Offers an economist's view of everyday human behavior, and examines surprising situations from everyday life, such as why is movie theater popcorn so expensive, and why do seatbelts cause more accidents

#8220;This new edition of The Armchair Economist is a wide-ranging, easily digested, unbelievably contrarian survey of everything from why popcorn at movie houses costs so much to why recycling may actually reduce the number of trees on the planet. Landsburg valiantly turns the discussion of vexing economic questions into an activity that ordinary people might enjoy.” – Joe Queenan

Autorentext

Steven E. Landsburg is a professor of economics at the University of Rochester. He is the author of More Sex Is Safer Sex and The Big Questions. He has written for Forbes, The Wall Street Journal, and Slate. He lives in Rochester, New York.

Klappentext

Witty economists are about as easy to find as anorexic mezzo-sopranos, natty mujahedeen, and cheerful Philadelphians. But Steven E. Landsburg...is one economist who fits the bill. In a wide-ranging, easily digested, unbelievably contrarian survey of everything from why popcorn at movie houses costs so much to why recycling may actually reduce the number of trees on the planet, the University of Rochester professor valiantly turns the discussion of vexing economic questions into an activity that ordinary people might enjoy.
-- Joe Queenan, "The Wall Street Journal"
"The Armchair Economist" is a wonderful little book, written by someone for whom English is a first (and beloved) language, and it contains not a single graph or equation...Landsburg presents fascinating concepts in a form easily accessible to noneconomists.
-- Erik M. Jensen, "The Cleveland Plain Dealer"
...enormous fun from its opening page...Landsburg has done something extraordinary: He has expounded basic economic principles with wit and verve.
-- Dan Seligman, "Fortune"

Zusammenfassung
The extensively revised and updated edition of Steven Landsburg’s hugely popular book, The Armchair Economist—“a delightful compendium of quotidian examples illustrating important economic and financial theories” (The Journal of Finance).

In this revised and updated edition of Steven Landsburg’s hugely popular book, he applies economic theory to today’s most pressing concerns, answering a diverse range of daring questions, such as:

Why are seat belts deadly?
Why do celebrity endorsements sell products?
Why are failed executives paid so much?
Who should bear the cost of oil spills?
Do government deficits matter?
How is workplace safety bad for workers?
What’s wrong with the local foods movement?
Which rich people can’t be taxed?
Why is rising unemployment sometimes good?
Why do women pay more at the dry cleaner?
Why is life full of disappointments?

Whether these are nagging questions you’ve always had, or ones you never even thought to ask, this new edition of The Armchair Economist turns the eternal ideas of economic theory into concrete answers that you can use to navigate the challenges of contemporary life.

Leseprobe
CHAPTER 1

***THE POWER OF INCENTIVES

How Seat Belts Kill***

Most of economics can be summarized in four words: "People respond to incentives." The rest is commentary.

"People respond to incentives" sounds innocuous enough, and almost everyone will admit its validity as a general principle. What distinguishes the economist is his insistence on taking the principle seriously at all times.

I remember the late 1970s and waiting half an hour to buy a tank of gasoline at a federally controlled price. Virtually all economists agreed that if the price were allowed to rise freely, people would buy less gasoline. Many noneconomists believed otherwise. The economists were fight: When price controls were lifted, the lines disappeared.

The economist's faith in the power of incentives serves him well, and he trusts it as a guide in unfamiliar territory. In 1965, Ralph Nader published Unsafe at Any Speed, a book calling attention to various design elements that made cars more dangerous than necessary. The federal government soon responded with a wide range of automobile safety legislation, mandating the use of seat belts, padded dashboards, collapsible steering columns, dual braking systems, and penetration-resistant windshields.

Even before the regulations went into effect, any economist could have predicted one of their consequences: The number of auto accidents increased. The reason is that the threat of being killed in an accident is a powerful incentive to drive carefully. But a driver with a seat belt and a padded dashboard faces less of a threat. Because people respond to incentives, drivers are less careful. The result is more accidents.

The principle I am applying is precisely the same one that predicted the disappearance of gasoline lines. When the price of gasoline is low, people choose to buy more gasoline. When the price of accidents (e.g., the probability of being killed or the expected medical bill) is low, people choose to have more accidents.

You might object that accidents, unlike gasoline, are not in any sense a "good" that people would ever choose to purchase. But speed and recklessness are goods in the sense that people seem to want them. Choosing to drive faster or more recklessly is tantamount to choosing more accidents, at least in a probabilistic sense.

An interesting question remains. How big is the effect in question? How many additional accidents were caused by the safety regulations of the 1960s? Here is a striking way to frame the question: The regulations tend to reduce the number of driver deaths by making it easier to survive an accident. At the same time, the regulations tend to increase the number of driver deaths by encouraging reckless behavior Which effect is the greater? Is the net effect of the regulations to decrease or to increase the number of driver deaths?

This question cannot be answered by pure logic. One must look at actual numbers. In the middle 1970s, Sam Peltzman of the University of Chicago did just that. He found that the two effects were of approximately equal size and therefore cancelled each other out. There were more accidents and fewer driver deaths per accident, but the total number of driver deaths remained essentially unchanged. An interesting side effect appears to have been an increase in the number of pedestrian deaths; pedestrians, after all, gain no benefit from padded dashboards.

I have discovered that when I tell noneconomists about Peltzman's results, they find it almost impossible to believe that people would drive less carefully simply because their cars are safer Economists, who have learned to respect the principle that people respond to incentives, do not have this problem.

If you find it hard to believe that people drive less carefully when their cars are safer, consider the proposition that people drive more carefully when their cars are more dangerous. This is, of course, just another way of saying the same thing, but somehow people find it easier to believe. If the seat belts were removed from your car, wouldn't you be more cautious in driving? Carrying this observation to the extreme, Armen Alchian of the University of California at Los Angeles has suggested a way to bring about a major reduction in the accident rate: Require every car to have a spear mounted on the steering wheel, pointing directly at the driver's heart. Alchian confidently predicts that we would see a lot less tailgating.

It is in no sense foolhardy to take more risks when you have a padded dashboard. Driving recklessly has its costs, but it has its benefits too. You get where you are going faster, and you can often have a lot more fun a…