Freakonomics

Economics is, at root, the study of incentives.

A child born into an adverse family environment is far more likely to become a criminal than other children. Roe v. Wade in 1973 legalized abortion, allowing the millions of women most likely to have an abortion, poor, unmarried, teenage mothers for whom illegal abortions had been too expensive or hard to get, to get abortions. They were the women whose children were more likely to become criminals, but these children were no longer being born. So the drop in crime after 1995, which had been projected to increase, wasn't from gun control or just a thriving economy. It was, among other factors, that the pool of potential criminals had dramatically shrunk.

An Israeli daycare implemented a $3 fine for parents picking up their child late. The tardy rate increased. Not only was the $3 fine too small, it also substituted an economic incentive, the $3 penalty, for a moral incentive, the guilt the parents were supposed to feel when they came late.

Cheating is a primordial force in economics. The dark art of getting more for less.

Stetson Kennedy largely dismantled the Ku Klux Klan by infiltrating it along with a man code-named John Brown. They then spread Klan secrets on the radio and the appeal of the Klan fell because everyone knew their secrets. People who were in the dark were now actively against them. People leaning in favor were dissuaded because they were now a target of mockery. They were portrayed as villains on kids' radio. The dissemination of information caused attendance to fall.

Entering a new town: "Do you know Mr. Ayak?" Ayak meant "are you a klansman?" The response was: "Yes, and I know Mr. Akai too." Akai meant "a klansman am I."

Similarly, Quotesmith.com was an early internet business that allowed people to easily compare life-insurance rates. The high-charging companies were forced to lower their rates and Americans paid one billion dollars less a year for life insurance.

Information asymmetry.

Two leading theories of discrimination among economists: taste-based discrimination, you just don't like them, and information-based discrimination, you believe they are worse.

Data analysis of 20,000 active dating-site users, median age 21-35: for men, income was most important. For women, looks were most important. A woman's income appeal is a bell-shaped curve. Men didn't want to date low-earning women, but also seemed to be scared off once a woman started earning too much. Pretty much all stereotypes were data-backed. Being short for men or overweight for women was a big disadvantage, which is why on average men and women lied the most on those categories.

Why crack dealers still live with their mothers: they barely make any money. Unless you're at the top, you're making next to nothing, around $3.30 an hour. But you stay at it because if you make it to the top, you're making $100,000-plus a year and have status. Same incentives as struggling actors or a high-school quarterback. If you make it, you make it big, but you need to put in lots of unpaid work before you do.

Steve Levitt was able to access the financials of the Black Disciples gang in Chicago over a four-year span. You were more likely to die if you were in that gang in Chicago than if you were on death row in Texas. One in four died over the four-year span.

Crack brought cocaine to the masses. An insane high for way cheaper than cocaine.

The four decades between World War II and the crack boom had been marked by steady and often dramatic improvement for black Americans. By the 1980s, virtually every facet of life for black Americans was improving and showing no sign of stopping. Then came crack cocaine.

It wasn't a black-only phenomenon, but it hit black neighborhoods much harder than most. The number of black people sent to prison tripled. The gap between black and white schoolchildren widened. Homicide rates among young urban blacks quadrupled.

The postwar progress wasn't just stopped cold but often knocked as much as ten years backward. Black Americans were hurt more by crack cocaine than by any other single cause since Jim Crow.

But then crime dropped in the 1990s. Lots of prevailing theories as to why. Some were right, some were wrong. One was never mentioned.

According to John Kenneth Galbraith, the factors that most contribute to the formation of conventional wisdom are the ease with which an idea may be understood and the degree to which it affects our personal well-being.

In Switzerland, every adult male is issued an assault rifle for militia duty and is allowed to keep the gun at home. On a per-capita basis, Switzerland has more firearms than just about any other country in the world, and yet is one of the safest places in the world.

Twenty-five percent of the homicides in New York City in 1988 were crack-related. Crack is still prevalent today, but the crack bubble burst. Profits went down because dealers underpriced each other and it was no longer worth killing someone to steal their crack turf.

The very factors that drove millions of American women to have an abortion, believing they were too young, poor, single, addicted, or uneducated to raise a child, also seemed to predict that their children, had they been born, would have led unhappy and possibly criminal lives.

Growing up in a single-parent home roughly doubles the propensity to commit crime.

Roughly 1.6 million women had abortions per year by 1980, about one for every 2.25 live births. Often it cost less than $100 and was legal, as opposed to $500 and illegal.

In the early 1990s, just as the first group of children born after Roe v. Wade was hitting its late-teen years, the years during which young men enter their criminal prime, the rate of crime began to fall.

Legalized abortion leads to less unwantedness; unwantedness leads to crime; legalized abortion, therefore, led to less crime.

In New York, California, Washington, Alaska, and Hawaii, abortions were legal for at least two years before Roe v. Wade. Those early-legalizing states saw crime begin to fall earlier than the other 45. Violent crime fell 13 percent comparatively between 1994 and 1997 for the earlier legalizers.

After Roe v. Wade, the states with the highest abortion rates in the 1970s experienced the greatest crime drops in the 1990s, and vice versa for low-abortion-rate states. The correlation existed even when controlling for a variety of factors that influence crime: incarceration, number of police, economic situation, and more.

Moreover, there was no link between a given state's abortion rate and its crime rate before the late 1980s, when the first group affected by legalized abortion was reaching its criminal prime.

In states with high abortion rates, the entire decline in crime was among the post-Roe group as opposed to older criminals.

With all this said, the tradeoff between higher abortion and lower crime is terribly inefficient. You're not saving lives unless you consider a fetus worth nothing.

The per-hour death rate of flying and driving is about equal. About 40,000 auto deaths and fewer than 1,000 plane deaths, but people spend far more time in cars.

The black-white income gap is virtually eradicated if black students' lower eighth-grade test scores are taken into account. In other words, the income gap is largely a product of a black-white education gap.

"The Economics of Acting White" by Roland G. Fryer Jr.

It doesn't so much matter what you do as a parent; it's who you are.

Does a name matter? Dumb names correlated with dumb children are likely both a result of the same factor: dumb parents.

Today, more than 40 percent of black girls born in California in a given year receive a name that not one of the roughly 100,000 baby white girls received that year.

Black mothers, particularly unmarried, low-income, undereducated teenage black mothers with a distinctive black name themselves, don't want to be seen as acting white by naming their kid a white name.

Names are an indicator, not a cause, of your outcome. Someone with a unique name is more likely to come from a low-educated, low-income household, and therefore likely to do worse in life.

Chicago had a school-choice lottery where some lucky few could go to school outside their neighborhood. Nicer schools. Going to the nicer school didn't have much effect, but opting into the lottery, being the kind of family that cared enough to want a nicer school, was correlated with higher test scores even if they didn't get picked for the better school.