An economist walks into a brothel, with Allison Schrager

Informed Choice Radio Personal Finance Podcast

An Economist Walks Into a Brothel. It's not the first line of a bad joke, but the title of a new book all about unexpected places to find risk.

Is it worth swimming in shark-infested waters to surf a 50-foot, career-record wave?

Is it riskier to make an action movie or a horror movie?

Should sex workers forfeit 50 per cent of their income for added security or take a chance and keep the extra money?

You might not expect an economist to answer these questions, or other questions people face in daily life, including who we should date or how early we should leave to catch a flight from the airport. But then you've never met my guest before.

Allison Schrager is an economist and award-winning journalist. She's spent her career exploring this subject of how people manage risk in their daily lives.

This is so important, because whether we realise it or not, we all take risks large and small every day.

Even the most cautious among us cannot opt out--the question is always which risks to take, not whether to take them at all.

What most of us don't know is how to measure those risks and maximize the chances of getting what we want out of life.

So that's what we cover in the episode today. Allison shares some ways to dealing with risks; these are the same principles used by professional risk takers, like poker players and big wave surfers.

Here's my conversation with Allison Schrager, in episode 412 of Informed Choice Radio.