Superfreakonomics – A Review

I will be first to admit I first fell in love with economics thanks to Levitt and Dubner. The first Freakonomics book transformed my view of economics, from a drab and dull (and dry) subject, to something far more interesting. I guess my career path wouldn’t have been as an economist, if I had never read the book.  4 years on, I am now a proper economist (still working towards my PhD though), and Levitt and Dubner has done it again, and had come out with the sequel freakquel to Freakonomics, called Superfreakonomics.

I frequently read back to the original Freakonomics, to see if my level of understanding of economics is up to par. I told myself, that if I can work out the methods the economists come to their conclusion by myself and just the data, I would have made it. By 2007, I was able to reverse engineer the findings, and the way the academics think in Freakonomics (with a little cheatcode known as JSTOR and other academic journal sources).

Anyways, I recently bought and read half of Superfreakonomics while waiting for a business meeting to start. I promptly came home and read the other half in the bath tub. And I like the book. If anything, Levitt and Dubner romanticizes the economics profession. It was a good reminder why I had read economics in university – to be able, and I quote them, “…cold blooded enough to sit around and calmly discuss the trade-offs involved in… catastrophes”.

Of course, now that I am working, doing analysis, nothing is as it seems in both Freakonomics books. The commercial work environment is a highly political arena, and we economists in general don’t get to do fun stuff as described in Freakonomics as frequently as we’d like to. Sometimes, when we come to a conclusion that is not favourable to the company, some clever things have to be done to the numbers (and yes, from reports from my friends who are working, every company (sample size of 4) does, to some degree, some fudging of numbers in their analyses).

Anyway, I have digressed. Back to Superfreakonomics. I feel that this book has content that are better than the previous books, in the sense that it uses more traditional economic concepts than the previous book did. It felt like Tim Harford had possessed the authors – because the book on many occasions, felt like it was written by Harford.

Steve Levitt, if you read his academic articles, is firmly grounded in economics. The main reason why the first Freakonomics is such a pleasure to read is because, I suspect of Stephen Dubner. Economists do not have a reputation for writing – most economic writings sound highly jargon-ish, and even I myself have fallen into the trap. A few good writers do spring to mind – Ronald Coase for example wrote “…islands of conscious power in this ocean of unconscious cooperation like lumps of butter coagulating in a pail of buttermilk”, which is poetic, but clearly shows its age.

So, a clearly written book, written for easy understanding with modern language is very much welcome (I had spent my last semester dissecting Chamberlin’s Theory of Monopolistic Competition and I really don’t want to read another economics article that was written in the 1920s or 1930s; those people have strange language.). Of course, it is the ease-of-access that is what makes the book so appealing. I have many many other economics books that are marked ‘light reading’ (and one of my favourites that I constantly read is Mostly Harmless Econometrics by Angrist and WeirdEuropeanNameDude – simply because whatever is in that book is highly applicable in my work, LOL), but none I can consider recommending to anyone without some prior knowledge of  economics.

I am aware of the whole global warming/climate change debate that has been going on. There is a chapter about global warming in Superfreakonomics, and I honestly have no opinion on it (because I don’t have enough knowledge on the issue to comment). I stand by my stance, that skepticism is a good thing. I also agree with Levitt and Dubner that global warming and climate change is overblown. If I have the time, I will probably write a change-point analysis (together with a markov chain textual analysis) of all the media hype over global warming over the past 20 years. Since change point analyses can actually uncover hidden states, we can use change point analyses to find out what’s underneath the hype. But from what I can see, it is going to be a very tall order, so I shall only do it during my free time (i.e. Christmas time). As such, I am perfectly fine with whatever they wrote about global warming. I do not see it as part of a conspiracy to hide the truth about global warming, nor do I see Levitt and Dubner as global warming deniers. They’re just being contrarian (and I hope, since I had not had the time to read up the references, not being contrarian for the sake of being contrarian).

I guess this again brings up another point that pains me quite a bit. Sometimes in our lines of work, when we stumble upon a contrarian solution, nobody listens to us, even if we know that it will be a net benefit for all. For example, when I am at my current work place, I had some ideas on how to increase sales. The math, the data all says so, but because the company is used to doing things one way, they will not budge from their current methods (which are slow and rather ineffective). In Superfreakonomics, economists are portrayed as heroes who do whatever the hell they want (Sudhir Ventakesh studying prostitutes, Keith Chen and his capuchin monkeys etc). The reality seems a little far away from that though.

Speaking of Sudhir Ventakesh, I have one major grouse with Superfreakonomics – I felt very short changed reading it (even though I bought it at a supremely discounted price). It was so short. I finished reading the whole book, cover to cover, in 2 sittings, each lasting about 30 minutes. Many of the stories and research in Superfreakonomics, I had already read. Of course, I like to consider myself well-read and I do read quite a bit. But I felt that the authors could have squeezed in a lot more. For a retail price of 40 dollars, I think the price:content ratio is very very high, and value for money is low. Many of the researched the authors touched on could have been expanded, and given a much more vivid and human-side story to it.

I like the book, don’t get me wrong. As I said, it romanticizes the economics profession, it puts economists on a pedestal and call them heroes. I like that (and of course I like it, I am an economist, duh). It is clear writing, it is well written, well exposited, but too short. It covers a lot more traditional economics than the first Freakonomics book, but also covers a number of things that were already in the first book. This book felt like a companion book to an updated version of Freakonomics, rather than a sequel – kinda like how Season 2 of Big Bang Theory felt like a continuation of Season 1 instead of being a separate season. I would recommend you to read it. 4/5 stars (FFS Levitt and Dubner, you guys write so much on your blog, it doesn’t bloody hurt to write a bit more in the book)