Sex, Drugs, and Economics" –A Book Review:

Despite economists’ frequent use of graphs and figures in justifying their theories and predictions, economics has never been either an exact or an abstract science. Economics attempts to describe patterns of human behavior and human choices that often seem unpredictable and irrational, unless these choices are closely examined in their specific context. Diane Coyle’s book Sex, Drugs, and Economics uses examples as far-reaching as the sex industry, illegal drugs, and sports, as well as other unlikely sources such as the behavior of modern teenagers and popular music, to illustrate such basic economic concepts as supply and demand. Coyle suggests that, as economics attempts to explain human
Take, for example, teenagers. Classical economic wisdom holds that human beings are risk-averse and weigh the possible consequences of their actions. It seems like “most teenagers don't act like economists,” given this analysis. (19) Teens take a very different view of the likely future consequences of various options. This is because teenagers face different opportunity costs than adults do. Teens “don't suffer the same costs from sleeping off a hangover most mornings rather than holding down a regular job,” as an adult. (20) However, on some level teenagers are still operating according to rational choice theory. Their perceived balance of probabilities about future outcomes are different than adults as their levels of societal responsibilities are different, so teenagers indulge in risky behavior and place immediate gratification higher than adults as a priority.
Just because something is rational, teenage behavior shows, doesn’t mean that it is good, Coyle demonstrates in her examples—consider how government subsidies have made overproduction of foodstuffs profitable for agricultural businesses. (39) Also, some industries, like the sports industry, illustrate how economic principles do not universally apply in the same way to all industries—for example, unlike most companies, sports teams do not want a monopoly, because the purpose of the contest is what spectators pay to see in a