Economists know that there is an optimal level of a bad
thing, and that the optimal level is not necessarily zero. This phenomenon is
most often mentioned in the context of negative production externalities, for
example, where there is a rational level of pollution that is greater than
zero. Last week, however, we examined this economic understanding as it applies
to voting and political information, an area in which there are not obvious
negative production externalities. We discovered that individuals are
rationally ignorant about many political issues. The rational level of
ignorance for different subjects is found by graphing their marginal cost and
benefit curves and calculating where the curves intersect, or where the costs
of ignorance equal the benefits.
The economic inference of the rationality of a non-zero
level of a “bad thing” applies in a myriad of everyday situations. One such
arena is dieting. Eating sweets on a diet is generally considered to be
irrational -- why behave in a way that works against your goal of losing
weight? According to our economic principle, however, this behavior, of
completely cutting out “bad foods” is likely a mistake.
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