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Identity Economics: How Our Identities Shape Our Work, Wages, and Well-Being

3.51  ·  Rating details ·  480 ratings  ·  55 reviews
How identity influences the economic choices we make

Identity Economics provides an important and compelling new way to understand human behavior, revealing how our identities--and not just economic incentives--influence our decisions. In 1995, economist Rachel Kranton wrote future Nobel Prize-winner George Akerlof a letter insisting that his most recent paper was wrong. Id
Hardcover, 185 pages
Published February 21st 2010 by Princeton University Press (first published 2010)
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Feb 15, 2015 rated it liked it
While this research was long overdue in the economics community, and the case studies currently relevant, Nobel Prize laureate George Akerlof has failed to tailor this book for any target audience. Too uninspiring for the 'pop sociology' Gladwell-ites, and likewise too vague and self-referential for students of economics, Identity Economics fails to inspire or even inform. ...more
Geoffrey Gordon
Jan 24, 2013 rated it really liked it
Shelves: economic-theory
I can't believe economists are just now discovering that how people view themselves and their place in society affects the economic decisions they make. Identity economics is a very promising field, and this book represents the tip of the iceberg. The chapters on gender and race left much to be desired, but as this book is merely an introduction to the topic of identity, and because entire books can be (and have been) written on how gender and race/ethnicity influence economic behavior, I'm will ...more
Alex Wang
Dec 29, 2011 rated it it was ok
You do not need this book to understand the academic literature in economics of identity, nor do you need this book if you want to be entertained by the amazing power of identity in human society. So only suitable for those who do research in the area and want a light reading that relevant...
Erika RS
Oct 11, 2019 rated it really liked it
This was a quick read with some important ideas. The core idea is that we can integrate identity into standard economic models by formalizing identities as sets of social norms and assigning costs and benefits for both following and not following those norms.

Let's expand on that. Following the authors, we define identities as sets of norms that people generally expect others to follow. These can be the usual identity categories like gender or race. They can also encompass identities such as whet
Lawrence C. Marsh
Jan 16, 2020 rated it it was amazing
The authors see people not just as individuals alone out for themselves, but also as having social categories that define them as belonging to particular groups. Some groups are general and inherent such as male or female. Others are by choice such as political affiliations. Work situations provide an especially interesting circumstance where individuals sometimes identify with their company's mission as insiders, or see themselves as outsiders whose only concern is with the pay and other benefi ...more
Dec 16, 2018 rated it liked it
How we identify ourselves influences our decisions.

Non-economists may find that statement to be self-evident and not worthy of a whole book, let alone a whole new field within an academic field. Yet the nuance behind this statement is what makes this topic so very important and impactful. Initial insights in the economic field came by stripping humanity down to rational automatons: homo economicus. This model did not reflect the lived human experience, though it did help identify patterns at th
Apr 24, 2019 rated it liked it
2.5 stars.

The book held my attention at parts, but other parts felt fairly dry. What I thought was the best was his focus on the identity of people as either an insider or an outsider. When people feel that they are on the inside they will behave one way, and when they feel they are on the outside they will behave another. This identity, or division, can be for a large variety of reasons (religion, race, gender, etc.). Some of these divisions seem to be created by others, while some divisions pe
Martin Lábaj
Aug 04, 2019 rated it it was amazing
Great book. It expands the view of economists. It introduces social categories, norms, ideals and identity to economics. Very clear style of writting. It motivates to go beyond standard economic models and quantitative analysis. It shows how to go in that direction.
Interdisciplinary research in practice.
It has a potential to change the economic profession in a way Gary Backer did by introducing tastes to economics and behavioral economists did by focusing on cognitive biases and bounded ration
Arthur Yu
Sep 10, 2020 rated it it was amazing
This review has been hidden because it contains spoilers. To view it, click here.
Jun 11, 2017 rated it liked it
Interesting read, though I am skeptical if it is as pathbreaking as the author suggests it is. The book is largely focused on stapling economic understandings to sociological problems. Still, it is probably worth a quick read if the topic interests you. It brings an economic thinking to problems few apply the model to.
Sep 24, 2017 rated it liked it
Alkerlof presents interesting insights and helps us view the intersection of psychology and economics with 'identity' as the lens. Though, just when one is beginning to think of the deeper implications of his proposition as well its application, the book almost nears an end. A quick read, engaging enough to motivate the reader to read further about the work happening in this domain. ...more
Erik Johnson
Feb 05, 2017 rated it really liked it
Shelves: economics, psychology
Really interesting introduction into identity psychology and how it affects our decision making. It comes more from the economics angle than the psychology one.
Seng Aung Sein Myint
Jul 13, 2017 rated it it was amazing
I like this plain language, the concept as well as no number economic
Feb 05, 2018 rated it did not like it
130 pages, barely any original thought, just a bunch of cites of other sources. Blah.
R.K. Byers
Mar 14, 2018 rated it it was ok
not clear on if this book was geared more towards understanding our actual identities or how we identiFY.
James V
Apr 22, 2018 rated it really liked it
Great introduction on the subject.
Lorenzo Barberis Canonico
great economist and collaborator with Robert Shiller, but this book just kinda let me down to be honest.
Jan 07, 2016 rated it liked it
Recommends it for: Economists
Shelves: economics
What is the effect of identity on behavior from an economic perspective? This is the key question which George Akerlof and Rachel Kranton wish to explore in their book "Identity Economics". Akerlof and Kranton argue that many phenomena both within and without the realm of economics - e.g. R-Day at West Point - can be explained neither by standard (neoclassical) economics nor even by behavioral economics, but can be explained by "identity economics". Identity economics, as conceptualized by the a ...more
Oct 21, 2016 rated it really liked it
The author's central thesis is so intuitive and remarkable that it is shocking that economics didn't catch onto this earlier. I have always been hyper-suspect of homo-economicus as too reductionist of human nature. This theory accounts for a large psychological-social aspect of decision making based on the Utility of Identity. As social creatures humans are predisposed to be 'groupish' and these groups create a shared identity based on shared norms and expectations. An individual thus derives ut ...more
Shonna Froebel
Nov 25, 2012 rated it really liked it  ·  review of another edition
Grabbed this book from the new book shelf at work as I needed something to listen to on my commute.
It was interesting, but I am glad I have a degree in economics, as some of the terminology was definitely subject specific. It talked about a relatively new aspect of economics that uses individual or group identity perception to predict behaviour. Some types of identity are generally fixed (race, gender), while others are temporary and may change over time. Standard economics says that people woul
Nick Klagge
Sep 17, 2012 rated it liked it
Shelves: economics
The topic of this book is very interesting; however, it is basically an elaboration of Akerlof's AEA presidential address "The Missing Motivation in Macroeconomics." I became interested in reading the book after reading that address, but the book is more or less a less-technical exposition of the same ideas. The overall thrust is that economists need to incorporate social norms into their models of utility functions, and that doing so can help explain several counterintuitive results that arise ...more
Apr 27, 2012 rated it did not like it
Shelves: non-fiction, business
I started with the misperception this was a book on economics, but it fits better in the business category.

A late section illustrates my view of the book:

.. most economists also believe that a good model yields surprising conculsions.. there must be a gentlemanly distance between assumptions and conclusions, otherwise the theory is vacuous... We are like the sage who explained movement by saying that it is due to the principles of locomotion.

The section goes on to point out two examples of conc
David Lau
Oct 22, 2010 rated it really liked it
His book has lukewarm reviews but I'm gonna give it a 4 because i think identity economics has great potential. The reader must understand that it is still a field in the fetal stages of development so studies and data are limited.

I was first exposed to identity economics when I read gang leader for a day. The book showed that even though drug dealers made minimum wage (equivalent to a mcdonalds salary), they chose the more risky profession because they wanted to be identified a certain way. Th
Feb 26, 2010 rated it it was amazing
Trevor Phillips OBE ,head of the Equality and Human Rights Commission, has chosen to discuss George A Akerlof and Rachel E Kranton’s Identity Economics: How Our Identities Shape Our Work, Wages and Well-Being , on FiveBooks ( as one of the top five on his subject - Equality, saying that:

“…This recently published book says that one effect of being in an increasingly liberal and affluent society is that aspects of identity that previously didn’t seem to matter that much to e
Roy Kenagy
Oct 13, 2011 marked it as to-read
Publisher's blurb:

"Identity Economics bridges a critical gap in the social sciences. It brings identity and norms to economics. People's notions of what is proper, and what is forbidden, and for whom, are fundamental to how hard they work, and how they learn, spend, and save. Thus people's identity--their conception of who they are, and of who they choose to be--may be the most important factor affecting their economic lives. And the limits placed by society on people's ide
Jan 28, 2012 rated it really liked it
How we identify ourselves is vital to the decisions we make, and its something that traditional economics does not address, so I was pleased to stumble onto this book. It is surprisingly short, which makes it an easy read. As intended by the authors, this is just an outline and introduction to how to apply identity utility and the outsider vs. insider paradigm. I think this theory could be extremely useful for analyzing international economics, in addition to the smaller scale issues analyzed in ...more
Jeffrey Cavanaugh
May 01, 2012 rated it liked it
A short primer on the utility of adding sociological notions of identity to neoclassical economic analysis - particularly in the form of preference formation and expression. The book is lucid, well-written, and thoughtful, though not particularly compelling for those familiar with the many problems inherent in the rational actor assumptions of homo economicus Consider it another salvo in the ongoing war fought by sociologists, psychologists, and dissident economists against the hegemony of the C ...more
I certainly agree with the premise of this book - that identity and social norms are critical determinants in the choices individuals make, but I cannot recommend this much too short volume as a means to reach that conclusion. I listened to the audio version of this book - which claimed to be unabridged - but after 3 short discs the book ended abruptly and seemed to draw no conclusions except the very specific results of the few experiments mentioned in the book. I kept waiting for the meat of t ...more
Mar 30, 2014 rated it really liked it
Not as amazing as Animal Spirits, but again touches on the role of identity and background as part of shaping economics and policies -- but again, anyone reading op-eds by Friedman, Krugman, Stiglitz (or any other Economist for that matter -- heck, throw in Gladwell who's been apparently also classified as an "Economist), among others are aware of identities and backgrounds shaping economic thinking. ...more
Feb 05, 2015 rated it really liked it
An extremely fascinating look at how identity can be incorporated in the study of economics and choices. As someone who has always felt uncomfortable with the basic tenets of self-interest and rationality that underlies much of economic thinking and methodology, this book helped me reframe my understanding of economic choices and the usefulness of economics in informing my own field of interest, sociology.
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George A. Akerlof is a Professor of Economics at the University of California, Berkeley, and 2001 Nobel Laureate in Economics.

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“We discussed the focus on identity: how people think they and others should behave; how society teaches them how to behave; and how people are motivated by these views, sometimes to the point of being willing to die for them.” 1 likes
“Such interplay of tastes and norms lies at the heart of this book. The merry-go-round illustrates a general point. When people are doing what they think they should be doing, they are happy, like the four- and five-year-olds. But those who are not living up to the norms that they (and others) have set for themselves, like the older children, are unhappy. They then change their decisions to meet their standards.” 1 likes
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