Marginal Revolution: An Economist's Son

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An Economist's Son

My 8-year old was in trouble, a not uncommon occurrence in our household. In addition to punishment I required that he make restitution. "You owe me $15," I said sternly.
"Ok," he replied, "Do you take checks?"

Regretfully, I had to laugh.

Posted by Alex Tabarrok on May 14, 2007 at 07:05 AM in Education | Permalink

Comments

Make sure you check his ID, there's a lot of check fraud these days.

Posted by: John Goes at May 14, 2007 7:58:54 AM

Is that funny? or just pathetic?

Are your relations with your son only of that kind?

Should you ask someone you love (someone who loves you too) money to fix a conflict?

I am sure you did that just for fun, and so did your son, but…

Posted by: Bernard Girard at May 14, 2007 8:04:42 AM

Bernard, unbunch your panties and get over it.

Posted by: Julio at May 14, 2007 8:11:12 AM

Kids are the finest form of entertainment.

BTW - I think it's kind of insulting to (a) assume that instilling a respect for property is not an occasionally serious matter (there were a couple of time when restitution was an appropriate response with my own kids), or (b) presume that this relationship is the "only...kind" that exists between a parent and his kids.

Posted by: MH at May 14, 2007 8:42:00 AM

Just curious -- your 8-yr.-old son has a checking account and knows how to use it?

Posted by: jp at May 14, 2007 9:10:50 AM

Require a co-signer.

- Josh

Posted by: Wild Pegasus at May 14, 2007 9:19:33 AM

Bernard,

My parents did much the same with me and the major return on that parenting scheme was to make me more aware that things have costs, even if I'm not the owner of the object in question. I'd contrast this with another sibling who wasn't brought up with a "break it and buy it" punishment who routinely abuses other people's things and is, in general, a little rent-seeker.

Posted by: Steven Schreiber at May 14, 2007 9:28:43 AM

If you break something, pay for it or at least part of it. In life, our actions have consequences and teaching your child that early is important. It is the kids who don't learn this step who are spoiled brats as teenagers or worse. This also teaches money management responsibility.

Posted by: Steve Roberts at May 14, 2007 10:03:20 AM

Take it easy Bernie! It's a joke about a dad and his son...Steven S. sums it up nicely for you.

Posted by: Chicagoan at May 14, 2007 10:15:14 AM

As Tina Turner sang, "What's love got to do with it"? If someone breaks something, intentional or not, there are consequences. By forcing restitution, Alex is reinforcing the concept of consequence and, in my opinion, is being an excellent parent. A loving parent does not let their child get away with things; A loving parent teaches their child that every action has consequences.

Posted by: Vincent Clement at May 14, 2007 11:28:26 AM

I intend on teaching my kids the value of money by holding plenty of auctions. Let's say they find a rock in the park and they both claim they "saw it first" and it belongs to them. I auction off the rock, and the winner of the auction has to give the other child the proceeds of the sale.

It lets them think about how much they value things in dollar terms and it distributes goods to the child who wants it most.

It also works for chores. If a new chore comes up, auction the salary of the chore to the kids. Lowest bidder wins.

Posted by: Chris at May 14, 2007 11:42:00 AM

Are you at all concerned that by requiring payment you may be undermining the lesson you're trying to teach? I'm all for incentives, but this made me think of the study (I forget by who) where they made parents pay a fine if they were late picking their kids up from daycare. They collected a lot of fines because parents could assuage their guilt now when they were late.

Posted by: Dan at May 14, 2007 11:54:22 AM

My daughters LOVE to cut pictures out of magazines. Two problems arise, however. 1) In order to cut pictures out of one side, you must destroy the pictures on the other. 2) I said daughterS, as in two. I impose a simple rule: no one can cut any pictures out of a magaizine until they agree on the arraingment--peacably. I remember a particularly prized picture two years ago. They both really, really wanted that picture. They fussed and argued for, I believe, two days. In the end, the picture went for the rights to the rest of the magazine. What amazed me was the tremendous excitement that both had when the deal was done. They came running & bouncing to announce the deal.

Dan:
You might be misreading the situation. If the parents have the ability to buy extra minutes of childcare at an inflated price, why is this bad? Before, they were violating a contract--and their moral sense was not happy.

If I were to observe callous behavior arising from the market I have created, I can make adjustments. It IS good to be king, after all.

Posted by: Nathan at May 14, 2007 12:59:10 PM

Nathan wrote: "What amazed me was the tremendous excitement that both had when the deal was done."

This is a great illustration of the fact that kids, if left alone to sort out their disagreements, get zero-sum. A parent need only enforce the 'peaceful solution' rule, and the kids pretty much intuitively start to engage in some fairly high-level horse trading. Kids with interventionist parents (parents who get involved in disputes even when there's no physical danger involved) develop a belief that appealing to higher authority will solve problems involving distribution of scarce goods. This belief doesn't go away when they become adults, unfortunately.

Posted by: LP at May 14, 2007 2:37:14 PM

Nathan:
I have no problem with parents buying extra minutes of child care, but they were not trying to offer that option, they were trying to stop parents from being late. They just underestimated the importance of the "moral sense" as you put it.

Put another way, if Alex's son has the ability to buy extra joyous trouble-making for an inflated price, why is that bad?

Posted by: Dan at May 14, 2007 2:43:24 PM

Dan:

The problem with the Israeli daycare study (which incidently has never been verified) was that they set the price too low. Note that Alex said in addition to the punishment... he required restitution. This is exactly why we have punishments for crimes. In other words, imagine that the only penalty for stealing a car was that I had to pay a rental price if I got caught. Setting aside mroal issues, I would steal a car whenever I needed one. Even if getting caught were certain with probability p=1 I would be no worse off than if I had simply gone to the rental car agency and in fact I'd probably be better off since I would have avoided the hassle of driving the rental car agency filling out forms etc. Therefore the penalty for stealing needs to be some multiple X where X>1 to deter such behavior. In many cases a moral cost, shame going to jail (which is both moral and monetary) serves to increase this penalty and deter an efficient nubmer of property crimes. If Alex had only fined his son, and the fine had simply been the cost of the property destoryed, I would agree you might have a problem.

Posted by: Michael at May 14, 2007 4:45:41 PM

I spent a lot of time explaining interest payments on a $43 savings account to my son. He was comfortable understanding how the bank gets money to loan people, and those people pay interest too, and that's how he gets paid, and the bank keeps a little bit.

A few weeks later he heard me was grumbling about taxes and he, a nine year old, said "Dad, so taxes are the opposite of interest?"

Posted by: Timothy at May 14, 2007 8:14:37 PM

So, the fact that I never got myself in trouble and never had reason to pay or be charged "restitution" and I had no siblings to argue over material things with means that I am ill-equipped to negotiate the economy?

Heh. I suppose that explains some things :).

Posted by: Allison at May 15, 2007 2:51:22 PM

LP: Actually, I've found that another duty regularly pops up (not in the picture-cutting context)--contract enforcement. Hmm... maybe I ought to figure out some way to impose a loser pays regime...

Dan: Michael answers for me.

Allison: no, it just means that your parents did not have the same opportunities to inculcate you to their world view.

Posted by: Nathan Zook at May 15, 2007 3:20:11 PM