Incentives Matter, Even When Making Babies: Tyler Cowen

“Incentives matter” is the most central lesson of economics. And they matter no matter what kind of social activity you examine or which level of the economy you study.

Economists used to believe that not many people moved across state lines because of tax rates, for example, but a study published earlier this year suggests that there was indeed a tax-driven exodus from California about a decade ago. Or consider lithium, a critical component for some kinds of batteries. Fears of a shortage, and subsequent high prices, drove further exploration, and one of the biggest lithium deposits was recently discovered ...