No, People Are Not Rational

Tim Harford\’s new book is out next week and I\’m reading my copy (there are perks to being an econ blogger).

The Undercover Economist, his first book, sold 600,000 copies worldwide, 160,000 of them in Britain. Books based on economics are not supposed to sell that well, let alone be prominently displayed on the bestseller racks by WH Smith. Were it not for Freakonomics, by the American economists Stephen Dubner and Steven Levitt, which has sold an extraordinary 3m copies, Harford’s achievement would be even more outstanding.

His second book, The Logic of Life, is published next week by Little, Brown. Harford is one of life’s nice guys, so it is a bit of a shock to open the new book and go straight into oral sex, apparently the rational choice of American teenagers worried about Aids or abortion. But like its predecessor it is never short of interest.

The essential point is that people are indeed rational (with the sub-point that the more expert at something we are, the more rational we become. This has very interesting implications: as food shopping, for example, tends to be done by those who do it a lot then food labelling doesn\’t have to be all that simple and obvious. However, as buying a house is something that most of us do a few times at most in a lifetime then the possibility that we\’ll do something irrational is much greater.)

However, the introduction talks about living in Hackney. A not very good area of Hackney, too. And this from a man who has sold 600,000 books and cashed the royalty cheques on that number.

So humans may indeed be rational most of the time but perhaps Tim Harford isn\’t?

🙂

More on the book once the embargo is lifted.