Question

Governments often adopt certain policies in order to promote desired behavior among their citizens. For each of the following policies, determine what the incentive is and what behavior the government wishes to promote. In each case, why do you think that the government might wish to change people's behavior, rather than allow their actions to be solely determined by individual choice? a. A tax of $$ 5\( per pack is imposed on cigarettes. b. The government pays parents \)\$ 100$ when their child is vaccinated for measles. c. The government pays college students to tutor children from low-income families. d. The government imposes a tax on the amount of air pollution that a company discharges.

Short answer

The government imposes incentives like taxes and monetary rewards to promote healthy, educated, and environmentally sustainable behaviors that contribute to public welfare and mitigate negative externalities.

Step-by-step solution

Identifying the Incentive for Imposing a Tax on Cigarettes

To determine the incentive behind the cigarette tax, analyze the impact of an additional cost of $5 per pack on consumers. The incentive is to discourage smoking by making it more expensive. The government wishes to promote healthier lifestyles and reduce healthcare costs associated with smoking-related illnesses.

Assessing the Incentive for Paying Parents for Child Vaccinations

Consider why the government offers financial rewards for vaccinations. The incentive is to encourage parents to vaccinate their children against measles by providing a monetary benefit. The government aims to increase vaccination rates to ensure public health and prevent outbreaks of preventable diseases.

Understanding the Incentive for Paying College Students to Tutor

Examine the reasons behind government payments to college students who tutor children from low-income families. The incentive is to support education and provide role models for children who may lack educational resources. The government wishes to promote educational equity and improve long-term economic outcomes for individuals from low-income backgrounds.

Analyzing the Incentive for Taxing Air Pollution

Explore the rationale for taxing companies based on their air pollution levels. The incentive is to motivate companies to reduce pollution by making it financially beneficial to operate in a more environmentally friendly manner. The government desires to promote sustainable practices and protect the environment for the health and well-being of the population.

Discussing the Preference for Behavior Modification Over Individual Choice

Contemplate the reasons why a government might prefer to alter behavior through policy rather than rely on individual choice. Governments might wish to change people's behavior because individual choices do not always align with the public good, may lead to negative externalities, and can impact the entire society. In these cases, government intervention seeks to correct market failures and protect public interests.

Key concepts

Tax on Cigarettes

Governments frequently levy taxes on cigarettes to combat the adverse effects smoking has on public health. The premise here is simple: by imposing an additional cost—let’s say \( \$5 \) per pack as noted in the exercise—the price of cigarettes increases. This price hike serves as a deterrent, making smokers reconsider their habit due to the increased financial burden.

Studies have shown that higher prices lead to reduced cigarette consumption, particularly among youth and low-income smokers. The overarching aim is to reduce healthcare costs and improve the general health of the population by lowering the prevalence of smoking-related illnesses like heart disease, lung cancer, and emphysema.

By introducing such a tax, the government sends a clear message about the risks associated with smoking and indirectly steers people towards healthier lifestyle choices. In practice, these taxes are part of broader tobacco control strategies that might also include public education campaigns and restrictions on smoking in public spaces.

Financial Rewards for Vaccinations

Optimal public health requires high vaccination rates, which is why governments might offer financial rewards to parents who have their children vaccinated. For example, receiving \( \$100 \) for a measles vaccination not only offsets any direct costs associated with the vaccination but also serves as an incentive for parents who might otherwise have reservations or face logistical barriers.

Such financial motivators are powerful tools in public health policy because they directly encourage positive behavior — in this case, maintaining the community's immunity against preventable diseases. The underlying aim is to help reach herd immunity, the point at which enough people are immunized to prevent the spread of disease, protecting those who cannot be vaccinated, such as infants or individuals with certain medical conditions.

Financial rewards thus become not just a short-term motivator for individual action but also a long-term investment in societal health and resilience against potential outbreaks.

Educational Equity

When a government pays college students to tutor children from low-income families, it addresses multiple social objectives. This approach promotes educational equity, ensuring that learners who may not have access to adequate academic support receive the help they need to succeed.

Educational equity is crucial for breaking the cycle of poverty, as it provides a level playing field for all students, regardless of their socio-economic background. The involvement of college students as tutors also benefits higher education students, who gain teaching experience and a deeper understanding of societal inequalities. Moreover, this initiative exemplifies a strategic investment in the country's future workforce by preparing all children to compete in an increasingly knowledge-based economy.

It's this two-fold benefit—helping children achieve their potential and college students gain valuable skills—that underpins the government's desire to intervene in facilitating equitable educational opportunities.

Environmental Taxes

Environmental taxes, such as those levied on the amount of air pollution a company discharges, aim to internalize the external costs of environmental degradation. Since air pollution affects public health, agricultural production, and overall ecosystem integrity, holding polluters financially accountable encourages more sustainable business practices.

By introducing a tax based on pollution levels, governments incentivize companies to reduce emissions, such as investing in cleaner technologies or adopting more efficient processes. This approach aligns with the 'polluter pays principle', a key concept in environmental management, suggesting that the party responsible for pollution should bear the cost of managing it.

An additional benefit is that revenue from environmental taxes can be reinvested into green initiatives or used to alleviate the tax burden on other sectors, promoting an overall transition to a greener economy. Such policies are instrumental in driving long-term shifts toward sustainability and environmental stewardship.