In chapter 1, Levitt and Dubner describe how many people in different cultures and walks of life, which are otherwise inclined to be honest, find subtle ways of cheating to advance their position or increase monetary awards when incentives are strong enough. The authors define an incentive as “a means of urging people to do more of a good thing or less of a bad thing,” and identify three varieties of incentives. Economic incentives are those, which a person responds to in the marketplace. Social incentives motivate people to respond in a certain way because they care or are worried about how they will be viewed by others. Moral incentives appeal to a person’s sense of right versus wrong. Three case studies of the effects of incentives dominate the chapter; public school teachers in Chicago, sumo wrestling in Japan, and Paul Feldman’s bagel business.
In chapter 2 the author imposes on those who do not, the ways it can be misused, and the ways it can be abused. The first part of the chapter describes how the Ku Klux Klan first came into being and, how, over time, it was able to exert considerable influence over the lives of those it considered the “enemy,” e.g., blacks, Jews, Catholics. What the discussion also shows very clearly is how the acquisition and dissemination of information that had been known only to members of the Klan–secret coded greetings, the Klan’s organizational structure–took away much of the power the Klan had previously enjoyed. Once the “secret” was out, much of the membership was no longer willing to participate for fear of being exposed to the public.
In chapter 3 Levitt and Dubner quote from the economist and diplomat John Kenneth Galbraith, who asserts that social behavior is complex and “to comprehend its character is mentally tiring.” So, according to Galbraith, conventional wisdom must be simple, convenient, and comfortable and comforting, though not necessarily true. Levitt and Dubner cite several examples of conventional wisdom, which is demonstrably in error. They go on to note that even though the conventional wisdom may be wrong, it nonetheless may be hard to correct. Experts in a field often create conventional wisdom. They make observations and draw conclusions without resorting to the facts.
In chapter 4 the chapter considers a variety of possible explanations for the significant drop in crime and crime rates that occurred in the 1990s. Based on articles that appeared in the country’s largest newspapers, the authors compile a list of the leading, commonly offered explanations. The next step is to systematically examine each explanation and consider whether available data support the explanation. What the authors, in fact, demonstrate is that in all but three cases–increased reliance on prisons, increased number of police, and changes in illegal drug markets–correlation was erroneously interpreted as causation and in some cases, the correlation wasn’t even that strong.
In chapter 5 the author summarizes the results of studies by his coauthors, as well as other studies, that examine the influence demographic, cultural and other variables have on the performance of school-age children on standardized tests. In a now familiar theme, the results are plangently counterintuitive. Based on a mountain of school children’s test scores, a successful child appears to be more “made” than nurtured, more mused than molded. The chapter begins by reviewing how many parents get educated on raising their children and how parenting experts swing from one extreme position to another in an attempt to get the attention of risk-adverse parents. The authors then consider what motivates parents and others to worry more about certain risks than others, focusing on the effects of fear and a misinterpretation of available data.
In the last chapter which is chapter 6 this chapter continues to explore the question of what impacts parents have on their child’s success by focusing on the effects, if any, of the child’s name. Considering that baby naming has become big business the question becomes, Does the child’s name matter when it comes to the child’s potential for economic success? The short answer is no. The authors focus primarily on the very different names black and white parents choose for their children and explore whether those differences are a cause of the economic disparity between the two groups or a symptom (building on the work of Professor Roland Fryer Jr.) Citing a considerable amount of analysis of data on names from California, we learn at least three things: (1) the names chosen by black and white parents are extremely dissimilar, (2) a child’s name is not a determinant of success but rather a predictor because of what it conveys about the child’s parents (and what that means for the child’s likely economic success), and (3) names tend to cycle through socio-economic strata over time, moving from higher to lower strata and eventually out of favor with most parents.