Books : The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor--and Why You Can Never Buy a Decent Used Car!
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Type of bind: Hardcover
Dewey Decimal Number: 330.90511
EAN num: 9780195189773
ISBN number: 0195189779
Label: Oxford University Press, USA
Manufacturer: Oxford University Press, USA
Quantity: 1
Page Count: 288
Printing Date: November 01, 2005
Publishing house: Oxford University Press, USA
Sale Popularity Level: 10773
Studio: Oxford University Press, USA
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Product Description:
An economist's version of The Way Things Work, this engaging volume is part field guide to economics and part expose of the economic principles lurking behind daily events, explaining everything from traffic jams to high coffee prices.
The Undercover Economist is for anyone who's wondered why the gap between rich and poor nations is so great, or why they can't seem to find a decent second-hand car, or how to outwit Starbucks. This book offers the hidden story behind these and other questions, as economist Tim Harford ranges from Africa, Asia, Europe, and of course the United States to reveal how supermarkets, airlines, and coffee chains--to name just a few--are vacuuming money from our wallets. Harford punctures the myths surrounding some of today's biggest controversies, including the high cost of health-care; he reveals why certain environmental laws can put a smile on a landlord's face; and he explains why some industries can have high profits for innocent reasons, while in other industries something sinister is going on. Covering an array of economic concepts including scarce resources, market power, efficiency, price gouging, market failure, inside information, and game theory, Harford sheds light on how these forces shape our day-to-day lives, often without our knowing it.
Showing us the world through the eyes of an economist, Tim Harford reveals that everyday events are intricate games of negotiations, contests of strength, and battles of wits. Written with a light touch and sly wit, The Undercover Economist turns 'the dismal science' into a true delight.
User popularity level:
Rated by buyers -
I grabbed this book from my local bookstore after being drawn in by the title. I've always had an interest in economics as whole, but never took the time to really dig myself into some reading material (besides the voluminous textbook I was forced to trudge through in college).
Mr. Harford does a satisfactory job of trying to explain the devil in the details behind many of society's microeconomic transactions. Like a few of the other reviewers, I did find the text to be a bit dry, but maybe it's a cultural thing (I believe he is English). That being said, I think it's fair to say that after a second reading, one should be able to have a fairly strong grasp of the ideas the author puts forward. Tim takes us through economic ideas such as marginal value, externalities and scarcity and presents multiple examples of these in action. I particularly enjoyed his challenges put forth to a lot of popular ideas (Anti-Globalization, Environmentalism), based on standard economic thought.
I believe this book is an excellent starting point for further study of the world of economics.
Rated by buyers 
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Harford provides some wonderfully relevant, interesting and entertaining examples of basic economic principles. His style is not too wordy, but still illustrative of his ideas. I highly recommend this book - I guarantee you will have had some of the experiences he analyzes in economic terms. Very enlightening and a fun read.
Rated by buyers -
Tim Harford explains economics and uses economics to explain things that don't seem to make much sense on the surface.
Rated by buyers -
I came across this book at Commercial Press a few months ago. The cost was $160. I didn't buy it in the very first instance but instead went to the Victoria Park Book Festival hoping to get a discounted copy. Yes, there was a simplified Chinese version of the book at $30 only. I thought simplified Chinese was not a problem for me, but I was wrong. Simplified Chinese characters were not a problem. There were not too many simplified characters and I knew most of them. However, the problem was the translation which carried a lot of phraseology and idioms used in the Mainland. Although I could decipher them for their Cantonese meaning, the process of mental translation slowed me down a lot. I could only finish two chapters in several weeks.
At last, I went to Cosmo to get the original book. Luckily, the new paperback version only cost less than $100. It was not a great penalty to me for buying the second copy of the book. I finished reading the book during a trip to Africa.
The book is a world view from the angle of an economist. It is lucidly written complete with some interesting examples. The main theme circles around the ideal of a perfect market, but unfortunately there are always conditions that destroy it. They are scarcity, incomplete information and externality.
Scarcity
The very first few chapters are the most interesting and they concern scarcity. The most striking example, which makes the book famous, is the high price of coffee in prime location shops. Prime locations are scarce, and landlords demand extra high rents. To make the most of the scarce resources, coffee price has to be high. It is possible because there are many price insensitive commuters passing by in a hurry. On the other hand, there are also price sensitive customers who do not mind walking a few hundred metre more to buy normal price coffee. Coffee shops differentiate the customers and create coffees of different prices and varying degree of prestige, like special brands, special flavours and special additions in order to attract both types of customers. There was a coffee bar called Costa Coffee which offered fair trade coffee: products directly marketed for the third world producers. Customers were charged more and they paid thinking they were helping non-privileged farmers. It turns out that the marginal costs of all the high price varieties are very little compared to the big price difference. Owing to customer protests of being cheated, Costa Coffee had to withdraw its so-called fair trade coffee. Notwithstanding that, many customers are willing to pay more for more prestigious products, but with inflated price.
The book also reveals the strategy of supermarkets in setting the price of their merchandise. Besides differential pricing for similar products of slight variations, like organic products and brand name products, supermarkets deliberately arrange them at different shelve locations. Similar products with different prices are not placed side by side for easy comparison. Cheap products are put in inconspicuous location. It really pays if one could spend a little more time comparing prices when shopping in a supermarket.
Incomplete information
The author proposes that the perfect markets are distorted owing to incomplete information, both for buyers and sellers. In an imaginative ideal world of truth, where all information on the true cost of product and the true intention of buyer are known to all parties, there will be a perfect market with the following outcomes:
- Companies are making things the right way.
- Companies are making the right things.
- Things are being made in the right proportions.
- Things are going to the right people.
However, a perfectly efficient market does not always ensure fairness. An example is that interference to the market is made in providing to the poor in the form of subsidized heating fuel. We agree to distort the market so that the poor do not have to face the truth of high fuel cost. For arguments and solutions, you may wish to check out the book for various models proposed by famous economists.
The book also explains the phenomenon of rational insanity. In a complex market, take the stock market for example, there are educated and intelligent rational persons who are capable of gathering all information affecting stock prices. However, if all information leading to a rise or fall in stock prices are known, all rational investors will be capable of predicting stock price movement and act accordingly, leading to no predictability at all. As a result, all that is left to affect the market is unpredictable news. As such, stock prices and indices move at random affected by such unpredictable news. Although the long term trend still reflects the basic analysis, on any given day the trend is dwarfed by random movements. The paradox is that perfectly informed investors produce ... Read More
Rated by buyers -
Mr. Harford has done a wonderful job of explaining economics. While many of the textbooks published about this topic are about as exciting as watching paint dry, Mr. Harford succeeds in making the subject matter fun and informative. For the casual layman such as myself, this book is an excellent beginning to understanding capitalism. Though I have read a few other books on economics, this was easily the most entertaining.
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