Adonis Diaries

Posts Tagged ‘FreakOnomics

 

Micro-economics freak, Freakonomics…: Who is Steven Levitt

Note: updated this review book of 2011

Seven  D. Levitt made himself famous by focusing on micro-economics phenomena that macro-economics scholars would not touch with a long pole.

The macro-economists theorize about mathematical monetary issues, but Levitt says: “I don’t pretend to know very much about the field of economics, I am poor in econometrics (mathematical set of equations with an objective equation and a set of constraint equations, like in operation research field), I don’t know how to do theory. It would be a total fake on my part if I claim that I know how the stock market moves, or if the economy is shrinking, or if deflation is bad or good…”

Levitt’s point of view is that economics is a science with excellent tools for gaining insights, but it lacks and is short on interesting questions to ponder upon.

Steven loves to ask freaky questions and get on with the task of torturing data-bases in order to discover trends and correlations among the various factors.

For example, you ask a question that interest you, and you discover the story behind the problem, such as:

1) Why most drug dealers still live with their mothers?

2) Which is more dangerous: Having a gun at home or a private swimming pool?

3) Why crime rate plunged dramatically in the last two decades and is still witnessing a steady decline, though population increased and the economy has its feet flailing up?

4) Why your real estate agent sells his own home at a higher price and stay longer on the market?

5) Does your stock broker has your best interest in mind?

6) Why black parents give their children names that they know may hurt their career prospects…?

7) Do school teacher cheat to meet high-stakes testing standards?

8) Why police departments distort crime data and eliminate cases from the records…?

Do you believe that the problems of this modern world are not impenetrable, and can be resolved, if the right questions are asked, and people are dedicated in uncovering the real story?

Are you curious in divulging the real stories behind cheating, corruption, and criminal behaviors and activities?

Levitt just loves to play the economist investigator to questions that are related to criminal behaviors.

Levitt drives an aging green Chevy Cavalier with a window that does not shut close, and the car produces a dull roar at highway speed. Levitt notices a homeless guy and says: “He had nice headphones, nicer than mines. Otherwise, it doesn’t look like he has many assets…”

Levitt had an interview for the Society of Fellows, a Harvard clubhouse that pays young scholars to do their own work, for three years, with no commitments attached. Levitt was on fire and his wit crackled. A scholar member asked Steven:

“Do you have a unifying theme of your work? I’m having hard time seeing one underlying theme…”

The scholars volunteered offering what they thought could be a unifying theme, and Steven found himself agreeing with every alternative theme.

Finally, philosopher Robert Nozick interrupted saying: “He is 26 year-old. Why does Steven need to have a unifying theme at such a young age? A talented person take a question and he’ll just answer it, and he’ll be fine.”  Steven was awarded the grant.

Steven Levitt has contributed in giving micro-economics and edge over macro-economics or “homo economics” and this behavioral perspective has called into doubt many claims of mankind rational decision-making tendencies.

Real world problems demand to get immersed into various fields of knowledge such as psychology, criminology, sociology, neurology… in order to overcome mathematical theoretical shortcoming.

At 36 of age, Levitt is a full professor at the Univ. of Chicago’s economics department, and received tenure two years after starting to teach. He is an editor of “The Journal of Political Economy

Note 1Stephen J. Dubner, co-author of “Freakonomics”, covered the biography of Steven D. Levitt in a special chapter called “Bonus matter”

Note 2:  I have published 5 posts on chapters of Freakonomics and you may have a head start with https://adonis49.wordpress.com/2011/10/26/how-to-convert-conventional-wisdoms-into-success-freakonomics-discoveries/

What made violent crime drop sharply in the last two decades?

Is Legalized abortion law the main factor in the decline in violent crimes?

In the first half of the century, incidence of violent crimes in the USA was fairly steady. Why?

Infantile mortality was very high due to lack of vaccination and treatments for curable diseases.  All those unwanted children from single parent families died prematurely. and the pool of potential criminals, living in poor and uneducated families and in poor neighborhoods was manageable.

By 1960, violent crime rate increased steadily, so did the economy and the employment rates.

During the period of the civil rights movement, in the 60′s and early 70′s, conviction rates declined, as were sentences duration for most of the crimes committed. Why?

Judges and political climate didn’t want to be labelled racist or believing in apartheid (fear of being viewed as racist and backward) since more crimes, proportionally, were committed by Blacks and Hispanics living in poor neighborhoods.

Between 1980-2000, the period witnessed a 15-fold increase in the number of convicts on drug charges, and sentence duration increased accordingly.

By 2000, the US prison system had more than 2 million convicts, a 4-fold increase as of 1972.  Mind you that a prisoner costs $25,000 per year to keep him behind bars and away from the streets…

As of early 1990, crime rates of all categories, especially violent crimes, started to decline sharply and steadily. Criminology experts had warned that crime epidemics will get out of control, and they needed so time to realize that it was the opposite trend that was taking its steady course.

Between 1991 and 2001, crime experts extended many explanations for this aberrant trend of crime decline. Here are a few of the explanations with frequency of citations in the media:

1. Innovative policing strategies:  52 citations

2. Increased reliance on prison: 47

3. Changes in crack and other drug markets: 33

4. Aging population: 32

5. Tougher gun-control laws: 32

6. Strong economy: 28

7. Increased number of police force: 26

8. Increase use of capital punishment: 24

9. Concealed-weapon laws

10. Gun buybacks policies…

Only 3 of the above 10 explanations had significant effects on crime decline, mainly factors 2, 3, and 7.

There are strong correlation, if not causative explanation, among the trends of increased reliance on prison, prison duration, increase conviction rates and the number of law and order effective in order to round-up, capture, process, and prosecute criminals.

Consequently, it can be said that the increase in police forces was associated with a political policy of increasing conviction rates and expanding the prison system. These factors accounted for almost one-third of the crime drop.

In that period, cocaine and heroine prices dropped, and it was no longer worth sacrificing years in prison for small returns on crimes…

The main factor that was behind the decline and accounted for two-third was never mentioned or even contemplated.

This factor needed about 17 years of incubation (gestation) before it generated its powerful effect, and it is the legalized abortion law that took effect in 1973 in all US States.

A few large cities in States such as New York, Illinois, California… that had legal abortion laws before 1973, all had witnessed decline in crime rates before all other States.

All those unwanted children, born from single mothers or living in single families in poor neighborhoods and uneducated parents, were not born and had not to be raised to emulate their predecessors, as highly potential criminals in the waiting and the making.

That is what the analysis of Steven Levitt showed from torturing huge data-bases on the subject. Read Freakonomics.

We are all criminals: Given the proper conditions and temptations…

Question:  Of the two explanations that  predict having a predisposition to criminal behavior and actually committing a crime, which alternative is the most plausible?

First explanation: The group of adolescents living in a clean and stable neighborhood, an active and sensible community, but whose family environment is violent and crude, is more predictive that it will eventually commit a higher rate of criminal activities than other situations and conditions;

Second alternative: The group of adolescents living in family environment that practice standard moral values and exhibit strong moral support, but is surrounded with violent and crude neighborhood would actually exhibit a higher rate of criminal acts.

It is of no use following the conventional argument that family is the cornerstone of real behavioral actions: A family provides a strong defensive nature against criminal behavior in the first few years of upbringing, but it is the daily environment and peer pressures that offer the catalytic situations for committing an actual criminal act.

In social science, a cause sought is usually a muddle found. In life as we experience it, a crisis resolved is causality established. If a pill cures a headache, we do not ask too often if the headache might have gone away by itself.

All this ought to make the publication of Franklin E. Zimring’s new book, “The City That Became Safe,” a very big event. Zimring, a criminologist at Berkeley Law, has spent years crunching the numbers of what happened in New York in the context of what happened in the rest of America. One thing he teaches us is how little we know.

The 40% drop across the continent—indeed, there was a decline throughout the Western world— took place for reasons that are as mysterious in suburban Ottawa as they are in the South Bronx.

Zimring shows that the usual explanations, including demographic shifts, simply can’t account for what must be accounted for. This makes the international decline look slightly eerie: blackbirds drop from the sky, plagues slacken and end, and there seems no absolute reason that societies leap from one state to another over time.

Trends and fashions and fads and pure contingencies happen in other parts of our social existence: it may be that there are fashions and cycles in criminal behavior, too, for reasons that are just as arbitrary.

The change didn’t come from resolving the deep pathologies that the right-wing parties fixated on—from jailing super predators, driving down the number of unwed mothers, altering welfare culture. Nor were there cures for the underlying causes pointed to by the left: injustice, discrimination, poverty. Nor were there any “Presto!” effects arising from secret patterns of increased abortions or the like.

For example, New York City didn’t get much richer; it didn’t get much poorer. There was no significant change in the ethnic makeup or the average wealth or educational levels of New Yorkers as violent crime more or less vanished. “Broken windows” or “turnstile jumping” policing, cracking down on small visible offenses in order to create an atmosphere that refused to license crime, seems to have had a negligible effect.

There was, Zimring writes, a great difference between the slogans and the substance of the time. (Arrests for “visible” nonviolent crime—e.g., street prostitution and public gambling—mostly went down through the period.)

Instead, small acts of social engineering, designed simply to stop crimes from happening, helped stop crime significantly, (but could not account for the sharp drop). In the nineties, the N.Y.P.D. began to control crime not by fighting minor crimes in safe places but by putting lots of cops in places where lots of crimes happened—“hot-spot policing.”

The cops also began an aggressive, controversial program of “stop and frisk”—“designed to catch the sharks, not the dolphins,” as Jack Maple, one of its originators, described it—that involved what’s called pejoratively “profiling.” This was not so much racial since in any given neighborhood all the suspects were likely to be of the same race or color, as social, involving the thousand small clues that policemen recognized already.

Minority communities, Zimring emphasizes, paid a disproportionate price in kids stopped and frisked, and detained, but they also earned a disproportionate gain in crime reduced.

The poor pay more and get more” is Zimring’s way of putting it. He believes that a “light” program of stop-and-frisk could be less alienating and just as effective, and that by bringing down urban crime stop-and-frisk had the net effect of greatly reducing the number of poor minority kids in prison for long stretches.

Zimring insists, plausibly, that he is offering a radical and optimistic rewriting of theories of what crime is and where criminals are, not least because it disconnects crime and minorities.

“In 1961, 26% of New York City’s population was minority African-American or Hispanic. Now, they constitute half of New York’s population is—and what that does in an enormously hopeful way is to destroy the rude assumptions of supply side criminology“, (meaning the conservative theory of crime that claimed that social circumstances produced a certain net amount of crime waiting to be expressed; if you stopped it here, it broke out there. The only way to stop crime was to lock up all the potential criminals. In truth, criminal activity seems like most other human choices—a question of contingent occasions and opportunity.

Crime is not the consequence of a set number of criminals; criminals are the consequence of a set number of opportunities to commit crimes. Close down the open drug market in Washington Square, and it does not automatically migrate to Tompkins Square Park. It just stops, or the dealers go indoors, where dealing goes on but violent crime does not.

And, in a virtuous cycle, the decreased prevalence of crime fuels a decrease in the prevalence of crime. When your friends are no longer doing street robberies, you’re less likely to do them. Zimring said: “Remember, nobody ever made a living mugging. There’s no minimum wage in violent crime.”

In a sense, Zimring argues, it’s recreational, part of a life style: “Crime is a routine behavior; it’s a thing people do when they get used to doing it.” And therein lies its essential fragility.

Crime ends as a result of “cyclical forces operating on situational and contingent things rather than from finding deeply motivated essential linkages.” Conservatives don’t like this view because it shows that being tough doesn’t help; liberals don’t like it because apparently being nice doesn’t help, either.

Curbing crime does not depend on reversing social pathologies or alleviating social grievances; it depends on erecting small, annoying barriers to entry.

One fact stands out. While the rest of the country, over the same twenty-year period, saw the growth in incarceration that led to our current astonishing numbers, New York, despite the Rockefeller drug laws, saw a marked decrease in its number of inmates. “New York City, in the midst of a dramatic reduction in crime, is locking up a much smaller number of people, and particularly of young people, than it was at the height of the crime wave,” Zimring observes.

Whatever happened to make street crime fall, it had nothing to do with putting more men in prison. The logic is self-evident if we just transfer it to the realm of white-collar crime: we easily accept that there is no net sum of white-collar crime waiting to happen, no inscrutable generation of super-predators produced by Dewar’s-guzzling dads and scaly M.B.A. profs…

If you stop an embezzlement scheme here on Third Avenue, another doesn’t naturally start in the next office building. White-collar crime happens through an intersection of pathology and opportunity; getting the S.E.C. busy ending the opportunity is a good way to limit the range of the pathology.

Social trends deeper and less visible to us may appear as future historians analyze what went on. Something other than policing may explain things—just as the coming of cheap credit cards and State lotteries probably did as much to weaken the Mafia’s Five Families in New York, who had depended on loan-sharking and numbers running, as the F.B.I. could. It is at least possible, for instance, that the coming of the mobile phone helped drive drug dealing indoors, in ways that helped drive down crime.

It may be that the real value of hot spot and stop-and-frisk was that it provided a single game plan that the police believed in. As military history reveals, a bad plan is often better than no plan, especially if the people on the other side think it’s a good plan. But one thing is sure: social epidemics, of crime or of punishment, can be cured more quickly than we might hope with simpler and more superficial mechanisms than we imagine. Throwing a Band-Aid over a bad wound is actually a decent strategy, if the Band-Aid helps the wound to heal itself.

Which leads, further, to one piece of radical common sense: since prison plays at best a small role in stopping even violent crime, very few people, rich or poor, should be in prison for a nonviolent crime. Neither the streets nor the society is made safer by having marijuana users or peddlers locked up, let alone with the horrific sentences now dispensed so easily.

For that matter, no social good is served by having the embezzler or the Ponzi schemer locked in a cage for the rest of his life, rather than having him bankrupt and doing community service in the South Bronx for the next decade or two. Would we actually have more fraud and looting of shareholder value if the perpetrators knew that they would lose their bank accounts and their reputation, and have to do community service seven days a week for five years?

It seems likely that anyone for whom those sanctions aren’t sufficient is someone for whom no sanctions are ever going to be sufficient. Zimring’s research shows clearly that, if crime drops on the street, criminals coming out of prison stop committing crimes. What matters is the incidence of crime in the world, and the continuity of a culture of crime, not some “lesson learned” in prison.

At the same time, the ugly side of stop-and-frisk can be alleviated. To catch sharks and not dolphins, Zimring’s work suggests, we need to adjust the size of the holes in the nets—to make crimes that are the occasion for stop-and-frisks real crimes, not crimes like marijuana possession.

When the New York City police stopped and frisked kids, the main goal was not to jail them for having pot but to get their fingerprints, so that they could be identified if they committed a more serious crime. But all over America the opposite happens: marijuana possession becomes the serious crime. The cost is so enormous, though, in lives ruined and money spent, that the obvious thing to do is not to enforce the law less but to change it now.

Dr. Johnson said once that manners make law, and that when manners alter, the law must, too. It’s obvious that marijuana is now an almost universally accepted drug in America: it is not only used casually (which has been true for decades) but also talked about casually on television and in the movies (which has not).

One need only watch any stoner movie to see that the perceived risks of smoking dope are not that you’ll get arrested, but that you’ll get in trouble with a rival frat or look like an idiot to women. The decriminalization of marijuana would help end the epidemic of imprisonment.

The rate of incarceration in most other rich, free countries, whatever the differences in their histories, is remarkably steady. In countries with Napoleonic justice or common law or some mixture of the two, in countries with adversarial systems and in those with magisterial ones, whether the country once had brutal plantation-style penal colonies, as France did, or was once itself a brutal plantation-style penal colony, like Australia, the natural rate of incarceration seems to hover right around a hundred men per hundred thousand people. (That doesn’t mean it doesn’t get lower in rich, homogeneous countries—just that it never gets much higher in countries otherwise like our own.)

It seems that one man in every thousand once in a while does a truly bad thing. All other things being equal, the point of a justice system should be to identify that thousandth guy, find a way to keep him from harming other people, and give everyone else a break.

Epidemics seldom end with miracle cures. Most of the time in the history of medicine, the best way to end disease was to build a better sewer and get people to wash their hands. “Merely chipping away at the problem around the edges” is usually the very best thing to do with a problem; keep chipping away patiently and, eventually, you get to its heart.

To read the literature on crime before it dropped is to see the same kind of dystopian despair we find in the new literature of punishment: we’d have to end poverty, or eradicate the ghettos, or declare war on the broken family, or the like, in order to end the crime wave.

The truth is, a series of small actions and events ended up eliminating a problem that seemed to hang over everything. There was no miracle cure, just the intercession of a thousand smaller sanitary facilities. Ending sentencing for drug misdemeanors, decriminalizing marijuana, leaving judges free to use common sense (and, where possible, getting judges who are judges rather than politicians)—many small acts are possible that will help end the epidemic of imprisonment as they helped end the plague of crime.

At every moment, the injustice seems inseparable from the community’s life, and in every case the arguments for keeping the system in place were that you would have to revolutionize the entire social order to change it—which then became the argument for revolutionizing the entire social order. In every case, humanity and common sense made the insoluble problem just get up and go away. Prisons are our this. We need take more care.” End of quote

What made violent crime drop sharply in the last two decades? I decided to re-edit an article that I posted a while ago.

Where have all the criminals gone?

In the half of the century, incidence of violent crimes in the USA was fairly steady. Why? Infantile mortality was very high due to lack of vaccination and treatments for curable diseases.  All those unwanted children from single parent families died prematurely. and the pool of potential criminals, living in poor and uneducated families and in poor neighborhoods was manageable.

By 1960, violent crime rate increased steadily, so did the economy and the employment rates. During the period of the civil rights movement, the 60′s and early 70′s, conviction rates declined, as were sentences duration for most of the crimes committed. Why? Judges and political climate didn’t want to be labelled racist or believing in apartheid (fear of being viewed as racist and backward) since more crimes, proportionally, were committed by Blacks and Hispanics living in poor neighborhoods.

Between 1980-2000, the period witnessed a 15-fold increase in the number of convicts on drug charges, and sentence duration increased accordingly. By 2000, the US prison system had more than 2 million convicts, a four-fold increase as of 1972.  Mind you that a prisoner costs $25,000 per year to keeping him behind bars and away from the streets…

As of early 1990, crime rates of all categories, especially violent crimes, started to decline sharply and steadily. Criminology experts had warned that crime epidemics will get out of control, and they needed so time to realize that it was the opposite trend that was taking its steady course.

Between 1991 and 2001, crime experts extended many explanations for this aberrant trend of crime decline. Here are a few of the explanations with frequency of citations in the media:

1. Innovative policing strategies:  52 citations

2. Increased reliance on prison: 47

3. Changes in crack and other drug markets: 33

4. Aging population: 32

5. Tougher gun-control laws: 32

6. Strong economy: 28

7. Increased number of police force: 26

8. Increase use of capital punishment: 24

9. Concealed-weapon laws

10. Gun buybacks policies…

Only three of the above 10 explanations had significant effects on crime decline, mainly factors 2, 3, and 7. There are strong correlation, if not causative explanation, among the trends of increased reliance on prison, prison duration, increase conviction rates and the number of law and order effective in order to round-up, capture, process, and prosecute criminals.

Consequently, it can be said that the increase in police forces was associated with a political policy of increasing conviction rates and expanding the prison system. These factors accounted for almost one-third of the crime drop.

In that period, cocaine and heroine prices dropped, and it was no longer worth sacrificing years in prison for small returns on crimes…

The main factor that was behind the decline and accounted for two-third was never mentioned or even contemplated.  This factor needed about 17 years of incubation (gestation) before it generated its powerful effect, and it is the legalized abortion law that took effect in 1973 in all US States. A few large cities in States such as New York, Illinois, California… that had legal abortion laws before 1973, all had witnessed decline in crime rates before all other States.

All those unwanted children, born from single mothers or living in single families in poor neighborhoods and uneducated parents, were not born and had not to be raised to emulate their predecessors, as highly potential criminals in the waiting and the making.  That is what the analysis of Steven Levitt showed from torturing huge data-bases on the subject. Read Freakonomics.

Are you sure that paying taxes is an American civic duty?

Surveys would show that over 90% of US citizens claim that paying taxes is a civic duty, and that they do pay taxes out of civic duty…Is that claim true in reality?

Beside the salaried and wage workers who have no choice in paying taxes according to Congress tax laws, since their taxes are automatically withheld from every pay check, almost all “non-farm proprietor income”, meaning the self-employed in liberal jobs, small owners of enterprises, owner of restaurants… under report their real income by 60%, an amount estimated to generate over $70 billion in unpaid taxes.

The tax gap (difference between tax owed and tax actually paid) is about $350 billion, or one-fifth of all taxes collected by the IRS, or $1,000 for every man, woman, and child…

The IRS job is executing Congress tax laws, requiring tax payers to comply.  The IRS role is to “help the large majority of compliant taxpayers with tax law, while ensuring that the minority who are not unwilling to comply, pay their fair share…”

The IRS barely audit 20 out of 1,000 taxpayers per year: Congress is not about to fund this institution in order to investigate and target the big fishes. Consequently, chances is that you may not be audited in decades if the tax gap is not outrageously obvious or your business is not classified as Red for potentially prone to tax cheating and evasion.

The IRS should be investing most of its efforts on the big fishes that can afford to hire teams of tax lawyers and “tax experts” in locating loopholes as large as Oregon.  However, the IRS claim not to have the means to confront legal and protracted tax battle with the big fishes, who are generally backed by powerful politicians….

Actually, the big fishes are the ones sustaining the budgets allocated to State and Federal institutions, meant to be squandered for self-interest and self-serving objectives… For example, in 1986, Congress passed the tax law, which was instigated and suggested by tax employee John Szilagyi six years earlier, that required to list children’s Social Security numbers.  In that year, 7 million children vanished from the tax rolls, saving $3 billion a year in tax revenue.

The gist of the matter is that any government, if it will to be serious in considering citizens at equal footing in rights and responsibility, can collect every dime it owes and block any loopholes for cheating opportunities. For example, forcing the employed people to automatically pay every month…Tax laws are political in nature, and if you think that not every one is paying his fair share in taxes, how national civic duty stand?

Conversely, educated and engaged citizens who reclaim fair and equitable election laws and tax laws, can defeat any powerful governmental institution.

Note: Inspired from Freakonomics by Levitt and Dubner

 

Internet Dating facilities: How discrimination is at work?

Tacit discrimination are revealed in many aspect of life. There are mainly two ways of testing discrimination in a community:

First, you investigate the perception of people on their preferences and dislikes, or idiosyncrasies on a society attitudes and behaviors.  Successful salespeople indulge on applying what they learn of “what a particular community wants and prefer…”

Second, you torture a vast amount of data in any fields and you observe the correlation or trends of people, consumers, clients… The main technique that institutions in charge of controlling discrimination at work and enterprises, and in charge of enforcing anti-discrimination laws is by analyzing the data in the workplaces for every kind of industry or social facility…

How implicit is discrimination played in Internet dating social platforms?

What the dating candidate reveals is not what he actually want in a dating partner.

While white women say that “color of a partner”  is irrelevant in their choices: the responses and messages sent target mostly white men.

When women say that “blond guys” are irrelevant in their choices, the e-mails give priority to blond guys.

When women say that “high-earners” are not that relevant as long as the guy has a good standard of living, they actually mostly prefer to date guys who claimed to earn $200,000. Actually, 3 out of 4 males who claim to earn about $200,000 are liars.

Women tend to discriminate against guys in manufacturing jobs, and they much prefer to date police officers, firemen, lawyers, physicians

Women and men cheat one inch taller.

Women cheat 20 pounds less on their weight.

Candidates want to be perceived as above average…

Women and men cheat 70% of the time by claiming to be above average in looks.

Married men never publish their photos, especially when they claim to be “happily married”.

Women prefer to sent messages to men claiming to be looking for a “long-term relationship” while men prefer “casual lovers” or “just looking…”

Data have shown that 56% of males never received a single response, compared to 21% for women candidates.

The candidates getting the most responses are the “smart” daters who try to fit their profile to correspond to the most common stereotypes about men and women in particular communities.

Many claim that Faceebook.com is enjoying such vast popularity because it is a free dating platform, and more effective than the others. Anyone wanting to date has the honest data of the prospected partner, and many more particular honest opinions…

The small chatting exercises reveal many aspects of a person and the clever candidate is attuned to catching the characteristics that mostly suit his “secret” preferences.

The most common obvious discrimination target elderly people and Latinos because discrimination on both groups are not largely covered or disseminated, and their anti-discrimination movements are not as widespread or effective to the general public  https://adonis49.wordpress.com/2011/11/17/how-contestants-discriminate-in-game-shows-what-is-the-weakest-link-game/

Note: Post inspired by the book “Freakonomics” by Steven Levitt

Micro-economics freak, Freakonomics…: Who is Steven Levitt

Seven  D. Levitt made himself famous by focusing on micro-economics phenomena that macro-economics scholars would not touch with a long pole.

The macro-economists theorize about mathematical monetary issues, but Levitt says: “I don’t pretend to know very much about the field of economics, I am poor in econometrics (mathematical set of equations with an objective equation and a set of constraint equations), I don’t know how to do theory. It would be a total fake on my part if I claim that I know how the stock market moves, or if the economy is shrinking, or if deflation is bad or good…”

Levitt’s point of view is that economics is a science with excellent tools for gaining insights, but it lacks  and is short on interesting questions to ponder upon.

Steven love to ask freaky questions and get on with the task of torturing data-bases in order to discovering trends and correlations among the various factors.

For example, you ask a question that interest you, and you discover the story behind the problem, such as:

1) Why most drug dealers still live with their mothers?

2) Which is more dangerous: Having a gun at home or a private swimming pool?

3) Why crime rate plunged dramatically in the last two decades and is still witnessing a steady decline, though population increased and the economy has its feet flailing up?

4) Why your real estate agent sells his own home at a higher price and stay longer on the market?

5) Does your stock broker has your best interest in mind?

6) Why black parents give their children names that they know may hurt their career prospects…?

7) Do school teacher cheat to meet high-stakes testing standards?

8) Why police departments distort crime data and eliminate cases from the records…?

Do you believe that the problems of this modern world are not impenetrable, and can be resolved, if the right questions are asked, and people are dedicated in uncovering the real story?

Are you curious in divulging the real stories behind cheating, corruption, and criminal behaviors and activities? Levitt just love to play the economist investigator to questions that are related to criminal behaviors.

Levitt drives an aging green Chevy Cavalier with a window that does not shut close, and the car produces a dull roar at highway speed. Levitt notices a homeless guy and says: “He had nice headphones, nicer than mines. Otherwise, it doesn’t look like he has many assets…”

Levitt had an interview for the Society of Fellows, a Harvard clubhouse that pays young scholars to do their own work, for three years, with no commitments attached. Levitt was on fire and his wit crackled. A scholar member asked Steven:

“Do you have a unifying theme of your work? I’m having hard time seeing one underlying theme…” The scholars volunteered offering what they thought could be a unifying theme, and Steven found himself agreeing with every alternative theme.

Finally, philosopher Robert Nozick interrupted saying: “He is 26 year-old. Why does Steven need to have a unifying theme at such a young age? A talented person take a question and he’ll just answer it, and he’ll be fine.”  Steven was awarded the grant.

Steven Levitt has contributed in giving micro-economics and edge over macro-economics or “homo economics” and this behavioral perspective has called into doubt many claims of mankind rational decision-making tendencies.

Real world problems demand to get immersed into various fields of knowledge such as psychology, criminology, sociology, neurology… in order to overcome mathematical theoretical shortcoming.

At 36 of age, Levitt is a full professor at the Univ. of Chicago’s economics department, and received tenure two years after starting to teach. He is an editor of “The Journal of Political Economy”

Note 1: Stephen J. Dubner, co-author of “Freakonomics”, covered the biography of Steven D. Levitt in a special chapter called “Bonus matter”

Note 2:  I have published 5 posts on chapters of Freakonomics and you may have a head start with https://adonis49.wordpress.com/2011/10/26/how-to-convert-conventional-wisdoms-into-success-freakonomics-discoveries/

Hey, mom. Where did you fetch my name from?

A variety of motives are at work when parents consider a name for their child.  

For example, parents may decide to select from traditional names, bohemian, unique, or perfectly trendy names are shuffled around or one parents is adamant on naming after a descendant, or affixing Junior one, two, three…as with the Bushes.

For example, where do lower-end families (economically and in social status…) go name shopping?

Parents try hard to signal something with a name, mostly to send a strong message of their own expectation: How successful their child will be…

Evidently, a name isn’t likely to make a shard of difference, but don’t try to kill the grain of hope in parents wishing to feel better trying to do their best.

Detailed data-bases, extending continuously for decades, have not shown that names are selected based on current celebrities: Names of celebrities of the famous and glamorous are generally symptoms, but not the cause for picking names to newborn.  

Usually, names are borrowed from families, a few blocks over (but never from neighbors), with the biggest car, the most luxurious house, the most educated and rather well-to-do…

The kinds of families that were the first to call their daughters Amber or Heather and now are calling them Lauren or Madison. Or names of boys going from Justin or Brandon to Alexander or Benjamin…

In general, as a high-end name is adopted in mass, high-end families begin to abandon their previous choices of names: It is eventually considered so common that even lower-end parents may no longer want it!

A name send idiosyncratic messages in the community.  

For example, you send two identical CV to an employer with different names such as DeShawn Williams and Jake Williams.  The odds are much higher that Jake will get a call, regardless if the employer is White, Black, or Hispanic. The employer does not want anything to do with a “potentially troubled” individual who lived in bad neighborhood and raised by poor and uneducated parents…

Roland G. Fryer Jr (see note) collected data from the California civil status registers, millions of pieces of data gathered since 1960. Fryer claims that he was interested in “Why mothers give particular names to their child, weird names…” The registers offered valuable bonus of where the mother was born.

Why focus on mothers?

I guess it stand to reason that, most probably, in low-end families, fathers are nowhere to be found when a baby is born?  What if many babies are born of single mothers, and who are not in the age of obtaining a driving license?

Fryer listed 20 most popular names for girls and boys for every decade, and it looks as names can cycle in and out very quickly: Barely three names on the 20 hottest names remain in the next decade list of “hottest names”

I do suspect that this economics professor had a “hidden agenda” and the “name research” was a collateral paper or a smokescreen excuse for undertaking this tedious research.

What do you think could be your real agenda, if you had to spend years pondering on this huge amount of data, and be funded to go all the way through?

I read this Tuesday, May 15, 2012 that Sofia is the most common female name in the US, while Jacob is still the first among the males for the third consecutive year. Isabella was displaced to the second rank after being the first for two consecutive years.

Note: This article was inspired by a chapter in “Freakonomics” by Steven Levitt, and this chapter was written by Roland G. Fryer Jr.

Fryer came from a broken poor family: The mother abandoned the child with the father who turned alcoholic and violent. At the Univ. of Texas at Arlington, on an athletic scholarship, Roland quickly realized that he is not an NFL or NBA material, and focused on academic achievement.

He was hired by Harvard as economics professor at the age of 25.

What are driving this gap in test scores among races and minorities…?

There are so many variables that come into play to explaining this sustained gap in primary school test scores among students.  There are gaps in test scores in primary schools that are different from the ones in high school, and university score performances. The first part will focus on differences in primary and preschool test scores.

Several longitudinal surveys (following kids performance over several years), accompanied with details on the kid, the parents (biological and adoptive), quality of life, environmental conditions…, and the program of Chicago Public school system where students are allocated to the various public schools according to a lottery procedure (pretty much similar to the one when the military forced citizens to join the army during the Viet Nam war), shed strong light to the reasons behind the discrepancies in test scores.

Let us consider two sets of factors: set A and set B.  The first “set A” are variables representing or describing things that parents “are”:  for example, how parents evolved, grew-up, learned, experimented with life…before they got married and decided to have kids.  Set B are the variables that describe things that parents “do”: For example, what they did after the kid was born according to their model of “what is the best method or behavior to raising a child…”

The “Set A” factors are:

A1. Highly educated parents

A2. High socioeconomic status of parents

A3. First child is of mothers about 30 year-old

A.4 Parents speak English at home (for countries where English is the national language…)

A5. Child is adopted

A6. Parents are involved in PTA program (share in school activities and management…)

A7. House is stuffed with books

A8. Child has low birth-weight

Set B consists of the variables:

B1. Family is intact (no divorces, single family parent…)

B2. Parents recently moved into a better neighborhood…

B3. Mother didn’t work between giving birth and kindergarten (no economic unit productive…)

B4. Child attended Head Start program (for the deficient children…)

B5. Parents take the child to museum, zoo…

B6. Child is regularly spanked

B7. Child watches TV frequently

B8. Parents read to child almost every day, sort of “Goodnight Moon” stuff…

What the analyses of data by regression, comparing two variables in a subgroup that share the same characteristics but the two factors, showed that:

First, in primary test scores, the parenting processes of set B of factors had NO effect, one way or another in the performance of scores. It looks as if the “obsessed parents and parenting” do not matter in how the kid will perform in primary and preschool levels.

Second, the factors in set A can offer preliminary explanation for the gap.  For example, the trends are highly positively correlated, except for low birth-weight which is negatively correlated.

Third, apparently, at his early age, the kid is dominated by his genes advantages: Genes alone might be responsible for 50% of a child’s personality and abilities. It is after the early upbringing with sustained positive “nurturing” of parents that makes the big difference in high-school and university performance and future success.

That is what Bruce Sacerdote demonstrated in his paper “The Nature and Nurture of economic outcomes”. Sacerdote analyzed 3 adoption studies, two in the US and one in England, with detailed in-depth data on the adoptive kids, adoptive parents, and biological parents.

With sustained nurturing parenting, the IQ genetic advantage cede importance to behavioral maintenance… The next article will approach the question: “Why this gap…and what is meant by nurturing parents” https://adonis49.wordpress.com/2011/11/07/part-2-why-the-gap-in-school-test-scores-among-minorities/

Note 1: Regression analysis is one particular statistical method for showing correlation in trends between two variables.  Analyses of huge data-bases, by manipulating data in several perspectives, can be very valuable in generating profitable ideas and hypotheses for further controlled experiments in order to research cause and effect relationship.

Note 2: Post was inspired from a chapter in “Freakonomics” by Steven Levitt

What drive panic attacks: Imminent possibility and out of control situations?

Fear is a most potent emotion that people intentionally capitalize on it to satisfy their objectives and purposes.  Fear is a combination of perceived high risks and level of current public outrage.  In general, as public outrage is fresh for a perceived imminent hazard, disseminated by interested institutions or “experts”, the higher this outrage the more powerful the emotions to overrun whatever is the actual real seriousness of the risk.

Suppose you are told that you have 5% chance of dying within an hour, or 40% chance within a year, which probability will drive your frenzied panic? If we try to recollect the dozens of situations that had the potential to kill us every day, we should be convinced that Russian roulette probability of one in six is a great advantage to the probabilities for our survival every single day. Most probably, we are panicked with the presence of the physician who divulged his expert opinion of our very soon death. The moment the physician is out of sight, things go back to normal, I think…If a God can guarantee that you will survive the day if your Russian roulette exercise is successful, you might live to be a thousand, at least, or you might not…

Suppose you know for fact that experiencing a plane problem (when flying…) is far less frequent than witnessing a problem when driving your car.  You know that you are Not a car mechanics, and even if you are you’ll not check your car every-time to get behind the wheel: Airplanes would not, or should not fly, before expert professional mechanics thoroughly check it.  What you refuse to remember is that chances of dying from a plane crash is far less frequent than driving your car, per year.  Yes, I extending your life year by year, instead of day by day…  Which means of transportation would you choose for the same driving duration and cost?

Actually, per-hour death rate is about Equal. So, if you don’t get out of your home frequently, and the airport is close to home, and you own your private jet…you might as well toss a coin?  People opt to drive their cars, even if they can afford airplanes, on the assumption that they have “total control over their cars…”  What control do you have over your car if you tend to fail checking the car before driving? What control you have over the other drivers…?

There are 40,000 car deaths per year compared to 1,000 by airplane. This fact is related to many more people driving longer hours their cars than boarding airplanes…

Suppose that you know (from available data-bases, see note 1) that kids younger than 10 year-old drown in private swimming pools is far greater frequency than kids visiting homes retaining a gun for “eventual protection cases…”, would you still prefer to send your kid to families having a swimming pool and not having a gun?

A kid drown in a private swimming pool out of 11,000, and the US has 6 million such private swimming pool.  A kid is shot out of one million homes carrying a gun, out of over 200 million such “well protected” homes.

Suppose you know the private swimming pool that your kid visits satisfies all the regulations of fenced pool, locked back door…would you still send your kid without a personal watchful adult, whom you have total confidence that he will keep an eye every second, and he is licensed as swimming guard…?

Suppose that you finally realized that catching a terrible disease from food in your kitchen is far more frequent than rare cases of mad-cow prions, would you still get that outraged on the imminent danger of a mad-cow disease?

As Peter Sandman said: “Risks that you think have control over are much less a source of outrage than risks that are out of your control.  The basic reality is that the risks that scare people (to death) and the risks that actually kill people are very different…”

Experts on risks and dangers are not making things any easier on concerned citizens: It is in their advantage to encourage emotional outrage in the public in order to get higher visibility and recognition, instead of analyzing the problem from various perspectives…

Obsessive parents invest plenty of money for securing against risks that are virtually barely dangerous or frequent per year and in the USA, such as ten kids dying from flame-retardant pajamas, fewer than 5 for keeping children away from car airbags, two for safety drawstring on children’s clothing…

Parents worry too much and refuse to let go, as if a child could not die a hundred times a day for one thing or another.  But parents think that they have the entire responsibility over their shoulders for the most “precious thing” they decided to raise and keep with their own volition…

Note 1: There are plenty of data-bases for almost any kind of research you might want to undertake.  The hitch is that you cannot extract cause and effect relationship from data not done under experimental control.  You may still torture the data until data divulge the mystery behind the story, kind of discovering correlations and how the trend is progressing.  You can find troves of useful and valid hypotheses to experiment on and demonstrate cause and effect…Read my posts in the category “Human Factors in Engineering”

Note 2: Post inspired from a portion of a chapter in “Freakonomics” by Steven D. Levitt and Stephen J. Dubner

What do they share: KuKlusKlan, Drug Cartels, Extremist religious sects…?

Random violence is the most striking resemblance among criminal organizations and one-dimensional violent ideological parties and extreme religious sects.

These criminal organizations start their projects with the strategy of random violence, until the 1% on the top of the organization realizes that business is brisk and profit is coming in.  At this phase, random violence activities are reduced to a minimum, sort of couple of random violent acts are enough to remind the community that “we are still here, and kicking…” I’ll expose a few example of such organizations.

One, on KuKlusKlan.

After the American Civil War, six lawyer soldiers in the Confederate army formed a budding midnight pranks, riding horses and draped in white sheets and pillow-case hoods.  This group chose “KuKlus” for name, from the Greek kuklos or “circle of friends”.

Five former general in the Confederate army, supported by plantation owners, adopted the name and terrorized and killed emancipated black slaves.  This new organization added Kl as a prefix to names, thus Klan for clan.

President Ulysses S. Grant delivered a speech to the House of Representatives in 1872, on the objectives of the Klan: “They are organized to prevent all political action not in accord with the views of the members, to deprive colored citizens of the right to bear arms, and of the right of a free ballot, to suppress the schools in which colored children were taught, and to reduce the colored people to a condition closely allied to that of slavery…

Within a decade in 1870’s, the Klan, as an organization, was defeated by legal and military intervention out of Washington DC. As the federal government troops withdrew from the South, and combined with US Supreme Court ruling for full-scale racial segregation, the Klan reappeared in force.

By 1920, the Klan claimed 8 million members and insinuated that most politicians and police forces in the south were Klans.

This climate of the “supremacists” cowed the Blacks into hunkering down into their own communities. Statistics gathered from 1890 to 1970, revealed the following facts:

First, in the decade of 1890-1899, there were 1,111 lynchings of Blacks, and this number dropped steadily to 3 in the 60’s.

Second, the decades which witnessed high lynching frequency coincided with periods of Klan “suppressed activities”.  Thus, the lynchings were carried out by the prevalent social/political climate of racial discrimination, a climate that the Klan managed to disseminate.

Third, by the 30’s, lynching was no longer a profitable necessity: The huge business profit of the “Board of Directors” of the Klan didn’t need but a couple of lynching per year to go a long way in inducing docile behavior among the southern people.

The Klan created rackets, generated money from “protection of business owners to scare off the unions“, donations from frequent rallies, dues from members… How the Klan lost ground? (Read note 1)

Two, on drug dealers and drug cartels... Read note 4.  You’ll discover that almost all criminal organizations are structured as the legal liberal capitalist enterprises, and that the rational is basically the same for withholding sharing profit with the lower rank-and-files, such as workers and employees.

Three, on extreme religious sects. Since time immemorial, sects in relative majority in a community tend to engage in random violence in order to vacate or force the minority sects into transferring somewhere else.

After the occupation of Iraq by US troops in 2003, waves of “terrorist” random violent mass killing by car-bombs were meant to securing the displacement of minority sects outside the zone of influence of the majority in a region.

Although these occurrences have diminished in number, the toll in casualties for every activity is as large and as brutal as ever. These random violence on “innocent civilians” are strong messages that “we are here…and we want our share of the pie…”

The Zionist terror organizations in Palestine were the first groups to instituting these random violence tactics in the Middle-East, during British mandate. The terror resumed after the partition of Palestine into two lands, at the recognition of the State of Israel, after the recognition, and continuing till today.

Actually, most of the current Islamic “terrorist” organizations have learned the tools and procedures from their Masters the Zionist terror organizations.

For example, the Zionist Irgun and Haganah terror parties forced Palestinians out of their villages by committing genocides in several towns. During the invasion of Lebanon in 1982, Israel dropped bombs on high-rise buildings:  The special bombs (given away by the US Administrations) were of the kind to pierce all floors and detonate in the basement, where hundreds of civilians were huddled.

This tactic was to convince civilians to vacate the area before the advance of the Israeli army…The genocide in the Palestinian camps of Sabra, Chatila, Jenine…are samples of this criminal mentality. Read note 2.

The civil war in Lebanon that lasted over 17 years witnessed random violence by sectarian militia organizations in order to securing their own canton by “cleansing” the areas from “unwanted minorities

Note 1: From a chapter of “Freakonomics” by Levitt and Dubner, we read that Stetson Kennedy, aided by an inside informant to the inner circles of the Klan, disseminated information and pieces of intelligence to journalist Drew Pearson, whose radio program “Washington Merry-Go Round” was heard by million of adults every day, and also to the producers of the show “Adventures of Superman“, which reached million of children every day.

The US citizens got familiar with the secret code names and the secret childish behavior of the Klan organization.  Membership dropped drastically: People felt ashamed being fingered out as Klan…behaving in Klan antics… childish manner…

Note 2https://adonis49.wordpress.com/2011/08/31/kids-burned-by-phosphorous-bombs-usage-not-internationally-illegal-yet/

Note 3https://adonis49.wordpress.com/2011/10/16/colorless-and-insipid-palestinian-mahmoud-abbas-speech-at-un-gained-rainbow-spectrum-of-colors/

Note 4https://adonis49.wordpress.com/2011/10/26/why-do-drug-dealers-still-live-with-their-mothers-who-is-sudhir-venkatesh/


adonis49

adonis49

adonis49

August 2020
M T W T F S S
 12
3456789
10111213141516
17181920212223
24252627282930
31  

Blog Stats

  • 1,405,876 hits

Enter your email address to subscribe to this blog and receive notifications of new posts by email.adonisbouh@gmail.com

Join 756 other followers

%d bloggers like this: