Diminishing Returns

In the first,Levitt,along with past collaborator Sudhir Venkatesh,takes traditional economics on a detour. The starting point is that men earn more than women. This is a simple assertion,but the edge in this argument lies in the introduction of prostitution as both a variable and an indicator. Men,they say,have traditionally outdone women in all fields except prostitution. Then they,in a very novel way,compare prostitution and real estate. Given the benefits of technology,the role of realtors has diminished in value simply put,it is cheaper to view a property yourself rather than through an agent. However,prostitution does not benefit from the technological revolution it is unlikely that you would find prostitutes advertising online. Data and evidence support the benefits of using a pimp. Thus,PIMPACT>RIMPACT. But some women choose not to have pimps and still turn tricks on the streets. The book argues,… one feature of a market economy is that prices tend to find a level whereby even the worst conceivable job is worth doing.

How does this explain wage differentials? The authors argue that the onset of the feminist revolution reduced the demand for prostitution and enabled more benefits for women,but still the gap existed. Why? Their answer is that women love babies and men are more interested in money; in fact,they argue that there are many other factors influencing/motivating decisions and outcomes that a true understanding may be achieved either through human cloning or sex-change operations.

This is where Superfreakonomics lets the reader down. It is exciting to see the field of economics undergo radical changes and depart from traditional approaches. But,more often than not,the questions posed remain unanswered.

This is not to say that populism in economics should be discounted and such renegade economists are a disservice to their profession. Superfreakonomics is an enjoyable read as it brings to light how autocratic regimes have a more successful kidney donor regime than democratic countries but once again it fails to explain why the duo attempt to explain the phenomenon through altruism.

The most ambitious chapter is on global cooling as it takes on one of the most pressing issues for economists,politicians and climate scientists. Departing from a doomsday approach to a rapidly heating world and the measures currently employed,the chapter explores the work of Intellectual Ventures. Exceptionally innovative ideas are bought to the forefront and the potential of geo-engineering is the main thrust of the argument. However,unfortunately,there is almost no attempt to address the progress that has been made on creating a less-carbon regime and the argument more often than not is one-sided.

Superfreakonomics employs a wealth of data and statistics with ingenuity to address everyday problems,but it is largely a collaborative exercise collating ongoing research and some of Levitts own work. This is a departure from Freakonomics,which was largely based on the research undertaken by Levitt. Perhaps one could attribute this change for the lack of fluidity in the sequel.