Q: WHAT DO ABORTIONS, CRACKDEALERS, REAL ESTATE AGENTS, THEKKK, AND ADOPTED CHILDREN HAVE

TO DO WITH ECONOMICS?

A presentation by Grace Wang

Notable Economist: StevenD. Levitt

A: WELL, NOT MUCH AT FIRST GLANCE.

Yet, these are the things thateconomist Steven D. Levittstudies.

Levitt uses the tools ofeconomics to explore humanbehaviors, often examiningseemingly unrelatedcuriosities, expanding theboundaries of economics toother social sciences.

He is… an economist. But!

“Forget your image of an economist asa crusty professor worried aboutfluctuating interest rates” – PublishersWeekly

He is…

“A maverick treasure hunter” - The WallStreet Journal.

“Neither politically correct nor pushinga political viewpoint” – Time Out NewYork

“An economist Sherlock Holmes” – TheEvening Standard

WHO IS MR. LEVITT?

BUT REALLY… WHO IS STEVEN LEVITT?

A Harvard and MIT alumnus.

The winner of the 2003 JohnBates Clark Award, awarded tothe most influential economistunder the age of 40.

A professor of Economics at theUniversity of Chicago

Co-Author of Freakonomics andSuperfreakonomics, 2 of thebest selling economics books ofall time.Stephen Dubner and Steven Levitt with their

book Freakonomics

Q: Will having more police officerscause a decrease in crime?

Q: Why did crime rates drop sosuddenly in the ‘90s?

Problem no other researcher overcame:positive correlation between number ofpolice officers and number of crimes. Inother words, when there are more police,there are more crimes. (Does not meanmore police CAUSES more crimes)

Levitt’s answer: To show causality, the policeforce needs to increase while crime ratesremained constant. Before elections,mayors hire more police forces to pull invotes. This exogenous source of variationallowed Levitt to show that yes, indeed, alarge police force causes a decrease incrime.

Everyone else’s answer: better gun control,innovative policing strategies, and bettereconomy.

Levitt’s answer and reasoning: Thelegalization of abortion in the 70’s.Legalized abortion altered the size of thecriminal population in later decades byallowing these would be criminallyinclined children to not be born. It wasalready established that those gettingabortions were young, unmarried, andpoor and that children raised in poorconditions were more likely to engage incrimes.

THIS IS WHAT HE DOES

FREAKONOMICS

Freakonomics presented the difficultscience of economics in non-academic terms, making the subjectaccessible to those untrained in thefield.

It brought the general public a newway of looking at the world whilealso stimulating interestingconversations among experts in thefield about the future of economics

THE FUTUREOF

ECONOMICS

Macroeconomics-dealing with broad and generalaspects of economics. Generallyusing model assumptions and

economic theories.

Microeconomics-dealing with particular aspectsof economics. Often usingstatistical data and empiricalresearch.

Recent surveys showincrease of graduatestudents of economicsinterested in what Levitt isdoing (microeconomics)versus what most notableeconomists of recent timehave been doing(macroeconomics)

“More and more, ‘Freakonomics’ is becomingmainstream economics. That is the research thatyoung economists see themselves doing” – DavidColander, economic historian at Middlebury College

In summary

Levitt has…

Challenged conventional wisdom using economics as a tool

Expanded the range of economics, tackling novel subjects

Popularized economics to the general public through hisacclaimed books

Stimulated conversation within his field and inspired aresurgence of interest in microeconomics

SOURCES

INFORMATION Dubner, Steven Levitt & Stephen. Freakonomics. New York: Harper Perennial, 2009.

Fox, Justin. "Is the World Ready for Freakonomics Again?" 26 October 2009. Times. 9 February 2010<http://www.time.com/time/magazine/article/0,9171,1930520,00.html>.

Levitt, Steven. "NBER Publications by Steven D. Levitt." December 2009. National Bureau of EconomicResearch. 9 February 2010 <http://www.nber.org/authors/Steven_Levitt>.

Poterba, James M. "Steven D. Levitt: 2003 John Bates Clark Medalist." The Journal of Economic PerspectivesSummer 2005: Vol. 19, No. 3 pp. 181-198.

Uchitelle, Louis. "Students Are Leaving the Politics Out of Economics." 26 Janruary 2006. The New YorkTimes. 9 February 2010<http://www.nytimes.com/2006/01/27/business/27econ.html?_r=1&scp=10&sq=steven+levitt&st=nyt>.

IMAGES● http://blog.winerywebsitereport.com/images/2007/06/24/freakonomics.jpg● http://img.timeinc.net/time/daily/2006/0605/levitt0508.jpg● http://userserve-ak.last.fm/serve/252/7613211.jpg● http://jacketsandcovers.files.wordpress.com/2008/03/freakonomics.jpg