What You Don't See Can't Hurt You: An Economic Analysis of Morality Laws

12 Pages Posted: 2 Apr 2008

See all articles by Philip A. Curry

Philip A. Curry

affiliation not provided to SSRN

Steeve Mongrain

Simon Fraser University (SFU) - Department of Economics

Abstract

This paper provides an efficiency explanation for regulation of sex, drugs, and gambling. We propose that these morality laws can be explained by considering some activities to impose a negative externality when the activity is observed. Efficiency requires discretion by the individual who engages in such activities. When discretion is difficult to regulate directly, the activities can instead be proscribed, thereby giving individuals incentive to hide their actions from others. We find conditions for the first-best levels of consumption and hiding to be implementable. Since some level of activity is efficient, the optimal sanctions are not maximal.

Suggested Citation

Curry, Philip A. and Mongrain, Steeve, What You Don't See Can't Hurt You: An Economic Analysis of Morality Laws. Canadian Journal of Economics/Revue canadienne d&apos'économique, Vol. 41, Issue 2, pp. 583-594, May/mai 2008. Available at SSRN: https://ssrn.com/abstract=1115501 or http://dx.doi.org/10.1111/j.1365-2966.2008.00476.x

Philip A. Curry (Contact Author)

affiliation not provided to SSRN

No Address Available

Steeve Mongrain

Simon Fraser University (SFU) - Department of Economics ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada
604-291-3547 (Phone)
604-291-5944 (Fax)

HOME PAGE: http://www.sfu.ca/~mongrain/

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