A THREAD on key ideas from the book "Freakonomics" by Steven Levitt & Stephen Dubner:
1/
Economics is, at root, the study of incentives: how people get what they want, or need, especially when other people want or need the same thing.
1/
Economics is, at root, the study of incentives: how people get what they want, or need, especially when other people want or need the same thing.
2/
Incentives are the cornerstone of modern life.
And understanding them is the key to solving just about any riddle, from violent crime to sports cheating to online dating.
Incentives are the cornerstone of modern life.
And understanding them is the key to solving just about any riddle, from violent crime to sports cheating to online dating.
3/
Morality represents the way that people would like the world to work, wheareas economics represents how it actually does work.
When moral posturing is replaced by an honest assessment of the data, the result is often a new, surprising insight.
Morality represents the way that people would like the world to work, wheareas economics represents how it actually does work.
When moral posturing is replaced by an honest assessment of the data, the result is often a new, surprising insight.
4/
Since the science of economics is primarily a set of tools, as opposed to a subject matter, then no subject, however offbeat, need be beyond its reach.
Since the science of economics is primarily a set of tools, as opposed to a subject matter, then no subject, however offbeat, need be beyond its reach.
5/
Knowing what to measure and how to measure it makes a complicated world much less so.
Knowing what to measure and how to measure it makes a complicated world much less so.
6/
There are three basic flavors of incentive: economic, social, and moral.
Very often a single incentive scheme will include all three varieties.
Think about the anti-smoking campaign of recent years.
The addition of a $3-per-pack “sin tax” is a strong economic...
There are three basic flavors of incentive: economic, social, and moral.
Very often a single incentive scheme will include all three varieties.
Think about the anti-smoking campaign of recent years.
The addition of a $3-per-pack “sin tax” is a strong economic...
... incentive against buying cigarettes.
The banning of cigarettes in restaurants and bars is a powerful social incentive.
And when the U.S. government asserts that terrorists raise money by selling black-market cigarettes, that acts as a rather jarring moral incentive.
The banning of cigarettes in restaurants and bars is a powerful social incentive.
And when the U.S. government asserts that terrorists raise money by selling black-market cigarettes, that acts as a rather jarring moral incentive.
7/
Information is a beacon, a cudgel, an olive branch, a deterrent--all depending on who wields it and how.
Information is a beacon, a cudgel, an olive branch, a deterrent--all depending on who wields it and how.
8/
Information is the currency of the Internet, which has accomplished what even the most fervent consumer advocates usually cannot: it has vastly shrunk the gap between the experts & the public.
But despite its power, it has failed to kill the beast of informational asymmetry.
Information is the currency of the Internet, which has accomplished what even the most fervent consumer advocates usually cannot: it has vastly shrunk the gap between the experts & the public.
But despite its power, it has failed to kill the beast of informational asymmetry.
9/
Experts depend on the fact that you don’t have the info they do.
Or that you are so befuddled by complexity of their operation that you wouldn’t know what to do with the info if you had it.
Or that you are so in awe of their expertise that you wouldn’t dare challenge them.
Experts depend on the fact that you don’t have the info they do.
Or that you are so befuddled by complexity of their operation that you wouldn’t know what to do with the info if you had it.
Or that you are so in awe of their expertise that you wouldn’t dare challenge them.
10/
Sunlight is said to be the best of disinfectants.
Sunlight is said to be the best of disinfectants.
