Surfing Malcolm Gladwell’s wake on the wave of popular social science books came a pair of writers who set the stage for many journalist/social scientist combinations. Steven Levitt was a rising star in the world of economics when he was interviewed by successful journalist Stephen Dubner.
When the publishing world offered sufficient incentives (in the form of an author’s advance), they began their collaboration that has resulted in four books and over 5 million sales. More important, it opened our minds to the world of perverse incentives that the two dubbed ‘Freakonomics’.
Steven D Levitt
Steven Levitt is a successful academic. Born in New Orleans, in 1967, he studied economics at Harvard, graduating in 1989. He then spent a couple of years in management consulting, specialising in decision-making, before enrolling in a PhD programme at MIT.
His time at MIT was far from conventional. Whilst his peers did the standard thing of analysing case studies and studying theory, Levitt discerned a simple truth about academic life: success depends on published papers. So before even starting his formal thesis work, he was gathering and analysing his own data, conducting his own research, and writing his first papers.
His varied and curious approach to economics, and his succession of published papers, paid off. he was awarded his PhD in 1994 and, following a period as a research fellow at Harvard, was offered a post in arguably the most prestigious economics department in the US, at the University of Chicago. In just two years, he was made a professor.
He is now William Ogden Distinguished Service Professor of Economics and was, in 2003, the recipient of the John Bates Clark Medal. This is awarded every two years by the American Economic Association to the most promising US economist under the age of 40.
In the same year, a New York Times journalist interviewed Levitt for an extended article. That journalist was Stephen J Dubner.
Stephen J Dubner
Stephen Dubner was born in 1963 (AVGY), in New York, and started writing young. His first published work was in a children’s magazine . He studied at Appalachian State University in North Carolina. He graduated in 1984 and focused on a music career until he switched to writing in 1988 and enrolled in a Master of Fine Arts in Writing programme at Columbia University. After graduating in 1990, he taught in the English Department and started work as a journalist, becoming a story editor at The New York Times Magazine.
Dubner’s journalistic writing is highly regarded, and he has also written for Time, The New Yorker, and the Washington Post. In 2003, he interviewed a rising star among academic economists, called Steven Levitt.
The Spirit of Freakonomics
The thing about Freakonomics is that the book series, New York Times columns, and blogs range over a wide arena of social science and economics. What connects it all is the idea that, whilst everyone knows that people respond to incentives, research shows that some of our responses are surprising. So surprising, shocking, delightful, and curious, that the stories of what happens are compelling, and the unravelling of why it happens often reads like the most gripping of detective fiction.
The other vital aspect of the spirit of freakonomics is the combination of an academic economist’s eye for data and the story-telling capability of a seasoned journalist. These are held together by the glue of a shared sense of curiosity and delight in the phenomena that Levitt and Dubner explore.
The books make for a great read. They are thought-provoking and enhanced by Levitt’s analysis of large amounts of data. Indeed, the use of data is another theme. However, this is not to say that Levitt and Dubner’s conclusions have gone unchallenged. With astonishing claims, like ‘abortion cuts crime’, come a welter of critique.
In some cases the critiques have hit home, in other cases, Levitt and Dubner have successfully countered them. What all of their writing is, is entertaining and thought-provoking. It is no wonder that their books have sold so well. And, on the margins, they also highlight some important truths that managers would do well to note:
- People respond to incentives.
- People’s response to incentives is not always what you would expect and is sometimes hard to understand.
- Big data sets can hold within them valuable and surprising conclusions. We can uncover useful insights and, equally, demolish cherished assumptions.
- Working with big data sets in the messy and complex world of human interactions is tricky. Separating coincidence from causation among correlated data is hard. And extracting data where many confounding variables are present will open you up to biting challenge.
- Socio-economic evidence should inform policy, but not dictate it.
The Freakonomics Library
Steven Levitt at TED
Steven Levitt has spoken twice at TED events, in 2004 and 2005.