Showing posts with label Steven Levitt. Show all posts
Showing posts with label Steven Levitt. Show all posts

Saturday, 24 October 2009

Alternative Solutions to Stop Global Warming?

Steven Levitt & Stephen Dubner, authors of Freakonomics and now of Superfreakonomics (published a couple of days ago), are always able to spread strong controversy with their writings. In Freakonomics it was the case of Levitt's famous study claiming that the significant reduction in crime that the US witnessed in the nineties was mainly due to the Roe vs. Wade law that authorized abortion (I had written a post on this research, you can read it here). You can imagine how a similar statement was taken by certain political/religious groups. This time, with Superfreakonomics, they managed to create a new, possibly harsher, debate on the hot (allow me to use this term) theme of global warming and climate change. In this chapter, always using their economist lenses, they discuss the various implications of the phenomenon, therefore the "the risks, uncertainties, misperceptions, and proposed solutions" (Freakonomics blog) to Global warming.

In the chapter, Levitt & Dubner discuss about the various difficulties in reducing our carbon emission significantly. It would take many and many years, they say, and the costs of trying to reduce the emissions would be huge ($ 1 trillion per year they say). Moreover, "even the most sophisticated climate models are limited in their ability to predict the future, and [there is a] large measure of uncertainty in this realm, given that global climate is such a complex and dynamic system." (Freakonomics Blog). They also write that even if start reducing our carbon emissions today the Earth would continue to get warmer every day.

Therefore, given all these seemingly insurmountable difficulties, the solution of geo-engineering is proposed: basically trying to lower the temperature of the Earth by artificially decreasing it. Obviously, being economists, they did not invent this technique, but they give voice the ideas of different scientists. In their blog (where they are fighting the battle against the strong criticism following from their statements) they write:

"A much better approach, we conclude, is geoengineering. The scientific evidence suggests that either the stratoshield [a technique that "involves the controlled injection of sulfur dioxide into the stratosphere to cool ground temperatures"] or increased oceanic clouds [another strange technique to lower the Earth's temperature] would have a large and immediate impact on cooling the Earth, unlike carbon-emission reductions. The cost of these solutions is trivial compared to the cost of lowering carbon emissions — literally thousands of times cheaper! Perhaps best of all, if something goes wrong and we decide we don’t like the results of the stratoshield or the oceanic clouds, we can stop the programs immediately and any effects will quickly disappear. These two geo-engineering solutions are completely reversible." (Freakonimcs Blog).

Now, the solution they put forward is at least interesting (also kind of complex to understand, let's admit it). But, it definitely goes against the mainstream line of thought and, obviously, this creates a strong debate. Ok, you may argue: proposing similar controversial themes also creates a lot of advertising for their book. But, apart from this considerations, I think that, when discussing about such important themes (like global warming), it is very important to really listen to all the different voices in the debate (if we want to enrich it). Otherwise we may end up running blindly in one direction without thinking about the possible consequences of that. In fact, on a purely intuitive level, it is easy to understand that lowering significantly our carbon emissions may be very difficult: more than two billion people (China and India mainly) are starting/have already started to have higher consumption levels and therefore the overall level of pollution is rising tremendously. I don't think they would be happy if we'd ask them something like: "Could you please stop developing so fast?" Therefore alternative solutions deserve to be, at least, taken into consideration without arguing that those putting them forward are terrorists!

Monday, 14 September 2009

Why do Crack Dealers Still Live With Their Moms?

Co-author of the book Freakonomics, Steven Levitt, gives a nice lecture on the topic "Why do crack dealers still live with their moms?". He explains why drug dealing is not the profitable business many would think.

Toward the end of his lecture he explains some applications of classic economics theories to actual life in drug selling. The funniest is (at around 19:50):
Economic Theory: Every two-person game has a Nash Equilibrium (Game Theory).
Real life (drug dealers): If we start shooting around there [the other gang's territory], nobody, and I mean you dig it, nobody gonna step on their turf. But we gotta be careful, 'cause they can shoot around here too, and then we all fucked (obviously it is a drug dealer speaking).

Well, if this is not a perfect application of the Prisoner's dilemma!

Here's the video:

Tuesday, 1 September 2009

The Effects of Abortion on Crime Rates

A study done by Chicago University’s scholars Steven Levitt (co-author of the book Freakonomics) and John J. Donohue III, can be used to explain with an example the strange links that sometimes exist in reality[1]. In the nineties the U.S. witnessed an incredible drop in crime rates (especially murder rates). The fall was incredible: close to 40%! Explanations of every kind started being given by the media and various experts. It was because of the increasing use of incarceration some were saying. It is because of the increase of the number of police officers! It is because of better policing strategies! It is because of better economic conditions! And so on and so forth.

Though, the study found that the above advocated causes were only (a minor) part of the truth. They had played a role of course, but they could not have been the only reasons of the sharp decline in criminality. Levitt & Donohue got out with another explanation. It was also because of 1973 law (Roe v. Wade) that had legalized abortion! (why the hell?! One may ask...) In the paper they write: “States with high abortion rates in the 1970s and 1980s experienced greater crime reductions in the 1990s. [...] Legalized abortion appears to account for as much as 50 percent of the recent drop in crime.”[2] The reason, in a few words, is that unwanted children are more likely to grow up in an difficult environment (e.g.: abandoned teenager mothers, economically disadvantaged families, etc...). And “Decades of studies have shown that a child born into an adverse family environment is far more likely than other children to become a criminal”.[3] Interesting findings!

Obviously someone opposed to the findings of the study (maybe for political views on the matter or maybe for more scientific reasons regarding the method[4]). But I don’t care here. I just wanted to bring an interesting example to show how sometimes causes of phenomena are hidden (e.g.: delayed in time; mixed with other, more evident, causes; etc...) and that conventional wisdom cannot always explain it.



[1] You can find the study at the following link : http://pricetheory.uchicago.edu/levitt/Papers/DonohueLevittTheImpactOfLegalized2001.pdf

If you don’t want to read boring academic stuff, the same explanations can be found in the book Freakonomics.

[2] Levitt, S. & Donohue, J. J. (2001). The Impact of Legalized Abortion on Crime. Quarterly Journal of Economics. Vol. CXVI, Issue 2. Pg. 379-420.

[3] Levitt, S. D & Dubner, S. J.(2005) Freakonomics. Harper Collins Publishers. New York. Pg.4.

[4] After some critics from other scholars a measurement error was acknowledged by Levitt & Donohue. Anyway, after reviewing the study they confirmed their previous findings.