Superfreakonomics Part 1

Superfreakonomics.

Steven D. Levitt.

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 SuperFreakonomics, 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, AllieOne 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.SuperFreakonomics

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.

If you had the option of being born anywhere in the world today, India might not be the wisest choice. Despite its vaunted progress as a major player in the global economy, the country as a whole remains excruciatingly poor. Life expectancy and literacy rates are low; pollution and corruption are high. In the rural areas where more than two-thirds of Indians live, barely half of the households have electricity and only one in four homes has a toilet.It is especially unlucky to be born female, because many Indian parents express a strong "son preference." Only 10 percent of Indian families with two sons want another child, whereas nearly 40 percent of families with two daughters want to try again. Giving birth to a baby boy is like giving birth to a 401(k) retirement fund. He will grow up to be a wage-earning man who can provide for his parents in their sunset years and, when the time comes, light the funeral pyre. Having a baby girl, meanwhile, means relabeling the retirement fund a dowry fund. Although the dowry system has long been under a.s.sault, it is still common for a bride's parents to give the groom or his family cash, cars, or real estate. The bride's family is also expected to pay for the wedding.The U.S. charity Smile Train, which performs cleft-repair surgery on poor children around the world, recently spent some time in Chennai, India. When one local man was asked how many children he had, he answered "one." The organization later learned that the man did have a son-but he also had five daughters, who apparently didn't warrant a mention. Smile Train also learned that midwives in Chennai were sometimes paid $2.50 to smother a baby girl born with a cleft deformity-and so, putting the lure of incentives to good use, the charity began offering midwives as much as $10 for each baby girl they took to a hospital for cleft surgery.Girls are so undervalued in India that there are roughly 35 million fewer females than males in the population. Most of these "missing women," as the economist Amartya Sen calls them, are presumed dead, either by indirect means (the girl's parents withheld nutrition or medical care, perhaps to the benefit of a brother), direct harm (the baby girl was killed after birth, whether by a midwife or a parent), or, increasingly, a pre-birth decision. Even in India's smallest villages, where electricity might be sporadic and clean water hard to find, a pregnant woman can pay a technician to scan her belly with an ultrasound and, if the fetus is female, have an abortion. In recent years, as these s.e.x-selective abortions have become more common, the male-female ratio in India-as well as in other son-wors.h.i.+pping countries like China-has grown even more lopsided.A baby Indian girl who does grow into adulthood faces inequality at nearly every turn. She will earn less money than a man, receive worse health care and less education, and perhaps be subjected to daily atrocities. In a national health survey, 51 percent of Indian men said that wife-beating is justified under certain circ.u.mstances; more surprisingly, 54 percent of women agreed-if, for instance, a wife burns dinner or leaves the house without permission. More than 100,000 young Indian women die in fires every year, many of them "bride burnings" or other instances of domestic abuse.Indian women also run an outsize risk of unwanted pregnancy and s.e.xually transmitted disease, including a high rate of HIV/AIDS. One cause is that Indian men's condoms malfunction more than 15 percent of the time. Why such a high fail rate? According to the Indian Council of Medical Research, some 60 percent of Indian men have p.e.n.i.ses too small for the condoms manufactured to fit World Health Organization specs. That was the conclusion of a two-year study in which more than 1,000 Indian men had their p.e.n.i.ses measured and photographed by scientists. "The condom," declared one of the researchers, "is not optimized for India."With such a mult.i.tude of problems, what should be done to improve the lives of Indian women, especially the majority who live in the countryside?The government has tried to help by banning dowries and s.e.x-selective abortions, but these laws have largely been ignored. A number of monetary interventions have also been designed for Indian women. These include Apni Beti, Apna Dhan ("My Daughter, My Pride"), a project that pays rural women not to abort female babies; a vast micro-credit industry that makes small-business loans to women; and an array of charitable programs launched by a veritable alphabet soup of international aid agencies.The Indian government has also vowed to make smaller condoms more readily available.Unfortunately, most of these projects have proven complicated, costly, and, at best, nominally successful.A different sort of intervention, meanwhile, does seem to have helped. This one, like the ultrasound machine, relies on technology, but it had little to do with women per se and even less to do with baby-making. Nor was it administered by the Indian government or some multinational charity. In fact, it wasn't even designed to help anyone at all, at least not the way we normally think of "help." It was just a plain old entrepreneurial development, called television.State-run broadcast TV had been around for decades, but poor reception and a dearth of programming meant there simply wasn't much reason to watch. But lately, thanks to a steep fall in the price of equipment and distribution, great swaths of India have been wired for cable and satellite TV. Between 2001 and 2006, some 150 million Indians received cable for the first time, their villages suddenly crackling with the latest game shows and soap operas, newscasts and police procedurals, beamed from the big cities of India and abroad. TV gave many Indian villagers their first good look at the outside world.But not every village got cable TV, and those that did received it at different times. This staggered introduction produced just the kind of data-a lovely natural experiment-that economists love to exploit. The economists in this case were a pair of young Americans, Emily Oster and Robert Jensen. By measuring the changes in different villages based on whether (and when) each village got cable TV, they were able to tease out the effect of TV on Indian women.They examined data from a government survey of 2,700 households, most of them rural. Women fifteen and older were asked about their lifestyles, preferences, and familial relations.h.i.+ps. As it turned out, the women who recently got cable TV were significantly less willing to tolerate wife-beating, less likely to admit to having a son preference, and more likely to exercise personal autonomy. TV somehow seemed to be empowering women in a way that government interventions had not.What caused these changes? Did rural Indian women become more autonomous after seeing cosmopolitan images on their TV sets-women who dressed as they pleased, handled their own money, and were treated as neither property nor baby-making machines? Or did such programming simply make the rural women feel embarra.s.sed to admit to a government surveyor that they were treated so badly?There is good reason to be skeptical of data from personal surveys. There is often a vast gulf between how people say they behave and how they actually behave. (In economist-speak, these two behaviors are known as declared preferences and revealed preferences.) Furthermore, when it costs almost nothing to fib-as in the case of a government survey like this one-a reasonable amount of fibbing is to be expected. The fibs might even be subconscious, with the subject simply saying what she expects the surveyor wants to hear.But when you can measure the revealed preference, or the actual behavior, then you're getting somewhere. That's where Oster and Jensen found persuasive evidence of real change. Rural Indian families who got cable TV began to have a lower birthrate than families without TV. (In a country like India, a lower birthrate generally means more autonomy for women and fewer health risks.) Families with TV were also more likely to keep their daughters in school, which suggests that girls were seen as more valuable, or at least deserving of equal treatment. (The enrollment rate for boys, notably, didn't change.) These hard numbers made the self-reported survey data more believable. It appears that cable TV really did empower the women of rural India, even to the point of no longer tolerating domestic abuse.Or maybe their husbands were just too busy watching cricket.

When the world was lurching into the modern era, it grew magnificently more populous, and in a hurry. Most of this expansion took place in urban centers like London, Paris, New York, and Chicago. In the United States alone, cities grew by 30 million residents during the nineteenth century, with half of that gain in just the final twenty years.But as this swarm of humanity moved itself, and its goods, from place to place, a problem emerged. The main mode of transportation produced a slew of the by-products that economists call negative externalities, including gridlock, high insurance costs, and far too many traffic fatalities. Crops that would have landed on a family's dinner table were sometimes converted into fuel, driving up food prices and causing shortages. Then there were the air pollutants and toxic emissions, endangering the environment as well as individuals' health.We are talking about the automobile-aren't we?No, we're not. We are talking about the horse.The horse, a versatile and powerful helpmate since the days of antiquity, was put to work in many ways as modern cities expanded: pulling streetcars and private coaches, hauling construction materials, unloading freight from s.h.i.+ps and trains, even powering the machines that churned out furniture, rope, beer, and clothing. If your young daughter took gravely ill, the doctor rushed to your home on horseback. When a fire broke out, a team of horses charged through the streets with a pumping truck. At the turn of the twentieth century, some 200,000 horses lived and worked in New York City, or 1 for every 17 people.But oh, the troubles they caused!Horse-drawn wagons clogged the streets terribly, and when a horse broke down, it was often put to death on the spot. This caused further delays. Many stable owners held life-insurance policies that, to guard against fraud, stipulated the animal be euthanized by a third party. This meant waiting for the police, a veterinarian, or the ASPCA to arrive. Even death didn't end the gridlock. "Dead horses were extremely unwieldy," writes the transportation scholar Eric Morris. "As a result, street cleaners often waited for the corpses to putrefy so they could more easily be sawed into pieces and carted off."The noise from iron wagon wheels and horseshoes was so disturbing-it purportedly caused widespread nervous disorders-that some cities banned horse traffic on the streets around hospitals and other sensitive areas.And it was frighteningly easy to be struck down by a horse or wagon, neither of which is as easy to control as they appear in the movies, especially on slick, crowded city streets. In 1900, horse accidents claimed the lives of 200 New Yorkers, or 1 of every 17,000 residents. In 2007, meanwhile, 274 New Yorkers died in auto accidents, or 1 of every 30,000 residents. This means that a New Yorker was nearly twice as likely to die from a horse accident in 1900 than from a car accident today. (There are unfortunately no statistics available on drunk horse-drivers, but we can a.s.sume the number would be menacingly high.)Worst of all was the dung. The average horse produced about 24 pounds of manure a day. With 200,000 horses, that's nearly 5 million pounds of horse manure. A day. Where did it go?Decades earlier, when horses were less plentiful in cities, there was a smooth-functioning market for manure, with farmers buying it to truck off (via horse, of course) to their fields. But as the urban equine population exploded, there was a ma.s.sive glut. In vacant lots, horse manure was piled as high as sixty feet. It lined city streets like banks of snow. In the summertime, it stank to the heavens; when the rains came, a soupy stream of horse manure flooded the crosswalks and seeped into people's bas.e.m.e.nts. Today, when you admire old New York brownstones and their elegant stoops, rising from street level to the second-story parlor, keep in mind that this was a design necessity, allowing a homeowner to rise above the sea of horse manure.All of this dung was terrifically unhealthy. It was a breeding ground for billions of flies that spread a host of deadly diseases. Rats and other vermin swarmed the mountains of manure to pick out undigested oats and other horse feed-crops that were becoming more costly for human consumption thanks to higher horse demand. No one at the time was worried about global warming, but if they had been, the horse would have been Public Enemy No. 1, for its manure emits methane, a powerful greenhouse gas.In 1898, New York hosted the first international urban planning conference. The agenda was dominated by horse manure, because cities around the world were experiencing the same crisis. But no solution could be found. "Stumped by the crisis," writes Eric Morris, "the urban planning conference declared its work fruitless and broke up in three days instead of the scheduled ten."The world had seemingly reached the point where its largest cities could not survive without the horse but couldn't survive with it, either.And then the problem vanished. It was neither government fiat nor divine intervention that did the trick. City dwellers did not rise up in some ma.s.s movement of altruism or self-restraint, surrendering all the benefits of horse power. The problem was solved by technological innovation. No, not the invention of a dung-less animal. The horse was kicked to the curb by the electric streetcar and the automobile, both of which were extravagantly cleaner and far more efficient. The automobile, cheaper to own and operate than a horse-drawn vehicle, was proclaimed "an environmental savior." Cities around the world were able to take a deep breath-without holding their noses at last-and resume their march of progress.The story, unfortunately, does not end there. The solutions that saved the twentieth century seem to have imperiled the twenty-first, because the automobile and electric streetcar carried their own negative externalities. The carbon emissions spat out over the past century by more than 1 billion cars and thousands of coal-burning power plants seem to have warmed the earth's atmosphere. Just as equine activity once threatened to stomp out civilization, there is now a fear that human activity will do the same. Martin Weitzman, an environmental economist at Harvard, argues there is a roughly 5 percent chance that global temperatures will rise enough to "effectively destroy planet Earth as we know it." In some quarters-the media, for instance, which never met a potential apocalypse it didn't like-the fatalism runs even stronger.This is perhaps not very surprising. When the solution to a given problem doesn't lay right before our eyes, it is easy to a.s.sume that no solution exists. But history has shown again and again that such a.s.sumptions are wrong.This is not to say the world is perfect. Nor that all progress is always good. Even widespread societal gains inevitably produce losses for some people. That's why the economist Joseph Schumpeter referred to capitalism as "creative destruction."But humankind has a great capacity for finding technological solutions to seemingly intractable problems, and this will likely be the case for global warming. It isn't that the problem isn't potentially large. It's just that human ingenuity-when given proper incentives-is bound to be larger. Even more encouraging, technological fixes are often far simpler, and therefore cheaper, than the doomsayers could have imagined. Indeed, in the final chapter of this book we'll meet a band of renegade engineers who have developed not one but three global-warming fixes, any of which could be bought for less than the annual sales tally of all the Thoroughbred horses at Keeneland auction house in Kentucky.The value of horse manure, incidentally, has rebounded, so much so that the owners of one Ma.s.sachusetts farm recently called the police to stop a neighbor from hauling it away. The neighbor claimed there was a misunderstanding, that he'd been given permission by the farm's previous owner. But the current owner wouldn't back down, demanding $600 for the manure.Who was this manure-loving neighbor? None other than Martin Weitzman, the economist with the grave global-warming prediction."Congratulations," one colleague wrote to Weitzman when the story hit the papers. "Most economists I know are net exporters of horses.h.i.+t. And you are, it seems, a net importer."

The vanquis.h.i.+ng of horse manure...the unintended consequences of cable TV...the perils of walking while drunk: what does any of this have to do with economics?Instead of thinking of such stories as "economics," it is better to see them as ill.u.s.trating "the economic approach." That's a phrase made popular by Gary Becker, the longtime University of Chicago economist who was awarded a n.o.bel Prize in 1992. In his acceptance lecture, he explained that the economic approach "does not a.s.sume that individuals are motivated solely by selfishness or gain. It is a method of a.n.a.lysis, not an a.s.sumption about particular motivations.... Behavior is driven by a much richer set of values and preferences."Becker started his career studying topics that weren't typically germane to economics: crime and punishment, drug addiction, the allocation of time, and the costs and benefits of marriage, child rearing, and divorce. Most of his colleagues wouldn't go anywhere near such stuff. "For a long time," he recalled, "my type of work was either ignored or strongly disliked by most of the leading economists. I was considered way out and perhaps not really an economist."Well, if what Gary Becker was doing was "not really economics," then we want to do it too. Truth be told, what Becker was doing was actually freakonomics-marrying the economic approach to a rogue, freakish curiosity-but the word hadn't yet been invented.In his n.o.bel address, Becker suggested that the economic approach is not a subject matter, nor is it a mathematical means of explaining "the economy." Rather, it is a decision to examine the world a bit differently. It is a systematic means of describing how people make decisions and how they change their minds; how they choose someone to love and marry, someone perhaps to hate and even kill; whether, coming upon a pile of money, they will steal from it, leave it alone, or even add to it; why they may fear one thing and yearn for something only slightly different; why they'll punish one sort of behavior while rewarding a similar one.How do economists describe such decisions? It usually begins by acc.u.mulating data, great gobs of it, which may have been generated on purpose or perhaps left behind by accident. A good set of data can go a long way toward describing human behavior as long as the proper questions are asked of it. Our job in this book is to come up with such questions. This will allow us to describe, for instance, how the typical oncologist or terrorist or college student behaves in a given situation, and why.Some people may feel uneasy about reducing the vagaries of human behavior to cold numerical probabilities. Who among us wants to describe ourselves as "typical"? If, for instance, you added up all the women and men on the planet, you would find that, on average, the typical adult human being has one breast and one t.e.s.t.i.c.l.e-and yet how many people fit that description? If your loved one was killed in a drunk-driving accident, what comfort is there in knowing that walking drunk is more dangerous? If you are the young Indian bride who is brutalized by her husband, what cheer can be had from learning that cable TV has empowered the typical Indian bride?These objections are good and true. But while there are exceptions to every rule, it's also good to know the rule. In a complex world where people can be atypical in an infinite number of ways, there is great value in discovering the baseline. And knowing what happens on average is a good place to start. By so doing, we insulate ourselves from the tendency to build our thinking-our daily decisions, our laws, our governance-on exceptions and anomalies rather than on reality.Cast an eye back for a moment to the summer months of 2001, which in the United States came to be known as the Summer of the Shark. The media brought us chilling tales of rampant shark carnage. The prime example was the story of Jessie Arbogast, an eight-year-old boy who was playing in the warm, shallow Gulf waves of Pensacola, Florida, when a bull shark ripped off his right arm and gorged a big piece of his thigh as well. Time magazine ran a cover package about shark attacks. Here is the lead of the main article:Sharks come silently, without warning. There are three ways they strike: the hit-and-run, the b.u.mp-and-bite and the sneak attack. The hit-and-run is the most common. The shark may see the sole of a swimmer's foot, think it's a fish and take a bite before realizing this isn't its usual prey.Scared yet?A reasonable person might never go near the ocean again. But how many shark attacks do you think actually happened that year?Take a guess-and then cut your guess in half, and now cut it in half a few more times. During the entire year of 2001, around the world there were just 68 shark attacks, of which 4 were fatal.Not only are these numbers far lower than the media hysteria implied; they were also no higher than in earlier years or in the years to follow. Between 1995 and 2005, there were on average 60.3 worldwide shark attacks each year, with a high of 79 and a low of 46. There were on average 5.9 fatalities per year, with a high of 11 and a low of 3. In other words, the headlines during the summer of 2001 might just as easily have read "Shark Attacks About Average This Year." But that probably wouldn't have sold many magazines.So for a moment, instead of thinking about poor Jessie Arbogast and the tragedy he and his family faced, think of this: in a world with more than 6 billion people, only 4 of them died in 2001 from shark attacks. More people are probably run over each year by TV news vans.Elephants, meanwhile, kill at least 200 people every year. So why aren't we petrified of them? Probably because most of their victims live in places far from the world's media centers. It may also have something to do with the perceptions we glean from the movies. Friendly, entertaining elephants are a staple of children's films (think Babar and Dumbo); sharks, meanwhile, are inevitably typecast as villains. If sharks had any legal connections whatsoever, they surely would have sued for an injunction against Jaws.And yet the shark scare played out so relentlessly that summer of 2001, with such full-throated horror, that it didn't quiet down until the terrorist attacks on September 11 at the World Trade Center and the Pentagon. Nearly 3,000 people were killed that day-some 2,500 more than have died from shark attacks since the first records were kept, in the late sixteenth century.So despite its shortcomings, thinking in terms of the typical does have its advantages. We have therefore done our best to tell stories in this book that rely on acc.u.mulated data rather than on individual anecdotes, glaring anomalies, personal opinions, emotional outbursts, or moral leanings. Some people may argue that statistics can be made to say anything, to defend indefensible causes or tell pet lies. But the economic approach aims for the opposite: to address a given topic with neither fear nor favor, letting numbers speak the truth. We don't take sides. The introduction of TV, for instance, has substantially helped the women of rural India. This doesn't mean we accept the power of TV as unerringly positive. As you will read in chapter 3, the introduction of TV in the United States produced a devastating societal change.The economic approach isn't meant to describe the world as any one of us might want it to be, or fear that it is, or pray that it becomes-but rather to explain what it actually is. Most of us want to fix or change the world in some fas.h.i.+on. But to change the world, you first have to understand it.

As of this writing, we are roughly one year into a financial crisis that began with a subprime-mortgage binge in the United States and spread, like an extremely communicable disease, around the world. There will be hundreds, if not thousands, of books published on the topic.This is not one of them.Why? Mainly because the macroeconomy and its mult.i.tude of complex, moving parts is simply not our domain. After recent events, one might wonder if the macroeconomy is the domain of any economist. Most economists the public encounters are presented as oracles who can tell you, with alluring certainty, where the stock market or inflation or interest rates are heading. But as we've seen lately, such predictions are generally worthless. Economists have a hard enough time explaining the past, much less predicting the future. (They are still arguing over whether Franklin Delano Roosevelt's policy moves quelled the Great Depression or exacerbated it!) They are not alone, of course. It seems to be part of the human condition to believe in our own predictive abilities-and, just as well, to quickly forget how bad our predictions turned out to be.So we have practically nothing to say in this book about what people call "the economy." Our best defense (slim as it may be) is that the topics we do write about, while not directly connected to "the economy," may give some insights into actual human behavior. Believe it or not, if you can understand the incentives that lead a schoolteacher or a sumo wrestler to cheat, you can understand how the subprime-mortgage bubble came to pa.s.s.The stories you will read are set in many realms, from the rarefied corridors of academia to the grimiest street corners. Many are based on Levitt's recent academic research; others have been inspired by fellow economists as well as engineers and astrophysicists, psychotic killers and emergency-room doctors, amateur historians and transgender neuroscientists.* Most of the stories fall into one of two categories: things you always thought you knew but didn't; and things you never knew you wanted to know but do.Many of our findings may not be all that useful, or even conclusive. But that's all right. We are trying to start a conversation, not have the last word. Which means you may find a few things in the following pages to quarrel with.In fact, we'd be disappointed if you didn't.SuperFreakonomics

CHAPTER 1.

HOW IS A STREET PROSt.i.tUTE LIKE A DEPARTMENT-STORE SANTA?One afternoon not long ago, on a welcoming cool day toward the end of summer, a twenty-nine-year-old woman named LaSheena sat on the hood of an SUV outside the Dearborn Homes, a housing project on the South Side of Chicago. She had a beaten-down look in her eyes but otherwise seemed youthful, her pretty face framed by straightened hair. She was dressed in a baggy black-and-red tracksuit, the kind she'd worn since she was a kid. Her parents rarely had money for new clothes, so she used to get her male cousins' hand-me-downs, and the habit stuck.LaSheena was talking about how she earns her living. She described four main streams of income: "boosting," "roosting," cutting hair, and turning tricks."Boosting," she explained, is shoplifting and selling the swag. "Roosting" means serving as a lookout for the local street gang that sells drugs. She gets $8 for a boy's haircut and $12 for a man's.Which job is the worst of the four?"Turning tricks," she says, with no hesitation.Why?"'Cause I don't really like men. I guess it bothers me mentally."And what if prost.i.tution paid twice as much?"Would I do it more?" she asks. "Yeah!"

Throughout history, it has invariably been easier to be male than female. Yes, this is an overgeneralization and yes, there are exceptions, but by any important measure, women have had it rougher than men. Even though men handled most of the warfare, hunting, and brute-force labor, women had a shorter life expectancy. Some deaths were more senseless than others. Between the thirteenth and nineteenth centuries, as many as 1 million European women, most of them poor and many of them widowed, were executed for witchcraft, taking the blame for bad weather that killed crops.Women have finally overtaken men in life expectancy, thanks mainly to medical improvements surrounding childbirth. In many countries, however, being female remains a serious handicap even in the twenty-first century. Young women in Cameroon have their b.r.e.a.s.t.s "ironed"-beaten or ma.s.saged by a wooden pestle or a heated coconut sh.e.l.l-to make them less s.e.xually tempting. In China, foot binding has finally been done away with (after roughly one thousand years), but females are still far more likely than males to be abandoned after birth, to be illiterate, and to commit suicide. And women in rural India, as we wrote earlier, continue to face discrimination in just about every direction.But especially in the world's developed nations, women's lives have improved dramatically. There is no comparing the prospects of a girl in twenty-first-century America or Britain or j.a.pan with her counterpart from a century or two earlier. In any arena you look-education, legal and voting rights, career opportunities, and so on-it is far better to be a woman today than at any other point in history. In 1872, the earliest year for which such statistics are available, 21 percent of college students in the United States were female. Today, that number is 58 percent and rising. It has truly been a stunning ascendancy.And yet there is still a considerable economic price to pay for being a woman. For American women twenty-five and older who hold at least a bachelor's degree and work full-time, the national median income is about $47,000. Similar men, meanwhile, make more than $66,000, a premium of 40 percent. The same is true even for women who attend the nation's elite universities. The economists Claudia Goldin and Lawrence Katz found that women who went to Harvard earned less than half as much as the average Harvard man. Even when the a.n.a.lysis included only full-time, full-year employees and controlled for college major, profession, and other variables, Goldin and Katz found that the Harvard women still earned about 30 percent less than their male counterparts.What can possibly account for such a huge wage gap?There are a variety of factors. Women are more likely to leave the workforce or downs.h.i.+ft their careers to raise a family. Even within high-paying occupations like medicine and law, women tend to choose specialties that pay less (general pract.i.tioner, for instance, or in-house counsel). And there is likely still a good amount of discrimination. This may range from the overt-denying a woman a promotion purely because she is not a man-to the insidious. A considerable body of research has shown that overweight women suffer a greater wage penalty than overweight men. The same is true for women with bad teeth.There are some biological wild cards as well. The economists Andrea Ichino and Enrico Moretti, a.n.a.lyzing personnel data from a large Italian bank, found that female employees under forty-five years old tended to miss work consistently on twenty-eight-day cycles. Plotting these absences against employee productivity ratings, the economists determined that this menstrual absenteeism accounted for 14 percent of the difference between female and male earnings at the bank.Or consider the 1972 U.S. law known as t.i.tle IX. While broadly designed to prohibit s.e.x discrimination in educational settings, t.i.tle IX also required high schools and colleges to bring their women's sports programs up to the level of their men's programs. Millions of young women subsequently joined these new programs, and as the economist Betsey Stevenson discovered, girls who play high-school sports are more likely to attend college and land a solid job, especially in some of the high-skill fields traditionally dominated by men. That's the good news.But t.i.tle IX also brought some bad news for women. When the law was pa.s.sed, more than 90 percent of college women's sports teams had female head coaches. t.i.tle IX boosted the appeal of such jobs: salaries rose and there was more exposure and excitement. Like the lowly peasant food that is "discovered" by the culinary elite and promptly migrates from roadside shacks into high-end restaurants, these jobs were soon snapped up by a new set of customers: men. These days, barely 40 percent of college women's sports teams are coached by women. Among the most visible coaching jobs in women's sports are those in the Women's National Basketball a.s.sociation (WNBA), founded thirteen years ago as a corollary to the men's NBA. As of this writing, the WNBA has 13 teams and just 6 of them-again, fewer than 50 percent-are coached by women. This is actually an improvement from the league's tenth anniversary season, when only 3 of the 14 coaches were women.For all the progress women have made in the twenty-first-century labor market, the typical female would come out well ahead if she had simply had the foresight to be born male.

There is one labor market women have always dominated: prost.i.tution.Its business model is built upon a simple premise. Since time immemorial and all over the world, men have wanted more s.e.x than they could get for free. So what inevitably emerges is a supply of women who, for the right price, are willing to satisfy this demand.Today prost.i.tution is generally illegal in the United States, albeit with a few exceptions and many inconsistencies in enforcement. In the early years of the nation, prost.i.tution was frowned upon but not criminalized. It was during the Progressive Era, roughly from the 1890s to the 1920s, that this leniency ended. There was a public outcry against "white slavery," in which thousands of women were imprisoned against their will to work as prost.i.tutes.The white slavery problem turned out to be a wild exaggeration. The reality was perhaps scarier: rather than being forced into prost.i.tution, women were choosing it for themselves. In the early 1910s, the Department of Justice conducted a census of 310 cities in 26 states to tally the number of prost.i.tutes in the United States: "We arrive at the conservative figure of approximately 200,000 women in the regular army of vice."At the time, the American population included 22 million women between the ages of fifteen and forty-four. If the DOJ numbers are to be believed, 1 of every 110 women in that age range was a prost.i.tute. But most prost.i.tutes, about 85 percent, were in their twenties. In that age range, 1 of every 50 American women was a prost.i.tute.The market was particularly strong in Chicago, which had more than a thousand known brothels. The mayor a.s.sembled a blue-ribbon Vice Commission, comprising religious leaders as well as civic, educational, legal, and medical authorities. Once they got their hands dirty, these good people realized they were up against an enemy even more venal than s.e.x: economics."Is it any wonder," the commission declared, "that a tempted girl who receives only $6 per week working with her hands sells her body for $25 per week when she learns that there is demand for it and men are willing to pay the price?"Converted into today's dollars, the $6-per-week shopgirl had an annual salary of only $6,500. The same woman who took up prost.i.tution at $25 a week earned the modern equivalent of more than $25,000 a year. But the Vice Commission acknowledged that $25 per week was at the very low end of what Chicago prost.i.tutes earned. A woman working in a "dollar house" (some brothels charged as little as 50 cents; others charged $5 or $10) took home an average weekly salary of $70, or the modern equivalent of about $76,000 annually.At the heart of the Levee, the South Side neighborhood that housed block after block of brothels, stood the Everleigh Club, which the Vice Commission described as "the most famous and luxurious house of prost.i.tution in the country." Its customers included business t.i.tans, politicians, athletes, entertainers, and even a few anti-prost.i.tution crusaders. The Everleigh's prost.i.tutes, known as "b.u.t.terfly girls," were not only attractive, hygienic, and trustworthy, but also good conversationalists who could cite cla.s.sical poetry if that's what floated a particular gentleman's boat. In the book Sin in the Second City, Karen Abbott reports that the Everleigh also offered s.e.xual delicacies that weren't available elsewhere-"French" style, for instance, commonly known today as oral s.e.x.In an age when a nice dinner cost about $12 in today's currency, the Everleigh's customers were willing to pay the equivalent of $250 just to get into the club and $370 for a bottle of champagne. Relatively speaking, the s.e.x was pretty cheap: about $1,250.Ada and Minna Everleigh, the sisters who ran the brothel, guarded their a.s.sets carefully. b.u.t.terflies were provided with a healthful diet, excellent medical care, a well-rounded education, and the best wage going: as much as $400 a week, or the modern equivalent of about $430,000 a year.To be sure, an Everleigh b.u.t.terfly's wages were off the charts. But why did even a typical Chicago prost.i.tute one hundred years ago earn so much money?The best answer is that wages are determined in large part by the laws of supply and demand, which are often more powerful than laws made by legislators.In the United States especially, politics and economics don't mix well. Politicians have all sorts of reasons to pa.s.s all sorts of laws that, as well-meaning as they may be, fail to account for the way real people respond to real-world incentives.When prost.i.tution was criminalized in the United States, most of the policing energy was directed at the prost.i.tutes rather than their customers. This is pretty typical. As with other illicit markets-think about drug dealing or black-market guns-most governments prefer to punish the people who are supplying the goods and services rather than the people who are consuming them.But when you lock up a supplier, a scarcity is created that inevitably drives the price higher, and that entices more suppliers to enter the market. The U.S. "war on drugs" has been relatively ineffective precisely because it focuses on sellers and not buyers. While drug buyers obviously outnumber drug sellers, more than 90 percent of all prison time for drug convictions is served by dealers.Why doesn't the public support punis.h.i.+ng users? It may seem unfair to punish the little guy, the user, when he can't help himself from partaking in vice. The suppliers, meanwhile, are much easier to demonize.But if a government really wanted to crack down on illicit goods and services, it would go after the people who demand them. If, for instance, men convicted of hiring a prost.i.tute were sentenced to castration, the market would contract in a hurry.In Chicago some one hundred years ago, the risk of punishment fell almost entirely on the prost.i.tute. Besides the constant threat of arrest, there was also the deep social stigma of prost.i.tution. Perhaps the greatest penalty was that a woman who worked as a prost.i.tute would never be able to find a suitable husband. Combine these factors and you can see that a prost.i.tute's wages had to be high to entice enough women to satisfy the strong demand.The biggest money, of course, was taken home by the women at the top of the prost.i.tution pyramid. By the time the Everleigh Club was shut down-the Chicago Vice Commission finally got its way-Ada and Minna Everleigh had acc.u.mulated, in today's currency, about $22 million.

The mansion that housed the Everleigh Club is long gone. So is the entire Levee district. The very street grid where the Everleigh stood was wiped away in the 1960s, replaced by a high-rise housing project.But this is still the South Side of Chicago and prost.i.tutes still work there-like LaSheena, in the black-and-red tracksuit-although you can be pretty sure they won't be quoting you any Greek poetry.LaSheena is one of the many street prost.i.tutes Sudhir Venkatesh has gotten to know lately. Venkatesh, a sociologist at Columbia University in New York, spent his grad-school years in Chicago and still returns there regularly for research.When he first arrived, he was a naive, sheltered, Grateful Deadloving kid who'd grown up in laid-back California, eager to take the temperature of an intense town where race-particularly black and white-played out with great zeal. Being neither black nor white (he was born in India) worked in Venkatesh's favor, letting him slip behind the battle lines of both academia (which was overwhelmingly white) and the South Side ghettos (which were overwhelmingly black). Before long, he had embedded himself with a street gang that practically ran the neighborhood and made most of its money by selling crack cocaine. (Yes, it was Venkatesh's research that figured prominently in the Freakonomics chapter about drug dealers, and yes, we are back now for a second helping.) Along the way, he became an authority on the neighborhood's underground economy, and when he was done with the drug dealers he moved on to the prost.i.tutes.But an interview or two with a woman like LaSheena can reveal only so much. Anyone who wants to really understand the prost.i.tution market needs to acc.u.mulate some real data.That's easier said than done. Because of the illicit nature of the activity, standard data sources (think of census forms or tax rolls) are no help. Even when prost.i.tutes have been surveyed directly in previous studies, the interviews are often conducted long after the fact and by the kind of agency (a drug-rehab center, for instance, or a church shelter) that doesn't necessarily elicit impartial results.Moreover, earlier research has shown that when people are surveyed about stigmatizing behavior, they either downplay or exaggerate their partic.i.p.ation, depending on what's at stake or who is asking.Consider the Mexican welfare program Oportunidades. To get aid, applicants have to itemize their personal possessions and household goods. Once an applicant is accepted, a caseworker visits his home and learns whether the applicant was telling the truth.Cesar Martinelli and Susan W. Parker, two economists who a.n.a.lyzed the data from more than 100,000 Oportunidades clients, found that applicants routinely underreported certain items, including cars, trucks, video recorders, satellite TVs, and was.h.i.+ng machines. This shouldn't surprise anyone. People hoping to get welfare benefits have an incentive to make it sound like they are poorer than they truly are. But as Martinelli and Parker discovered, applicants overreported other items: indoor plumbing, running water, a gas stove, and a concrete floor. Why on earth would welfare applicants say they had these essentials when they didn't?Martinelli and Parker attribute it to embarra.s.sment. Even people who are poor enough to need welfare apparently don't want to admit to a welfare clerk that they have a dirt floor or live without a toilet.Venkatesh, knowing that traditional survey methods don't necessarily produce reliable results for a sensitive topic like prost.i.tution, tried something different: real-time, on-the-spot data collection. He hired trackers to stand on street corners or sit in brothels with the prost.i.tutes, directly observing some facets of their transactions and gathering more intimate details from the prost.i.tutes as soon as the customers were gone.Most of the trackers were former prost.i.tutes-an important credential because such women were more likely to get honest responses. Venkatesh also paid the prost.i.tutes for partic.i.p.ating in the study. If they were willing to have s.e.x for money, he reasoned, surely they'd be willing to talk about having s.e.x for money. And they were. Over the course of nearly two years, Venkatesh acc.u.mulated data on roughly 160 prost.i.tutes in three separate South Side neighborhoods, logging more than 2,200 s.e.xual transactions.The tracking sheets recorded a considerable variety of data, including:The specific s.e.xual act performed, and the duration of the trickWhere the act took place (in a car, outdoors, or indoors)Amount received in cashAmount received in drugsThe customer's raceThe customer's approximate ageThe customer's attractiveness (10 = s.e.xy, 1 = disgusting)Whether a condom was usedWhether the customer was new or returningIf it could be determined, whether the customer was married; employed; affiliated with a gang; from the neighborhoodWhether the prost.i.tute stole from the customerWhether the customer gave the prost.i.tute any trouble, violent or otherwiseWhether the s.e.x act was paid for, or was a "freebie"So what can these data tell us?Let's start with wages. It turns out that the typical street prost.i.tute in Chicago works 13 hours a week, performing 10 s.e.x acts during that period, and earns an hourly wage of approximately $27. So her weekly take-home pay is roughly $350. This includes an average of $20 that a prost.i.tute steals from her customers and acknowledges that some prost.i.tutes accept drugs in lieu of cash-usually crack cocaine or heroin, and usually at a discount. Of all the women in Venkatesh's study, 83 percent were drug addicts.Like LaSheena, many of these women took on other, non-prost.i.tution work, which Venkatesh also tracked. Prost.i.tution paid about four times more than those jobs. But as high as that wage premium may be, it looks pretty meager when you consider the job's downsides. In a given year, a typical prost.i.tute in Venkatesh's study experienced a dozen incidents of violence. At least 3 of the 160 prost.i.tutes who partic.i.p.ated died during the course of the study. "Most of the violence by johns is when, for some reason, they can't consummate or can't get erect," says Venkatesh. "Then he's shamed-'I'm too manly for you' or 'You're too ugly for me!' Then the john wants his money back, and you definitely don't want to negotiate with a man who just lost his masculinity."Moreover, the women's wage premium pales in comparison to the one enjoyed by even the low-rent prost.i.tutes from a hundred years ago. Compared with them, women like LaSheena are working for next to nothing.Why has the prost.i.tute's wage fallen so far?Because demand has fallen dramatically. Not the demand for s.e.x. That is still robust. But prost.i.tution, like any industry, is vulnerable to compet.i.tion.Who poses the greatest compet.i.tion to a prost.i.tute? Simple: any woman who is willing to have s.e.x with a man for free.It is no secret that s.e.xual mores have evolved substantially in recent decades. The phrase "casual s.e.x" didn't exist a century ago (to say nothing of "friends with benefits"). s.e.x outside of marriage was much harder to come by and carried significantly higher penalties than it does today.Imagine a young man, just out of college but not ready to settle down, who wants to have some s.e.x. In decades past, prost.i.tution was a likely option. Although illegal, it was never hard to find, and the risk of arrest was minuscule. While relatively expensive in the short term, it provided good long-term value because it didn't carry the potential costs of an unwanted pregnancy or a marriage commitment. At least 20 percent of American men born between 1933 and 1942 had their first s.e.xual intercourse with a prost.i.tute.Now imagine that same young man twenty years later. The s.h.i.+ft in s.e.xual mores has given him a much greater supply of unpaid s.e.x. In his generation, only 5 percent of men lose their virginity to a prost.i.tute. And it's not that he and his friends are saving themselves for marriage. More than 70 percent of the men in his generation have s.e.x before they marry, compared with just 33 percent in the earlier generation.So premarital s.e.x emerged as a viable subst.i.tute for prost.i.tution. And as the demand for paid s.e.x decreased, so too did the wage of the people who provide it.If prost.i.tution were a typical industry, it might have hired lobbyists to fight against the encroachment of premarital s.e.x. They would have pushed to have premarital s.e.x criminalized or, at the very least, heavily taxed. When the steelmakers and sugar producers of America began to feel the heat of compet.i.tion-in the form of cheaper goods from Mexico, China, or Brazil-they got the federal government to impose tariffs that protected their homegrown products.Such protectionist tendencies are nothing new. More than 150 years ago, the French economist Frederic Bastiat wrote "The Candlemakers' Pet.i.tion," said to represent the interests of "the Manufacturers of Candles, Tapers, Lanterns, Candlesticks, Street Lamps, Snuffers, and Extinguishers" as well as "the Producers of Tallow, Oil, Resin, Alcohol, and Generally Everything Connected with Lighting."These industries, Bastiat complained, "are suffering from the ruinous compet.i.tion of a foreign rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price."Who was this dastardly foreign rival?"None other than the sun," wrote Bastiat. He begged the French government to pa.s.s a law forbidding all citizens to allow sunlight to enter their homes. (Yes, his pet.i.tion was a satire; in economists' circles, this is what pa.s.ses for radical high jinks.)Alas, the prost.i.tution industry lacks a champion as pa.s.sionate, even in jest, as Bastiat. And unlike the sugar and steel industries, it holds little sway in Was.h.i.+ngton's corridors of power-despite, it should be said, its many, many connections with men of high government office. This explains why the industry's fortunes have been so badly buffeted by the naked winds of the free market.

Prost.i.tution is more geographically concentrated than other criminal activity: nearly half of all Chicago prost.i.tution arrests occur in less than one-third of 1 percent of the city's blocks. What do these blocks have in common? They are near train stations and major roads (prost.i.tutes need to be where customers can find them) and have a lot of poor residents-although not, as is common in most poor neighborhoods, an overabundance of female-headed households.This concentration makes it possible to take Venkatesh's data and merge it with the Chicago Police Department's citywide arrest data to estimate the scope of street prost.i.tution citywide. The conclusion: in any given week, about 4,400 women are working as street prost.i.tutes in Chicago, turning a combined 1.6 million tricks a year for 175,000 different men. That's about the same number of prost.i.tutes who worked in Chicago a hundred years ago. Considering that the city's population has grown by 30 percent since then, the per-capita count of street prost.i.tutes has fallen significantly. One thing that hasn't changed: for the customer at least, prost.i.tution is only barely illegal. The data show that a man who solicits a street prost.i.tute is likely to be arrested about once for every 1,200 visits.The prost.i.tutes in Venkatesh's study worked in three separate areas of the city: West Pullman, Roseland, and Was.h.i.+ngton Park. Most of these neighborhoods' residents are African American, as are the prost.i.tutes. West Pullman and Roseland, which adjoin each other, are working-cla.s.s neighborhoods on the far South Side that used to be almost exclusively white (West Pullman was organized around the Pullman train factory). Was.h.i.+ngton Park has been a poor black neighborhood for decades. In all three areas, the race of the prost.i.tutes' clientele is mixed.Monday is easily the slowest night of the week for these prost.i.tutes. Fridays are the busiest, but on Sat.u.r.day night a prost.i.tute will typically earn about 20 percent more than on Friday.Why isn't the busiest night also the most profitable? Because the sing