FREAKONOMICS: WHAT IS THAT? 13

There is a 2005 paperback book with the improbable and a bit bizarre title of FREAKONOMICS: A Rogue Economist Explores the Hidden Side of everything by Steven D. Levitt and Stephen J. Dubner. It was on the New York Times non-fiction best seller list for almost a year, reaching number four. You may have read it, but if, per chance, you haven’t, I will relate a couple of items from it.

At mid-night on April 15th 1986 approximately 7 million children disappeared completely in the United States – just disappeared! Was this the biggest, and unreported, kidnapping in the history of the world? Well, no it wasn’t, although it was indeed a singular event. However it would be accurate to say that circa 7 million imaginary children disappeared. Here is what happened: A law was passed, effective for the 1985 tax year, mandating that the IRS require not only the names and birthdates, but also the social security numbers of minor dependents on the 1040 income tax forms. The result was a decrease in the claimed dependents from 1984 to 1985 of the aforementioned 7 million. Clearly many people do not mind being dishonest, especially when it comes to the prevention of government seizing their money, but given the probability of a penalty associated with the crime, then they are deterred. People do respond to proper motivation as the following vignette from the book further illustrates.

A day care center in Israel decided to impose a fine of $3 each time a parent was 10 minutes or more late in picking up their child(ren). What do you suppose happened? If you said the delinquency rate increased you would be right. In fact it doubled from what it was before fines were imposed. Why? The answer lies in the concepts of motivation and incentives. A parent could be late every school day of the month and pay only $60 per month additionally, just 1/6 of the basic fee of $360 per month. Not only would the parent be able to continue longer whatever they had been doing, but would have the lagniappe of having their guilty conscience assuaged by paying a fine. If the fine had been $100 per incident then rest assured there would have been many fewer late arrivals – and a great deal of ill will. The answer is to find the proper penalty – severe enough to change behavior, but not so draconian as to generate widespread resentment and, no doubt when the option was available, a vacating of the day care center by the clients.

Starting 15 years prior to 1990 the violent crime rate in the United States rose by 80%. Whatever the real reasons for this increase were, there were a number of causes put forth including a more liberal attitude toward crime, lighter prison sentences for criminals, and fewer policemen. The experts, criminologists and journalists (who of course have answers for everything – almost always the wrong answers) predicted that the crime rate would spiral completely out of control with dire consequence for society in the next decade. In fact a funny thing happened. Instead of rising precipitously as had been predicted, the teen age murder rate fell more than 50% in the five years after 1990 and by the year 2000 the over-all murder rate fell to its lowest level in 35 years. As listed by Levitt & Dubner the reasons given by the ‘experts’ for this drastic drop in violent crime is as follows: (1) Innovative policing strategies; (2) Increased reliance on prisons; (3) Changes in crack and other drug markets; (4) Aging of the population; (5) Tougher gun control; (6) Strong economy; and (7) Increased number of police. The crime data have shown that of these only #2 and #7 had any significant effect on the lowering of the violent crime rate. By the use of a mathematical process used in probability and statistics called regressive analysis one reason for the lower crime rate can be isolated from the data which was far and away the most important, but was never mentioned by the ‘experts’ and journalists. Forty years ago, yes a full forty years in 1966, I took an evening course in mathematical statistics at Southern Methodist University which covered the theory and application of this mathematical procedure (for anyone who is interested, any standard textbook on probability theory would contain this theorem).

To get at this causative factor we have to go back to a legal decision in the case of Norma McCorvey vs. the Dallas County district attorney, Henry Wade. On January 22, 1973 the U.S. Supreme Court issued a final ruling, written by Justice Harry Blackmun, in the famous Roe v. Wade abortion case, holding by 7:2 that abortion was a constructional right in the entire country based on the due process clause of the XIV amendment of the United States Constitution. Fast forward about 16 or 17 years because that is when the violent crime rate started dropping. Why? Many of the most at risk babies who would have been born to young, single, largely minority mothers and who would have become violent criminals were aborted. It makes sense and it is borne out by the data. Can you imagine the irony and unintended consequence of it all? Conservatives who favored a severe ban on abortion and who were also tough on criminals saw the unsettling complementation of their two contrasting philosophies. Liberals who favored abortion and a more gentle treatment of malefactors also saw that abortion caused fewer young criminals who could be coddled. Sometimes one thing one wishes for is diagrammatically opposed to another. At times doesn’t life (actually, in this case, life and death) offer a strange and contradictory scenario?