Super Freakonomics Part 1

SuperFreakonomics.

Global Cooling, Patriotic Prost.i.tutes, and Why Suicide Bombers Should Buy Life Insurance.

AN EXPLANATORY NOTE

The time has come to admit that in our first book, we lied. Twice.

The first lie appeared in the introduction, where we wrote that the book had no "unifying theme." Here's what happened. Our publis.h.i.+ng house-nice people, smart people-read the first draft of our book and cried out in alarm: "This book has no unifying theme!" Instead, the ma.n.u.script was a random heap of stories about cheating teachers, self-dealing Realtors, and crack-selling mama's boys. There was no nifty theoretical foundation upon which these stories could be piled to miraculously add up to more than the sum of their parts.

Our publisher's alarm only grew when we proposed a t.i.tle for this mishmash of a book: Freakonomics. Even over the phone, you could hear the sound of palms smacking foreheads: This pair of bozos just delivered a ma.n.u.script with no unifying theme and a nonsensical, made-up t.i.tle!

It was duly suggested that in the published book we concede right up front, in the introduction, that we had no unifying theme. And so, in the interest of keeping the peace (and our book advance), that's what we did.

But in truth, the book did have a unifying theme, even if it wasn't obvious at the time, even to us. If pressed, you could boil it down to four words: People respond to incentives. If you wanted to get more expansive, you might say this: People respond to incentives, although not necessarily in ways that are predictable or manifest. Therefore, one of the most powerful laws in the universe is the law of unintended consequences. This applies to schoolteachers and Realtors and crack dealers as well as expectant mothers, sumo wrestlers, bagel salesmen, and the Ku Klux Klan.

The issue of the book's t.i.tle, meanwhile, still lay unresolved. After several months and dozens of suggestions, including Unconventional Wisdom (eh), Ain't Necessarily So (bleh), and E-Ray Vision (don't ask), our publisher finally decided that perhaps Freakonomics wasn't so bad after all-or, more precisely, it was so bad it might actually be good.

Or maybe they were simply exhausted.

The subt.i.tle promised that the book would explore "the hidden side of everything." This was our second lie. We were sure reasonable people would view such a phrase as intentional hyperbole. But some readers took it literally, complaining that our stories, as motley a collection as they were, did not in fact address "everything." And so, while the subt.i.tle was not intended as a lie, it turned out to be one. We apologize.

Our failure to include "everything" in the first book, however, had an unintended consequence of its own: it created the need for a second book. But let it be noted straightaway that this second book and the first book combined still do not literally comprise "everything."

The two of us have now been collaborators for several years. It began when one of us (Dubner, an author and journalist) wrote a magazine article about the other (Levitt, an academic economist). Adversaries in the beginning, albeit civil ones, we joined forces only when several publishers began to offer significant sums of money for a book. (Remember: people respond to incentives-and, despite the common perception, economists and journalists are people too.)

We discussed how the money should be divided. Almost immediately we came to an impa.s.se, for each of us insisted on a 6040 split. Upon realizing that we each thought the other guy should get 60 percent, we knew we'd have a good partners.h.i.+p. So we settled on 5050 and got to work.

We didn't feel much pressure writing that first book because we genuinely thought few people would read it. (Levitt's father agreed and said it was "immoral" to accept even a penny up front.) These low expectations liberated us to write about any-and everything we found worthwhile. So we had a pretty good time.

We were surprised and thrilled when the book became a hit. As profitable as it might have been to pump out a quick follow-up-think Freakonomics for Dummies or Chicken Soup for the Freakonomics Soul-we wanted to wait until we had done enough research that we couldn't help but write it all down. So here we finally are, more than four years later, with a second book that we believe is easily better than the first. Of course it is up to you, not us, to say if that is true-or perhaps if it's as bad as some people feared our first book might be.

If nothing else, our publishers have resigned themselves to our unyielding bad taste: when we proposed that this new book be called , they didn't even blink.

If this book is any good, you have yourselves to thank as well. One of the benefits of writing books in an age of such cheap and easy communication is that authors hear directly from their readers, loudly and clearly and in great number. Good feedback is hard to come by, and extremely valuable. Not only did we receive feedback on what we'd already written but also many suggestions for future topics. Some of you who sent e-mails will see your thoughts reflected in this book. Thank you.

The success of Freakonomics had one particularly strange by-product: we were regularly invited, together and separately, to give lectures to all sorts of groups. Often we were presented as the very sort of "experts" that in Freakonomics we warned you to watch out for-people who enjoy an informational advantage and have an incentive to exploit it. (We tried our best to disabuse audiences of the notion that we are actually expert in anything.)

These encounters also produced material for future writings. During a lecture at UCLA, one of us (Dubner) talked about how people wash their hands after using the bathroom far less often than they admit. Afterward, a gentleman approached the podium, offered his hand, and said he was a urologist. Despite this unappetizing introduction, the urologist had a fascinating story to tell about hand-was.h.i.+ng failures in a high-stakes setting-the hospital where he worked-and the creative incentives the hospital used to overcome these failures. You'll find that story in this book, as well as the heroic story of another, long-ago doctor who also fought poor hand hygiene.

At another lecture, to a group of venture capitalists, Levitt discussed some new research he was doing with Sudhir Venkatesh, the sociologist whose adventures with a crack-selling gang were featured in Freakonomics. The new research concerned the hour-by-hour activities of street prost.i.tutes in Chicago. As it happened, one of the venture capitalists (we'll call him John) had a date later that evening with a $300-an-hour prost.i.tute (who goes by the name of Allie). When John arrived at Allie's apartment, he saw a copy of Freakonomics on her coffee table.

"Where'd you get that?" John asked.

Allie said a girlfriend of hers who was also "in the business" had sent it to her.

Hoping to impress Allie-the male instinct to impress the female is apparently strong even when the s.e.x is already bought and paid for-John said he'd attended a lecture that very day by one of the book's authors. As if that weren't coincidence enough, Levitt mentioned he was doing some research on prost.i.tution.

A few days later, this e-mail landed in Levitt's in-box:

I heard through a mutual acquaintance that you are working on a paper about the economics of prost.i.tution, correct? Since I am not really sure if this is a serious project or if my source was putting me on, I just thought I would put myself out there and let you know I would love to be of a.s.sistance.

Thanks, Allie

One complication remained: Levitt had to explain to his wife and four kids that he wouldn't be home the following Sat.u.r.day morning, that instead he'd be having brunch with a prost.i.tute. It was vital, he argued, to meet with her in person to accurately measure the shape of her demand curve. Somehow, they bought it.

And so you will read about Allie in this book as well.

The chain of events that led to her inclusion might be attributed to what economists call c.u.mulative advantage. That is, the prominence of our first book produced a series of advantages in writing a second book that a different author may not have enjoyed. Our greatest hope is that we have taken proper advantage of this advantage.

Finally, while writing this book we have tried to rely on a bare minimum of economics jargon, which can be abstruse and unmemorable. So instead of thinking about the Allie affair as an example of c.u.mulative advantage, let's just call it...well, freaky.

INTRODUCTION

PUTTING THE FREAK IN ECONOMICS

Many of life's decisions are hard. What kind of career should you pursue? Does your ailing mother need to be put in a nursing home? You and your spouse already have two kids; should you have a third?

Such decisions are hard for a number of reasons. For one, the stakes are high. There's also a great deal of uncertainty involved. Above all, decisions like these are rare, which means you don't get much practice making them. You've probably gotten pretty good at buying groceries, since you do it so often, but buying your first house is another thing entirely.

Some decisions, meanwhile, are really, really easy.

Imagine you've gone to a party at a friend's house. He lives only a mile away. You have a great time, perhaps because you drank four gla.s.ses of wine. Now the party is breaking up. While draining your last gla.s.s, you dig out your car keys. Abruptly you conclude this is a bad idea: you are in no condition to drive home.

For the past few decades, we've been rigorously educated about the risks of driving under the influence of alcohol. A drunk driver is thirteen times more likely to cause an accident than a sober one. And yet a lot of people still drive drunk. In the United States, more than 30 percent of all fatal crashes involve at least one driver who has been drinking. During the late-night hours, when alcohol use is greatest, that proportion rises to nearly 60 percent. Overall, 1 of every 140 miles is driven drunk, or 21 billion miles each year.

Why do so many people get behind the wheel after drinking? Maybe because-and this could be the most sobering statistic yet-drunk drivers are rarely caught. There is just one arrest for every 27,000 miles driven while drunk. That means you could expect to drive all the way across the country, and then back, and then back and forth three more times, chugging beers all the while, before you got pulled over. As with most bad behaviors, drunk driving could probably be wiped out entirely if a strong-enough incentive were inst.i.tuted-random roadblocks, for instance, where drunk drivers are executed on the spot-but our society probably doesn't have the appet.i.te for that.

Meanwhile, back at your friend's party, you have made what seems to be the easiest decision in history: instead of driving home, you're going to walk. After all, it's only a mile. You find your friend, thank him for the party, and tell him the plan. He heartily applauds your good judgment.

But should he? We all know that drunk driving is terribly risky, but what about drunk walking? Is this decision so easy?

Let's look at some numbers. Each year, more than 1,000 drunk pedestrians die in traffic accidents. They step off sidewalks into city streets; they lie down to rest on country roads; they make mad dashes across busy highways. Compared with the total number of people killed in alcohol-related traffic accidents each year-about 13,000-the number of drunk pedestrians is relatively small. But when you're choosing whether to walk or drive, the overall number isn't what counts. Here's the relevant question: on a per-mile basis, is it more dangerous to drive drunk or walk drunk?

The average American walks about a half-mile per day outside the home or workplace. There are some 237 million Americans sixteen and older; all told, that's 43 billion miles walked each year by people of driving age. If we a.s.sume that 1 of every 140 of those miles are walked drunk-the same proportion of miles that are driven drunk-then 307 million miles are walked drunk each year.

Doing the math, you find that on a per-mile basis, a drunk walker is eight times more likely to get killed than a drunk driver.

There's one important caveat: a drunk walker isn't likely to hurt or kill anyone other than her-or himself. That can't be said of a drunk driver. In fatal accidents involving alcohol, 36 percent of the victims are either pa.s.sengers, pedestrians, or other drivers. Still, even after factoring in the deaths of those innocents, walking drunk leads to five times as many deaths per mile as driving drunk.

So as you leave your friend's party, the decision should be clear: driving is safer than walking. (It would be even safer, obviously, to drink less, or to call a cab.) The next time you put away four gla.s.ses of wine at a party, maybe you'll think through your decision a bit differently. Or, if you're too far gone, maybe your friend will help sort things out. Because friends don't let friends walk drunk.