. But Biden puts it in a more arresting
way, and he doesn’t rely on vaguely inchoate notions like "a world that
is increasingly impatient with long-term processes". And he certainly
doesn’t provide, at the end of a list of "Suggested Interview Questions",
this:
14. You say your ultimate aim is to figure out a way to use economic data
to fight terrorism. How would you do it?
Levitt, it seems, wants to have his cake and eat it: on the one hand he tells
us that we shouldn’t be nearly as afraid of terrorism as we are, and then on
the other he (or his publicist) says that his "ultimate aim" is to
fight terrorism.
And just like the University of Georgia’s cheating professors, the stuff on
fear serves as extra padding. In the first chapter there are two full pages
of alphanumerical data, which we’re actually given, rather than simply told
about. The final chapter is much worse: it has no fewer than 26 different tables
listing various boys’ and girls’ names, sorted according to popularity, sex,
what they indicate about the race of the child, what they indicate about the
level of education of the child’s parents, and so forth. There’s even a table
telling us that the mother of the average Jasmine has 12.88 years of education,
compared to 11.94 years of education for the average Jazmine’s mother and 13.23
years of education for the average Jasmyn’s mother.
All of these tables do a great job at taking up space in this very short book,
but their dialectical purpose, I have to admit, defeats me. The beginning of
the chapter (subtitile: Would A Roshanda By Any Other Name Smell As Sweet?)
includes one marginally interesting empirical result: that a black child with
a distinctly black name does not suffer quantifiable economic disadvantage in
comparison with an identical black child with a distinctly white name. Once
we’ve discovered that, however, we then go on a veritable fun-ride of naming
conventions and correlations, to no obvious end. Here’s the final conclusion
of the final chapter (if you don’t include the Epilogue):
What the California names data suggest is that an overwhelming number
of parents use a name to signal their own expectations of
how successful their children will be. (Bold emphasis mine; italic emphasis
the authors.)
Nowhere in the chapter have we been told about the numbers of parents who choose
various different types of name, or the numbers who don’t. There have been lots
of lists of names, but no numbers at all: the whole chapter reads as though
if you pile up enough anecdote, you can generate empirical conclusions by sheer
mass alone.
It conceivable, although I doubt it, that there’s something in the data which
supports the authors’ conclusion. There’s certainly nothing in the book, however.
If they know how many parents use a name to signal their own expectations of
how successful their children will be, why don’t they tell us? And if they don’t
know what the number is, how do they know that the number is overwhelming?
One of the problems is that by this point in the book, the authors have seemingly
run out of Levitt studies to talk about. There were three in the first chapter,
you’ll recall; there are two in Chapter Two – a study of how estate agents
get higher prices for their houses, and another on discrimination in the TV
program The Weakest Link. In Chapter Three there’s one, on the economics
of a gang of crack dealers. Apparently it’s much the same as the economics of
McDonald’s.
Chapter Four brings together Levitt’s other studies on crime: how adding policemen
brings it down, and how it’s related to both the crack epidemic and to abortion
rates. Chapter Five barely touches on Levitt research; one study about the black-white
test score gap is mentioned. And Chapter Six, as we have seen, starts with Levitt
research on the consequences of having a distinctively black name, and then
sets off into uncharted territory.
As the amount of empirical research underpinning each chapter slowly ebbs away
over the course of the book, the authors are forced to cast their net ever wider
for interesting, if dubiously relevant, anecdotes. We’re given a potted history
of the Ku Klux Klan. We find which words correlate with high prices in real-estate
ads. We learn how to get a date from online dating sites. We’re asked what crack
cocaine has in common with nylon stockings.
And, at the beginning of each chapter, we get a little excerpt from Dubner’s
original profile of Levitt, including some extremely personal information which
felt to me at least rather gratuitous. By the end, we’ve learned not only that
Levitt lost his firstborn son to pneumococcal meningitis, but also that his
coauthor on one paper, Roland Fryer, was abandoned by his mother, beaten by
his alcoholic sex-criminal father, and became a gun-toting drug dealer before
turning his life around and ending up at Harvard.
This isn’t economics, and it isn’t freakonomics. It’s prurient biography masquerading
as illuminating anecdote.
Which brings me to the question of what, exactly, these anecdotes
are purportedly illuminating. The authors go to great pains to say that "there
is no unifying theme" to the book, but I’m not sure that’s true. Underneath
it all, I definitely detect a right-libertarian stance, which is all the more
noticeable for the authors’ protestations that it isn’t there. Here’s an excerpt
from the introduction to the abortion chapter:
Conservatives were enraged that abortion could be construed as a crime-fighting
tool. Liberals were aghast that poor and black women were singled out. Economists
grumbled that Levitt’s methodology was not sound. As the media gorged on the
abortion-crime story, Levitt came under direct assault. He was called an ideologue
(by conservatives and liberals alike), a eugenicist, a racist, and downright
evil.
In reality, he seems to be very much none of those.
That, I think, is what is known as setting the bar very low. I’m sure that
Levitt is not downright evil, nor is he racist, and nor is he an ideologue.
But over the course of the book, the authors do seem to have been spending quite
a bit of time in the shadow of Ayn Rand. (Levitt is at Chicago, don’t
forget.) From reading the book, we learn that:
- Big Government is bad, especially in its more lefty manifestations: look
at those cheating Chicago public schoolteachers, or the insane cost of the
Endangered Species Act. Left-wingers are really bad: look at the
made-up numbers of that homeless advocate. Right-wingers are also bad, but
maybe not as bad: the Trent Lott affair is referred to in the table
of contents with the question "Is Trent Lott more racist than the average
Weakest Link contestant?" (The answer, one assumes from the
question, is no.) And if you’re worried about the influence of money in politics,
don’t be: there’s barely any.
- If you’re relying on anybody else to make your life better, your faith is
probably misplaced. Doctors, real-estate agents and other experts are basically
self-interested. Even your parents might want to make your life better,
but in fact they aren’t "likely to make a shard of difference,"
whether they’re choosing schools, buying car seats, or choosing names. Our
destiny is largely set at birth: who our biological parents are is much more
of a determining factor than anything else. If your parents are poor and black,
they’re very likely to give you a ridiculous name, and you are relatively
likely to become a criminal.
- Some individuals, however, transcend their destiny. Steven Levitt "is
the guy who, in the slapstick scenario, sees all the engineers futzing with
a broken machine – and then realizes that no one has thought to plug
it in." Stetson Kennedy had "a stroke of brilliance" when he
leaked secret Klan information to The Adventures of Superman radio
show and became "the single most important factor in preventing a postwar
revival of the Ku Klux Klan in the North". Roland Fryer went from gangbanger
to Harvard economist.
At heart, Freakonomics is not a book about economics at all: it’s
a book about a hero who can ask the right questions and uncover the truth. Once
you’ve read it, you’ll know lots of interesting facts you didn’t know before.
But it won’t make you stop and think (stopping and thinking is the job of the
hero), and it certainly won’t "literally redefine the way we view the modern
world," as the jacket copy has it. You know how that crack gang was just
like McDonald’s? Well, this book is too. You finish it off quickly, but end
up vaguely dissatisfied: all the added sweeteners and calories serve to mask
the fact that there’s very little protein or nutritional value.
If you’re interested in Steven Levitt the person, then by all means read Freakonomics:
you’ll learn a decent amount about him and his interests. If you’re interested
in his work, however, I’d advise waiting for his next book, or maybe trying
to track down his original papers. This short and hurried book is not the book
you’re looking for.
And
