If you thought economics were freaky before…
Levitt & Dubner return with more crazy connections in SuperFreakonomics
Here are just a few key takeaways from the book that’s making economics cool again (again).
- Freakonomics, or microeconomics, is fueled by relentless curiosity and embraces the analysis-driven approach to examine the motivations and decisions of individuals.
- All economic behavior is driven by incentives. Rational individuals can make unexpected decisions based on incentives that conventional economics assumes would point toward one particular choice for a perfectly rational individual.
- The factors that predict outcomes in certain situations can often be counterintuitive and are best revealed through studies of data without the bias of prior assumptions.
- An ideal experiment to prove or disprove an economic hypothesis would involve randomly assigned test and control groups, but that is often impractical or unethical.
- When laboratory experiments are unavailable, economists seek natural experiments that approximate a randomized, controlled trial through staggered adoption of policies or technologies.
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