“The Logic Of

Life”
~ Tim Harford
~
“A book that forever changes the way
you look at things”
(BBC Economics
 Tim Harford
(1973)
An English economist and journalist.
• 2 economic books:
– “The Undercover Economist” (2005)
– “The Logic Of Life” (2008)
• The presenter of the BBC TV series
– “Trust me, I’m Economist”
• Writer of “Dear Economist” for “The
Financial Times”
 Rational
Choices
• The Rational Economics of an
Irrational World

• Life often seems to defy logic, but in

fact, according to Tim Harford,
everything that we concern as unlogical
does comply with economic logic.
 When the costs or
benefits of something
change, people change
their behavior.
 Oral sex
• Between 1994 and 2004: young people between
ages 12-24:
– Boys: 16% -> 32%
– Girls: 14% -> 38%

• Professor Jonathan Zenilman, expert at John

Hopkins University on sexual transmitted
diseases: “Oral sex is definitely in vogue”

• Regular sex is more costly than it used to be,

because of the spread of HIV / AIDS.
 Rational people
respond to
incentives.
They consider
their budget.
And they are
mindful of future
 You
buy a
Honda
instead
=> People respond to
incentives
Price of
Toyota
rises
 Your
income rises

People consider
their budget.
You plump
for a Ferrari
 You know that the loan
to buy that Ferrari must
eventually be repaid

=> People are mindful

of future consequences
 People are
motivated by all
kinds of human
emotions.
… which are not
financial, but our
responses to them are
As Tim Harford has mentioned in the book:

“For almost teenagers, planning

and calculating and strategising
about matters of the heart go on
as many as about the matters of
the wallet.”
THANK YOU

MAGDA NGUYEN