By Steven D. Levitt and Stephen J. Dubner
How is a Street Prostitute like a Department Store Santa? Throughout chapter one, the authors examine prostitution as it is one of the world’s oldest professions. The Authors begin by explaining the challenges that women face compared to men. They state that women have had it rougher than men, especially in the less developed nations, such as China and Cameroon. In more developed nations, women’s lies have improved dramatically. Education, voting rights, career opportunities, and so on, is far better for women than it was at any other point in history. However, there is still an economic price to pay for being a woman. A women is paid approximately paid about 40-30 percent less than a man even if they obtain similar credentials. Factors such as a women being more likely to leave the workforce or downshift their careers to raise a family, choosing specialties that pay less, discrimination, being overweight, having bad teeth, and etc. contribute to the gap in pay between men and women. However, women have always dominated in the labor market of prostitution. Men have always been in intrigued by sex. The authors then contrast some main differences between prostitution today and one hundred years ago. Due to the acceptability of pre- marital sex in today’s society men are able to satisfy their demands without requiring a prostitute, but the demand for sex still remain high. This change in society has caused prostitutes to drop their prices. The relationship between law enforcement and prostitutes can be seen to describe the principal- agent problem discussed with respect to shareholders and management. Based on the data expressed a prostitute is more likely to give a freebie to a cop than be arrested. The authors also examine the effects of pimps, and compares their effects on prostitution to the effects of using real-estate agents to sell homes. The authors conclude that pimps are able to market to clients in demographics and geographies that prostitutes are unable to reach. While, the internet has made it so that real estate agents are not adding much in the way of value to the clients. The Authors then go on to profile a highly successful prostitute who uses economic techniques to improve her profits which is like a department store Santa. She is an example of department store Santa because she understands the elasticity of demand, market forces, and employs price discrimination. They both take advantages of short-term job opportunities brought about by holiday spikes in demand.
Why Should Suicide Bombers Buy Life Insurance? The authors begin this chapter by describing several situations of how data can be used to make better decisions. They use anomalies with respect to what month a person is born. An example that they use is if a baby is born in a certain month of the year they are more likely to sustain a learning disability, because of religious fasting. If a pregnant woman participates in the fasting then the lack of food can lead to a disorder. They also use the cut off dates to play soccer and baseball as an example. The authors conclude that an American child is more likely to play profession baseball if he is born in august. A British child is more likely to play professional soccer if he is born in January. They concluded this because kids that excel under that format are given the most encouragement, confidence and playing time, due to the cutoff date for youth soccer and baseball are December 31st and July 31st. Then the authors go on in detail how such data mining can be applied to help improve our lives. Mining medical records can help identify the best and worst doctors. Mining banking data can also help identify terrorist. They list several examples of which terrorist could have made the situation a lot worse than it what they did and the changes made by society due to