I have read the The Undercover Economist in early 2007. I remember it was a fun read but remembered very little of the actual content.
Economists might not be the first person you would turn to as the Agony Aunt that would solve some of your daily dilemma like parenting, the intricacies of etiquette or the dark arts of seduction. But for years Tim Harford has been doing just that with the Financial Times (FT): answering the most challenging questions in his column, where he uses the tools of and studies of economics to give advice about everyday issues, conundrum and concerns. From family rows and the stock market to buy socks or speed dating, you’ll find Harford has a rational economics solution to all of them. Although I opined, contrary to the publicity opinion, not always practical, often blunt and at times digressing from the real issue, but it would surely bring a smile to your face.
Each page of the book opens with a fresh question and a half page answer. There are so many strange questions and dilemmas that you wonder if Harford had cooked some of them up, or if there are quite a few strange people out there who reads FT or if they are writing to the column just to irk the editor? Harford is always able to provide answers to strange questions like: are there tangible benefits in flossing? Is it wrong to fake orgasms? Should we bother doing the ironing? Should one leave the lavatory seat down? And some of these questions sounds like one that I could write myself:
- If I am a rational economic agent, how am I able to succeed in fooling myself systematically by setting my watch up 5 minutes fast? – answer hint: being early is costly, and I probably have a warped view about time.
- Wedding list is fraught with inefficiencies, the efficient way is to get rid of wedding list and charge an admission fees, but his wife will be crossed, wonder why. Little does Harford knows, Chinese are already an established practitioner of such admission charge.
- I recycled and adopt a green living everyday only to book holidays by clocking air miles. I’m not the only one, apparently most governments are Green Hypocrites too!
- Someone asked if they should keep the gym membership going as incentive to get fit? I actually did that, I paid hefty gym membership fees so that every time I think about the huge sum of money paid, I am compelled to pack up my gym bag and pump some irons.
- Being nice and not write negative comments about a bad seller in Amazon or ebay just stop the market from being efficient. So go ahead and say it like it is!
- The law of comparative advantage suggests people should use their talent but we’re also told ‘do what we love’. What if I have no talent for what I love? Is it worth time and effort pursuing a dream career I’m no good at? The economist said there is no conflict. Being good at a job means you will earn more; enjoying a job means you will not mind earning less.
Some suggestions are outrageous, suggestion to pay your children to visit and call more often so that they can get a bigger piece of inheritance; and if the market is efficient, you can auction and pay whoever who can provide information about your husband’s infidelity; ask your circle of friends whom you meet up frequently to pay up a deposit, so that there is no free-rider in the group (not a bad idea actually); bribe your best friend enough to assuage your guilt for not attending her wedding and enjoy an extended 4 months of backpacking holidays in Down Under, rewarding your cleaner is not a good idea, best pay low and use the extra money to get a second cleaner etc…..; repulsive, but it makes economical sense. But I think I won’t have the heart to do it.
What did I learnt from the book? Loads.
- For one, some cultures are more economic efficient than others. There is no hesitation to split the bill when dining together. Sharing of food only happens in with the closest friends and perhaps only with buffet lunches. Wedding showers and wedding lists, Christmas gifts are literally alien, instead money in a packet replaces all these in festive occasions.
- No gain is better than tiny grain.
- Not expecting too much is the first step to happiness. Andrew Oswald, an economist says that happiness increases with higher income but it falls with higher expectations. This is not good news for reader Karl. “Since you ask smart questions and read the Financial Times, you must expect a lot out of life. Oswald suggest that you are unlikely to be happy.”
- It clearly is more efficient if the world operates in pure economics. But the more economics life is, the less heart it is.
I never did very well in economics. Of all the subjects that studied, economics is one that eludes me, twice. My only criticism is that some advice can be distasteful. Some advice you will have no clue of, because he uses economics academic theory and jargons, and doesn’t seem to quite answer the question.
It’s a small book, full of practical ideas and some sensible advice. In my view, at 179 page, it’s a gem.
I’ll leave you with two teasers:
When it comes to cinema tickets, adjustable pricing does not apply. Why is that so? After all big budget movies deserve higher pricing, don’t they?; and
Are extended warranties and travel insurance a waste of money?
Paperback. Publisher: Penguin [in series 1946-7, in book form 1951, 1994]; Length: 192; Finished reading at: 3 Jan 2010. Source: From the Library.
About the writer:
Tim Harford is a member of the Financial Times editorial board and presenter of “More or Less”, Radio 4’s look at the numbers in the news and in everyday life.
Tim’s FT column, “The Undercover Economist”, which reveals the economic ideas behind everyday experiences, is published in the Financial Times and syndicated around the world. He is also the only economist in the world to run a problem page, “Dear Economist”, in which FT readers’ personal problems are answered tongue-in-cheek with the latest economic theory.
Tim’s first book, The Undercover Economist has sold nearly one million copies worldwide in almost 30 languages. His second book, The Logic of Life, was published early in 2008 in English, and has also been widely translated. He presented the BBC 2 television series Trust Me, I’m an Economist and is a frequent contributor to other radio and TV programmes, including the Colbert Report, Marketplace, Morning Edition, Today, and Newsnight.
He has been published by the leading magazines and newspapers on both sides of the Atlantic, including Esquire, Forbes, Wired, New York Magazine, the Guardian, the Times, the Washington Post and the New York Times. He won the 2006 Bastiat Prize for economic journalism.
Before becoming a writer, Tim worked for Shell, the World Bank and as a tutor at Oxford University, from where he earned an MPhil in economics in 1998. He is a senior visiting fellow at Cass Business School, and he lives in London with his wife and two daughters.