Incentives Matter: Poverty Edition

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The result of 4 and a half decades of "helping" the poor: more poor people (here). Come on now, let's all say it together: "Incentives matter!" When you make being poor easier to bear, people take less effort to avoid being poor. The incentive story is really not any different from either of the following:

Deaths increase on Mt. McKinley after rescue policy initiated (Clark and Lee paper here)
Accidents increase in NASCAR with adoption of additional safety (my paper with Russ Sobel here)

The examples of off-setting behavior are abundant. Auto insurance and reckless driving, theft insurance and locking doors, government bailouts and risk-taking by firms, etc., etc. When people receive some sort of protection against an unfavorable event they exert less effort trying to avoid that event, ultimately increasing the probability of that event occurring. Incentive matter.

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