Blog: Economics in Action

What would you do with a database of the weights, measurements and life histories of fourteen thousand people? Economic historian Marco Sunder used them to relate life expectancy to Body Mass Index. He reached the surprising conclusion that slightly “overweight” people lived longer.

Nobody’s implying that healthy eating and regular exercise are bad for you. All the advice is that these are worth doing for good reasons but what Sunder found, and was borne out by subsequent medical research, was that people dieting excessively to bring their bodies into the “normal” range were decreasing their life expectancies.

This is one of many intriguing, succinct and occasionally odd economic ideas in “Economics 2.0: What the best minds in Economics can teach you about business and life,” a book released this year by economics journalists Norbert Häring and Olef Storbeck. Other topics they explore include The Economics of Beauty, Why Economists love Sports, How Bad Will the Financial Crisis Get and why Europeans were a great deal shorter in the 17th Century.

It’s not easy being a pirate on the high seas. There is always a possibility that your crew will kill you and take your share of the loot. Since piracy is criminal by definition, you can’t call on the police or courts to enforce contracts. So a pirate ship needs a way of keeping order, just as a country does.

Economist Peter T. Leeson of West Virginia University has released a working paper arguing that 17th Century pirates actually used constitutional democracy, achieving this before either the USA or England. This is is an important recurring theme in economics: how self-interested individuals can work together to achieve a common good.

Read More: An-arrgh-chy: The Law and Economics of Pirate Organization (Abstract of the paper on Social Science Research Network)

Peter T. Leeson (2007) An-arrgh-chy: The Law and Economics of Pirate Organization (full paper in PDF format)

This is a gem of an item, found through the Improbable Research blog. It’s a study of the social benefits of celebrity suicide by Samuel Cameron (an economist at the University of Bradford) and his colleagues. You may need to be at an educational institution to get the full report, but here is the abstract:

“This Commentary suggests that it is possible, from an economic perspective, that any individual artist/celebrity suicide may be of net benefit to society. Sales of the artist’s products and associated merchandise may increase after the suicide, and people, including those who were not even born at the time of the suicide, may derive value from its iconic reification, not to mention the higher value they derive from some private goods. A case study of Kurt Cobain is given to illustrate this phenomenon.”

Read more: “Artists’ Suicides as a Public Good” Archives of Suicide Research, Volume 9, Number 4, October-December 2005, pp. 389-396(8)

From the New Scientist:

“An analysis of how cells in a tumour cooperate has provided a unique insight into the evolution of cancer, and may lead to new treatments.

“It makes use of ‘game theory’ the mix of mathematics and economics that has been invaluable in understanding how cooperation can evolve in animal societies, even when individuals are selfish.

“The ‘game’ to grow a successful tumour proceeds more efficiently for all [cellls] if they cooperate, and this can occur without requiring the players to make conscious strategies.”

Read more: “Do cancer cells cooperate with each other?”, New Scientist, 28 August 2006.