What do you think?
Rate this book
The Economic Way of Looking at Behavior: The Nobel Lecture
On October 13, 1992, the Royal Swedish Academy announced the award of the Nobel Prize in economic sciences to Gary S. Becker, a senior fellow at the Hoover Institution and University Professor of Economics and Sociology at the University of Chicago. In announcing the award, Gary was cited for Extending "the domain of microeconomic analysis to a wide range of human behavior and interaction, including nonmarket behavior." In the lecture he delivered as part of the 1992 Nobel Prize award ceremony, Gary discussed four topics--discrimination against minorities, crime and punishment, the development and accumulation of human capital, and the structure of families--that are emblematic of his innovative approach to the economic analysis of social issues.
- GenresEconomics
Paperback
First published January 1, 1996
79 people want to read
About the author
Gary S. Becker
47 books107 followersAmerican economist. He is a professor of economics and sociology at the University of Chicago and a professor at the Booth School of Business. He has important contributions to the family economics branch within the economics. Neoclassical analysis of family within the family economics is also called new home economics . He was awarded the Nobel Memorial Prize in Economic Sciences in 1992 and received the United States Presidential Medal of Freedom in 2007.He is currently a Rose-Marie and Jack R. Anderson senior fellow at Stanford University's Hoover Institution.
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 of 1 review
October 30, 2024
I studied this essay/ Nobel lecture during my downtimes here and there in my new job. I sent this to my work-wife to troll as always, but unexpectedly, she actually read it carefully, told me what she thought, and asked questions which gave me the shameless pleasure as always, of explaining economics.
Some random new ideas:
1) To state the obvious, Becker was a true pioneer by extending the tools of economics into classic, practical problems that might traditionally be considered the realm of sociologists. This obviously lent rich analytical power to social problems. In my view, Becker was truly the greatest microeconomist (but then I haven't read too much of the micro literature).
2) The economics of family - men and women get married because they evaluate that E(W) (married) > E(W) (stay single). However, some animals do get married in a way, and definitely do form families and tribes. Do animals perform the same sort of cost-benefit analysis?
3) Economics of family - in a marriage, the man and the woman implicitly pool their human capital and enjoy the positive spillovers (mainly because the man and the woman can each specialize in their comparative advantage). They could also engage in risk-sharing (Becker doesn't mention this, but he does mention capital 'turnover') - in a recession, the man could lose his job perhaps, and the woman could help out. Presumably, men could even be more risk-seeking and women more risk-averse, so that lends itself to a very nice risk-sharing family.
4) The economics of divorce - the same Euler equation of the decision of marriage, just in reverse. However, what happens the observed set of facts, of increased divorce rates in recent years? Becker suggests policies that redistribute wealth to the elderly (in response to the secularly aging population in developed economies) reduce the incentive for parents to invest in their children's human capital, which has intuitive spillover effects to the decline of marriage/ family as an institution. Economics is the study of incentives.
5) When men and women get married (i.e., when 2 agents trade, to generalize), a rent is indeed created and both parties engage in rent-seeking behaviour in accordance to each agent's bargaining power. Inequalities emerge when one agent has systematically higher bargaining power.
6) Somewhat skeptical of the notion that these micro insights could be extended to make international comparisons of economic output.
7) You can think of human capital (i.e., investing in your children's human capital so that they'll take care of you in your old age) as just another risky asset that bears a higher expected return. The risk is obvious - lots of people give birth to doofus children. Becker also doesn't mention the intuitive non-linear dynamics of investing in human capital - I observe many parents who place a lot of hopes in their children, but end up doting on and spoiling their kids and turning them into idiots. Higher resources devoted to investment can actively and causally yield worse returns in this asset class.
8) Leading from 7), investing in your children's human capital is IMPORTANT, if viewed from this lens, because it really is just another risky asset. It's clear that everyone should be investing in risky assets across the life-cycle, instead of just saving it and putting it into risk-free assets.
9) Human capital can be broken down into general skills and firm-specific skills. Firm-specific skills seem to make you more valuable to a company (Becker observes that workers with specific skills are less likely to quit their jobs and are the last to be laid off in recessions).
Economists study the meta behind observed phenomena. In this sense they truly are like philosophers.
Edit: Might read more essays/ papers now that I have to read them in my free time at work but still need to maintain face-time at my PC.
Some random new ideas:
1) To state the obvious, Becker was a true pioneer by extending the tools of economics into classic, practical problems that might traditionally be considered the realm of sociologists. This obviously lent rich analytical power to social problems. In my view, Becker was truly the greatest microeconomist (but then I haven't read too much of the micro literature).
2) The economics of family - men and women get married because they evaluate that E(W) (married) > E(W) (stay single). However, some animals do get married in a way, and definitely do form families and tribes. Do animals perform the same sort of cost-benefit analysis?
3) Economics of family - in a marriage, the man and the woman implicitly pool their human capital and enjoy the positive spillovers (mainly because the man and the woman can each specialize in their comparative advantage). They could also engage in risk-sharing (Becker doesn't mention this, but he does mention capital 'turnover') - in a recession, the man could lose his job perhaps, and the woman could help out. Presumably, men could even be more risk-seeking and women more risk-averse, so that lends itself to a very nice risk-sharing family.
4) The economics of divorce - the same Euler equation of the decision of marriage, just in reverse. However, what happens the observed set of facts, of increased divorce rates in recent years? Becker suggests policies that redistribute wealth to the elderly (in response to the secularly aging population in developed economies) reduce the incentive for parents to invest in their children's human capital, which has intuitive spillover effects to the decline of marriage/ family as an institution. Economics is the study of incentives.
5) When men and women get married (i.e., when 2 agents trade, to generalize), a rent is indeed created and both parties engage in rent-seeking behaviour in accordance to each agent's bargaining power. Inequalities emerge when one agent has systematically higher bargaining power.
6) Somewhat skeptical of the notion that these micro insights could be extended to make international comparisons of economic output.
7) You can think of human capital (i.e., investing in your children's human capital so that they'll take care of you in your old age) as just another risky asset that bears a higher expected return. The risk is obvious - lots of people give birth to doofus children. Becker also doesn't mention the intuitive non-linear dynamics of investing in human capital - I observe many parents who place a lot of hopes in their children, but end up doting on and spoiling their kids and turning them into idiots. Higher resources devoted to investment can actively and causally yield worse returns in this asset class.
8) Leading from 7), investing in your children's human capital is IMPORTANT, if viewed from this lens, because it really is just another risky asset. It's clear that everyone should be investing in risky assets across the life-cycle, instead of just saving it and putting it into risk-free assets.
9) Human capital can be broken down into general skills and firm-specific skills. Firm-specific skills seem to make you more valuable to a company (Becker observes that workers with specific skills are less likely to quit their jobs and are the last to be laid off in recessions).
Economists study the meta behind observed phenomena. In this sense they truly are like philosophers.
Edit: Might read more essays/ papers now that I have to read them in my free time at work but still need to maintain face-time at my PC.
Displaying 1 of 1 review