There is an old joke about economics being accounting for the numerically challenged. Like many such jokes it contains a germ of truth in as much as that economics is largely theoretical and vague whereas accounting is very practical and precise. While accounting focusses on measuring the financial performance of individuals and companies, economics is more academic and encompasses a broader view of the world, seeking to identify relationships between activity and outputs. Many UK politicians have a grounding in economics. One of the main challenges of economics is (in another old joke) that if you ask two economists to solve a problem they will come up with at least three answers. This is not helpful for those trying to formulate policy, nor for the members of their societies.
Recently a new branch of economics has evolved; field economics, which is largely the creation of the authors of this book, Uri Gneezy and John List. Their work inspired Steve Levitt of “Freakonomics” fame. It differs from classic economics in being based upon experiments with real people who are unaware that they are part of an experiment. This gives its results great strength, as there is data to support every opinion. This book is essentially the story of some of their more remarkable experiments.
After an opening chapter which explains the concepts of using economic incentives to alter peoples behaviours and identifies some of the pitfalls the book then recounts a series of problems that the authors have worked on. The list included increasing charitable giving, gender equality, education and discrimination – not easy subjects and not ones that would all be immediately obvious ones to be solved by economists.
The approach does get a little repetitive and is relentlessly liberal American in outlook and language. That said, it is an easy read and one is carried along quite effortlessly. The odd figure is a jolt to a European – the casual reality of school shootings in Chicago Heights being one. However the authors’ pragmatic approach to motivating students clearly worked and is food for thought for any who bemoan the problems that beset education in the UK.
By the end of the book the reader will have gained an understanding of how field economics might help them, whether as a parent or businessman, and a slight concern that such a straightforward, evidence based approach has taken so long to evolve in a subject that seeks to inform both government and commerce.
This review first appeared on the Army Rumour Service http://www.arrse.co.uk and appears hear with their kind consent.