Superfreakonomics Chapter 1

So much attention has been focussed on Chapter 5 of Superfreakonomics which dealt with climate change policy that there has been little discussion of other chapters. I have now read Chapter 1 which explored how prostitution was related to Santa Claus and was the second issue — “Patriotic Prostitutes” — on the Superfreakonomics byline.

That chapter has been held up as being most like the original Freakonomics as it focussed on research carried out by Steve Levitt and sociologist Sudhir Venkatesh. And as Tim Harford notes, it does have some interesting results concerning the role of pimps (it turns out that they help prostitutes earn more) and the seasonal nature of supply (a reverse Says’ Law) which is the reason why Santa Claus gets a shout out here. (By the way, what is the total supply of Santas in Australia? 175; you won’t find that in this book, it is just something I happen to know).

This chapter is fun to read and is supposedly about the whole ‘strip the morals arise and focus on the economic forces’ type of investigation. But it is descriptive. The results are ‘hey this is a market’ and some have wondered whether we should care.

The problem is that we should care but that this chapter — for all of its research base — does not address why. And the issue is drugs. This a market where the suppliers’ choices are influenced by addiction (Jon Stewart noted it by the way). Yes, it is a market and there is some elasticity of supply but I was left wondering whether the research was focussed on the wrong thing. I want to know whether supply decisions are distorted by addiction and is this problematic for welfare. I think it is but when you think about interventions to do something about it, you can see the potential for unintended consequences everywhere.

Surely, there is more research that could have balanced up this chapter. For example, there are countries with more liberalised laws for both drugs and prostitution. Where is the real, data-driven, comparative analysis? I don’t know about this stuff but I wanted to know more. There was surely room in this chapter to provide it. In the end, we are left with stories, a bit of data and not just a stripping away of the moral and welfare issues but what is generally a complete avoidance of them. The issue is not “who cares?” We all do. The issue is that this chapter provides a surface treatment without delving or even pointing the way on the stuff we ought to care about. But why isn’t there more outrage about that?

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