« Wait a Minute Here! | Main | Housing Bubble »

June 01, 2005

Virtual Steve Levitt Seminar at Crooked Timber

There is a very good virtual Steve Levitt seminar at Crooked Timber:

Steven Levitt Seminar - Introduction: Posted by Henry: Steven Levitt's work is familiar to many Crooked Timber readers. He's a professor in the University of Chicago's Economics Department, a winner of the John Bates Clark medal, [an] editor of the Journal of Political Economy, and the author of a rather terrifying number of peer-reviewed articles.... Freakonomics is currently Number Two on the New York Times bestseller list.... We asked Steve a while back whether he would be prepared to participate in a Crooked Timber seminar on freakonomics, economics, and the social sciences; he very kindly agreed, and you see the result before you. We're also grateful to have the participation of two non-CT regulars. Tyler Cowen is a professor at George Mason University; he blogs at Marginal Revolution and still puts in an occasional appearance at the Volokhs. Tim Harford writes the Dear Economist column for the Financial Times. His first book, The Undercover Economist, is coming out in November 2005.

I was supposed to participate, but inspiration did not strike and the time to write something good while uninspired was nibbled to death by bureaucratic ducks. *Sigh.*

It's very good.

Here's Steve's gracious response:

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt and Stephen J. Dubner - William Morrow, 2005 : Posted by Steven Levitt: I'm not sure whether it says more about my own shortcomings, or the quality of these five commentaries above on Freakonomics, that I gained a great deal of self-awareness from reading them. It was a surprising reaction for me. There have been many published reviews of Freakonomics, and not one of them has given me the slightest insight into myself. Strangely, though, I felt like I understand my own motivations and goals better than I did a few hours ago. For me, that has always been one of the greatest benefits of inter-disciplinary interactions. Self-awareness is a scarce commodity, and a valuable one, so I am quite grateful for this remarkable gift that Tyler Cowen, Henry Farrell, Tim Harford, Kieran Healy, and John Quiggin have given me.

So let me try to pay these guys back with some thoughtful responses to their comments. Because the same themes ran through most of the comments, I address them collectively rather than individually.

Let's start with the title. Freakonomics. We debated endlessly over the title. From a naming perspective, the difficulty with this book is it doesn't have a theme. We thought about a question title ("What do sumo wrestlers and school teachers have in common?"), some non-threatening titles ("The Hidden Side of Everything" or "Ain't Necessarily So"), and some loopy titles ("E-ray Vision"). In the end, though, Freakonomics became the obvious choice, for reasons anchored in the contrast between my own research on names and that of others. Let's just assume that the research is right and it is really true that names matter for getting a resume callback, but don't matter for long-term life outcomes. Then this probably implies that names matter a little for first impressions, but then quickly get swept aside in importance once we gain some familiarity. When's the last time you thought to yourself, "Oprah is a ridiculous name, I certainly won't watch her show." Or, "The Beatles...what a ridiculous name for a band. No one would ever buy their records." In naming a book, you need something attention-grabbing to cut through the clutter of the thousands of competing books, but as shocking as "Freakonomics" sounds the first time you hear it, by the twentieth time it becomes familiar, like Oprah. My guess is that the commenters were already softening their hatred for the title by the time they finished writing. And a year from now, they may even forget that they ever hated the title. (At least, that is what happened with our publisher, who initially dismissed the title out of hand, only allowed it at the 11th hour, and now are telling us we need to sign up with them for a second book because who else can market our books as well as they do.) And if there is a second book, we have a title in mind that is so outrageous it will have to be loved.

So how about the absence of a unifying theme in the book? My own hunch, borne out by the public response to this book, is that nobody really cares about or even wants a unifying theme in a book. Everyone is just afraid not to have one, since almost all books do. (In this respect, I think unifying themes in books are a lot like campaign spending. All candidates feel compelled to spend a lot of money for fear of the disastrous consequences that could result if they take a chance and don't spend, spend, spend.) But when I read Malcolm Gladwell's incredible books, I don't care about the theme, I just love his stories. His books top the charts because he has incredibly good taste and he is the best storyteller going. For me, and others I talk to, the unifying themes sometimes get in the way of his stories which are individually so amazingly interesting. Books of short stories, similarly, have no unifying theme. I certainly don't feel cheated by that either. More valuable than anything else I or Dubner ever does, perhaps, would be to make the world safe for books that have great stories but no unifying theme.

All of the commentaries spent some time discussing where I fit into economics and the social sciences more broadly. If I got to make three wishes, perhaps one of them would be that I might turn into a truly interdisciplinary social scientist who uses data to inform human behavior in ways that both shed light on and draw upon not only economics, but sociology, political science, and psychology as well. But, let's be realistic. I'm having trouble even mastering the tools of my own discipline. (If you ask my students whether I know calculus, they will say "not very well." I'm not proud of that fact, but I am a realist. If you ask the really great economic thinkers like Gary Becker or Kevin Murphy, how often I'm right when I try to apply Chicago price theory, they will simply tell you that I am showing a lot of improvement because they are kind.) The only things I'm good at, really and honestly, are asking questions that people seem to find interesting, and figuring out how to trick data into answering those questions. I will never be even a passable sociologist, political scientist, or psychologist. But that is okay. I think the thing that gets a lot of economists into trouble is the false belief that they can be good at everything. A few years back, when I was on sabbatical at the Center for Advanced Study of Behavioral Sciences at Stanford, I gave a talk to the other fellows on my research. Some in the audience were indignant, asking why I called myself an economist given what I did. They said I was really a sociologist. One only had to look at the horror on the faces and the strong counter-arguments made by the sociologists in the room to see that I wasn't a sociologist either. But, by starting from the position that I don’t know much, I am open-minded enough to co-author with an ethnographer (Sudhir Venkatesh), an econometrician (Jack Porter), a political scientist (Tim Groseclose), and now a journalist (Stephen Dubner). And maybe, in addition to making it safe for someone to publish a book without in a theme in the future, I will make it easier for academics from all social sciences to follow the sort of "adisciplinary" (as opposed to inter-disciplinary) path I'm on.

Next, there is the question of incentives. In the same way that "utility maximization" can be turned into a tautology, the commentors point out that our use of the term incentives is moving in that direction as well. By widening incentives to encompass not only financial, but social and moral incentives, we have covered just about everything. Still, I think there isn't really another choice. To focus just on financial incentives would obviously be misguided. On the flip side, for me (and I think this is the thing that makes me an economist ultimately) I just can't get away from the idea that people are active decision makers trying to get what they want in a reasonably sophisticated fashion. The most real sense in which I think incentives are the unifying theme of my research (even when they aren't obviously there like in the abortion-crime stuff), is that whenever I try to answer a question, I put myself in the shoes of the actors and I ask myself "what would I do if I were in that situation?" And I am the kind of person who is always trying to concoct some scheme to beat the system or avoid getting scammed, so I presume the people I'm studying are thinking the same way. So when I think about legalized abortion, I think it sounds like a really sick form of insurance policy against an unwanted pregnancy. When I see that one sumo wrestler has more to gain from a win than the other foregoes by losing, I figure they'll make a deal. When I think about real-estate agents, I'm constantly paranoid they are trying to screw me.

Finally, there is the question of whether I deserve to be called a rogue economist or not. There are two definitions of rogue. One kind of rogue is the Saddam Hussein-type. We have a few of those in economics, unfortunately, and we sure don't need any more. But when the book calls me a rogue, we mean it in the "mischievously playful" sense of the word that Webster's lists as the second definition. The rogue I have in mind is someone who strays from the subjects deemed appropriate for an economist, fails to treat economics with the necessary sense of seriousness (how dare I admit I can't do theory, or call the book Freakonomics), and embraces approaches that are implicitly disallowed by the profession (like ethnography and story-telling). As I said on the Daily Show, and apparently no one except me has seen Shrek 2, I like to think of myself as a rogue in the way that Antonio Banderas' character Puss 'n' Boots is a rogue.

I am the first one to admit that if all economists were like me, the field would probably be a disaster. But the fact that other economists more or less like me in spite of this, tells me that there is plenty more room for rogue economists in the profession.

Posted by DeLong at June 1, 2005 12:29 PM