On Nudge

If I have a high expectation of a book due to hearing many praises of the book, would I end up liking the book more or less? The authors of Nudge may suggest that due to our tendency to conform to what other people do, I would value the book more highly for reasons involving the information conveyed by other people’s judgments and the peer pressure. Well, I don’t have peer pressure in the context I am in now, so that’s maybe why I was somewhat disappointed.

The book is easy to read and yet by no means shallow. I strongly agree with the authors on many points, especially on marriage and education. The book presents a strong justification of what the authors call liberal paternalism. Many applications of Nudge seem appealing.

Yet I had a difficult time finishing the book. Some examples and concepts, although very interesting and even inspiring, appeared to be too stretched to make connections with the book’s main points. I felt that the book was jumping here and there, sometimes digressing to wilderness and sometimes coming back to the same point over and over. The flow of the book was less than ideal.

I was also little concerned with the recurring dichotomy of Humans and Econs, the irrational and rational aspects of an individual. I don’t think even the classical economists necessarily assume that individuals always behave rationally, that they make complex mathematical calculations to behave optimally. Rather, they would claim that people’s economic (and other) behaviors can be explained through rational and mathematical models. I thought that many of the cases in which people fail to behave optimally were due to lack of information rather than due to irrational aspects of human nature.

With all that, I do think that the principles of Nudge presents a great possibility for improvements in all kinds of things as the authors claim. I think one of the bonus nudges, discouraging college students from using trays in cafeteria, can be easily employed in UChicago.

On Freakonomics

It is slightly embarrassing to confess that I have not read Freakonomics until recently, but on the other hand I am somewhat glad that I delayed reading until I had at least some exposure to economics. I believe having some knowledge in economics allowed me to appreciate the book more than I would have otherwise. Many thoughts came to my mind while reading the book, and I’ve been intending to scribble those thoughts down for quite a few days now (Why did I not do immediately after finishing the book, when my thoughts were more vivid? Ask a behavioral economist).

The Q&A section of the book suggests that the chapter on abortion and crime rate was the most controversial one, so I’ll start with that. The gist of the argument in that chapter is that legalizing abortion causes crime rate to go down. The argument does not imply that abortion should be legalized (abortion might be categorically impermissible and even if you believe in consequentialism, you could argue that human life is worth more than reduced crime rate), but one can see why this argument faces unfriendly reaction.

Nevertheless, I think there is more than just the sensitivity of the subject matter that makes the argument controversial. Even if you think abortion should be legalized and are comfortable with the idea of quantifying the value of human life (the authors provide 100 fetuses to 1 new born ratio as an example of relative value of human lives to measure the efficiency of trade-off between abortion and crime rate), the argument is disturbing. Consider the secondary causes of crime rate reduction that the authors suggest, namely the increased number of prisons and police (essentially greater incentive to not commit crime). As authors themselves write, these factors do not “address the root causes of crime.” It almost seems that the only way to get rid of crime is to get rid of criminals before they are literally born. Of course this is not necessarily true since there can be other plausible solutions, but the authors at least suggest that the end we achieved (reduced crime rate) is not the result of the means we wanted. I think this has a significant implication on politics and more specifically liberal ideology, but I will not venture to discuss those here. Economics alone is sufficiently dismal.

What I personally find little more troublesome is the chapter on parenting. The main argument of the chapter is that “it isn’t so much a matter of what you do as a parent; it’s who you are.” This claim, however, comes with a lot of ‘but’s. To start off, it does matter what you do if you are doing bad: “Clearly, bad parenting matters a great deal” (Otherwise it would be difficult to explain why legalizing abortion reduces crime rate). So if you are beating up your children, your children will be affected, but if you are intending to do good, then those actions have no influence.

But there is another catch. The ELCS data show that what you do as a parent doesn’t affect your child’s school performance, not necessarily your child’s whole life. Authors write: “since most parents would agree that education lies at the core of a child’s formation, it would make sense to begin by examining a telling set of school data.” Fair enough, but the story not only begins at the school performance, but it also ends there. So I am convinced that having lots of books in the house or having Mozart music playing all the time won’t improve the child’s school performance, but I am not fully convinced that they don’t matter. The smartness of a child, measured by IQ, probably is the main determining factor of a child’s school performance especially in the early years, and I am willing admit that better neighborhood or museum trips won’t improve the child’s IQ. But as the authors state, school performance is “a useful but fairly narrow measurement… poor testing in early childhood isn’t necessarily a great harbinger of future earnings, creativity, or happiness.” And then the chapter ends with a brief mention of Sacerdote’s research that shows “the influence of the adoptive parents … made the difference [on children’s higher education and career].”

As I believe I exaggerated a little here, the whole chapter on the parenting doesn’t seem to have a strong message. What you do as a parent doesn’t affect your children’s IQs, but it could affect their future careers. I can agree that reading to your children won’t affect their school performances, but I am not convinced it doesn’t matter.

This was all in all a fun and interesting book to read, and I am excited to read Superfreakonomics, but coming up next is Nudge.