Tuesday 20 September 2016

Peter's academic interests not studied at university

How people make the decisions they do about where they live, what they do, what jobs they do, what they buy and so on interests me, so I read a lot of behavioural economics. Actually, it was only after I'd read a bit on this that I learned that behavioural economics is an area of academic work, a subset of economics.
In some places, parents turning up late to collect the children after school is a problem for the schools.
If you punish parents with a small fine for turning up late to pick up their kids after school, will that solve the problem? No. In fact, it makes it worse. And it's hard to get back to the pre-fine situation. This surprised me, but it's just one example of something I've learned from the researchers working in behavioural economics. What was really interesting was the subsequent explanation for what was going on in this and similar cases, which has wider implications for society and social policy. Another example: almost everyone is dishonest - and the dishonesty and stealing of people cheating on taxes, insurance claims, pirated software and so on is vastly greater then the dishonesty and theft from robberies of homes and bank holdups. The things that send people to prison for years cause much less cost to society than the white collar crimes that tend not to be prosecuted at all.

3 comments:

  1. It's interesting and useful for us to know it. But i'm curious what do you think which way is the bast to solve the problems like these?

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    Replies
    1. I think that if we are making policy about what happens in the world, we should get solid evidence. Too many people decide something is "obvious" and make policy based on their certain belief. Unfortunately, those certain beliefs are often false, and that can be a disaster. For example, many people think that drugs like yaa baa, heroin and so on should be illegal, but the evidence tells us that making a drug illegal does not reduce use and that making it legal does not increase use. The solid evidence from places like Portugal is that the best solution is to legalize the use of drugs, which reduces corruption, reduces mafia, inceases tax income, lets police work on real crimes and does not increase drug use.

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  2. Your example seems to come from freakanomics or the like. The first example is quiet understandable despite its paradox. When people are charged of picking up children late and the fine is very little, people tend to deem the money paid as a baby sit fee and that sounds right because you paid for it. You have done nothing wrong. Nonetheless when you are not charged for it then you feel guilty of being late. There is no such compensation for the caretaker. Thus one will think that it's morally wrong to be late and levy burden on an uncompensated individual. That aside the topic is really interesting.

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