Dear Undercover Economist

SHOULD a woman fake an orgasm?

Should a husband be expected to leave the toilet seat down, or, with gravity on her side, does it make more sense to leave it to the man’s wife? Should a young couple cut an eight-month, round-the-world sabbatical short to return home for a friend’s wedding?

These are just some of the intriguing questions that Tim Harford tries to solve in his Dear Economist column in the Financial Times.

Harford – who tutored at University College Cork in the mid-1990s, and sold 170,000 copies of his previous pop economics book, The Logic of Life – has gathered the column’s best letters together in a collection entitled Dear Undercover Economist.

You’ll be left agape at some of the letters; some merely confound because of their audacious practicality, like Harford’s favourite: “I am 74, vigorous, wealthy and boringly married. My girlfriend of eight years, who is 37, has found a man of her own age of moderate means. She has assets of £300,000 and a salary of about £50,000. I had intended to give her £250,000 and would still do so if she continued a discreet relationship with me. What do you think?”

In advising this lovelorn man, Harford invokes, first, a Milton Friedman hypothesis, which goes through the financial implications of the income his “gift” would generate in perpetuity, which would only be a modest sum compared to her salary. He then warns the man about the difficulty of enforcing a financial contract, before concluding that he should continue with the formula that has served him well for eight years: keep hold of his money and turn on the charm.

“Who out there writes these letters?” says Harford, rhetorically.

“I had another one, recently. It’s not in the book. A guy wrote in to say: ‘my wife wants me to have a vasectomy and I’m not that keen. We’re not really having as much sex as I would like. We’re only having it about once a month. I’d like it, maybe, three times a week. She says that if I don’t have the vasectomy, she’s going to stop having sex with me completely. I think that she should use a positive incentive; that if I have a vasectomy, she’ll have sex with me three times a week. So what should I do’?”

“Some people think that I make that kind of thing up, but you can’t make that kind of thing up. I gave him the best advice that I could. I told him his biggest problem was that after the vasectomy how does he know that she’s going to fulfil any of her promises. He needs to get his payment up front, before the vasectomy, so I suggested that they have sex 450 times over the next year, and then he has the vasectomy, so he’d basically be getting his payment in advance. I don’t know whether they’re going to take my advice, but I actually think that if they did take my advice they might find that they like each other a bit more than they seem to up to now.”

As you might have guessed – even from only a cursory introduction to the letters that Harford has received – sex is pivotal to people’s well-being, as has been confirmed by a study by Nobel laureate, Danny Kahneman, which Harford references, of a large sample of working women’s lifestyles and feelings.

Exercise, food, prayer and socialising also make people happier, it seems. Commuting makes people dejected, as does, unsurprisingly, divorce (though not as much as being separated but not divorced) and unemployment. Losing your job and a third of your income, notes Harford, is four times more depressing than just losing the income.

In order to be happy, Harford says, the advice is clear: “first, don’t make career choices that jeopardise your marriage; second, a secure job with moderate pay will make you happier than a shaky job with high pay. Finally, form low expectations. People with a high-earning peer group, women whose sisters marry rich men, and people with a lot of education, but little income, are all miserable.”

Harford, who has been writing his Undercover Economist for five years, says that he has even taken on a lesson or two from his study of behavioural economics.

“This is a totally trivial result, but I like it,” he says. “It has to do with ordering speciality beers, but I think it carries over to food and all kinds of things, based on an experiment which was done twice: once in America and once in Hong Kong. In America, the people who ordered first affected the decisions of the people who ordered later – the people who ordered later would try and avoid duplicating what had already been ordered. They felt that they shouldn’t copy what had gone before, but they ended up not liking their choice as much.”

“In Hong Kong, you got the reverse, but really with the same result. People tried to copy what the first person ordered. Again, they liked what they ordered less. In both cases, you’ve got people who are socially conditioned. In America, they’re trying to avoid doing the same thing; in Hong Kong they’re trying to do the same thing, but either way they’re choosing their beer for a social reason and then they don’t like what they chose.”

“It’s a tiny, tiny little thing, but it affects how I behave every time I go to a restaurant. Now, I think to myself ‘I don’t want to be affected by the decisions other people make’. Also, I don’t want to spoil their meal by ordering first and then having them avoid what I’ve chosen, so I always make up my mind and then order last, but I never change my mind based on what other people have ordered because that’s a mug’s game. You choose what you’re going to like.”