Tuesday, January 02, 2007

'Incentives', against smoking for example ...

Q: What do you mean by 'incentive' and what are its different flavors?

A: According to Steven Levitt and Stephen Dubner, authors of Freakonomics, an incentive is simply a means of urging people to do more of a good thing and less of a bad thing.
They say, there are three basic flavors of incentive - economic, social and moral. Very often a single incentive scheme will include all three.

For example, think about the anti-smokingcampaign.
(1) The addition of a $3-per-pack sin tax is a strong economic incentive against buying cigarettes
(2) Banning of cigarettes in restaurants and bars is a powerful social incentive
(3) When U.S. Govt. says terrorists raise money by selling black-market cigarettes, it acts as a strong moral incentive.



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