Steven Levitt


American Economist, Author of Freakonomics

Author Quotes

The economic approach is not to describe the world as any of us want it to be, or fear it, or pray it becomes, but rather to explain what is in reality. Most of us would fix or change the world in some way. But to change the world, one must first understand it.

The sixties and seventies were, in retrospect, a fabulous time to be a street criminal in most American cities. The odds of punishment were so low came the heyday of a liberal judicial system and the movement for the rights of delincuente- to commit a crime simply not difficult.

The evidence linking increased punishment with lower crime rates is very strong.

The gulf between the information we proclaim & the information we know to be true is vast. In other words: we say one thing & do another.

The key to learning is feedback. It is nearly impossible to learn anything without it.

The major challenge facing most foundations is that they are risk averse. This inhibits their ability to experiment and commit to the experimentation and innovation process.

The media need to experts as well as experts to the media.

The media never met a potential apocalypse it didn't like.

The message is unequivocal: failure may be an option but quitting is not.

The most obvious things are often right there, but you don't think about them because you've narrowed your vision.

The next time you encounter such a barrier, imposed by people who lack your imagination and drive and creativity, think hard about ignoring it. Solving a problem is hard enough; it gets that much harder if you?ve decided beforehand it can?t be done.

The next time you run into a question that you can only pretend to answer, go ahead and say I don?t know?and then follow up, certainly, with but maybe I can find out. And work as hard as you can to do that.

The next time you?re in a real jam, facing an important question that you just can?t answer, go ahead and make up something?and everyone will believe you, because you?re the guy who all those other times was crazy enough to admit you didn?t know the answer.

The non-profit industry itself, the most dysfunctional $300 billion industry in the world, as he saw it. Mullaney had come to believe that too many philanthropists engage in what Peter Buffett, a son of the ber-billionaire Warren Buffett, calls conscience laundering?doing charity to make themselves feel better rather than fighting to figure out the best ways to alleviate suffering.

The plural of anecdote is not data.

The ECLS data do show, for instance, that a child with a lot of books in his home tends to test higher than a child with no books.

The probability that an average American will die in a given year from a terrorist attack is roughly 1 in 5 million; he is 575 times more likely to commit suicide.

The economic approach is both broader and simpler than that. It relies on data, rather than hunch or ideology, to understand how the world works, to learn how incentives succeed (or fail), how resources get allocated, and what sort of obstacles prevent people from getting those resources, whether they are concrete (like food and transportation) or more aspirational (like education and love).

The same thing happens if health care is distributed in a similar fashion: people consume more of it than if they were charged the sticker price. This means the worried well crowd out the truly sick, wait times increase for everyone, and a massive share of the costs go to the final months of elderly patients? lives, often without much real advantage.

Stories also appeal to the narcissist in all of us. As a story unspools, with its cast of characters moving through time and making decisions, we inevitably put ourselves in their shoes. Yes, I would have done that too! or No, no, no, I never would have made that decision! Perhaps the best reason to tell stories is simply that they capture our attention and are therefore good at teaching. Let?s say there?s a theory or concept or set of rules you need to convey. While some people have the capacity to latch on directly to a complex message?we are talking to you, engineers and computer scientists?most of us quickly zone out if a message is too clinical or technical.

Tell stories that are based on aggregated data and not on personal anecdotes, striking anomalies, personal opinions, emotional outbursts or moral tendencies.

Tetlock?s words, even when their predictions prove

That is a lethal combination?cocky plus wrong?especially when a more prudent option exists: simply admit that the future is far less knowable than you think.

That is in part because the very words education reform indicate that the question is What?s wrong with our schools? when in reality, the question might be better phrased as Why do American kids know less than kids from Estonia and Poland? When you ask the question differently, you look for answers in different places.

The absurdly talented George Bernard Shaw?a world-class writer and a founder of the London School of Economics?noted this thought deficit many years ago. Few people think more than two or three times a year, Shaw reportedly said. I have made an international reputation for myself by thinking once or twice a week. We too try to think once

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American Economist, Author of Freakonomics