A reader named Jason Stauffer writes:
I live with four guys in a house. We had no cleaning schedule until about a month ago, but the house was never cluttered, and was more than clean enough for actual women to feel comfortable visiting. Even the bathroom was clean enough for the girls to freely use it without vomiting. However since we have implemented our cleaning schedule the house has gotten into worse and worse shape. The toilet downstairs is even looking so bad I don’t want to use it. What gives?
Okay, everybody, let’s hear what you have to say about private vs. public incentives, moral hazard, and the general cleanliness of men.
The Texas Legislature is back in session, providing its usual cookie jar of absurd economic proposals. A real winner is House Bill 649, which would provide compensatory tax reductions to companies that become taxed under the Affordable Care Act because their employer-provided health insurance fails to cover employees’ emergency contraception. Such a bill means Texas would be giving firms incentives to thwart federal law. It also opens up the possibility of much broader tax offsets. I’m certain that our governor and legislature dislike the recent imposition of higher federal income tax rates on high-income families. Why not take the logic of this bill one step further and offer tax reductions (sales tax, since we have no income tax) to very high-income families? Indeed, the reductio ad absurdum would construct all state tax policy to offset to the extent possible any incentives provided by federal tax policy.
Starbucks recently came out with an ultra-high end cup of coffee. Wondering whether that cup of coffee was really worth $7, Kimmel took to the streets and ran some experiments. He didn’t however, do what you might expect. Rather, he pulled a page out of the old wine tasting experiment I ran twenty years ago. It is definitely worth watching. Read More »
Fourth-graders in Declo, Idaho, faced an unusual incentive scheme for reading: if they didn’t complete their work they could either forgo recess or have others kids draw on their face with marker. Several kids chose the latter punishment and, as you can imagine, this didn’t go over so well. It should be noted that the teacher had let the students choose these rules. From the Times-News:
When Cindy Hurst’s 10-year-old son arrived home from school Nov. 5, his entire face, hairline to chin, was scribbled on in red marker — including his eyelids. He also had green, red and purple scribble marks over the red, and his face was scratched by a marker that had a rough edge.
“He was humiliated, he hung his head and wanted to go wash his face,” said Hurst. “He knows he’s a slow reader. Now he thinks he should be punished for it.” …
As more and more schools look for better ways to motivate students, I am guessing this tactic won’t gain a lot of traction.
The Tigers (bravo!) and Giants are in the World Series, with possibly 4 of 7 games to be played in San Francisco. The majority of games will be played there because the extra game (if necessary) goes to the team representing the league that won the All-Star Game. The purpose of the rule (adopted in 2003) is to offer players and managers an incentive to provide more effort in the All-Star Game. I’m doubtful that this incentive matters much. First, with large teams each player is to some extent a free-rider — why risk injury, why strain yourself, if your efforts have little effect? That is especially true if by July you realize that your team has no chance of making it into the Series. Second, and even more important, I doubt that any player or manager’s effort is very responsive to this kind of incentive.
A recent Freakonomics radio podcast focused on the unintended consequences of bounties. Here’s another great example: California’s recycling redemption program no doubt seemed like a great idea when it was initiated, but an L.A. Times article suggests the system is being gamed. Last year, it appears that nearly 100 percent of recyclable cans sold in California were returned, and 104 percent (!) of plastic containers:
Read More »
Crafty entrepreneurs are driving semi-trailers full of cans from Nevada or Arizona, which don’t have deposit laws, across the border and transforming their cargo into truckfuls of nickels. In addition, recyclers inside the state are claiming redemptions for the same containers several times over, or for containers that never existed.
Quite a few readers and listeners have written in with their own versions of “the cobra effect,” as described in our recent podcast of the same name. Here’s one particularly entertaining one, from Eblyn Miguel Angel:
Read More »
I would like to bring a comment that came to mind when I heard your podcast on the “Cobra Effect,” in particular when Levitt mentions that for any scheme presented a government must come to the realization that there will be schemers who will break the system or get around it.
I bring this up because my family is Dominican and growing up my father told me a folk tale of something very similar to this involving electric meters in his home country.
My wife took four grandkids to the Adventure Aquarium in Camden, New Jersey. Looking for a parking space, she noticed the usual handicapped parking spots near the entrance, but also parking spaces reserved for hybrid vehicles. The Aquarium, though not government-run, appears concerned about environmental issues and apparently tries to encourage energy conservation by making a visit easier for those who have chosen energy-efficient vehicles. The private sector is implicitly subsidizing the purchase of hybrid cars, not by offering monetary incentives, but by subsidizing the time cost of owning these cars. I suppose one can object that the subsidy matters more to those whose time is more valuable—presumably higher earners; but it’s still a neat way for the private sector to encourage energy efficiency. I wonder how many other examples exist of explicit non-monetary subsidies by the private sector? (HT to FWH)