Freakonomics

[chimerically]

Friday I went to another Google talk, this one by the authors of Freakonomics. While the room filled to overflowing in the half hour before the presentation started, I read through the introduction of the free copy I picked up. Even the intro is filled with assertions that are very interesting but leave me thinking, "really?," even when they're something about which I've reached a similar conclusion. After all, if all the other experts have missed the causal factors that the authors have uncovered, what factors are the authors missing? Many of the anecdotes that take up a few paragraphs in the introduction could be expanded into a book, and probably would have to be for me to feel like I have enough information to evaluate the veracity of their claims. But perhaps this is my fault for wanting academic rigor in a pop-science book.

Here's one anecdote. Preceding it, the authors describe how violent crime was climbing at a rapid rate up to the mid-nineties, and then it dropped off unexpectedly but universally. They summarize some of the most popular ideas of why this happened ("These stories were not only logical; they were also encouraging, for they attributed the crime drop to specific and recent human initiatives"), and then assert that they weren't true. Then they say the crime drop started 20 years earlier, and give a quick summary of how abortion became legal.

So how did Roe v. Wade help trigger, a generation later, the greatest crime drop in recorded history?

As far as crime is concerned, it turns out that not all children are born equal. Not even close. Decades of studies have shown that a child born into an adverse family environment is far more likely than other children to become a criminal. And the millions of women most likely to have an abortion in the wake of Roe v. Wade - poor, unmarried, and teenage mothers for whom illegal abortions had been too expensive or too hard to get - were often models of adversity. They were the very women whose children, if born, would have been much more likely than average to become criminals. But because of Roe v. Wade, these children weren't being born. This powerful cause would have a drastic, distant effect: years later, just as these unborn children would have entered their criminal primes, the rate of crime began to plummet.

It wasn't gun control or a strong economy or new police strategies that finally blunted the American crime wave. It was, among other factors, the reality that the pool of potential criminals had dramatically shrunk.

So I've heard these arguments before in different forms, and I certainly agree that planned families and wanted children - of which abortion is an unfortunate but sometimes necessary part - make a huge difference in what kids do when they grow up. But I have to take on faith the authors' assertion that this cause-and-effect really exists, and that the other factors didn't have effects. I'm sure they have more data on which they based their assertions, but I want to see it and see if I reach the same conclusions.

Another reason that I'm skeptical is that even in the introduction, the authors play psychological games with statistics:

In a typical election period that includes campaigns for the presidency, the Senate, and the House of Representatives, about $1 billion is spent per year - which sounds like a lot of money, unless you care to measure it against something seemingly less important than democratic elections. It is the same amount, for instance, that Americans spend every year on chewing gum.

The comparison between campaign spending and chewing gum is supposed to make me see that campaign spending isn't so bad after all, except that the former is what an individual spends and the latter is what a large aggregate spends, and comparing them is misleading. And the use of chewing gum as the example just tries to trivialize it more.

Anyway, in the talk, the two authors introduced themselves and how they (an economist and a writer) came to work together, and then talked about a couple of anecdotes that weren't in the book. One was about a Yale economist, Keith Chen, teaching Capuchin monkeys how to use money. Over 6 months, they taught the monkeys to first associate and then trade washers for high-sugar foods that they loved, and found that they reacted rationally to price fluctuations (e.g. they bought less of their favorite food if it cost more) and irrationally to a game where they could lose their money, "just like the average day trader." They also related that researchers observed monkeys steal money from them, and claimed that monkey prostitution was observed as well. (Another of those "really?" moments there.)

In response to one question, the authors argued that the usual metrics by which schools are measuerd - class sizes, test scores, the number of students to go on to college or get good jobs, etc. - don't matter, and that the important parts are the quality of teachers and their peers. They quoted studies done on the Chicago public school lottery system, where students who won the lottery to get into a good school didn't perform better - indeed, they did slightly worse - than similar students who didn't win the lottery and had to go to a "worse" school. However, the students at the worse schools did get into trouble more.

Comments

[eviladmin.livejournal.com]

The authors were on Forum this morining, which I missed, but I'm going to try and listen to it tomorrow. I'm gong to (eventually) get around to reading the book to see if they can really back up the arguments, but I'm betting a bunch of them, if not definative, are probably compelling. And they are probably answers we don't want to hear, which is why others have not proposed them. For instance, lots of people have noted that the big crime drops were in part due to a decline in the number of 18-29 year old males. I think they have gone farther to look at why that demograpic declined just then. But I'll reserve judment until I read the book.

[http://users.livejournal.com/shallwedance_/]

They must have been in the area doing a media tour because I heard them on NPR's Forum this morning. I found it a little hard to swollow that they rejected many facts of conventional wisdom (e.g. increased police spending did not have a large effect on crime) while making assertions that are bound to cause controversy, especially when they attribute the behavior to one and only one factor. But they say the data supports them, and I don't have the data...

Some other tidbits they had this morning:
- Swimming pools are more dangerous to kids than guns
- Realtors are more interested in getting your house sold than getting you a good price

[fanlain.livejournal.com]

for anyone who's wondering about this swimming pool versus gun one, it's published online in a chapter excerpt

[anemone.livejournal.com]

It's a book I want to look at too, though I'm not sure I believe the abortion link without more evidence. this shows first Levitt's theories, then click on Tuesday for a reply arguing that it isn't abortion at all.

It's interesting that Levitt's reply is not really a defense of the legalized-abortion hypothesis, but an attack on the crack hypothesis.

[fanlain.livejournal.com]

I do agree that people who grow up in adverse environments have a higher risk of criminal behavior. I don't think this is because of the adverse environment exactly but because they have far less to lose than someone who grew up in a happy environment. I don't mean economically...I mean emotionally. But I think it's a stretch to assume that there's a direct link to abortion since there is likely to be many more factors to explain the drop in crime. And his view assumes that crimes are reported accurately at all.

[chimerically.livejournal.com]

Good link - thanks for posting! In the book they didn't exlicitly say that abortion was the only reason, but they suggested it by saying that all of the short-term explanations were wrong. I'd want them to investigate why certain states have high abortion rates, but I guess that probably goes beyond the numbers ...

[fanlain.livejournal.com]

and probably into flaming religion realms?

[chimerically.livejournal.com]

For some, yes. :~) Though there are probably other factors that correlate with a high abortion rate, apart from any religious arguments. I guess this gets at my general complaint about economics: it doesn't go beyond the numbers to a social investigation of why.

[fanlain.livejournal.com]

i was just looking at the freakonomics site last night! i thought it was interesting to read and think about although i also agree that the conclusions are definitely not academic. i don't think this is bad but more perspective which is meant to be standalone in a comedic sort of way but not meant to be academic sources to support arguments. i think it's just interesting.

The comparison between campaign spending and chewing gum is supposed to make me see that campaign spending isn't so bad after all, except that the former is what an individual spends and the latter is what a large aggregate spends, and comparing them is misleading.

I think it's an interesting parallel of spending money although I do agree that the individual v. group makes it not a fair comparison. It makes me stray from the authors point and think about how so many people can afford chewing gum but so many less people can afford to campaign so democracy does not exist when economics get factored somehow.

[eviladmin.livejournal.com]

I think the point was not that individual elections are expensive, but that what we spend in total on elections is not out of line with what we spend on other things. One could (and I wouldn't) that we should only spend a $10,000 per campaign. Everyone could run, but no one would even know the name of the candidates and you would just have to vote for the party and hope your respresentative wasn't evil. (having not read the specific argument - this is a general argument - we spend more on advertising toothpaste than on elections [vacuous fact warning]

[chimerically.livejournal.com]

That's true, though various government lobbies don't account for much of chewing gum or toothpaste sales. :~) In the intro they argue that popular candidates naturally get more donations than unpopular sure-losers (Dean aside, I guess ...), but it's hard for me to be satisfied with just the numbers. Where is that money coming from? Couldn't it be the case that various lobbies support and court more popular candidates the same way people do? Isn't that one of the main complaints with campaign spending: that politicians are being paid to have certain viewpoints?

campaign contributions

[joshuavonkorff.livejournal.com]

I didn't realize you had this blog. Hi James! I don't think I know anyone else though . . .

I just picked up the book and re-read the relevant 2-3 pages. I would agree with his point (that we overestimate the effect of campaign contributions) but not for his reasons.

Levitt's arguments are:
1) People like Dean, Forbes, etc. can spend a lot of their own money and not win an election.
2) When two politicians have a re-match after several years, changes in their spending are correlated only slightly with changes in the outcome of the election.

But this doesn't prove that campaign contributions have nothing to do with winning an election. There is no instant positive feedback from individual spending, but there may be long term feedback from a party's spending. After all, I bet most people on this list have not recently changed which party they voted. In that case, if you were affected by campaign contributions at all, it was long, long ago, the last time you switched parties.

Suppose that the popularity of a given party comes from the collected advertisements run by all interested organizations: the NRA, the pro-life lobby, the anti-gay lobby, et cetera. And suppose people have loyalty to a party, so they effectively remember not just this year's ads, but last year's, and the year before. And suppose that a Californian might rely on what s/he read in the New York Times, which is influenced by the ads that the New York Times journalist sees on TV in New York. In that case, the ads would be very important, but individual politicians would derive little or no benefit from their ads. Only the party as a whole derives a benefit.

But even if contributions don't influence the election, politicians will still think the contributions are important. If a politician believes that campaign contributions influence the election, then s/he will pay attention to the needs of contributors before non-contributors.

It's all a very complicated nonlinear system, kind of like the stock market, with the causes and effects all muddled. This happens whenever the system is composed of people who are trying to understand the system.

Re: campaign contributions

[chimerically.livejournal.com]

Hello, and welcome! You would recognize a whole lot of these folks from bab5, but maybe not by their handles. :~)

Great points - there do seem to be a lot of factors here that the authors didn't mention. Dean is an interesting case - he did raise (unprecedentedly?) huge amounts of money from individual donors (who presumably were casting their monetary "votes" that he was a viable candidate), yet he crashed fast and hard. That was in a primary, though, where people voted for a top candidate within their party (so party distribution doesn't matter so much), rather than for their choice for final winner (where they would tend to vote along party lines).

Re: campaign contributions

[joshuavonkorff.livejournal.com]

It's true that Dean couldn't have been helped much by political ads (either in the long term or the short term) that increased the total number of democrats. But he could have been helped by ads that brought his ideologies to the forefront of the democratic party platform. For instance, Dean had opposed the war in Iraq from the beginning, which marked him as a loony because it was way out of step with the rest of the party. But if someone had spent a lot of money, over the past few decades, on TV ads advocating multilateral instead of unilateral solutions to international problems (stronger UN, et cetera.) that might have made Dean look more centrist, and hence more like a winner . . . as it was, people didn't really get the idea of multilateralism. Kerry ended up stumbling over phrases like "it has to pass the global test" in the debates.