|About the Book|
Ive been trying to increase my understanding of economics lately, and have found myself reading a lot of books like this one. From The Undercover Economist to Freakonomics I feel a lot more informed about the world, but also better equipped to view my surroundings from new perspectives.This book is no exception. Harford has a knack for delivering complex information to the everyday reader in an entertaining way. Most importantly, he deals with issues that are relevant to the average persons life while making his main point that the decisions we make are essentially rational. By rational, Harford means, rational people respond to incentives. With this assumption, hes able to flush out all kinds of interesting, and sometimes scary, incentives to which humans respond. Additionally, Harford claims that we respond to incentives that go beyond mere monetary considerations to our everyday decisions, i.e. sex, neighborhoods, race, culture, and so on. Basically, anything that has a consequence can also be an incentive.Its at this point that Harford says rational choice theory becomes controversial because it enters the realm of everyday human behavior. And for me, it is also controversial because I dont think we can call every individual rational in the sense that we all respond to reasonable incentives. Obviously we respond to incentives, but how logical are these incentives on the individual level? This book is about flushing out what incentives we are responding to in particular situations, and, as is always the case with statistics, an aggregate number that points to a particular incentive doesnt really tell us much about whether a particular individual is responding to that incentive.I think the incentives Harford highlights are enlightening and useful, but that he should stop short of labeling life logical.