When you have a working knowledge of economics, it’s like having a mild super power. For example, I use my knowledge of economics to avoid speeding tickets. I assume the local law enforcement agencies have limited funding and can’t be everywhere at the same time. That tells me, fairly reliably, when I can speed without detection and when I can’t.
For example, if I get up before the crack of dawn to go to the airport, I can speed all I want. No police force is going to pay an employee to sit on a road at 5 AM with virtually no traffic and a low accident rate and wait for a speeder. That would be bad economics.
You also never see speed traps on the freeway during rush hour. One reason is probably because it’s more dangerous to pull over people in that much traffic. But the bigger factor is that it would slow traffic during rush hour. That’s a huge economic impact on society for not much return in the way of making society safer. All it would do is make the police less popular, and make people think the police don’t need the funding they already have.
Around here, the police have little portable trailers with radar and a display sign. They leave it unattended on side streets. The radar tracks your car and the display tells you how fast you are going. They’ve discovered that motorists slow down when they realize the device is tracking their speed. This doesn’t work on me. When I see that trailer, I speed up because I know the police won’t put both the trailer and a real policeman in the same neighborhood. It would be a waste of money to have both, since the trailer with the radar slows down everyone but economists.
You can also speed on the Fourth of July if you are nowhere near the celebration areas. All the police will be where the crowds are. No other arrangement would make economic sense. That tip is my little gift to you, until you run over someone because you were speeding.
If you plan to speed, it also pays to be a middle-aged male. For years I have been observing who the police pull over for speeding and who they don’t. A police officer (usually male) has lots of choices for who to ticket for speeding. If he is heterosexual, and stops a heterosexual male, he has no chance of getting sex, and a non-zero chance of getting killed. If he stops a female, he has some chance of being offered sex (or at least some flirting) to get out of the ticket, and not much risk of violence. Cops are rational and make the correct economic decision most of the time. Where I live, about 80% of all motorists who are stopped for speeding are women, and it has been that way since I can remember. Economics tells me it will stay that way, at least as long as the opportunity for getting head is more valuable than the opportunity of getting punched in the head. (If it’s different where you live, your cops are either gay or irrational.)
I was reminded again of the power of economics when reading responses to my post yesterday on the future of newspapers. One of the more common dissenting opinions was that as long as grandpa is alive, there will be newspapers, because he will always want one. Readers who have the super power of economics training recognized that newspapers have high fixed costs and could become unviable if only a portion of younger readers cancel subscriptions. Grandpa is somewhat irrelevant to the future of newspapers, especially since advertisers don’t care much about him. To advertisers, one subscriber who is thirty-something is worth about seven grandpas.
My reason for majoring in economics in college was to understand how the world works, so I would be more equipped to navigate in it. I think it was a good choice. Has your college major given you any mild super powers?