Why do 24-hour convenience stores have locks on the doors?
The answer, in a word, is cost. Given that the vast majority of industrial doors are sold with locks, it is definitely cheaper to make and therefore purchase all doors the same way. This is just one example of the sorts of everyday questions that Robert Frank answers in his book The Economic Naturalist: Why Economics Explains Almost Everything (Virgin Books, 2007). The ‘naturalist ‘ in the title refers to Frank ‘s belief that economics is best grasped through real-world puzzles rather than the usual graphs and formulas ( ‘mathematical formalism ‘).
I picked up the book in Heathrow enroute to my summer holiday. It ‘s good reading, a real attempt to move economics on from its status as ‘the dismal science ‘ to something of everyday use. Which it should be. How can you take responsibility for personal or business finance if you don ‘t grasp the basics of economics?
Frank is concerned with the basics. He takes a few fundamental economic concepts like ‘opportunity cost ‘ and ‘the cost-benefit principle ‘ and plays them out in a number of everyday scenarios, looking at them from different angles. He does this with the help of questions posed to him by his students (he ‘s a teacher of economics somewhere). Here are some of my favourite quandries:
- Why do bars charge customers for water but give away free peanuts?
- Why do female models earn so much more than male models?
- Why do we leave tips for some services but not for others?
- Why do bureaucrats favour the passive voice?
- Why do lawyers spend more on cars and clothes than university professors with the same income?
- Why do humanities lectures, who should be more adept than most in their use of language, often write so unclearly?
- Why do managers tend to overestimate the efficiency of blame and underestimate the efficiency of praise?
- Why do Japanese couples send more on wedding parties than their Western counterparts?
- Why is it easier to find a partner when you already have one?
- Why are physically attractive people also more intelligent than others, on average?
- Why do companies hire temporary management consultants at premium rates rather than employing full time managers at much lower salaries?
And then there is the question of all questions:
- Why do women endure the discomfort of high heels?
Frank answers all these enquiries in a straight-forward and entertaining way, always keen to illustrate the bigger economic principles that lurk just below the surface. Highly recommended.