By Shana SagerThe Daily Northwestern
In high school, Steven Levitt got a two on the Advanced Placement calculus exam.
He even once thought of dropping out of graduate school at Massachusetts Institute of Technology.
But the author of the New York Times bestseller “Freakonomics: A Rogue Economist Explores the Hidden Side of Everything” told about 600 people Tuesday night that economics is about more than just math.
“I could never compete on equal footing with the really smart economists that were my peers and colleagues,” he said. “I was going to have to find a part of economics that answered the questions that no one else was going to ask.”
Tickets for the event, which was sponsored by A&O Productions, sold out Monday afternoon.
Levitt is a professor of economics at the University of Chicago and was honored with the John Bates Clark Medal – awarded to the most influential economist in America under 40 – in 2003.
But Levitt said “Freakonomics” is not a business book.
Instead, it is an investigation of incentives, which Levitt described as “the key to almost everything in economics.”
In his speech, Levitt discussed his research and explained altruism, prostitution, crime and hand-washing in terms of economics.
In one of the studies he spoke about, Levitt examined cocaine dealing within gangs.
“This gang was structured exactly like a regular corporation,” Levitt said. “Like McDonald’s.”
Levitt said the top drug dealers in the gang made nearly $500,000 a year while the “foot soldiers” made about minimum wage.
“It looked very much like the wage structure at a corporation, with many people making next to nothing and the people at the top making a ton,” he added.
Levitt said hand-washing is another daily event that relates to incentives.
He said that many doctors and nurses don’t wash their hands in hospitals, which can lead to medical errors.
To give doctors and nurses an incentive to wash their hands, researchers presented those who did with a $10 Starbucks card.
“Whenever the cards came around, the doctors all rushed to the faucets to wash their hands,” Levitt said.
Weinberg senior Rachel Cort, A&O’s chairwoman, said the organization brought Levitt to NU because he “straddles the line between education and entertainment.”
Levitt is more educational than some of A&O’s past speakers, Cort said.
Weinberg senior Josh Plavner, captain of NU’s Federal Reserve Challenge Team, came to the event because he enjoyed Levitt’s book and his “different take on economics.”
“It addresses some interesting moral issues,” Plavner said. “It’s a thought-provoking discussion about things you wouldn’t necessarily think that economics would discuss.”
Reach Shana Sager at [email protected].
