Freakonomics

"Freakonomics", Levitt & Dubner, Penguin, £8.99

No it isn’t strictly a business or a marketing book. What it has got going for it is that it stimulates thinking about business, about markets, about customers, about buyer behaviour and about supplier behaviour.

Steven Levitt is an economist who apparently doesn’t like numbers. Stephen Dubner is a journalist who has helped turn an interesting economic perspective into a book which keeps the reader reading.

One of the key themes of the book is the effect (planned and unintended) of incentives. For instance the wonderful incentive of commission paid to real estate agents. What Levitt does is use the stats to tell the true story. The Estate Agent will do what they can to get a quick sale even at lower price because sticking out for a higher price means only a marginal increment in their income. This contrasts with what happens when realtors sell their own property – the property stays on the market longer in order to get a better price.

And this analysis is continued into a variety of interesting, bizarre and controversial areas. Why did crime levels in New York and other major US cities plunge in the 90’s? Is corruption rife in the ancient and traditional sport of Sumo wrestling? You will find the answers here and you might not like them.

It’s a great read. The only complaint is that it is too short!