Reaction Paper
Freakonomics: Documentary

Emmanuel S. Garcia
Managerial Economics
Land Bank of the Philippines

Freakonomics was a good way to introduce the basic concepts of economics applied in everyday living and what we can learn from that. It primary aim seems to open the eyes of the general public to the fact that economics should be a conscious part of our way of life. Generally, what it says is that economics is a good tool in understanding and eventually helping us decide important aspects of our day to day living.
The innovative ideas presented in the various segments tries to alter a lot of perspectives on how we think. At the end of it all, it leaves one with the thought that "conventional wisdom" is not what we thought it was.
For example, it was interesting to note how the principle "Rational people think at the margin" was discussed in the movie as a real estate example. Explained in layman's terms, agents tend to advice homeowners to sell their house even at a lower price if the marginal benefit for the agent is low.
The documentary demonstrated the pervasiveness of incentives in society. I agree to Levitt and Dubner’s premise that it is commonly accepted that for most people, given the right price or the right incentive, 1. cheating will always be considered by the most affected people as an option 2. there will always be a desire to maximize the incentive 3. certain behaviors could be changed.
The first premise was elaborated further on the portions of the documentary that analyzed Chicago public school test data for evidence of teachers cheating on standardized tests and allegations of cheating at sumo wrestling matches in Japan. For teachers in Chicago public schools, the incentive is high: get high scores or face losing funding or even your job. So is the situation in sumo wrestling: I scratch your back and you scratch my back later. What makes these portions of the documentary interesting and entertaining is the fact that economic sciences and mathematics tended to prove one thing, which is the fallability of human nature, especially in make or break situations.
It is also interesting to note that incentives tend to be, in more ways than one, abused. As explained by Levitt in his story about his daughter, if kids as young as his daughter develop these tendencies, how much more will it be for adults.
The section of the documentary on bribing high school students to push them to excel was also very interesting. However, it is interesting to note that only a low percentage of the overall population responded with a positive change in behavior. Their explanation is probably that the base behavior which they wanted to change was too far ingrained in their personalities that it would take more than just money to change this. Or it could also be argued that money is probably not the best bribe to be use in motivating students to study harder.
Another concept worth noting is about: “Correlation doesn’t mean causation.” The examination of cause and effect on the decrease of crime rate in the United States during the 90' is highly controversial. Dubner and Levitt concluded that the legalization of abortion in the 70's correlated to 50% percent of the decrease of crime because unwanted babies who present a very high likelihood of turning into criminals may not have been born. Their evidence relies heavily on the statistical data that these children were likely to be poor and raised by single mothers. Statistics can be mathematically correct, but their interpretations are still subjective.
The value of economics as a way of initiating change in society should never be underestimated. We study economics in micro and macro scales because our intention is not just to observe and learn from the society as a whole but to observe and learn from the smaller parts of society. Lessons learned from both macro and micro economic scales provide us with insight that affects our decisions and actions hopefully for the better.
Freakonomics presented itself as economics in a micro scale, the scale where ordinary people can relate to and understand. This is the reason why it became a phenomenon. It made us more conscious on which of our choices carry more impact on our lives.
However, given the fact that the movie was intended for general public consumption, the expectation is basically for the movie to provide watered down economic concepts for easier public digestion. In light of this, it should also be noted that all claims in the movie were based on data which were assumed to be correctly gathered and thoroughly analyzed. The general public might accept this hands down, but from a purely academic point of view, the movie should have spent some more effort in presenting and explaining data to prove its points. Given that 186 minutes was not enough to thoroughly discuss the topics, extra effort could still have been made, considering that some of the claims are highly controversial. In light of this, reading the book could help clarify things further.
In conclusion, from my own perspective as a student of economics, the movie presents a minimal academic value. The movie served for me as more of practical economics, seeing the theoretical concepts being executed in real life. But from the perspective of the general public, this movie is a total eye opener and should be seen by everyone. The real life perspectives, the concepts and the attempt to make people think a little deeper about the other side of things make the move worth the while.