Image courtesy of Rose Colligan.
Most economic research is a process of adding to ideas that have already been thought of. In Mrs Lovett’s case her grand plan involves adding concepts to Sweeney Todd’s welfare policy.
Now if you haven’t seen the movie yet, this might be a bit more of a spoiler than the previous post. As a result, think carefully before you click below the flap.
You always here about how biased referees are from football fans. However, Matt and Agnitio are model football fans and seem to rarely criticise the referee, even when Liverpool are getting walloped. Now Robin Hanson links to a study which gives them a reason to lambast the ref a bit more:
Referees, who are appointed to be impartial, tend to favor the home team by systematically awarding more stoppage time in close matches in which the home team is behind. They also favor the home team in decisions to award goals and penalty kicks.
Not that we should be surprised by this news: it would be odd if referees were such a different breed that they could block out all the incentives to appease the home crowd. Why should we ascribe some superhuman power to them that none of us possess? Fans everywhere can rejoice in the knowledge that all referees are likely to be biased towards the home team, or whatever team they personally sympathise with. It’s just human nature and we can expect no more of them. Read more
‘Inflation psychology’ was the topic of a recent inflation update by Stephen Cecchetti (h.t. Freakonomics blog). In it he mentions that people seem to have selective memories regarding price changes – namely people are likely to remember price increases more than price falls.
I once mentioned such a potential bias when I commented on Kiwiblogblog, it is a bias that I definitely hold, and I suspect other people do too. For example, did you know that the nominal New Zealand price of petrol is only starting to reach the level recorded in July 2006 now? People often remember the big increase in petrol prices in mid-2006 and late 2007, but they seem to forget about the significant fall in prices that occurred between these periods.
The question then is, what does this bias imply for inflation?
Over at NZQuest, Oliver Woods claims that economics
…works around perfect conditions and universal application of models and theories developed many years ago to any economic problem, believing history, society and all sorts of other factors undermine the ‘homo economicus’, or the supposedly rational profit-driven man who thinks entirely in his own self-interest and only helps others when they can help him.
As Matt has previously addressed there is a huge difference between positive statements and normative judgments. Woods is confusing the judgments he attributes to economists with positive statements of economics. Read more
Stuff mentions a survey done by Research New Zealand on petrol prices and household consumption of petrol. In the survey they found a number of results that seem to follow the basic idea of a demand curve.
From the article the results were:
It is entirely possible that these facts were cherry-picked by the NZPA article, however lets try to understand them.
Greg Mankiw reports that a lady in Britain was prevented from supplementing her state-provided healthcare with private care. Apparently the NHS favours equality over efficiency:
Officials said that allowing Mrs. Hirst and others like her to pay for extra drugs to supplement government care would violate the philosophy of the health service by giving richer patients an unfair advantage over poorer ones.
Clearly, this restriction on her ability to spend her money as she sees fit is not allocatively efficient. The policy is also likely to diminish the health of the population, as the rich are no longer allowed to boost their healthcare levels above what is offered by the government. That, in turn is likely to lead to a greater burden on the government run, public healthcare system which lacks good services such as this Dentist In Huntington Beach CA.
The morality of equality must run strongly through the British government for it to prevent spending that would reduce the load on its own health funding. Mankiw has an interesting analogy for those who agree with the government’s policy:
Should a parent who hires an after-school tutor for his child be barred from sending the child to the public schools?
