Introduction
"When to Rob a Bank" is a collection of quirky and thought-provoking economic insights from Steven D. Levitt, the co-author of the bestselling book "Freakonomics." This book compiles some of the most intriguing blog posts and reader-submitted oddities from the Freakonomics website, offering a fresh perspective on the hidden economics that shape our world.
Levitt's approach to economics is far from conventional. He delves into the strange, surprising, and often counterintuitive aspects of human behavior and decision-making. From the economics of names to the peculiarities of pricing, from the unexpected dangers we face to the bizarre world of crime and punishment, this book challenges our assumptions and makes us see the world through a different lens.
The Curious World of Names
The Wayne Effect
One of the most unexpected revelations in the book is the curious connection between middle names and criminal behavior. A Freakonomics reader, M. R. Stewart, has an unusual hobby of collecting newspaper clippings about crimes committed by people with the middle name Wayne. The sheer volume of these clippings is so striking that it led author Stephen Dubner to jokingly forbid his daughters from dating anyone with the middle name Wayne.
While this observation is more anecdotal than scientific, it raises interesting questions about the potential influence of names on behavior or the possibility of certain names being more common in demographics prone to criminal activity.
The Nevaeh Phenomenon
The book also explores how names can suddenly surge in popularity due to seemingly random events. A prime example is the name Nevaeh, which is "Heaven" spelled backward. In 1999, only eight children in the United States were given this name. However, after Christian rockstar Sonny Sandoval of P.O.D. appeared on MTV in 2000 with his baby girl named Nevaeh, the name's popularity skyrocketed. By 2005, 4,457 baby girls were named Nevaeh, making it more popular than traditional names like Sara.
This phenomenon illustrates the power of media influence and how quickly cultural trends can spread, even in something as personal as naming a child.
Aptly Named Individuals
Levitt also shares some humorous examples of people whose names seem uncannily fitting for their situations or professions. These include:
- A man with the surname Limberhand who was arrested for public masturbation.
- A dentist named Dr. Les Plack.
While these are likely coincidences, they highlight our human tendency to find patterns and meaning in random occurrences.
The Puzzling World of Prices
The 99-Cent Illusion
The book delves into the psychology of pricing, noting how consumers often perceive a significant difference between items priced at $1 and those at 99 cents, despite the minimal actual difference. This psychological trick is widely used in retail to make products seem more affordable.
Medication Pricing Disparities
Levitt reveals shocking disparities in medication pricing between different pharmacies. For instance, a bottle of Prozac pills could cost $117 at Walgreens but only $12 at Costco. This significant price difference highlights the importance of comparison shopping, especially for essential items like medications.
The book suggests that many consumers, particularly retirees, assume generic drug prices are consistent across all stores and don't bother to compare prices. This assumption can lead to unnecessarily high healthcare costs for individuals and contribute to the overall inflation of medical expenses in the country.
Illogical Pricing Strategies
The author shares an amusing anecdote about Harold's Chicken Shack, where he noticed that the price difference between a two-wing meal and a three-wing meal made the third wing more expensive than the first two combined. This example illustrates how some businesses may not fully understand pricing strategies or may implement them illogically.
The Penny Paradox
Levitt points out the economic absurdity of the U.S. government continuing to produce pennies despite the cost of production exceeding their face value. This practice raises questions about tradition versus economic efficiency in government policies.
Misperceptions of Risk and Danger
Horseback Riding vs. Motorcycling
The book challenges our perceptions of danger by revealing that horseback riding is statistically more dangerous than riding a motorcycle. This surprising fact, based on a 1990 report from the Center for Disease Control and Prevention, shows that the number of severe injuries per hour of horseback riding exceeds that of motorcycling.
This revelation highlights how our perception of risk can be influenced by factors other than statistical reality, such as cultural norms and media portrayal.
The Danger of Familiarity
Levitt argues that we should be more wary of people we know than strangers, contrary to common advice. He cites several statistics to support this claim:
- The number of murder victims who knew their killers is about three times higher than those murdered by strangers.
- 64% of rape victims know their aggressor.
- 61% of female victims of aggravated assault know their attacker.
- In one year, out of 203,900 child abductions, only 58,200 were perpetrated by strangers.
These statistics challenge the common "stranger danger" narrative and suggest that we might be focusing our fears in the wrong direction.
The Economics of Lying
Counterproductive Lies
The book explores instances where people lie even when telling the truth would be beneficial. A study of the Mexican welfare program Oportunidades revealed that many applicants underreported valuable assets like cars and satellite TV to appear eligible for the program. However, surprisingly, many also overreported basic facilities like toilets, tap water, and gas stoves, even though lacking these might have made them more eligible for assistance.
This behavior is attributed to embarrassment; some applicants would rather risk not receiving welfare than admit to not having basic amenities. This example shows how social and psychological factors can sometimes outweigh economic self-interest.
Profitable Fabrications
On the flip side, Levitt examines cases where lying can be economically beneficial, particularly in the publishing industry. He notes that partially fabricated memoirs often generate more hype, media coverage, and sales than novels. This economic incentive explains why some authors and publishers might be tempted to market fictional stories as memoirs, despite the risk of eventual exposure.
Environmental Misconceptions
The Walking vs. Driving Dilemma
The book presents a counterintuitive environmental calculation: walking 1.5 miles and then replenishing the lost calories with a glass of milk can have the same environmental impact as driving 1.5 miles. This is due to the greenhouse gas emissions associated with milk production, including those from cows and milk-delivery trucks.
This example illustrates how complex environmental impacts can be and how our intuitions about "green" behaviors might sometimes be misleading.
Home Gardens vs. Meat Consumption
Levitt challenges the notion that growing your own vegetables is the best way to reduce your environmental impact. He cites research showing that 83% of food-related greenhouse gas emissions come from production, while only 11% come from transportation.
The book suggests that reducing meat consumption one day per week would have a more significant positive environmental impact than maintaining a home vegetable garden. This is because meat production requires far more energy and resources than vegetable production.
Crime and Law Enforcement Oddities
The Best Day to Rob a Bank
The book shares an amusing tidbit from a successful New Jersey bank robber who claimed that Thursday is the best day to rob a bank. While this information isn't particularly useful for law-abiding citizens, it's an intriguing insight into criminal thinking.
The Power of Priming in Criminal Behavior
Levitt discusses a study demonstrating how reminding criminals of their criminal identity can influence their behavior. In the experiment, prisoners who were asked about their convictions before a coin-flipping task were more likely to lie about the results than those who were asked a neutral question about television viewing habits.
This finding suggests that priming can have a significant impact on behavior and could potentially be used in positive ways in correctional facilities.
The Surprisingly Effective Immigration Form
The book reveals an unexpected method for catching criminal immigrants: simply asking them if they're criminals. The U.S. Immigration and Naturalization Service's Form N-400 includes the question, "Have you ever committed a crime for which you were not arrested?"
While it might seem naive to expect criminals to admit their crimes, this question serves a legal purpose. If authorities can later prove that an applicant lied on this form, it can be grounds for prosecution or deportation.
The Economics of Sex
More Sex for Safer Sex?
Levitt presents an unconventional argument from economist Steven Landsburg's book "More Sex is Safer Sex." The theory suggests that encouraging careful, STD-free people to have more casual sex could benefit public health. The logic is that increasing the proportion of safe sexual partners in the dating pool would reduce the overall spread of STDs.
This counterintuitive idea challenges traditional approaches to public health and sexual education.
The Case for a Sex Tax
The book proposes the controversial idea of implementing a tax on sex. This suggestion is based on several economic factors:
- The high annual healthcare costs associated with sexual activity (e.g., unwanted pregnancies and STDs)
- The lost productivity that sex represents
- The government's need for additional revenue
The proposed tax system would heavily tax sexual activities that spread disease and cost society money, while potentially offering tax breaks for safe sex practices. While this idea is presented more as a thought experiment than a serious policy proposal, it highlights how economic thinking can be applied to unexpected areas of life.
Rethinking Economic Principles
The Unexpected Benefits of Bribery
Levitt challenges the conventional wisdom that bribery is always wrong by exploring its potential benefits, particularly in education. He describes an experiment where students were offered money to improve their test scores. The students who received this financial incentive performed better than those who didn't.
This example suggests that monetary incentives, often frowned upon in educational settings, might have a place in motivating students to perform better academically.
Supply vs. Demand: A Shift in Perspective
The book examines how different groups might interpret economic trends differently. Using the example of increased shrimp consumption in the U.S. between 1980 and 2005, Levitt contrasts the approaches of psychologists, economists, and economics students:
- Psychologists might focus on changes in consumer demand due to health trends or advertising.
- Economists would likely examine changes in supply, such as improved fishing techniques.
- Economics students and the general public tend to think more like psychologists, focusing on consumer demand.
This example illustrates how economic training can shift one's perspective on everyday phenomena.
Key Takeaways and Final Thoughts
"When to Rob a Bank" offers a fresh and often humorous look at the hidden economic forces shaping our world. Some of the key insights from the book include:
- Names can have unexpected influences on our lives and society.
- Our perceptions of risk and danger are often misaligned with reality.
- Economic incentives can lead to surprising behaviors, even when they seem counterintuitive.
- Environmental impacts are complex and not always what we expect.
- The world of crime and law enforcement is full of economic oddities.
- Economic thinking can be applied to unexpected areas of life, including sex and relationships.
- Our understanding of economic principles often evolves with education and experience.
Levitt's approach encourages readers to question their assumptions and look at the world through an economic lens. By examining the strange, surprising, and often counterintuitive aspects of human behavior and decision-making, the book demonstrates that economics is not just about money and markets – it's a way of thinking that can be applied to virtually every aspect of our lives.
The book's strength lies in its ability to make complex economic concepts accessible and entertaining. By using relatable examples and quirky anecdotes, Levitt brings economics to life in a way that engages readers who might otherwise find the subject dry or intimidating.
However, it's important to note that many of the ideas presented in the book are speculative or based on limited data. Levitt often uses these examples to provoke thought and discussion rather than to provide definitive answers. Readers should approach the book with a critical mind, using it as a starting point for further exploration and debate rather than as a source of absolute truths.
In conclusion, "When to Rob a Bank" is a thought-provoking and entertaining read that challenges us to see the world differently. It reminds us that economics is everywhere, influencing our decisions and behaviors in ways we might not always recognize. By understanding these hidden economic forces, we can make more informed choices and perhaps even find innovative solutions to societal problems.
The book's ultimate message is that curiosity and critical thinking are essential tools for navigating our complex world. By questioning conventional wisdom and looking beyond surface-level explanations, we can uncover the fascinating economic principles that shape our lives and society.
Whether you're an economics enthusiast or simply someone who enjoys exploring new ideas, "When to Rob a Bank" offers a unique and engaging perspective on the world around us. It encourages us to think like "freakonomists," always looking for the hidden incentives, unexpected connections, and surprising truths that lie beneath the surface of everyday life.