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Posts Tagged ‘incentives’

Still No Cash for Clunkers

Last year I blogged about the Cash for Clunkers program in which the government subsidizes consumers who turn in their beat-up old cars to buy new ones. I noted that this program was likely to have a host
of negative unintended consequences that its proponents were ignoring.
The bad news is that the House of Representatives has now passed a Cash for Clunkers bill. The good news is that the version they passed applies to so few vehicles that there is virtually no incentive for anyone to take advantage of the program, so its unintended consequences will be smaller than they otherwise would be.


The Salmon Is Delicious: An Example of Incentives at Work

A group of us went out for dinner the other night at a reasonably fancy restaurant. As we looked over the menu, the waitress was kind enough to let us know that the salmon was particularly delicious. We might also want to try the artichoke dip, she told us. It was her personal favorite. Half-joking, one of us asked her if there was a particular reason why she wanted us to try the artichoke dip.


Bus-Riders of the World Unite!

Remarkable facts from a new paper by James Habyarimana and William Jack of the Center for Global Development: The World Health Organization (2004) reported that 1.2 million people died from road traffic injuries in 2002, 90 percent in low- and middle-income countries, about the same number as die of malaria. In addition, between 20 and 50 million people are estimated . . .


Greening the Brain

In the Times Magazine, Jon Gertner takes a look at the Center for Research on Environmental Decisions (CRED), which is dedicated to analyzing how people make environmental decisions. CRED has discovered, for instance, that if a carbon tax is framed as an “offset” instead of a “tax,” it makes a substantial difference in how people, particularly Republicans, feel about it. . . .


Fun Is Better on Deadline

If you give your mother a gift card this Mother’s Day, make sure it expires soon; otherwise she might not enjoy it. That’s the suggestion of this Atlantic article (with a rather familiar headline), citing research by the economists Suzanne B. Shu and Ayelet Gneezy. They found that if you put a tight deadline on a fun activity, people are . . .


FREAK Shots: Is Google the Gift That Keeps Taking?

To get Google to open a major routing center in Lenoir, N.C., and bring with it 200 jobs and about $172 million in local investments, the state and local governments offered the company $200 million worth of incentives, reports The Lenoir News-Topic, including sales-tax-free electrical power and computer purchases. When the deal was signed in 2007, some members of the . . .


An Ingenious Approach to Drug Compliance

Some ideas are just so great I am left in awe. Photo: Christopher Harting As Emily Singer writes in Technology Review that drug-resistant tuberculosis is an important problem, especially in poor countries. After you get TB, you are supposed to take antibiotics for six months to prevent drug-resistant strains of TB from arising. The problem, however, is that the antibiotics . . .


PimpThisBum.com

| Does panhandling work better through the web? A Houston father and son team thinks so. They gave a homeless man named Timothy Dale Edwards a sign to hold while panhandling; it directed passersby to his website, PimpThisBum.com. In less than two months, the site has garnered $50,000 in pledges and donations. The project’s creators believe its success has to . . .


How Do You Speed Up Economists?

Like many other journals in economics and other disciplines, the Economic Journal, the main scholarly organ of the Royal Economic Society, has paid referees (judges of submitted scholarly papers) for prompt reports (e.g., the American Economic Review offers $100 for a prompt report). The purpose of this is to provide an incentive to get the job done quickly. I have . . .


Rubbish With Your Name On It

| A shop owner in England is tackling the litter problem in her neighborhood by marking sweets wrappers and drink bottles with the names of the children buying them. This way, she tells the BBC, she can easily identify and reprimand litter “offenders.” Waste-personalization is hardly a novel ideal; it’s been done before (to Dubner’s delight) with dog poo. Perhaps . . .


Personae Non Gratae

| When Stephen Colbert promised to lead an angry, pitchfork-wielding mob to A.I.G. headquarters last week, he was joking. The actual angry mob that stood outside A.I.G. headquarters yesterday chanting “shame on you” wasn’t. Nor are the literally bus-loads of protesters scheduled to visit A.I.G. executives’ homes in Connecticut this weekend. No wonder the company has issued a security memo . . .


Want A Politically Viable Gas Tax? Make It Voluntary

Like Greg Mankiw, I think it’s a no-brainer that we should raise the gas tax. But it’s incredibly difficult to muster the political will to impose a traditional tax. (Witness California’s inability to increase the state gas tax by a measly 12 cents.) Last year, Robert Samuelson (and a host of others) proposed a contingent tax that only kicks in . . .


"This Is No Picnic for Me Either, Buster": Obama and Outliers

My favorite Obama quotation is not one of his most poetic: My mother [would] … wake me up at 4:30 in the morning, and we’d sit there and go through my lessons. And I used to complain and grumble. And she’d say, “Well this is no picnic for me either, buster.” He had me at “buster.” I love these words . . .


Put Your Money Where Your B-Tush Is

Thanks to The Times‘s nice writeup (“Dieting? Put Your Money Where Your Fat Is”), an Internet company that I helped found, www.stickK.com, has been getting a spike in commitment contracts. As readers of this blog know, stickK (shameless plug) is a commitment store that helps you stick to your goals. We’ll elicit support from your friends. We’ll nag you if . . .


Nudge Contest

The Robert Wood Johnson Foundation is offering three $5,000 prizes for the best new ideas that “nudge” people towards better health.


Hospitals as Hotels

Hospitals may be more recession-proof than many other industries, but they are hardly immune. If you are running a hospital these days and want keep your beds full, what should you do: Try to raid your competitors for the best doctors available? Undertake an ad campaign that trumpets the excellence of your care? Or maybe just install wireless internet and spruce up the rooms?


What's the Point of an Apology?

In the last few years, institutions have been issuing more apologies, according to an Economist article. And lately there have been calls for quite a few more (from institutions and individuals), including Wall Street to American citizens and Bernard Madoff to the people he allegedly swindled (rather than just his co-op neighbors). But aside from emotional reparations, what’s the point . . .


FREAK Shots: Not Everyone Likes Free Parking

Blog reader Paul Gorbould emailed us this photo from a parking lot at the Joggins Fossil Cliffs on the Bay of Fundy in Nova Scotia, Canada: Photo: Paul Gorbould Gorbould understands the good intent of the spots: The site was recently declared a Unesco World Heritage Site, and it appears to have taken the designation to heart. I’ve never seen . . .


What Happens When College Cafeterias Go Trayless?

The answer is:
People buy less food and subsequently eat less and throw away less. For the customer, it’s good for the budget and the waistline; for the cafeteria (and the environment), it substantially cuts down on waste. Sounds like a win-win situation, unless you are the party who profits most from selling a high volume of food. Here, from an article in Restaurants and Institutions, are some details:


Free the Hangers

I typed this from 10,000 feet, while on my way to the annual econ gabfest known as the ASSA meetings. I was lucky enough to score an upgrade to first class, and as I settled into my seat I was informed about the most astonishing cost-cutting measure: U.S. Airways has taken the coat hangers out of its planes.


Our Daily Bleg: Why Do You Vote?

We received an interesting bleg from Martin Saavedra, who is studying international economics and finance at the Catholic University of America and plans to start an economics Ph.D. next fall. He is interested in a subject we’ve written about before — the utility of voting — although he is after a more personal set of information, namely: why do you . . .


A Policy Screwup?

Some Italian professors told me about one of the most bizarre incentive systems in the world. The amount of fees that an Italian university can charge to students is linked to the amount of support the university receives from the national government. Sounds sensible, right? After all, public universities in the U.S. typically try to make up lost state revenue . . .


Our Daily Bleg: What’s My Incentive to Work?

Photo: That Guy Who’s Going Places Here’s a desperate bleg from a reader named Theo Bryan. (Send your own blegs here.) Hey, I am living with my stepfather and don’t pay rent or food expenses. I am not pressured to find work from my stepdad or my mother, who lives in another city for work. I fear I have no . . .


Why Roast a Turkey?

Photo: cobalt123 According to this collection of turkey statistics, “more than 45 million turkeys are cooked and eaten in the U.S. at Thanksgiving.” In a country of some 300 million people, that’s one whole turkey for every 6.67 people. According to this report, the average Thanksgiving gathering has about 11 people. So that’s nearly two whole turkeys on every single . . .


Waste Happens: A Q&A With the Author of The Big Necessity

Photo: Felicity Paxton I’ve never thought much about my toilet. (Though we’ve discussed toilets on this blog here, here, and here.) It usually does its job; sometimes it needs a little help from the plunger. Rose George‘s new book The Big Necessity: The Unmentionable World of Human Waste and Why It Matters not only got me wildly interested in my . . .


Cafe’s Dilemma: Can You Offer Free Wi-Fi and Still Sell Lattes?

Do you ever feel the guilt-stare from a barista as you’re sitting in a cafe enjoying its free wireless? The cheapest patrons will nurse a coffee for three hours, while many will cave at the rate of roughly one beverage (or baked good) per hour. Rather than guilting e-freeloaders (which puts strain on customer-barista relations), some cafes ban laptops or . . .


No Cash for Clunkers

Photo: Bogdan Suditu Princeton economist Alan Blinder recently proposed a new government program he christened “Cash for Clunkers” in an article in The Times‘s Business section. Under the program, the government would buy back old cars at above market prices and scrap them. According to Blinder, this would accomplish a policy trifecta: 1) help the environment by getting the most . . .


Why Do Mortgage Brokers Get Paid Everything Up Front?

Blog reader Chris Harris raises an interesting question in an email to us: Why do mortgage brokers get paid everything up front when they originate a deal? This sort of contract gives brokers terrible incentives. They just want to get a deal done. It matters very little to them whether the borrower eventually defaults or not. (It is possible that . . .


Who Is the Greatest Modern-Day Thinker?

The e-mail gods recently delivered this interesting query from a reader named Derek Wilhelm: I go to the University of Richmond, which requires [us] to take a class called Core, where we read famous historical books. (Gandhi, Marx, Plato, Augustine, just to name a few). Anyway, my question for you is: Who do you think is the greatest modern-day thinker? . . .