Image for post
Image for post
(credit for the background image: Jennifer Stahn BY/CC)

(Behavioural) economics through sunglasses

When you’ve embraced economic thinking, even a summer break from work doesn’t stop you seeing how profoundly we humans truly are economic beings

This summer I have once again been wearing my trusted economics sunglasses. As before they supplied some interesting observations, confirming how good economics is at describing and explaining a lot of our behaviour.

1. The weather

In my home town (and much of England), we would on average get 8 rainy days per month in June and July. That’s two a week. Of the other days, not all are warm and sunny, so really nice days are generally quite scarce. Not so this year: we had 41 consecutive dry days between the middle of June and the end of July. Most of these were genuine summer days (30 with a temperature above 25 degrees C). In June we had 75 hours more sunshine than average, and in July that was nearly 100 extra hours.

Image for post
Image for post
How boring can the weather get?

2. The shop

Differential pricing is the holy grail for retailers. When you offer your goods or services at the same price to everyone, you exclude every prospective customer whose willingness to pay (WTP) is below that price. Moreover, you’re giving it away to cheaply to everyone willing to pay more than your price.

3. The rubbish

Rubbish collection in a seaside town with lots of holiday makers over the summer is a complex affair. Most municipalities in Belgium operate a ‘polluter pays’ principle: inhabitants buy rolls of refuse bags which carry a rubbish levy, and only those bags will be taken by the collectors. The more rubbish you produce, the more therefore you pay. Fair enough, and environmentally sensible.

Image for post
Image for post
Just you try to squeeze a refuse bag through that hole!
Image for post
Image for post
Cause (L) and consequence (R)

Written by

Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store