Super-Freaky: Intellectual dishonesty or disingenuous immorality?

The new Levitt and Dubner Freakonomics book has come out (called, of course, Super Freakonomics) and the buzz has already started. The two authors are making the talk show circuits and they have a scheduled appearance tonight at Town Hall in Seattle.

With the first book, they pissed us off with the “How are real estate agents like the Ku Klux Klan”. But now it gets better with “Why pimps have a greater financial impact than real estate agents”.

“Just as you can sell your body with or without the aid of a pimp, you can sell your house with or without a Realtor,” they write. “While Realtors charge a much lower commission than the pimps — about 5 percent versus 25 percent — the Realtor’s cut is usually in the tens of thousands of dollars for a single sale.”

And more:

“A Realtor and a pimp perform the same primary service: marketing your product to potential customers,” Levitt and Dubner write. “As this study shows, the Internet is proving to be a pretty powerful substitute for the Realtor.”

Of course, the problem with Super Freakonomics is it prefers an interesting story to an accurate one.

It is in the authors economic self-interest to promote sensational and controversial stories, whether or not they are true. Like an intellectual Rush Limbaugh or one of the Fox News toadies, it’s interesting and sensational stories, not accurate ones, that pump up ratings and sell the books.

Making claims that will likely not stand up to serious scrutiny won’t matter after the personable authors sell thousands of books and make the talk-show circuit at $30 a ticket.

Why are residential real estate agents compared to pimps? Why not commercial real estate agents? Why not stockbrokers? Why not retail shopkeepers who act as middleman between wholesalers and the general public? Why are residential real estate agents, mostly women, targeted by these two authors? It’s interesting to note too, that in their new book they bend over backwards not to make any moral judgments about the prostitutes they write about, but wonder why more women don’t make the “career choice” to turn to prostitution. Who knows? Maybe that will be an easier choice for some women if Levitt and Dubner are successful in eliminating real estate sales as a career option.

There approach to their subject isn’t so much research than reducto ad absurdam; it takes the complexities of economics and reduces it down to a simplistic and meaningless vision. It takes the most obvious of targets, in this case residential real estate agents, and attempts to prove their uselessness. Because, after all, that’s how the authors make their points, by proving “conventional wisdom” is wrong, by finding something people believe in and playing the role of contrarian. With the down economy, Realtor bashing and whack-an-agent is popular now days and Realtors make a convenient punching bag.

The Shoddy Statistics of Super Freakonomics

Journalistic Malpractice From Leavitt and Dubner

Does “Superfreakonomics” Need A Do-Over?

Super Offend-O-Nomics

Superfreaky idea pits pimps vs. real estate agents
(Ex-pimp turned preacher gives his take on Freakonomics theory)

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13 comments

  1. Ed Kohler

    I imagine they wouldn’t take on stockbrokers because they already have been intermediated by the web to a large degree. Few people have relationships with a broker but use automated buying through their 401k or manual buying for less than $10/trade through online discount brokers.

    It hadn’t occurred to me that their content would be viewed as sexist. Clearly, they’re picking titillating topics to generate more buzz than a typical book on economics receives, but I, personally, don’t think their use of prostitution in examples turns them into sexists.

    Realtors continue to be easy targets for topics like this since so many people feel like they overpaid their agents. Look at how few people use the same agent twice to see how much of a problem it is. If people felt they were getting a fair value, the churn would be much less.

  2. David Losh

    I was actually looking for the statistics of how many trick or treaters were on Capitol Hill, but I’m glad you are blogging. The Real Estate community needs new blood, I should say better blood, in blogging.

    When the Super Freak was on the Jon Stewart show a few weeks ago he said he was just there to sell books.

    Many people are sitting on declining assets, paying mortgages, and the Big Players of Real Estate are saying everything will be alright if you just keep paying.

    People who want to buy may believe the hype we have going on today, but the millions of people who have bought, refinanced, or taken equity are asking for answers. Even though we may take exception to the comparison it just adds to or expands on the questions people are asking.

  3. Susan Alexander

    Whack-an-Agent?!? That’s priceless. Where did you get that? I think I need one to give to unhappy clients.

    The Freakonomics guys are selling sensationalism, pure and simple. It’s popular science diluted down for the masses.

    Both studies that they use to “prove” real estate agents are immaterial come from small college towns with atypical populations. Most all of their findings have been debunked, and these will too.

    One of their main “findings” is that real estate agents underprice people’s homes but sell their own homes for more money. What’s hidden in the fine print is that though some may get more money, the market time is significantly higher.

    The reason for this is that most sellers will only sign a 3-month listing.

    Agents know they only have 3 months to sell a home, so they want to price it to sell. In addition, many people only list there home to sell when there is a “sales emergency”: that is, they MUST sell. That being the impetus, agents are trying to help get the home sold FAST, so they often suggest a number that may be slightly below market.

    With their own homes, agents do not often wait for a “sales emergency” as they have the leisure of putting the house on the market in their own timeframe. In addition, after 3 months, the agent isn’t going to “fire” themselves. They know that if it doesn’t sell in 3,4,5 months, they can just go ahead and extend the listing.

    A seller may not be that patient.

    That’s really the explanation on why, perhaps, some agents are able to sell for more money, even though it takes longer.

    Too bad they didn’t take the time to interview many actual agents.

    Sloppy, shoddy pseudo-science.

  4. Mack McCoy

    We have just lived through an age in which economists were our most influential moral philosophers. The results haven’t been great. “The main moral compass we now have is a thin and degraded notion of economic welfare, measured in terms of quantity of goods,” Robert Skidelsky writes. Lately we’ve been failing even by that impoverished measure. The time certainly seems ripe for an overthrow of the economists.

    Justin Fox in the New York Times Book Review.
    I think that says it all.
    Goodbye, freaks.

  5. Marlow Harris

    Ed, both stock brokerages and commercial real estate agencies are male-dominated fields. Only in residential real estate do women outnumber men. And in most other high-ticket items sales, men dominate the field. It’s just this particular field of residential real estate that is getting dumped on. Sexist by design? Perhaps not. But the result is the same.

    (Also, there really isn’t much of a “churn rate” with agents, as most people are pretty happy with their services. An independent survey reports that 84% of home buyers would use the same Realtor again.)

  6. San Antonio Real Estate

    Maybe the author should have used himself as the example. Writing a book like that I feel is no different than using the examples the author did. Anything to sell.

  7. Leanne Finlay

    Well, why don’t we write a book? We can call it 53-Yr Old Realtor Prostitutes Get Even … or something like that!

  8. Leanne Finlay

    Well, pimps and prostitutes are an age-old business, having success for centuries. I guess it’s a fair business model :-).

  9. Marcia Bell

    Hilarious, pimp those properties. Its true, one cannot exist without the other, unless you’re a triple threat… However, as always, you get what your pay for, the man who acts as his own lawyer has a fool as a client, yada, yada. Cheap ‘tricks’, watch out!

    good work,
    mb

  10. Tor Slinning

    I think we all realize that the internet has revolutionized the way people search for homes, and market their homes for sale. I don’t think anyone ever talks about the value that a realtor can bring to a negotiation, or even handling situations gingerly that can potentially blow up in everyones face.

    I don’t know how many times I’ve defused explosive situations out of the 150 homes that I’ve sold, but it definitely worth the commissions that I’ve earned. I even credit my buyers half my commission in the process! I always get thanked, but most importantly, I know my clients did the absolute best in the transaction.

    These idiots – umm – economists don’t take any of this into account, because they simply can’t see the service that’s being offered by a professional agent.

    -Tor

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