Living in Bolivian

Wednesday, June 01, 2005

Get Your Freakonomics On!

I have an enthusiastic recommendation for you - Freakonomics, by Steven Leavitt. It's the sort of analysis that I loved when I was just a young econ student with stars in my eyes. Essentially, the mission of the book is to poke at problems big (crime) and small (sumo wrestling) and determine what hidden causes may be at work. It's incredibly well-written and fun, so long as you are able to put yourself in the economist mind-set and leave all value judgments at the door. The purpose of such writing is not to determine whether crime is bad. The purpose is to see what external influences tend to cause more or less crime. There's a long section on the KKK, and its primary purpose is to uncover the incentives that prompted its popularity and the incentives that eventually dismantled it.

Unfortunately in the era of 24-hour news, many talking heads have seized on a small segment of the book and that is all they will discuss with Dr. Leavitt. Of course, it is the abortion-crime correlation. Again, this is value-neutral discussion. Essentially, he is trying to determine why the forecast crime boom of the late 1990s never happened. He makes the correlation between the years in which abortion was legalized in various states, and ultimately in the federal courts, and tracks crime stats to the time when these children would have been entering their "crime prime". Without exception, crime rates in all categories begin their decline in accordance with this formula.

Pundits are jumping on this, and I will admit that it makes me uneasy. This sort of data can be used to "prove" that it is Those People causing all our problems, and it can be used by the pro-abortion camp to indicate a great societal benefit as a result of abortion, and it can be used as an excuse to sterilize the inner city. But all of these things miss the point entirely. Economic analysis presents a set of information. It does not assign values to the actions people take as the result of that information. Certain incentives existed to join the Klan in the 1920s. That was unequivocally a Bad Thing. Not the point.

In any event, the book has loads of great stuff, so if you were turned off by the abortion business, it comprises about ten pages, so check it out anyway.

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