Originally published at: https://blog.12min.com/superfreakonomics-summary/
Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance
Let’s dive right into it!
Who Should Read "SuperFreakonomics" and Why?“SuperFreakonomics” will reveal how social subjects are correlated with the economy and will show you how you can make use of statistics in every field of life.
We recommend it to all statistics lovers, to everyone worried about pressing issues such as terrorism and global warming and to all people to want to understand how the modern world functions.
About Steven D. Levitt & Stephen J. DubnerSteven D. Levitt is an American economist, currently teaching at the University of Chicago, specializing in researching corruption and crime.
Stephen J. Dubner is an American journalist and writer, mostly researching on economic topics.
"SuperFreakonomics Summary"There are so many pressing problems in today’s world and not enough solutions.
Why is that so?
Aren’t there equally as many smart people who are supposed to be able to solve any issue?
There are, indeed. But that does not mean that they can easily find a solution to problems.
The reason behind their failure is not the lack of intelligence, but the lack of proper data.
Many researchers rely on the imperfect stories of individuals and incorrect recollections of events, which leads to many mistakes.
So, what should they do instead?
Rely on statistics.
Statistics are objective and empower its users to come up to more correct conclusions.
As much as you try to find out what makes people tick, you cannot get into their heads and find out the true reason.
However, people, no matter where they come from, almost always react to incentives.
So, it seems that society can change the behavior of individuals by giving them something in return.
Sadly, there are exceptions to every rule, and there are exceptions to the success of incentives as well.
Often, incentives do not work as planned, and they can have rather damaging results.
This is because of the law of unintended consequences, as the authors name it.
The way that we can make incentives work is by predicting people’s reactions before the incentives take place.
But didn’t we just say that we cannot get into people’s heads?
We did, but that does not mean that we cannot draw conclusions about their drivers and behaviors using statistics.
By collecting enough data, and analyzing it, it is possible to understand the reasons for the collective behavior.
Gathering data does not only help with problems that we want to solve, but it also helps us see problems that until that point may not have been apparent.
Solving such problems that are not visible to everyone leads to disruptive innovation, which changes the course of society.
Take global warming for example.
We all know how damaging global warming is, and how dangerous it is for this planet.
Yet it seems that society does not do much about it.
The problem is that it is not yet clear what causes global warming. We all know that it is human activity, but we do not know exactly which one.
As a result, it is hard to debate over it and present objective facts. All debates around global warming are on the basis of myths that portray the industry or the cars as the main reasons for global warming.
Yet, some studies show that the reasons for this phenomena actually lie someplace else.
Did you know that the planet’s ruminants, cows especially, are the source of over 50 percent of the greenhouse gasses produced? This is more than the whole transportation industry!
However, although there are some indicators for the reasons global warming occurs, extensive studies cannot be done, since it is a very complicated phenomenon, and scientists are not able to do any experiments, which means that they cannot test and know for certainty what can minimize this occurrence.
Another problem is that negative externalities exist when it comes to this topic. Negative externalities are all effects which are created by a group of people but felt by entirely another group.
The problem with these negative externalities is that when people who are responsible for an unwanted event do not feel its consequences, it is unlikely that they will change their behavior.
Also, all the tries to influence people by just raising their awareness are not giving any big results, since as we already said, many people react to the right incentives.
However, there might be a quick fix for this problem.
What is it?
Geoengineering that allows for influencing the global climate system.
Scientists have found out that it is possible to cool down the planet by emitting sulfur dioxide in the stratosphere – in a volume much higher than the industry does.
The solution to pollution is more pollution?
Yes, we know that it may sound counterintuitive, but that is what statistics does: it allows its users to look at problems from different angles, and find solutions where they would not have thought they could find them in the first place.
Key Lessons from "SuperFreakonomics"1. All Incentives Come with Side Effects 2. Solutions to Tricky Problems are Hard to Find 3. There is No Such Thing as Too Much Data
All Incentives Come with Side EffectsPeople react to incentives and may be driven by them, but even the best incentives may not work as it was planned in the first place and all of them are accompanied by side effects.
To explain this occurrence, Dubner and Levitt have come up with the phrase: the law of unintended consequences.
Solutions to Tricky Problems are Hard to FindYou may think that you can find solutions to even the most complex problems if you collect enough data, but that might not always be the case.
At times, the data you collect will not be the right one, and the solution will lie in the data you forgot to include in your research.
Also, many times it will be much easier to find a way to prevent an issue from occurring, than solving it once it happens.
There is No Such Thing as Too Much DataWhen it comes to data, there is no such thing as collecting too much. Remember what we said in the previous key lesson – sometimes the solution hides in the data you did not collect.
So make sure you collect a lot of information, in order to come to solutions more easily and intuitively.
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"SuperFreakonomics Quotes"[bctt tweet="And knowing what happens on average is a good place to start. By so doing, we insulate ourselves from the tendency to build our thinking - our daily decisions, our laws, our governance - on exceptions and anomalies rather than on reality." username="get12min"]
[bctt tweet=“Most of us want to fix or change the world in some fashion. But to change the world, you first have to understand it.” username=“get12min”]
[bctt tweet=“Politicians have all sorts of reasons to pass all sorts of laws that, as well-meaning as they may be, fail to account for the way real people respond to real-world incentives.” username=“get12min”]
[bctt tweet=“People are people, and they respond to incentives. They can nearly always be manipulated–for good or ill–if only you find the right levers.” username=“get12min”]
[bctt tweet=“Deliberate practice has three key components: setting specific goals; obtaining immediate feedback; and concentrating as much on technique as on outcome.” username=“get12min”]
Our Critical ReviewThis book offers an interesting perspective on some social subjects, such as global warming, terrorism, and prostitution.
It is an economic view on subjects that you may think to have nothing to do with the economy, and explains why statistics can be and should be used in every field, no matter its nature.