Travel

Culture / Land / Methods / Policy / Teaching / Travel — 2 Comments
27
Feb 12

Speeding Fines That Vary With Income: Absolute vs. Relative Risk Aversion and Public Policy

Where there are posted restrictions, most European countries take speeding very seriously and levy hefty fines. The latest case in point is a 37 year-old Swedish man who was clocked at 180 miles per hour on a motorway between Bern and Lausanne in Switzerland.

Unfortunately for this driver of a new Mercedes-Benz SLS AMG, Switzerland doesn’t have fixed fines for speeding. Instead they use a formula similar to that in Finland where the fine is calculated based on the vehicle’s speed and the driver’s income. Back in 2002, Nokia executive Anssi Vanjoki had to pay a fine of $103,600 for going 47 mph in a 31 mph zone.

A student in my Law, Economics, and Organization seminar mentioned the article quoted above last week when I was explaining the difference between the twin concepts of absolute and relative risk aversion.

In economics, risk is not so much about what most people call risk as it is about gambles over income. In other words, risk preferences are defined over income or wealth. See here for an excellent discussion starting on page 64 in chapter 6 of David Friedman’s Law’s Order. So why would Switzerland and Finland have speeding fines that vary with income? Continue reading →

Miscellaneous / Travel — Comments Off
8
Jun 11

Pittsburgh Bleg

I have been asked to present a paper at a conference held in Pittsburgh in July, so my wife and I have decided to turn that trip into our annual vacation given that her new job leaves her too little time to make a trip abroad worth the transaction costs.

We will be spending four days in Pittsburgh, and four days in Ithaca, NY. We both lived in Ithaca while we were in grad school, but neither one of us knows anything about Pittsburgh, although we already have been told that the Frank Lloyd Wright-designed Fallingwater was not to be missed. As such, we would love to hear your suggestions as to what to do, what to see, and where to eat.

Travel — 2 Comments
28
Feb 11

Downtown ATL Bleg

I will be in Atlanta for a little over 36 hours in a few weeks for a conference. As such, my schedule will be packed, but I expect to have some time for one nice dinner, and I would welcome suggestions as to where to eat in downtown Atlanta.

I have only been to Atlanta once, for an even shorter trip in the summer of 2009 when my wife and I picked up our visas from the Belgian consulate there. Back then, someone had recommended eating at Paschal’s, which turned out to be a smorgasbord of heartburn-inducing deep-fried fare.