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Economic Theories For Everyday Happenings

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By KEVIN WALKER

Published: February 24, 2008

"The Logic of Life," by Tim Harford (Random House, $25)

Tim Harford, a British economist and author of "The Underground Economist," returns with another look at the world through the lens of economics. The overarching theory is there really is a rationale for the seemingly irrational things people do.

Harford opens with an explanation - stop reading if you are easily offended - on why the increase in oral sex among teens is a rational trend. One (particularly a parent) might prefer less or no sex among teens, but history shows that is unlikely to happen. Given that, the new trend is rational once you factor in that such acts are less likely to transmit disease and have a zero chance of leading to pregnancy.

Later, he explains why it makes sense your boss is overpaid: It makes the job more enticing for subordinates, who will work harder in hopes of one day getting that high-paying job. He explains that people who commit petty crimes know (consciously or unconsciously) that the odds of success are with them.

He explains how a small minority (like the sugar industry) get millions in government subsidies and why it makes sense that we don't fight them (because it would cost more than simply paying the subsidies, which is only pennies per person). It often is not what one wants to hear.

Harford writes that "economists hope that their way of simplifying the world will provide more insight than it destroys." Certainly it provides provocative reading. And while he tackles difficult subjects, Harford remains funny and readable.

Kevin Walker writes for the Tribune and TBO.com.

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