Showing papers by "Gary S. Becker published in 1993"

Nobel Lecture: The Economic Way of Looking at Behavior

Abstract: An important step in extending the traditional theory of individual rational choice to analyze social issues beyond those usually considered by economists is to incorporate into the theory a much richer class of attitudes, preferences, and calculations. While this approach to behavior builds on an expanded theory of individual choice, it is not mainly concerned with individuals. It uses theory at the micro level as a powerful tool to derive implications at the group or macro level. The lecture describes the approach and illustrates it with examples drawn from my past and current work.

A Simple Theory of Advertising as a Good or Bad

Abstract: Our analysis treats advertisements and the goods advertised as complements in stable metautility functions, and generates new results for advertising by building on and extending the general analysis of complements. By assimilating the theory of advertising into the theory of complements, we avoid the special approaches to advertising found in many studies that place obstacles in the way of understanding the effects of advertising. We also use this approach to evaluate advertising from a welfare perspective. Whether there is excessive or too little advertising depends on several variables: the effects on consumer utility, the degree of competition in the market for advertised goods, the induced changes in prices and outputs of advertised goods, and whether advertising is sold to consumers.

The economic way of looking at life

Abstract: The economic approach My research uses economic approach to analyze social issues that range beyond those usually considered by economists. This lecture will describe the approach, and illustrate it with examples drawn from past and current work.

George Joseph Stigler: January 17, 1911-December 1, 1991

Abstract: George Stigler was born in a small town near Seattle and grew up in that city. He was the only child of immigrant parents who came from farm backgrounds his father from Germany and his mother from Hungary. Until he was three, George spoke only German, and he retained fluency in that language throughout his life. Stigler always spoke fondly of his youth in the Northwest. He attended Seattle public schools and read insatiably on his own. He spent his summers and other free time playing tennis, climbing local mountains and camping through active involvement in the Boy Scouts, and engaging in assorted minor mischief. He attended the University of Washington in Seattle, where he majored in business administration. Stigler intended to go into business when he was graduated in 1931, but the Great Depression was in full swing. Lacking any employment opportunities, he decided to get an MBA at Northwestern. It was there that he became interested in economics and the possibility of pursuing an academic career. A major turning point in his professional and personal life came with his decision to enroll for a Ph.D. degree at the University of Chicago. Chicago had an outstanding Department of Economics that was led by Frank Knight and Jacob Viner. Stigler was one of the few students who wrote dissertations under Knight. However, Viner may have had the greater long-run impact through his emphasis on the empirical relevance of macroeconomic theory, and on the necessity of testing a theory with historical and other empirical evidence. As important as the faculty's influence was, that of a remarkable

Cross-Cultural Differences in Family and Sexual Life An Economic Analysis

Abstract: This article uses rational choice theory to explain family and sexual life in so-called primitive societies. It develops implications of the theory that relate the degree of polygamy, the relative value placed on men and women (as proxied by the respective amounts of “bloodwealth” prescribed for killing or wounding a man or a woman), and the degree of homosexuality to each other and to other variables, including the relative numbers of men and women and the mode of production—whether agricultural or hunting and gathering. Examined is quantitative evidence bearing on these implications from almost 70 societies.

Comments on Danzon, Maki, Murray, and Allen

Abstract: The two studies on disability by Patricia Danzon and Dennis Maki nicely complement each other. Danzon provides a very fine theoretical analysis of the effects of disability insurance, while Maki's is a good empirical study of the Canadian experience. Why are governments so extensively involved in disability programs? Two very different explanations are (1) that governments offset failures in the private insurance market or (2) that government disability programs redistribute resources to some groups at the expense of others. Some analysts claim that private insurance markets do not work well because of the difficulties in handling self-selection and moral hazard. Empirical studies in both the United States and Canada typically find that public disability programs significantly reduce labor force participation rates. For example, Maki finds that about a third of the reduction in participation rates of Canadian males aged 45-64 in recent years is due to disability programs. Sizable effects are also found with U.S. data, although Danzon shows the large unexplained differences in estimates from different studies. She states, "It is often implicitly assumed that all reduction in labor supply associated with disability insurance is moral hazard and entails an excess burden" (p. S188). Her theoretical analysis helps evaluate this implicit assumption. For she shows that an optimal first-best disability program might well reduce labor supply relative to a world with no insurance, even when there is full information about disabilities. Indeed, she shows more than this, that under certain conditions with first-best insurance, the insuree is better off by suffering a disability than not. Insurees then have a strong incentive to fake disabilities. It is not yet possible to evaluate how much of the reduction in labor supply in either Canada or the United States is due to redistributive aspects

Voir La Vie De Façon Économique

Abstract: Mes recherches utilisent l'approche économique pour analyser des problèmes de société qui se situent hors des préoccupations habituelles des économistes. Cette leçon s'attachera à décrire l'approche économique et à l'illustrer par des exemples extraits de travaux passés et actuels. Contrairement à l'analyse marxiste, l'approche économique à laquelle je me réfère ne suppose pas que les individus soient uniquement motivés par l'égoïsme et l'appât du gain. Il s'agit d'une méthode d'analyse et non d'une hypothèse concernant des motivations particulières. Avec d'autres, j'ai essayé de détacher les économistes de l 'hypothèse étroite de l'intérêt personnel. Le comportement est commandé par un ensemble bien plus riche de valeurs et de préférences. L'analyse suppose que les individus maximisent leur bien-être tel qu'ils le conçoivent, suivant qu'ils sont égoïstes, altruistes, fidèles, rancuniers ou masochistes. Leur comportement est orienté vers le futur, de même qu'il est cohérent à travers le temps. En particulier, ils tentent d'anticiper de leur mieux les conséquences incertaines de leurs actions. Un comportement tourné vers l'avenir peut toutefois trouver ses racines dans le passé, car le passé peut exercer une influence durable sur les attitudes et les valeurs. Les actions sont contraintes par le revenu, le temps, la mémoire et les capacités de calcul imparfaites, et autres ressources limitées, mais aussi par les possibilités disponibles dans l'économie. Ces occasions sont en grande partie déterminées par les actions privées et collectives des autres individus et organisations.