Homer Economicus: The Simpsons and Economics.

Luccasen, R. Andrew, III

Homer Economicus: The Simpsons and Economics, edited by Joshua Hall, Stanford, CA: Stanford University Press, 2014.

Joshua Hall brings together a distinguished group of economists to explain what one can learn about economics from watching the popular television show The Simpsons. This book is intended for an audience with little or no previous exposure to economics, and includes 16 chapters on introductory topics organized into three sections. Often the book make use of character studies (imagine Bart does this, or Homes does that...), but most chapters draw on episodes from the fictional show as anecdotal but intuitive evidence to illustrate basic economic concepts presented in the chapter.

Part 1 provides an introduction to the economic way of thinking, beginning with Anthony M. Carilli's overview emphasizing concepts such as opportunity costs, scarcity and choice, and specialization. In chapter 2, Douglas Rogers and Peter J. Boettke explain the role of comparative advantage, prices, profits, and losses in organizing economic activity. While chapters 1 and 2 reference many episodes, Art Carden focuses on one episode in Chapter 3 to illustrate that people respond to incentives, but often in ways that are not intended by policymakers.

Part 2 is entitled "Money, Markets, and Government." Andrew T. Young begins this section by examining episodes of The Simpsons that illustrate the defining characteristics of money. Chapter 5 by Gregory M. Randolph reiterates the role of profits and losses in allocating scarce resources, and also discusses how barriers to market entry lead to abnormally high profits. Per L. Bylund, Christopher M. Holbrook, and Peter G. Klein draw upon several episodes to discuss entrepreneurship as a dynamic process. Diana W. Thomas provides examples of market power and barriers to entry, public goods, and asymmetric information as examples of market failure. Justin Ross continues the theme of externalities by discussing the Coase Theorem and raises questions concerning the ability of government action to improve upon market externalities. John Considine, in turn, expands on the previous chapter by citing episodes that illustrate government failure.

The topic of part 3 is "Applied Microeconomics." Focusing on the case of Kwik-E-Mart manager Apu as well as the episode "Coming to Homerica," Seth R. Gitter and Robert J. Gitter begin this section with an economic analysis of immigration. Episodes illustrating labor markets are discussed by David T. Mitchell, and topics introduced include compensating differentials, job search, and signaling. The complex market for healthcare services, including asymmetric information, third-party payers, and medical licensing is simplified for the reader by Lauren Heller. Chapter 13 uses one episode, "Homer vs. The Eighteenth Amendment," as a case study of the (unintended) effects of alcohol prohibition. Mark Thornton applies these lessons to the parallel case of drug prohibition, arguing that such prohibitions raise prices and therefore are associated with greater crime, create an incentive to produce more potent products, and does not appear to have any appreciable affect on consumption. Similarly, the economic costs and benefits of legalized casino gambling, as illustrated by "Springfield (Or, How I Stopped Worrying and Started to Love Legalized Gambling)" are explained by Douglas M. Walker and Shannon M. Kelly. Jodi Beggs tackles the topic of behavioral economics, using various episodes to demonstrate time inconsistency, narrow bracketing, reference-dependent utility, and the anchoring effect. Behavioral economists may take issue with referring to behavioral traits discussed as "irrational," as well as not delineating between biases and heuristics. The final chapter by Steven Horwitz and Stewart Dompe does reference individual episodes, but the authors point out improvements in product quality evident in the show over the last twenty years (HDTV, cell phones, and the internet) to discuss economic growth and standards of living.

The interested instructor may assign Homer Economicus as engaging supplementary reading or as a source for entertaining examples to use in class. However, a few caveats are in order. Although several examples in the book appear in previously published journals, the references to these articles are missing. Many examples can be found in a 2010 paper I coauthored with M. Kathleen Thomas entitled "Simpsonomics: Teaching Economics Using Episodes of The Simpsons" {Journal of Economic Education, Volume 41, Number 2, pp. 136-149.). If citing the book's references, one should double check the source. For example, Joshua Hall's 2010 paper with Mark Gillis entitled, "Using The Simpsons to Improve Economic Instruction through Policy Analysis" was published by this journal, The American Economist, but is listed as being published by the American Economic Review. Finally, there is not a section on macroeconomic topics. At the risk of sounding self-serving, the interested teacher can refer to another paper published by this journal (Andrew Luccasen, Michael Hammock, and M. Kathleen Thomas. 2011. "Teaching Undergraduate Macroeconomics Using Cartoons." The American Economist. Volume 56, Number 1, pp. 38-47). for examples from The Simpsons (among other cartoons) that illustrate macroeconomic principles.

Instructors who enjoy presenting a variety of perspectives in class should know that the majority of chapters are from the Austrian perspective. When market failures are discussed, the conjecture is that government intervention is likely to worsen market outcomes rather than improve upon them. Such libertarian exuberance may be off-putting for some students. For example, one chapter argues that safety regulations are unnecessary, as any safety differences in products would be capitalized into prices. Whether or not one agrees with this policy recommendation, instructors who want to promote critical analysis by students may wish to counterbalance the book with articles, such as Michael Sandel's recent article in the Journal of Economic Perspectives entitled "Market Reasoning as Moral Reasoning: Why Economists Should Re-engage with Political Philosophy" (2013. Volume 27, Number 4, pp. 121-140).

With this in mind, the book is a relatable and provocative introduction to the economic way of thinking. The intuition of economic analysis is made not only entertaining but also memorable by referring to scenes from The Simpsons. Instructors can use this book as a source for entertaining examples to use in class and it would make a nice gift not only for fans of The Simpsons, but also anyone looking for an accessible introduction to economic analysis.

R. Andrew Luccasen, III

Economics and Finance

Mississippi University for Women