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Econ books  Get inspiration about brilliant popular science books! New posts every week 📚

Here are two examples of what “a field guide to lies and statistics” by Daniel Levitin is about.
GIGO: garbage in garbage out. When the data is flawed, the conclusions drawn are not much worth.

When someone makes a claim about for example the rate of suicides among gay teenagers, we should not accept it without hesitation but ask: how can someone know this? It’s not like it’s possible to determine the sexuality via a autopsy. This doesn’t mean we always should reject claims on matters of this kind, but that we should at least think critically.

The second example concerns the way a lack of understanding of probability can be disastrous in some situations, such as the legal world and that an expert in paediatrics isn’t necessarily an expert in epidemiology or statistics.

#afieldguidetolies #afieldguidetoliesandstatistics #daniellevitin #statistics #datascience #probability #economics #thinkingfastandslow #danielkhaneman #mathematics #bayesianstatistics #bayesrule

A FIELD GUIDE TO LIES AND STATISTICS - Daniel Levetin

Some time ago I wrote about “How to lie with statistics”, by Darrell Huff. It’s a nice short book on some of the basics in statistics and the traps and tricks to be vary about. I would say that this book by Levetin is pretty much an upgraded version of that book!
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While “how to lie with statistics” only discuss the ways statistics and graphs can deceive and mislead, this book goes deeper on that subject, but it also explains how the phrasing of words can deceive and why. In the third section, Levetin goes into the basics of the scientific method as well.
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One shouldn’t expect to become an expert on the subjects in this book, but it’s a good introduction and include a lot of references for further reading for the interested. It is after all a popular science book - not a text book, and it’s full of interesting and enlightening stories which makes it easy to read.
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(My favourite part is the one of probabilities where he explain bayes’ theorem 💛)
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#afieldguidetoliesandstatistics #daniellevitin #statistics

Here are some statistics I found interesting: while conventional wisdom tell us that with the internet (and in particular social media) have segregated us politically, by making it possible for us to filter out people with differing views from our feeds. It might be true, though the data can’t confirm this, instead, we are more likely to meet someone with opposite views online than offline. (pages 140, 141, 142 and 144)

Having more data isn’t always better. The usefulness of big data isn’t that it necessarily will provide better answers to the same questions.

Instead, big data enables us to ask new kinds of questions. For example, when we have a lot of data, it’s possible to compare very narrowly specified groups based on demographics, preferences or perhaps geography. There are also completely new types of data that can be used such as google search data, which again allows us to answer completely new question.

#economics #everybodylies #sethstephensdavidowitz #datascience #bigdata

EVERYBODY LIES - Seth Stephens-Davidowitz

This book is very similar to ‘freakonomics’ by Levitt and Dubner, which show how creative researchers can provide interesting answers to quirky questions by thinking out of the box. This book does very much the same thing with the message that big data will revolutionize social science research in the years ahead.

One source of data that Seth especially points to is Google search data. While surveys are unreliable because people don’t tell the truth (why would they, there’s no incentive to do so), the traces left behind from their online activities can tell us what they really think and feel. With the tools of data science, that kind of data can tell us how racism can be combated, how many people are gay, what makes a story go viral and so so much more.

The research described in this book is clever, interesting and it has me excited for what research will be done in the future! My favourite chapter is the sixth, where Seth describes how big data will allow us to conduct new types of experiments, and he goes onto explain how controlled trial experiments work and why it is the golden standard of research design. Great stuff!

#statistics #datascience #economics #research #economics #socialscience #bigdata #econometrics #everybodylies #sethstephensdavidowitz

If the market mechanism is efficient in allocating resources in the economy, then why do firms exist? Inside firms, there’s no trade, instead they are mini command economies.

David Friedman explains in “hidden order” that firms exist because of transaction costs. An economy without firms - where every individual only exchanged with other individuals for what they could produce and what they wanted to consume - wouldn’t be very efficient.

Competition between firms ensure that efficient companies thrive and inefficient firms die, so that in the end the whole economy os efficient.

Excerpts from hidden order, by David Friedman, pages 111, 113 and 114 #hiddenorder #davidfriedman #economics #economy #marketeconomy #transactioncosts

HIDDEN ORDER: THE ECONOMICS OF EVERYDAY LIFE - David Friedman
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Compared to other popular economics books, this one stands out in a couple of ways. Friedman starts with the basics on how the price is set for a single good and slowly builds the whole economy where many consumers and producers interact. Eventually he adds on complexities such as why firms exist, and how evolving technology and the uncertainty of the world changes the economic analysis in interesting ways. It really is a great way to get the big picture on the economy.
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Friedman don’t refrain from using some mathematics when explaining economic concepts, for this reason I wouldn’t recommend this to someone who haven’t read any economics books before. But math is a really important part when economists create models of human behaviour, so for this reason I’d say it’s a great book for someone who is interested in learning more than just the most basics. I wish I’d read this back when I was studying the introductory economics course, as it pretty much cover all of that stuff, but in a more pedagogical way.
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Lastly, I want to say that Friedman is very good at acknowledging not only how and why the market is imperfect but also when, why and how politics can fail to correct the flaws of the market. There are also a tonne of great references for further reading for the curious one.
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#hiddenorder #davidfriedman #economics

Excerpts from ”The social order of the underworld: How prison gangs govern the American penal system” by David Skarbek

This is a book taking a look at the prison system in America with the economists glasses. It provides answers to questions such as why prison gangs started to develop inside correctional facilities in the USA in the 1950s. What was it that made “the (convict) code”(norm based governance) disappear and be replaced by prison gangs?

Skarbek explain that prison gangs supply “governance institutions”, for example by providing protection for its members and facilitate trade between inmates.

It’s a clever book, highly recommended for the interested in areas of political economy or political science.

THE SOCIAL ORDER OF THE UNDERWORLD - David Skarbek
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The prison system, at least in the US, is pretty much its own separate society. Even though prisoners can’t rely on the formal legal and social institutions of the outside world to promote social order and economic activity. They have their own set of governance institutions that prevent chaos.
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Before the 1950s, “The convict code” served this purpose. But as the number of incarcerated people rose, it broke down and instead prison gangs emerged in its place.
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If you are curious in political economy, studying politics with the use of the economic science, then this is an awesome book for you.
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It’s more academic than some other books I’ve recommended that deal with similar subjects such as “Narconomics” (about politics and economics of drug cartels) and “The invisible hook” (about politics and economics of pirate societies). If you are looking for some light reading in the sun, perhaps those are easier to start with.
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#thesocialorderoftheunderworld #davidskarbek #economics #politicalscience #governance #politicaleconomy

What reasoning is behind the claim that “more sex is safer sex” which is the title of this economics book? Steven E Landsburg definitely proves that economics isn’t just about analysing production and consumption in strict terms, but that economics can be used to analyse all kinds of issues about human behaviour and society.
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When sexually conservatives increase their sexual activities by moderate amounts, they do the rest of us a favour because the risk of having sex with someone with an STD is then lower. Cautious Martin however doesn’t reap all the benefits from him having more sex, so he will not pay enough effort to find those sexual partners. Instead, it’s his sexual partners and their future sexual partners who would benefit.
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As Landsburg writes: “chastity pollutes the sexual environment by reducing the fraction of relatively safe partners in the dating pool.”

MORE SEX IS SAFER SEX - Steven E. Landsburg
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I’ve posted about his book “the armchair economist” which is up to be about how incentives matter for how people behave (I can highly recommend it), this book is about the concept economists call externalities.
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Landsburg sums it up like this: ”Things tend to work out best when people have to live with the consequences of their own behaviour, or, to put it another way, things tends to work poorly when the consequences of our actions spill over onto other people.”
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If you’ve studied an introductory course in economics, pollution is probably the go to illustration of an externality - when you pollute, others are affected so you don’t bear the full cost of your action.
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In this book, Landsburg demonstrate that concept of externalities is useful to analyse so many aspects of society, from the justice system and politics to the spreading of sexually transmitted diseases and the generosity of saving money.
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This is probably one of the best books I’ve posted here so far. Highly recommended!
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#moresexissafersex #stevenlandsburg #economicsstudent #economics #externalities

How come people are okey stealing office supply, but they wouldn’t if it instead was money of the same value. Isn’t that weird?
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Ariely writes in one of his articles that “People like to think of themselves as honest. However, dishonesty pays—and it often pays well. How do people resolve this tension? This research shows that people behave dishonestly enough to profit but honestly enough to delude themselves of their own integrity.” (Ariely et al, 2008)
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There are a lot of norms and customs that from the look of it seem irrational or wasteful. Spending a fortune on a wedding ring could count as one of them. Researchers have found numerous ways in which people don’t act completely rationally, but everything that seems irrational isn’t necessary so.
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dismissing behaviours as irrational rarely help us understand why such practices spread in society or why they persist over time. A useful way of thinking about such puzzles is instead to say: “why would completely rational individuals behave this way?” In the case of expensive wedding rings, the wasteful spending could be a way to signal love and care.
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#behaviouraleconomicssavedmydog #behaviouraleconomics #economist

BEHAVIOURAL ECONOMICS SAVED MY DOG - Dan Ariely
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This book is a collection of Dan Arielys Wall Street journals advice column “Ask Ariely”. You won’t learn much about economics from this book, but it’s witty and has humour.
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I think the most disappointing part is that the title of this book is never explained. I was honestly curious to know how the field of behavioural economics saved his dog.
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Behavioural economics is a sub field of economics, which studies the ways we don’t always behave fully rationally. People are “predictably irrational” to quote the title of Dan Ariely’s earlier book.
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For example, when people evaluate how much they appreciate or enjoy an experience, they tend to overemphasise the ending of that experience. The farewell is more important than the hello when you go on a date or a job interview for example. And if a book leave out explaining its title, which people won’t realise until the last page, that will diminish the readers impression of the book. Just a suggestion for Ariely’s publisher.
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#behaviouraleconomicssavedmydog #behaviouraleconomics #danariely #economics

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