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Luke Croft's avatar

I'd like to learn more about the non-liberal Hanania ideology you mentioned.

Scott Sumner's avatar

Another very good post. In my field (economics) we were taught to focus on how people behave, not what they say. To some extent, that's because expressed views are often insincere (as you emphasize)--people wish to "say the right thing". Over time, I've come to realize that there is another problem with expressed views, cognitive errors. For instance, when people rely on "common sense" they tend to underestimate "elasticities", the extent to which people respond to incentives.

When a city proposes something like a congestion charge, it will generally be opposed by a public that is skeptical that it would reduce traffic. When traffic congestion does end up falling, the congestion charge often becomes more popular.

My favorite example involved my father, who was a heavy smoker. He would deny that cigarette taxes would reduce smoking, a habit he viewed as an addiction. Much later in life my mother casually mentioned that she had smoked in college, something I never imagined. I asked her why she stopped, and she said "When your father and I got married we decided we could only afford one smoker in the family." My father (who had a high IQ) had failed to see the impact of economic incentives even when it operated within his own family, which shows how much our common sense intuition can mislead us on incentive effects.

Many public policies such as minimum wages, mandated job benefits, and rent controls would be less popular if people correctly understood the relevant elasticities.

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