The Undercover Economist
Tim Harford, Little Brown, 2006, 278 pages, £12.99.

Tim Harford writes the weekly ‘Dear Economist’ and ‘Undercover Economist’ in the Financial Times Saturday Magazine, and has also extended his ‘franchise’ to BBC television. This book, which is not a compendium of his articles, is an entertaining account of how economic principles can be applied directly to a number of everyday situations. He has a knack of making (some) economics sound easy without lecturing, though he may be accused of over-simplifying. As a result readers of this journal may feel that this light-hearted tract is beneath them because they know it all, and more besides. However, one wonders, for example, how many professional economists ever consider the ‘successful’ pricing policy of some of the contemporary coffee bars to be a kind of virility test to flush out what the customer is willing to pay – they offer the choice of a basic coffee with no frills or a not very dissimilar cup with some bells and whistles, produced at little extra cost to the retailer but charged with a generously higher margin, or as he puts it, applying complex and subtle strategies to get us to pay more for the goods than we need to, even though cheaper alternatives are available – or put more bluntly, ‘what the market will bear’, smoking out customers who are insensitive to price.

Topics that receive the Harford treatment range quite widely from those that impact on the individual – supermarkets, public vs private transport, the environment, healthcare, the stock market, game theory and gambling – to larger national and international issues like China and globalisation. His achievement is to present some basic economic principles in an easy-to-read style which de-obfuscates the ‘dismal science’. This is not the kind of book that appears all that often, though some may compare it with Stephen Levitt’s Freakonomics. Would that Harford’s contribution might reach the same level of popularity by featuring on bookshops’ Best Seller shelves.