Tuesday, October 28, 2008

The Economic Naturalist - Why Economics Explains Almost Everything

Wow ! Another books about economics yet again ! I guess this is my 3rd title I've read after Freakanomics and The Undercover Economics. Both are equally good and makes me understand about how so much thing are related to economics than I initially thought. Why pick up this book you may ask ? I guess is the questions that were mentioned on the title of the book. As curiosity kills a cat, I decided to pick up the book from the MPH warehouse sales last weekend.

I was intrigued ! I've finished the book within 3 days ! What a great read. The book satisfy a lot about life interesting trivia from aluminum cans to wedding dress.

Unlike Freakanomics where incentive was one of the key themes, this book is more balanced in covering the broad topics in economics. The book is structured mostly via collection of Q & A with additional note from the author to reinforce the subject. All those questions is a story by itself. Unlike Freakanomics which only explains only few of the interesting story, there's bound to be a lot of story you can find out here. The book is a compilation of essays submitted by the student of Robert H Frank while he's teaching economics course in the university.

Main theme
1. Economics of product design - Cost/Benefit trade off in can, milk carton, men/women clothing
2. Economics of supply and demand - How things may sold cheaper than the cost to produce
3. Economics of wages/salary - Income inequality in gender to higher price of doing same thing in different states
4. Economics of discount pricing - How company adopt different sale price in attracting different crowd of people to make maximum profit. Examples include bus fare, airline tickets, concert tickets to Black Apple laptop.
5. The divergence of social and self interest (Economics arms race) - How animals/females do more exaggerating thing to get more attention.
6. Ownership Myth - Why different ownership of goods, animals, land etc have particular effect on you
7. Market trend - How subtle signal on product may affect the behaviour of your action in buy/spend/sell goods
8. International economics - How different country and culture have differences towards goods
9. Psychology and economics in action - How psychology actually affect our attitudes towards economics even though the benefit outstrip the logic.
10. Economics of personal relationship - How relationship from courting to marriage actually have economic scene behind it.

Interesting economics principle
No cash on the table - Price of gold in the two cities generally will not differ by more than the cost of shipping the stuff from one to the other

All in all the book is fun to read and easy to understand. The book appeals to those who would like to understand more about economics without getting into nitty gritty detail of graphs and formulas. I would like to warn people out there that reading this book may cause you to fall in love to economics even though the course taught in university was not at all interesting as this. Consider yourself warned on this !I'm sure you'll be starting to share those story inside to your family, friends and your love ones. I rate this book a 8.5 out of 10.


Pranav said...

Vic, just a suggestion......it will be better if you can share cost of book as general info.
-- this blog is rocking!!! I am also reading some good books specially by Indian authors and related to Indian economy/companies.
Any good read on current financial crisis?

Victor AY said...

Hi Pranav,

Book cost differ from country to country. I'll try to post that in local currency.

Do recommend those that are good to read from your country.

Some good title are on current financial crisis are
1. Against the Gods - The remarkable story of risk by Peter Bernstein
2. The Subprime Solution by Robert J. Shiller (Princeton)