In the first chapter of Freakonomics, the question is “What do schoolteachers and sumo wrestlers have in common?” The chapter dives into into a story about economists who tried to find a solution for a daycares problem. The problem the daycare was having is too many parents were picking up their children late when the daycare had a strict policy of picking up the children at four. The economist decided that 20 daycares in Israel would fine $3 for each child that was picked up late. After the parents were warned about this fine, the number of late pickups only went up.
After this story Levitt has a discussion on incentives. He describes incentives as “how people get what they want, or need, especially when other people want or need the same thing.” (in text citation). Levitt goes on to tell about how we as people learn how to respond to incentives at a very young age. You get good grades, you get a new bike etc… but we also learned the punishments for bad behavior. An incentive overall is just a way
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There is an example used about cheating on a high-stakes test in Chicago public schools. The public schools that have the lowest test scores have a risk of being shut down, then the teaches with the lowest score could possibly fired. The teachers were given incentives to cheat, when the teachers would cheat it would inflate their student’s scores, the teacher’s could have cheated by changing the students answers or even giving the students the answers. The Chicago public school system had investigators look into repeated patterns on students answer sheets, whether is was repeated letter answers or just a spike in test scores from the previous year. In over 200 classrooms per year, teachers were cheating for their students. The teachers that were cheating were most likely to be younger and less qualified. After this was found out, a retest was administered and enough evidence was gathered to fire the cheating