Bryan Caplan and David Henderson

Cost-benefit Analysis

A Category Archive (278 entries)

Fixed Costs and Open Borders

Economic Philosophy
Bryan Caplan
Given existing border controls, mild measures to prevent serious contagious disease seem morally acceptable.  Yet the best choice, in my view, remains fully open borders - tear down the walls and make travel between countries as free as travel within... MORE

Ebola and Open Borders

Cost-benefit Analysis
Bryan Caplan
Opponents of immigration almost instantly latched onto Ebola (see here, here and here for starters).  Isn't this horrific disease the "killer argument" showing that open borders is a naively deadly proposal?  The Center for Immigration Studies' Mark Krikorian swiftly coined... MORE

Risk Analysis in One Lesson

Cost-benefit Analysis
Bryan Caplan
Mueller and Stewart's new piece on "Responsible Counterterrorism Policy" doubles as a great primer on risk analysis:Terrorism is a hazard to human life, and it should be dealt with in a manner similar to that applied to other hazards--albeit with... MORE

The Welfare State as Extended Warranty

Cost-benefit Analysis
Bryan Caplan
"Extended warranty?  How can I lose?"             -- Homer SimpsonValue is subjective, and taste for risk varies widely.  But every economist I've asked - and virtually every savvy consumer - concludes that extended warranties are a lousy deal.  The short... MORE

Implicit Rent and the True Cost of Education Bleg

Cost-benefit Analysis
Bryan Caplan
As far as I can tell, spending statistics for education do not count implicit land rent as part of the cost of education.  The Digest of Education Statistics' Table 213 for example, states that:Current expenditures include instruction, support services, food... MORE

Open Borders: My Vox Interview

Cost-benefit Analysis
Bryan Caplan
The noble Dylan Matthews interviewed me on open borders for Vox.  Here's his write-up.  Here's the full interview.  We shall overcome.... MORE

Our Regulated Society

Regulation
David Henderson
Last night, after a productive meeting in Indianapolis, I flew home to Monterey. Well, not quite to Monterey. That was the plan. But the plan didn't work out. And the reason it didn't work out is a tale of regulation.... MORE

First Cut

Cost-benefit Analysis
Bryan Caplan
When I try to convince my ideological opponents that a government program is a waste of money, I often succeed.  More than a few liberals have responded to my case against education by shrugging, "You're totally right - what a... MORE

Dear Catherine,I was very pleased to read your "The College Degree Has Become the New High School Degree."  I'm currently writing a book defending the signaling model of education.  You're clearly taking my favorite story seriously:Note, though, that the skills... MORE

The Nixon Pardon: Incentives Matter in Politics Too

Public Choice Theory
David Henderson
In this weekend's Wall Street Journal, Ken Gormley and David Shribman celebrate the 40th anniversary of President Ford's pardon of Nixon. The piece is titled "The Nixon Pardon at 40: Ford Looks Better Than Ever." They give basically three arguments:... MORE

EconLog reader Meretta Marks sent me the following request:Would you consider the following topic for your EconLog blog: "What every high school junior should know before thinking of going to college" Suppose.....it's the beginning of the school year in high... MORE

Against Winning

Cost-benefit Analysis
Bryan Caplan
When I was a child, adults taught us to look down on bad winners.  The maxim: "It's not whether you win or lose; it's how you play the game."  The implicit model was something like: Yes, winning is better than... MORE

Mencken's Appeasement

Cost-benefit Analysis
Bryan Caplan
I just learned that the great H.L. Mencken's Prejudices contains an eloquent plea for appeasement.  From Mencken's "Martyrs": Normal 0 MicrosoftInternetExplorer4 [I]t seems to me sheer vanity for any man to hold his religious views too firmly, or to submit... MORE

What's the Use of Crying Over Spilled Blood?

Cost-benefit Analysis
Bryan Caplan
The U.S.-led invasion of Iraq in 2003, you may recall, was dubbed Operation Iraqi Freedom.  Eleven years and over 100,000 civilian deaths later, the name is dark comedy.  The replacement Shiite-dominated government is a close ally of the Iranian theocracy,... MORE

Practical Guidance for Prudent Students

Cost-benefit Analysis
Bryan Caplan
The Case Against Education's chapter on the selfish return to education runs over sixty pages.  Since I suspect that even eager readers may skim all the tables, I end with practical advice in plain English.  Note: Nothing in this section... MORE

Choose Your Battles

Cost-benefit Analysis
David Henderson
It's rare that I disagree with much of what co-blogger Bryan Caplan posts. But among those rare posts are his two recent ones (here and here) on appeasement. I don't want to go at them line by line. Other commenters... MORE

My Life of Appeasement

Cost-benefit Analysis
Bryan Caplan
Morally speaking, I think taxation is theft.  The government has a lot of bad excuses for taking my money without my consent, but no really good reasons.  Still, every year, I pay my taxes.  Why don't I stand up for... MORE

Eminent Domain Bleg

Business Economics
David Henderson
In a comment on my earlier post today, Tom West writes: I'm fairly certain that most infrastructure projects like pipelines or electrical transmission corridors would *never* get built without the government power of eminent domain. That's a reasonable view, and... MORE

Note on Borjas: Non-Binding Constraints Are Not Necessary

Labor Mobility, Immigration, Outsourcing
David Henderson
One of the most articulate critics of expanded immigration into the United States is Harvard economics professor--and immigrant--George J. Borjas. Because I wanted someone who knew the facts about immigration to the United States and could present a balanced view... MORE

George Borjas' new Immigration Economics contains the first intellectually serious critique of the increasingly mainstream view that open borders is a big stack of "trillion dollar bills on the sidewalk."  Borjas begins by clearly explaining what's at stake.[W]hat types of... MORE

The Weak-Willed Do-Gooder

Behavioral Economics and Rationality
Bryan Caplan
Imagine Smith sees a problem in the world.  He knows how to fix the problem.  He's got the resources to implement this remedy.  He sincerely wants to do good.  If he decides to fix the problem, is there any reason... MORE

Evaluating The Arab Spring: What Would Tetlock Say?

Cost-benefit Analysis
Bryan Caplan
I was never optimistic about the Arab Spring.  But the spread of the hellish Syrian Civil War into Iraq leaves the net-effect-so-far quite a bit worse than I expected.  You could say, "You're no expert on this topic, so your... MORE

When Do Hypotheticals Cover Their Cost?

Cost-benefit Analysis
Bryan Caplan
Suppose I asked, "Where would you buy steaks if you only shopped at stores starting with the letter Q?"  A few people would wrack their brains for an answer.  But most would dismiss the question: "That will never happen, so... MORE

Tyler Cowen versus Frederic Bastiat

Cost-benefit Analysis
David Henderson
And also versus Julian Simon and Alex Field Counterintuitive though it may sound, the greater peacefulness of the world may make the attainment of higher rates of economic growth less urgent and thus less likely. This view does not claim... MORE

Krugman's Misleading Post on Coal

Economic Education
David Henderson
There used to be a lot of coal miners, but not any more -- strip mines and machinery in general have allowed us to produce more coal with very few miners. Basically, it's a job that was destroyed by technology... MORE

While there's much to like in Yoram Bauman's Cartoon Introduction to Climate Change, this page nicely captures my reservations about his approach: He's tolerant of economically illiterate action, but intolerant of economically literate inaction.  (Click to enlarge).[Excerpted from The Cartoon... MORE

Last Spring, a student came to my class wearing a shirt reading "Basketball Never Stops." I need to get a shirt that says "Economics Never Stops." David's recent post on uncertainty and global warming was a good reminder. Public policy... MORE

Uncertainty Can Go Both Ways

Energy, Environment, Resources
David Henderson
In a recent response to Byran Caplan on global warming, Yoram Bauman rested part of his argument against cost/benefit analysis on the issue of uncertainty. Bauman wrote: Reason #1 is that CBA has trouble dealing with uncertainty: if there's a... MORE

The Difficulties with Lying

Economic Philosophy
David Henderson
Co-blogger Bryan Caplan, in his post, "Frank on Phony Credentials," points out a big problem with cheating on credentials. He writes: [W]hile telling an isolated lie comes easily to human beings, most human beings are bad at living a lie.... MORE

I offered to give Yoram the last word in our exchange.  Here it is.P.S. Yoram's non-fiction graphic novel officially releases on June 5.  That week, with his kind permission, I'll be posting a few pages from his book. Normal 0... MORE

Cartoon Introduction to Climate Change: Rejoinder to Yoram Bauman

Behavioral Economics and Rationality
Bryan Caplan
Here is my (delayed) rejoinder to Yoram's response to my review of his Cartoon Introduction to Climate Change.  He's in blockquotes, I'm not.As with most academics, Bryan keeps his words of praise to a minimum and instead focuses on criticisms.... MORE

Yoram Bauman, co-author of The Cartoon Introduction to Climate Change, asked to respond to my review.  I'm about to go to my parents' golden anniversary party, so I probably won't respond until late next week.Here's Yoram: Normal 0 MicrosoftInternetExplorer4 Response... MORE

The Cartoon Introduction to Climate Change

Cost-benefit Analysis
Bryan Caplan
Stand-Up Economist Yoram Bauman is back with another non-fiction graphic novel, The Cartoon Introduction to Climate Change.  As with his previous Cartoon Introductions to Economics (micro and macro), there is much to like.  Bauman thoughtfully interweaves physical science and economics. ... MORE

Great Moments in Federal Government Retirement

Cost-benefit Analysis
David Henderson
On Tuesday, I spent all day at a retirement planning seminar with more than 100 other federal government workers. Talking to a few of my colleagues around my same age (63), I jokingly referred to it as an AARP event.... MORE

Three Graphs About Trying and Failing

Cost-benefit Analysis
Bryan Caplan
The true return to college heavily depends on the probability of successful completion.  That probability in turn heavily depends on pre-college academic performance.  How heavily?  Check out these three graphs from Bound, Lovenheim, and Turner's "Why Have College Completion Rates... MORE

George R.R. Martin's Pacifist Tendencies

Books: Reviews and Suggested Readings
Bryan Caplan
I've argued that George R.R. Martin's novels vividly illustrate my case for pacifism.  Now G.R.R.M. tells us directly:You're a congenial man, yet these books are incredibly violent. Does that ever feel at odds with these views about power and war?... MORE

Tourists Welcome

Cost-benefit Analysis
Bryan Caplan
Almost everyone wants to heavily restrict immigration.  Foreigners will take our jobs, go on welfare, poison our culture, and vote for socialism.  But there's one kind of foreigner almost every country welcomes: tourists.  Sure, locals gripe about their cluelessness and... MORE

Try Harder or Do Something Easier?

Behavioral Economics and Rationality
Bryan Caplan
A friend tells you, "I'm thinking of starting a restaurant.  Advise me."  You know that about 60% of new restaurants fail in their first three years - and have no reason to think that your friend would be anything other... MORE

Civil Disobedience: King versus Huemer

Cost-benefit Analysis
Bryan Caplan
Martin Luther King's "Letter from a Birmingham Jail" defends an odd position: You may morally break an unjust law IF you make no effort to evade the legal punishment for the unjust law you break.In no sense do I advocate... MORE

The Impolitic Wisdom of Simon Kuznets

Cost-benefit Analysis
Bryan Caplan
Highlight from Diane Coyle's GDP: A Brief but Affectionate History:Kuznets, however, saw specifically his task as working out how to measure national economic welfare rather than just output.  He wrote:It would be of great value to have national income estimates... MORE

The Righteous Scofflaw

Cost-benefit Analysis
Bryan Caplan
The most popular argument against illegal immigration is probably that breaking the law is wrong.  At least since the Nazis, though, virtually no one believes that breaking the law is always wrong.  Instead, we all recognize circumstances under which being... MORE

Is Welfare a Band-Aid for Nominal Wage Rigidity?

Cost-benefit Analysis
Bryan Caplan
The minimum wage and welfare (broadly defined to include unemployment benefits and such) curiously interact.  As I've previously explained:The minimum wage deprives the unfortunate workers shown in red of their ability to support themselves.  Given this involuntary unemployment, the case... MORE

You Don't Know the Best Way to Deal with Russia

Cost-benefit Analysis
Bryan Caplan
Foreign policy experts love making bold predictions.  The clearer their conclusions, the wiser they sound.  Unfortunately, as Philip Tetlock documents, their predictions about controversial topics are scarcely better than chance.  They're all style, no substance.  The Economist's recent editorial on... MORE

Why we debate the unimportant issues

Regulation and Subsidies
Scott Sumner
Alex Tabarrok has a post discussing the laws protecting auto dealers from competition. One thing I notice is that when I discuss this sort of crazy law in the faculty dining room, many non-economists will tell me that they have... MORE

Crude Materialism versus the Wolfers Equation

Behavioral Economics and Rationality
Bryan Caplan
Suppose you're a crude materialist who believes that money is the secret to happiness.  You're estimating an equation of the form: Happiness (in Standard Deviations) = a + b * ln(income) How big should you expect b to be?  Well,... MORE

The Minimum Wage vs. Welfare: Band-Aid or Salt?

Cost-benefit Analysis
Bryan Caplan
Peter Thiel entertains what economists would call a "second-best" argument in favor of raising the minimum wage:"In theory, I'm against it, because people should have the freedom to contract at whatever wage they'd like to have. But in practice, I... MORE

Ambition Revisited

Cost-benefit Analysis
Bryan Caplan
I just ran across some more striking evidence that ambition really matters.  James Rosenbaum's "College-For-All: Do Students Understand What College Demands?" (Social Psychology of Education, 1998) shows degree completion as a function of high school students' GPA and educational aspirations.Exhibit... MORE

Ballparking the Marital Return to College

Cost-benefit Analysis
Bryan Caplan
When education correlates with a good outcome, labor economists are usually eager to publicize the fact.  There is, however, one glaring exception.  Labor economists rarely announce that the well-educated are more likely to marry a well-educated spouse - and capture... MORE

What Bad Students Know that Good Economists Don't

Economics of Education
Bryan Caplan
The college premium skyrocketed over the last three decades.  B.A.s now out-earn high school grads by 70-80%.*  College graduation, in contrast, barely rose.  In econospeak, the supply of college graduates looks bizarrely price-inelastic.Over the last two months, I've read virtually... MORE

The Futility of Quarreling When There Is No Surplus to Divide

Behavioral Economics and Rationality
Bryan Caplan
Imagine two people have the following relationship options:Option A: DateOption B: Be FriendsOption C: Stop Seeing Each OtherPerson #1's preference ordering is: {A, C, B}.  In English, #1 most prefers to date, and least prefers to just be friends.Person #2's... MORE

In Praise of Passivity

Behavioral Economics and Rationality
Bryan Caplan
"In Praise of Passivity" is another gem from Mike Huemer, my favorite philosopher.  Thesis:Voters, activists, and political leaders of the present day are in the position of medieval doctors. They hold simple, prescientific theories about the workings of society and... MORE

Liability, Disclaimers, and Adverse Selection

Information Goods, Intellectual Property
Bryan Caplan
Suppose the law says that parking garages are liable for whatever damages occur on the premises.  However, there's a big loophole: Garages can disclaim liability by posting a big "ENTER AT YOUR OWN RISK" sign.  What happens?Non-economists usually conclude that... MORE

Mandela: Reckless But Lucky

Cost-benefit Analysis
Bryan Caplan
I've heard ugly rumors about Nelson Mandela for years.  Was he a Communist - or a terrorist?  His recent death inspired me to learn more.  Alex Tabarrok nudged me to start with Mandela's autobiography, which presumably puts his career in... MORE

Some historians argue that colonialism was an outgrowth of nationalism.  Once the people in the leading industrial powers started to strongly identify as British, French, German, American, or Japanese, they fell in love with the idea of planting their national... MORE

Why So High? Economics and the Value of Life

Behavioral Economics and Rationality
Bryan Caplan
Economists are widely-seen as heartless.  Their use of the phrase "value of life" is often seen as damning confirmation of this heartlessness.  Nice people say, "You can't put a value on a human life" and change the subject!What's striking, though,... MORE

You read that headline right. This last Wednesday, I sat for over an hour in a waiting room while my wife was having a medical procedure. On the way to the outpatient facility early that morning, I picked up my... MORE

Sitting on an Ocean of Hypotheticals

Behavioral Economics and Rationality
Bryan Caplan
David senses a weakness in my "Sitting on an Ocean of Talent": But I don't think people's opposition to more immigration is that different from how they would react to those who would prevent them from getting at precious resources.... MORE

Sitting on an Ocean of Talent

Cost-benefit Analysis
Bryan Caplan
Imagine scientists discover a new substance that reverses aging.  They name it Leonium, after Ponce de Leon.  The catch: Leonium is vanishingly rare.  Some years later, though, the scientists discover a trillion dollars worth of Leonium directly under the Empire... MORE

NSA Spying: A Cost/Benefit Analysis

Cost-benefit Analysis
David Henderson
Why does the National Security Agency (NSA) spy on Americans? In short, it is attempting to reduce even further the small probability of terrorist attacks on Americans. That reduction in probability, times the value of the damages averted, is the... MORE

Great Moments in Cost/Benefit Analysis California's S.B. 375 mandates that cities increase the population densities of targeted neighborhoods because everyone knows that people drive less in higher densities and transit-oriented developments relieve congestion. One problem, however, is that transportation models... MORE

People with more education don't just make more money if they have jobs; they're more likely to have jobs in the first place.  As a result, the earnings premium now greatly exceeds the wage premium.  Consider the following caricature approximation... MORE

How Bad Is White Nationalism?

Cost-benefit Analysis
Bryan Caplan
White nationalism is one of the most reviled ideologies on earth.  But what exactly is so awful about it?  Menachem Rosensaft's piece in Slate quotes some leading white nationalists, but never really explains why this nationalism is worse than all... MORE

Gifts, Efficiency, and Social Desirability Bias

Behavioral Economics and Rationality
Bryan Caplan
Is cash the only efficient gift?  Pure economic theory points to two contradictory answers:1. Yes, because of the receiver's demonstrated preference.  Suppose gift X costs $100.  If you gave the receiver $100, would he still have spent the money on... MORE

Briggs and Tabarrok provide strong evidence that gun ownership increases suicide risk.  The response to their research provides strong evidence that readers swiftly twist research to suit their prejudices.  A slight caricature of the two standard reactions:Reaction #1: Crusade.  Guns... MORE

How Staggering is the Briggs-Tabarrok Effect?

Cost-benefit Analysis
Bryan Caplan
Rumor has it that GMU's Justin Briggs and Alex Tabarrok have hammered the final nail into the NRA's coffin.  Zack Beauchamp of Think Progress explains:A new study, coauthored by a libertarian-aligned economist, has found strong evidence that the spread of... MORE

Normal 0 MicrosoftInternetExplorer4 It's hard to believe we're even debating "Let anyone take a job anywhere."  If someone said, "The law should prevent women from working," or "The law should prevent Jews from working," or "The law should prevent... MORE

Normal 0 MicrosoftInternetExplorer4 "Let anyone take a job anywhere."  Given current policy, it sounds radical.  But notice: The resolution does NOT say "Let anyone become a citizen anywhere," "Let anyone collect government benefits anywhere," or "Let anyone vote anywhere." ... MORE

Pick Your Poison

Cost-benefit Analysis
Bryan Caplan
Suppose you need a helper, but face two imperfect candidates:1. A smart person who only cares about himself.2. A stupid person who only cares about you.Under what conditions would you prefer #1?  Under what conditions would you prefer #2?  Why? ... MORE

My Two Modes

Cost-benefit Analysis
Bryan Caplan
Sometimes I wonder if I'm an extreme cynic or an extreme idealist.  The truth is that I'm both.  My mind works in two different modes.I enter my idealist mode whenever someone proposes a reform that could plausibly make the world... MORE

A Cheap, Inoffensive Way to Make Democracy Work Better

Cost-benefit Analysis
Bryan Caplan
Experts agree: The typical voter knows next to nothing about politics, economics, or policy.  In a democracy, this has major negative externalities.  Existing civics education is supposed to deal with these externalities, but it's been an abject failure: Students learn... MORE

Fun Facts on Disability Insurance

Cost-benefit Analysis
Bryan Caplan
The new Cato Policy Analysis on Social Security Disability Insurance is full of fun facts. (footnotes omitted)The U.S. disability rate fell 25% between 1977 and 1987, then more than doubled.  The staunchest health care skeptics should be baffled.  Unless, of... MORE

A Micro-Mincer regression estimates personal income as a function of personal education and controls:ln Personal Income = a + b*Personal Years of Education + other stuffUnless b is very large, b approximately equals the individual education premium.  b=.09, for example,... MORE

Morbid Thinking

Behavioral Economics and Rationality
Bryan Caplan
We often accuse each other of wishful thinking.  Only rarely, though, do we accuse each other of the opposite cognitive vice: morbid thinking.  The disparity could be purely linguistic, but it probably isn't.  We have tons of synonyms for "wishful... MORE

For Natalism

Cost-benefit Analysis
Bryan Caplan
Jason Sorens critiques natalism over at Pileus.  Here's my point-by-point reply.  Jason's in blockquotes, I'm not.The main advantage of more people is a deepening of the market and the division of labor. More people means more ideas and more specialization.... MORE

A Pacifist History of Westeros: Gochenour Guest Post

Books: Reviews and Suggested Readings
Bryan Caplan
Zac Gochenour, who co-authors with both me and David, is also my go-to Game of Thrones savant.  Here's his reaction to my recent post on pacifism and GoT.I think that your analysis is very much in line with Martin's intent.... MORE

Game of Thrones and the Common-Sense Case for Pacifism

Books: Reviews and Suggested Readings
Bryan Caplan
[Warning: Full of book and show spoilers.]"And those who have not swords can still die upon them."  The words are J.R.R. Tolkien's, but they could just as easily have come from the pen of George R.R. Martin, author of the... MORE

What Is the Forced Organ Donation Hypothetical?

Cost-benefit Analysis
Bryan Caplan
I often appeal to the forced organ donation hypothetical.  See for example my common-sense case for pacifism.  But what precisely is the hypothetical?  Here's an excellent explanation, courtesy of Judith Jarvis Thomson:[I]magine yourself to be a surgeon, a truly great... MORE

Life Extension: Economists vs. the Public

Behavioral Economics and Rationality
Bryan Caplan
Earlier this year, Pew surveyed Americans' beliefs about life extension.  I was appalled by their nihilistic responses.  Worst of the bunch:Asked about the consequences for society if new medical treatments could "slow the aging process and allow the average person... MORE

Peace On Earth Is Almost Here

Cost-benefit Analysis
Bryan Caplan
The ceaseless ugliness of the news notwithstanding, the Great Pacification continues.  Check out Wikipedia's latest map of Ongoing Military Conflicts, circa October 2012.The minor wars are usually dwarfed by private crime.  Even most of the major wars would have seemed... MORE

The Means-Testing Club

Cost-benefit Analysis
Bryan Caplan
We advocates of means-testing need a name for our club.  Singapore and Tyler Cowen (somewhat surprisingly) could be charter members.  Tyler, from Singapore: Normal 0 MicrosoftInternetExplorer4 This is oversimplifying of course, but you can think of the Singaporean system as... MORE

The Programmatic Paternalist

Cost-benefit Analysis
Bryan Caplan
Suppose you were a free-thinking, hard-core paternalist.  Regardless of the forms of paternalism that people in your society will accept, you're determined to give them forms of paternalism they need.  If coercing people for their own good will in fact... MORE

We got together with some neighbors last month and held a yard sale. A good number of our customers were Spanish-speaking immigrants. Co-blogger Bryan Caplan discusses research suggesting that more immigrants make for higher real estate values in the Cato... MORE

Nudge and Abortion Followup

Behavioral Economics and Rationality
Bryan Caplan
"Nudge and Abortion" has sparked a lively Twitter debate.  Leigh Caldwell has most thoughtful reaction:Leigh: @BafMacro but: @bryan_caplan's arg holds IF his preference premise is true. Regretting NEVER having kids != regretting an abortion @R_ThalerMy response to Leigh: I didn't... MORE

Nudge and Abortion

Behavioral Economics and Rationality
Bryan Caplan
Here's my ongoing Twitter exchange with Richard Thaler: Thaler: As @CassSunstein and I say repeatedly in Nudge, the goal is to improve outcomes for people AS JUDGED BY THEMSELVES, not policy maker's tasteMe: .@R_Thaler @ATabarrok @CassSunstein So what existing *hard*... MORE

Tribalism, Misanthropy, and the Lesser Evil

Behavioral Economics and Rationality
Bryan Caplan
I've long attacked tribalism and misanthropy as grave evils.  Only recently, though, have I had two epiphanies:1. Tribalism without misanthropy is fairly harmless.  If you're optimistic about the potential of the typical human, you'll see out-groups as opportunities for mutually... MORE

Guess Who's Second-Guessing

Cost-benefit Analysis
Bryan Caplan
A single-issue website laments:It is just depressing to witness academics confining the discussion of complex issues within the parameters of pre-existing public opinion. What's the point of possessing vast knowledge of any subject if one chooses to then limit themselves... MORE

Noah Smith on Wealth and Efficiency

Cost-benefit Analysis
David Henderson
In a recent post on how "normal people" think about economics, Noah Smith writes something that I strongly disagree with: In a certain sense, the normal people's approach makes more sense than that of the economists. We are an incredibly... MORE

Meta-Measuring Signaling

Cost-benefit Analysis
Bryan Caplan
Tyler has probably just posted his best piece on educational signaling ever.  Unfortunately, I leave for vacation today, so I won't write a detailed response.  My quick take: Tyler now tacitly admits the force of many of my arguments, so... MORE

On Bastiat and the Edifice Complex

Central Planning vs. Local Knowledge
Art Carden
Last week, I asked my principles of macro students to do the following: Evaluate this argument in light of Frederic Bastiat's essay "What is Seen, and What is Not Seen." You may use the assigned readings and videos, but you... MORE

Trading With Foreigners: What's In It For Us?

Cost-benefit Analysis
Art Carden
Arguments against international trade and immigration are classic examples of people ignoring Bastiat's lesson and focusing only on what is seen while ignoring what is unseen. What, people ask, is in it for *us* if we trade with foreigners? The... MORE

The Mosquito Bite Analogy

Behavioral Economics and Rationality
Bryan Caplan
Free-market economists often lament the difficulty of communicating their ideas to a popular audience.  Why?  Because the free-market prescription is often, "Government should leave the problem alone.  Trying to fix it only makes it worse."  How is anyone supposed to... MORE

The Silence of the Bets

Cost-benefit Analysis
Bryan Caplan
Last week's post on "Bets, Portfolios, and Belief Revelation" sparked a long list of responses: Tyler (here, here, plus a ton on Twitter), Alex, Robin, Eli Dourado, and more.  Adam Gurri kindly aggregates here.  The quick version of my view:... MORE

In Case of Revolution, Climb Into a Hole

Cost-benefit Analysis
Bryan Caplan
In 1968, Abbie Hoffman published Revolution for the Hell of It.  Five years later, this silly title inspired David Friedman to include a chapter called "Revolution Is the Hell of It" in his Machinery of Freedom.  I remember Friedman's words... MORE

Coase versus Pigou on Independence Day

Central Planning vs. Local Knowledge
Art Carden
As I write this on Wednesday night, I hear the sounds of fireworks going off in the distance. My first thought was "maybe distant fireworks were the 'orange stuff' my son saw that through his window that 'scared [him]' earlier... MORE

Market Distortions Are Lower Bounds

Behavioral Economics and Rationality
Art Carden
A few days ago, I blogged from the Mall of America and asked whether it is "the most bourgeois place on Earth." One commenter pointed out that it's subsidized and actually policed by the Bloomington PD. Neither really surprise me... MORE

Don Boudreaux thoughtfully discusses the putative political externalities of immigration, then ends on a pessimistic note:I have no illusions (I really and truly do not) that anything that I write here, or that I might write in follow-up posts or... MORE

New at the IHS Kosmos Blog: My Productivity Bookshelf

Books: Reviews and Suggested Readings
Art Carden
One of my favorite organizations in the world is the Institute for Humane Studies. This isn't because I do contract work for them or because I won their 2013 Alum of the Year Award. I do contract work for them... MORE

Why Don't Dying Firms Raise Prices?

Cost-benefit Analysis
Bryan Caplan
"Demand is more elastic in the long-run than the short-run."  It's a textbook truism.  Implication: Raising prices is often a bad idea even if profits instantly rise.  In the long-run, demand will get more elastic, and the price-gouging firm will... MORE

Caplan-Ting Immigration Debate

Cost-benefit Analysis
Bryan Caplan
My Students for Liberty immigration debate with Jan Ting of the Center for Immigration Studies is now up.  Here's the teaser, here's the whole thing.  Credit where credit is due: Ting was brave enough to debate before a hostile libertarian... MORE

Debate: Does Democracy Work?

Behavioral Economics and Rationality
Bryan Caplan
Last week I did an online debate for Learn Liberty with philosopher Helene Landemore.  The topic: Does democracy work?  Here's my opening statement.Democracy clearly works if you set the bar low enough.  Is democracy better than dictatorship?  Of course.  Does... MORE

In my profession as an economics professor and through churches I have attended, I've been around a lot of people who want to "make a difference." They almost inevitably equate "making a difference" with "working for a government or a... MORE

Prison Sentences: Finally Some Good News

Cross-country Comparisons
David Henderson
One of the scariest facts about the United States is that our governments' rate of incarceration competes for the highest in the world. Why do I say, "competes for" rather than is? Because when a government forcibly keeps its citizens... MORE

Efficiency, Equity, and Ideology: What "Other Values" Matter?

Behavioral Economics and Rationality
Art Carden
Here's a puzzle I've noticed: criticize government intervention on efficiency grounds, and you will be quick to be told that there are "other values" (equity, for example) that a good society should consider in addition to efficiency. Perhaps you will... MORE

The June issue of Cato Unbound features a lead essay on recycling by Mike Munger and, so far, response essays from Edward Humes, Melissa Walsh Innes, and Steven Landsburg. As of right now, there are also "conversation" essays from Mike... MORE

Which Books Should We Re-Read?

Books: Reviews and Suggested Readings
Art Carden
Some books are to be tasted, others to be swallowed, and some few to be chewed and digested: that is, some books are to be read only in parts, others to be read, but not curiously, and some few to... MORE

NSA Surveillance: More Hay and More "Hey!"

Regulation
David Henderson
In a post earlier this week, "NSA Surveillance: A Cost/Benefit Analysis," I quoted John Mueller and Mark G. Stewart's statement, "However, the reaction has continually been to expand the enterprise, searching for the needle by adding more and more hay."... MORE

U.S. Foreign Policy: The Swiss Perspective?

Cost-benefit Analysis
Bryan Caplan
Switzerland hasn't fought a war since 1815.  The standard explanation is Swiss neutrality.  When other countries fight, the Swiss do not take sides.  As this official Swiss website explains:The advice of Switzerland's popular saint, Nicholas of Flüe (1417-87), "Don't get... MORE

NSA Surveillance: A Cost/Benefit Analysis

Cost-benefit Analysis
David Henderson
However, the reaction has continually been to expand the enterprise, searching for the needle by adding more and more hay. Far overdue are extensive openly published studies that rationally evaluate homeland-security expenditures. The NSA's formerly secret surveillance programs have been... MORE

My latest op-ed was published today by AL.com. In it, I evaluated claims by Senator Jeff Sessions and Rep. Mo Brooks that "we don't have that many jobs" (Sessions) and that "simple economics" says "You increase the supply of anything,... MORE

Foreign Language Study: Should it Be Compulsory?

Cost-benefit Analysis
Art Carden
A few weeks ago, I was in Stockholm, Sweden for a conference. My observations along the way brought to mind co-blogger Bryan Caplan's posts about foreign language requirements(1, 2, 3). Specifically, during my layover in Amsterdam, I noticed that some... MORE

Semi-Rivalry and Fiscal Externalities

Microeconomics
Bryan Caplan
Suppose a country has a progressive tax system.  If everyone equally consumes government benefits, isn't everyone with below-median income automatically a net fiscal burden - i.e., a person who withdraws taxes more from the Treasury than he contributes?Naive analysts usually... MORE

Better Living Through Economics: Using Incentives to Get Fitter

Behavioral Economics and Rationality
Art Carden
My latest article at Forbes.com explains the set of self-imposed constraints I'm using to eat better and exercise. I'm threatening myself with a very sharp stick; for every goal I don't meet, I have to give the Democratic Party $5... MORE

Caplan-Ting Foreign Policy Debate

Cost-benefit Analysis
Bryan Caplan
I debated Jan Ting twice at this year's Students for Liberty Conference: once on foreign policy, and once on immigration.  Our foreign policy debate is now up, including an awesome animated intro.  Enjoy!... MORE

Five Points in Birmingham is a destination for an interesting combination of good food and crazy. There's a Chick-fil-A in Five Points, and I didn't realize until I read this article that said Chick-fil-A doesn't have a drive-thru. There was,... MORE

Misanthropy by Numbers

Behavioral Economics and Rationality
Bryan Caplan
Suppose you're a self-doubting misanthrope.  You want to malign a group of people, but don't feel up to the job.  I'm here to help.  If you stick to the following four easy steps, you can and will craft a rhetorically... MORE

If I Had a Billion Dollars: My Answer to Bryan's Question

Central Planning vs. Local Knowledge
Art Carden
Bryan asked his PhD students how the government should spend $1 billion most efficiently (in the Kaldor-Hicks sense). He posted the best answers here. I agree generally that subsidizing decisions to have kids would be a good use of the... MORE

Monetizing Job Security

Cost-benefit Analysis
Bryan Caplan
Federal workers' total compensation far exceeds that of private sector workers.  The CBO says so, and so does a large academic literature.  One glaring omission, though, is federal job security.  High job security is nice to have during normal times,... MORE

Like most people, Tyler Cowen thinks that rising high school graduation rates are good news:The nation's high school graduation rate has risen -- to 78 percent in 2010, the Education Department says in its most recent estimate. That's obviously still... MORE

There were, once again, some truly excellent comments on my last post, in which I offered my answers to the questions blockquoted below. Furthermore, Jeanne Hoffman at Heels First Travel--a lawyer by training and a member of the IHS staff--also... MORE

Coase on a Plane: My Answer

Cost-benefit Analysis
Art Carden
Thanks to everyone who offered excellent comments on my last post. Most people were thinking about it the way I do. To recap, here were the questions I someday want to ask on an exam or in a job interview:... MORE

Consumer Surplus: An Application of the Concept

Cost-benefit Analysis
David Henderson
I've written on consumer surplus a number of times on this blog. See here. David Boaz recently posted on a 1979 talk by Nathaniel Branden to which I was the introducer. In my intro to Nathan, I applied the concept... MORE

Updating My RSS Feeds: What Am I Missing?

Cost-benefit Analysis
Art Carden
With the end of the semester and the coming demise of Google Reader, I'm going to take an inventory of my already-thin list of RSS feeds and add and subtract as I deem necessary. Since crowdsourcing is the hip, "in"... MORE

How to Spend a Billion Dollars: Best Answers

Cost-benefit Analysis
Bryan Caplan
Thanks for all 115 answers to my "how to spend a billion dollars" challenge.  Two general observations:1. When you claim that X is most efficient way for the federal government to spend an extra billion dollars, you should point to... MORE

Population Externality Bleg

Cost-benefit Analysis
Bryan Caplan
Suppose a city's population exogenously rises.  You might think that price theory clearly implies that demand for real estate will rise.  But that's not so.  In theory, higher population could generate a congestion externality so awful that demand for real... MORE

Congestion Externality Bleg

Cost-benefit Analysis
David Henderson
In the cost/benefit analysis course i teach, one of the actual cost/benefit analyses we work our way through--and one that I present as a reasonably good CBA--is a study done by two St. Louis Federal Reserve economists on adding another... MORE

How to Spend A Billion Dollars

Cost-benefit Analysis
Bryan Caplan
My Ph.D. students' responses to the following question on their final exam disappointed me:In the modern U.S., what is the most efficient way for the federal government to spend an extra billion dollars?  What is the maximally utilitarian way for... MORE

Rector, Poverty, and Immigration

Cost-benefit Analysis
Bryan Caplan
Robert Rector and Jason Richwine's new Heritage report on the fiscal effects of immigration has been widely criticized (see here, here, and here for starters).  I'm honestly surprised that the report is not worse.  Rector and Richwine may get a... MORE

Owen, Sawhill, and "the" Return to Education

Cost-benefit Analysis
Bryan Caplan
Yesterday I attended a roundtable discussion on the new Brookings brief, "Should Everyone Go to College?"  The authors, Stephanie Owen and Isabel Sawhill, succinctly document a point that labor economists routinely neglect: there ain't no such thing as "the" return... MORE

Adam Smith on the Public Choice of Foreign Intervention

Cost-benefit Analysis
David Henderson
Why the 13 colonies are a net loser for Great Britain: A great empire has been established for the sole purpose of raising up a nation of customers who should be obliged to buy from the shops of our different... MORE

A Supererogatory Provision

Economic Philosophy
Bryan Caplan
I incline to the view that giving charity to deserving strangers is morally good but not morally required.  To use philosophical jargon, I hold that charity is supererogatory.  However, the fact that I consider charity to be above and beyond... MORE

The Grave Evil of Unemployment

Behavioral Economics and Rationality
Bryan Caplan
Free-market economists rarely declare, "We have to do X about unemployment."  Why not?  Free-market economists' standard reply is just, "We expect X to fail."  Their critics, however, have a less favorable explanation: Free-market economists oppose X because free-market economists are... MORE

ZMP, Morale, and Statistical Discrimination

Cost-benefit Analysis
Bryan Caplan
Recent Twitter exchange between myself and Tyler:@tylercowen: [ZMP] is about morale effects in the workplace, not "finding something for them to do," the latter is trivially easy.@bryan_caplan: This reply deserves mischief-free elaboration.@tylercowen: Is there a difference?@bryan_caplan: Asking "Is there a... MORE

What You Say When You Don't Call an Applicant

Behavioral Economics and Rationality
Bryan Caplan
"If your phone doesn't ring, it's me."  When a potential employers doesn't call about your application, they're telling you something about you - but they're also saying something about themselves.  My friend Perry Metzger explains:[Reprinted with Perry's permission.]BTW, one effect... MORE

What You Say When You Throw an Application Away

Cost-benefit Analysis
Bryan Caplan
Tyler has an odd interpretation of an interesting story.  The story:[R]esearchers sent out 4,800 fake résumés at random for 600 job openings. What they found is that employers would rather call back someone with no relevant experience who's only been out... MORE

On The Effects of Homeschooling: A Bet

Alternative Economics
Art Carden
I can't wait for Bryan's The Case Against Education: every semester, my beliefs move in favor of the signaling model and against the human capital model of schooling. This isn't to say there aren't a lot of students who are... MORE

Major Premium

Cost-benefit Analysis
Bryan Caplan
Economists usually talk about the college premium, but the college premium heavily depends on your major.  At the same time, though, stronger students typically choose harder - and more lucrative - majors.  Thus, the college premium is doubly infected by... MORE

Policy Implications of the Marriage Premium

Cost-benefit Analysis
Bryan Caplan
In the comments, Thomas Boyle fears that the marriage premium could become an excuse for bad policies: Years ago we heard that homeownership was positively associated with all sorts of socially desirable outcomes. Now we know that public policy to... MORE

On Human Evil: Concrete Down the Drain Edition

Cost-benefit Analysis
Garett Jones
When people have little incentive to behave well, and when nobody is watching, what do people do?  The last few years have given us millions of opportunities to answer that question as people living in foreclosed homes decided whether to... MORE

"Get Married and Stay Married"

Cost-benefit Analysis
David Henderson
I'm glad that co-blogger Bryan Caplan raised the issue of the marriage premium. When I was writing a review of Dwight Lee's and Richard McKenzie's excellent book, Getting Rich in America: 8 Simple Rules for Building a Fortune and a... MORE

Mises on Death Panels (Implicitly)

Cost-benefit Analysis
Bryan Caplan
Unlike most opponents of Medicare, I think that restricted reimbursements and so-called "death panels" are great ideas.  If the government is paying the bills, saying "We'll pay for whatever you want" or "We'll pay whatever it takes to save you"... MORE

Bad Social Science: A Consequence of Consequentialism

Cost-benefit Analysis
Bryan Caplan
From my response to Mike Huemer's target essay on this month's Cato Unbound:As a free bonus, Huemer dulls the urge consequentialist libertarians often feel to stretch the truth, to make stronger claims about the benefits of libertarian policies than the... MORE

The GiveWell-Clemens Brainstorm

Cost-benefit Analysis
Bryan Caplan
Call it the nobility summit: The noble charity evaluator GiveWell brainstorms with the noble immigration researcher Michael Clemens.  The highlight for me (Clemens speaking):CITA is a non-profit organization in Yuma, AZ founded by Janine Duron, which aims to match Mexican... MORE

Tim Kane and Means-Testing

Behavioral Economics and Rationality
Bryan Caplan
Whenever an economist or libertarian opposes means-testing of Social Security and Medicare, I immediately ask: "So should we extend all currently means-tested programs to the entire population?"  Listeners often admit that it's a persuasive challenge.  At our last lunch, however,... MORE

Measurement Error and the Education Premium

Cost-benefit Analysis
Bryan Caplan
If you take a look at the Census, education appears to be extremely lucrative.  Back in 1975, drop-outs earned about 20% less than high school grads, college grads earned over 50% more than high school grads, and holders of advanced... MORE

Should Cost/Benefit Analysis Consider Only Benefits?

Cost-benefit Analysis
David Henderson
There's no such thing as a free lunch. Don't worry. I'm not going to produce a new insight that cost/benefit analysis should consider only benefits. But the reason for the title of this post is that a logical conclusion to... MORE

Pacifism in 4 Easy Steps

Economic Philosophy
Bryan Caplan
Normal 0 false false false MicrosoftInternetExplorer4 As I said, this morning's Students for Liberty debate was a double-header.  Here's my two minute opening statement for Topic #2: War.Pacifism in 4 Steps  1.      In the modern world, there are no... MORE

IGM on High-Skilled Immigration

Economic Methods
Bryan Caplan
The IGM Forum reacts to:The average US citizen would be better off if a larger number of highly educated foreign workers were legally allowed to immigrate to the US each year.The result is very lop-sided agreement:The award for the strangest... MORE

Economics Quote of the Week

Cost-benefit Analysis
David Henderson
Although the week is half over, I bet this one will beat all comers. David Friedman, after analyzing queues and time lost to government bureaucracy in Britain while he was traveling, had an anonymous commenter who said: No offence, but... MORE

Don't Let Your Boss Hold You Back

Business Economics
David Henderson
One of the most-powerful pieces of advice that Dwight R. Lee and Richard B. McKenzie give in their book, Getting Rich in America: 8 Simple Rules for Building a Fortune and a Satisfying Life, is: Don't Let Your Boss Hold... MORE

Vipul Naik of Open Borders sent me a very insightful email on the non-pecuniary returns to education.  He's kindly given me permission to reprint it.  Vipul speaks:I've been thinking more about your human capital/signaling/ability bias theories of education. It seems... MORE

The Joy of Microwaves

Cost-benefit Analysis
David Henderson
When our microwave oven broke down a few weeks ago after almost 15 years of faithful service, it got me thinking about how valuable microwaves are to my family, which led to thinking about the consumer surplus we get from... MORE

Independence and Growth

Cost-benefit Analysis
Bryan Caplan
Garett interestingly builds on Lucas' fact that "with the exception of Hong Kong, no massive economic modernization has ever happened in a colony."  Still, I'm unimpressed on multiple levels.1. How about Macao?  If you count so-called "settler societies," then you... MORE

Tyler Cowen often calls Alex Tabarrok the best truth-tracker in Carow Hall.  With good reason.  When I ask Alex questions, he's consistently careful, direct, and accurate.  When I investigate his assertions, they check out.  I trust Alex - even when... MORE

Decadent Parenting

Family Economics
Bryan Caplan
More on decadent parenting from the intro of Selfish Reasons to Have More Kids:To be brutally honest, we're reluctant to have more children because we think that the pain outweighs the gain. When people compare the grief that another child... MORE

Global Utilitarianism and Airport Security

Cost-benefit Analysis
Bryan Caplan
Garett's main point - air travel terrorism has enormous social costs counting the effect on foreign policy - is clearly correct.  The straightforward implication: Mildly reducing the risk of terrorism with major inconvenience for air travelers easily passes a cost/benefit... MORE

If I Were a Global Utilitarian...

moral reasoning
Garett Jones
...I'd probably push for an incredibly stringent anti-hijacker policy.  After all, the last time a few individuals hijacked U.S. planes, it genuinely caused a war in Afghanistan and substantially raised the probability of a war in Iraq.  Massive loss of civilian... MORE

Kidphobia: Decadent, or Just Misguided?

Cost-benefit Analysis
Bryan Caplan
The U.S. birthrate is falling, and Ross Douthat largely blames decadence: [W]hile the burdens on modern parents are real and considerable and in certain ways increasing, people in developed societies enjoy a standard of living unprecedented in human history, and the... MORE

Immigration Charity Bleg

Cost-benefit Analysis
Bryan Caplan
Suppose you wanted to spend your charitable dollars to increase the total number of people who migrate from the Third World to the First World.  What approach would give you the biggest bang for your buck?  Are any specific countries,... MORE

Free Market Airport Security

Cost-benefit Analysis
Bryan Caplan
I think Garett's basically wrong about airport security on the free market.  Yes, both markets and politics respond to risk misperceptions.  But the political response is much more likely to ignore cost and convenience, to impose whatever sounds good.  The... MORE

Towards the end of my debate with Steve Pearlstein, he posed an intriguing question.  My paraphrase: Suppose half of higher education really is pure waste.  What's the efficient government response?  Should government should cut its subsidy by 50%?  Or what?Steve's... MORE

Learning and Retention in Medical School

Economics of Education
Bryan Caplan
Peter Wei, a medical student at Duke, has some interesting thoughts on my post about learning and retention.  Here's Wei, reprinted with his permission:You're right, there's a substantial literature on learning loss, yet this doesn't seem much lamented and educators... MORE

Higher Education: Time to Cut the Cord

Cost-benefit Analysis
Bryan Caplan
Should government withdraw from an active role in promoting and subsidizing higher education?  I recently debated Pulitzer Prize winner Steve Pearlstein on this very question.  Here's the debate resource page, including full audio.  I've also published a correction: total government... MORE

Intermediate Hypothetical Bleg

Cost-benefit Analysis
Bryan Caplan
I asked Steve Sailer:Steve, would you please name a few examples of citizenist policies that you think go slightly beyond the limits of our moral obligations to outsiders?  A few examples of such policies that you think are just barely... MORE

The Present Value of Learning, Adjusted for Forgetting

Cost-benefit Analysis
Bryan Caplan
Suppose learning marginal fact F increases your productivity by V.  What is the present value of learning F?  Economists will be tempted to mechanically apply the standard present value formula.  Using discrete time to keep things simple: PDV(F)=V + V/(1+r)... MORE

A Bunch of Arguments in Favor of Regressive Tuition

Economics of Education
Bryan Caplan
Florida may start varying tuition by major:Tuition would be lower for students pursuing degrees most needed for Florida's job market, including ones in science, technology, engineering and math, collectively known as the STEM fields.The committee is recommending no tuition increases... MORE

My Visit to NASA

Business Economics
David Henderson
Every fall quarter I teach an economics class to Executive MBA students by distance learning. For the first time, we have civilians in the program--in this case 5 students from NASA's Johnson Space Center in Houston. When I teach 5... MORE

Why Not a Free Market in Educational Loans?

Cost-benefit Analysis
Bryan Caplan
Suppose investments in education are every bit as fantastic as we're supposed to believe: Ability bias and signaling are myths, so the entire observed education premium is causal and socially valuable.  Even so, it's hard to see why government should... MORE

Does High School Algebra Pass a Cost-Benefit Test?

Cost-benefit Analysis
Bryan Caplan
"How much do students learn in school?"  The question is harder than it seems.  You get one answer if you measure their knowledge at the end of the school year or right before graduation.  You'll probably get a very different... MORE

Optimizing Your Family Size in Real Time

Cost-benefit Analysis
Bryan Caplan
Someone recently asked me, "How should you decide how many kids to have?"  Since he'd already read Selfish Reasons to Have More Kids, I thought he deserved a detailed step-by-step answer.  Here's roughly what I told him:Having kids is very... MORE

How Not to Be a Pacifist

Economic Philosophy
Bryan Caplan
I often feel the need to save pacifism from the pacifists.  Though the argument for pacifism is surprisingly solid, flesh-and-blood pacifists often make me cringe with their naive and even intellectually dishonest claims.  Some even shamefully glide from pacifism to... MORE

Thoughts on Second Language

Cost-benefit Analysis
David Henderson
Like Bryan Caplan, I think that most investment in learning a second language is a waste. Yes, I've benefited, when traveling abroad, by knowing some French (learned from 8th grade through 12th grade plus first year of college, all in... MORE

The average high school graduate spends two years studying a foreign language. (Digest of Education Statistics, Table 157)  What effect do these years of study have on Americans' actual ability to speak foreign languages?I started by looking at the Census,... MORE

Popular Resistance to Cost-Effectiveness Research: Two Stories and a Challenge

Behavioral Economics and Rationality
Bryan Caplan
Measuring the cost-effectiveness of medical treatment seems unpopular - especially among conservatives.  Why would this be?  I have two stories - one fairly charitable, the other not so charitable.The charitable story.  Many people - even people who strongly favor heavy... MORE

Social Darwinism vs. the Economic Way of Thinking

Cost-benefit Analysis
Bryan Caplan
David Gordon has a fascinating piece on Social Darwinist defenses of capitalism:[I]t is difficult to find writers who called themselves "social Darwinists." But some of Obama's critics have gone too far. Jonah Goldberg, e.g., treats social Darwinism as largely a... MORE

What Would Efficient Sexual Harassment Law Look Like?

Economics and Culture
Bryan Caplan
In a post I otherwise applaud, Alex Tabarrok presents an efficiency defense of sexual harassment law: What the theory and the empirical results are saying is that people exposed to a higher risk of sexual harassment are paid more, just as people... MORE

Henderson on Robert Guest

International Trade
David Henderson
His basic argument is that migration of people across borders creates, in the United States particularly, not so much a melting pot as a "rich stew." (This is not a quote from the book; it's actually from Cato Institute senior... MORE

A Memorial Day Appreciation

Central Planning vs. Local Knowledge
David Henderson
Over at "Facts and Other Stubborn Things," Daniel Kuehn, a frequent commenter on this site, asks that we share thoughts of appreciation for veterans. Here is mine. It's for Richard Timberlake, a well-known monetary economist and student of Milton Friedman.... MORE

Market Failure: The Case of Organic Food

Behavioral Economics and Rationality
Bryan Caplan
Right-leaning people typically believe that (a) markets work, and (b) organic food is a scam.  I definitely fit the profile.  As a result, my every trip to the grocery store inspires cognitive dissonance.  Organic food isn't merely on the shelves;... MORE

Arbitrary Intervention

Cost-benefit Analysis
Bryan Caplan
Life is full of suffering.  At least that's what the Buddha tells us - and if you're a glass-half-empty kind of person, you'll find endless confirmation.  In a statist society, our response often seems to be, "If there's a problem,... MORE

Moderate immigration reformers usually argue in favor of more skilled immigrants.  As a matter of economic efficiency, are they correct?  Suppose skilled immigrants earn $30,000 at home and $100,000 here; unskilled immigrants earn $1000 at home and $25,000 here.  Then... MORE

The Unsung

Growth: Causal Factors
Bryan Caplan
GDP is an agnostic statistic.  If someone spends money on something, it counts as GDP.  This agnosticism helps statisticians avoid controversy.  But it's hard to see any other epistemic benefit.  If we really want to measure output, we have to... MORE

Sunk Cost in War

Cost-benefit Analysis
David Henderson
I am used to people making the sunk cost fallacy when discussing war, that is, in one of the most important cases in which not to commit the fallacy. So I was pleasantly surprised by a segment on The O'Reilly... MORE

Microcredit versus Immigration

Labor Mobility, Immigration, Outsourcing
David Henderson
When people try to think of ways to ease global poverty, they seldom mention migration. They tend to instead think of things like microcredit. There is nothing wrong with microcredit (the lending of small sums of money to poor entrepreneurs).... MORE

Cato Journal Immigration Symposium Round-Up

Cost-benefit Analysis
Bryan Caplan
I've now read the full Cato Journal immigration issue cover-to-cover.  Leaving aside my lead article, here are my brief reactions:1. Gordon Hanson, "Immigration and Economic Growth."  Pretty good, especially on the interaction between high-skilled native labor and low-skilled immigrant labor:One... MORE

When to Be Meek

Cost-benefit Analysis
Bryan Caplan
If you're not getting what you want out of life, people usually advise you to speak up and demand what's coming to you.  You'll never get anywhere just saying "please" and "thank you."  You've got to stand up and assert... MORE

The Orphan Not Adopted

Family Economics
Bryan Caplan
From Dan Carroll, blogger and adoptive father of a former orphan from Ethiopia:The pattern of behavior from the US Department of State (DOS) is to shut down adoption programs from countries that do not participate in the Hague Convention for... MORE

There have been a lot of good comments on Arnold Kling's post on Charles Murray's "bubble" and a few on mine. On Arnold's post, Tom West makes a good point about not taking any particular question of the 20 too... MORE

A Little Optimism from Walter Block

Politics and Economics
David Henderson
This is part of economics professor Walter Block's answer to someone who expressed deep pessimism about the prospects for liberty in the future: I agree with your negative assessment of short term success. It is due to biological hard wiring,... MORE

Antitrust Kills

Cost-benefit Analysis
Bryan Caplan
Since 2007, Bill Gates has given away $28B, 48% of his net worth.  Frugal Dad estimates that he's saved almost 6 million lives.  I haven't double-checked his sources, but it's a plausible estimate.Back in the nineties, Bill Gates was experiencing... MORE

The Marginal Cost of Perfection

Cost-benefit Analysis
David Henderson
In my Executive MBA class, I use The Economic Way of Thinking by the late Paul Heyne, Peter Boettke, and David Prychitko. In a recent problem set, I used a question from the chapter on externalities. The authors have a... MORE

Will Only the Criminals Have Tans?

Regulation
David Henderson
My friend, Ted Levy, MD, sent me the following. It was so good that I couldn't figure out a way to cut it down or choose only a few paragraphs. So here's the whole thing. In the 19th century, one... MORE

Quiggin the Pacifist?

Economic Philosophy
Bryan Caplan
My betting partner John Quiggin seems to be in near-perfect agreement with my pacifism:When is violence justified as a response to manifest and apparently immovable injustice? My answer, with Martin Luther King is: Never, or almost never... In large measure,... MORE

Financial Dysfunction: Who Shares the Blame?

Finance: stocks, options, etc.
Bryan Caplan
When people eat and drink too much, most of us blame the consumer.  Businesses don't force anyone to become obese alcoholics; they're just responding to consumer demand.  If people started spending their money more wisely, business would uncomplainingly cater to... MORE

Universal Social Programs vs. Cost-Benefit Analysis

Cost-benefit Analysis
Bryan Caplan
Economists habitually mock protectionism for its high cost-benefit ratio.  "$265,000 per job saved!  How ridiculous."  But when you propose means-testing Social Security and Medicare benefits, these same economists usually protest, "A program for the poor will always be a poor... MORE

David Friedman on Global Warming

Cost-benefit Analysis
David Henderson
After about a 3-week hiatus, David Friedman is blogging again. And the first one he did after starting is excellent. It's on global warming. Here's the opening paragraph: The argument for large and expensive efforts to prevent or reduce global... MORE

Economics Everywhere

Business Economics
David Henderson
The resourcefulness of free markets. Most mornings I go to the Starbuck's at the local Safeway to buy coffee for my wife. When I went this morning, I pulled up beside an unoccupied Sara Lee truck delivering bread. Outside the... MORE

Beautiful Discussion on the Web

Cost-benefit Analysis
David Henderson
Bryan Caplan has already blogged about the debate between Paul Krugman and Steve Landsburg. I have nothing to add to the substantive issue debated. But I do have four things to add: 1. Notice that Krugman, in a later post,... MORE

The Economics of Gifts

Cost-benefit Analysis
David Henderson
The Institute for Humane Studies did an interview with George Mason University economist Chris Coyne just before Valentine's Day on the economics of gifts. Chris lays out one of the standard claims that economists have made about gifts: that to... MORE

Top Economist's Headache

Cost-benefit Analysis
David Henderson
In my tribute to the late Bill Breit of Trinity University, I promised to retell a story from my book, Making Great Decisions in Business and Life, co-authored with Charley Hooper. Here it is: A Nobel prize-winning economist was to... MORE

Leon Panetta: Wars Will Go On Forever

Cost-benefit Analysis
David Henderson
At a speech that Defense Secretary Leon Panetta gave at the Naval Postgraduate School in Monterey yesterday, I posed the following question: Good morning, Mr. Secretary. I'm David Henderson, an economics professor here in the Graduate School of Business and... MORE

10:1

Cost-benefit Analysis
Bryan Caplan
Hawks love the analogy between defensive war and individual self-defense.  But as I keep saying, there's a big difference: so-called "defensive war" almost always involves the deliberate or reckless killing of innocent bystanders.  Why They Die: Civilian Devastation in Violent... MORE

Against "Defensive War"

Cost-benefit Analysis
Bryan Caplan
Almost everyone is incredulous at my pacifist opposition to so-called "defensive war."  In last week's debate, Ilya Somin's case began with this supposedly clear-cut case of legitimate war.  What could possibly be wrong with a country using military means to... MORE

Pacifism Redux

Economic Philosophy
Bryan Caplan
Today I'm debating pacifism - another position I acquired in the process of blogging - with Ilya Somin at GMU's law school.  My pacifist writings so far:1. Why libertarians should be pacifists, not isolationists.2. The common-sense case for pacifism -... MORE

Tyler Cowen challenges me to engage "with the academic literature" on consumer surplus from the Internet. Fair challenge. First, before doing so, I'll point out that I found it a little strange that he referred critically to a post I... MORE

Hanson's Pragmatic Pacifism

Cost-benefit Analysis
Bryan Caplan
I just discovered that I could conceivably co-author Pragmatic Pacifism with Robin Hanson.  Robin:War is bad. Defending against war, that can be justified. But starting a war, well that is presumably very bad. Not that starting a war could never... MORE

Asymmetric Loss Functions

Cost-benefit Analysis
David Henderson
One of the most important things I learned from my Economics professors at UCLA was at a cocktail party at the late Sherwin Rosen's place in Rochester, New York. Labor economist Finis Welch was visiting from UCLA and I had... MORE

My Consumer Surplus Story

Business Economics
David Henderson
I said here that I would tell my consumer surplus (CS) story that I often tell when I teach the concept. Here it is. In September 1972, my friend Harry Watson (aka J.W. Henry Watson) and I were traveling from... MORE

The Tiger Mother versus Cost-Benefit Analysis

Family Economics
Bryan Caplan
One of my favorite economists urged me to cut this passage from Selfish Reasons to Have More Kids:Before you do something for your child, try asking yourself three questions.1. Do I enjoy it?2. Does my child enjoy it?3. Are there... MORE

Further Advice for a Future Regulator

Cost-benefit Analysis
David Henderson
Tyler Cowen posted a while ago about some advice for a future regulator. I thought the best comment adding advice was this one: Do your best to fight for freedom by attempting to combat any proposed new regulations and undermine... MORE

My Big Fat Consumer Surplus

Cost-benefit Analysis
David Henderson
My original idea for this post was to share my intense happiness at getting my computer fixed quickly. Then I realized that what's really going on is that I got huge consumer surplus. I'll tell you my story and then... MORE

Counterexample on Female Pathology

Cost-benefit Analysis
David Henderson
In an excellent post earlier today, co-blogger Arnold, discussing "Suits vs. Geeks" in the financial industry, writes: I don't think female executive minds are as capable of the same pathology. That's crying out for a counterexample. Here's mine. Listen to... MORE

Killing Off Halloween

Cost-benefit Analysis
David Henderson
We can kill off Halloween, or we can accept that it isn't dangerous and give it back to the kids. Then maybe we can start giving them back the rest of their childhoods, too. This is from Lenore Skenazy, "'Stranger... MORE

Bob Murphy's Question

Cost-benefit Analysis
Bryan Caplan
In the comments, Bob Murphy writes:When Bryan says the first-best solution is to tax education, is he just making a point that there are negative externalities? In other words, does Bryan also think a government tax on pollution is the... MORE

The Wrong Case for "Green Jobs"

Cost-benefit Analysis
David Henderson
Suppose that you want to build a house, and you solicit two builders for estimates. Builder A's eight employees can build the house in three months for $300,000. Builder B's four employees can build the same house in the same... MORE

The Seen, the Unseen, War, and Peace

Cost-benefit Analysis
Bryan Caplan
Economists and libertarians often argue that foolish policies prevail because the benefits of government action are more visible than the costs.  To bolster their point, many reference Bastiat's classic essay, "What Is Seen and What is Not Seen."  Here's how... MORE

If You Never Miss a Plane...

Cost-benefit Analysis
Bryan Caplan
George Stigler famously observed, "If you never miss a plane, you're spending too much time at the airport."  I heard that he wasn't amused by his secretary's corollary,  "If you never make a typo, you're typing too slow."  But he... MORE

Survival Investing

Cost-benefit Analysis
Bryan Caplan
My knee-jerk instinct is to laugh at survivalists.  In fact, I'm forecasting an increasingly peaceful future.  Still, if there's even a 1% chance of a major nuclear war in the next 50 years, doesn't it seem wise to allocate at... MORE

My Policy Trade-Offs Conjecture

Cost-benefit Analysis
Bryan Caplan
A conjecture that seems true to me:1. In economic policy, people under-estimate trade-offs.  When contrarians point out the large hidden costs of "feel good" legislation - protectionism, price controls, Medicare, etc. - the public and politicians furrow their brows in... MORE

The Common-Sense Case for Pacifism

Economic Philosophy
Bryan Caplan
I used to call myself an isolationist, but I recently realized that pacifist is a much better description of my position.  All of the following definitions aptly describe what I believe:pacifism: The doctrine that disputes (especially between countries) should be... MORE

"Everyone" Does Not Equal "Most Everyone"

Cost-benefit Analysis
Bryan Caplan
Robin replies to my recent post on Hanson's Fallacy:Few deals can guarantee to get everyone more of what they want, but by encouraging and enabling more better wider deals, the use of efficiency analysis sure seems to me to tend... MORE

Hanson's Fallacy

Cost-benefit Analysis
Bryan Caplan
Robin Hanson is probably the most logical mind I know, so it pains me when he keeps insisting that:As an analysis tool, economic efficiency is designed and well-suited to finding win-win deals that get us all more of what we... MORE

Means-Testing Really Is Relatively Awesome

Cost-benefit Analysis
Bryan Caplan
David's not convinced by my case for means-testing.  I'd like to reply to his objections, point-by-point:1. The phase-out issue. Bryan recognizes that you wouldn't want to give benefits below income threshold x and then zero benefits to people above that... MORE

Problems with Means Testing

Cost-benefit Analysis
David Henderson
Bryan posted earlier this week on why means testing is "awesome." While I do think that future budget deficits will push us towards some version of means testing, I can't agree that it's awesome. It just may be less bad... MORE

Means-Testing is Awesome

Cost-benefit Analysis
Bryan Caplan
I'm against forced redistribution, even to help the deserving poor.  Still, unless you buy the whole libertarian package, I understand taxing the rich to help the poor.  What I can't understand is taxing everyone to help everyone.  Means-tested programs like... MORE

Are Economists Cheap? Or Just Rational?

Cost-benefit Analysis
David Henderson
Today's weekend Wall Street Journal carries a hilarious story about how cheap some economists are. Three stories from the piece and then my thoughts. Highlights: Children of economists recall how tightfisted their parents were. Lauren Weber, author of a recent... MORE

When Is Uncertainty an Argument for Inaction?

Cost-benefit Analysis
Bryan Caplan
From a naive point of view, uncertainty clearly tips the scales against costly action.  If you're only 50% sure that your transmission if broken, for example, you have less reason to replace it than if you are 100% sure that it's... MORE

I Optimized

Cost-benefit Analysis
David Henderson
One of the conclusions that emerges from "thinking on the margin," one of the Ten Pillars of Economic Wisdom that I teach my students, is that just as you shouldn't underinvest in something, so also you shouldn't overinvest. In fighting... MORE

"National defense" is a textbook example of a public good.  Unlike Austrians, I have no problem with the concept of public goods.  I just deny that national defense is a valid example.  In fact, I will be so bold as... MORE

Where the Pigovians Are

Cost-benefit Analysis
Bryan Caplan
Scott Sumner's not officially in the Pigou Club - and for the record I'm officially not in the club.  Still, in a just world, Scott's words of wisdom would provoke Pigovians to beg him to become their King:If we set... MORE

Jet Lag, Night Feedings, and Fixed Costs

Cost-benefit Analysis
Bryan Caplan
Economists usually emphasize marginal analysis.  Should a firm make one more pound of steel?  Should a shopper spend one more minute looking for a lower price?  But economics has just as much to say about all-or-nothing decisions.  If a firm... MORE

How Long Would Peter Pan Live?

Cost-benefit Analysis
Bryan Caplan
In 2005, American kids aged 5-14 had a death rate of 16.3 per 100,000.  Here's one way to think about how incredibly low that is:Suppose a kid could keep that childhood mortality rate forever.  What would be his expected lifespan? ... MORE

Torture: Find the Missing Cost

Cost-benefit Analysis
David Henderson
On his blog yesterday, Jeffrey Miron does a rough cost-benefit analysis of torture; I basically agree with his quick analysis. He ends as follows: In that case, the cost-benefit evaluation of torture is trivial: it has certain costs, such as... MORE

Back in the fifties, kids didn't even have seatbelts.  My dad tells me that in 1971 I came home from the hospital the old-fashioned way: In my mother's arms.  Nowadays, in contrast, we transport our babies using special infant carriers... MORE

Cash for Clunky Ideas

Cost-benefit Analysis
David Henderson
Cash for Clunkers Destroys Wealth Under the current so-called "Cash for Clunkers" program, people who have owned a car for at least a year that gets below 18 miles per gallon can turn in the car as trade for a... MORE

Sandra Scarr's "Why Child Care Has Little Impact on Children's Development" (Current Directions in Psychological Science, 1997) is an impressive literature survey.  Postcard version: Within a broad range of safe environments, quality variations in child care have only small and... MORE

Friedman's Law

Cost-benefit Analysis
David Henderson
In his classic, The Machinery of Freedom (1973, 1989), David D. Friedman formulated Friedman's Law. The law states: It costs any government at least twice as much to do something as it costs anyone else. David Friedman is usually much... MORE

Behaviorial Geneticists versus Policy Implications

Cost-benefit Analysis
Bryan Caplan
In most disciplines, experts oversell their ability to give useful policy advice.  In behavioral genetics, however, experts strangely undersell their ability to give useful policy advice.  Here's a striking passage from Plomin, DeFries, McClearn, and McGuffin's leading behavioral genetics textbook:The... MORE

Must-Read Hanson

Cost-benefit Analysis
Bryan Caplan
Robin Hanson surveys the empirical literature on what goods are positional and what goods aren't.  Prepare to be edified.... MORE

Who Loses From Efficiency?

Cost-benefit Analysis
Bryan Caplan
During last night's debate, Robin repeated an argument many economists have made: In the long-run, maximizing efficiency is actually better for everyone.  If we consistently adopt any policy with benefits greater than costs, then the times that you win will... MORE

Historical Body Counts

Cost-benefit Analysis
Bryan Caplan
In the process of replying to Jeff Hummel in the comments, I came across this useful summary of the death toll of the wars of the 18th century.  And there's a lot more where that came from.  Read them and... MORE

Klein Answers the Davos Question

Cost-benefit Analysis
Bryan Caplan
The Davis Question asks: What one thing do you think that countries, companies, or individuals must do to make the world a better place in 2008?Dan Klein vlogs his answer: Deregulate the drug approval process.My answer, of course, would be... MORE

Should You Lose Sleep Over Global Catastrophic Risks?

Cost-benefit Analysis
Bryan Caplan
I've finished the Bostrom-Cirkovic edited volume on Global Catastrophic Risks. The book is a fun read, but it ultimately failed to scare me - and I'm the author of one of the chapters! Out of a long list of conceivable... MORE

I gained five pounds in Europe. And it was optimal. Partly, that's just because the food was both good and different from what I can easily get in Virginia. The fundamental reason I gain weight on vacations, though, is that... MORE

We Have a Winner

Cost-benefit Analysis
Bryan Caplan
HD-DVD is dead; Blu-Ray lives. How long will it take before someone starts arguing that the wrong format won due to path-dependence problems?... MORE

Alcohol and Non-Linear Dosage Effects

Cost-benefit Analysis
Bryan Caplan
Our years overlapped, but when I was an undergrad at Berkeley, I never met Aaron Wildavsky. My loss. Here's a great passage he wrote (along with Adam Wildavsky) for Henderson's encyclopedia:Another questionable assumption is that cancer causation is a linear... MORE

What Nordhaus Said in 2002

Cost-benefit Analysis
Bryan Caplan
Economists are great at "predicting" events after they happen. Unfortunately, the real trick is predicting events before they happen. Friedman thus deserves extra credit for foreseeing stagflation. Donald Wittman deserves extra credit for foreseeing the base closings bill. Now I'd... MORE

The Common Sense of Defense Cuts

Cost-benefit Analysis
Bryan Caplan
As an equal-opportunity offender, I'm finding it harder and harder to keep up with the competition. After arguing that we should cut health spending in half, Robin Hanson now adds that we should do the same with defense spending:But the... MORE

Free Disposal

Cost-benefit Analysis
Bryan Caplan
Ed Glaeser says that having kids has positive externalities:[T]here is another reason to subsidize larger families. When parents decide to have kids, they are creating a massive benefit for their children. As much as parents may love their children, they... MORE

Thoughts on September 13

Cost-benefit Analysis
Bryan Caplan
Terrorism has been an infinitesimal risk so far, but on September 11, Arnold told us that he's worried nonetheless:I understand that if you look at history, the probability of being killed by a terrorist is low. But if you had... MORE

Please, Doctor, Treat Me Like a Statistic!

Cost-benefit Analysis
Bryan Caplan
I second Arnold's recommendation of Charles Lambdin's dissection of medical diagonosis. Here is wisdom:Where one sides in the debate is largely determined by what one makes of a single phrase: “Group statistics don’t apply to individuals.” This claim, widely believed,... MORE

When the Facts Don't Change, I Change My Mind

Cost-benefit Analysis
Bryan Caplan
Perhaps Keynes' best quip: "When the facts change, I change my mind. What do you do, sir?" Fair question. But what do you think about people who change their minds when the facts haven't changed? Wait, don't answer... see this... MORE

Kip Viscusi is probably academia's most famous risk analysis. His decades of research document democracy's pervasive tendency to adopt regulations with absurdly high cost-benefit ratios - to spend billions fighting problems that barely exist. But in a recent interview with... MORE

Dubner Dodged a Bullet

Cost-benefit Analysis
Bryan Caplan
Here's another story about a guy who wisely ignored the bad advice of a wise man: Hugo Lindgren (the guy who wrote Tyler's profile in New York Magazine) told Steve Dubner not to co-author Freakonomics!It should be noted, however, that... MORE

Cowenian Advice: The Best and the Worst

Cost-benefit Analysis
Bryan Caplan
Yesterday I said that Tyler Cowen is "the giver of the best and worst career advice I've ever gotten." In the comments, Jason follows up:Please share the best and worst career tips Tyler offered you.Some of the best advice:If you... MORE

Basic Decision Theory

Cost-benefit Analysis
Arnold Kling
From my latest essay: If we give more people MRI's, we reduce type I errors but increase type II errors. If we give fewer people MRI's, we reduce type II errors but increase type I errors. The Maggie Mahars of... MORE

Does Humility Really Walk on Water?

Cost-benefit Analysis
Bryan Caplan
I just filled out a recommendation form that asked me to rate a student's "humility." Every other attribute I was asked to evaluate - e.g. "Intellectual Ability" and "Integrity" - was positive, so apparently humility is supposed to be positive... MORE

Climate Preference Survey Pretest

Cost-benefit Analysis
Bryan Caplan
Remember my Climate Preference Survey idea? Suppose you surveyed a random sample of Americans with the following question: "Overall, would you rather the climate in the area you live got warmer, got cooler, or stayed the same?"Yesterday, I polled a... MORE

Tenure and Non-Profits

Cost-benefit Analysis
Bryan Caplan
Steve Levitt has come out against tenure, and Greg Mankiw is standing up for it on grounds I'd normally accept: [U]niversities may well be better off by paying lower salaries to tenured faculty, despite the adverse incentive effects, than paying... MORE

What Do We Know About Climate Preferences?

Cost-benefit Analysis
Bryan Caplan
Suppose you surveyed a random sample of Americans with the following question: "Overall, would you rather the climate in the area you live got warmer, got cooler, or stayed the same?" Has such a survey ever been done? My guess... MORE

Planes, Trains, and Automobiles

Cost-benefit Analysis
Bryan Caplan
Here are three surprising transportation factoids from Clifford Winston's Government Failure vs. Market Failure. Winston on planes: Airport expenses are covered by passenger facility charges and landing fees, which are set by local airport authorities based on an aircraft's weight...... MORE

A True Story of Efficient Regulation

Cost-benefit Analysis
Bryan Caplan
I'm a member of local Fairfax pool. I don't know exactly how this pool got started, but for about $400/year, my family was able to become a shareholder in this private non-profit. One nice thing about this pool is that... MORE

Doing Good While Doing Well: Breaking Norms at GenCon

Cost-benefit Analysis
Bryan Caplan
GenCon was fantastic. The highlight: Fab Rojas ran a sublime session of Pandemonium!, the tabloid journalism role-playing game. We laughed so hard we cried, and our characters got the front-page story: "Dave Chapelle Rescued from Time-Travelling Witches." You didn't have... MORE

Fixed Costs: The Moderate Case for Extremism

Cost-benefit Analysis
Bryan Caplan
Does cost-benefit analysis always council against extremism? In a reply to Arnold, Mankiw seems to argue that it does: I am not a scientist and am therefore agnostic about a lot of issues surrounding global warming. Suppose I assign a... MORE

Deadweight Loss for Toddlers

Cost-benefit Analysis
Bryan Caplan
My boys' latest favorite book is The Tawny, Scrawny Lion. It's not only a great story; it also illustrates the concept of deadweight loss with greater clarity and force than most textbooks: Once there was a tawny, scrawn lion who... MORE

Notably Unnotable: Should Wikipedia Delete Me?

Cost-benefit Analysis
Bryan Caplan
Wikipeda recently featured a discussion about whether the article about me should be deleted: Caplan is an associate professor, who wrote a few articles, and has a number of opinions. He certainly isn't notable. It seems to me that the... MORE

The Marginal Tooth

Microeconomics
Bryan Caplan
Keynes famously wished that economists would one day become as useful as dentists. But every time I go to the dentist, it's clear that knowledge of economics would be useful to to dentists. The whole idea of cost-benefit analysis seems... MORE

The Beauty of Marginalism

Cost-benefit Analysis
Bryan Caplan
HBO's new series Rome cost $100 M to make, and its ratings are about one-fourth of The Sopranos'. But it's getting renewed anyway. Bad business? No, it looks like good old-fashioned marginalism and avoidance of the sunk-cost fallacy. According to... MORE

Useless Information

Cost-benefit Analysis
Bryan Caplan
When you cite a book, you're expected to list its city of publication. As in: Sheffrin, Steven. (1996). Rational Expectations. Cambridge: Cambridge University Press. Questions: Does anyone care what city a book was published in? Why do you need to... MORE

Surveillance Costs and Benefits

Cost-benefit Analysis
Arnold Kling
In this essay, I argue that in the wake of the London bombings that screening passengers is still not cost effective. I am pretty sure that any cost-benefit analysis of "equal-opportunity" screening would reach an adverse determination. Crude racial profiling... MORE

Usually Look on the Bright Side of Life

Cost-benefit Analysis
Bryan Caplan
[Note: This post may be better if you hum as you read.] I am a firm believer in the view that complaining about problems usually makes them worse. I have endured my fair share of bad service in restaurants, but... MORE

Stadium Obstruction

Cost-benefit Analysis
Arnold Kling
Henry Aaron (the economist, not the former baseball star) writes, The proposed deal imposes huge costs on the District and gives virtually all of the financial gains to the team. The city will bear the burden for years to come,... MORE

Outsourcing

International Trade
Arnold Kling
Bruce Bartlett surveys recent cost-benefit analysis. In July, economist Martin N. Baily, chairman of the Council of Economic Advisers under President Clinton, looked at who benefits from outsourcing. He found that... on balance, the U.S. economy gains $1.12 to $1.14... MORE

The Economics of Wage Labor

Cost-benefit Analysis
Michael Munger
by Michael Munger Guest Blogger An amazing study was released August 2 by the UCal-Berkeley Labor Center. The conclusion? Wal-mart costs California $86 million a year. The nefarious company does this by cruelly (wait for it) employing 44,000 Californians as... MORE

Wiretapping Costs and Benefits

Cost-benefit Analysis
Arnold Kling
In my latest essay, I argue that the costs of wiretapping are going up, while the costs of alternative surveillance technologies are going down. With ordinary phone service, wiretapping is nearly impossible to prevent. Regardless of what equipment the phone... MORE

Government Incentives

Cost-benefit Analysis
Arnold Kling
Does the absence of a bottom line affect government behavior? Consider this story from the Washington Post about the "busy season" for GTSI, a company that sells technology products to government agencies. Fall is coming, and for GTSI that means... MORE

Government Performance Effectiveness

Cost-benefit Analysis
Arnold Kling
Ted Balaker links to this analysis by the Office of Management and Budget of the effectiveness of government programs. Demanding that programs prove results in order to earn financial support, however obvious and sensible, marks a dramatic departure from past... MORE

Nanotech Research Funding

Regulation and Subsidies
Arnold Kling
Is Federal funding for research in nanotechnology justified? Declan McCullagh raises some doubts. First, private sources will pay for basic research. It may not be at the level that all researchers would prefer, but if it can lead to applied... MORE

Sports Stadiums

Cost-benefit Analysis
Arnold Kling
The Atlantic Monthly points to this survey of the economic impact of pro sports stadiums. The verdict from many economic studies is that the marginal contribution of a sports team to a local economy is small, and perhaps negative. When... MORE

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