Freakonomics

Criticism

Freakonomics has been criticized for, in fact, being a work of sociology and/or criminology, rather than economics. Israeli economist Ariel Rubinstein criticized the book for making use of dubious statistics and complained that "economists like Levitt ... have swaggered off into other fields", saying that the "connection to economics ... [is] none" and that the book is an example of "academic imperialism".[6] Arnold Kling has suggested the book is an example of "amateur sociology".[7]

Thomas Ferguson, author of Golden Rule: The Investment Theory of Party Competition was asked in 2009 to respond to the following statement in Freakonomics:

A winning candidate can cut his spending in half and lose only 1 percent of the vote. Meanwhile, a losing candidate who doubles his spending can expect to shift the vote in his favor by only that same 1 percent.

His response was:

Where on earth do such figures come from? You would need a fully specified regression equation to do this, that incorporated a lot of variables. Unless you hold constant everything else, including issues -- not easy even to imagine -- such claims are nonsense. Think of a couple of cases. Obviously, an incumbent Congressman or woman with a big margin could spend a bit less and probably do almost as well. By contrast, candidates in close elections surely cannot do this. The real issue is the dependence of money on taking conservative issue positions. Claims about existing candidates typically reflect censored data. That is, there's no one able to run that can run very far to the left.

Economist Robert P. Murphy takes exception to the way the book describes economists and their field, saying the authors end up actually describing econometrics. He also contends the book's ambiguous style makes it very difficult to determine exactly what the authors are asserting in various chapters.[8]

The Impact of Legalized Abortion on Crime

See The Impact of Legalized Abortion on Crime for a detailed discussion of the issue.

Revisiting a question first studied empirically in the 1960s, Donohue and Levitt argue that the legalization of abortion can account for almost half of the reduction in crime witnessed in the 1990s. This paper has sparked much controversy, to which Levitt has said

"The numbers we're talking about, in terms of crime, are absolutely trivial when you compare it to the broader debate on abortion. From a pro-life view of the world: If abortion is murder then we have a million murders a year through abortion. And the few thousand homicides that will be prevented according to our analysis are just nothing—they are a pebble in the ocean relative to the tragedy that is abortion. So, my own view, when we [did] the study and it hasn't changed is that: our study shouldn't change anybody's opinion about whether abortion should be legal and easily available or not. It's really a study about crime, not abortion."[9]

In 2003, Theodore Joyce argued that legalized abortion had little impact on crime, contradicting Donohue and Levitt's results ("Did Legalized Abortion Lower Crime?" Journal of Human Resources, 2003, 38(1), pp. 1 –37.). In 2004, the authors published a response,[10] in which they argued that Joyce's argument was flawed due to omitted-variable bias.

In November 2005, Federal Reserve Bank of Boston economist Christopher Foote and his research assistant Christopher Goetz published a working paper,[11] in which they argued that the results in Donohue and Levitt's abortion and crime paper were due to statistical errors made by the authors: the omission of state-year interactions and the use of the total number of arrests instead of the arrest rate in explaining changes in the murder rate. When the corrections were made, Foote and Goetz argued that abortion actually increased violent crime instead of decreasing it and did not affect property crime. They even concluded that the majority of women who had abortions in the 1970s were middle class whites rather than low income minorities as Levitt stated; this was, they stated, because white middle class women had the financial means for an abortion. The Economist remarked on the news of the errors that "for someone of Mr Levitt's iconoclasm and ingenuity, technical ineptitude is a much graver charge than moral turpitude. To be politically incorrect is one thing; to be simply incorrect quite another."[12] In January 2006, Donohue and Levitt published a response,[13] in which they admitted the errors in their original paper but also pointed out Foote and Goetz's correction was flawed due to heavy attenuation bias. The authors argued that, after making necessary changes to fix the original errors, the corrected link between abortion and crime was now weaker but still statistically significant, contrary to Foote and Goetz's claims. Foote and Goetz, however, soon produced a rebuttal of their own and showed that even after analyzing the data using the methods that Levitt and Donohue recommend, the data does not show a positive correlation between abortion rates and crime rates. [14] They are quick to point out that this does not necessarily disprove Levitt's thesis, however, and emphasize that with data this messy and incomplete, it is in all likelihood not even possible to prove or disprove Donohue and Levitt's conclusion.


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