Comments on: Against Makeup?

By: Miscellaneous Links « Brad Taylor’s Blog

Miscellaneous Links « Brad Taylor’s Blog — Wed, 27 May 2009 22:21:26 +0000

[...] 28, 2009 Will Wilkinson and Robin Hanson argue about cultural externalities and harm. Excellent all [...]

By: Overcoming Bias : Tax Unhappiness?

Overcoming Bias : Tax Unhappiness? — Tue, 26 May 2009 07:34:02 +0000

[...] (i.e., relative status) harms on others. After describing our best data on positionality, I asked if Frank would endorse its implication that we tax should beauty aids, education, and [...]

By: Robin Hanson

Robin Hanson — Tue, 19 May 2009 12:39:20 +0000

See my added to the post.

By: a soulless automaton

a soulless automaton — Tue, 19 May 2009 10:02:00 +0000

The primary argument against spending on positional status goods seems to be that, due to the inherently zero-sum nature, it induces wasteful spending, displacing other things, correct?

However, as has been mentioned, some positional goods (education, beauty, &c.) potentially have positive externalities. If the magnitude of these externalities is great enough, wouldn’t it actually make sense to, if anything, encourage positional spending on them, since this will lead to people voluntarily spending additional resources creating said positive externalities? A society of well-educated, beautiful people seems strictly better than a society of less-educated, less-beautiful people with the same relative status positions.

By: Paul Crowley

Paul Crowley — Tue, 19 May 2009 08:07:09 +0000

Dagon: if all I care about is having a better barbecue than you, and I have $5000 to spend while you have $2000, then I don’t care if high-end barbecues are heavily taxed, because even if my $5000 only buys $2000 worth of barbecue, it will still be better than yours. So the Government can enrich itself while minimizing the harm it does its citizens. That’s the theory; it’s not to do with discouraging it, but with extracting money in a way that causes less pain.

By: blink

blink — Tue, 19 May 2009 03:02:00 +0000

Even if we can agree on some activities to tax, we still have to consider what happens when we make one or several status signals more expensive. Instead of decreasing overall status-seeking, individuals may simply shift to less efficient and informative status signals, perhaps increasing the total cost and quantity of signaling. I do not see how Frank can answer this short of a tax and subsidy schedule for all conceivable activities.

By: Robin Hanson

Robin Hanson — Tue, 19 May 2009 02:37:20 +0000

Tomasz, we spent lots on hairdressing and beauty-enhancing clothes. The main positional costs of sports are time and effort, and these are not taxed at all.

By: Tomasz Wegrzanowski

Tomasz Wegrzanowski — Tue, 19 May 2009 02:30:15 +0000

I think taxing status signaling spending is one of the best policies a government can implement. Just like taxing anything else with major negative externalities, and subsidizing things with major positive externalities.

However, makeup is really cheap, and it’s a fuzzy category (makeup vs hygiene), so taxation would be hard to implement. One of the most expensive categories – surgery – is indirectly taxed already – because normal surgery is subsidized cost of surgeon services on the market are higher than they would otherwise be. So it’s not really terribly great idea to tax it.

The same applies to other kinds of small categories of status products – its too expensive to organize a proper tax for them.

Sports competition performance is already treated like an extrernality, not by taxes but by outright ban on many performance enhancements (positional good) with serious negative health consequences (non-positional bad).

It’s not obvious that education has negative externalities, most people believe its externalities are very strongly positive.

By: Unnamed

Unnamed — Tue, 19 May 2009 01:41:39 +0000

Robin, do you know if Frank counts competition between producers to attract consumers (e.g. athletes attracting fans) as positionality? The examples that I’ve heard (and the quote in yesterday’s post) all focus on consumption – consumers competing to do well relative to other consumers. Competition between producers isn’t a problem if it leads them to produce a better product (though it depends, I suppose, on whether consumers find the product to be better in an absolute sense or only in a positional sense).

By: John Maxwell IV

John Maxwell IV — Mon, 18 May 2009 20:48:58 +0000

But what about personal beauty, which our evidence suggests is one of our most positional goods? Yes, exercise also improves health, but it is very hard to see any large compensating side effects justifying makeup, hairdressing, and nice clothes.

Suppose the interviewees interpreted the beauty question as

a. You score 8 on a scale of 1 to 10; others of your gender score 10
b. You score 6 on the same scale of 1 to 10; others of your gender score 4

In this case, there is a large compensating side effect: the appreciation of members of the other gender.