I'm such an idiot: Taxes and Incentives!

So I'm sitting on the Metro North train right now traveling home, and a guy just sat down next to me (he can't see my typing this, don't worry. I'm not THAT dumb.) And he didn't buy a ticket at the station.

The same probably goes for any train service, but if you don't buy a ticket before boarding the Metro North you have to pay like an extra 3-5 bucks for it. I always thought that was just a way for the MTA to squeeze a few mo' dollaz out of you.

[Insert line about me being an idiot here.] No! It's not about squeezing more money out of you! It's about making the train operate more smoothly! If they can create an incentive where you're more incline to buy a ticket before boarding than on the train (ie. make it more expensive on the train) then almost everyone will do just that (which they do). Having people buy a ticket before boarding then means they don't buy it on the train. Having less people buy tickets on the train means that the operators and people don't have to make 5 minute sales transactions with everyone to sell them a ticket. That means they have more time to actually check for tickets and do a more effective job of it. More effective ticket checking means a smoother ride for passengers, and less costs for the MTA.

Therefore, by enforcing a tax on the train, the MTA provides a public good: namely smooth operations.

Now this might be common sense for a lot of people, but honestly whenever I get some sort of tax on something my first inclination is to think about how I'm getting screwed, and how The Man is profiting off me for it.


I will make this post even longer by telling you about, a few weeks ago, I met someone from Harvard at a Civic Engagement Conference studying Folk Anthropology. At first, I was like "what's that good for?" And then he explained: Folk Anthropology studies traditional folk tales of cultures, but does so from the culture's prospective. One of the things he studies is why certain tales came about, and of course it was from the perspective of the studied culture. He said he wanted to major in that because he figured it would teach him how to think about social problems from the eyes of those who experience them, and not from an outsiders.

I think had I studied Folk Anthropology, I would have come to this conclusion about the MTA sooner. And it's too bad more people don't study Folk Anthropology, because then maybe we'd have more public solutions, and less reason for us to act purely for our own good.

One thing that comes to mind is a Nash Equilibrium of a Prisoner's Dilemma game. I won't explain the game as most introductory economics classes teach it (and I was do a down-right awful job), but in the game both participants end up worse-off than they could be because they are acting purely for their own good (which is perfectly reasonable, because else-wise they'd be throw in jail!). But if we'd consider the perspective of the other parties involved, then we might be a little better off. Case in point: had I realized the MTA was taxing on-board tickets for a reason that actually give me more benefit in the end, I would've been much less annoyed with them a year ago when I bought an on-board ticket.


And the last tangent I'll go on for this post will be about homeless shelters. Yeah, I'm taking you guys for quite the random ride, huh? Anyway, I was talking to a friend yesterday who said that Dr. Dennis Culhane (a professor and expert in homelessness in our Urban Studies department) stirred up quite the controversy yesterday when he said that homeless shelters should all be closed down during a homelessness panel.

A little extreme? Maybe not so much as you think. When I asked him about that today he explained by saying that most people don't understand how much the poor hate homeless shelters. They are degrading, crowded, and do not have the capacity to serve their demographic properly. Most of all, they're inefficient, and he argues it would be better just to give the homeless all housing (and the housing's out there, he argues), and that the same social services that a homeless shelter provides can be given more efficiently and at a higher level through other programs which are already in place. One point he argues is that nobody uses the social services a shelter provides unless they are actually in the shelter (as the homeless try to avoid the shelters as much as possible), and as the typical shelter stay is only 60 days long, people stay and receive services for 60 days and then leave, without much followup thereafter, which doesn't help much in terms of homelessness prevention. What the government should do, he says, is to put more money into government social services, and less into subsidizing private shelters.

You can probably imagine that after saying that homeless shelters should closed down at a panel for homelessness he was met with some disagreeance from the crowd. In fact, there was one man who worked at a shelter who had quite a few exchanges with him during Q&A. But what's interesting is that after the panel ended, some people who were homeless or were former homeless came up and thanked him for saying what he did. Because shelters really are that bad to be in, and we really should be focusing more on prevention rather than band-aids. I wonder how many people who volunteer at homeless shelters think about the homeless in that way: that it's the last place they want to be, that it's degrading, that everything about it is just awful from its efficiency to its cleanliness, that they just really don't want to be there. Sure, nobody wants to be homeless and in a shelter, but when was the last time someone thought of it from the homeless guy's perspective.

To really put some light on my last point, let's look at panhandlers on the street. I've seen situations where people have walked back with a carton of leftovers from eating at a restaurant and had a panhandler person ask them for some change for food. The passerby offers to give them his leftovers, but the panhandler refuses to accept. And the passerby leaves muttering words of "you'd think he could take what he can get" etc. to his friends. In fact, to be honest, I've probably been that passerby at one point.

But if you're the homeless guy, it's a pretty hard hit to their dignity to take someone's leftovers. Food that's already been salivated on, and eaten. Food that most other would not eat from a stranger. It's pretty hard to maintain a sense of dignity when accepting that option. Most would argue that nobody deserves to have their dignity completely stripped away from them.


So anyway, this post has drawn long and somewhat missed its original intent, but the main point is that we should all learn to study Folk Anthropology more. If we did, we'd probably see that a lot of things people and businesses do aren't really to screw us, but provide some public good that we don't see. That or we might learn that we're promoting a disservice to some even though we think we're just trying to help. Who knows what we'd come up with.

I, for one, would probably just be less cranky.