At the core of Freakonomics is the concept of incentives. The concept of incentives is a way of explaining why human beings do things. In general, humans behave a certain way because they either perceive that behavior as offering a reward of some kind—a positive incentive, or “carrot”—or they avoid certain behaviors because those behaviors seem to lead to a punishment—a negative incentive, or “stick.” Intuitively, we all understand how incentives work: people work harder…read analysis of Incentives
Irrational Behavior, Experts, and “Conventional Wisdom”
At times, human beings behave rationally. They pursue their own best interests, protecting their health, their financial security, and their safety. However, there are many times when human beings act irrationally, harming their own interests. In Freakonomics, Dubner and Levitt show how extensively irrational thinking governs our lives, and how economic knowledge can sometimes correct irrational thinking at its worst.
Dubner and Levitt detail two main forms of irrational behavior. First, Freakonomics shows how…read analysis of Irrational Behavior, Experts, and “Conventional Wisdom”
Nature vs. Nurture
Much of Freakonomics is concerned with the difference between nature—the genetic qualities with which a human being is born—and nurture—the environmental influences that shape a human being’s character and behavior. By studying the relative influence of nature and nurture in children, the book reaches some interesting conclusions about both, while also suggesting some of the strengths and weaknesses of economics itself.
In order to assess the relative importance of nature and nurture, Levitt and Dubner…read analysis of Nature vs. Nurture
More than half of the chapters of Freakonomics take some form of crime as their subject. Throughout the book, the authors use case studies of crime as examples of important economic principles. But crime is more than just an illustration of economic ideas—it’s an important theme of Freakonomics in its own right. In general, the authors’ impartial, behavioral arguments have the effect of removing the stigma of crime and humanizing criminals.
One of the authors’…read analysis of Crime