# Any Economists in the house?



## matt01 (Aug 9, 2006)

I am taking an Economics course this term, which is proving somewhat difficult. How does one show the marginal benefit and marginal cost of things which may not have a definable value?

An example would be: MB and MC of Caning versus Imprisonment. I understand that the marginal costs of the two options would be their relative cost. But how does one show the benefit?

Any advice would be appreciated.







* I realize that this might be a very basic subject to some. Please forgive my ignorance...


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## Puritanhead (Aug 9, 2006)

This sounds more like a quantative methods exercise than a regular macroeconomics class. 

[Edited on 8-10-2006 by Puritanhead]


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## Puritanhead (Aug 9, 2006)

Common-sense tells you that you would compare and contrast the various crime rates, specifically the crimes which have a punishment of caning or imprisonment (presumably arson, assault, petty theft, vandalism, et al.) The benefit would ascertained by the difference between the median crime rates of those jurisdictions that use caning vis-a-vis those that make use of imprisonment. Other variables affecting the analysis would be the sampling of countries/jurisdictions who are part of the cost-benefit analysis.

Anyway, on a strict mathematical basis, the marginal cost (MC) function is expressed as the derivative of the total cost (TC) function with respect to quantity (Q). The analysis can of course become more complex as more variables are introduced. In all likelihood, a serious inductive study of penal benefits needs a complex analysis with multiple variables and a large sample size in order to make it more accurate.


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## Puritanhead (Aug 9, 2006)

I once read a book called _More Guns, Less Crime_. Maybe they could come up with one called _More Caning, Less Crime_.
:bigsmile:

In May 1994, an American citizen Michael Fay, then 18, was flogged four strokes with a rattan cane on his bare buttocks following a vandalism conviction in Singapore, provoking outrage by the media in the United States. I say, let the beatings begin!!! It should been eight or nine strokes too!

We need more canings for individuals convicted of petty crimes like vandalism and graffiti. Singapore has a good idea. According to the broken window theory, punishing petty crimes like vandalism and petty thefts keeps down crime rates in general. As the theory goes, "If a window is broken and left unrepaired, people walking by will conclude that no one cares and no one is in charge, and it sows discord in the community and encroaches on the peace (shalom) of the community. As a result, the dreg elements of society become more apt to reap mischief when they see no constraining authority.

For the record, I can be a zealot for constitutional liberties, which I am unashamedely. Moreover, I don't think most non-violent crimes warrant imprisonment as I believe in the concept of restorative justice, and the need for criminal justice reform. However, it doesn't mean one is soft on crime, or that those convicted with due process of law should not receive a stern punishment. Besides, as a law professor of mine once said, if we took equal protection seriously, all convicted first-degree murderers would get the death penalty.


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## matt01 (Aug 10, 2006)

Ryan,

I must lack common sense... Though your answer was a bit more technical than I was hoping for, I do appreciate the effort.


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## Formerly At Enmity (Aug 11, 2006)

I'm friends w\ Gary North's son.....Does this make me an economist?
Just Kidding (about the economist part; I am friends w\ Gary's son)


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## smhbbag (Aug 11, 2006)

Sorry, didn't see this thread for a while.....



> I understand that the marginal costs of the two options would be their relative cost. But how does one show the benefit?



This cannot be done objectively, as in a standard graph that would show, for everyone, the MB and MC of caning vs. imprisonment.

Surely, there is an element of both that involves objective data such as overt costs, money saved depending on which makes criminals less likely to repeat as offenders, etc.

But that data doesn't tell the whole story.

The entire graph's purpose is, ultimately, to show the subjective value of each option's costs and benefits _in the mind of the one making the decision_

For someone who believes in caning over imprisonment, its MB and MC curves will look differently than one who prefers imprisonment. The two decision-makers have different values, preferences, and attach value to the B's and C's differently.

Example: Guy A may really like the public nature of caning and think it has a great deterrent effect on crime. But Guy B believes that effect is minimal and, in a non-economic stance, believes such punishment is immoral. But that immorality has a cost to Guy B - and he factors that into his MC's subjectively.

So, while there are objective parts that can be evaluated easily in monetary terms, there are always parts that can't be - and in that case the graph is derived further simply from the decision-maker's subjective valuation.

The graph is not actually to be used rigorously in a decision-making sense - it's just a visual way of getting accross the point that when MC is greater than MB - the decision-maker will cease doing the action, and vice-versa. And that MC's typically rise with greater production, while MB's fall.

[Edited on 8-11-2006 by smhbbag]


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## Puritanhead (Aug 11, 2006)

One thing I learned about statistics. You can make them look anyway you want, as long as the numbers look pretty.

_How to Lie With Statistics_ by Darrell Huff and Irving Geis.


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## matt01 (Aug 11, 2006)

> _Originally posted by smhbbag_
> The entire graph's purpose is, ultimately, to show the subjective value of each option's costs and benefits _in the mind of the one making the decision_



Thank you for your post. It was indeed helpful. The part that I was struggling with was the _subjective value_. It would be so much easier to have a defined, set value to chart.


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