2 March 2012

Regarding Rush Limbaugh and contraception

Rush Limbaugh’s comments on contraception have shown that he doesn’t understand how people respond to basic economic situations.

The contraceptive pill is something you have to take every day. You don’t only use it when you have sex. So if you think you might have sex once, you need to go on the pill and stay on it.

This means that the cost of contraceptive pills purchased by the user is what economists call a sunk cost. Humans are loss-averse, so when they are faced with a sunk cost, they tend to try and make more use of whatever incurred the cost, so as to minimize the perceived loss.

This is most often encountered when considering transport. Suppose I spend $6,000 per year to maintain an automobile so that I can commute to work. Now suppose I’m faced with the desire to go to a restaurant downtown. I could pay a couple of dollars to get the bus, but since I’ve already paid the six grand to have a car available, chances are I’ll go by car in order to get more use out of it.

So if people have to pay for contraceptive pills, then economics tells us they’re likely to view the sunk cost that way. In other words: if you have to pay a fixed amount per month for contraceptive pills, chances are you’ll want to have more sex, so as to reduce the apparent cost per sexual encounter.

On the other hand, if contraceptive pills appear to cost you nothing, because you get them covered by insurance, there’s no motivation to have more sex.

So if conservatives wanted to encourage people to have sex more, making them pay for contraceptives would be the perfect way to do so.

There are similar economic motivations around condoms, of course. If you buy a box of 12 you have an economic incentive to use them up before they expire. If you get them for free, you don’t care if they go unused.

© mathew 2017