Steve Levitt famously theorizes that, in America at least, the drop in crime rates over the last few decades correlates with a rise in legalized abortions. He also reckons that some of the least honest people in the working world are telemarketers. And he counts amongst his friends an economist who is teaching monkeys to use money.
No surprise, then, that the author of Freakonomics, a book that debuted on Amazon's top 20 on the first day of sales and landed on the New York Times bestseller list after the second week, drew a crowd on Wednesday at the CLSA Investors' Forum in Hong Kong only marginally smaller than the one president Bill Clinton attracted two days earlier.
Accustomed to controversy, but seemingly unconcerned by it, he appears to have the patience to wait out the fanatical responses to his theories and to explain his statistical-based reasoning.
Predictably much of the Hong Kong audience was fixated on his abortion/crime theories.
Statistical evidence of crime in the US started to increase in the 1960s (Levitt posits that one explanation is that crime was better reported after the advent of computer systems, and so the increases may reflect better information gathering not an actual increase in crime.). By the 1980s, the numbers of crime hit all-time highs. But then for the next decade, crime rates started to drop - to about half what it had been in 1980. And so he began to research why.
He claims he did not start with a preconceived concept and search out data to support it; indeed he studied the usual suspects of reasons - tough-on-crime politicians, more stringent jail terms, capital punishment, etc. - for about four years.
Levitt says: "So one day I was leafing through the statistical abstract of the United States, which is something that only economists do, I think. It's a compendium of basically all of the numbers that the government keeps. And I just stumbled on the page about abortion. And the numbers were incredible. It turns out that in the United States each year there are about 1.5 million abortions. I said, '1.5 million? That's a big number.' I said, 'I wonder how many kids are born every year in the United States.' It turns out there are about three million kids born every year in the United States. So one-out-of-every-three pregnancies in the United States ends in an abortion. Which is not anything, but stunning? I couldn't believe the numbers."
That statistic led him to think about the relationship between unwanted children and a propensity for them to end up involved in crime. The statistics showed that young, poor and single women were most likely to get abortions. "All three of these are factors that put children at risk for crime when they grow up," says Levitt. "Unwanted children are at risk for crime, legalized abortion reduced the number of unwanted children. Therefore, legalized abortion should have reduced crime."
And the number of crimes dropped just as the first wave of children born during the years when abortion became legal in the US (The landmark abortion case, Roe v. Wade, was decided by the Supreme Court on 22 Jan. 1973) became adults.
He says he's no defender of legalized abortion - arguing it is a "really terrible crime-control policy because you end up doing a million abortions to maybe reduce homicides by 2,000. It's a very bad trade-off."
But it is a theory. Of course, there is certainly room to argue with it - it is a limited study. He does not look at European rates of abortion/crime, for example. The increase in crime in the 1960s also correlates with an increase in post World War II births, leading to an increase in population. Indeed one could argue that he is simply drawn to the creative, off-beat, controversial theories and explanations.
Levitt is a full professor in the University of Chicago's economics department, and a recipient of the American Economic Association's John Bates Clark Medal, which is given to the country's best economists under 40. In a publish or perish academic world, he certainly hit upon a marketable concept - look for the off-beat explanations that make for cocktail-party chatter.
Take that telemarketer - Americans have a tendency to vent pent up anger on phone-calling salesmen who have a knack for ringing during supper. Levitt offers them more ammunition.
For 20 years, a fellow economist relied upon an honour system to sell donuts and bagels at varying offices in the US. It worked like this: Take the breakfast. Put your money in a lock-box. He then tracked the honesty-rate - and Levitt ultimately analyzed the data.
Some highlights: On average, over 20 years, people paid the posted prices 87% of the time. Honesty rates went up to 91% -- and stayed there -- post 9/11. People stole more in larger offices - places with 200 or 300 employees - than in the smaller offices of 25 or 30 people.
Alas, holidays are not times of giving -- people steal more during Christmas, Thanksgiving and Valentine's Day. They also thieve more on rainy days. And different businesses yield different levels of honesty - with telemarketers, apparently, the worst of the lot.
But perhaps the most amusing research that Levitt promotes is from a friend, Yale economist Keith Chen. He has taught capuchin monkeys to use money in order to "purchase" sweets.
"It turns out there's only one thing that capuchins really, really love - and that's sweet stuff. If you give them a big vat of say, marshmallow fluff, and you let them go at it, what they'll do is eat their body weight in marshmallow fluff, walk away, they'll vomit, and they'll come back and eat their body weight again. And they'll vomit. And they'll do that for as long as there is marshmallow fluff out there. They love marshmallow fluff," explains Levitt.
So teach them that money buys sweets, and guess what: "They were pretty good with money. They made the right decisions," says Levitt. "For instance, when you raise the price of jelly cubes, they buy a lot more grapes and a lot fewer jelly cubes."
"Interestingly they also make mistakes in exactly the way that humans make mistakes… humans do something that economists don't understand, which is if I give you a little bit, you don't like it as much as you hate it if I take it away. Economists don't think that should be. They think that if I give you a dollar it should make you feel as good as it feels bad if I take away the dollar. But almost every human exhibits the same behaviour; it turns out monkey's exhibit the same behaviour."
The similarities do not end there, once money is introduced to primates. Chen also apparently witnessed another scene: One male monkey gave a female monkey a coin, and "no rituals, no grooming, they have monkey sex." It seems he witnessed the first documented case of monkey prostitution.
Lessons learned? Love your child, work in a small office - but not as a telemarketer - in a sunny climate, and try, if you can, to be smarter than a monkey.
