One of the recurring suggestions that comes up in the downward spiral of Canadian medicare is that patients receive an itemized bill for service, showing exactly how much each thing cost. They wouldn't have to pay the bill, since it's all covered by the government, but the intuition behind the proposal is similar -- people might be more frugal if they know what things cost (even if they don't have to pay a dime directly). As far as I know, that proposal hasn't gone anywhere yet though.
Eric On Tue, 24 Jun 2003, Bryan Caplan wrote: > My wife was so swamped at work that I wound up paying our bills for the > first time in years. As I was writing the checks, I began to wonder: > After seeing the bills, would my consumption of e.g. utilities > systematically fall? It seems at least plausible that the act of paying > the bills makes you more likely to think about the expense of various > actions, and therefore more frugal. This bears more than a family > resemblance to the availability heuristic, where people estimate > probabilities using the ease of thinking of examples. > > RE tells us, of course, that paying the bills and becoming more > price-conscious should have no systematic effect on consumption. Some > prices will be higher than you thought, some lower. The contrary > theory, though, is that we implicitly think of a lot of things as free, > unless direct experience reminds us of the opposite. > -- > Prof. Bryan Caplan > Department of Economics George Mason University > http://www.bcaplan.com [EMAIL PROTECTED] > > "Infancy conforms to nobody: all conform to it, so that > one babe commonly makes four or five out of the adults > who prattle and play to it." > > --Ralph Waldo Emerson, "Self-Reliance" > > > >
