I finished reading a used copy of Freakonomics over the weekend. If you haven’t read a review of this book, follow this link
I thought this book was interesting, but I don’t know how highly I would recommend it. His use of statistics make it an intersting read and he generally avoids, and actually points out, the correlation vs. causality dicotomy. His correlations on a number of different items are interesting and are contrary to ‘common wisdom’. He avoids the morality of his points and simply make observations about the different data.
In the introduction, he suggests that there are several points he is trying to make (p13):
- Incentives are the cornerstone of modern life
- Conventional wisdom is often wrong
- Dramatic effects often have distant, even subtle causes.
- “Experts” – from criminologists to real-estate agents – use their informational advantage to serve their own agenda
- Knowing what to measure and how to measure it makes a complicated world much less so
On those points, I found the discussion of incentives interesting and obviously, given the name of this block, I find the 3rd item pretty interesting.
On incentives, he suggests that there are three types of incentives: economic, social, and morale. One anecdote that I thought was interesting was that a study with a day-care in Israel did a study where they were trying to reduce the number of people picking up their kids late, so they imposed a small fine. The number of people now picking up their child late increased becuase the incentive had shifted from a moral one to an economic one and the economic cost was not that great. When they removed the fine, the number stayed high.
Anyway, if you happen to find a copy, it’s worth taking a look at.
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