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Naked Economics

Charles Wheelan

More books on Behaviour

Affirmative action: a firm has a policy that if two candidates are of equal merit, the job should go to the minority candidate. So ten people apply. Two are clearly best. One is black and he is hired. Only one person has suffered from the policy, but nine white people go away angry, feeling that they have been discriminated against.

2008 crash caused by mortgage brokers making irresponsible loans. They didn't care - they got a commission based on how much was loaned. The loaning bank didn't care, bc they sold the mortgage to investors who wanted a future income stream from the mortgage payments.

In 1971 a 25 inch colour TV cost worker on average wage 174 hours of labour. Today it costs 10 hours.

The real cost of something is what you must give up to get it.

When the US car industry was facing intense competition from japanese automakers in the 1980's, they two choices - they cd create better, cheaper, more fueleco cars that customers wanted, or they cd hire an army of lobbyists to get Congress to enact tariffs and quotas to keep the Jap cars out of their market.

Asian sweatshops are staffed by workers who are either: really stupid and slave in poor conditions rather than take better jobs outside, or thery are making a rational choice to take a job that pays better than what they can earn elsewhere. Activist often insist that the best policy is to try to shut these sweatshops down (through boycotts etc) but ignore the fate of workers who then lose their jobs.

Riding a motorbike is 2000 times more dangerous, per km travelled, than flying.

Mexico City tried to combat air pollution by mandating carless days based on your licence plate. Pollution went up. Why? Because people made sure they had a second car to be able to drive every day. And that second car was usually a cheaper, older model that emitted more fumes.

Smokers provide a benefit to the rest of us - they die young. On average 7 years earlier.

Native Americans living on reservations with communal land. Bank won't lend against that bc no way of foreclosing if mortgagee defaults. But they will lend money for a trailer, which can be repossessed. So Indians all live in trailers, which are built by workers hundreds of miles away. If they cd build houses, there wd be work for Indians themselves, in an area where there are no jobs.

H.L. Mencken quote that a wealthy man is one who earns $100 a year more than his wife's sister's husband. Study found this actually true - controlling for every other factor, a woman was more likely to be in paid work if her sister's family richer.

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