Russel Norman

Hockey players, fuel efficiency, the state and market failure

by Russel Norman

An interesting article on hockey players and fuel efficiency in the New Yorker.

Economist Thomas Schelling found in the 1970s that most hockey players didn’t wear helmets if given the chance, even though helmets reduce head injuries, because if you wore a helmet it slightly reduced your vision on the field and hence made you play a little less well. But if asked in secret ballots whether helmets should be compulsory, a majority said yes.

Likewise in the US now, people are buying massive SUVs with low fuel efficiency because they think they are safer and have higher status than small cars. But when these same people are asked what they want the govt to do they say they want the govt to legislate to increase fuel efficiency standards, and hence effectively to legislate to make it harder to buy their massive three-ton SUV.

Sometimes the collective outcome of our individual decisions is irrational and not what we collectively want. In these situations we would acheive a more rational and popular outcome by using our collective agent, the govt, to legislate for the outcome we collectively actually want. Fuel efficiency standards are one of those situations.

Published in Environment & Resource Management by Russel Norman on Sun, July 29th, 2007   

Tags:

More posts by Russel Norman | more about Russel Norman