In re: Freakonomics

So its a new year, happy new years, and that means it a new book in the book club (Garbage Land : On the Secret Trail of Trash By Elizabeth Royte is due up for January) To end the old year, (not to be confused with old europe) a friend and I had a breakfast at which we did a little discussion of the book Freakonomics: A Rogue Economist Explores The Hidden Side of Everything by Steven Levitt and Stephen Dubner,which was the December book.

Which is more dangerous, a gun or a swimming pool? What do schoolteachers and sumo wrestlers have in common? Why do drug dealers still live with their moms? How much do parents really matter? What kind of impact did Roe v. Wade have on violent crime?

Freakonomics is a short, and interesting look at applying economic theories to a myriad of subjects including cheating in sumo wrestling, cheating by teachers, real estate agents incentives and most interesting the ‘true’ cause of America’s drop in crime.
To try and keep it fair and balanced, I read some criticism of the book, including WSJ article (also see Levitts blog response or also a Slate post), including criticism of the numbers related to the controversial theory concerning the drop in crime. The drop in crime theory is that it was caused not by innovative police solutions or economic boom but rather morbidly by Roe v. Wade and the subsequent legal abortions, meaning that the aborted babies from poor, often single mothers, were not able to grow up to become criminals. The theory is extremely interesting, not only for the economic analysis used to find this and rule out the other potential reasons, but also for the subsequent moral issues that such an issue creates.
However interesting these debates are and the accuracy or lack of it in his data, are not at the heart of the book I feel. The most important central issue that I take away from the book is the importance of separating correlation and causation. In many situations it seems very easy for people attribute causation, where there was really correlation (example in the book is that good students houses have more books, but it isn’t the books that are making them smarter, it is that houses more likely to encourage education, and to have a higher income, have more books) So to sum up, I think that this idea, of the importance of separating cause and merely related events.

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