I Am Not An Economist (IANAE) (DISCLAIMER: IANAE, I Am Not An Economist).

A few readers of this blog may recall how I sometimes prefix posts based on a random thought (e.g., the similarities between traffic lights and the different types of economic systems), with the infamous letters: IANAE.

The fact that I am not an economist has never stopped me from trying to think like one, or from trying to think of things (like life), from an economic point of view: opportunity cost, incentives, motives, externality and so on and so forth.

There are others who do the same. A few of these folks are 'proper' economists that have expressed, in economic terms and concepts, things that we take for granted. Folks like Tim Harford, author of: The Undercover Economist. Harford also writes the 'Dear Economist', column for the Financial Times. The Dec 28 'DE' column had this to say in response to concerns about drunks on the road during the Christmas season:

"Dear Economist,
This Christmas and new year, I expect to encounter a lot of drunks on the road. In fact, I may well be one of them. Should I feel guilty? And should I be worried?
Mr F Jones, London

Dear Mr Jones,

It has always been difficult to test the effect of alcohol on drivers let loose on the roads. The difficulty is this: if half of all crashes involve drunks, that may be because drinking impairs your driving or it may be because there are a lot of drunks on the road – and we can only guess at how many drunk drivers there are.

But the economists Steven Levitt and Jack Porter realised that it was possible to say more, by looking at how often drunk drivers crashed into each other. If 10 per cent of drivers drink, and if drunk drivers are as safe as any other kind of driver and randomly mixed among the sober drivers, then only 1 per cent of two-vehicle crashes should involve two drunks.

Drunk-on-drunk crashes are much more common than one would expect, given the number of drunk-on-sober crashes, allowing Levitt and Porter to reach firm conclusions about the risks of drink driving.

They find a very large effect. Drivers who have been drinking are seven times more likely to cause a fatal crash; those who have drunk over the legal limit (in the US) are 13 times more likely to cause a fatal crash. You might also bear in mind another finding from the paper: “The great majority of alcohol-related driving fatalities occur to the drinking drivers themselves and their passengers.” That should be sobering.

economist@ft.com"

Source: FT.com / Weekend columnists / Tim Harford - Dear Economist...

Harford's writing also appears on Slate Magazine. A recent article asks (and answers) the question: Can economics make you a better person? So, if you've got some disposable income rolling around, I suggest you consider adding The Undercover Economist, as well as Freakonomics, to your bookshelf. Both books may end up revealing things about the World that you never considered and always took for granted.

Labels: blogging, economics, life, World

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