Tuesday, February 1, 2011

Mandated Budgets

That government people might choose to attend the same course when it is offered at a high price rather than free says more about the mandated budget for training each year than valuing something higher because it has a price on it. If the training budget isn't spent the money is 'lost'.

[This is written in reference to an example in Behavioural Economics by the New Economics Foundation (p11) which is meant to show that if something has a price on it, it is valued higher (and not just monetarily higher). Actually, just trying to distinguish value from monetary value is hard enough in today's world.]

Is the answer not to create budgets? Rather to operate on an if-it's-needed-we-will-get-it operative? Or perhaps a make-savings-get-a-greater-dividend operative?

B

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