Why Economists Aren't Experts on What Is a Cost or Benefit

In the comments below, Robin Hanson writes:

I can't imagine what you are thinking in saying economists have no competence to say what is a cost or benefit. That seems to me to be one of the things we know best. And the market interest rate clearly gives the opportunity cost of resources spend in the future. You complain about cost-benefit analysis, but seem to have nothing to offer in its place.

I will help you imagine! I am thinking that the meanings of “cost” and “benefit” are either contested, due to diversity in reasonable evaluative standards, or their meanings are stipulated for technical purposes.
If the meaning is plural and contested, economists have no special comptence to decide between the different evaluative standards underlying different meanings of “cost” and “benefit”. Economists are people, and people can make arguments and exchange reasons for an against various evaluative standards, but economists do this as people with a conception of value, not as economists.
If the meanings are stipulated to make a kind of a toy analysis tractable or determinate, that's fine. But then the toy analysis has force only for those who already accept the stipulated meaning of the terms.
I have to get on the plane, but when I get home, I'll say something about policy evaluation that takes evaluative pluralism seriously.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center

9 thoughts

  1. Curiously enough, those who would be swayed to vote by the ‘beautiful people’ in the video are exactly the folks who will almost exclusively vote for Obama. That ad and the whole ‘Rock the Vote’ campaign are intended for the ‘hip’ segment of America – young, liberal, left-leaning. MK gets it exactly right. The many folks whose intelligence is insulted by the ad have already made up their minds on whether they will vote and who they will vote for. The unspoken truth is that those who will be swayed to vote will, by and large, vote Democrat.

  2. To add onto Paul’s comment, anyone who is finally convinced to register to vote, who has not already done so, by ads like this – “I mean I wasn’t going to vote until I ‘Youtubed’ a bunch of hip celebrities saying that I should do it in a way that speaks to my hip, albeit naive temperament, and now I’m totes gonna get my ass into that polling booth … honest to blog!” – are probably just the types who should NOT be voting.
    I think it goes unmentioned that these campaigns are nothing if not gussied up versions of the ward heeling tactics of Tammany or the Daly Machine of old.

  3. Is not voting one of these deep psychological issues where people don’t vote so that other people (celebrities…) pay attention to them. If everyone said “hey don’t bother voting if you don’t want to” maybe the turnout rate would go up?

  4. Steve Landsburg has apparently read Brennan and Lomasky, and so has the right stuff to say about this here:
    Dear Uneducated Celebrities Who Don’t Know What They’re Talking About,
    Look–there might be good reasons to vote. But please stop telling people that the reason they should vote is because individual votes are significant. They are not. We’d be happy to explain this to you, but it will involve math, and so you won’t get it.
    Educated Experts

  5. To add to Cool Cal, libfree and Jason; isn’t the ad just the usual, Hollywood, self-praising drivel? If 8 year olds could vote, this would be very effective. But the real message is: We’re big time Hollywood celebs and we want you to know how important your vote is, and by the way, aren’t we great for doing this?

  6. “Buggrit!” is the only example I can think of.
    And even that might not be unconditional. But then I don’t use “vote!” as an unconditional.

  7. Certain groups vote less than others. For example, younger and poorer people tend to vote less. I don’t think this is due to higher opportunity costs for poor people to vote. Voting is just considered a duty by the middle class. Ads aimed at low voting populations don’t worry me much.
    If voting really was a burden, you could do statistical sampling based voting. Get the sample size big enough and it would be pretty accurate. A lot of people like to vote though.

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