Bring Your Questions for the Undercover Economist

DESCRIPTIONPhoto: Fran Monks Tim Harford

If the financial crisis has proven anything, it’s that you should ignore the advice of most economists.

Most economists, that is.

And then there’s Tim Harford, who traffics in an entirely different sort of advice-giving: the old-fashioned, Dear Abby kind, which he dispenses regularly in the Financial Times. In his book-writing, Harford is best known as the Undercover Economist; at the FT, he goes by Dear Economist. His latest book combines the two: Dear Undercover Economist.

He explains why an economist is actually a perfect choice to advise people on their daily travails: “The economist’s instinct to strip away social niceties and turn messy problems into simple abstractions produces just the kind of no-nonsense counsel we expect from any good advice column.”

Here’s one example from the new book:

Dear Economist,

My favorite table at the local pub is getting too crowded. A few of us sit down for a few drinks. Then, as strangers come and join us one by one, there’s hardly any room to bend your elbow. Why does this happen, and what can we do about it?

Your Sincerely,
George Pollitt, Buckinghamshire, UK

Dear Mr. Pollitt,

The solution is simplicity itself — and it is also a tradition that I am surprised you are not upholding. Each new companion should pay an entry fee in compensation to the others — traditionally, one pint per person. This elegant solution ensures that incumbent drinkers are compensated for giving up space. It also ensures that the more crowded the table is, the less tempting it is to join it.

Your round,
The Undercover Economist

And another:

Dear Economist,
I’m looking for “the one.” Is he out there?

Yours,
Ruth, Barcelona, Spain

Dear Ruth,

Marriage offers economies of scale in production. … husband and wife can each specialize in different skills. … I fail to see why you cannot realize these economies of scale with almost anyone. … The real question, then, is whether you can stand the person you marry enough to enjoy these efficiencies. [The economists Michele Belot and Marco Francesconi] examined data from a speed dating company … The more intriguing finding happened when pickings were scarce. Women “ticked” about 10 percent of men as worthy of further investigation, regardless of the quality of a particular crop. My conclusion: even when there is little to be lost from maintaining standards, people are very quick to lower them. My advice: do likewise.

Yours pragmatically,
The Undercover Economist

Harford (who, we should say, is a longtime friend of Freakonomics) has offered to field “Dear Economist” questions from our readers. I suspect you are better-positioned to deluge him with challenging queries than the readers of any other blog in the universe. So have your way with him and we’ll post his answers in short course.

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  1. brian says:

    This may be a question better asked for the physicists here, but at what point, from a gasoline utilization perspective, is it more prudent for one to actually use air conditioning in a car, versus put the windows down? There has to be a point of diminishing returns due to a drag effect. They offer a similar (though not the same) benefits. So, what MPH? Anybody know? Let’s assume a 2010 Toyota Camry, with four windows and a sunroof, all down.

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  2. JER says:

    Dear UE:

    I have a headache. Should I take two aspirin, or simply cut it off?

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  3. RandFan says:

    I have always found the Freakonomics way of seeing the world as refreshing and illuminating. As a clinical psychologist trained in the Cognitive-Behavioral school, I have always thought that economics had much to offer my discipline. In fact, I am more convinced than ever that most of the best psychologists the world has ever known were economists (and with the advent of “behavioral finance” perhaps the converse is true as well). I think it only natural, then, that we begin to see a melding of our two professions. However, I’m not sure that the title “Clinical Freakonomic Psychologist” will fit on my business card.

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  4. Dave says:

    Here’s a problem I’ve been wondering about:

    I am sharing a 2 bedroom, 2 ba. apartment with a roommate. The rooms are unequal; there is a much larger master bedroom with an attached full bathroom and a second bedroom with a full bathroom in the hall.

    The question concerns room assignment and appropriate splitting of rent. Total rent is fixed (say $1300). I would like to come up with a process to determine who gets which bedroom/bathroom and a split of the rent which is appropriate, meaning that

    1. group utility is maximized AND
    2. rent is split “fairly” (perhaps differences between WTP and actual payment should be equalized? open to other possibilities)

    Thanks!

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  5. Brooks says:

    Dear Undercover Economist,

    I have a bachelors degree in economics, graduated in 2006, am 25, and have a job in finance, but also now am currently back in school to get another bachelors degree in Geo-engineering. My immediate family is very supportive, but I am surprised to see most people almost incredulous that I would I would move “laterally” and not go to business school or law school. I as an economist at heart I look at the utility of the situation and see my decision as a no-brainer even without considering my interests. That is more job openings, 1/4 as much money for tuition, similar incomes, ability to work internationally, etc…

    So then why are so many people still pouring money and time into law schools and business schools when the benefits relative to costs in this economic climate seem marginal at best. This leads to the question of why don’t people look at America’s lack of scientists and engineers with numerous job openings and flock to get the education to fill those openings as is happening in nursing.

    I’m happy for the lack of competition, but why don’t people seem to consider many of the economic benefits and costs when they consider further education.

    Thanks,
    Brooks in SLC

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  6. BA says:

    Hi. I have a lot of stuff. I find it’s really hard to throw things out – I usually feel like I’ll eventually need it. From that statement, you can see I overestimate the probability (‘eventually’) and the utility (‘need’). Over time, the cost grows as I accumulate more things; I require more space (financial cost), more upkeep (time cost) and also things are more cluttered (quality cost). Yet, this simply cost-benefit analysis doesn’t persuade me. Suggestions?

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  7. Brent says:

    GW,
    You forget one historical aspect of economics….stealing. If the desk is effectively empty and the owners are rarely there, simply use the desk until someone says something. If you have locked storage you need and the owner has the key then perhaps you can find alternative storage solutions. That may be a bit of a hassle, but probably better than no desk at all. In this case it seems the benifits of stealing a desk would outweigh the risk of being *caught*

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  8. A3k says:

    Dave,

    You and your roommate should undertake a blind auction. Each of you writes down an amount that the larger room is worth to you and that you will agree to pay if you win the auction. Then open the bids and the higher bid wins.

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