Thursday, May 26, 2011

Freakonomics: Chapter 6 - Perfecting Parenting, Part II; or: Would a Roshanda by Any Other Name Smell as Sweet?

1. What do the experiences of Winner Lane, Loser Lane, and Temptress tell us about the likely relationship between a child’s name and his/her prospects for success in life? Are these examples sufficient for us to draw any definitive conclusions? Why or why not?

Loser Lane became a pillar in the community as a police sergeant while Winner Lane became a criminal. This shows that they didn't "live up to their name." While Temptress did live up to her name. In the case of these three people we can't draw definitive conclusions.

2. Explain what Roland G. Fryer was trying to get at when he decided to explore the following question: is distinctive black culture a cause of the economic disparity between blacks and whites or merely a reflection of it?

Roland G. Fryer was trying to find if a stereotypical black culture and the difference between that and the stereotyical white culture and economic status of those people during their life.

3. Why is the California birth certificate data set so valuable from the economist’s perspective? In particular, what type of data does it include that would be of interest to economists? Why are the variables you listed so useful/valuable?

Birth certificates show the name of not only the baby but the parents. It also shows the zip code which genernally shows the economic status of the family. This can show a connection between the naming of children and the neighborhoods they are living in.

4. What do the California names data tell us about the similarity between the names black parents and white parents gave their children up until the early 1970s and in the period of time since then?

The uniqueness after the 1970s increased among black families and the names used in high economic status familes white and black moved down the economic ladder.
 
5. Summarize the degree of uniqueness of names given to black girls and black boys revealed in the California names data.What do the authors cite as the most likely cause of this phenomenon?
 
After the 1970s the black-white gap grew possibly because of the Afro-American moment that had just occuried bringing more unique names among black families.


6. Summarize the characteristics of a black parent who is most likely to give his/her child a distinctively black name.

According to the book, the California data showed that the black parents of low economic status will give their children more unique names.

7. Explain how an “audit study” is used to determine whether having a very “white” name or a very “black” name matters.

Bias views of how a name sounds may determine and discernment how a person is treated without even seeing their face.

8. Are the results of audit studies regarding the effects of a person’s name on that person’s prospects for success reliable? If not, why not?

It is not reliable to base a person's success just on their name. It becomes a huge bias that has been disproven outrightly by many examples including "Loser" from earlier in the chapter.

9. According to the analysis of the California names data, does a person with a distinctively black name have, on average, a worse life outcome than a person with a distinctively white name? If so, is it the fault of the name? If not, explain what the data are telling us.

The name has almost nothing to with the outcome of a person's life. If anything it is based on the poor environment that he or she is raised in that zip code data can explain. Names however can bring a bias among other people but that has nothing to do with the outcome of a person's whole life.

10. Is there a discernible pattern in how certain names move through the population over time? If so, describe it.

More common names used among high economic families in past have been most common among low economic families today.

11. Is a low-income parent more likely to choose the name of a celebrity or the child of an upper-income family for his/her own child.Why?

No, celebrites have had almost no stating in the naming of any children high or low income.

12.According to the California names data, what are many parents trying to signal when they choose a particular name for their child?

According to the data, "smart" sounding names are the goal of the parents.

Freakonomics: Chapter 5 - What Makes a Perfect Parent?

1. Why are parents more susceptible to “fearmongering” than other people?

Parents have a unshakeable bond to their children. Any threat that is projected can be over exaggerated but a concerned parent.

2. What market forces give rise to parenting books that appeal to a parent’s fears and inadequacies rather than books which present an objective and evenhanded articulation of the state of the science of good parenting?

Parenting experts contradict themselves. A new parent may not know how their baby should be sleeping. The wisdom that it is better to a newborn sleep on his stomach may change just because of a "expert's" opinion. Parenting books themselves could also give completely different opinions on the same subject at the same time. Parents want or need to know what to do it is almost impossible to keep up with the "right parenting" habits.

3. How does the information in this chapter regarding the contradictory and confusing assemblage of information from parenting experts support the major theme of this book?
(Hint: incentives matter)

It doesn't matter what the experts are saying as long as there is a scared parent their books will sell. The experts varied opinions will be respected by different types of parents. However, they all have something in common, they want the best for their child.

4. Based on the example of perfect parenting in this chapter, provide examples that illustrate how the combination of asymmetric information and fear can lead to inefficient outcomes.

In the gun and swimming pool example, in theory it is safer for children to play in a swimming pool than in a house with a gun. The fear of your child being shot is more frightening so it would be logical that it is safer in a swimming pool. However, statistics show that more child deaths happen in swimming pools than by gun play.
The hype of the dangers of a gun in the home make asymmetric information a problem not telling how dangerous the swimming pool is.

5. When looking at statistical data over a period of time, what does “correlation” mean? How is it different from “causation?”

Causation is basically refered to as cause and effect. For example, if a child that is brought up in a home around education, books, etc. and goes on in life ot become very successful it would stand to reason it was the way he was brought up. Correlation is the mutual relation between two or more things.

6. What tool does an economist use to make sense of data which include many variables? In general terms, how does regression analysis sort out the data?

In the example of children, schoolwork is used to make since of the parenting data. Schoolwork brings it to a basic level is the child doing well or not.

7. Describe the difference between normative and positive analysis.What can you learn about the utility of this distinction from this chapter on perfect parenting?

Normative economic analysis refers to economic theories that cannot be proven whereas positive economic analysis refers to economic theories that can be proven. Perfect parenting is almost impossible to analysis due to the many factors that it brings up. Data can show theories of what makes a good parent but different variables to a specfic child may mean that some data is useless or unimportant.

8. Describe, in general terms, the Early Childhood Longitudinal Study (ECLS)? Who conducted it, who was the target of the study, and what was the purpose of the study?

The ECLS was a study taken by the U.S. Department of Education that measured the progress of 20,000 student from kindergarten to fifth grade. The purpose of the study was to see what effects a child's proformance in school: parents education, whether they took their children to museums, etc.

9. According to the data in this chapter, what are the main differences between a school which overwhelmingly has black students versus a school which overwhelmingly has white students?

The schools with more black students to do worse do to lack of funding, inner school problem such as gangs, and loitering non-students.

10.Academically, how well does an average black student do in a “bad” school? How is this different from an average white student in a “bad” school?

The black students who did poorly in the "bad" schools had the same poor grades as the white students.

11.According to the data developed from the ECLS, what is more important regarding a child’s success on standardized tests: what a parent does for a child or what a parent is? In your opinion, what might be an explanation for such a strange conclusion?

According to the data it is what a parent is. In my opinion, this does not say that all parents who try make a better education for their children then they did all fail it just means that parents who are higher educated have more resources and money to put into their children and their education.

12.According to the data developed from the ECLS, having lots of books in the home is correlated with higher scores on a child’s tests, reading to the child nearly every day is not. If a parent were only interested in having his or her child achieve higher scores on standardize tests, what would you imagine his or her benefit/cost considerations to be when it came to the purchase of books and this use of his or her time?

Parents with many books in the home have a greater likelihood to value education because are have a higher education. The fact that they read to their children doesn't have anything to do with their test scores.

13.According to the data developed from the ECLS, a low birth weight is correlated with lower test scores on standardized tests, but the attendance by a child in the Head Start program is not. If you were a government official with limited financial resources, how would this inform your decisions regarding the allocation of government funds? 

The data would say that although Head Start is used, it is not needed. The education of children at Head Start doesn't matter, it would be more suited as day care without any education based classes.


Wednesday, May 25, 2011

Freakonomics: Chapter 4 - Where Have All the Criminals Gone?

1. In economic terms, what was Nicolae Ceausescu’s rationale for banning abortion in Romania, i.e., how did he see banning abortion befitting the Romanian economy?


Banning abortion in Romania would (in theory) bring more people to be the future of Romania and increase the economy of the future.


2. Describe the incentives Ceausescu used to increase the birth rate in Romania.Were these incentives effective? Explain.


Beside making abortion illegal Ceausescu would have many work places take weekly to monthy pregnancy test on all of the female employees and if they were not pregnant they risked losing their job. Out of fear this did work the population of Romania grew.


3. As a result of Ceausescu’s policies, what happened to the average quality of life in Romania? Provide an economic explanation for the change that occurred.


Because of the increase in population the quality of life dramatically decreased. While the increase of people sounded good in theory the resources, goods, and services didn't change making life harder.


4. Describe the general behavior of the crime rate in the United States between 1970 and 1999, i.e., indicate whether it was increasing or decreasing from year to year.


Crimologists thought a 80% increase in crime was going to happen by 1999 when in fact it decreased.


5-6. List each of the explanations of the drop in the crime that occurred in the 1990s that are evaluated by Levitt and Dubner. Of the explanations you identified in the previous question, which ones do not appear to in fact be valid? Which ones do appear to in fact be valid?


Innovative policing strategies/Increased number of police
  • The decrease in crime also showed an increase in police officers on the street.
  • The police that were on the street had resources, training, and experience.
Increased reliance on prisons
  • It's true that crime decrease naturally showed an increase in prison population but it was the new court system that kept criminals behind bars.
Changes in crack and other drug markets
  • In the 1990s law enforcement was takind the selling of drugs more seriously. That along with less lenient court system (which can down hard on drug issues) did in a way increase crime. However, the drug business was and is still a very big business.
7. The argument linking the drop in crime to the robust economy in the1990s would seem to be quite strong. Provide a brief explanation of what the data have to say about the viability of this explanation.


The strong economy boost in theory did decrease the crime rate of nonviolent crime like robbery, car theft, and burgalry based on the theory that criminals didn't need to steal. However, it did not explain the 40% decrease of violent crimes like homicide, assault, and rape.


8. What rationale do some criminologists offer for the argument that imprisonment rates should be lowered as part of the effort to reduce crime in the United States? Was their logic sound? If not, what fallacy did they commit?


The arguement is that crime rates are high when imprisonment is high while crime rates are low when imprisonment is low. This is called the "Moratorium" arguement and doesn't make much sense. It costs $25000 dollars to keep one person in prison for a year and it doesn't get to the root causes of crime but that doesn't justify setting criminals free.


9. What does the available evidence have to say about whether increased reliance on prisons is a viable explanation for the drop in crime in the 1990s?


The increase in prison reliance did keep criminals off the street but it was the increased sentencing of the court systems that kept them there.


10.What does the available evidence have to say about whether increased reliance on capital punishment is a viable explanation for the drop in crime in the 1990s?


The cost of keeping a prisoner locked up is costly and never really fixes the problem of why they were put in prison in the place but it does keep them off the street from commiting more crimes more more lives in danger.


11. Explain how an increase in the number of police officers could cause the crime rate to decline. Does the evidence support this explanation of the drop in crime in the 1990s? Explain.


More police would mean more inforcement of the law but why the increase in police may not be for the crime rate. Politicians wanting your vote may hire more police officers to show how much he cares about your safety and he want to "clean up the neighborhood." However, that doesn't change the fact that inforcement of the law does decrease the crime rate.


12. Many observers maintained that the drop in crime in the 1990s was at least in part due to the adoption of innovative policing strategies. Focusing on the experience in New York City, what do the data tell us about the viability of this assertion? Should we then conclude that smart policing is not a good thing? Why or why not?


In New York City, the crackdown on small crime was key. Someone who jumped the subway turnstile was not punished would see the opportunity to commit a more serious crime later on. A person who urinated in the streets doesn't have the respect for the people around him and may rob or steal later on. This was dubbed the "broken window" theory. Not only were small crimes being enforced more harshy but policing was also introduced to more technology and instead of having a chain of command it was more a accountability among everyone to keep the city safe.


13.What percentage of homicides in the United States involve a gun? How many guns are there in the United States compared to the number of adults? Based on your answers to the previous two questions, formulate a hypothesis regarding the relationship between the crime drop in the 1990s and laws such as the Brady Act and initiatives such as the various gun buyback programs that were implemented around the country.

Two-thirds of United States homicides involve a gun. If you were to give a gun to everyone in the world you would run out of people before you run out of guns. Gun buyback programs do not take in enough guns to have any drop in crime. The Brady Act keeps guns out of the hands of citizens while criminals buy their guns off the equally as thriving black market.

14.What do the data tell us about the viability of the assertion that tougher gun laws contributed to the drop in crime in the 1990s? What helps to explain this finding? 

Based on imprisoned felons, most guns are bought by licensed dealers even the ones used in crimes.

15. Summarize the findings of economist John R. Lott Jr. regarding the relationship between “right-to- carry” gun laws and crime. Have other scholars been able to produce similar findings? What does this say about the reliability of Lott’s findings?

If criminals think that most of the law-biding citizens are carrying weapons then criminals will be less likely to commit crimes. However, these results could not be produced multiple times.

16. Is there evidence to suggest that the “bursting of the crack bubble” contributed to the crime drop in the 1990s? If your answer is yes, explain how it happened.


The takeover of turf, killing for power, and other crimes around the selling on drugs decreased because of the cheapest of the drug itself and lack of profit.


17. Did the “graying of America” help bring down the crime rate in the 1990s? Why or why not?

The aging of America had nothing to do with the crime rate drop, also the increase of youth didn't have anything to do with either. 

 18. Summarize the argument by Donahue and Levitt regarding the relationship between the drop in crime in the 1990s and the legalization of abortion as a result of Roe v.Wade.Your summary should focus on such factors as the characteristics of the average criminal (e.g., average age, home life), what happened in states that legalized abortion prior to the decision in Roe v.Wade, and the type of woman who is likely to take advantage of Roe v.Wade.

The increase in abortion decreased the crime rate because there was fewer people to commit the crimes. The homes and lifestyles that they would have been born into would have set them up for failure. 

Thursday, May 12, 2011

Freakonomics: Chapter 3 - Why Do Drug Dealers Still Live with Their Moms?


1. What is “conventional wisdom?” What are some ways that “conventional wisdom” comes into being?

Conventional wisdom is an idea or explanation that is excepted by the public regardless of the truth in the statement. For example, advocates of women's rights, homeless, and politicians stretch the truth on statistics to encourage people to pay attention and get more support. 

2. Explain why challenging the “conventional wisdom” with regard to a sticky social issue may be difficult to do.

When there is a chance no one will question conventional wisdom it due to the nature of a topic, why not? However, when someone exaggerates their arguments and are confronted with facts it creates a problem. The topic that a person lied about is not bad (i.e. the homeless, woman's rights) but the false information that has been given hinders the good that they are trying to do.

3. Considering this chapter’s analysis of the transformation of Listerine from an antiseptic to a cure for halitosis, what can one conclude about the effect of advertising on market demand for a good or service?

Listerine was sold as anything from a floor clearer to a antiseptic so why would people want to use it as mouthwash (something that didn't exist back then.) The advertsing completely sold the product showing a couple not so happy because of one of them had bad breath. Until then bad breath wasn't considered a problem but Listerine made it seem like one and made $8 million dollars off of it.

4. Explain how the incentives of police departments and the public media gave rise to explanations of the rising crime rate in the 1980s that were totally wrong.

In run for the 1996 Olympics, the Atlanta Police Department would throw away nearly 2000 police reports to lower crime rate. However, it didn't matter because the crime rate still rose. The media also told the story of crack cocaine and how it was a powering industry and had a lot of money in it but the people selling the drug still lived in the projects where they started selling it.

5. Describe, in general terms, the organizational structure of the Black Disciples street gang. How is it similar to the organizational structure of most business?

The Black Disciples were set up like almost any business. The top men were called "board of directors" then in individual cities/districts their were bosses with three men under him and "enforcer" for safety, a "treasurer" to manage the gang's liquid assests, and a "runner" for transporting the drugs from the supplier. Under these four men are "foot soldiers" which sell the drugs but want to one day be the boss of their individual city/district. However, there are also many more unpayed sellers in hopes of even becoming a foot soldier. This business model (although not completely the same) is very simlar to how many legal legit businesses run.

6. Explain how four years of financial records of the Black Disciples street gang found their way into the hands of a University of Chicago graduate student. 

With the gang under indictment, one of the gang's inner members (the one who was being blamed for the new legal interest) gaave the financial records of the gang to Venkatesh in hopes that it could maybe do some good because of his fear of death that would most likely occur of the gang's backlash.

7. How did J.T., a branch leader of a Black Disciples street gang, acquire and maintain a regional monopoly over crack cocaine within the territorial domain of the gang?

How any gang would survive, out of violence and takeoff of rival gangs. J.T. was also a college graduate and a business major. He knew what he was doing in the managing and organizing his portion of the crack cocaine business.

8. What are monthly costs incurred by J.T.’s unit of the Black Disciples? Which costs would be considered fixed costs? Which would be considered variable costs?

The money that J.T.'s unit brought in was around $25,000 in drug sales.

Variable Costs
  • Weapons (the gang would have deals with local businesses for services)
  • Mercenary fighters (hired short-term to fight turf wars)

Fixed Costs
  • Money needing to be payed to the board of directors
  • Dues
  • Extortionary taxes
9. Explain how a “tournament” or “winner take all” labor market works.Why would a street-level drug dealer be willing to accept low pay and poor working conditions?

Young aspiring workers in to start out at the bottom to get to the more glamous high-paying jobs for little pay and great devotion. A drug dealer has the same outlook. He wants to be one the top bosses but he has to be a "foot soldier," first. That incentive would drive anyone to do a job for low pay.

10. Give your own examples of a “tournament” type of labor market.

In Hollywood, becoming a movie star or singer is almost a dream that will never come true. Taking extra jobs or even finding a job is where you have to start. Most of the big name actors and actresses didn't start off in the blockbuster hits.

11. How do the incentives of the street-level drug salesman differ from those of the gang leader/franchise owner? Are they both attempting to maximize the profits of the gang? Why or why not?

Both the street-level drug salesman and the gang leader/franchise owner are both somewhat looking out only for themselves. With the leader pocketing a lot of the profit and the salesman just trying to get by on any money he can get. However, the leader is also systematically distrubutes the money for the better of the gang keeping it in business and growing.

12. How did the invention of crack cocaine transform the urban street gang?

Urban street gangs before crack cocaine were more on creating mayhem and not money. But as street gangs were introduced to the new booming business of crack they started to make more and more money.

13.According to the data cited in this chapter, civil rights laws and a shift in the attitudes in the United States regarding race helped to improve the status of black society. How did crack cocaine alter that progress?

The addiction to crack and the high that it gave was only temporary and and user would come back for more. That and the fact that the invention of crack was so cheap it could easily be sold in poorer neighborhoods by urban gangs.

14. Based on the examples in this chapter, what does the invention of better and cheaper production methods do to the price and sales of a good or service?

Price is everything. In the example of cocaine it was something only rich people could afford but after the invention of crack it was much cheaper and more people could afford to buy it.

Thursday, May 5, 2011

Freakonomics: Chapter 2 - How is the Ku Klux Klan like a group of Real Estate Agents?

1. Describe, in broad terms, how the Ku Klux Klan came into existence and how its level of popularity varied over time. In addition, identify specific factors that caused the Klan’s popularity to rise or fall.

The Ku Klux Klan started out as just a circle of friend with like-minded views. Through the WWI and WWII the group was low but after the KKK grew and started causing more volience. However, it was the acts of Stetson Kennedy that caused the major drop in Klan members.

2. Explain Stetson Kennedy’s role in the Klan’s ultimate decline in popularity in the South, focusing on the role the dissemination of what the Klan believed was secret information played in that process.

Kennedy hated the Klan and what they stood for. In studying the KKK he realized that no one really knew what the Klan was doing behind closed doors. So, to find out, he joined. After meetings, he would go home and write the passwords, events, and rankings of KKK members and give them out to union members, anti-KKK politicans, etc. However, the Klan remained strong. The ultimate downfall of the KKK was when Kennedy gave all the infomation he had to the Superman radio show which monked the KKK and all that it stood for. Within two Klan meetings no one was showing up.

3. Explain what is meant by the term “information asymmetries” and give examples of information asymmetries we encounter in everyday life. 

Infomation asymmetries are infomation that is not told (and may not even exist) but changed a person's decision. For example, if someone is selling a new car many people will assume that there is something wrong with it. This way not be the case, but nevertheless it becomes almost impossible for the seller to sell the car for its worth.

4. Explain whether, and if so, how, information asymmetries create a competitive advantage for particular individuals.

Using the lemon car example again it is possible that infomation asymmetries can be used as an advantage. If someone's car really was a lemon that infomation may never be disclosed and the buyer of the car will be cheated out of it's money.

5. Explain how such innovations as the Internet have affected the prevalence of information asymmetries.

The internet is home to a unlimited amount of infomation. Most of this infomation is bogus and untrue because anyone anywhere can write anything whether is it true or not. You can find multiple opinions and theories and any subject but finding facts is almost impossible.

6. Explain how information asymmetries facilitated the corporate scandals that occurred in the early 2000s.

Multiple big name businesses were conducting many "under the table" deals which came to light. Some of these including trading infomation about shares (which caused the scandal with Martha Stewart,) hidden memberships, disguised debt, and manipulation, These were all things that were happening but just weren't talked about (information asymmetries.)

7. Provide examples that illustrate how the combination of an information asymmetry and fear can lead to inefficient outcomes. Explain how the introduction of the element of fear makes the problem of the information asymmetry even worse.

Doctors can use their knowledge as an information asymmetry. They may know that you don't need a certain surgery but will use fear (like the fear of having heart attack) to "sell" you on the idea. You need this surgery to survive when really, you don't. This causes more money to be spent on unnecessary medical procedures and more money to pad the pocket of the doctor that sold it to you.

8. What evidence do the authors offer to support their claim that real estate agents exploit an information asymmetry to their client’s detriment? As more clients become aware of the possibility of such behavior by agents, how might it affect the relationship between the two?

A person trying to sell their house has two main fears: will I try and sell my house for least or far more then it is worth. So the logal solution is to hire a real estate agent an expert at selling homes. However, the real estate agent also uses that to her advantage by setting and selling the price that gives her the most profit. The internet however gets rid of this problem. Anyone can go online and do their own research on any home they want without realtors help.

9. Explain how the choice of terms a real estate agent uses to describe a particular property conveys additional information about the property, and hence the price a potential buyer might be able to successfully offer the seller.

If an ad for a home uses general terms such as "fantastic" "spacious" or "great neighborhood" it is really covering up the fact that the house is not interesting and not worth buying. More descriptive words like "maple" "hardwood floors" and "state of the art" give you an idea of what is in the home and which makes it more appealing.

10. This chapter examines how the economic incentives of a real estate agent may differ from those of his or her client.What other subject matter experts are often hired by individuals and businesses? Might they have incentives that differ from those of the clients that hire them?

Funeral directors are hired to give griefing familes final resting places for their loved ones. However, instead of showing the reasonably priced caskets they will show you the top of the line, very expensive caskets because it is good for business.

11. Explain how the information a person has can affect his/her propensity to discriminate. As part of your explanation, distinguish between taste-based discrimination and information-based discrimination.

taste-based discrimination - when someone just doesn't want to assoicate with a certain type of people
information-based discrimination - when someone feels that a certain type of person is not capable of doing something

12. According to the voting data from the Weakest Link, which two groups of people are most likely to be discriminated against in that setting.What type of discrimination is being practiced in each case? Explain.

Elderly - taste-based - Regardless of their skill for the game elderly players were voted off on the fact that they don't want them around
Hispanics - information-based - Regardless of their skill for the game hispanic players were voted of on the opinion they are poor players

13. What do the data say about the characteristics of men and women who participate in Internet dating sites relative to the characteristics of the broader population?

Men and women on interest dating sites can do one of two things: 1. Try and be and truthful as possible to find someone they like or 2. Lie to seem more appealing. This can be very true of the broader popualtion as well.

14. Assuming many of the people who use Internet dating sites are not being truthful when they describe themselves, what could motivate them to do so?

One thing could be knowing that if they ever actually met a date face-to-face, the truth would likely come out.


Freakonomics: Chapter 1 - What Do Schoolteachers and Sumo Wrestlers Have in Common?

1. Explain how the imposition of a fine for tardy parents at a day care center may have altered the motivations of these parents.

If something needs to get done you hit them where it counts, their wallets. If parents with children at the day care suddenly knew that they would have to pay to pick up their kids late then they would make the extra effort - have the incentive - to come on time for fear of being unnecessarily charged more money. At least that is what they thought would happen. When this was put into practice the tardyness of parents increased. The guilt they were supposed to feel was bought off for $3.



2. What is an incentive? How does it relate to the study of economics?

In Freakonomics an incentive described as "a means of urging people to do more of a good thing or less of a bad thing." It is the motivation to change something in almost anything. In economics, if there is a problem with a good, service, or a marketplace then economists have the incentive to change it.

3. What examples can you think of where moral or social incentives and economic incentives are both present? Are the different incentives complementary or competing? For each of the cases you cite, which do you think is the stronger incentive?


The anti-smoking campaign put multiple incentives to smokers. For the sin-tax of $3-per-pack (economic), the banning of cigarettes in restaurants (social), and the U.S. government asserting that terrorists raise money by selling black-market cigarettes (moral) these are all incentives not to buy cigarette

4. Describe some ways in which a school teacher might be able to improve the scores of his or her students on a standardized test.

Working directly from the standardized tests topics from the past
Getting the questions from study packets given out by the test people themselves
With what infomation is being taught make sure the students are retaining the infomation


5. How has a well motivated and seemingly benign government requirement to administer standardized tests to grade school students had unintended and malicious consequences?
Can you think of other examples of government regulations that were imposed to achieve one goal but have had unanticipated consequences?

Students who have to take the tests not only are judging themselves but their teachers and their school. Testing is argued to increase the standard of learning. It is also argued that certain students are unfairly penalized and the stakes are to high. This line of thinking is not just exist in school testing but in ecnomics and government as well. Anything from failed policies to a new bill can backfire dramatically.

6. Explain how Levitt devised a means of examining student test scores to uncover evidence of cheating teachers. Explain also why Levitt’s analysis of the data constituted evidence, but not proof, of cheating.

Levitt explains that cheating teachers so by systematically changing the students answers. However, this method does not work. The test that the teacher changes is most likely a poor student and easier questions on the test that he got wrong (that the teacher did not change) don't match up with the harder write answers (that the teacher did change.) This brings up a theory of how teachers cheat but it does not prove it. It is possible (though unlikely) that the student did get harder questions right while he got the easier questions wrong. In other words, it is hard to prove if a teacher is cheating or not.


7. Explain what incentives, if any, a university might have to artificially improve the test scores and grades of its athletes.

If a school has a high proforming team that is plenty incentive to keep the players on the team, regardless of their academic proformances.


8. Describe, in general terms, how sumo wrestling tournaments in Japan are arranged and how the rank of an individual sumo wrestler might change as a result of his performance at one of these tournaments.

Sumo wrestlers are treated as royalty in Japan. They are ranked by their proformance in tournaments. If at the end of a tournament a wrestler loses many of his matches he is booted out of the "best of the best" racking and forced to do the work of the "less than" wrestlers like washing, cleaning, etc. Also the "best of the best" make far more money and losing a tournament greatly decreases their pay.


9. Describe what it means for a Japanese sumo wrestler to be “on the bubble” and what incentives this wrestler and his opponent may have to “throw” a wresting match.

If during a tournament a wrestler in danger of being booted out of the "best of the best" is in a match againest another wrestler that has nothing to worry about why wouldn't the sumo wrestler with more wins let his opponent win.


10. How did Levitt construct a means of detecting evidence of cheating among Japanese sumo wrestlers? What evidence does he offer in support of his claim that some Japanese sumo wrestlers probably “throw” some of their matches?

Sumo wrestlers that have already won a spot in the top could easily beat the wrestler that is "in the bubble." The proformance standards do not mtach up. Then, we these same people meet again in a match neither at risk or "in the bubble" the stats seem to be that of what the match should have been when one was "in the bubble."


11. How did Paul Feldman set up his bagel business in the Washington, D.C. area? How did it differ from most business models?

While working for a big business in Washington D.C. he started to bring in bagels into work and basket with a suggested price then later he would collect the money and leftovers. After Feldman quit his job, he starting doing this in multiple businesses. This is different because it leaves the comsumer (the business getting the bagels) to pay for the bagels themselves. They are not forced to pay like you usually are, it is only a suggestion.


12.What do the authors of Freakonomics conclude from an analysis of the Paul Feldman’s bagel sales data? Do these conclusions match with economists’ expectations of human behavior?

This book feels that it gives wonderful insight to the human behavior and honesty. How much money Paul Feldman wasn't getting back was how much money he was being cheated out of. These results also match what economists have studied.


13.What window does an analysis of the sales data of Paul Feldman’s bagel business open? Why is this
usually a difficult subject for economists and others to analyze?

This bagel business provides evidence into white collar crime. In white collar crime there usually is not no victim but in this case Paul Feldman is the victim. When embezzlement happens there is not an problem (not one that needs to have action taken like in a murder or attack) the person who is commiting the crime says nothing and goes along with life "not hurting anyone." This makes white collar crime difficult to analyze.


14. Based on what can be learned from a study of sales data of Paul Feldman’s bagel business, what
variables affect the incidence of theft in an office setting?

Many factors came into play on whether a person payed for his bagel or not:


  • Weather
  • Holidays
  • Rank at work (People ranked higher are more likely to cheat)
  • Shame


It really comes down to a matter of honesty do you or do you not pay for the food?

Monday, May 2, 2011

Freakonomics: Introduction - The Hidden Side of Everything

The basic theme of the introduction of Freakanomics is that the answer to a problem may not be the same "cookie-cutter" solution that we expect of all problems. In the book he gives examples of this in:

Crime
  • Crime dropped significantly from one generation to the other
  • Abortion also increased
  • The unlikely solution of the crime rate going down could be there were less people to commit the crimes.
Relators/Commission
  • You hire a realtor because they are the best at what they do.
  • However, they also want to make a profit for themselves so the price increase could be less of the value of your home and more of the skills of the realtor getting as much money as possible for both you and them.