Tuesday, August 27, 2013
Lesson from Freakonomics
One thing I thought was interesting in Freakonomics is how the bagel man quit his initial job in an office room and took the risk of just selling bagels to companies all around as a full time job. He had no idea how much of a success he would have in this idea but was willing to give it a shot. In the end not only did he make more money than his original job but he learned a lot about the patterns of people who had paid for the bagels and the ones who didn't. He was able to test all sort of incentives in order to figure the question of why people were willing to pay or steal a bagel that was only one dollar. A lesson I learned from this story was that more one respects you they less of a chance they would steal from you. Also that it is tough to make the right choices when no one is watching you but it is surprising of the number of people that will still act appropriate or in this case pay for a bagel.
Summer Surprises
I was personally ever surprised at how much I enjoyed Freakonomics. I had expected a boring book about basic economics, but instead what I received was an interesting book about hidden things that influence our lives. The book was easy to get into, it was entertaining, it didn't feel like a burning professor talking to an inattentive class, and the little anecdotes made it funny and a little but personal. It was a pleasant surprise for me. It just goes to show that shouldn't judge a book by its cover (literally in this case). The book was very good and made me want to pick up the sequel.
Monday, August 26, 2013
The Economics of Behavior
Throughout Freakonmonics, Levitt and Dubner observe "the hidden side of everything" and question what actually happens in our world. One of the things I noticed that kept reoccurring was behavior and actions of people and how they affected the world around them.
In chapter 1: the overall controversy/topic is how teachers cheat on their own students state exams to gain better reputation or get more money. To me, this is still incredibly ironic, since teachers have always been saying that cheating does no good in school and in life. But if that's actually true then why DO teachers cheat? Or what made them make this decision to cheat? Their action to do this lead those teachers to some dire consequences, like being fired, which completed altered their lives for not only that moment but for the future of any other job they get, their reputation has permanently been stained.
On the other hand, in chapters 5 and 6: the topic is the overall role and effects of parents on their children. what I found most interesting about this was the fact that even when parents (and most others) think they are doing the right thing to help or benefit their children, but in reality they might actually be hurting their future reputation. Even with something as little as a name; Levitt and Dubner explored how the different variations of names can affect their total years of school education. I had never actually thought about how two people with the same name, but different spelling, differed in lifestyles, or how the parents settled on a variation of a name and not the original. Also, Levitt and Dubner claimed that books in the home played a key role in the future of a child's success; if there are books in the house the child grows up in then they will have better test scores latter on. This is just another decision a parent would have to make if they wanted to create a better future for their child.
In chapter 1: the overall controversy/topic is how teachers cheat on their own students state exams to gain better reputation or get more money. To me, this is still incredibly ironic, since teachers have always been saying that cheating does no good in school and in life. But if that's actually true then why DO teachers cheat? Or what made them make this decision to cheat? Their action to do this lead those teachers to some dire consequences, like being fired, which completed altered their lives for not only that moment but for the future of any other job they get, their reputation has permanently been stained.
On the other hand, in chapters 5 and 6: the topic is the overall role and effects of parents on their children. what I found most interesting about this was the fact that even when parents (and most others) think they are doing the right thing to help or benefit their children, but in reality they might actually be hurting their future reputation. Even with something as little as a name; Levitt and Dubner explored how the different variations of names can affect their total years of school education. I had never actually thought about how two people with the same name, but different spelling, differed in lifestyles, or how the parents settled on a variation of a name and not the original. Also, Levitt and Dubner claimed that books in the home played a key role in the future of a child's success; if there are books in the house the child grows up in then they will have better test scores latter on. This is just another decision a parent would have to make if they wanted to create a better future for their child.
Heritage
I've always know that where you're from can have an impact on who you are and your mannerisms, but I never really knew what huge effect it can have on people until I read Outliers by Malcolm Gladwell .
He showed just how large the impact could be through the example of the first officers and flight engineers, who came from a culture that had great emphasis on respect for people who are considered your superior, which ultimately caused several plane crashes. At first it may seem a bit ridiculous that they didn't just speak up when they realized that the plane was going to crash, but then I thought about it, and how I could see a little bit of myself in that. Vietnam's culture also has emphasis in respect for superiors, specifically elders. I realized that when I greet elders in the Vietnamese community and my grandma I bow to them as a sign of respect, an say a very formal greeting. This is something that I was raised to do, and something that I have done for so long that I don't even notice that I do it anymore. So you never really know just how deeply your heritage impacts who you are.
You can't choose you heritage, but you can go against it like the first officers and flight engineers from Korean Air, and change your habits, you just have to work at it. This is reassuring news since its a nice though that you can decide to change and be something other than what your heritage has, in part, made you.
He showed just how large the impact could be through the example of the first officers and flight engineers, who came from a culture that had great emphasis on respect for people who are considered your superior, which ultimately caused several plane crashes. At first it may seem a bit ridiculous that they didn't just speak up when they realized that the plane was going to crash, but then I thought about it, and how I could see a little bit of myself in that. Vietnam's culture also has emphasis in respect for superiors, specifically elders. I realized that when I greet elders in the Vietnamese community and my grandma I bow to them as a sign of respect, an say a very formal greeting. This is something that I was raised to do, and something that I have done for so long that I don't even notice that I do it anymore. So you never really know just how deeply your heritage impacts who you are.
You can't choose you heritage, but you can go against it like the first officers and flight engineers from Korean Air, and change your habits, you just have to work at it. This is reassuring news since its a nice though that you can decide to change and be something other than what your heritage has, in part, made you.
The Power of Information
I thought information asymmetry was one of the most interesting topics in Freakonomics. I have the term "knowledge is power" many times before but I never thought too much about it. However, after reading about the power knowledge gave real estate agents or business men I understood why people say it so often.
People are often afraid to sell their homes themselves because they are afraid of pricing it too high or too low. They believe that real estate agents will help them sell it for as much as possible. However real estate agents often manipulate information. One of the most interesting facts I saw was that when real estate agents are selling their own homes they will keep their houses 10 days longer and usually make $10,000 more than when they are selling someone else's house. A few studies have actually shown that using a real estate agent to help sell your home will not actually lead to higher average selling prices
When someone has more information they typically have more power. Businessmen can use information to disguise debt or manipulate their profits. They can also trade information about the stock market. This has led to many scandals within large corporations over the past decade.
Until reading this chapter of Freakonomics I had not thought about how powerful information really was. Having more information will usually give someone more control and can be used in both positive and negative ways.
Summary of Dark Tide
I found the nonfiction novel, Dark Tide, written by Stephen Puleo to be a very interesting and stimulating. It is about a molasses tank built in the heart of Boston right near the harbor. The tank itself could hold up to 2.3 million pounds of molasses. This truly was a fascinating structure that was extremely important to the economy and society of Boston during the early 1900s.
Molasses was very important during the early 1900s as it was not only a food but was a ingredient was used to make weapons and ammunition, which was very important during the time as World War I was going on in Europe. It was also used in the slave trade as a way for the U.S. to get slaves from Africa in exchange for molasses. This tank was very important to big businesses including its supplier USIA or the United States Industrial Alcohol as it made them a lot of money.
Since the tank was so important for making money the USIA wanted it built as soon as possible even if it meant that not all of the safety requirements were made. Everyone liked the idea of building a molasses tank except anarchists. They hated the tank because it supplied soldiers fighting in the war with weapons and ammunition and anarchists hated the war itself. The tank was built and it instantly made tons of money. The tank did not last very long as it eventually collapsed. The disaster caused 2.3 million pounds of molasses to spread all over the city of Boston in all directions. The wave of molasses killed 21 and injured many more. It destroyed buildings and the railroad system leaving wreckage everywhere.
The cause of the collapsed tank remained a debate for several years. Some believed that it collapsed because it was built incorrectly from the day it was built. Others believed that it collapsed because an anarchists put a bomb into the tank which caused the tank to explode. Eventually the debate went to court and after years of argument a final decision was reached that the tank collapsed because the tank was not built correctly. The rivets were built wrong, the steel plates were not the right size, and the "factor of safety" was too low. Eventually USIA was held responsible for the disaster.
Molasses was very important during the early 1900s as it was not only a food but was a ingredient was used to make weapons and ammunition, which was very important during the time as World War I was going on in Europe. It was also used in the slave trade as a way for the U.S. to get slaves from Africa in exchange for molasses. This tank was very important to big businesses including its supplier USIA or the United States Industrial Alcohol as it made them a lot of money.
Since the tank was so important for making money the USIA wanted it built as soon as possible even if it meant that not all of the safety requirements were made. Everyone liked the idea of building a molasses tank except anarchists. They hated the tank because it supplied soldiers fighting in the war with weapons and ammunition and anarchists hated the war itself. The tank was built and it instantly made tons of money. The tank did not last very long as it eventually collapsed. The disaster caused 2.3 million pounds of molasses to spread all over the city of Boston in all directions. The wave of molasses killed 21 and injured many more. It destroyed buildings and the railroad system leaving wreckage everywhere.
The cause of the collapsed tank remained a debate for several years. Some believed that it collapsed because it was built incorrectly from the day it was built. Others believed that it collapsed because an anarchists put a bomb into the tank which caused the tank to explode. Eventually the debate went to court and after years of argument a final decision was reached that the tank collapsed because the tank was not built correctly. The rivets were built wrong, the steel plates were not the right size, and the "factor of safety" was too low. Eventually USIA was held responsible for the disaster.
Dark Tide vs the other books
Being in both AP History as well as AP English, I was forced to read all three books: Dark Tide, Freakonomics, and Outliers. As well written as Freakonomics and Outliers were, I would have to say I thoroughly appreciated the set up of Dark Tide the most. Dark Tide made it seem as though I was reading a story. Freakonomics and Outliers, to me, simply had too many random facts being thrown around and connected to other random facts and studies. When reading, I don't like to be told facts, I like to explore them. It took me a long time to read Freakonomics and Outliers because they seemed too confusing and they skipped around too much for my liking. I also tended to mix up the facts in the two books while writing in both AP blogs and I had to constantly look back between the two books which took a lot of time. By the time I reached Dark Tide, I was so done with school work, I was ready to quit school before it even started. Once I started reading Dark Tide, I couldn't stop. The first day of reading I suddenly found myself on page 70 (which for me is a personal accomplishment since I am the slowest reader ever). Everything in the book seemed to flow together quite nicely and orderly. The prologue caught my attention as I realized that the book wasn't just a bunch of facts being thrown at me. It was a story of different people; different experiences. Reading it reminded me of watching the movie "Vantage Point" because it gave different points of view and different daily lives which all connected eventually.
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