Suchergebnisse

Advocates of increased government regulation of intoxicating substances often cite the "social cost" of such goods. A close examination of studies that calculate the social cost of intoxication reveals a variety of recurring methodological errors. These studies do not clearly distinguish external costs from private costs. They do not systematically compare the costs associated with the regulation of intoxicant use with the costs of intoxicant consumption, nor do they even estimate the social benefits associated with intoxication or compare them with the social costs. Unless these problems are addressed, social cost calculation will be dismissed as a tool for political lobbying.

Legal segregation was a fact of life for blacks in the American South during the first half of the present century. These laws are sometimes compared to South African apartheid. However, there seems to be one important difference: Jim Crow, unlike apartheid, did not directly hamper the ability of blacks to compete with whites in labor markets. Our paper explores this problem. We report evidence which suggests that, in spite of the absence of direct labor market restrictions confronting blacks subject to Jim Crow, these laws nevertheless reduced the ability of blacks to compete with whites for jobs.

Abstract. Modern economics assumes that individuals are rational maximizers, who, in the presence of costly information, sometimes make mistakes. Recently, George Akerlof has challenged this presumption. He proposes that people sometimes fail to maximize their long‐run utility, due to the phenomenon of "salience." This refers to the alleged systematic distortion in individual perception where events closer to a person (in time and in space) seem bigger and more important than they really are. The salience phenomenon is claimed to interfere with the process of rational maximization, rendering some individual choices, in effect, irrational. This paper subjects Akerlof's suggestion to critical scrutiny. It is argued that the examples Akerlof offers of the effect of salience are not the anomalies he claims but instead represent behaviors which can be readily explained within the framework of the standard economic model. All of his major examples are considered in this light and it is suggested that the work of Israel Kirzner holds more promise for improving the analytical power of the standard economic model than does the idea of salience.