There has been a spate of economically related popular, non-fiction books of late. But Super Crunchers by Ian Ayres is the pick of the bunch. It documents the increased use of large data-sets to uncover various facts about the world in policy circles, academia and even business. Put simply, with some careful thought, randomised trials can be conducted at the click of a computer key, allowing falsifiable hypotheses to be tested and challenge conventional wisdom.
The book is written in a journalistic more than an education style. The chief characters — the Super Crunchers — are portrayed as ‘super’ heroes. It is a bit of a stretch — I have met most of these people — to think of them this way but then again who am I to object to injecting some glamour into economics and econometrics. So we read about an ‘impish’ Joel Waldfogel who found out what prison sentences actually did to criminality; his colleague, the ponytailed Australian, Justin Wolfers, who uncovered seemingly bet rigging in basketball when preparing a class for MBA students; and the amusing Ben Polak who heroically used Bayes rule to work out what obstetricians should be telling their patients about risky tests. There is even an anti-hero but I dare not write about that one.
This book is essential reading for all business and economics students starting out. While Freakonomics has caught the limelight, Super Crunchers highlights the stuff that will really be relevant to day to day practice in economics. I can’t recommend it highly enough.