Freakonomics

[nclib]

Can someone give a good explanation of this? I know it's been used to link legalized abortion with lower murder rates, but what does freakonomics inherently do?

[DC Al Fine]

Can someone give a good explanation of this? I know it's been used to link legalized abortion with lower murder rates, but what does freakonomics inherently do?

Freakonomics isn't a methodology. It's a (very interesting) book showing how incentives affect people's behaviour. It's quite an interesting read even if some of the conclusions (like the abortion one) are sketchy.

[The Mikado]

He makes a number of...interesting links.  The abortion/crime one is the most notorious, but his proposal to deal with climate change by "global dimming" (putting so much junk in the atmosphere that fewer of the sun's rays reach Earth) is positively Lex Luthor territory (he points out that nature could do that anyway through a large volcanic eruption).

[nclib]

Can someone give a good explanation of this? I know it's been used to link legalized abortion with lower murder rates, but what does freakonomics inherently do?

Freakonomics isn't a methodology. It's a (very interesting) book showing how incentives affect people's behaviour. It's quite an interesting read even if some of the conclusions (like the abortion one) are sketchy.

Pardon my ignorance, but not sure what incentives affecting people's behavior have to do with these conclusions.

[ag]

Can someone give a good explanation of this? I know it's been used to link legalized abortion with lower murder rates, but what does freakonomics inherently do?

Freakonomics isn't a methodology. It's a (very interesting) book showing how incentives affect people's behaviour. It's quite an interesting read even if some of the conclusions (like the abortion one) are sketchy.

Pardon my ignorance, but not sure what incentives affecting people's behavior have to do with these conclusions.

Well, all economics is about incentives affecting human behavior But that particular book (and its sequel), largely, presents to the general public a bunch of interesting empirical studies that provide interesting or somewhat counterintuitive conclusions. Basically, it simply tells some stories about contemporary economic science for laymen

[Antonio the Sixth]

I read it about five years ago, and yeah, it was a pretty interesting and fun read. I sometimes felt the authors were a tad too confident about their results and forgetful of the complexity of the processes involved, but still they make pretty convincing arguments.

[Oakvale]

Freaknonomics is a popular book, not a methodology.

[Oldiesfreak1854]

I guess it has more to do with using economics to examine unintended consequences than anything else. 

[DC Al Fine]

Here is an illustrative example:

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Ugh. It's stuff like that that gives economists a bad name. Even if they think health care should be totally free market, they should realise that politicians have to implement what is politically feasible.

[King]

Healthcare is NOT like any part of the economy. People do not shop around for healthcare and have no means to do it. When you have a heart attack, you don't go on Yelp and compare nearby hospitals.  You take the nearest available medical assistance at whatever cost. As a consumer, you don't know the difference between a good MRI machine and a bad one.  To compare it to free cars is bull.

I hate when economists talk out of their ass. Freaking stupid economics is more like it.

[muon2]

Healthcare is NOT like any part of the economy. People do not shop around for healthcare and have no means to do it. When you have a heart attack, you don't go on Yelp and compare nearby hospitals.  You take the nearest available medical assistance at whatever cost. As a consumer, you don't know the difference between a good MRI machine and a bad one.  To compare it to free cars is bull.

I hate when economists talk out of their ass. Freaking stupid economics is more like it.

Emergency heath care may not be like much of the economy, but there are many other parts of health care to consider. Over the years as a family we have shopped for a primary care physician, a dentist, an optometrist, a pharmacy, and a facility for my wife to give birth. We also review insurance coverage periodically in case we wish to shift insurers, which has happened a couple of times over the last 25 years. Those parts of health care are quite similar to other economic decisions we make as a family.

[King]

Healthcare is NOT like any part of the economy. People do not shop around for healthcare and have no means to do it. When you have a heart attack, you don't go on Yelp and compare nearby hospitals.  You take the nearest available medical assistance at whatever cost. As a consumer, you don't know the difference between a good MRI machine and a bad one.  To compare it to free cars is bull.

I hate when economists talk out of their ass. Freaking stupid economics is more like it.

Emergency heath care may not be like much of the economy, but there are many other parts of health care to consider. Over the years as a family we have shopped for a primary care physician, a dentist, an optometrist, a pharmacy, and a facility for my wife to give birth. We also review insurance coverage periodically in case we wish to shift insurers, which has happened a couple of times over the last 25 years. Those parts of health care are quite similar to other economic decisions we make as a family.

But at the same time, your decisions are not based on any sort of cost value like most other shopping experiences. You're simply looking at doctors who accept your insurance, rating them on personality, and if the waiting room looks clean.  There's no way to the quality of their work, accuracy of their diagnosis, and if their equipment is the top of the line or a few years old.

It's equivalent of buying a car because you liked the salesman, not researching the car.

[muon2]

Healthcare is NOT like any part of the economy. People do not shop around for healthcare and have no means to do it. When you have a heart attack, you don't go on Yelp and compare nearby hospitals.  You take the nearest available medical assistance at whatever cost. As a consumer, you don't know the difference between a good MRI machine and a bad one.  To compare it to free cars is bull.

I hate when economists talk out of their ass. Freaking stupid economics is more like it.

Emergency heath care may not be like much of the economy, but there are many other parts of health care to consider. Over the years as a family we have shopped for a primary care physician, a dentist, an optometrist, a pharmacy, and a facility for my wife to give birth. We also review insurance coverage periodically in case we wish to shift insurers, which has happened a couple of times over the last 25 years. Those parts of health care are quite similar to other economic decisions we make as a family.

But at the same time, your decisions are not based on any sort of cost value like most other shopping experiences. You're simply looking at doctors who accept your insurance, rating them on personality, and if the waiting room looks clean.  There's no way to the quality of their work, accuracy of their diagnosis, and if their equipment is the top of the line or a few years old.

It's equivalent of buying a car because you liked the salesman, not researching the car.

Actually in some of the cases I cited cost value was a factor. That was particularly true for the birth of our first, since my wife did not care for her referred obstetrician so we chose to go out-of-pocket for the childbirth. Trust me, as we interviewed over a dozen options from specialists at hospitals to family physicians to nurse midwives at clinics, cost was very much a factor.

Though my situation was unusual in that regard, some of the other items on my list like my optometrist and pharmacy were decided in part on the range of products available. Having a wide range of eyeglass frames with an optometrist is important since insurance typically covers only a fraction of the cost of all but the cheapest frames.

[anvi]

Isn't one of the false premises in Levitt's and Dubner's hypothetical to Cameron that health care is delivered to British citizens "free of charge"?  Just because health care costs are paid through tax revenues and occasional user rates with some testing and prescriptions instead of through premium rates and out-of-pocket payments doesn't mean it's free.  Isn't another false premise in the example the idea that there are no use incentives in the system?  There are quite a few factors requiring choice there, particularly with regard to GP physicians, a patient's informed consent regarding what kinds of care they may receive, ect.  Maybe Levitt and Dubner could have researched the system a little before cooking up a hypothetical example that depicts the NIH as being bereft of both costs and incentives?  Like I've said on many occasions, I prefer Bismarck systems, but i also have little argument to counter the fact that over 70% of British citizens think their system is a good thing, and neither does Cameron.  

[King]

Healthcare is NOT like any part of the economy. People do not shop around for healthcare and have no means to do it. When you have a heart attack, you don't go on Yelp and compare nearby hospitals.  You take the nearest available medical assistance at whatever cost. As a consumer, you don't know the difference between a good MRI machine and a bad one.  To compare it to free cars is bull.

I hate when economists talk out of their ass. Freaking stupid economics is more like it.

Emergency heath care may not be like much of the economy, but there are many other parts of health care to consider. Over the years as a family we have shopped for a primary care physician, a dentist, an optometrist, a pharmacy, and a facility for my wife to give birth. We also review insurance coverage periodically in case we wish to shift insurers, which has happened a couple of times over the last 25 years. Those parts of health care are quite similar to other economic decisions we make as a family.

But at the same time, your decisions are not based on any sort of cost value like most other shopping experiences. You're simply looking at doctors who accept your insurance, rating them on personality, and if the waiting room looks clean.  There's no way to the quality of their work, accuracy of their diagnosis, and if their equipment is the top of the line or a few years old.

It's equivalent of buying a car because you liked the salesman, not researching the car.

Actually in some of the cases I cited cost value was a factor. That was particularly true for the birth of our first, since my wife did not care for her referred obstetrician so we chose to go out-of-pocket for the childbirth. Trust me, as we interviewed over a dozen options from specialists at hospitals to family physicians to nurse midwives at clinics, cost was very much a factor.

Though my situation was unusual in that regard, some of the other items on my list like my optometrist and pharmacy were decided in part on the range of products available. Having a wide range of eyeglass frames with an optometrist is important since insurance typically covers only a fraction of the cost of all but the cheapest frames.

Yes, it is an unusual situation.  Not common enough in the healthcare sector for an all-private system to work in that kind of way efficiently. Optometry and pharmacy indeed are parts of healthcare where the consumer can shop around and know a good product when they see it, but they aren't the vast majority of the healthcare market.

I'm not a fan of single payer because I do believe the American health care system has a lot of advantage to single payer nations that cannot be overlooked. I'm not however a Freaknomic all private guy either. I think our current system of private insurers, private hospitals, and massive government regulation that we've had for decades is a winning system provided the government is allowed to reform the rules every decade or so without there being cries of tyranny.

[🐒Gods of Prosperity🔱🐲💸]

Healthcare is NOT like any part of the economy. People do not shop around for healthcare and have no means to do it. When you have a heart attack, you don't go on Yelp and compare nearby hospitals.  You take the nearest available medical assistance at whatever cost. As a consumer, you don't know the difference between a good MRI machine and a bad one.  To compare it to free cars is bull.

I hate when economists talk out of their ass. Freaking stupid economics is more like it.

Emergency heath care may not be like much of the economy, but there are many other parts of health care to consider. Over the years as a family we have shopped for a primary care physician, a dentist, an optometrist, a pharmacy, and a facility for my wife to give birth. We also review insurance coverage periodically in case we wish to shift insurers, which has happened a couple of times over the last 25 years. Those parts of health care are quite similar to other economic decisions we make as a family.

But at the same time, your decisions are not based on any sort of cost value like most other shopping experiences. You're simply looking at doctors who accept your insurance, rating them on personality, and if the waiting room looks clean.  There's no way to the quality of their work, accuracy of their diagnosis, and if their equipment is the top of the line or a few years old.

It's equivalent of buying a car because you liked the salesman, not researching the car.

It's more like going to a car mechanic because you like the mechanic and you had a good experience - Which is usually what those decisions are based on.