Another Dilbert (I promise to cut back on posting them – it was just a great set of economist cartoons 🙂 )
Source Dilbert.
Never have I seen the two-handedness of economists and the “physics envy” of economists intertwined in one short cartoon. Very good 😀
The Herald are reporting that Tony Veitch has (once again) attempted to take his life. The story is very sad but did get me thinking about whether suicide is ever a rational response.
There is some literature (here, here and here) on this very topic. The most interesting thing for me was that an attempt at suicide can be rational so long as the attempt is not successful. A failed attempt tends to significantly increase income (by 20.3% on average, relative to those who consider suicide but do not make an attempt) as more resources, such as healthcare and affection, are made available to the person who made the attempt. The more serious the attempt, the greater is the impact on income (36.3% on average for so-called ‘hard-suicide’ attempts).
This economic approach to suicide runs counter to the traditional view that suicide occurs at a fragile point in time when someone is acting irrationally.
In the instance of Tony Veitch, it is difficult to see how a positive income effect would be gained from his numerous attempts at suicide, given his broadcasting career has been ruined by the case. However, this might be underplaying the positive, non-financial, effect that a ‘cry for help’ can have on an individual. On the other hand, Tony Veitch could simply be acting irrationally.
Whether Tony Veitch is acting rationally or irrationally, one thing is certain – the case is extremely tragic.
The other night I caught the film ‘Second Skin’, showing at the World Cinema Showcase. Second Skin an MMORPG (Massively Multiplayer Online Role Playing Game – think World of Warcraft or Second Life) documentary about virtual worlds and the real lives they effect. It’s a decent watch.
On the film they interviewed a “virtual world economist”, Edward Castronova, about the markets that have evolved in these online games. I went to check this guy’s website and stumbled across a product that intrigued me.
Seriosity have developed a product called Attent™, which involves assigning a monetary value to emails to signal their importance. The problem that this product is trying to solve is that so many emails are sent around each day that it is difficult to efficiently determine which emails are truly important, while senders tend to send more emails than is optimal (such information overload apparently costs US corporations hundreds of billions of dollars per year).
When senders ‘pay’ to send their email, their behaviour naturally changes so that potentially less, better quality emails are sent. Emails are visibly tagged with a currency value that signals the importance of the message, which improves efficiency at the readers’ end.
Whether such pay-to-send technology takes off remains to be seen (there is an obvious issue of critical mass) but I thought it was a tidy way of incentivising potentially welfare-enhancing behaviour.
Foodstuffs have recently announced that they will voluntarily introduce a 5c charge per plastic bag consumed through their New World and 4 Square supermarkets, with the revenue generated being used for an “environmental initiative” (previous post on the issue here).
Foodstuffs account for over half of all supermarket sales in New Zealand through their New World, 4 Square and Pak ‘n’ Save brands, while supermarkets in general account for 80% of plastic bags. Foodstuffs has got its own warehouses and wide spread distribution chain. Maintaining a warehouse is a challenging task. Visit https://kljconsultingaz.com/choosing-dock-equipment/ for some tip.
This move follows the likes of the Warehouse and Borders who already charge for plastic bags (and North Island Pak ‘n’ Save stores have long charged for plastic bags, albeit for different reasons).
One might assume from this positive action by Foodstuffs that an industry-based solution to the perceived problem of plastic bag over-consumption would negate the need for any regulation. But the thing that jumped out at me from the article was this quote from the Greens Russel Norman:
“What we need now is for the Government to back up Foodstuffs’ good initiative by introducing mandatory product stewardship for plastic bags”
Why would the Government need to mandate anything to do with plastic bags when the industry is clearly finding a solution to the perceived problem? Regulation is costly, not just in terms of resources needed to enact a bill or other measure, but also due to unforeseen outcomes that may arise from such intervention. Regulation should always be a last resort. In this instance I think regulation is blatantly unnecessary.
One might argue that it is due to the threat of regulation that Foodstuffs took this action in the first instance. This may be true, we don’t know. But given the moves made by Foodstuffs and other retailers I think that to now clamour for regulation is just plain silly and unfortunately seems to be a reflection of the Greens approach to everything – regulate!
No matter what the issue, you should always give industry a chance to resolve a perceived problem before intervening.
As rightly pointed out over at Kiwiblog, when you make something free you distort incentives around use of that good or service.
The previous Government introduced a Supergold card, offering concessions and discounts on various goods and services. In all their wisdom, they offer free off-peak travel on certain public transport. One such service was the Fullers Ferry to Waiheke Island.
It has now been reported that pensioners flocking to Waiheke Island have delivered more than $750,000 in Government subsidies to Auckland ferry operator Fullers in the first five months of free travel, with an average of 200 pensioners per day taking in the journey.
Who could possibly have foreseen that response?
Just saw this article courtesy of Greg Mankiw. In the article the authors talk about the impact of rising the drinking age from 18 to 21 in the US. There were two parts – a voluntary lift in some states, and later on a legislated increase for the whole country.
The key bit for me is this (highlighting by me):
The results are striking. Virtually all the life-saving impact of the MLDA21 comes from the few early-adopting states, not from the larger number that resulted from federal pressure. Further, any life-saving effect in those states that first raised the drinking age was only temporary, occurring largely in the first year or two after switching to the MLDA21.
So this isn’t saying that lifting the drinking age is necessarily a bad idea – but that it isn’t necessarily going to save lives either. In the end only the states which did it voluntarily (where it was more of a community effort) had any impact – and even that was only temporary.
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