On Freakonomics

I just finished reading the book Freakonomics by Steven D. Levitt and Stephen J. Dubner. This book introduces a new paradigm of thinking, borrowed from economics, to help us answer questions in the areas of sociology, criminology, parenting etc. This paradigm is based on the understanding of correlation and causality. Instead of adopting  the answers obtained via “conventional wisdom”, the authors analyze the underlying situations and the available data to determine what factors are correlated and which ones are at the cause of them. Conventional wisdom sometimes suffers from the basic flaw that correlation implies causality. A situation, in which two events appear to happen together (correlated), does not gives us any indication as to the causality (which one if any causes the other). To obtain the true causes of these situations, we need to conduct further experiments in which we vary one of the factors while keeping the other constant. The authors perform this analysis in several areas ranging from real estate, sumo wrestling, drug dealing etc. Although the situations are not related, the common thread across this book is the method of analysis described.

My criticism of this book is from the fact that the area from which this paradigm is borrowed (economics) is the one in which it is mostly abused. It doesn’t take more than reading the business news to realize how often correlation and causality are abused and misused to justify the current situation.

For follow-on readings along the same lines:  Discover your Inner Economist, and Nudge. Overall an entertaining read and an interesting way to help address some of our every day lives questions.

Regards,

Omar Halabieh

Freakonomics

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