The Undercover Economist
by Tim Harford
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Book Reviews of The Undercover Economist
Book Review: Witty and Original
Summary: 4 Stars
Laced with classic British wit, this book is essentially two parts. First, Harford explains Ricardo's theory of rent surplus.
He then spends the rest of the book applying it to a variety of situations, and has interesting economic insights into random things such as the price of Starbucks coffee, uncomfortable airport seats, and corruption in Cameroon.
He also discusses some theoretical underpinnings of economic theory, and interesting instances of when it appears to fall apart (health care seems to be one instance), and why economists often seem to drop the ball - because the real world is so complex, they invariably forget to factor in some critical piece of the equation or the other.
Particularly interesting is an analysis of the stock market, and its runs in the late 90s in the light of game theory. The discussion is buttressed by analyzing a number of auctions carried out by G-7 countries in the early 2000s, showing how small nuances could lead to radically different results: the ability to halve the income tax, or such incredible bungling that political and civil service heads rolled.
Highly recommended, both as a great read, and as a progeny of the line that started with "Freakanomics."
Book Review: Basic Economic Principles Applied to Real Life
Summary: 4 Stars
The science behind this book is, in the end, a dumbed-down version of what you would learn in Economics 1 at any college or university. The author explains basic principals such as externalities and Adam Smith's "unseen hand"; there are no break-through insights here.
On the other hand, this is no college textbook. It is much more fun to read and much more accessible. There are no formulas or math. The concepts are explained in simple English, and then immediately applied to everyday life situations such as the price of coffee at Starbucks, health care and traffic. Whether or not you know anything about economics, you won't be bored.
Most importantly, this book helps people think in rational terms about hot-button issues like free trade and the environment. The author has his own views -- we all do -- but his approach to issues is rational. He encourages us to think critically, rather than simply reacting emotionally. For that reason, if no other, this is a worthwhile book and the world would be a better place if everyone read it.
Note: my undergraduate degree is in economics, although that was a long time ago and I have not studied it, nor used it in my job for about 20 years.
Book Review: `..the difference between nineteenth century farming and twenty-first-century frothing ..'
Summary: 4 Stars
This is an entertaining and informative journey through some aspects of economic theory. By using contemporary examples (such as the various factors that influence the price of a cup of coffee), Mr Harford removes some of the mystery and explains how some of the conclusions consumers may draw can be both logical, and flawed. While this won't make your coffee any cheaper, it may make some decisions more informed. And you can always strike up a conversation with your fellow coffee aficionados about the analysis of coffee rents. Just wait until they've had at least one coffee first.
Readers should note that this book addresses market behaviour rather than social issues. Most readers will consider sweatshops to be inherently bad: however the alternatives for the participants need to be considered as well.
Like other books in this field, this could be a starting point for discussion. Knowing more about the way in which supply, demand and the markets which address both work gives some insight into a field which is often seen as full of dry, mechanistic arcana. Who knows? You may even understand the used car market.
Jennifer Cameron-Smith
Book Review: Life is economics
Summary: 5 Stars
One of my many regrets about my misspent college days is that I never took a course in economics. It was not until I got involved with several documentary projects dealing with economics that I started to learn about it through books. One of the best is Tim Harford's "The Undercover Economist." In this book, he explains why normal people do things that defy common sense: pay a big price for a cup of coffee or build a library in a third world country that can't hold any books because the roof can't keep out the rain.
Long ago, in a book called
Systemantics: How Systems Work and Especially How They Fail, I learned that systems work best that are designed to run downhill. That's one reason it's hard for reformers to get people to do the right thing if it involves more cost or effort than the wrong thing. Harford clearly knows the difference between uphill and down, and in ten delightful chapters, he explains it to his readers.
This is an excellent book with which to start learning about economics. It's easy to read, a lot of fun, and really informative.
Book Review: One of the most fun econ books you'll ever read.
Summary: 5 Stars
This book, culled mainly from Harford's great body of articles for the Financial Times in London, was a fantastic read. I've been an economist for some 15+ years and picked up this tome while waiting for a flight in Mumbai. As a sidenote, if you're planning on being in India anytime soon, you can pick up the British paperback edition for around $4.50 at the airport. The book is an excellent tutorial on basic microeconomic principles. Not a lot of heady theoretical stuff here. Plain English. Interesting. Compelling. Topics that are very relevant today. I'd say the ideal audience is a college econ major or a sharp high school kid who is thinking about majoring in econ in college. Also a great book for us economists to give to our non-economist friends to explain how useful and important we are in the world.
The most value in the book is that it gets you to think in economic terms about everyday things. As a result, it is not a quick read. You will pause and think and reread sections and have long discussions with your wife and officemates about all that you're learning. And that is certainly worth the price.