Adonis Diaries

Posts Tagged ‘Stephen J. Dubner

 

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/

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/

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


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adonis49

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