Incentives and Disincentives; Superfreakonomics (2009)

   Steven D. Levitt & Stephen J. Dubner.  Superfreakonomics (2009) Another excursion into the obvious but oddly unappreciated fact that humans, like other animals, respond to incentives. But it’s not aways obvious what the incentives are, in part because a policy proposer by definition doesn’t think like most people, and when most people propose or back a policy, they usually misunderstand both the problem and the solution. The former is shown in campaigns to eliminate prostitution (most prostitutes are in the business because it’s the best-paying work they can get); and the latter in the design of child safety seats for cars (for 3-year-olds an up, the adult seatbelt does as good a job as the safety seat).

     Nevertheless, the implicit thesis is worth placing front of mind: If you want to know whether a proposed policy will work, ask both what the incentives and disincentives are. Thus, Ford installed seatbelts as a safety feature, but buyers balked: they didn’t want to be reminded that driving a car is dangerous. But after several decades of ubiquitous seatbelts, buckling up has become second nature. The incentive is conformity to a social norm.
     The last chapter deals with global warming, which 10 years ago could still be considered not well enough understood for making sound policy. The doomsayers of the time have turned out to be correct: it’s real, and we should have begun mitigation and adaptation decades ago.
     A fun read, which gently teaches you to check the numbers and think hard about what people actually want. We humans rarely have simple wants: we generally want to have it all, which is impossible. So we need to compromise. Understanding the problem comes first, and that almost always requires knowing the numbers and doing the math. ***