Steven D. Levitt: Freakonomics

Steven D. Levitt and Stephen J. Dubner are economists who use statistical analysis to answer very common questions. And sometimes the answers aren't anything like what you would expect them to be.

While this is not technically a "conservative book" and Levitt is certainly not a "conservative author," I include it here because this book so enrages liberals. But to be fair about it... parts of the book also enrages conservatives too.

The book is a collection of 'economic' articles written by Levitt, an expert who has already gained a reputation for applying economic theory to diverse subjects not usually covered by "traditional" economists; he does, however, accept the standard neoclassical microeconomic model of rational utility-maximization.

In Freakonomics, Levitt and Dubner argue that economics is, at root, the study of incentives.

The book's topics include:
Chapter 1: Discovering cheating as applied to teachers and sumo wrestlers
Chapter 2: Information control as applied to the Ku Klux Klan and real-estate agents
Chapter 3: The economics of drug dealing, including the low earnings of crack dealers
Chapter 4: The role legalized abortion has played in reducing crime.
Chapter 5: The negligible effects of good parenting on education
Chapter 6: The socioeconomic patterns of naming children

One example of the authors' use of economic theory involves demonstrating the existence of cheating among sumo wrestlers. In a sumo tournament, all wrestlers in the top division compete in 15 matches and face demotion if they do not win at least eight of them. The sumo community is very close-knit, and the wrestlers at the top levels tend to know each other well.

The authors looked at the final match, and considered the case of a wrestler with seven wins, seven losses, and one fight to go, fighting against an 8-6 wrestler. Statistically, the 7-7 wrestler should have a slightly below even chance, since the 8-6 wrestler is slightly better. However, the 7-7 wrestler actually wins around 80% of the time. 

Levitt uses this statistic and other data gleaned from sumo wrestling matches, along with the effect that allegations of corruption have on match results, to conclude that those who already have 8 wins collude with those who are 7-7 and let them win, since they have already secured their position for the following tournament.

Despite round condemnation of the claims by the Japan Sumo Association following the book's publication in 2005, the 2011 Grand tournament in Tokyo was cancelled for the first time since 1946 because of allegations of match fixing.

The authors attempt to demonstrate the power of data mining. Many of their results emerge from Levitt's analysis of various databases, and asking the right questions. The authors hypothesize that various incentives encourage teachers to cheat by assisting their students with multiple-choice high-stakes tests.

Such cheating in the Chicago school system is inferred from detailed analysis of students' answers to multiple choice questions. But first Levitt asks, "What would the pattern of answers look like if the teacher cheated?" The simple answer: difficult questions at the end of a section will be more correct than easy ones at the beginning.

Dubner and Levitt

Perhaps the most controversial part of the book is Chapter 4, which uses statistical data to prove that the legalization of abortion in 1973 resulted in fewer neglected and unwanted children, and the net result was that 20 years later there was a dramatic decrease in the crime rate.

As uncomfortable as that theory sounds, it is hard to refute. Conservatives claimed that the crime rate came down due to "right to carry" laws and tougher sentencing guidelines. Liberals claimed that the crime rate went down due to gun restrictions like the Brady Bill. It turns out they were both wrong. The truth was... an entire generation of criminals simply wasn't born.