Affecting People's Decisions
I’ve been watching and enjoying the Agnes Callard interview of Bryan Caplan. I don’t think I had watched a 2.5-hour interview in the last two years, but this was well worth it.
I’ll do more posting on it, but I want to highlight one thing that caught my attention and made me think of my own contributions to people’s decisions. At about the 36:25 point, Bryan makes the point that he has created enormous wealth by persuading over 100 parents to have more kids.
It got me thinking about my own life. I haven’t done anything as dramatic. It’s hard to measure my effect in the Reagan administration. The odds are reasonable that I lowered the probability of some megadollar spending bills by 1 in 10,000 and these mega dollars would have been annually. So I probably paid my lifetime income in an expected value sense.
The closest I can come to saying I had an identifiable impact was on a local issue in 2003. In expected value terms, my activity would have paid over 1/4 of my whole lifetime income. I wrote about it here, here, and here.
(In this one, by the way, I talk about how people came out of the woodwork to support me. I take that as evidence of Bryan’s point about social desirability bias. They weren’t outspoken in my favor, probably for obvious reasons: it seems so cruel to say no to a tax increase to pay for a government hospital. But they told me to my face that they liked what I was doing.)
So how did Bryan’s point make me think of this? To win the fight against a tax increase of $25 million annually, we needed to get a 33.4 percent or higher vote against. The present value of that increase over, say, 6 years (Why 6? Because eventually, I thought, they would get a tax increase for something) was about $130 million. Let’s say that my activity increased the probability of defeat by 1 percentage point. Then my expected value was $1.3 million. QED.
I anticipate that some commenters will argue that this saving in taxes is not a net saving. I disagree. As a result of the defeat, Natividad Hospital brought in consultants who proposed changes that were accepted and saving millions of dollars a year. As we said during the debate, in opposition to the claim of the pro-taxers, without the tax increase, Natividad would still exist 5 years later. It has now been 18 years and it still exists.