Book Review: IDENTITY ECONOMICS: HOW OUR IDENTITIES SHAPE OUR WORK, WAGES, AND WELL-BEING George A. Akerlof & Rachel E. Kranton, Princeton, 2010, 185 pages, ISBN 978-0-691-14648-5

Akerlof & Kranton propose a way to capture the power of identity with traditional economic analysis. The writing is lucid and clear and opens the way to wide readership by avoiding the use of economic jargon. The book’s stated aim is to introduce a way of making sense of the effect social contexts have on beliefs (or non-economic motives). Identity economics, they say, gives a vocabulary and analytical framework to discover and describe norms that drives these motives – a social context putting ‘humanity’ into understanding individual decision making.