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The Undercover Economist made for interesting reading. For me personally it was an excursion into an area I thought that a. I had no interest in and b. I remembered nothing about from my economics degree. I was actually surprised that I found some of the explanations too basic, and that apparently I did remember a fair chunk of first-year microeconomics (I actually had to resit that exam, I did so badly the first time round ;-).

The first part of the book (chapters 2 - 5) is essentially a high-level introductory course in microeconomics, except without the graphs, and with a lot of stories which pull out the relevance of microeconomics to our every-day lives. Tim Harford takes us through the theory of perfect competition (or how a perfect market would work and why it would be efficient), and then spends three chapters talking about the most common modes of market failure (scarcity power/anything that moves us away from perfect competition, externalities, and asymmetric information). He uses some interesting real-life examples to illustrate all of these: he's almost got me sold on road pricing (to be fair I was pretty sold on road pricing before that), and the example he uses for asymmetric information - the US healthcare system - is particularly powerful and relevant right now. Anyone involved in the current US healthcare debate should read chapter 5 of this book.

Part 2, or chapters 6 and 7, gives us an introduction to game theory, through the examples of the stock markets and the auctions for 3G mobile phone licenses.

The last part (chapters 8 - 10) focuses heavily on international development, covering "why poor countries are poor" (perverse incentives and lack of institutions), the benefits of globalisation, and "how China grew rich" (controlled economic liberalisation).

For a fluffly left-wing liberal like me, The Undercover Economist sometimes makes uncomfortable reading. There is a remarkably elequent defense, for instance, of sweatshops. They are, so Harford's argument, better than a whole host of alternatives available to the local population (such a scavenging on landfill sites) and they are a step up on a journey towards something better. Boycotting companies who operate sweatshops hurts the employees of those sweatshops and benefits organised labour in the West. (Harford incidentally also identifies trade unions as an example of market failure of the scarcity power/imperfect competition variety.) Uncomfortable reading indeed, yet some of the arguments are extraordinarily poweful, particularly when it comes to international development.

Probably one of the book's weakest points is glossing over some of the practicalities of implementing perfect competition. Harford admits to the three big modes of market failure and goes some way towards proposing a solution rooted in "keyhole" microeconomics - small interventions targeting the specific problem. Yet, how exactly one would implement a road pricing system which genuinely addresses all externalities generated by road transport, and who would actually get the money generated by such a system or decide how it is spent remains unexplained.

Harford also acknowledges that while markets do create the most efficient outcomes, they don't necessarily create fair outcomes. He goes some way towards proposing that fairness can be created by adjusting the starting positions and letting the market take care of the rest, but again, this is vague on practicalities.

Ultimately, Harford, like Keynes, would like economists to be "like dentists" - able to give specific advice and make specific interventions to achieve certain outcomes. And while some days I wish we could live optimally ever after in a technocracy, The Undercover Economist has actually convinced me that that is not practical.

Something else that struck me while reading the book is how quickly some parts of it have aged. Particularly the chapter on stock markets left almost no impression at all in my brain: the book was published in 2005 and in 2009 any stock market crash or financial crisis before the current one (other than the Great Depression) hardly seems worth talking about. I would actually quite like to read what Tim Harford has to say on the current crisis.

I am also a loyal listener of Tim Harford's Radio 4 show More or Less and thus was both shocked and delighted to find what could possibly be described as an instance of improper use of statistics. Have a look at the stats quoted for China's exports in chapter 8 and those in chapter 10. Colour me puzzled. ;-)

Finally, Bechdel. Yes, non-fiction, we could use the "not appliable" cop-out. However, something struck me in the final chapter. Harford devotes half a sentence to explaining how China's one-child policy has contributed to its rapid growth by freeing up women's time for work outside the home. I would absolutely love to read a Tim Harford take on the subject of women working outside the home, the challenges of childcare, and the effect all this has on the economy. Pity he didn't choose to go down that path. Thus, Bechdel fail. ( )

Well-written and interesting look at many aspects of economics and basic games theory in everyday life. Know going in, though, that he's a dedicated free-trade advocate, and while his info and analysis are excellent as far as they go, he does not put together the "scarcity" aspects at the beginning og the book with the ways globalization is reducing the number of options as companies get bigger and bigger, and options become fewer and fewer- thus leading to artificial scarcity, high prices, and artificially low wages. ( )

A better book than Freakonomics, Harford is wide-ranging without being scattershot like Levitt and Dubner. I found myself disagreeing with Harford in some places but have to admit he made me reconsider some things that I would never have expected to. Worth the read, but read with a critical eye. ( )

Good overview of economics, definitely opinionated guy, but well worth the read. Explains why trade tariffs are usually a bad idea, why buying products from 3rd world is OK and better for the world, and how to create incentives to solve problems. ( )

Good way of introducing economics to the innocent. Very clear. Opens with a excellent discussion of the economcs of coffee bars. I found the account of pricing strategies particularly interesting : how Starbucks uses price of basic cup of coffee versus price of coffee with add-ons like flavours, to get customers to reveal their price sensitivity. ( )

Tim Harford indeed explains why the rich are rich but I think his explanation of why you can never buy a decent used car holds more water than his first premise. Mr. Harford believes that truly unfettered free enterprise is self regulating and is the only way to ensure that things are bought and sold at their true value. His explanations become less and less convincing when he enters into the realm public policy on such things as health care. While he admits (and shows figures to prove) that the United States has the most expensive health care system in the world which, when compared to other system provides woeful coverage, he advances a plan of governemnt funded catastrophic care and individual private forced savings as an alternative. Certainly the recent vagaries of the stock market give many people pause to question whether government regulations should not play a role in national and international financial policies. Mr. Harford would seem to disagree. ( )

On the whole a solid book, but Tim Harford’s chapters on micro-economic behavior and game theory are far stronger than the pro-trade arguments he makes in later chapters on improving the lot of poor people around the world. I generally tend to agree with a pro-trade stance, but straw man arguments and bait-and-switch explanations aren’t going to convince anyone except the already convinced.

(Full review at my blog) ( )

Brings economics back to the individual on the street, who, after all, is the point of departure in the first place. ( )

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. ( )

Tim Harford is very talented at explaining economic theory and research. Highly recommended. ( )

Very interesting and informative book. Makes an excellent case against the US Healthcare system, and suggests that Singapore has found an appropriate balance. ( )

Pretty good -- if you liked "Freakonomics," this is more in-depth and a bit more serious, though still a bit tongue-in-cheek. ( )

Externalities: Causes/effects that are outside of an economic transaction.
Barrier to trade also hurts the country imposing it. One sector is protected but the country as a whole will be hurt.
A country should do what he does best and buy other products from countries that do them best. ( )

Similar to Freakonomics, but a bit more standard "economist" fare...

More dollars and GDP talk than the Freakonomics authors who were all over the place. (but made a superior book) ( )

Great book - certainly a though provoking eye opener as is suggested ( )

very enjoyable non-technical introduction to a number of non-trivial main concepts of economics and how they relate to one another and to phenomena that any intelligent and curious person could easily observe in her environment. it helped me piece together into a more coherent mental map ideas that I had heard before in other contexts and encouraged me to follow up with more specialized reading on some of them. I agree with some of the other reviewers that Harford's perspective often comes across as a little biased. his description of China's transportation system, for example, is at odds with what was observed during the last week of January 2008 and what I hear from my Taiwanese relatives who work there and describe road conditions as horrible. one last comment about the title: there is nothing undercover in anything Harford says or does in this book except, maybe, for his investigation of the marginal cost of producing a cappuccino in Central London. ( )

In this interesting and well written book, Harford explains how basic economics drives the world and why the cup of coffee you buy on your commute in the morning is so expensive. A quick glance at your average daily newspaper will show how a lot of people who ought to know better completely misunderstand economics and how the world works. This book is fun to read as well as easy to understand, but not patronisingly simple. ( )

Very enoyable, easy to read. You actually get to learn a few things too! ( )

I picked up a bargain priced copy of this work after having leafed through Tyler Cowen's hardback Inner Economist (waiting for the paperback version). Having studied the craft of economics, I am probably not the book's target audience. Economics has at last arrived in the pop science book section, albeit in a strange format. Just like the physics books, it sheds all elements of math and rigour: Look, no need to think, no complicated formulas. Add a snappy moniker ("freakonomics", "undercover", ...) for extra street cred. Unfortunately, these junkfood books are very low in nutritional value. The reader is only left with an illusion of understanding. Better read a textbook on microeconomics or managerial economics.

Tim Harford has written a readable book which presents economic concepts such as markets, scarcity, choices, externalities, asymmetric information, adverse selection, games, auctions, comparative advantage and free trade via household examples (coffee and beer being Harford's staples). Essentially an unconnected tour of some ideas and concepts of some Nobel prize winners from the perspective of a rich, white male.
The book has three obvious blind spots: Firstly, the good aspects of government (and government's function in a modern market economy) are hardly mentioned. Mostly, government is treated as the source of failure, waste and stupidity. While the value of an institutional framework gets a positive remark, the valuable contributions of economists to the study of government are ignored. Secondly, Harford is not interested in discussions of equality and fairness, invalidating his subtitle ("exposing why the rich are rich and the poor are poor"). Your parents determine much of your station in life. I wonder if a Harford born in Cameroon would express a similar world-view. Again, a less insular treatment would have illuminated some of the contributions of economics to the discussion of fairness and equality. Thirdly, spending his time between London and Washington DC, the author has developed a smug view about the rest of the world. Instead of belittling corrupt Africa, he might have taken his examples from corrupt Washington (federal or district, your choice). Public transport is notoriously bad in the US and the UK too. No need to go to Cameroon. He praises the US imperialistic market opening of Japan in 1854 but ignores the British gunships promoting free trade in opium a few years later. A less Panglossian worldview would make the text better.

Overall, a book I can not recommend for teaching purposes or as an introduction for beginners. Its one-sidedness does not present the full range of economics. Curiously (or to demonstrate my objections to the text), neither book nor index mention the founder of economics, Adam Smith, a professor of moral philosophy (hear, hear). The undercover economist has yet to uncover the foundations of economics. ( )

first class example that complicated concepts can be made clear if the writer knows what they are talking about. Made me wonder how these ideas could be applied to the notions of the childcare markets currently being set 'free' in england. ( )

This book is a very good overview of economics. The best thing for me is his explanation of Ricardo's theory of comparative advantage. For the first time I really understand this theory. The book is written so that it is easy to read and understand. His explanation of why China is rich is fascinating. ( )

half stating the obvious, half brainwashing propaganda economics. ( )

For someone as clueless about economics as I am, this book provides the light. Very nicely written, with material developing systematically and covering quite some breadth; this provides a very good introduction to economics to the uninitiated. It is also nicely peppered with examples of various events in history that provide further insight. Of course, while the book provides initiation, it doesn't seem to quite provide the ability for the reader to independently think of clever economic explanations and recipes of the problems that affects one's life. That would need further study.
(My review from http://www24.brinkster.com/srineet/re...) ( )

I liked it better than Freakonomics. Anecdotes were just as interesting, but the explanations were more fleshed-out. Better introduction to the principles of microeconomics. I especially liked the discussion of Starbucks pricing. ( )