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Comments on: Obvious perverse incentive of the week award goes to… http://www.tvhe.co.nz/2009/04/18/obvious-perverse-incentive-of-the-week-award-goes-to/ The Visible Hand in Economics Tue, 21 Apr 2009 08:47:15 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Matt Nolan http://www.tvhe.co.nz/2009/04/18/obvious-perverse-incentive-of-the-week-award-goes-to/#comment-19157 Tue, 21 Apr 2009 08:47:15 +0000 http://www.tvhe.co.nz/?p=3637#comment-19157 I suspect Goonix is saying that the pensioners willingness to pay represents the social value of the activity – after all there is always an opportunity cost from taking pensioners to Waiheke Island.

As a result Goonix is effectively appealing to the second welfare theorem and saying it would be more efficient to give pensioners money directly in order to move us to the equilibrium we as a society would prefer, instead of directly messing around with relative price signals …

]]> By: Keith Ng http://www.tvhe.co.nz/2009/04/18/obvious-perverse-incentive-of-the-week-award-goes-to/#comment-19156 Tue, 21 Apr 2009 05:43:49 +0000 http://www.tvhe.co.nz/?p=3637#comment-19156 Re: overconsumption

… of sunshine and fresh air? You big meanie with your diminishing marginal utility.

]]> By: rauparaha http://www.tvhe.co.nz/2009/04/18/obvious-perverse-incentive-of-the-week-award-goes-to/#comment-19149 Mon, 20 Apr 2009 02:58:29 +0000 http://www.tvhe.co.nz/?p=3637#comment-19149 I think you’re making a value judgment there. The government clearly thinks that the benefit to the pensioners outweighs any deadweight loss from the subsidy, so I guess the problem is really conflicting value judgments rather than inefficiency 😉

]]> By: goonix http://www.tvhe.co.nz/2009/04/18/obvious-perverse-incentive-of-the-week-award-goes-to/#comment-19148 Mon, 20 Apr 2009 01:57:27 +0000 http://www.tvhe.co.nz/?p=3637#comment-19148 Overconsumption.

]]> By: rauparaha http://www.tvhe.co.nz/2009/04/18/obvious-perverse-incentive-of-the-week-award-goes-to/#comment-19147 Mon, 20 Apr 2009 01:52:22 +0000 http://www.tvhe.co.nz/?p=3637#comment-19147 I agree with Keith. I dont’ think it matters that Fullers got piles of cash: the important thing is that the pensioners are happier. What exactly is the problem here? Do you object to a single company gettnig such a large slice of the benefits of the subsidy?

]]> By: Keith Ng http://www.tvhe.co.nz/2009/04/18/obvious-perverse-incentive-of-the-week-award-goes-to/#comment-19146 Mon, 20 Apr 2009 01:41:54 +0000 http://www.tvhe.co.nz/?p=3637#comment-19146 Does it really count as perverse? The objective wasn’t to get pensioners to productive activities, it was about improving their quality of life by making it easy for them to get out more. Doesn’t a boatful of grannies going on a sunny boat ride to Waiheke give you the warm fuzzies? Just a little?

]]> By: Eremeeff http://www.tvhe.co.nz/2009/04/18/obvious-perverse-incentive-of-the-week-award-goes-to/#comment-19112 Sat, 18 Apr 2009 20:26:39 +0000 http://www.tvhe.co.nz/?p=3637#comment-19112 Thanks for article. Everytime like to read you.
Thanks

]]> By: SimonD http://www.tvhe.co.nz/2009/04/18/obvious-perverse-incentive-of-the-week-award-goes-to/#comment-19110 Sat, 18 Apr 2009 17:13:01 +0000 http://www.tvhe.co.nz/?p=3637#comment-19110 as Homer Simpson once put it… doh !

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