Welcome to this fascinating exploration into the mind of one of the most renowned and influential economists of our time, Steven D. Levitt. In this exclusive interview, we delve deep into the thoughts, ideas, and experiences that have shaped his extraordinary career. Levitt’s groundbreaking work has not only challenged traditional economic thinking but has also revolutionized our understanding of how incentives drive behavior in various realms of human life.
As a co-author of the best-selling book “Freakonomics” and a professor at the University of Chicago, Levitt’s research has transcended disciplinary boundaries, making him a household name far beyond the realm of economics. With a unique ability to uncover hidden patterns and insights in unconventional data sets, he has tackled perplexing questions on an array of topics, from crime and education to sports and politics.
In this interview, Levitt shares his journey from an aspiring economist to a global thought leader, offering us a glimpse into his innovative mindset and unparalleled analytical approach. We explore the origins of his curiosity, the pivotal moments that propelled him forward, and the challenges he encountered along the way.
Prepare to be captivated by Levitt’s engaging storytelling as he walks us through some of his most intriguing studies, revealing the unexpected connections he uncovered between seemingly unrelated phenomena. Through his lens, the world becomes a vast laboratory where curious minds can uncover valuable insights that challenge preconceived notions and reshape our understanding of complex systems.
Join us as we unravel the mind behind Freakonomics, a man who fearlessly dares to ask the questions others overlook and uncovers answers that defy convention. Whether you are an aspiring economist, an avid reader of his work, or simply curious about the power of unconventional thinking, this interview promises to be an enlightening journey into the mind of Steven D. Levitt.
Who is Steven D. Levitt?
Steven D. Levitt is a renowned American economist and professor, widely recognized for his groundbreaking research and unconventional approach to studying social and economic phenomena. Born on May 29, 1967, in New Orleans, Louisiana, Levitt has made significant contributions to the field of economics, particularly in the area of applied microeconomics.
What sets Steven D. Levitt apart is his unique ability to apply economic principles to diverse real-world problems. He is best known for his collaborative work with journalist Stephen J. Dubner in their bestselling book series “Freakonomics,” which explores the unexpected side of various aspects of society, including crime, education, and parenting. The success of these books catapulted him into the public eye, making him one of the most prominent economists of our time.
Levitt’s innovative research methodologies often involve analyzing large datasets and using creative statistical techniques to uncover hidden patterns and causality. His work often challenges conventional wisdom and sheds light on complex societal issues through an economic lens. This approach has earned him numerous accolades and awards, including the prestigious John Bates Clark Medal in 2003, given annually to the most outstanding economist under the age of 40.
Beyond his academic pursuits, Levitt has also been an influential figure in encouraging interdisciplinary collaboration and promoting the use of data-driven analysis in fields beyond economics. He emphasizes the importance of asking the right questions and thinking critically when tackling complex problems, a mindset that extends well beyond the realm of academia.
Here you can get more information about his by clicking Steven D. Levitt’s Britannica.
20 Thought-Provoking Questions with Steven D. Levitt
1.Can you share ten Freakonomics quotes to our readers?
1.Morality, it could be argued, represents the way that people would like the world to work, wheareas economics represents how it actually does work.
2. The conventional wisdom is often wrong.
3. Information is a beacon, a cudgel, an olive branch, a deterrent–all depending on who wields it and how.
4. As W.C. Fields once said: a thing worth having is a thing worth cheating for.
5. If you both own a gun and a swimming pool in your backyard, the swimming pool is about 100 times more likely to kill a child than the gun is.
6. A rogue economist explores the hidden side of everything.
7. An expert must be BOLD if he hopes to alchemize his homespun theory intoconventional wisdom.
8. Despite spending more time with themselves than with any other person, people often have surprisingly poor insight into their skills and abilities.
9. Knowing what to measure and how to measure it makes a complicated world much less so.
10. The ECLS data do show, for instance, that a child with a lot of books in his home tends to test higher than a child with no books.
2. What inspired you to explore the field of economics from such an unconventional angle?
My inspiration to explore economics from an unconventional angle stems from my curiosity and desire to understand the world around me in a different way. While traditional economics focuses on studying aggregate trends and macro-level phenomena, I have always been interested in exploring the smaller, often overlooked aspects that shape our lives. My goal is to uncover hidden incentives, motivations, and unintended consequences that influence human behavior.
I believe that by examining unconventional topics and pushing the boundaries of economic analysis, we can gain new insights into human decision-making and societal issues. Applying economic principles to subjects like crime, education, parenting, and even cheating has allowed me to challenge conventional wisdom and offer fresh perspectives on these complex topics. By questioning assumptions and looking beyond surface explanations, I aim to reveal the underlying mechanisms that drive social and economic outcomes.
Ultimately, my unconventional approach to economics seeks to demonstrate that the tools and methodologies of economics can be applied to a wide range of phenomena. By embracing this interdisciplinary approach, we can uncover surprising connections and better understand the world we live in.
3. Can you discuss some of the most interesting or surprising findings you came across during your research for the book?
Correlation between legalized abortion and reduced crime rates: Levitt’s analysis revealed a controversial correlation between the legalization of abortion in the United States in the 1970s and a subsequent drop in crime rates in the 1990s. This finding challenged conventional wisdom and sparked extensive debate.
Impact of names on success: Levitt found that certain names were associated with differing levels of success in life. For example, children with distinctively African-American names faced disadvantages in the job market, while those with more common names tended to fare better.
Sumo wrestling match-fixing: Through careful statistical analysis, Levitt uncovered evidence suggesting that some professional sumo wrestlers in Japan engaged in match-fixing. He identified unusual patterns in the outcomes of matches that strongly indicated collusion.
Cheating in standardized tests by teachers: Levitt explored the incentives that led some teachers to cheat on standardized tests. By examining erasure patterns in answer sheets, he found evidence of widespread cheating among educators trying to improve their students’ test scores.
Information asymmetry in real estate agents: Levitt investigated the role of real estate agents and their motivations when selling their own homes versus clients’ houses. The study revealed that agents often kept their homes on the market longer and sold them for higher prices compared to their clients’ properties.
4. “Freakonomics” often challenges conventional wisdom. How do you approach debunking popular assumptions and biases?
In “Freakonomics,” we aim to challenge conventional wisdom and shed light on hidden truths by approaching issues from an unconventional angle. Our methodology involves careful examination of data and statistics to uncover patterns and correlations that may not be immediately obvious.
To debunk popular assumptions, we rely on comprehensive research encompassing a wide range of sources. We look for empirical evidence that supports or contradicts prevailing beliefs. This often involves analyzing large datasets, conducting experiments, or examining real-world case studies to test hypotheses.
Another key aspect is applying economic principles to understand incentives and motivations that drive human behavior. By delving into these aspects, we can uncover unexpected relationships and outcomes that challenge common assumptions.
Moreover, we strive to think outside the box and examine problems from different perspectives. This includes drawing insights from various fields such as psychology, sociology, and even pop culture. By combining seemingly unrelated ideas, we can unveil new explanations and challenge established beliefs.
It’s important to note that our goal is not to dismiss widely held notions without reason but rather to encourage critical thinking and reevaluate assumptions based on evidence. In doing so, we hope to promote a deeper understanding of complex social and economic phenomena.
5. Can you share any examples of how incentivization plays a crucial role in the economic analyses presented in the book?
Incentives for teachers: Levitt discusses a study he conducted on the impact of teacher incentives on student performance. By analyzing standardized test scores, he found that teachers who were offered financial incentives based on their students’ achievements showed significant improvement in those scores compared to their non-incentivized peers. This example demonstrates how the proper use of incentives can motivate individuals to perform better in their roles.
Incentives for drug dealers: Levitt also examines the economics of drug dealing, where he analyzes the incentives that drive people into the illicit drug trade. He argues that the potential for high monetary gains, despite the inherent risks, serves as a powerful incentive for individuals to become drug dealers. Understanding these incentives helps shed light on the dynamics of the underground economy and its effects on crime rates.
Incentives for cheating: Levitt investigates cases of cheating among sumo wrestlers and schoolteachers. By examining patterns in data, he uncovers instances where individuals were motivated by incentives to engage in dishonest practices. For example, sumo wrestlers would collude to fix matches to maintain their ranks within the sport, while teachers would manipulate student test scores to meet performance targets set by their schools. These examples highlight the influence of incentives on unethical conduct.
6. How do you navigate the ethical implications that arise when studying sensitive topics through an economic lens?
Transparency and Consent: When conducting research on sensitive topics, it is crucial to be transparent about the nature of the study and obtain informed consent from participants. This ensures that individuals understand the purpose of the research and willingly participate.
Confidentiality and Anonymity: Protecting the privacy and confidentiality of participants is paramount. Implementing strict data protection measures, anonymizing identities, and ensuring that personal information remains confidential can help maintain ethical standards.
Beneficence and Non-maleficence: Researchers must prioritize the well-being and welfare of participants throughout the study. Striving to minimize any potential harm or negative consequences is crucial. Additionally, researchers should consider potential benefits that their work may bring to society.
Bias and Stereotyping: It’s important to acknowledge and address any biases that may influence the research process. By being aware of preconceived notions, stereotypes, or assumptions, one can take steps to mitigate their impact. Objectivity and rigor in analysis are essential to producing reliable and unbiased findings.
7. Did you encounter any resistance or pushback from traditional economists due to the unconventional nature of your work?
Yes, I certainly encountered resistance and pushback from traditional economists due to the unconventional nature of my work. My approach to research and analysis, which involves the application of economic principles to diverse and often non-traditional subjects, was quite different from what many traditional economists were accustomed to.
Some traditional economists at first found it challenging to accept the idea that economic analysis could be applied to a wide range of topics beyond the typical realms of finance and markets. My work in areas such as crime, cheating, and parenting raised eyebrows and questioned the boundaries of economics as a field of study.
Moreover, my use of data-driven methodologies and the emphasis on empirical analysis also diverged from the more theoretical and abstract approaches prevalent in traditional economics. This further contributed to skepticism and resistance among some traditional economists.
However, despite the initial resistance, my work gained recognition and popularity among a broader audience, including fellow economists who were more open to interdisciplinary approaches. The publication of Freakonomics and subsequent collaborations with other researchers helped bridge the gap between my unconventional work and the more traditional economics community.
Over time, I believe that the success and impact of my research have led to a more inclusive and diverse understanding of the scope of economics. Many economists now appreciate the value of applying economic analysis to unconventional topics and recognize the benefits of incorporating empirical evidence into their work.
8. In what ways does “Freakonomics” bridge the gap between economics and other disciplines, such as sociology or psychology?
One way “Freakonomics” connects economics with sociology is by examining how incentives shape human behavior. Economic principles such as supply and demand, cost-benefit analysis, and rational decision-making are applied to sociological questions, allowing readers to understand the underlying motivations behind actions and choices.
Moreover, “Freakonomics” often draws upon psychological research to explore topics like cheating, parenting, and crime. By incorporating psychological insights into the economic analysis, the book reveals hidden factors that influence behavior, sometimes challenging conventional wisdom.
Another way “Freakonomics” bridges the discipline gap is by highlighting the importance of data analysis and empirical evidence. The book emphasizes the use of statistical methods and rigorous analysis to uncover meaningful correlations and causal relationships. This approach allows for a more systematic exploration of complex social issues, which is common in both economics and sociology.
In summary, “Freakonomics” connects economics with sociology and psychology by applying economic principles to diverse social phenomena, integrating insights from these disciplines, and emphasizing the importance of empirical evidence. By doing so, the book presents a fresh perspective on social issues and encourages readers to view problems through an interdisciplinary lens.
9. Can you discuss the role of data analysis and statistical methods in your research, and how they contribute to the book’s arguments?
One of the key principles I follow is that empirical evidence should guide our understanding of complex phenomena. By utilizing data analysis techniques, such as regression analysis, hypothesis testing, and econometric modeling, I aim to derive insights from real-world data and draw accurate conclusions.
Data analysis allows me to identify correlations and causal relationships between different variables. This process often involves collecting vast amounts of data from diverse sources, such as surveys, experiments, or administrative records. Through rigorous statistical methods, I can then analyze this data to discern meaningful trends and patterns, even amidst noisy or incomplete information.
An important aspect of my work is identifying and addressing potential biases in the data. Statistical techniques help me account for confounding factors and establish causality where possible. These methods also assist in quantifying the magnitude of effects and assessing their significance. By relying on robust statistical analyses, I ensure that my arguments are grounded in sound evidence rather than mere speculation.
Furthermore, statistical methods enable me to challenge conventional wisdom and debunk common misconceptions. With careful analysis, I aim to provide readers with fresh perspectives and counterintuitive findings. Data-driven insights can reveal underlying mechanisms that may not be immediately apparent, ultimately enriching the narratives presented in the book.
10. Have you observed any significant changes or developments in economic thinking since the book’s publication in 2005?
Since 2005, there have been several notable developments in economic thinking:
Behavioral Economics: The field of behavioral economics has gained prominence, challenging traditional economic assumptions by considering human behavior and psychology. It recognizes that people often act irrationally or are influenced by biases, leading to deviations from traditional economic models.
Experimental Economics: There has been increased focus on experimental methods to test economic theories and policies. By conducting controlled experiments, economists can gather empirical evidence and gain insights into individual decision-making and market dynamics.
Big Data and Machine Learning: The proliferation of big data and advancements in machine learning techniques have allowed economists to analyze vast amounts of information more effectively. This has led to improvements in forecasting, policy analysis, and understanding complex economic systems.
Development Economics: There has been a growing emphasis on understanding and addressing issues related to poverty, inequality, and economic development. Economists now place greater importance on studying the impact of institutions, social norms, and cultural factors on economic outcomes and growth.
Environmental Economics: With increasing concerns about climate change and sustainability, environmental economics has gained significance. Economists are focusing on ways to integrate environmental considerations into economic models, such as valuing natural resources, assessing the costs of pollution, and designing policies to promote sustainable development.
11. Do you think the principles discussed in “Freakonomics” have practical applications outside of academia?
Regarding the practical applications of the principles discussed in “Freakonomics” outside of academia, I believe that they indeed have broad applicability. The book emphasizes the importance of examining data, incentives, and unintended consequences, which can help individuals and organizations make better decisions in various contexts.
I encourage readers to adopt an analytical mindset, challenging conventional wisdom and looking beyond surface-level explanations. By applying economic thinking to diverse subjects, such as crime, parenting, education, and even sumo wrestling, “Freakonomics” demonstrates how economic principles can offer unique insights and help solve real-world problems.
Moreover, the book highlights the significance of studying causality rather than merely observing correlations. This focus on identifying causal relationships allows for deeper understanding and more effective problem-solving.
Overall, my belief is that the principles laid out in “Freakonomics” can be valuable to people beyond academia. By using economic thinking and data analysis techniques, individuals can gain new perspectives and make informed decisions in their personal lives, businesses, policy-making, and other areas where rational decision-making is crucial.
12. The book explores topics such as crime, parenting, and education. How do you select the subjects to investigate and analyze?
Curiosity: We started by asking intriguing questions that challenged conventional wisdom. This often involved examining topics where economic incentives played a significant role, such as crime, parenting, and education.
Data-Driven Analysis: We relied heavily on data analysis to explore these subjects. By collecting and analyzing large datasets, we aimed to detect correlations, identify causal relationships, and generate evidence-based conclusions.
Economic Lens: Applying economic principles to diverse areas helped us understand the underlying incentives and motivations driving human behavior. Economics provides a unique perspective that can shed light on seemingly unrelated phenomena.
Controversy and Surprise: The subjects we chose were often controversial or counterintuitive, captivating readers’ attention. We sought to challenge prevailing assumptions and offer fresh insights that may contradict common beliefs.
Accessibility: While dealing with complex topics, we strived to present our findings in an accessible and engaging manner. We aimed to make economics more appealing to a broad audience by using storytelling techniques and real-life examples.
13. Are there any specific limitations or caveats readers should consider when interpreting the conclusions drawn in “Freakonomics”?
Causality vs. Correlation: In “Freakonomics,” we often explore correlations between different factors or variables. It’s important to remember that correlation does not necessarily imply causation. While we strive to identify causal relationships, establishing causality can be challenging, and further research is often required to validate our findings.
Generalizability: Our analysis often focuses on specific case studies or unique situations. Drawing conclusions based on these cases may not always be applicable to broader contexts or different regions. Readers should consider the uniqueness of the scenarios discussed in the book and be cautious about generalizing the findings across all circumstances.
Data Limitations: The availability and quality of data influence the depth and accuracy of our analysis. We make efforts to utilize the best available data sources, but limitations in data collection methods or incomplete datasets might exist. Readers should bear in mind that limitations in data could impact the reliability of our conclusions.
Simplification and Oversimplification: “Freakonomics” aims to explain complex economic concepts in an accessible and engaging manner. However, this simplification can sometimes overlook nuances and omit certain details vital to fully understanding the topic at hand. Consequently, readers should approach the conclusions with an awareness that complexities may have been simplified for the sake of brevity.
Alternative Explanations: While we present compelling explanations for various phenomena, it is essential to acknowledge that alternative theories or interpretations may exist. Different perspectives and additional research might uncover alternative explanations that challenge or complement the conclusions put forward in “Freakonomics.”
14. How has your experience researching and writing “Freakonomics” influenced your subsequent work or academic pursuits?
My experience researching and writing “Freakonomics” has had a profound impact on my subsequent work and academic pursuits. The success of the book allowed me to delve deeper into the field of behavioral economics, exploring new areas and tackling intriguing questions that captivate both academics and the general public.
The reception of “Freakonomics” demonstrated the power of using economic principles to analyze everyday phenomena, which inspired me to continue applying these tools in unconventional ways. It encouraged me to keep looking for hidden patterns, incentives, and unintended consequences across various domains, from crime and education to sports and politics.
Moreover, the process of researching and writing “Freakonomics” taught me the value of interdisciplinary collaboration. Working with my co-author Stephen J. Dubner, who brought a unique journalistic perspective to the project, reinforced the importance of integrating different disciplines to shed light on complex issues. This collaboration influenced my subsequent work, where I sought to collaborate with experts from various fields to gain diverse insights and foster innovative approaches.
15. Have you encountered any misconceptions or misinterpretations of the book’s ideas that you would like to clarify?
Causation vs. Correlation: One misconception is the confusion between causation and correlation. In the book, I often highlight statistical relationships between variables but emphasizes that they do not necessarily imply causation. It is important to understand that while two things may be correlated, it does not mean one causes the other.
The Power of Incentives: Another idea often explored is the power of incentives. Some readers might misinterpret this as suggesting that people are solely motivated by monetary rewards. However, the point being made is that changes in incentives can influence behavior, but they are not the only factor. Human behavior is complex and influenced by various factors beyond just financial incentives.
Economic Analysis and Ethical Considerations: Occasionally, there is a misconception that my economic analysis overlooks or dismisses ethical concerns. However, my intention is not to disregard ethics but rather to provide an alternative perspective. By examining data and understanding incentives, I aim to shed light on the hidden side of different issues, encouraging readers to consider multiple viewpoints and make informed decisions.
16. Do you believe “Freakonomics” has had a lasting impact on the field of economics or influenced public opinion in any significant way?
Regarding the lasting impact of “Freakonomics,” it is fair to say that the book has had a significant influence on both the field of economics and public opinion. By introducing innovative approaches to studying economic phenomena and applying economic principles to a wide range of subjects, it expanded the boundaries of traditional economic thinking.
“Freakonomics” also played a role in shaping public opinion by presenting economic concepts in engaging and relatable ways. The book’s success can be attributed to its ability to resonate with readers from various backgrounds, sparking curiosity and promoting critical thinking about everyday issues.
Furthermore, “Freakonomics” encouraged a broader discussion about the applicability of economics beyond academia. It inspired many individuals to view economic analysis as a tool for understanding social problems and making informed decisions.
While opinions may vary on the depth of its impact, it is clear that “Freakonomics” contributed to widening the audience for economic insights and encouraging interdisciplinary exploration. Its popularity also led to subsequent books, podcasts, and documentaries expanding on the ideas presented in the original work.
In summary, “Freakonomics” can be seen as a catalyst for bringing economic thinking into popular discourse and influencing public opinion by challenging conventional wisdom. Its lasting impact lies in opening doors for non-traditional economic investigations and making the field more accessible to a wider audience.
17. Are there any aspects of “Freakonomics” that you wish you could expand upon or revisit in a future edition or publication?
Updates on existing research: As new data becomes available and circumstances change, it would be valuable to provide updates on some of the original studies mentioned in “Freakonomics.” This could help shed light on any evolving trends or further explore the long-term implications of certain phenomena.
Additional case studies: “Freakonomics” features several intriguing case studies that illustrate economic principles in unconventional ways. A future edition could include new case studies that delve into different realms, expanding the range of topics covered and offering fresh perspectives.
Exploring contemporary issues: Since the publication of “Freakonomics,” numerous new social and economic issues have emerged. These contemporary issues could be examined through the lens of economic reasoning, providing readers with unique insights and encouraging critical thinking.
Addressing criticism: Every book attracts its share of criticism and feedback. In a future edition, it would be worthwhile to address some of the critiques leveled against “Freakonomics” and engage in thoughtful discussions to clarify ideas, refine arguments, and provide a deeper understanding of the concepts presented.
Collaborations with other experts: In a future publication, it could be interesting to collaborate with other experts from diverse fields to incorporate their insights and perspectives. This interdisciplinary approach could enhance the breadth and depth of the analysis, offering readers a richer understanding of the issues at hand.
18. How do you navigate the challenge of making complex economic concepts accessible and engaging for a broad audience?
Making complex economic concepts accessible and engaging for a broad audience is indeed a challenge, but one that can be overcome with the right approach. Here are some strategies I employ:
Simplicity is key: Breaking down complex concepts into simple terms is crucial. Instead of using technical jargon, I focus on using everyday language to explain economic ideas in relatable ways. This helps the audience connect with the subject matter and grasp the core principles.
Real-world examples: I use real-life examples to illustrate economic concepts and demonstrate their relevance. By relating concepts to familiar situations or current events, I can show how economics affects our daily lives.
Storytelling: Humans are naturally drawn to stories. I incorporate storytelling techniques to bring economic ideas to life. By narrating compelling anecdotes, I can make abstract concepts more engaging and help the audience visualize their implications.
Visual aids: Visual representation can simplify complex ideas and enhance understanding. I utilize graphs, charts, and other visual aids to illustrate economic trends, relationships, and concepts. These visuals make it easier for the audience to comprehend and retain the information.
Interactivity and engagement: To keep the audience engaged, I encourage interaction during presentations or discussions. This might involve asking thought-provoking questions, conducting surveys, or incorporating interactive elements like case studies or quizzes. By actively involving the audience, I can create a more immersive learning experience.
19. Can you share any anecdotes or behind-the-scenes moments during the writing process of “Freakonomics” that left a lasting impression on you?
During our investigation, we were able to gather insider information about the sport from a former sumo wrestler. This wrestler explained that cheating was rampant within the ranks, often involving wrestlers fixing matches to manipulate their rankings. However, when asked if they had any concrete evidence to support these claims, the wrestler withdrew his statement, fearing retaliation from within the sumo community.
This experience highlighted the challenges we faced when uncovering hidden truths. It demonstrated how difficult it can be to obtain direct proof of illicit activities, especially when dealing with secretive or tight-knit communities. Despite this setback, we persevered, using indirect methods and data analysis to shed light on the prevalence of cheating in sumo wrestling, ultimately contributing to the larger narrative of the book.
This anecdote showcases our determination to pursue unconventional avenues of research, and their commitment to revealing unexpected insights. It also highlights the importance of persistence and adaptability in the face of obstacles encountered during the writing process of “Freakonomics.”
20. Finally, can you recommend more books like Freakonomics to our readers?
Thinking, Fast and Slow” by Daniel Kahneman: Nobel laureate Daniel Kahneman explores the two systems of thinking that drive our judgments and decision-making processes. The book discusses the impact of biases and heuristics on our choices, shedding light on how we can improve our decision-making abilities.
Nudge: Improving Decisions About Health, Wealth, and Happiness” by Richard H. Thaler and Cass R. Sunstein: This book examines the power of small nudges in influencing people’s behavior. It discusses how policymakers and individuals can use these nudges to make better choices for themselves and society at large.
The Black Swan: The Impact of the Highly Improbable” by Nassim Nicholas Taleb: This book explores the concept of black swan events – unpredictable and rare occurrences that have significant impacts on society and markets. Taleb challenges conventional wisdom and advocates for preparedness in a world full of uncertainty.