Who knew that raising the price of a given product would dissuade people from buying it?
Well, surprise or not, New York’s Metropolitan Transportation Authority announced last week that its experiment to levy a one-dollar surcharge on every new MetroCard has resulted in a precipitous decline in the number of new MetroCards purchased by riders of New York public transit.
Here’s the scheme. The cost of a single ride on the New York Subway costs $2.50, charged to an aforementioned plastic MetroCard, which can be reloaded and reused forever (or at least until global warming submerges Manhattan in a sea of sludge and kelp).
However, most subway patrons are either unaware of, or uninterested in, the card’s temporal durability and opt instead to deposit it in the trash (or, by the looks of it, everywhere other than the trash) after one trip.
In response to the resulting mess, the MTA in March 2013 imposed a $1 fee for the card itself, meaning that every subway ride would suddenly cost $3.50 instead of $2.50—that is, unless customers took the radical step of actually hanging on to the damn thing and recycling it for all subsequent journeys.
As it turns out, they have done exactly that. In the first 14 months of the surcharge being in effect, the number of new cards in circulation dropped 71 percent, with $24 million in new revenue for the MTA along the way. Presto.
To be sure, New York is hardly the first municipality to think of this. The Metro in Washington, D.C., charges $2 for a SmarTrip card, which, like a MetroCard, can be recycled ad infinitum and whose use, unlike a MetroCard, lowers the per-trip fee by a dollar, compared to using a disposal one-time-only ticket. In my hometown of Boston, the procurement of a CharlieCard, itself free of charge, grants a 50-cent discount on all subways and buses, plus free transfers.
In all these cases—and plenty more besides—the premise is one and the same: The most surefire way to make people behave in a certain way is to make it economically propitious for them to do so.
We don’t want people to smoke, so we raise the cigarette tax. We don’t want people to drive so much, so we raise the gas tax and the highway tolls. We don’t want people to soil the subway station floor with expired fare cards, so we charge them a dollar every time they do so. And so forth. (Raising money for the government is, of course, a concurrent motivation.)
To be precise, the above are all instances of using monetary incentives to limit bad behavior, not to encourage good behavior. But then again, most such price-based government policies operate in exactly this way, leading to the common gripe about the so-called “nanny state,” which presumes to know what is best for us and compels us to act accordingly. (See: Michael Bloomberg, entire mayoralty of.)
But what if our elected overlords took a more, shall we say, wholesome approach to influencing the public’s behavior, rather than merely punishing or restricting it? If the state is going to be a nanny, why not be a fair and rewarding one?
There is often talk about super-taxing sugary drinks and snacks to dissuade kids (and grown-ups) from over-consuming them. Why do we so seldom raise the prospect of subsidizing healthy foods instead? It may be true that a bag of grapes will never be as enticing as a Snickers bar, but let us not pretend that the relative costliness of the former does not have a commanding role in wafting our shopping carts toward the latter.
With how much we, the people, currently pay farmers to transform soil into dinner, don’t tell me we couldn’t coax them into, say, growing more carrots and less corn, thereby tweaking the market prices of both and astronomically improving the nation’s overall health—itself the single greatest means of solving the puzzle of unaffordable healthcare.
Likewise, rather than merely punishing companies that emit too much pollution (as necessary as that is), how about actually rewarding those that make the greatest effort to emit the least—much in the manner of the Obama administration’s “Race to the Top” program to raise public education standards?
Am I being naïve? You bet I am. I probably couldn’t know less about the root mechanics of these subjects if I tried.
What I do know is a sentiment expressed by historian David McCullough in defending government funding of the arts: “People say we don’t have the money. Of course we have the money. It all depends on what we want to spend our money on. You can tell an awful lot about a society by how it spends its money.”
What kind of a society do we want to be? One that actively strives for good, or one that merely avoids doing bad?
Mind you, these are not mutually exclusive ambitions. Just ask the MTA.