Suspicious discontinuities (2020) (danluu.com)

Article summary

The article discusses how various systems and policies can create discontinuities that lead to unintended consequences, such as people trying to lose money to qualify for subsidies or tax benefits. These discontinuities can be found in areas like healthcare, education, and finance. The article provides examples of how these discontinuities can be observed in data, such as spikes in election results or unusual patterns in car prices. The author suggests that having slow phase-outs instead of sharp thresholds can help mitigate these issues.

Main themes

• Discontinuities in policy
• Unintended consequences
• Economic incentives
• Data analysis
• Systemic flaws

What commenters say

• Some individuals and families strategically manipulate their income to qualify for subsidies or tax benefits, highlighting the need for more nuanced policies.
• The use of appraisers in the housing market can be seen as a way to reduce fraud, but it can also be influenced by biases and incentives.
• The welfare system can create a 'trap' where individuals are discouraged from working due to the potential loss of benefits, and the complexity of the system can make it difficult for people to navigate.
• Rounding effects and mental accounting can influence prices and financial decisions, such as in the case of car prices or rent increases.
• The article's examples of discontinuities can be seen as evidence of a broader problem with how policies are designed and implemented.
• Some commenters argue that the issues discussed in the article are not unique to the systems mentioned and can be found in other areas, such as education or healthcare.
• The idea of using slow phase-outs instead of sharp thresholds is seen as a potential solution to mitigate the unintended consequences of discontinuities.
• The complexity of the welfare system and the difficulty of navigating it can lead to frustration and inefficiency for those trying to access benefits.