American economist Steven Levitt does the hard work, ploughing through acres of statistical data spread over decades of research, to unearth surprising, yet simple results.
The anecdotal collection of both philosophical and economic principles is illuminating, particularly as the author manages to convey very complex economic principles by applying them to everyday practical situations.
From a personal point of view, the book has proven itself to be relevant and applicable to the day-to-day running of my business. It highlights certain key issues to think about when making important decisions relating to business strategy.
For example, in business you often have segmented information available to you. Traditionally in that environment, all you can rely on are the facts, in black and white – any other detail will be viewed as granular and unreliable. The book suggests basing decisions on sound knowledge, reliant on metrics and extenuating data. Many cogent examples in the book show how an over reliance on emotions and gut instinct can often result in the individual or organisation’s downfall.
By applying microeconomic modelling to seemingly disparate subjects, Freakonomics unearths the core challenges in isolating all the issues and constraints surrounding a problem. Decisions that take all the information into account and look at problems from a range of different perspectives are far more likely to succeed – an important lesson for any business.
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