CHAPTER 1THE POWER OF INCENTIVES
How Seat Belts Kill
Most of economics can be summarized in four words: "People respond to incentives." The rest is commentary.
"People respond to incentives" sounds innocuous enough, and almost everyone will admit its validity as a general principle. What distinguishes the economist is his insistence on taking the principle seriously at all times.
I remember the late 1970s and waiting half an hour to buy a tank of gasoline at a federally controlled price. Virtually all economists agreed that if the price were allowed to rise freely, people would buy less gasoline....