Being the econ nerd that I am, I was excited to hear Sam Pelztman's 1975 Journal of Political Economy article referenced in tonight's episode of CSI. It was brought up in the context of a fatal accident where the intoxicated driver was found wearing his seat belt.
Peltzman found that as more safety devices are added to automobiles, drivers tend to engage in more reckless behavior because of a perceived decrease in the associated risk. For example, a driver will tend to drive less carefully in a car equipped with front and side airbags than he might in a car without these safety devices. A later (1984) American Economic Review article by Robert Crandall and John Graham demonstrated that this "Peltzman Effect" does not completely offset the benefits of including seat belts and other safety features on automobiles (so you should still buckle up!), but the effect is still there.
I always enjoy seeing good economic theory getting a little airtime.
Thursday, November 20, 2008
Wednesday, August 8, 2007
Object Lesson
The other day, a good friend of mine (who is also a former student from several years ago) posted a comment on his blog lamenting the high fees associated with adoption. He felt that this was not fair, and even morally wrong. He also thought that it was counter-productive because it provided a disincentive for families to adopt children. I decided that my response might make a good object lesson for applying economic rationale to the analysis of policy instruments, so, although I hated for my first comment on his blog to be one that disagrees with him, I present my response in part below. Bear in mind that some of this is normative, but the application of concepts is what is important.
...this is really just an issue of economics (economics, just to be clear, is a very broad study of human behavior, not just making and buying stuff). Basically, it's like this: People potentially have a lot of different motivations for adopting a child. It's fairly common, for example, for people to have children or to take in foster children for purposes of getting more money from the government; attaching a large fee to adoption creates a disincentive for adopting children for that purpose. Some people could have other, even less virtuous purposes, God forbid. Of course there is a screening process that potential adoptive parents go through that should weed some of these out, but the financial barrier just adds one more layer of protection there.
Even in terms of those with pure motives, having a large financial investment up front makes them think a little more seriously about the decision. Without that cost, some people might be somewhat more inclined to adopt out of impulse rather than after longer, more careful consideration.
Now, on a purely human level, the involvement of money in the process does leave a bad taste in our mouths -- we look at it almost as making children into a commodity. But that's not what it's doing. It's simply a matter of people behaving rationally. When the cost of doing something is higher ("cost" need not always be in the form of money, btw, but money is generally the most effective way to make it more tangible to people, since folks often don't give the same weight to costs that are less visible), people put more thought into going through with it than they would if the costs were lower.
I do agree with you in the sense that I think there should probably be some sort of means testing in setting the adoption fees. People who are wealthy will be impacted very differently by a, say, $10,000 fee than people of more average income, and poorer people will be excluded entirely, which is hardly equitable, and does nothing to help with the rational purposes of the fee that I described above. So, I do think the fee should be adjusted to income somehow.
...this is really just an issue of economics (economics, just to be clear, is a very broad study of human behavior, not just making and buying stuff). Basically, it's like this: People potentially have a lot of different motivations for adopting a child. It's fairly common, for example, for people to have children or to take in foster children for purposes of getting more money from the government; attaching a large fee to adoption creates a disincentive for adopting children for that purpose. Some people could have other, even less virtuous purposes, God forbid. Of course there is a screening process that potential adoptive parents go through that should weed some of these out, but the financial barrier just adds one more layer of protection there.
Even in terms of those with pure motives, having a large financial investment up front makes them think a little more seriously about the decision. Without that cost, some people might be somewhat more inclined to adopt out of impulse rather than after longer, more careful consideration.
Now, on a purely human level, the involvement of money in the process does leave a bad taste in our mouths -- we look at it almost as making children into a commodity. But that's not what it's doing. It's simply a matter of people behaving rationally. When the cost of doing something is higher ("cost" need not always be in the form of money, btw, but money is generally the most effective way to make it more tangible to people, since folks often don't give the same weight to costs that are less visible), people put more thought into going through with it than they would if the costs were lower.
I do agree with you in the sense that I think there should probably be some sort of means testing in setting the adoption fees. People who are wealthy will be impacted very differently by a, say, $10,000 fee than people of more average income, and poorer people will be excluded entirely, which is hardly equitable, and does nothing to help with the rational purposes of the fee that I described above. So, I do think the fee should be adjusted to income somehow.
Thursday, March 8, 2007
Not just hot air
I had the opportunity last week to attend the Southeast Regional Offshore Wind Power Symposium in Charleston as a poster presenter with Roger Flynn, a fellow Policy Studies doctoral student (our presentation is briefly referenced here -- we are the "pair of Clemson University economists" mentioned toward the bottom of the page). I find the prospects for wind power to be rather exciting, given the opportunity to reduce the externalities associated with conventional methods of power generation. We learned that South Carolina is in an especially good position to develop an offshore wind power industry due to the shallowness of our coastal waters that extends much further than most other coastal states, allowing for less costly construction of wind farms that are far enough off-shore to take advantage of the best available winds. South Carolina also has the benefit of hosting a General Electric plant in Greenville that manufactures wind turbines; according to our study, this among other factors provides the potential for significant positive economic impacts to the state from wind power.
The biggest problem right now with developing wind power is that it requires substantial capital investment, such that, in terms of private cost, it is not very competitive with coal or other power generation facilities on a per-megawatt hour basis. Roger's presentation on the second day of the symposium, which outlined a number of policy options to stimulate investment in wind power, was well-received by those in attendance (SC BIZ coverage).
The biggest problem right now with developing wind power is that it requires substantial capital investment, such that, in terms of private cost, it is not very competitive with coal or other power generation facilities on a per-megawatt hour basis. Roger's presentation on the second day of the symposium, which outlined a number of policy options to stimulate investment in wind power, was well-received by those in attendance (SC BIZ coverage).
Thursday, February 15, 2007
Gubernatorial-legislative relations
During his first term, South Carolina governor Mark Sanford had a relationship with the legislature that was... let's say less than cordial. At one point he carried a couple of pigs into the legislative chamber in order to make a point about budgetary pork. The level of rancor is even more notable because the legislature is controlled by the governor's fellow Republicans.
Recently-inaugurated Governor Eliot Spitzer of New York appears to be well on his way to developing a similarly strained relationship with his fellow Democrats in the New York General Assembly. From the NY Times:
It will be interesting to follow Spitzer's progress and see if his confrontational outside strategy is more successful than Sanford's has been.
Recently-inaugurated Governor Eliot Spitzer of New York appears to be well on his way to developing a similarly strained relationship with his fellow Democrats in the New York General Assembly. From the NY Times:
The battle between Gov. Eliot Spitzer and the state lawmakers erupted into an all-out war on Thursday, as the governor began to visit the districts of fellow Democrats in the Legislature to assail their decision to make one of their colleagues the state’s top financial officer.Alan Greenblatt at the 13th Floor says that:
During a swing through Syracuse that was originally scheduled for the governor to promote his budget priorities, Mr. Spitzer denounced a local assemblyman, William B. Magnarelli, for reneging on the agreement that the Legislature had made to select a comptroller from a list of qualified candidates put forward by a screening committee.
“Bill Magnarelli is one of those unfortunate Assembly members who just raises his hand when he’s told to do so, and didn’t even bother to stand up and say, ‘Whose interest am I representing?’ ” he told The Post-Standard of Syracuse on Thursday.
It was, by Albany standards, a shocking breach of etiquette for a sitting governor to lambaste a colleague from his own party in his home district....
...none of this is surprising. Spitzer sees himself as a reformer and, having won a major election victory, believes he has the public on his side and can win by persuading legislators that they should bow to public opinion. Maybe. But Spitzer does have to persuade legislators. And as many governors have found , even legislators who agree with them philosophically will fight all the way if you cut out their perks or otherwise cross them.True. I wonder also if Spitzer lacks an understanding of the difference between being AG and being governor. An attorney general can pursue his own agenda without requiring much cooperation from any other official or institution. Although governors have some independent authority through executive orders and the like, to pass legislation they need the legislature.
It will be interesting to follow Spitzer's progress and see if his confrontational outside strategy is more successful than Sanford's has been.
About the bloggers
Chip Taylor is a research associate at the Strom Thurmond Institute of Government and Public Affairs. He is also a doctoral candidate in the Policy Studies Program at Clemson University. Most of his research interests lie within the field of state and local public policy. Specific topics include the fiscal impacts of growth on local government and gubernatorial policymaking.
Chip can be contacted at taylor.chip@gmail.com.
Rob Carey is a research associate at the Strom Thurmond Institute of Government and Public Affairs. He is also a doctoral candidate in the Policy Studies Program at Clemson University studying natural resource and environmental policy.
Chip can be contacted at taylor.chip@gmail.com.
Rob Carey is a research associate at the Strom Thurmond Institute of Government and Public Affairs. He is also a doctoral candidate in the Policy Studies Program at Clemson University studying natural resource and environmental policy.
About the blog
Why the "Policy Window"?
Because we all got a hefty dose of Kingdon shortly after our arrival here.So, what's the purpose of all this?
It's just a place to comment on news and events that catch our eye and are related to our interests.
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