The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor--and Why You Can Never Buy a Decent Used Car! Reviews

• It's much better than Freakonomics

  
  By A2PEVP36Y5A2EQ on 2005-12-15
  Steve Levitt's "Freakonomics" has made the economics of everyday life a trendy subject for readers and very lucrative for economists. Tim Harford has caught the wave with his own "The Undercover Economist." However, "The Undercover Economist" is far better.
  
  "The Undercover Economist" does an excellent job at explaining much of economics theory through the simple experiences of everyday consumers. We all buy coffee, go to the supermarket, buy airline tickets, buy used cars, and buy or rent housing. He explains the underlying economic forces that apply to our everyday purchasing choices by relying on his extensive background in macro and microeconomics, but also Game Theory, and Behavioral Economics. As a result, he educates the reader in a broad based knowledge of economics ranging from the basic (macro economics) to the cutting edge (Game Theory).
  
  "Freakonomics" deals with obtuse subjects that have nothing to do with consumers' everyday lives. When is the last time you were concerned with Sumo wrestlers or Chicago High School teachers cheating, or whether abortion in the 70s influenced the crime rate in NY City in the 90s. These events have nothing to do with economics but rather regression analysis. Levitt, unlike Harford, never covers basic economic topics like demand, supply, and price elasticity just to name a few.
  
  Harford does an excellent job of tying microeconomic events to the World economy. Your buying a cup of coffee at Starbucks boosts Brazilian coffee exports to the U.S., which affects the U.S. current account deficit that impacts the U.S. demand for foreign capital that may affect interest rate levels and future economic growth. Meanwhile, by focusing on Sumo wrestlers cheating Levitt can't readily explain the Japanese trade surplus. Thus, Levitt boxes himself in a corner with nowhere to go.
  
  Harford is a better writer. He is a well-established British FT columnist. Levitt can't write for the general public. So, he hired himself a co-author, Stephen Dubner, to put prose to paper. This strategy worked only up to a point, as Dubner wasted much ink on adulating Levitt. As a result, "Freakonomics" comes across as a PR campaign for Levitt. There is none of that self-adulating distraction in Harford's book.
  
  Harford gives credit where credit is due. Levitt truly believes he invented a new science "Freakonomics" or the economics of everyday life. But the subject is as old as economics itself as Adam Smith in his 18th century writings always referred to everyday common transactions between local merchants and consumers. Levitt just invented a meaningless word that turned out to be lucrative. Harford often acknowledges his predecessors (from Adam Smith to Steven Landsburg) and does not claim to have invented a new science. He just intends to educate while he entertains. Harford has been successful on both counts. Levitt has not.
  
  I recommend several other good books on this subject. These include: David Friedman's "Hidden Order: The Economics of Everyday Life", Gary Becker's "The Economics of Life", and Steve Landsburg's "The Armchair Economist."
  
  
  

• The Power of Orthodox Economic Thought

  
  By A2SFNACEX04NQT on 2005-11-19
  If you read only one pop economics book this year, The Undercover Economist should be it. Harford, a columnist for the Financial Times among other distinctions, has written a book that could almost serve as a textbook for an Economics 101 course. But it's emphatically not dry or dull. Instead, what Harford has done is convey the excitement, the power, and the often counter-intuitive results of economic thought. In so doing, he has written more or less the economic equivalent to The Selfish Gene.
  
  Many recent books (notably Freakonomics) have dealt with the more exciting realms of economic research, such as the application of certain economic models to what most people would consider non-economic behavior. And far more books have talked about "economics" in the context of even trendier ideas like globalization (think The World is Flat or even No Logo). Such books, however, are reflections of marginal (in the case of the former) or unsophisticated (in the case of the latter) economic schools of thought.
  
  Harford presents the orthodoxy in all its glory, and reminds readers that economists really do see the world in a different--and fascinating--way. He explains simple, but often misunderstood, concepts like adverse selection (that is, why health insurance costs too much), as well as even simpler, but far more consequential, economic models, such as David Ricardo's explanation of why landowners, and not farmers, make money from rising crop prices. Along the way, he explains why the prices at Safeway and Whole Foods are about the same--and why the prices for items on the top shelf are higher than prices for the same goods on the bottom shelf.
  
  Granted, the book has its flaws, principally its (market-driven) lack of any equations or graphs and, more important, its refusal to take up any serious questions of macroeconomics. If you want to understand how recessions occur or how federal spending affects the world and national economy, then you're out of luck. But in focusing tightly on basic microeconomic principles--the foundation of the most insightful parts of economics--Harford succeeds in keeping the book accessible and useful.
  
  

• Finally, an economist speaks my own language!

  
  By A3NE7AWRK7N9KS on 2005-11-03
  I just finished this book, which is a bit like a real life cheat-sheet. Give this guy the Nobel prize: he made economics INTERESTING AND FUN for me!!! A dreading challenge, believe me!
  
  Economics is everywhere. We're surrounded by it, but most people do not think about it in they're daily lives. That's unfortunate: one would certainly learn to drive before standing behind the wheel of an automobile. So why not learn about the economic incentives that actually drive most of our own behavior before getting out and getting hit by that $2.90 latte?
  
  Learning about those incentives is not only worth it, as the examples in this book prove again and again; it also helps you make sense of what is happening around you, and therefore make better, informed choices. If one understands how most things are driven by the invisible laws of trade, competition, inflation and cost/spending or tax incentives, then one has less chance to get abused by such a system. Even better: this book shows how to ride that system and take advantage of the inherent value one holds as a consumer.
  
  I am finishing writing this review and am going out get a latte and do some grocery shopping. Now that I've read Tim Harford's book, I know where to go and how to make the best use of the scarce money I have (but I won't reveal the tricks here, as it would be like revealing a surprise end to a good book).
  
  My bet is that I'll be able to save what I paid for the book by the time I log back in to Amazon to see if my review has been picked up or not!
  
  
  

• Undercover for whom???? Weak apology for the weaker faith of modern economic err uhh thinking????

  
  By A1MDPOPX22H8NN on 2005-11-30
  This is the sugar coated gullible suburbanite/cheerleader/frat biz major version of modern economics.
  
  Why the rich are rich? Inheritance mostly and occassionally luck, a ruthless character, connections, and sometimes actual innovative ideas.
  
  Why the poor are poor? Lack of the above, especially the money part. And perhaps governments who as Machiavelli says like to "keep their people poor and on a wartime footing."
  
  Why you can never buy a decent used car. "Never" is hyperbole and I'm sure anyone who has bought more than one used car can prove this otherwise. The same logic could be applied to buying a new car. You probably don't know where it was made and by whom. The designers/engineers could know some defects that weren't fixed to meet a timeline/budget. Cars are designed flawed all the time and perhaps an aged car has all those flaws recalled and fized.
  
  But why not answer the deeper question of why you almost need a car and a decent one at that to fully participate in this "free market capitalist system." *rim shot* Excuse the punchline, and perhaps question the premise/joke as truth.
  
  This is more of a book that is a sales job of accepting the status quo of modern life. 5 stars on that.
  
  "Undercover Economist" as title is a misnomer... It's the same standard, unquestioning, predictable what you'd expect from just about any textbook economist, albeit slightly more hip for those who drink "flavored coffee."
  
  If this book sparks you to read more into economics, which it might, it gets 2 stars. If not, one or none is appropriate.
  
  

• Superb... Best of Breed

  
  By ABMNX856X89CS on 2006-01-07
  After having taken nine economics courses at both undergraduate and graduate levels over the years, I found Harford's UNDERCOVER ECONOMIST to be the most enjoyable and penetrating popularization of the subject to date. Better even than Landsburg's THE ARMCHAIR ECONOMIST, Freiedman's HIDDEN ORDER, or Wheelan's NAKED ECONOMICS.
  
  Harford is a good writer and is particularly good at explaining reasons for the disparity of wealth and poverty in various countries around the globe.
  
  Not to mention explaining why Starbuck's coffee costs so much (and it isn't Starbucks who is gaining the lion's share of the profits...)
  
  It also explains why Amazon pricing seemed to vary on my wish lists from time to time! (Targeted pricing based on whether I had deleted my 'cookies' recently...)
  
  There is much else contained here for the curious and informed reader... covering real world examples embracing both micro and macroeconomics.
  
  Excellent. The best introduction to the 'dismal science' yet produced.
  
  Note: Levitt's FREAKONOMICS is more or less a collection of disjointed articles that vary from superb (the economics of Chicago gangs) to mundane (trends in children's names) depending on your interests. Your interest will waver on each topic depending on whether you prefer watching 'The Sopranos' or the Lifetime channel.
  
  Harford's volume, on the other hand, contains much of the important theory you would learn in introductory microeconomics and macroeconomics classes, albeit presented in a much more interesting fashion than you would encounter in almost any business school in the country.
  
  
• The Elder Sibling to Steve Levitt's Wild Child
  By AL9ATJABY9Y04 on 2005-11-04
  The title of this review comes from the Economist's recent piece on Tim Harford's book. In my view, the Undercover Economist is quite simply a triumph of good writing. Harford turns the "dismal science" on its head, making the concepts that most of us failed to learn in econ 101 understandable and RELEVANT to our everday lives by using them in everyday situations, from walking the aisles of a supermarket to picking the stock market. How many of you have been guilty of the "Grolsch method" of stock picking? Read this book to find out!
  
  
• Enjoyable but fishy
  By A30Q8OXV8S63Q on 2005-11-17
  Well, when I came here, what caught my attention is that of the first 6 reviews, 5 only have one review to their name (only for this book, all on Nov. 2) and the 5th has 3 reviews , all are other Oxford U Press books printed within the past year. Undercover economics perhaps.
  
  That said, this is a good book, not as good as Freakonomics, but well written and a fun quick read. If you have to chose, Choose Frakonomics. If not, this makes a nice addition next to it.
  
  And no, I haven't (as of this date) written a lot of reviews.
  
  
• Not another Freakonomics
  By A2T7UOKCGBAFKE on 2005-12-02
  Sorry, if you were looking for a folow-on read to Freakonomics, this is not it.
  
  If you are expecting more Freakonomics-like well researched and interesting insights, this book is sure to disappoint.
  
  
• Clarity, wit, and insight
  By ANDSCECK54ETN on 2005-11-08
  Tim Harford has the clear expression of complex ideas gliding off the page. There is a joy in having insight served up clear and whole, to which he neatly adds wit. It makes for a completely enjoyable book that makes the most of the application of economics to the real world -- a way of thinking about messy reality that polishes its shoes, straightens its tie, and makes it presentable to even the most sceptical.
  
  
• understandable orthodoxy
  By A2SGZY6FEQF3OT on 2005-12-08
  While this is my no means new, novel or anything but orthodox microeconomics, it is a good read. As one with a degree in economics, maybe I was not awed with new theory. But this is a good read, and accurate as far as it goes
  
  
• Good Reading
  By A22RY8N8CNDF3A on 2005-12-28
  Early in "Undercover Economist" Harford provides a clear explanation of how pricing pressure changes according to supply vs. demand. One of his examples is London's "Green Belt" - an undeveloped ring around the city that ends up increasing rents. Los Angeles County provides another example - so much of its land is off-limits to development that the area has become LESS attractive, not more, due to higher costs of housing and commuting, as well as increased pollution.
  
  Another point made by Harford is that large school districts in the U.K. have such negotiating power that they keep salaries low. This seems strange given that U.S. teachers are paid far more than, and receive much better benefits than their private-school counterparts - even in large districts.
  
  Illegal immigration is briefly reviewed - too briefly, in fact. Harford would have us believe that the matter simply turns on whether one is personally threatened by immigration or not - ignoring the serious externalities associated with U.S. illegals due to their reluctance to assimilate (school and police language problems), negative impact on property values (noise, crowding, unkempt yards, crime), etc.
  
  Harford's explanation of how/why sellers accomplish differential pricing (eg. "fair-trade" coffee, discounts to Florida locals at DisneyWorld, slowing down printers, low-cost train sections without basic amenities) was very useful, as was his review of pollution auctions that not only achieve efficient improvement, but also provide key information for future regulation - avoiding endless moral posturing.
  
  U.S. healthcare inefficiency is still another topic addressed. However, Paul Krugman (New York Times, 11/14/05) does this much more clearly.
  
  As for why some nations are poor, Harford offers evidence that corruption, incompetence, and the lack of trust (eg. a rationale legal system) are major culprits.
  
  One of the last topics covered is China's remarkable transformation post-Mao. This topic probably merits a book of its own - I wish more detail had been provided.
  
  
  
• Pretty good book for non-econcomists
  By A2MNX04XS0EAHK on 2005-11-20
  The author deals with topics such as marginal costs, externalities, perfect markets etc. This is nothing new to persons who once in their life attended an economic class, so you most benefit from the book if you have no knowledge about economics. For the others, the examples are funny but my lecturer in university was unique in presenting real life examples, too.
  I would rather recommend "Freakonomics".
  
  
• Are You Feeling Wealthier?
  By A11PKVBGCKRVEK on 2006-02-14
  After being delighted with Freakonomics, I eagerly purchased The Undercover Economist only to be disappointed by its tedium. The book is written like an elementary textbook on free-market economics, and it reads like a textbook. As opposed to Freakonomics, which is crammed with real-life studies, this book habitually relies on hypothetical instances which are designed only to prove the author's free-market dogma.
  
  There are also dull chapters on how poorly Cameroon is run and how misguided and disastrous the dictates of the late Chairman Mao were to China, but this horror story has been told more effectively elsewhere.
  
  An example of how divorced this book is from reality is the subchapter, "Globalization is Green." It maintains that the fears of those deluded environmentalists are absurd, because ". . . Poor countries produce goods like clothes, children's toys, and coffee, while the seriously polluting industries like bulk chemical production require high levels of skill, reliable infrastructure, and . . . political stability." In other words, the nasty industries will stay home where there is always strict and adequate regulation.
  
  Toys and clothes certainly do not seem very threatening, but apparently Professor Harford has never heard of the unpleasantness at the Union Carbide plant in Bophal, India -- perhaps it's insignificant to his theories. He would, no doubt, likewise have no interest in the recent reports that intensive fish farming in Chile which provides cheap salmon for Wal-Mart produces so much waste that it is killing off ocean life where it is dumped due to lax regulations.
  
  I am certainly no socialist, but I believe that I'd trust this book more if Dr. Harford had stuffed it with fewer fairy-tale examples and explained why it is that as the economy is allowed to gallop toward its free-market utopia, the chasm between between rich and poor continues to widen at an alarming rate. I am always wary when someone writes a book which attempts to force-fit real life to conform to his theory of perfection.
  
  
• I didn't know Cuba had Amazon
  By ANA5ORZ4QLTYO on 2005-12-04
  The rich get rich by inheritance? Good God have you looked at the top people measured buy wealth lately? Not many there because of daddy. And do I detect a we would be better off without cars nut. I'll tell you what,you go where those who know what's best for us aka Goo Goo Government Planners want you to go when they want you to go with the drunks and punks and I'll drive my very good value used car or motorcycle wherever and whenever I want. The book explains to the uninitiated basic life very well. Just don't get your earlier lessons from Castro or Chavez
  
  
• Fascinating insights for the intelligent layman
  By A372TS6JSAD4KD on 2005-11-02
  A book for people who enjoy grappling with ideas and being introduced to new ways of looking at familiar situations. It can even save you money - after unthinkingly putting a small bunch of broccoli in my supermarket trolley the other day, I remembered what the first chapter of this book had to say about supermarket pricing policies and took the time to discover that the much larger bunches, placed less eye-catchingly on the next shelf up, were actually cheaper.
  
  You may not agree with every word the author writes - for instance, he is more sanguine than I am about desperately poor people working in sweatshops to produce uneccessary consumer goods for the rich. But this actually illustrates one of the book's strengths - the author consistently presents economics as a way of making your own personal value judgements more informed, rather than as a discipline which inevitably leads you to one value judgement or another.
  
  Clearly written and well organised, this is a highly enjoyable read for intelligent people of any political stripe who are interested in the world around them.
  
  
  
• A gem of a read
  By A1V43VDWRZ4JST on 2005-11-04
  This book is a real gem. Harford has a knack for making the laborious theories of Economics 101 come alive, understandable, and relatable to our everyday lives. Part of the book's charm is the local examples provided. I'll never think of that Starbucks at Farragut Square the same way again! (not to mention Whole Paycheck, I mean, Whole Foods). The book is packed with fascinating ideas, full of surprises, and refreshingly accessible. Might I add that one of the surprises is that it is very funny, too. Anyone who liked Freakonomics or Globalization and Its Discontents will find this an enjoyable read
  
  
• Sequel to Freakonomics
  By A3V1EPSE6XDC0C on 2006-05-15
  This is a great book to follow up with if you enjoyed Freakonomics. This book's subjects are less amazing but are more practical and he goes into more detail.
  Here are some examples:
  1). Starbucks large sizes only cost pennies more but they charge much more for them because they want the people who don't care about spending more to have the option to spend more.
  2). He explains why countries like Cameroon stay so poor. It is due to the way the government punishes business with ridiculous taxes, and the government is completely corrupt and positions in government are rewarded based on connections.All decisions are based on politics, they have killed capitalism and the reward for capatilism.
  3). If we closed down the sweat shops around the world the workers would be forced to go back to digging through garbage dumps for a living.The sweat shops the west think are so horrible are actually a huge step up for these impovershed countries and could lead to manufacturing jobs.Sweat shop workers are like the middle class of their villages.
  And much,much,more....
  I found this book very thought provoking and enjoyable, I learned that our country is the most advanced in the world through the power of unrestrained capitalism.Because it works!
  
  
  
  
  
• Economics with a smile
  By A3USINSQE7S1WT on 2005-11-17
  I liked this book a lot. The author does acknowledge his debt to the economics writers who went before him, but this book puts all the ideas together in a fresh way, and covers both the small stuff (like buying a cheaper cappuccino) and the big stuff (how China became such an economic power). What is unique about 'undercover economist', I think, is that the book always remains very personal and is written with a great deal of charm.
  
  
• Traditional Economics with a dash of Freak
  By A3AN73X63BMLJ on 2006-01-05
  This book is being compared a lot with Freakonomics and this isn't really a fair comparison. This book is really about making traditional economics fun. The last couple of chapters is pure macroeconomics and almost reads like a textbook.
  The first 8 or so chapters is where the fun is at. But I take issue with a couple of his conclusions.
  While real estate is no doubt important to Starbucks, I'm not sure it's the primary reason why they're so expensive. Rent does not make up that much of the cost of a single cappuccino to justify such a high cost.
  Also, the part about healthcare ignores the fact that with catastrophic insurance alone, people will all too often avoid much-needed non-catastrphic care. A better solution would be to have insurance that requires a fixed percentage deductable, say 15%, up to a maximum, say $2000.
  
  Harford suggests in his book that if everyone was educated in economics, the world would be a much better place. I have no doubt that that is true and this book is a great contribution to that effort.
  
  
• Good Book for Economic Laypeople
  By ARNEUO7BF3J55 on 2006-02-18
  A lot of people are going to draw comparisons between The Underground Economist and the inexplicably popular Freakonomics particularly since the author of Freakonomics is used as the leading quote on the cover. The fact of the matter is that Freakonomics had very little to do with traditional economics per se while Underground is pretty much an economics books with some coolness added to keep it entertaining. The first chapter is essentially a primer on supply and demand.
  
  Tim Harford is an economist from England who pushes a free-trade, pro-globalization agenda. In fact two of the five authors with quotes on the back cover have pro-globalization books in their `Author of' section. The second to the last chapter is a hard sell of globalization and the final chapter is a portrait of the happy results of globalization in China. Harford also comes down on taxes saying they are inefficient and destroy competitiveness. Instead of a progressive income tax he argues in support of a flat sales tax. It all sounds like a sale of conservative economics which isn't necessarily a bad thing as long as it's done with honesty and clear thinking (many conservative economists have such an ideological bias that they become useless).
  
  The author spends a chapter on healthcare in the United States and demonstrates how flawed it is. The system is hugely expensive, highly bureaucratic, extremely patchy and unpopular to most American's. Harford writes, "United States government alone spends more than the combination of public and private expenditure in Britain, despite the fact that the British government provides free health care to all residents" In fact no country spends more as a percentage of the GDP as American's. Not even close. And as a final kick in the teeth American's aren't even particularly healthy when compared to the rest of the developed nations. However, rather than look to his own country's model for health care or Germany's or Canada's Mr. Harford looks to Singapore. It seems as if the author has mind melded with the Bush administration in believing that American's are over insured and need to look into Health Savings Accounts which to the best of my knowledge don't address ANY of the problems the author recounted. The book contains some real insight on why health insurance is often incompatible with a market based economy but the idea that we should just scrap it in favor of only catastrophic health insurance seems to deny that anyone could possibly be nickeled and dimed into poverty.
  
  The author also has some interesting views on handling pollution. The idea is that companies can buy the right to pollute using vouchers. Initially it seems to be a horrible idea but the thinking is that since businesses regularly inflate the cost of keeping clean we ask them to put their money where there mouth is. If the vouchers cost enough businesses will try to find cheap ways to stay under the emissions threshold rather than pay the voucher cost and the problem is solved in a very market based manner. On the other hand the author tends to discount environmentalism as a small cost (2 percent of manufacturing) and of little real concern to businesses. If this is true than why do business interests in the United States spend millions on think tanks and lobbying if it's no big deal? Global Warming is a huge deal and business seems willing to do just about anything to suppress legislation.
  
  Besides globalization the author doesn't seem to really be an ideologue. He is clearly a fan of market based economies but admits that participants often don't act sensibly. He's no cheerleader for the stock market by pointing out that price to earning ratios of companies are still vastly inflated and gives a great explanation on why internet companies lack any scarcity power making their ridiculous stock values in the late 90's look like nothing more than a fools dream. The Underground Economist is a very good book. Unlike Freakonomics it is legitimately an economics book and most assuredly has an agenda. Not that that's a bad thing.
  
  
  
• Good layman's explanation of economic concepts
  By A2E6LOTVXW8X2P on 2006-01-09
  "The Undercover Economist" covers a broad array of economic concepts, mainly using anecdotes and easy-to-understand hypothetical examples to illustrate the benefits of things like free trade and market pricing. Strikingly, you can read pages at a time without encountering a single number -- the book is clearly aimed at an audience which was scarred by too many graphs and charts in high school. I am fairly familiar with the economic concepts already, but I enjoyed the book too -- the author's easy-flowing writing style and sense of humor make the economic lessons go down easy. The wealth of real-world examples, from a comparison of India to China, to a proposal of how American health care could be improved, to an examination of why coffee seems so expensive, provide strong backing for the author's arguments. In my case, the book is preaching to the choir, but it also might sway people who considered themselves anti-globalists without ever considering the unintended consequences of their beliefs. "The Undercover Economist" is a good and interesting read.
  
  
• Excellent
  By A3AT63GA15W0MW on 2006-01-27
  This book really helped sharpen my thinking on vital, everday economic realities. As you read and explore various situations that effect us all, you feel like a lot of foggy misconceptions are being shaved away and a laser clarity is put in their place. I wish everyone would read this book. We would have a lot smarter voting populace if they did.
  
  A lot of topics are covered, but none are removed from situations that intimately effect all of us. You get a lot of insight on how various retailers struggle to set the highest price (this chapter alone paid for the price of the book, because it has made me a smarter, better armed shopper.) You learn how the concept of "missing information" makes it hard to buy a good used car as well as for a free market system to create afforable health insurance (the relationship between used cars and health insurance was as eye opening as it was fascinating.) You also learn that ecnonomists have some very good solutions to handling traffic congestion and pollution, if only the politicians would learn and listen.
  
  This is just a sample of what is available, all written in a friendly, accessible style. No math, no graphs. Just a lot of clear reasoning and mind expanding information. Reading it was well worth my time. Hats off to the author.
  
  
• A Lively Look at Beginning Economic Theory
  By A1K1JW1C5CUSUZ on 2006-02-01
  The Undercover Economist successfully avoids mind-numbing equations, boring examples and abstruse subjects.
  
  Using ten themes, Mr. Harford provides a popular platform for the latest thinking on economics.
  
  In Who Pays for Your Coffee? he looks at how a desire for quick access to caffeine allows landlords along commuter routes to charge high rents for take-out coffee locations.
  
  In What Supermarkets Don't Want You to Know? he explores how item choices and pricing are used to create the appearance of competitiveness while encouraging the price insensitive to pay as much as they like. He also explains the theory of why you pay so much more for fancier coffee drinks . . . and even possibly for fair trade coffee.
  
  Perfect Markets and the "World of Truth" considers how economic policy can influence how people make decisions and allocate resources more efficiently such as by raising taxes on fuel while subsidizing the poor with a "head start".
  
  Crosstown Traffic looks at the ways that social problems can be solved by a judicious use of fees, such as by charging for the right to pollute.
  
  The Inside Story examines how imperfect information causes costs and prices to soar . . . as those who know what's good and bad take advantage of those who don't. People sell used cars that are lemons and hold on to ones that are peaches. Those who need health insurance because they are sick buy it while those who are well avoid the cost.
  
  Rational Insanity describes talks about irrationality in economic decisions such as the recent Internet bubble.
  
  The Men Who Knew the Value of Nothing is about describes the brilliant and not so brilliant auctions that economists set up to sell radio spectrum for new services around the world.
  
  Why Poor Countries are Poor contains an unforgettable tale of what it's like in Cameroon and why the economy isn't likely to get better anytime soon.
  
  Beer, Fries and Globalization makes the case for free trade.
  
  How China Grew Rich is a nice study in government policy in China and how it overcame the worst problems of being a centralized economy.
  
  If you know economics, all that will be new in most of these chapters will be the examples, which are fairly new and interesting.
  
  If you don't know economics, you probably won't follow some of the chapters such as Beer, Fries and Globalization.
  
  So this book will be most appealing to those who know a lot about economics and will be interested to see how key ideas can be explained more simply and in a livelier way.
  
  For those who don't know economics, it's a lot better than my economics professors in explaining key ideas. But you may end up learning more than you wanted to know. Many of the chapters are of more interest to economists than the typical non-economist reader. I suggest you selectively read the chapters to focus on the ones that seem interesting to you.
  
  I thought that the last chapter on China had the most interesting material and explained it very well.
  
  Some people will compare this book to Freakonomics. That's a peculiar comparison to make. That book uses economics to provide new perspectives on old problems. This book, instead, tries to teach economics. The two books have substantially different purposes and perspectives as a result.
  
  
• Outstanding style, but only part of the story
  By A29SAQV356DDQ4 on 2007-05-12
  This is the kind of book any non-fiction writer can envy: a complex subject described with fluidity, wit and confidence. However, the view of economics that you will get from this book is often a bit *too* confident.
  
  For example, no distinction is drawn between what's known from empirical research and what's "known" from utterly non-empirical mathematical proofs such as Kenneth Arrow's proof of the efficiency of markets (@ 68-69). Arrow's proof is based on the properties of abstract convex sets, not on those of real-life markets. (You can get the flavor of Arrow's argument by downloading his Nobel lecture.) Moreover, Harford doesn't always integrate the subjects he discusses. Two chapters after discussing Arrow's proof, he spends a chapter discussing the impact of information asymmetries on economics (Ch. 5). But he doesn't mention that one of the achievements of information economics, albeit again accomplished by proofs, is to show that markets are virtually *never* efficient. (Check out the 2001 Nobel lecture of Joseph Stiglitz, esp. @pp. 503-507). Harford also ignores the impact of psychology on economics, which was recognized by the Nobel in 2000. In particular, the empirical work of laureate Daniel Kahneman and his late collaborator Amos Tversky challenges the assumptions of "rationality" that underlie the neoclassical theory that the book so smoothly espouses. (For a popular introduction to the work of Kahneman and Tversky, try Barry Schwartz's excellent "The Paradox of Choice", as well as Kahneman's Nobel lecture.)
  
  As other reviewers have noted, the book's justifications for globalization are not its strongest suit. Harford assures us that the "circular flow of currencies" in US trade with other countries "will balance out in the end" (@196), but doesn't factor in the flow of interest the US is paying to its foreign creditors, now that we're again the world's #1 debtor nation. In his glowing discussion of China, he mentions that wages have gone up in the countryside, but omits to say that they have increased at only a fraction of the rate of increase for urban jobs, resulting in heightened income inequality. But aside from a facetious reference to Bill Gates owning everything (@66), you won't find any discussion about income inequality in this book, much less about whether "free market"-type reforms play a role in enhancing it. And when Harford glibly describes Chinese textile workers as "selfishly" looking for the best jobs (@77), he omits to mention that often they're looking for jobs in order to support the education or health care of family members back home. And how free are most labor markets anyway: consider whether you'd "selfishly" dump your current job if no one would give you a recommendation for your next one -- or for a more Chinese example, if your employer promised you he'd pay you your back wages sometime in the future, and suing him was not an option. His remark is more apt, if at all, only for the most highly-educated and fluid segments of the labor market in certain areas, such as software engineers in the Shanghai region.
  
  I was scribbling my disagreement with the author in the margins of many pages of this book. But for his expository skill, I have only admiration. My rating reflects a compromise between style (5 stars) and substance (a bit less than 2 stars). For a slightly drier, but much more balanced and informative book covering a lot of the same subject matter, try "Reinventing the Bazaar" by the late John McMillan.
  
  
• A Terrific Gift Book for the Bright but Economically Illiterate
  By A2WI8JG5VPTXLJ on 2006-05-13
  A terrific gift book for the bright but economically illiterate student or liberal arts graduate. Harford explains, and entertains, using quick, clear examples to illustrate everyday issues and global macrotrends with a fast, easy journalistic style. Great for those of us who won't have the time or patience to read through dreary theory or to decipher those incomprehensible charts so beloved by professors, consultants and financial professionals.
  A wonderful choice for a fairly long flight; you'll learn, laugh and feel effortlessly enlightened.
  
  
• Dumb down more please ?
  By A2STCXXBJBN772 on 2006-11-28
  Harford is obviously well read, well traveled and decent at explaining complex concepts. This book is 6th grade reading level, tops, and explains the obvious. I would rather have spent my $25 on numerous other things, like a good meal or $25 worth of coffee. If you understand nothing about economics or have a cursory understanding but lack common sense, then this is the book for you. Very disappointing.
  
  
• Disappointing
  By A10250WFWWKGWV on 2006-03-02
  "The Undercover Economist" is supposed to be a fun and accessible discussion of economics as it relates to social issues. Not so much. It is bad enough that the author tries too hard to be cute. Economics can be painfully dry but plenty of authors have found ways to make it fun. Harford's efforts to liven up what he has to say fall a bit flat.
  
  What I found more disappointing was Harford's approval for redistributive policies. While they always sound great in theory, such policies are always impossible to administer fairly or soundly and always generate more problems than they solve. "Undercover" would have been a stronger work had the author focused on fundamentals and left the more advanced topics out.
  
  
• Insightful & Interesting
  By A3RALTM88X6FJW on 2006-04-03
  This was a great book. Even if you don't know anything about economics and thought you didn't care you will find this book funny and fascinating. For economics enthusiasts this is a must buy item!!!
  
  
• Entertaining and thoughtful
  By A33KRHC8N8G9YV on 2006-05-11
  This book is an entertaining and thought-provoking exposition of some key principles of economics and how they interact with big questions (such as "Why are rich countries rich and poor countries poor?"), small questions (such as "Why does my morning coffee cost as much as it does?") and all sizes in between. In that respect, it grows out of the author's "Dear Economist" column in the weekend ft, in which he offers often amusing "agony-aunt" style advice using the principles of economics to shine a light into normal everyday activities and moral dilemmas. The same mix of clear, reasoned argument and amusing and thought-provoking style is in evidence in this book.
  
  All of the economics is explained and argued in a way that someone (such as myself) who has interest but little understanding in this field can easily follow, and there are references at the back to academic papers and journalism that back up the author's points and provide a starting-point for additional reading.
  
  As another entry in the growing field of "popular economics" books, and with it's ostensibly similar promise of using economics to shine a new light onto everyday things this book is bound to provoke comparisons with "Freakonomics", but both books are worth reading in their own right and there is very little that is covered in both. Actually I enjoyed "The Undercover Economist" more, not least because it lacked the selfcongratulatory sections of Freakonomics that annoyed me so. (That book has sections that are just one of the authors telling you how clever and amazing the other author is- I don't want someone to tell me they are clever, I want them to show me!). It is also more deeply thought-provoking for being less willfully controversial.
  
  
• Asymmetric Information
  By AYAMBDEDF4N1C on 2006-04-19
  I snarkily suggested that Steven Levitt missed a killer marketing opportunity by publishing Freakonomics (no fuzzy, fancy math, but all those words) instead of Freakonomics Comix. With its "Lichtensteinesque" cover, Tim Harford took my advice and targeted a post-literate generation that gets its news from The Daily Show & that gets its views from Ted Rall.
  
  Actually, Mr Harford has written (words, alas) a very good book, much better than Levitt's. Dr Levitt told compelling stories. Mr Harford tells compelling stories for which the major premises and major points are usually clear. Harford's book is a principles primer. Levitt assumed that his assumptions were clear as he leapt from unstated principles to observations & conclusions. Harford spells things (the externalities & asymmetries of market failure, for example) out.
  
  About government failure, Mr Harford is less clear, & he occasionally veers into a twilight zone between Pollyanna & Walter Heller, who believed that a macroeconomy could be fine-tuned & played like a Strad. Macroeconomics, of course, isn't where Harford's book is at, since he's mostly explaining the microeconomic choices of individuals & firms, but his excellent discussion of globalization is a macro construct with consequences, intended & unintended, on the sweatshop floor.
  
  Mr Harford writes well & usually makes sense. Of a staff man for the Financial Times, published on pink paper, who could ask for anything more?
  
  

• Naked Economics: Undressing the Dismal Science
• Freakonomics [Revised and Expanded]: A Rogue Economist Explores the Hidden Side of Everything
• The Logic of Life: The Rational Economics of an Irrational World
• Armchair Economist: Economics & Everyday Life
• Hidden Order: The Economics of Everyday Life