It was a book that promised the impossible: to make economics sexy and fun. But Freakonomics, published in 2005, delivered in spades and became a publishing sensation by applying the tools of economics to illuminate aspects of everyday life. It was built around the work of Steven Levitt, an economist at the University of Chicago, who has been described as the Indiana Jones of the field. Rather than plucking obscure artefacts from ruined temples, Levitt is a master at drawing counter-intuitive conclusions from a mass of data.

His most famous (and controversial) finding is that the legalisation of abortion accounted for about half of the reduction in crime in America in the 1990s, because the terminated foetuses were disproportionately likely to have grown up to become criminals. Freakonomics also explained why drug dealers still live with their mothers (most of the profits go to the gang leaders, rather than into the dealers’ own pockets) and showed how having a swimming pool is more dangerous than having a gun (it is 100 times more likely to cause the accidental death of a child).

All this was great fun, but Freakonomics was rather an odd book. The co-writer was Stephen Dubner, a journalist who had ­profiled Levitt for the New York Times magazine. An expanded version of this profile was interwoven with highlights from Levitt’s research, resulting in some strange lurches in tone. But Freakonomics succeeded because of the thrills to be had in watching the authors setting off their intellectual firecrackers. Its success prompted a deluge of mostly inferior pop-economics books.

Now Dubner and Levitt are back with a sequel. Once again they have done the impossible, and have dreamt up a title that is even worse than Freakonomics. This time, though, the authorial voice is more confident and coherent. And having covered most of the research that made Levitt’s name in the first book, they have roamed more widely, highlighting the work of other “rogue” economists.

There is, for example, a detailed explanation of the work of John List, an economist who challenged the finding, based on experiments with volunteers, that people are inherently altruistic and will share money with strangers. List suspected that the subjects behaved this way because they were being watched. He supported his hypothesis by carrying out real-world experiments on traders at a baseball-card show. When they knew they were part of an experiment, buyers and dealers offered each other fair prices. But when List recruited dealers who were not told what was going on, they ripped the buyers off.

The book opens in typically provocative style with a look at the economics of prostitution. Among other things, the authors ­consider the changes in the relative prices of various sex acts since the early 20th century (oral sex used to cost two to three times more than vaginal sex, but today is half as much), and the effect on earnings of being employed by a pimp. By selecting clients carefully, pimps enable prostitutes to work less but earn more, even after the pimp’s commission. The authors contrast this with estate agents, who also act as middlemen between buyers and sellers, but are less likely to earn their commission.

Another chapter examines the challenges of finding patterns in data, from evaluating the performance of doctors to spotting terrorists via their bank statements. Would-be ­suicide bombers, for instance, tend not to have savings accounts or life insurance. They are also less likely to withdraw cash on a Friday afternoon (when Muslims attend prayer services).

Superfreakonomics travels further than its predecessor, but feels like more of a rag-bag of conclusions without Levitt’s big results to anchor each section. He provides some new research, such as an investigation into the relative merits of car seats and seat belts for children (seat belts seem just as effective in preventing injury), but it represents a smaller proportion of the total. And the last section barely qualifies as economics at all. It is presented as an analysis of externalities — the costs that a transaction imposes on others who are not party to it. The authors use this as an excuse to write about geoengineering, the deliberate modification of the environment in order to prevent climate change.

Dubner and Levitt insist they are not ­climate-change deniers, but this section provides plenty of ammunition for people who are. They outline a scheme to pump sulphur-dioxide into the atmosphere to mimic the effect of a large volcanic eruption and cool the earth. If it worked, this approach would be a far cheaper way to handle climate change than spending trillions switching to electric cars and so forth. But it could also undermine efforts to reduce carbon emissions, and would not deal with other consequences of greenhouse-gas emissions, such as the acidification of the oceans. This section is likely to generate the most controversy, just as the research about abortions did for the previous book.

But Superfreakonomics will at least bring the obscure debate over geoengineering, along with many other unusual findings, to a wide audience. As with its predecessor, the book’s flaws are outweighed by the sheer density of interesting ideas.

Superfreakonomics Steven D Levitt and Stephen J Dubner
Allen Lane £20 pp256

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