'Freakonomics' Author Steven Levitt Ed Gordon talks with Steven Levitt, author of The New York Times best-seller Freakonomics, which examines human motivations through an economic lens.

'Freakonomics' Author Steven Levitt

'Freakonomics' Author Steven Levitt

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Ed Gordon talks with Steven Levitt, author of The New York Times best-seller Freakonomics, which examines human motivations through an economic lens.

ED GORDON, host:

Which is more dangerous? A gun or a swimming pool? What do schoolteachers and sumo wrestlers have in common? Steve Levitt makes his living pondering questions like these. He's an economist at the University of Chicago, and along with journalist Stephen Dubner, he's written "Freakonomics." The New York Times best-seller examines real-world situations through the lens of economics, offering insight into how people get what they want or need. Levitt explains how he maps out his path of inquiry.

Mr. STEVE LEVITT ("Freakonomics"): Most economists when they think of incentives focus on how can you set up a set of rules that will get people to do what you want them to do? But my interest has always been when you get a really smart set of economists and policy-makers and they put in the best possible rules, you've got an army of people out there trying to figure out how to beat those rules. And a lot of what I do is about identifying when things go awry.

GORDON: Let's talk a little bit about some of these questions and your findings and how you went about getting the data. One of the interesting questions is: How much do parents really matter? Talk to me about that question and how you went about that finding.

Mr. LEVITT: The take I have on parenting comes out of this amazing new data set that the Department of Education has put together called "The Early Childhood Longitudinal Study," and it takes 20,000 kids and their parents and it asked them an enormous range of questions and it starts at a very young age, three or four years old, and follows them so far through third grade. What we set out to understand is: What variables in a child's background help predict how they're going to do on standardized tests? And what we find is that variables such as income and parental education, that all of those variables turn out to be quite important in terms of predicting whether kids will do well in school or not. But a whole other range of variables about parenting style, about whether you spank your kids, whether you let them watch TV, even whether you read to them, it turns out that we can't find any evidence that those kind of specific types of interactions are important for how your kids turn out.

GORDON: You mentioned this one, and again, it's just one of those interesting thoughts and I think people would, A, find it interesting to see that perhaps even a disproportionate amount of, quote, "drug dealers" still live with their mothers, but talk to me about how you found that out.

Mr. LEVITT: Our analysis of drug dealers comes out of the work really of a co-author of mine, Sedear Van Kadesh(ph), which is an amazing story in the book about how he came to go from being a graduate student at the University of Chicago in sociology to being so ingratiated with a local gang in Chicago that they not only opened up their lives to him, but opened up the financial records, the books that they kept. And so what we find when we look carefully is that the gang organization looks a whole lot like a typical corporate structure, a lot like McDonald's in some sense. And so just like McDonald's, it turns out there's a handful of guys at the top who are very successful who run the gang, who are bringing home, you know, mid to high six-figure salaries, but the 90 percent of the guys who are working in the gang are the young kids who are selling drugs on the street corner that it turns out they're getting paid roughly minimum wage for standing on the street corner and selling the drugs.

GORDON: Let me ask you about the impact of Roe vs. Wade on violent crime.

Mr. LEVITT: I should start by saying that this is not a statement about abortion being right or wrong, about whether Roe vs. Wade is a good decision or should be repealed. It's a statement trying to understand the incredible decline in crime that we had in the 1990s. And I don't know how much people are aware of it, but violent crime is down almost 50 percent in the United States. And so I have spent about five years looking at all the usual types of suspects of why crime might have fallen. There still is a lot left over and I puzzled over this for years until one day I stumbled on to a set of statistics about the amount of abortion that takes place in the United States. It turns out after legalization in 1973 to the present, about one in four pregnancies in the United States ends in abortion. How can that not have a big social impact?

And since I've been thinking about crime, I thought, `Well, is it possible this could really be linked to crime?' And it turns out there's decades' worth of social scientific research that suggests that if a child comes into the world, he's unwanted, has a difficult home life, that child's at tremendously increased risk for criminal activity. And so the theory is really pretty simple. After legalized abortion, there were fewer unwanted children being born. There are fewer unwanted children. When they grew up to reach their peak crime ages, they just weren't there to do the crime. And so it looks like about a third of this decline in crime that we saw in the '90s I believe can be attributed to the legalization of abortion.

GORDON: Well, as you suggest, it's a fun beach read to a great degree, and if you want to continue to answer questions like, `Which is more dangerous, a gun or a swimming pool?' you're going to want to pick up "Freakonomics: A Rogue Economist Explores the Hidden Side of Everything." Steven Levitt is one of the authors and we appreciate your time today.

Mr. LEVITT: Thank you very much for having me.

GORDON: That does it for the program today. To listen to the show, visit npr.org.

NEWS & NOTES was created by NPR News and the African-American Public Radio Consortium. I'm Ed Gordon. This is NEWS & NOTES.

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