Over the last 20 years or so, there have been many excellent books written about economics that are very accessible and readable, meaning not dry academic prose. If you are thinking of an economic gift this holiday season, here are my top three book recommendations.
1. Freakonomics by Steven Levitt and Stephen Dubner
First published in 2005, this is the original and best readable economics book. Although much of the book is about Steven Levitt’s research, Dubner makes it come alive with characters and stories. Each chapter poses a question such as “Where have all the criminals gone?” which famously linked lower crime rates in the 1990’s to legalization of abortion in the late 1960’s and early 1970’s, amongst other factors.
2.Nudge by Richard Thaler and Cass Sunstein
Nobel prize-winning economist, Thaler teams up with lawyer Sunstein to explain how small changes in the way choices are presented to us can have big impacts on our lives. Drawing on Thaler’s research in behavioral economics, these changes are not government mandates and still leave people to make their own choices. For example, many Americans do not save enough money for their retirement but Save More for Tomorrow commits workers to increase their contributions as they get pay raises, often coupled with automatic enrollment. Both decisions are voluntary and reversible and substantially increase saving.
3. Moneyball by Michael Lewis
The book is better than the movie! No really, if you have seen the movie with Brad Pitt, you have to read the book about how the Oakland Athletics baseball team used data analytics to buy undervalued players and compete despite a much lower payroll than other big baseball teams. Data analytics is not necessarily what people think of when they mention economics, but when I go to academic conferences, the big tech firms such as Amazon are always trying to recruit economists to analyze their data and consumer behavior.
Here are some other recommendations:
Predictably Irrational by Dan Ariely
People don’t behave as predicted by rational economic theory and these behaviors are systematic and predictable.
The Undoing Project: A Friendship that Changed our Minds by Michael Lewis
A readable story of the pioneers of behavioral economics, Daniel Kahneman and Amos Tversky, who were actually psychologists.
Everybody Lies by Seth Stephens-Davidowitz
Recommended to me by a former student, Stephens-Davidowitz uses internet data to distinguish what we say from what we do.
Super Crunchers by Ian Ayers
Examines the benefits and risks of making decisions based on big data and algorithms.