Investigations
Of sumo wrestlers and other mysteries
Steven Levitt uses economics to solve conundrums of human behavior.

Economist Steven Levitt delights in proving what others suspect but don’t believe can be confirmed. For years the Japanese tabloids accused sumo-wrestling matches of being rigged, but Levitt was the first to demonstrate it. Most studies are murky on whether more police actually reduce crime in U.S. cities, but it was Levitt who showed that the nation’s finest do, in fact, help protect its streets. And though some teachers have been suspected of helping students cheat on required standardized tests, no one knew the prevalence of such activity until Levitt quantified it.

Photo by Dan Dry

The Alvin Baum professor of economics, Steven Levitt, on sabbatical at Stanford this year, hopes his work can “answer relevant questions.”

Levitt, at Chicago since 1997, studies problems that differ from the typical economist’s purview because they don’t fit the standard formula. “Usually in economics you have two variables,” he says. For example, “when wages go up, people work more hours. You have the data for the thing you want to study.” Levitt, however, is drawn to “problems that ostensibly seem difficult, but with a trick one can find a simple solution.”

Those tricks vary from project to project. In the sumo-wrestling study, published in the December 2002 American Economic Review, Levitt and assistant professor of economics Mark Duggan “tricked the data into telling us the answers” by studying the distribution of wins and losses. In a tournament each wrestler competes in 15 matches. If a wrestler wins eight matches he moves up in the official rankings—and no longer must perform menial tasks like cleaning out the gym or cooking and carrying bags for the other wrestlers in his beya, or stable.

“So the eighth win,” Levitt says, “is very important.” He and Duggan noticed that in a given tournament many wrestlers won six matches, “shockingly few” won seven, and a “huge number” won eight. That statistically unlikely distribution suggested to Levitt that wrestlers with seven wins facing opponents with either eight wins or six or fewer wins had paid a bribe to ensure a victory.

But before alleging corruption he weeded out other scenarios. Perhaps, for instance, the win gap reflected increased effort. After all, the wrestlers really wanted that eighth win and simply might have tried harder during that match. But when Levitt looked at subsequent matches between the same pair, the winner of the crucial eighth match usually lost quite badly the next time around. “I have a hard time reconciling that with any other model,” Levitt says, “except that they have worked out some sort of explicit or implicit deal.” To further corroborate Levitt’s claim, he compared an inside whistleblower’s list of alleged cheaters with his analysis. They matched.

In the police study Levitt’s trick was to find a new way to examine the issue. Studies showed that rises in crime correlated with increased police forces, but whether one caused the other was arguable. So Levitt looked for another variable that correlated with police-force growth. Inspired by the 1993 New York mayor’s race—in which incumbent David Dinkins expanded the city’s police force to appear as tough on crime as his opponent, U.S. Attorney Rudy Giuliani—Levitt used the timing of mayoral elections. Often when big-city leaders are up for reelection, he found, they hire a disproportionately large number of police. His research, published in the June 1997 American Economic Review, showed that a year later, when the new recruits had some time to get to work, crime dropped.

To study teachers cheating on their students’ standardized tests, Levitt and Brian Jacob of Harvard’s Kennedy School of Government looked at elementary-student test scores in Chicago Public Schools. Because there is no standard measure for cheating, the trick in this case, Levitt says, was to “construct a variable”—that is, make assumptions about what cheating classrooms look like. So the researchers assumed that the more student test scores fluctuated from year to year, or the more suspicious answer patterns were found within a classroom, the more likely it was that teachers were cheating. They may have changed students’ answers, filled in blank sections, provided students with correct answers, or obtained copies of the test beforehand and taught students using that knowledge.

Creating an algorithm to check test-score patterns in 10,000 third- through seventh-grade classrooms between 1993 and 2000, Levitt and Jacob found evidence of cheating in 4 to 5 percent of classrooms per year—a figure they believe is low because the formula catches only the most blatant cases. Their results led the city to fire a few school employees and to question several more.

To Levitt, the sumo-wrestling, police, and cheating studies offer models for solving mysteries. They’ve shown him—and others—that “things that seem impossible may be possible. The answers are there,” he says, “when one thinks about questions the right way.”

That means thinking like an economist and understanding incentives. Sumo wrestlers want to move up in the hierarchy to get out of doing grunt work. Mayors hire more police in election years to convince the public they’re doing a good job. Many states reward schools—including merit pay for teachers—for improved test performances, and sanction those that perform poorly.

Yet some of Levitt’s studies have no tricks. On sabbatical this year at Stanford’s Center for Advanced Study in the Behavioral Sciences, he is researching “why black parents and white parents give their children different names.” Citing Chicago economist Marianne Bertrand’s recent study showing that job applicants with white-sounding names get more callbacks than those with black-sounding names, Levitt says, “It seems like having a black name is very costly.”

So he and Chicago postdoctoral fellow Roland Fryer are studying possible benefits of black-sounding names. Rather than simply a matter of culture or taste, Levitt says, “A parent might give a kid a distinctively black name because she expects the child to grow up primarily interacting with blacks.” In that case a child might be better off with a name like Jermaine rather than Neil.

Influenced by Chicago economist and sociologist Gary S. Becker, AM’53, PhD’55, Levitt’s interests transcend number crunching and reach into human behavior. Eventually he hopes to use his creative methods to tackle larger problems, such as money laundering, tax evasion, disability fraud, and antiterrorism. Although he focuses more on empirical data than on Chicago School theories, he says, his colleagues have taught him to think much harder about those economic models—and the tricks they suggest.

—A.B.