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).

  1. Freakonomics, or microeconomics, is fueled by relentless curiosity and embraces the analysis-driven approach to examine the motivations and decisions of individuals.
  2. 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.
  3. 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.
  4. 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.
  5. 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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