Econlinks for 27-11-’07

• Becker and respectively Posner, on tax evasion. Why is tax compliance higher than one would expect (with a reservation here: it also follows from Posner’s argument than in fact tax evasion isn’t necessarily lower than rationally expected…) and is that mainly due to the rational fear of punishment or to the taxpayers’ feeling of moral duty/ fairness etc? For me Posner wins this argument (they do oppose each other on the essence herein, which after all rarely happens on the Becker-Posner blog…): it is much more the deterrence effect of the fear of punishment plus the costs associated with getting to know how to evade the taxes ‘properly’, than a feeling of moral duty or fairness, particularly when no other individual is directly involved; after all Posner’s got the comparative advantage in this area and it is very very difficult to beat that…

• From now on (until I’ll exhaust all notable examples), I’ll present within the ‘econlinks’ posts my favourite examples of ‘markets in everything’ from Tyler Cowen’s recent book, “Discover Your Inner Economist“– one of my best reads this year (that does not mean that its chapters cannot be ranked: there are very good and also not so good, parts). Check for instance some quotes from it previously taken over for my quote-of-the-week rubrique, here or here. For today about the drinking-and-dialing-problem and equally exotic market solutions to prevent it (and from a more personal perspective, I think there is scope for a drinking-and-emailing-problem resolution as well :-)).

We have all known people who make phone calls when they shouldn’t, especially when they are drunk. A survey of 409 people by Virgin Mobile found that 95 percent had made drunk calls, mostly to ex-partners (30 percent), 19 percent to current partners, and 36 percent to others, including their bosses. Fifty-five percent of those people looked at their phones the next morning to see whom they had called– similarly, someone is waking up in the world this minute and checking to see who it is he or she is sleeping with.
To alleviate the drinking-and-dialing problem, a phone company in Australia started offering customers blocked “blacklist” numbers, which they select before going out to drink. In Japan they sell a mobile phone with a breathanalyzer, to see if you are really fit to drive home, or for that matter to make a phone call. If a bus driver fails the test, his location is sent immediately to his boss by GPS.

• Some wisdom from the one and only Milton Friedman. More actual than ever (in fact I recalled this old interview with Friedman after mentioning the very recent one with Richard Freeman in a previous post and disagreeing with some details in Freeman’s address). The most spontaneous and brilliant economist you’ve ever heard, I promise. So listen and relisten and… relisten. To all of it. And learn. About 30 min clip on YouTube.

• And finally, I will be a millionaire (albeit in DK Kroner, but after all one has to start somewhere) for the next two years. I have been awarded (mange tak!) a prestigious (and generous, academe-wise) independent postdoctoral research grant of The Danish Social Science Research Council (Forskningsrådet for Samfund og Erhverv) for my project “Wages, Productivity and Firm Sizes in Imperfectly Competitive Markets“, submitted for the grant applications’ contest last August. So yes, you can congratulate me :-). And no, they won’t let me buy Belgian beers for all that money. Though I guess that some top wine for research inspiration is allowed :-). Cheers!