Tradeoffs, Self-Insurance, and Externalities:
I ran across this very interesting post over at The Volokh Conspiracy. It talks about SUVs and self-insurance versus social-insurance. From the article:
The point is more general. Every time it snows, I can get around in my SUV (that’s one of the many reasons we bought an SUV in our family). Those hybrid drivers out there, by contrast, can’t move until the streets get plowed. Yet the snow plows are paid for my tax dollars as well as theirs. Again, whereas I have self-insured against snow and internalized my costs of getting to work, the hybrid driver has again decided to externalize the costs of his choice by forcing me to pay for the snow plows that he needs and I don’t. Again, policy conclusion: Mandate that every household own an SUV.
Sort of brings things into focus, doesn’t it? Now, you can hate people who drive SUVs; but trying to “ban” SUVs strictly on an environmental basis is clearly wrong. The picture is bigger than that.
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