Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

Economics is the study of the making and distribution of goods and services. Chief concerns among economists are the incentives—things that pull people toward or away from certain behaviors—that lie behind economic activity. A central purpose of Freakonomics is to show that those incentives can be quite surprising. People don’t always act in ways we expect, and that can cause negative outcomes.

The book includes several anecdotes that illustrate this point. Israeli parents were sometimes late picking up their children from daycare; when a $3 fine was introduced, tardiness went up, not down. Real estate agents are good at selling houses quickly, but this is because they make more money if their clients get less for their homes. Sometimes kids do poorly in school, not because they’re unable to do well, but because their peers punish them for getting As.

In other situations, people make persistent efforts to no avail but don’t realize it. Politicians spend large sums of money during electoral campaigns, but the amount spent has little effect on voting outcomes. Parents go to great lengths to provide their children with the best educational resources, but these have little effect; it’s who parents are as people that makes the biggest, if hidden, difference.