The Undercover Economist

The Undercover Economist is essentially an economics book, written by an Oxford-educated economist (Tim Harford) who, according to himself, intends to show its readers the world as viewed by an economist. Given this description, the book might appear to be a very boring book, filled with discussions on abstract stuff like monetary policies and other things typically associated with economics.

That impression, however, would be totally wrong.

Starting the book by wondering about the price of a cup of coffee at London's Waterloo Station, Harford proceeds to show how concepts such as scarcity, price discrimination, externality, adverse selection, and comparative advantage comes into play in our everyday life. With an engaging writing style, he presents case studies from a wide range of topics -- some big, some small -- ranging from air pollution due to traffic to things like state of development in some third-world countries.

However, Harford does not simply provide a possible explanation on how things may be working according to economic principles. He also provides relevant data and references to related works of other economists, making his already strong analyses more convincing. At times, he shows how ideas in “classic” works in the field (such as David Ricardo's analysis on scarcity) are still useful in modern context while also showing the caveats. Further, when applicable, he also explores possibilities to apply economics principles to improve an existing “inefficient” situation (such as the state of health care in US and UK), and specific examples where such approaches have worked.

Overall, as Steven Levitt's comment quoted on the paperback edition's cover, The Undercover Economist “brings the power of economics to life”. Its thorough explanation on various aspects of economics makes it very useful as some kind of introductory course to economics, while its writing style and wealth of real-world examples will keep readers engaged throughout. Verdict: Highly recommended.