{"id":1276,"date":"2023-11-24T23:30:41","date_gmt":"2023-11-25T04:30:41","guid":{"rendered":"http:\/\/commoncents.blogwyrm.com\/?p=1276"},"modified":"2024-02-24T14:28:34","modified_gmt":"2024-02-24T19:28:34","slug":"twisted-incentives-a-case-study","status":"publish","type":"post","link":"https:\/\/commoncents.blogwyrm.com\/?p=1276","title":{"rendered":"Twisted Incentives - A Case Study"},"content":{"rendered":"

There is never any shortage of policy ideas that, on the surface, seem to be good but that lead to stupid consequences.\u00a0 These are the types of policies that inevitably end up causing unintended consequences.\u00a0 At the bottom of this perverse cause-and-effect relationship are a set of twisted incentives.\u00a0 Sometimes these incentives are accidentally put in place by people who feel more than they reason and, so, don\u2019t think about how people will respond to the new policy all the way through.\u00a0 Sometimes the policy enactors know exactly what they are doing and use a veneer of \u2018caring emotion\u2019 to cover what is really a coldly calculated set of incentives that are meant to benefit nobody but them.\u00a0 Regardless of which type of motive the policy maker may have (and, yes, there can be both types supporting) society suffers.\u00a0 It\u2019s no wonder that economists focus on incentives.<\/p>\n

Reason TV has made a set of delightful videos documenting what they call Great Moments in Unintended Consequences<\/em><\/a> that are worth watching.\u00a0 One case that stood out is the Oakland, California gun buyback program of 2008.<\/p>\n

\nhttps:\/\/commoncents.blogwyrm.com\/wp-content\/uploads\/2023\/11\/vol13-1_small.mp4<\/a><\/video><\/div><\/center><\/p>\n

One hopes that this ridiculous escapade, which is also documented by Alexander T. Tabarrok in his article Oakland\u2019s Gun Buyback Misfires<\/em><\/a>, was really done with good intentions but it is a close call.\u00a0 According to the City of Oakland\u2019s own website<\/a>, the stated intent of June 2022\u2019s Guns to Gardens event is to provide \u201ca unique and innovative gun buyback\u201d.\u00a0 A poster accompanying the website list the biblical verse \u201cAnd they shall beat their swords into plowshares\u201d Isaiah 2:24.\u00a0 These types of evidence suggests that the organizers are sincerely trying to help stem gun violence in Oakland but, if so, they clearly understand biblical ethics better than economics.\u00a0 Although they seem to have learned a few things from the 2008 fiasco.<\/p>\n

The original 2008 buyback incentivized a variety of actions that did nothing to stem gun violence in Oakland.<\/p>\n

First, with a fixed price of $250, gun owners with property valued far less than that had ample reason to participate.\u00a0 Anyone owning say 4 guns, each valued at $10, would make nearly a thousand dollars for simply dumping their junk onto the city\u2019s lap.\u00a0 This was, no doubt, particularly attractive for gun dealers with useless, unmoving stock.\u00a0 However, for criminals who use guns for various enterprises $250 was likely too low.\u00a0 For example, a Glock 9 purchase, at the time, would have been closer to $350-$400.\u00a0 In addition, a firearm is working capital for the criminal robber.\u00a0 Why would he trade in for an one-time payment an instrument that allows him net hundreds or thousands per stick up or mugging.<\/p>\n

Second, with no restriction to local residents (either Oakland proper or the city plus delineated surrounding locales) there was ample incentive for people to come far and wide for the buyback, thereby crowding out, either literally or by exhausting the fund, locals who wished to participate.\u00a0 Oakland basically transferred wealth from their already impoverished neighborhoods to what are likely affluent municipalities elsewhere.<\/p>\n

Third and finally, by bringing a host of guns into close proximity, Oakland had organized a large, unregulated, open-air gun show.\u00a0 Just the territory where an enterprising criminal might go to buy a new weapon, with no questions asked and no background check.<\/p>\n

Thankfully, the city has seemed to learn from some of its mistakes.\u00a0 The Guns to Gardens event adjusts the buyback amount from a fixed price to gift cards in the range $100-$300 \u201cdepending on type of gun\u201d (their words).\u00a0 This fig-leaf of a correction only partially addresses the first issues.\u00a0 They may think that providing gift cards addresses all the other issues but gift cards, even if they are only for local merchants, have market value that makes them as good as cash.\u00a0 No doubt secondary markets will arise to move\/launder them.\u00a0 Whether the was any thought given to bringing guns and gun buyers together in one setting is unknown.\u00a0 The website mentions no restrictions along these lines but maybe Oakland had something in mind.<\/p>\n

But maybe all these objections about twisted incentives really don\u2019t matter.\u00a0 The City of Oakland has what seems like a good idea.\u00a0 They seem to have good intentions.\u00a0 What could possibly go wrong?<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

There is never any shortage of policy ideas that, on the surface, seem to be good but that lead to stupid consequences.\u00a0 These are the types of policies that inevitably... Read more ><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1276","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts\/1276","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1276"}],"version-history":[{"count":3,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts\/1276\/revisions"}],"predecessor-version":[{"id":1308,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts\/1276\/revisions\/1308"}],"wp:attachment":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}