Uri Gneezy and John List
The field of economic forecasting is often the butt of jokes, being
called the modern-day equivalent to soothsaying. Economists read the
entrails of Chicago school professors, together with anecdotal
evidence, mixed into a pot with abstract theories and a large portion
of wishful thinking, attempt to predict the behaviour of markets in
order to better make business decisions. Needless to say, it's about
as effective as it sounds. Even those within the industry are aware
of the faulty methods used, as even Goldman-Sachs' chief economist
Jan Hatzius was quoted as saying that “Nobody really has a clue
[what's going to happen].” In The Why Axis, John List &
Uri Gneezy attempt to rectify this problem by getting out of the lab
and into the field, designing innovative experiments to get actual,
empirical data on how various incentives motivate behaviour in order
to solve real-world problems. They study a variety of issues,
including the influence of patriarchal culture on individual
competitiveness (dispelling the notion that women are intrinsically
less competitive than men), how best to reduce inner-city school
absenteeism caused by the threat of violence, and how to get people
to donate more to charitable causes.
The thing that surprised me most about List & Gneezy's book was
how fun it was to read. While their methods are both well-laid out
and scientifically sound, The Why Axis reads more like a travel
journal. The process of recording scientific observations is
interspersed with the wild stories, like the time Uri attempted to
cash $60,000 worth of traveller's cheques in rural India, or John's
harrowing journey into Chicago's projects (where the number of
gun-related deaths rivals the literacy rate) to get parents to sign
consent forms for their previously absent children, so they could
take part in beneficial programs. The two have a flair for not
sacrificing methodology for accessibility, and the ease of prose with
which the book is written makes it a great read for audiences from
many backgrounds.
The Why Axis is also an important book for numerous reasons.
First, it challenges the rolling train of hegemony present in the way
many businesses are run. Data is gathered and decisions are often
made a certain way simply because “that's how it's always been
done”, and with a company's bottom line, well, on the line, those
in charge are frequently resistant to a changing methods. Gneezy &
List challenge long-held assumptions across the board, from hunches
about what motivates people, to wider beliefs regarding the
antagonistic relationship between altruism and capitalism. The latter
is a persistent theme, as Gneezy & List work with individuals
like the founder of Smile Train (a non-profit that provides cleft
palate operations for children in third-world countries), and the
founders of hedge fund giant Citadel, Kenneth and Anne Griffin, to
tackle problems in health and education. Just getting to hear the
stories of these self-made millionaires working for something greater
than their bank balance is refreshing amidst the howling cynicism
that surrounds the wolves of Wall Street. All in all, Why Axis
is an uplifting read that offers new perspectives on a number of
fields, and demonstrates the important point that a lab coat and
pocket protector are not required to engage in science.
Vincent
Smith is a taoist, aspiring writer, and dyed-in-the-wool psychology
geek at the University of Guelph. You can find his writing on video
games, comics, movies, and all things geek over at The Rogue's Gallery. Check out his FB page, Vincent Smith: Writer, Scholar, Gentleman, for more musings from the dark corners of the internet. Plus the occasional cat photo.
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