Incentives
What do the authors call the three basic types of incentives?
Economic, Social, and Moral
What was the “information advantage” real estate agents had over their clients?
They knew how long houses usually take to sell and at what prices
What unusual factor do the authors connect with the drop in crime during the 1990s?
Legalized abortion in the 1970s
Why did crime rates fall in the 1990s, according to Freakonomics?
Due to abortion, policing, and demographic shifts
What is the main question the authors ask about baby names?
Do names affect a child’s future success?
Why did the Chicago public school teachers cheat on standardized tests?
To avoid penalties and keep jobs
Why might an expert not always act in the client’s best interest?
They may exploit information asymmetry for personal gain
How do the authors argue abortion influenced crime rates later?
Fewer unwanted children reduced crime-prone demographics
What role did Levitt’s research find about policing strategies?
Increased police numbers helped but weren’t the main cause
What’s the difference between correlation and causation in names?
Names correlate with background, but don’t cause success
How did the bagel man’s experiment demonstrate honesty and incentives?
Payment rates showed honesty levels in workplaces
What do the authors say about the KKK losing its power after secrets were revealed?
Information loss weakened their influence
Why is correlation not the same as causation? Give an example.
Ice cream sales and drowning both rise in summer, but one doesn’t cause the other
How do the authors disprove myths about crime?
Using statistical analysis instead of assumptions
Why do the authors say names don’t guarantee success or failure?
Background factors matter more
Explain why financial incentives don’t always work as intended.
They can create perverse or unintended consequences
How did the internet change the balance of information between buyers and sellers?
It reduced information asymmetry
How did crack cocaine economics challenge the idea of 'drug dealers getting rich'?
Most dealers earned less than minimum wage
How did crack gang economics resemble corporations?
Top leaders made money, but most workers earned little
How do names reflect cultural and economic trends?
Trends start with elites and spread down
How did the daycare late fee in Israel backfire as an incentive system?
Parents treated it as a fee, not a penalty, and were late more often
How does 'information asymmetry' relate to sumo wrestlers’ match fixing?
Wrestlers manipulated matches because fans lacked insider info
What surprising connection do the authors make about parenting and children’s outcomes?
Parents’ education mattered more than their parenting style
What evidence argues against the 'super-predator' myth?
Crime declined instead of rising, disproving the fear
What is 'reverse causality' in names?
Successful parents choose certain names, not names making kids successfu