A large part of economic analysis is based on the concept of utility. Utility is, basically, something that people all try to maximize. It's an amalgamation of money, happiness, whatever the heck ever that people individually want. It is assumed that people have complete information about what maximizes their own utility, and probably are equally well informed about what to do to get what they want. They're basically omniscient. This is all complete bullshit.

My favorite example of how people aren't maximizing any kind of utility, because they don't have a clue what is going on, is their ability to access risk. People are afraid to fly, but they drive every day where they would be hard pressed to find a common behavior that is more unsafe. Piles of people freaked out when anthrax hit, when a whopping four people died. People were wearing SARS masks...but I'm not sure how bad an idea that is, in some places masks may be a good idea all the time. The point is people don't have a friggan clue. People from Beverly Hills high seem to have a high rate of cancer, perhaps due to an oil rig next door. How do you even begin to access a risk like this anyway, much less on an individual basis? Now, you can argue that part of "utility" is peoples psychological well being, so their perception of the risk could be more important than the actual risk, but then you'd have to measure people's psychology. Good luck.

I have no point.



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