Freakonomics Chapter 5 Analysis

Christopher Knight
Professor Gade
ECON 2103
21 October 2016
Freakonomics: Chapter 2,3,5 Freakonomics chapters two, three, and five intrigued me the most due to the chapter titles. In chapter two, the authors discuss the title question of the chapter, “How is The Ku Klux Klan Like a Group of Real-Estate Agents.” How does the world relate to one another, and how are groups the same in an information asymmetry aspect. In chapter three, the authors discuss the title question of the chapter “Why do Drug Dealers Still Live with Their Moms”, are drug dealers more likely to live with their mom, or how does the lifestyle impact the actual person. In chapter five, the authors discuss the title “What Makes a Perfect Parent” what makes a parent perfect,
With analyzing the chapter, information asymmetry relates to the Ku Klux Klan in a different perspective, to where Kennedy releases the information about the Ku Klux Klan, which caused the transaction to go away. Real-Estate Agents use information asymmetry to their advantage, allowing them to make more money by telling information regarding to the house, or other houses for sale to the owner. Chapter three ask about the stereotypical drug dealers, who live with their moms still. In this chapter, I was able to analyze the differences of conventional wisdom. I analyzed how the Black Gangster Disciples are similar to the franchise, McDonalds. Drug King Pins are similar to corporate bosses of branches, who run the business by using foot soldiers, or employees. Although you may think the typical drug dealer makes a lot of money, you thought wrong, the higher up bosses, the more money there is coming to them. This being said, foot soldiers make less than minimum wage. Showing how it can be similar to McDonalds is mostly based on the management style they use to operate this business. In Chapter three, the question of “What Makes a Perfect Parent” was asked, referring to correlation of children, whom may be successful or not in school. The correlation of success can be different from the causation of success, causation occurs when there is a cause, and later an effect to the cause. This chapter shows how the success of a child, is almost solely based off of the life they are born into. This in sense, shows the example of causation. The cause of having a child, the effect you have on the child’s life as a parent. I believe that all three of these chapters can have similarities to one another, the causation of a child and its life, which could lead to a drug dealer. The information asymmetry also very much relates to the life