Should we use the price system for evacuation?

From Boettke:

Stigler reports that he received a letter from Tjallling Koopmans asking whether he had in fact advocated the use of the price system to evacuate NYC in case of a bombing during WWII.  Stigler responded that he had never even thought about the problem before, but upon reflecting on the problem that (1) upon the first bombing of NYC any system of evacuation would be chaotic and inefficient, but that (2) if the bombings were repeated, that indeed he would argue that the price system would be the most efficient way to handle the problem.

It depends on the counterfactual.  It is already the wealthy who have the resources to leave afflicted areas, or who had the resources to send their children to the countryside, in the case of bombed London during World War II.  You could pay a relative to take the kids in, rather than having to rely on the charitability of your relatives.  So very often we already are using the price system, and in a fairly orderly manner.

If you are evacuating a city suddenly, along a constrained road or path, ideally (at least by economic standards, which may or may not be your final moral theory) you wish to favor the people who are young, productive to others, and people who value their own lives highly and are risk-averse.  A market auction tends to favor the wealthy and in this context many of the first leavers in line will be inefficiently old, again with the moral caveat noted above.  The wealthy spend money on the basis of "if I die, my wealth is worthless or worth less because my bequest motive is less than full," whereas from a social point of view the wealth survives the death of the wealthy person.

If institutions will enforce the traditional "women and children first," with a minimum of corruption, that solution may be preferable to the auction.  Men are on average more productive than women in the labor force, but the number of replacement children in the longer run is more closely tied to the number of women than to the number of men.  So, indirectly, favoring women favors men too.

The private sector often chooses the rule of "women and children first," at least when the disaster is explicitly seen as such.  This rule was heeded in the case of the Titanic but not the Lusitania, arguably because the latter ship sunk more quickly and with more panic.

In many other settings, especially where dying is non-immediate or stochastic, the market chooses the auction method.  Think of the market for pharmaceuticals.  In the absence of government subsidy, you have to buy the drugs and there is not always price discrimination in favor of women and children.  Also consider allocation procedures for kidneys, hospital rules for triage, and the sale and resale of fresh water during cholera epidemics, among other scenarios.  What's striking is how many different allocation procedures markets use, depending on context. 

Comments

Brian Simpson's excellent Cannibalism and Common Law pointed out that at sea, the "women and children first" rule did not appear before the twentieth century, and it always used to be that the crew got themselves off fast and the passengers were pretty much on their own.

You could sell evacuation rights before the disaster and let people trade them continuously.

At the level of social destruction requiring an ark the woman and children first argument might matter. Nevertheless, at the level of mere war, the wealthy not only have more wealth but are typified by values of hard work and thrift as well as much more skilled than average. It isn't at all clear you'd want a bunch of randomly selected women and children instead.

Sell enough evacuation rights at a high enough price and maybe you can afford better evacuation infrastructure.

Brian Simpson's excellent Cannibalism and Common Law pointed out that at sea, the "women and children first" rule did not appear before the twentieth century, and it always used to be that the crew got themselves off fast and the passengers were pretty much on their own.

Just asking: Maybe a combination of not many women and children traveling by sea before the 20th century, and, in the case of children, they were part of the crew, and because not many wealthy women and children traveled by sea before the 20th century?

and the 19th century

"You wish to favor the people ... who value their own lives highly."

If you (descriptively) expect meaningful variance on this measure, or (normatively) think that this is a good criterion for favouring evacuees, you might be an economist.

1) How long does it take to implement the pricing?

2) Doesn't this create a colossal incentive to rob other people trying to leave?

1994's sinking of the ferry Estonia in the Baltic Sea resulted in an unusual demographic profile of the survivors as compared to the victims. Men were substantially more likely to survive than women, apparently because the ship's very steep list made it almost impossible to evacuate unless one had the strength to climb hand-over-hand through the suddenly sideways rooms and corridors. For that reason the survival rate was almost zero among children and older people. Oddest of all, the passengers were divided about evenly between Swedes and Estonians, yet Estonians had more than double the survival rate.

Re: Men are on average more productive than women in the labor force

Yes, so you want to leave the men where their jobs are rather than have them out in the boonies where there's no work for them. I am assuming a WWII type of bombing-- not city-blasting nukes-- and in WWII the rule was to get the unproductive people out of the cities making it easier to shelter the productive people effectively so they could continue working in war-supporting industries.

Your overall analysis is really incomplete. The elderly and infirm are much more likely to die from what are relatively minor impediments for a healthy man or women, and when they don't die they require much more care to get over them. Even small children are much better off in disaster scenarios than the elderly as their nutritional and water needs are lower.

In addition to this the marginal product during disaster times is extremely high. Lifting a single beam can free a trapped persona and add the rest of their productive life to GDP, while putting out a fire prevents other buildings from burning down as well.

Getting the old and the very young out of the way and letting the most productive stay and help survivors and put out fires is almost certainly superior when you consider how much value there is in the infrastructure.

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