Friday, June 14, 2013

Freakonomics falls flat

I finally got around to picking up that fabled book at the library. The one titled Freakonomics that asked such tantalizing questions as "Why does a drug dealer still live at home with his mother?" So I sat down to begin reading it and put it down in favor of finishing another book. When I returned to this book with a fresh mind, I was able to finish it with a feeling of drudgery rather than of being an eye witness to an expose.
The book doesn't tie together each chapter, but it isn't supposed to and we are warned of this. We're also given a snippet from a glowing review of the book at the start of each chapter as if to constantly remind us that the book is great stuff. There's just one problem.
Most of the links tying the juxtapositions together ("How is a schoolteacher like a sumo wrestler," "How is the Ku Klux Klan like a group of real estate agents") are so spider silk-thin that you could make the assertion about practically any two groups.  Answers: they both have incentives to cheat, and they both closely control information.  How broad is that paint brush?
What is interesting about the book is the information it provides in the chapters, and not necessarily the conclusions. Through the chapters, we learn the issues involving teachers cheating for EOG testing, how the decline of the Ku Klux Klan was precipitated by Superman, reasons for decline of crime, and children's names being a reflection of the socioeconomic status they belong to.
The chapter that I enjoyed the most dealt with crack cocaine dealers. The bulk of the chapter was based on field research conducted by a grad student in the Chicago area who actually embedded himself into a gang to  understand how it operated. And as he found out, it closely mirrored a franchise, where the local gang paid a percentage of revenue to the head gang in order to operate under their name.
The end of the chapter segues into the following chapter dealing with declining crime. The reason for this, the authors conclude, is that people were having more abortions which effectively brought about the reduction in crime since there weren't as many kids in the next generation growing up into criminals. The authors compare different cohorts in different states to show that the crime reduction was correlated with the legalization of abortion. States that legalized early noted a decreased drop, and states that legalized later noted a drop after their legalization.
I remember reading this and thinking that something didn't really jive. Attempting to control for a bunch of different factors in a study is hard enough, and it wasn't stated just how long the study was conducted, nor did it point to any other study supporting their findings. So I read the conclusion with not just a grain but a spoonful of salt.
The Economist published an article on the same issue that arrived at a different conclusion. Conducted by two economists in Boston, they found a flaw in the test conducted with the authors' data and discovered that the effects of abortion on crime were cut in half with the original data and reduced by two thirds when using updated numbers. The economists ultimately decided that they couldn't answer the question of whether abortion reduces crime or not in the scope of their study. A statistician would put it bluntly as a "failure to reject the null hypothesis," which means that you can't prove your alternative hypothesis, which in this case is abortions cause fewer crimes.
Overall the book fell flat for me. The title is misleading; it should read something like, "Pell-Mell Random Factoids." The most exciting thing about the book is the questions asked on the dust cover. The answers, however, are far more routine. I believe the authors are trying to convey some of the principles of economics in an interesting setting, but like I said, the conclusions they reach as to why these things happen isn't really groundbreaking. Nothing exciting, new, or revolutionary is put forth in the book. My recommendation? Pick up Milton Friedman's Free to Choose instead of this book. 
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