October 15, 2013
Jack Covert Selects: Jack Covert Selects - The Why Axis
The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life by Uri Gneezy & John List, PublicAffairs, 288 pages, $26.99, Hardcover, October 2013, ISBN 9781610393119
Advantages are welcome in any economy, regardless of size or complexity, but the stakes are higher in today’s increasingly unstable and turbulent global economy. How can you take yesterday’s and today’s success and extend it over the next five or ten years? Any company and its hired analysts can study market data and make assertions about correlation between this data or that hoping to find formulas for sustainable success, but analysis can prove a waste of time if your analysts can’t go further than correlation. The question “why?” can help forge the path to sustainable excellence.
The answers to “why?” might seem obvious sometimes, but the obvious answers might also be wrong. Finding the hidden motivators can be difficult work. This nearly mystical terrain is what Uri Gneezy and John List explore and unearth in their new book, The Why Axis. The Why Axis proves to be more than a clever double entendre aimed at statisticians. Throughout the book, Gneezy and List take on a handful of big, real-world questions, incessantly asking “why?” and never settling for easy answers. Each chapter begins with a question—Chapter One, for instance, asks “How Can You Get People to Do What You Want?”—and works toward the answer by citing anecdotes, research, and data from various studies. The result is a series of intriguing stories and big-picture lessons we can all use in our understanding of the “economics of everyday life.” And, as you’ll find in Chapter One and throughout The Why Axis, offering appropriate incentives often leads to the answer of that question “why?” and can help you reach your goal.
In Chapter Six, Gneezy and List tackle one of the book’s larger, more central issues: discrimination. Citing economist Gary Becker’s book The Economics of Discrimination as a point of departure, The Why Axis notes a decrease in instances of what Becker called “animus” discrimination, and in its place the rise of economic discrimination. Gneezy and List mention simple examples such as health insurance companies charging higher premiums for smokers than non-smokers, and the fact that male drivers pay “as much as 20 percent more for car insurance than a woman does for identical insurance.” As these and other examples demonstrate, the why of economic discrimination, as nefarious as it may be, does not stem from “animus” or hate, but from simple calculations—the why is simply money. If we feel we must address it, that understanding is critical.
Without the accurate understanding of why people and the economies they collectively form behave the way they do, moving that behavior in a new direction will be a game of chance. The Why Axis works as a guide to demystifying motives and shows us how to incentivize behavior toward better, more productive results.