Monday, 24 August 2009

Incentives matter: fires file

Incentives matter, but you have to get the incentives right. This from David Henderson at the EconLog blog:
This last winter, our house smelled like an ashtray much of the time. Our neighbors upwind insisted on burning. We told them of the discomfort we felt and, while the lady of the household was sympathetic, the adult sons were not and, at one point, one of them got quite nasty when I tried to press the point. I even offered to pay $50 a month for every month they didn't burn. The lady of the household returned the check uncashed. You might say that I didn't offer enough. I sensed, though, that that wasn't it.


One day, my wife made banana bread and took half of it next door. The lady of the house was delighted. Then we noticed something else: the frequency of the fires went from almost every day, which had been driving us wild, to about once a week or less. Shortly after, one of the sons, out mowing his lawn, waved and smiled at my wife as she was pulling out of the driveway. She was so shocked that she almost sideswiped our house. I thought we were on to something, so the next time I made my brownies full of chocolate chips, I took half of them over. A few days after that, one of the sons brought over some cantaloupes. Then about a month ago, I took over some brownies. Then Sunday evening, one of the sons brought over some home-grown tomatoes and onions. Summer in Pacific Grove, where I live, is almost as cold as winter. Yet they have hardly burned a fire at all.
Montary incentives aren't always the best incentives.


homepaddock said...

What you might call banana bread dilomacy :)

Matt Nolan said...

That is a good story!!