Americans See the Light

A simple economic view of the light bulb industry might begin by comparing incandescent and recently introduced fluorescent bulbs.  Each provides light with a fixed cost, the purchase price, and a variable cost, the amount of electricity used per lumens.  They also differ in life, quality of light emitted, etc.  They are substitutes goods; the use of one substitutes for the use of the other.  As fluorescent bulbs were introduced, they took a segment of the market from incandescent bulbs.  If consumers considered fluorescent bulbs to be superior, they would have cannibalized the market share of incandescent bulbs much the way that MP3 players cannibalized the market for music playing devices from CD players.  Since they did not, any self respecting analyst would conclude that consumers' as a whole, prefer incandescent bulbs.

Our elected officials noted voter dissatisfaction with high oil prices that peaked in the summer of 2009, and decided that action was needed.  Action came in the form of the Energy Independence and Security Act of 2007, a mostly xenophobic and silly law.  To increase the supply of energy, the bill includes a give away to farmers, as if they needed more welfare, through mandates for increased production of biofuels.  The bill hits at consumers' demand for energy, raising CAFE standards and mandating the use of fluorescent bulbs. 

The Rasmussen Reports article, "72% Don’t Want Feds Changing Their Light Bulbs," dated July 23, 2009 surveys Americans about the ban on the sale of incandescent bulbs in favor of more expensive fluorescent ones.  Rassmussen finds that

Just 18% of adults think it’s the government’s job to tell Americans what kind of light bulb they use, according to a new Rasmussen Reports national telephone survey. Seventy-two percent (72%) say it’s none of the government’s business, and 10% are not sure...

Eighty-three percent (83%) of Republicans and 78% of adults not affiliated with either major political party say it’s not the government’s role to make Americans change their light bulbs. Among Democrats, 58% share that view, but 29% say it is the government’s job...

The survey also found that Americans wisely believe that markets generally provide better products than government.

When asked who would do a better job of providing quality products for consumers, only 23% of Americans say government planners and managers. Fifty-nine percent (59%) have more confidence in companies hoping to make a profit. Nineteen percent (19%) aren’t sure.

Men have more faith in the private sector than women. Sixty-eight percent (68%) of those who work for a private company say businesses motivated by potential profit will do a better job of coming up with quality consumer products. Just 45% of government employees agree.

Seventy-four percent (74%) of Republicans and 67% of unaffiliateds give the edge to private companies, while Democrats are almost evenly divided over which would do a better job.

Sadly, many Americans believe that they or perhaps other Americans need to make "major cutbacks in their lifestyle to save the environment, and elected officials are ready to help. 

Nearly half of Americans (49%) agree, however, that they need to make major cutbacks in their lifestyle to save the environment. Thirty-six percent (36%) disagree, and 15% are undecided.

This marks a significant change from early May when 42% supported major lifestyle changes to better the environment but 44% were opposed.

Sixty-eight percent (68%) of Democrats agree that Americans need to make major changes in lifestyle to help the environment, but 55% of Republicans don’t believe such changes are necessary. Unaffiliated adults are closely divided over the question.

I wonder if our abstract desire to cut back on our lifestyle will hold when faced with concrete examples of those cutbacks.  If Americans are unhappy with the government when it orders them to use inferior light bulbs, what will happen when they see the vehicles that roll off the assembly line in response to the increase in CAFE standards?  Maybe Americans would rather determine where they cutback rather than have the government tell them.