Wednesday, October 06, 2010

Steven Levitt - Freakonomics

I am listening to Steve Levitt, author of Freakonomics and Super Freakonomics. He is a professor in economics. He is a micro economist (so looks at the impact in companies and individuals) and does not try to look at the macro economy.

He makes economics interesting. He is funny, self depreciating and a good story teller.

He told the story of a lowly IRS clerk, John Silage, who noticed many of the names of children on forms were strange - like Fluffy and Spike. John suggested to the IRS that they add SSN of children to the tax form. It took a few years to get that idea to get implemented. When it was implemented, 7,000,000 children vanished overnight. This was 1 in 10 children. It made the government billions of dollars.

It was an amazing story of economics. The inertia of big business (like the IRS) to whom it was a minor pain to implement. The low enforcement rate caused low moral compass among a huge percent of the population.

I have always known the data in business is valuable. Levitt re-emphasizes that. There is gold in the data. The more the better. Then of course ask the right questions and do the right analysis.

He talks a lot about marketing. He really appreciates testing and would be a big believer in split run marketing that I write about in "Overspray in Marketing".

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