OOPS! I did it again! Britney Spears, in her song oops! I did it again, thought she had lost her senses. She had done it again, apparently without knowing why. Many times we vow not to do something again, and then we turn around and do yet again. About 70% of smokers say they would like to quit. Drug and alcohol abusers struggle to give up addictions that hurt their bodies and tear apart families and friendships. And many of us have unhealthy excess weight that we could lose if only we would eat right and exercise more. All these are typical issues that people face daily. We vow not to do the wrong thing, but somehow do it again. What economics leads us to do what we know is not good for us? As we all know, economics is always about choices and the opportunity costs associated with them. Okay, let's just say the costs associated with them, so they won't as they often say in Nigeria, that I am speaking too much grammar. So why do we do the wrong thing again? We do the wrong thing again because we do not correctly estimate the related costs and their timing and incidence. People somehow often fail to realize that sometimes we pay later for a transaction or activity. The alternative event to drinking a strong alcoholic beverage, for example, not drinking it and really craving it seems more psychologically costly. All we can see now are the immediate and proximate costs. We don't often see the costs to come or don't even believe the costs will come. So I said I won't do it anymore, but oops! I did it again. If I knew all the costs involved and their timing and size of impact I would very likely not do it. The costs involved in drinking and driving is possibly a ghastly accident. This accident may involve expensive repairs, paralysis or even death. Who would someone choose to drink and drive if they knew such terrible costs would come. Very few brave souls. From work done by scientists, it appears habits can develop when good or enjoyable events trigger the brainâ€™s â€śrewardâ€ť centers. This can set up potentially harmful routines, such as over eating, smoking, drug or alcohol abuse, gambling and even compulsive use of computers and social media. The bottom line is that people repeatedly do certain unacceptable things, not just because they are bad people, but because they are bad in calculating costs, in terms of the size, timing and incidence. And this is why we have penitentiaries and correctional institutions. Some people call them prisons, so that people can spend time to reflect on how to better estimate these costs in the future. This way they may not do it again. Our hidden economics for you.
Posted: Aug 18th, 2015 @ 01:33:00 AM